IEEJ：September 2016ｃ○ IEEJ 2016

Special Bulletin
A Japanese Perspective on the International Energy Landscape (286)August 26, 2016

Attention-attracting Diplomatic Events Regarding Energy and Resources
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, Japan
From late August to early September, Japan will have key diplomatic events involving
energy and resources issues. They include the August 27-28 sixth Tokyo International Conference on
African Development, or TICAD 6, in the Kenyan capital of Nairobi, Saudi Deputy Crown Prince
Mohammed bin Salman’s Japan visit from August 31 to September 3, and a Japan-Russia summit inVladivostok, Russia, on September 2.
The Japanese government took the initiative to hold the first TICAD in 1993 to discuss
African development, as indicated by the conference name. It opened TICAD every five years before
a decision at TICAD 5 in Yokohama in 2013 to hold TICAD every three years alternately in Africaand Japan. Therefore, TICAD 6 is the first such conference in Africa. Africa is a region or market
expected to achieve economic growth over a long term with population exceeding 1.1 billion. At
present, however, per capita national income is relatively low in Africa in comparison with otherregions, with basic infrastructure development left for the future. Both expectations and challenges
exist in regard to future development in Africa.
While African development has various potentials, the development of rich energy andresources including oil, gas, coal and rare metals has attracted attention as one of the African
development drivers. For example, proven African oil reserves total 129.1 billion barrels accounting
for 8% of the global total. Proven natural gas reserves on the continent stand at 14 trillion cubicmeters, capturing 8% of the global total. Africa includes Nigeria, Algeria, Libya and Gabon as major
oil and gas producing members of the Organization of the Petroleum Exporting Countries, as well as
Mozambique and Tanzania that are expected to develop energy resources in the future. Whenresources prices were very high until the first half of 2014, particularly, resources development wasexpected to drive African development.
Due to the resources price plunge since the second half of 2014, however, the situation has
turned around. African countries are pursuing their further development at a time when resources
prices have plunged. Over a medium to long term, energy and resources prices may rally again,
allowing the resources sector to make great contributions to African development. Cooperation andparticipation in African resources development are significant for Japan that has a low energy
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IEEJ：September 2016ｃ
○ IEEJ 2016self-sufficiency rate and is required to diversify energy import sources. In the present situation,
however, initiatives contributing to diversifying and sophisticating the economic structure in Africancountries are more important than the development of energy and resources. Japan is expected tocontribute to African development with its high technologies and quality infrastructure development.
Such contributions will allow Japan to enhance its expansion into the African market. Increasing
Japan’s presence in Africa will be significant for Japan’s diplomatic strategy including the reform ofthe United Nations. In this sense, TICAD 6 achievements are attracting attention.
Saudi Deputy Crown Prince Mohammed has taken power under King Salman bin
Abdulaziz al-Saud and attracted global attention as a young leader promoting Saudi Arabia’s policies
and reform. During his first visit to Japan as deputy crown prince, Mohammed will meet withEmperor Akihito and Prime Minister Shinzo Abe. His Japan visit is expected to enhance friendshipbetween Japan and Saudi Arabia.
It may be needless to say that Saudi Arabia is the world’s largest oil exporter and theOPEC leader. It is the most important oil producing country in the world. Japan’s enhancement ofgood relations with Saudi Arabia is very significant for world oil market stability and stable oil
supply for Japan. Deputy Crown Prince Mohammed who leads Saudi policies is about to proactively
implement Saudi economic structure reform, as is well known. Vision 2030, which was compiled at
his initiative and announced in April, clearly calls for diversifying and sophisticating the Saudi
economic structure to break away from the dependence on oil. The reform includes bold, ambitious
measures such as the creation of a $2 trillion public investment fund and the initial public offering ofstate-run Saudi Aramco. The Saudi deputy crown prince and Japanese leaders are expected todiscuss Saudi initiatives for Vision 2030 and Japan’s possible cooperation in these initiatives. Achallenge for his visit to Japan may be to deepen Japan-Saudi Arabia relations including those for theVision 2030 initiatives.
The Japan-Russia summit, which is reported as planned for September 2, is also important.
At the previous summit that took place in May in Russia’s Sochi, Prime Minister Abe and President
Vladimir Putin agreed to take a new approach to negotiations about the pending peace treaty andNorthern Territories issues. The Japanese side then presented a cooperation plan for eight fields -extending healthy life expectancy, building comfortable cities, expanding exchanges and cooperation
between Japanese and Russian small and medium-sized enterprises, energy, diversifying Russianindustry and improving productivity, promoting industry in the Far East and making the region anexport base, cooperating in high technologies, and expanding human exchanges fundamentally. The
Russian side reportedly indicated great interests in the plan.
Energy, though being one of eight fields, is significant, given its importance for theRussian economy and the Japanese energy situation. Energy and resources may be one of thehighlights at the Vladivostok summit where Abe and Putin are expected to discuss Japan-Russia
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cooperation in various fields. Details of discussions on energy will attract much attention.
As mentioned above, the key diplomatic events for Japan regarding energy and resources
are planned for the next two weeks. Each event is important for Japan to build and enhance strategic
relations with the region and the two countries. I would like to pay attention to the results of theseevents.

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