Hostage crisis sharpens focus on risks of Japan's business ambitions in Middle East

TOKYO – Japan's outrage over the slaying of two Japanese hostages by the Islamic State group is settling into a heightened awareness of risks associated with the country's pursuit of lucrative energy projects and other economic ties in the Middle East.

Tokyo's No. 1 salesman, Prime Minister Shinzo Abe, was wrapping up a six-day Middle East tour with executives of several dozen Japanese companies in tow on Jan. 20, when the Islamic State group purportedly issued a demand for $200 million in exchange for the two hostages.

The apparent beheadings of journalist Kenji Goto and gun aficionado Haruna Yukawa in Syria shattered the sense of security among Japanese and raised questions over Abe's effort to sell nuclear power technology in the region that supplies over 80 percent of Japan's oil and gas.

On Tuesday, a government committee began investigating the killings and will also assess ways to better protect Japanese overseas.

"Japan is keen to play a more active role in the world and it will be exposed to more dangers than it is accustomed to and it needs contingency plans for the future," said Yoel Sano, global head of political risk at Business Monitor, a London-based research consultancy.

About 800 Japanese businesses are operating in the Middle East-North Africa region, and about 12,000 Japanese are living there, according to the government. Huge conglomerates such as Mitsubishi Corp. and Hitachi Corp. and retailers including Muji and confectioner Yokumoku are finding opportunities in a market of 500 million people stretching from Mauritania to Afghanistan.

Surging auto shipments boosted Japan's exports to the Middle East by 21 percent last year to about 3 trillion yen ($25.3 billion), while imports from the region, almost all oil and gas, inched up 1 percent to 15.83 trillion yen ($133.2 billion) thanks to lower oil prices, according to the Ministry of Finance.

Abe is fending off criticism that he drew unnecessary attention to Japan during his Middle East tour with a speech mentioning a new $200 million contribution to countries struggling with the fallout from the conflict with the Islamic State extremists, who control about a third of both Iraq and Syria.

Japanese have been taken hostage before, but usually only by happenstance. Since Japan's Constitution limits its military to domestic defense, it provides only non-military support to the U.S.-led alliance against the Islamic State group. But the final message purportedly from the hostages' captors, announcing the killing of Goto, included a dire threat to "let the nightmare for Japan begin."

Sano believes that Asian targets will increasingly draw attention, but the greatest threats still are to Western and other Middle Eastern countries.

"The bigger risk is not that they (the Japanese) will be targeted but that they will be caught up in incidents where they are playing a bigger role," Sano said. "Japan needs to develop greater awareness and greater ability to solve or act upon these situations."

There was shock, mourning and hand-wringing after a militant attack on an Algerian gas plant in early 2013 took Japanese lives. The four-day hostage standoff between al-Qaida-affiliated militants and the Algerian army killed at least 37 foreign workers, including nine Japanese working for a Yokohama-based engineering company, JGC Corp. Seven JGC workers survived.

But little changed. The menacing messages last month targeting all Japanese seem to have struck a deeper nerve.

"Japanese felt that they were under the radar and really didn't have to worry so much about these kinds of things," D. Bruce McIndoe, chief executive of U.S. security company iJet, said during a visit to Tokyo earlier this month.

Japanese companies with global operations, such as automaker Nissan Motor Co., Takeda Pharmaceutical Co. and travel agency JTB Corp., are already iJet clients, but the company is now starting a Japanese language service, he said.

The government is tightening security at Japanese embassies, schools and other facilities, and airlines are also taking extra precautions. The Foreign Ministry also elevated alerts for areas affected by the conflict with Islamic State and other extremists.

As individuals used to living in a low-crime society, Japanese tend to be less aware of risks than some other nationalities. Compared with American corporations, Japanese companies aren't as prepared to give intensive training for traveling abroad.

They are even less equipped to handle crises like hostage-taking, said Tsuyoshi Takemura, a crisis-communications expert at public relations firm Burson-Marsteller in Tokyo.

But since the killings of Yukawa and Goto, many Japanese companies have been trying to develop specific guidelines in order for their employees abroad to stay safe, he said.

McIndoe said he sees increasing interest in iJet's services, which are modeled on U.S. military strategies and include crisis management, travel training and round-the-clock security monitoring.

The hostage crisis, McIndoe said, "is bringing home that Japanese citizens are potential targets globally."