Kuwait, Japan make great headway in economic cooperation

Bilateral ties between Kuwait and Japan have made significant headway over decades through frequent high-level exchanges at various levels and cooperation in all fields, particularly economic domain.
Kuwait and Japan established diplomatic relations in 1961, but commercial contacts began in 1958, when Kuwait granted oil and gas concessions in the offshore Divided Zone to the Arabian Oil Company.
Today, Japan is Kuwait's third-biggest trading partner, with two-way trade between the two countries reaching USD 14.2 billion in 2011, nearly doubled from the USD 7.5 billion worth for 2001.
Last year, Kuwait's exports to Japan totaled USD 12.9 billion, and imports USD 1.3 billion, according to Japanese government data.
The two countries have witnessed increased multi-layered economic relations and investments as a result of the historical visit to Tokyo by His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah in his former capacity as prime minister in July 2004. The 2004 summit meeting led to establishing a joint committee between the two governments in July 2008 to further activate cooperation in all fields, particularly the economic and commercial aspects.
The Japan-Kuwait Joint Committee helps the two governments discuss ways of enhanced cooperation in such areas as trade, investment and technology transfer, in addition to energy sectors including oil and gas, both upstream and downstream.
At their first Joint Committee in June 2010, the two sides agreed to scale up cooperation in the fields of renewable energy, energy conservation, atomic energy, water business and medical tourism. Kuwait and Japan also signed a double-taxation avoidance agreement in February 2010 aimed at facilitating economic activities and investment in each other's country, and Kuwait became Japan's first signatory among the Gulf Cooperation Council (GCC) states.
The treaty reduces the limit of withholding tax rates imposed on dividend income, interest and patent royalties paid between the two countries -- 5 percent for dividends when payable between a parent company and its subsidiary, and 10 percent for both interest and royalties.
Moreover, the two countries concluded a bilateral agreement in November 2010 on the promotion and mutual protection of investments, which contributes to opening up prospects for the flow of investments between Kuwait and Japan.
Meanwhile, reflecting the keenness of the private sectors in Kuwait and Japan to expand economic cooperation through joint ventures, businessmen from both countries established the Japanese-Kuwaiti Businessmen's Committee in 1995 and meet once a year alternately in Japan and Kuwait.
In their latest meeting in Tokyo that brought together some 120 government officials and businessmen from the two countries, the participants pledged more active economic ties and welcomed Japan's active engagement in various projects under the Kuwait's development plan, in which the government will spend USD 102 billion in order to transform the country into an international economic hub.
Japan is also considered one of the main markets for Kuwaiti oil, with Japan-bound shipments accounting for roughly 20 percent of Kuwait's total crude exports of 1.3-1.5 million barrels per day at any given time. State-run Kuwait Petroleum Corporation (KPC) established Tokyo Office in 1968 as its first regional market office in order to strengthen KPC's position in Asian markets.
H.H. the Amir will make a four-day visit to Japan from March 20 to meet Emperor Akihito, who will host a state banquet in honor of H.H. the Amir, and meet Prime Minister Yoshihiko Noda.
Previously, former Prime Minister Shinzo Abe made the first visit by a Japanese leader to Kuwait in 2007, which was followed by the visit to Japan in July 2008 of former Prime Minister Sheikh Nasser Al-Mohammad Al-Ahmad Al-Sabah.