Japan -- a nation almost entirely dependant on the resources of other countries -- faces an acute dilemma over the Arab oil boycott.
Japan -- a nation almost entirely dependant on the resources of other countries -- faces an acute dilemma over the Arab oil boycott. The failure to qualify as a "preferred nation" with the Arab oil producers may force it to make valuable, if reluctant, contributions to the Arab cause, thereby raising questions about her international security ties.
Japan imports 99.7 per cent of its oil from abroad, 83 per cent of it from the Middle East. Most of its industries are powered by electricity, 77 per cent of which is generated by oil burning steam plants.
In an attempt to woo the Arab oil producers, Japan has offered to let them own their own refineries and petrol stations in Japan. But it appears the Arabs want a lot more than that. They have indicated that if Japan wants to get off the "blacklist" it must be prepared to supply military assistance, economic aid, and to introduce legislation which would prohibit any form of voluntary support for Israel. If Japan responds to the Arab demands, it will have to reconsider its entire system of security ties with the United States and the western allies.
On Tuesday (November 6), the Japanese government issued a statement reiterating Japan's "absolute opposition to expansion of territory by means of force," and urged the implementation of the United Nations resolution, calling for the restoration of the boundaries that existed before the 1967 War. Japan has also sent "oil envoys", to the Arab countries to try to ease the situation. But the Arabs have remained unmoved.
The Japanese Ministry of International Trade and Industry has announced plans drastically restricting factories from burning crude oil, banning private cars from expressways on Sundays, and restricting the use of electricity. Already, electricity supplies to industry and private houses have been cut by ten per cent in the Tokyo area and the famous Ginza Christmas-New year neon decorations have been considerably dimmed.
Iran, Japan's largest single supplier, has guaranteed to continue supplies. But Indonesia, which supplies some 13 per cent of Japan's oil--has announced a sharp increase in its prices. Japan has 59 days of oil supplies with a further 20 days stock arriving in tankers. If this has to be rationed, retail oil supplies will drop heavily in December, just when they are most needed for the cold season.
But perhaps the hardest blow will be to Japan's economy as a whole. The Government has estimated that industry will have to slow down by 10 to 15 per cent. But the figure could rise as high as 20 per cent by early next year, if the Arab boycott continues.
It's a tough time for Japan. already faced with persistent rising price,s Japan has now become a deficit nation with her currency losing strength for the first time in years.