Promoting peace in the Mideast

Japan looks to help Lebanon’s host communities

Photo by: Greg Demarque/Executive

Executive sat with Matahiro Yamaguchi, Japan’s ambassador to Lebanon, to discuss the country’s humanitarian aid to Lebanon, April’s CEDRE infrastructure investment conference, and prospects for peaceful resolutions to the region’s conflagrations.

E   The Japanese Embassy is now funding a United Nations Industrial Development Organization (UNIDO)-designed project targeting job creation, productivity gains, and market access for furniture makers in the north of Lebanon. Can you tell us the motivation behind this initiative?

UNIDO made a well-designed plan, and we as [the] embassy aimed to see this project realized, because of the conditions of the host communities for refugees in Lebanon. We were attracted by a target to train host communities and include Syrian refugees. That idea was very suitable for us, [because] we not only want to help the Syrian refugees, but also [support] projects targeted at the development of host communities.

E   In Lebanon, one often encounters talk that host communities need to be supported before aid is given to refugees. Did you take steps to defuse such demands?

I know this claim. We always compare the situation in Jordan and Lebanon. Jordan has also received a lot of Syrian refugees, but they are hosting them where? In the Zaatari Camp, where a huge number of refugees live. This is very visible, and the UN can help systematically, and donors will see these refugees. But here in Lebanon, where are the 1.5 million refugees? We can see some unauthorized camps in the Bekaa, but these are small camps. All the refugees have penetrated into society so that our approach should be different from the project in Jordan. We should think about society itself. We should provide some funds for the [humanitarian support of] refugees, but we should at the same time take care of host communities.

E   Would the Lebanese furniture industry have any chance, in your view, to enter the Japanese market?

I think that, frankly speaking, this will be very difficult. One reason is that Japan is a very complicated market. We [have also] developed our own furniture industry which is very competitive. There would be a chance for a manufacturer who has very innovative design or material. For example, Swedish furniture is very popular in Japan.

E   Trade figures between Japan and Lebanon are driven by imports of cars and electronics to Lebanon, and in the other direction the flow is quite minimal and is mainly based on copper. Are there any trade deals that would make it possible for Lebanese goods to penetrate Japan’s market in greater numbers, perhaps in agriculture?

I noticed that Lebanese agricultural products are very good, but Lebanon is far from Japan, so the cost of transportation is huge. We prefer to have a very competitive price, so we mainly import from neighboring countries. That is the reality. I was very surprised that there are more than 200 Japanese sushi parlors in Lebanon; it is so popular here to have sushi that even the supermarkets have sushi corners and sell kits to roll sushi.

E   Could you imagine seeing a Lebanese food corner in a Japanese supermarket?

No. But there is potential for some Lebanese products, like wine. Some wines get a Robert Parker [ranking of] 93 or 94 points, and these can sell in Japan because we are the biggest importer of foreign wines. Also, I find the best olive oil in Lebanon, and I’m so happy about that. I personally have an idea to organize some kind of Lebanese fair in Japan in cooperation with the Lebanese ambassador in Tokyo.

E   How is the reputation of Lebanon in Japan today?

To be honest, ordinary Japanese do not know Lebanon at all. It is such a small land in the Middle East. Usually, the Japanese think about the Middle East as a whole and have some concept of areas, such as Yemen and Syria [because of the conflicts], and the Palestinian territory, but our embassy is now fighting to correct the perception [of the Middle East as war-ridden and risky] by saying that Lebanon is a safe place. We have removed a travel advisory, and now we see that, even though it is still in small numbers, Japanese tourists are coming back.

E   We saw that just under 2,000 Japanese visitors come to Lebanon every year, but is there much of a flow of Lebanese visitors to Japan?

Of course, as we can see from the number of Lebanese applying for a visa to Japan at our embassy. This number is stable and slowly increasing.

E   But is the image that Lebanon is a country in a crisis region and has historic and current issues with militia organizations still a concern in the development of bilateral tourism or visits?

Yes. [Looking at the history], we established diplomatic relations with Lebanon in 1954 and have developed business relations with Lebanon since then, and before the civil war the population of Japanese in Lebanon was 1,500 people because many companies had established presences in Beirut because Lebanon was the hub of the Middle East. All representatives of Japanese companies were stationed in Beirut. It was a nice city and allowed very good access to other Arab countries. But all that is gone. After the civil war [broke out], these companies moved to Bahrain and then to Dubai. The idea that Japanese businessmen have of Beirut is that they had offices here, but after the civil war they moved. They are still remembering the civil war, and now we are trying to inform them about the new reality in Lebanon.

E   In the relations between the Middle East and nations in the Western hemisphere, there is a main issue related to Iran. How does the situation look from the East Asian viewpoint? Is Iran a barrier for relations with the Middle East?

We are very neutral and have very good relations with Iran, but big brother is always pushing us [in certain policy directions]. For example, we are not naming Hezbollah as a terrorist organization, like America does. They are a political party in Lebanon, and so we consider it as a political party. We are not discussing them under the aspect of activity related to arms.

E   So can this be interpreted as a policy that aims for peace? As a country, you have chosen the road of peace even in designing your constitution after the end of World War II.     

Middle East peace is very important to us with regard to both the Palestinian issues that include Lebanon, which has received so many people of Palestinian origin, and also with regard to the peace process with Israel, which we are pushing for in our way, even as this situation is not easy, but rather very difficult.

E   In this context of enhancing peaceable structures in the Middle East—or specifically in Lebanon—is there interest from the Japanese business community in getting involved in infrastructure projects in Lebanon as were proposed under the CEDRE concept?

What is my concern is that the size of the [Lebanese] economy and the size of the projects is so small [by our standards]. Perhaps European firms, which are very near to this area, can more easily come here. Our engineering companies are highly developed nowadays, but the problem is that the labor cost in Japan is very high. How can we deal with such projects? [In some other cases] where we have very good and expensive technology, Japanese engineering companies will team up with a Korean or Chinese company to build something. This is our reality: The infrastructure projects in the [CIP] list in Lebanon are not at all sophisticated.

E   At the CEDRE conference Japan pledged $10 million in loans and part of the takeaway from the conference was that Lebanon’s government would commit to certain reforms. Do you have a wish list for how Lebanon should change its modus operandi in terms of public finance or in order to create stability?

The conditions that they promised to meet are very, very important. As I said, we are not so interested in the infrastructure projects as they were presented in the Capital Investment Plan, but one project outside of the CIP pipeline—which is not decided yet—is that we are providing $100 million [alongside] the World Bank in a rural road construction project. The World Bank has allocated $200 million to this project, and they are about to start the project which was already passed in Parliament. With our contribution, the total funding for this project will be $300 million in an infrastructure project that has a kick-start function for injecting money into the Lebanese economy. This is needed in the current situation. We, as the embassy, are trying very hard to see this project realized, and I hope that this will take place within this year. This is a very good project, and we already designed [it] with the World Bank. Thus it is different from the pledge at the CEDRE conference.

E   What are other things that Japan seeks to do to promote peace in the Middle East as one of the core regions of global conflict that exist today?

We are not a main player in this region and have realized this. But we want to make the situation much easier for discussing peace. This is our policy. For example, in the Palestinian territories, we have an industrial park in Jericho. It is Japanese funded in cooperation with Israel and the Palestinians. This is a kind of realistic project that is now exporting products [from this industrial park] to other countries.

Jeremy Arbid

Jeremy is Executive's in house energy and public policy analyst.

Thomas Schellen

Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years.