FOCUS : Two Views on Japan’s Role in Mideast War

Until Japan recently pledged $9 billion in aid to the U.S.-led multinational coalition in the Persian Gulf, it had come under increasing fire by some Americans for not doing its fair share.

To critics, Japan moved too slowly in announcing that it would join the economic embargo against Iraq. Then Japanese legislation to allow the dispatch of noncombat troops to the Gulf failed in a hail of national protest. And although Japan boasts foreign reserves of $76.6 billion, it could manage to muster up only $2 billion in aid and another $2 billion in mostly loans to the front-line Middle Eastern states.

Most of Japan’s hesitation has been explained in political terms: a Constitution that prohibits combat troops overseas, anti-war feelings among Japanese women and political opposition groups.

What is less understood are the business and economic reasons some Japanese initially balked at taking a tougher tack against Iraq. To understand those reasons, Times staff writer Teresa Watanabe interviewed two Japanese--one a businessman with one of Japan’s largest trading companies, the other an official with Japan’s Ministry of Foreign Affairs.

SHINZO KOBORI, economic counselor, C. Itoh & Co.: Quite frankly, at the first stage of $2 billion, Japan was a little bit ambivalent. We (business) did have commercial concerns coming as the top priority. Between Japan and Iraq, there is $5 billion of (private) credit still outstanding. Japan is the No. 1 creditor, after $6 billion from the Soviet Union. They are for the exports of machinery, generators, fertilizer plants.

So certainly we were very much worried about the money outstanding. The amount was too big for us to simply forget. This makes us a little bit cautious. If we take a confrontational position against Saddam (Hussein), many people say, that doesn’t serve the interest of repayment.

So $2 billion would not antagonize Iraq too much, but at the same time this hopefully would contribute to a peaceful settlement. If everyone was happy with a peaceful settlement, then we hoped we would end up having rather less hostile relations with Iraq and that, of course, would serve commercial purposes.

But the stage of that concern is over. The peace campaign failed, and war erupted. With the $9 billion, we are now in a more determined position, and we don’t care what position Japan has with Iraq. We have to take sides with the U.S. and the free world, and our commercial costs have to be sacrificed.

We looked at Iraq as a good market for reconstruction after the (Iraq-Iran) war without knowing what was in the mind of Hussein. We thought Iraq was a very credit-worthy country because its oil resources are so huge. The U.S. took sides with Saddam in the Iraq-Iran war. So certainly everyone has made a mistake.

TAIZO WATANABE, senior spokesman, Ministry of Foreign Affairs: Regarding the economic sanctions, in the beginning, there was a technical delay. Because of the enormity of the losses involved, we had to persuade the business people and the people involved in economic cooperation. The private debt was, altogether, 700 billion yen--almost $5 billion. In addition, there are government loans outstanding of tens of billions of yen.

We had just made an arrangement that as Iraq exported oil to Japan, the portion of the price we have to pay would be deducted so that they can repay the debt they owe to us. The private sector had made this arrangement with Iraqi authorities through the intervention of the Japanese government agencies.

But economic sanctions means that we will stop importing oil. So this is something which really caused great trouble in some quarters. The government agencies who oversaw this arrangement with Iraqi authorities were very much apprehensive because of the loss which would be inflicted upon the private sector.

It was a matter of hours rather than days that we delayed. But considering the enormity of losses we were prepared to suffer, it was very fast.

(The Ministry of Foreign Affairs) persuaded all of the government agencies involved. (Persuading business was) a matter for those other government agencies to do. They must have had quite a problem, but they did it.

All the time, whenever I read reports of anything related to Japan, we always find the bias that when business says this and (government) leadership says that, there is no distinction between the two. The ambivalence was maybe in the minds of businessmen, but in the minds of government leadership there was no ambivalence. As far as the fundamental position of criticizing Iraq for violating the law and the U.N. charter, there was unity among government leaders.