Japan's JICA ties with Islamic Development Bank arm, eyes Jordan sukuk

[Aepsilons]

The Japan International Cooperation Agency (JICA) has signed an agreement with the private sector arm of the Islamic Development Bank to develop sharia-compliant transactions with a focus on sukuk (Islamic bonds).

JICA joins other development agencies such as the World Bank and the Asian Development Bank in building links with Islamicfinance.

Sukuk, investment certificates which follow religious guidelines such as bans on interest and monetary speculation, have over the past year grown in prominence as a funding tool beyond the industry's core markets of the Middle East and southeast Asia.

JICA's agreement calls for efforts to develop Islamic moneymarkets across the IDB's 56 member countries, the Jeddah-based Islamic Corporation for the Development of the Private Sector said in a statement.

In June, Jordan's ministry of finance asked for assistance from JICA in issuing sukuk, one of the Jordanian government's objectives under a development programme with the World Bank.

Jordan is studying how to issue its first sukuk but pressure to cut public debt and a preference for concessionary loans from aid donor countries have hindered the plan.

JICA's agreement will help raise awareness of Islamic finance and attract other Japanese lenders to the sector, Kunio Okamura, JICA's senior special advisor, was quoted as saying in the statement.

Some Japanese banks are increasingly active in Islamic finance, though most of this is focused outside Japan; Sumitomo Mitsui Banking Corp and Bank of Tokyo-Mitsubishi UFJ have been expanding their Islamic businesses in Malaysia.

JICA is a regular bond issuer in Japan's domestic market and could follow state-owned Japan Bank for International Cooperation in helping Muslim countries with capital-rasing efforts.

Last week, Tunisia issued a $825 million bond on the domestic Japanese market, guaranteed by the Japan Bank for International Cooperation, Tunisia's third such bond since 2012. Tunisia is now preparing for its debut sovereign sukuk issue. (Editing by Andrew Torchia)

Japan's JICA ties with Islamic Development Bank arm, eyes Jordan sukuk| Reuters

 

[Arabian Legend]

Very welcome step. It will definitely benefits both Jordan and Japan economically and open the gate for further cooperation in other fields.

 

[Aepsilons]

Japan needs to increase its cooperation , more so, its investments in the Middle East.

 

[al-Hasani]

Japan should also invest in KSA, the GCC and the entire Arab world. We are a huge economy with an unlimited potential and a growing young population in need of investments and work-places in many Arab countries. Japans expertise on many fronts (technology, private firms, arms trade etc.) would be a welcomed stepped. KSA is the biggest ME economy outside of Turkey and a very stable economy. We just opened up our $531 billon stock market for foreign investors for the first time this summer.

Also Islamic banking is very big in KSA.

The Islamic Development Bank is a Saudi Arabian Islamic Bank based in Jeddah with many filiates abroad.

Please read more here below;

Islamic Development Bank - Wikipedia, the free encyclopedia

China is the biggest trade partner with the GCC. Actually not the West. Japan should also try to increase its cooperation with the Arab world. Even South Korea has big trading ties with the GCC and Arab world. I for long wondered what holds Japan back aside from you having the 4th biggest economy in the world.

 

[Arabian Legend]

Japan needs to increase its cooperation , more so, its investments in the Middle East.

Saudi Arabia and the rest of GCC states enjoy very strong and valuable relations with Japan on all terms.

Enhancing Saudi-Japan Relations

In 2015, Japan and the Kingdom of Saudi Arabia will celebrate 60 years of diplomatic relations.They are thus no strangers to one another. Moreover, relations have been smooth and have experienced no serious disruptions. Visits of leaders and senior officials of both nations take place on a regular basis and relations are based on mutual trust. The visit of HRH Crown Prince Salman Bin Abdulaziz al-Saud in February 2014 is another example of these cordial relations.

Given the overall shifts in the international system and the key connection that exists between the Gulf and East Asia, it is important for the Gulf as a whole and for Saudi Arabia in particular to elevate ties with Japan to a higher strategic level. Given the role of the Asia-Pacific area as the strategic region of the 21st century and the critical position of the Gulf region and the Middle East for peace and security worldwide, ties between Japan and Saudi Arabia have to be further enhanced as a means to ensure the interests of both sides.

As part of an effort to move beyond the exchange of energy for manufactured goods, the following areas offer potential for expanded cooperation:

Energy Relations: The kingdom has provided stable oil supplies to Japan even during period of crisis or change at the international level. Recently, following the sanctions on Iran, Saudi Arabia provided replacements to Japan to meet its energy requirements. The kingdom and Japan have also agreed to store more oil at the Japanese facility of Okinawa.

To further expand energy ties, areas of cooperation should include:

• Investment in Petrochemicals
• Refinery Projects

Apart from oil supplies, closer relations in terms of Japanese expertise, investment and joint projects should be pursued in the following areas:

• clean energy technology
• water resource development
• civilian nuclear technology
• solar technology

All of these areas can be discussed in the context of the King Abdullah City for Atomic and Renewable Energy (KA-CARE).

Trade and Industrial Relations: Saudi Arabia is the second largest export market for Japanese goods in the Gulf region and the first in terms of exports from the Gulf to Japan. Out of more than $180 billion in total trade between the GCC and Japan in 2012, more than one-third, or approximately $63 billion was accounted for by trade between Saudi Arabia and Japan. That is higher than the kingdom’s trade with any other Asian nation including China, India and South Korea.

To take trade relations to another level, the kingdom needs to seek greater Japanese involvement in the following sectors:

• Overall urban development including the transport sector and infrastructure. The kingdom is committed to spending nearly $1 trillion for infrastructure development over the next 10 years.
• Information technology and communication including issues of cyber security
• Japanese assistance for the kingdom’s Industrial Cities

Labor Market: Saudi Arabia is committed to labor market reform and is implementing large projects to promote skills development and increase the participation of Saudi citizens in the private sector. Given its vast experience in this regard, Japan needs to be involved in:

• Development of the Saudi Small and Medium Enterprise Sector
• Further expansion of existing vocational training centers

Maritime security: The security of energy supplies from the Gulf is essential. This includes the free movement of vessels and protection of sea lanes. Japanese navy boasts a high naval defense capability. As such and in order to ensure such security, Saudi Arabia and Japan should:

• Cooperate against piracy
• Enhance sharing of information when it comes to other maritime threats
• Expand minesweeping services in the waters of the Gulf by Japan
• Increase naval cooperation especially in disaster management and crisis response mechanisms.

Regional issues: Numerous regional issues in the Middle East and Asia require a closer consultation process between Saudi Arabia and Japan. This includes:

• Coordination in the Friends of Syria process. Japan should be urged to use its offices to engage with Russia and encourage a more constructive attitude on the part of Moscow for a resolution of the Syrian crisis.
• Ensuring that attention stays on the international responsibility with regard to the Iranian nuclear program. Japan should once again use its diplomatic offices to send clear signals to Iran that Tehran must take substantive steps to improve the Gulf security environment, as such steps would go a long way toward re-establishing much needed trust and confidence.
• Reflect the Japanese opinion and perspective on the situation in North Korea and its regional and global implications
• Promote more discussions with the United States on the so-called ‘pivot’ by the US to the Asia-Pacific region with regard to the impact on the strategic imperatives of both Japan and Saudi Arabia
• Japan and Saudi Arabia should support all efforts to ensure that the regional conference for the establishment of a Weapons of Mass Destruction Free Zone for the Middle East takes place in Finland as soon as possible.
• Saudi Arabia can offer to host a regional counter terrorism seminar. Following the kidnapping and killing of some Japanese nationals in Algeria in 2013, there is a high degree of concern about such incidents. By hosting such an event, Saudi Arabia can provide a window to Japan on current developments, threat levels and perceptions in the Arab states. This in turn will increase confidence,encouraging more Japanese businessmen to visit the region.

Culture: With more than 400 Saudi students already studying in Japan, a first important step has been taken but more can be done. Additional steps may include:

• Further exchange programs with leading Japanese universities for student exchange
• Japan’s inclusion and full support for the inter-faith dialogue initiative spearheaded by King Abdullah. This includes Japan’s involvement in the activities of the King Abdullah International Center for Inter-religious and Intercultural Dialogue (KAICIID) in Vienna, Austria.

Source: Gulf Research Center

 

[al-Hasani]

Saudi Arabia and the rest of GCC states enjoy very strong and valuable relations with Japan on all terms.

Indeed but they could be much bigger, IMO. We should update that thread concerning an Arab common market in 2020 that was made a few weeks ago. Could be interesting to follow the events in the Arab world in this regard. We already got the "GCC and KSA economy threads".

Plan to create Arab Common Market by 2020

We might not be many Arab users on PDF (at least active ones) but we sure have made a hell lot of interesting threads and educated dozens of users. Just look at the views and thanks in those threads.

It's just a shame that we cannot post social and economic threads on the Arab Section which is strictly about military and moreover almost 100% troll free despite having no moderator appointed. I would have liked to avoid the hordes of clowns, ignorants, trolls, double users on the ME/Africa section we write in right now. We should try to talk with Webby and the moderator team about changing that AND appointing an Arab moderator once again.

Unfortunately from next week (there is holiday in Denmark right now so no university for me) on I can't be on PDF much or at least I should not be. So I hope a few of the Arab users here will take some initiatives. I think that the moderators are tired of me by now.

In which case I nominate you.

@Ahmed Jo @BLACKEAGLE