Why Japan can't lead.

Author:Mulgan, Aurelia George

Japan, once considered an economic superpower and potential contender for global pre-eminence, finds itself slipping down the rankings of leading states. Although still the second largest economy in the world, it is absent from most realpolitik discussions about the global redistribution of power that is shaping the new world order, which highlight the emergence of Russia, China, and India. China's rise in East Asia is now eclipsing the land of the rising sun, but Japan's slippage is not all due to China's growth. Japan's maladies stem from three causes largely of its own making: its loss of a distinctive national identity, its international leadership deficit, and its continuing economic and political travails.

In many ways, Japan now finds itself a ship without a rudder. Fifty years ago, Japan redefined itself as a model of economic development and a nation dedicated to peace. Neither image fits the Japan of the early twenty-first century.

For years, Japan's international standing rested almost exclusively on a narrow base of economic power. For the past four decades, it has been the second-largest economy in the world, yet Japan's political or military status has not since World War II been commensurate with its economic power. Today, Japan's global profile and international influence is diminishing even further. The failures of the "lost decade" of the 1990s, when Japan's economic miracle collapsed and it lost credibility as a growth model to the rest of the world, have erased memories of earlier decades of spectacular economic success. A declining share of world trade, falling commercial competitiveness, and loss of its status as the world's leading creditor nation and aid donor have also undermined Japan's major power claims.

The International Monetary Fund (IMF) expects Japan's gross domestic product (GDP) to contract by 6.2 percent this year, more than any other advanced industrialized nation. If predictions hold, it will be the steepest decline in Japan's postwar history. The global economic crisis has underlined Japan's increasing dependence on exports for growth--but the plunge in manufactured exports, triggered by the shutdown of consumer spending in many of its customer nations, has led to Japan's first trade deficit in 28 years. Analysts warn of a long-term recession in Japan with ripple effects through its entire economy. Weak domestic demand is further eroding Japanese growth prospects in the face of a shrinking population, failing real wages, and soaring joblessness as unprecedented sackings of permanent workers threaten to shatter the system of lifetime employment.

Ueno Park in the center of Tokyo, better known for its cherry blossoms, is now home to an ever-expanding army of unemployed and homeless ex-salarymen, clustering together for moral support and assistance from public organizations. Those lucky enough to hold on to their jobs are squirreling money away as insurance for bad times. Affluent Tokyo residents no longer flock to Sunday shopping in the Ginza, the so-called "temple of luxury" and showpiece of brand-name consumerism.

With all these internal problems, Japan now can no longer even contemplate extending its influence abroad. At the end of the Cold War, the nation chose to emphasize its global civilian status, eschewing military power and emphasizing international contributions such as development assistance and UN peacekeeping. The nation's pacifist constitution, circumscribed defense posture, and resolutely anti-militarist public opinion have long underpinned its claim to be a nation devoted to the global cause of peace. But Japan is now neither a nation of peacekeepers nor a great military power.

Its armed forces have acquired modern, technologically advanced conventional capabilities, yet they are structured principally for defense of the homeland. Japan is committed to UN peacekeeping but not to the full spectrum of peacekeeping operations, which includes collective security. Likewise, Japan is nominally committed to the U.S.-Japan alliance but not fully committed, given its rejection of collective defense. Tokyo's quest for a permanent seat on the UN Security Council is periodically resuscitated with token overseas missions, but a substantial gap remains between this long-term foreign policy goal and the ability of its armed forces to take on increasingly difficult and dangerous military operations. Substituting "checkbook diplomacy" for actually dispatching civilian or military personnel as an international contribution to global crises has become a less viable option. Japan's dire fiscal outlook no longer furnishes the requisite financial resources.

With the erosion of its distinctive national identity, Japan no longer knows what it stands for and what international role it should pursue.

A Can't Do Attitude

Those expecting the Japanese government to take the initiative on a raft of international problems will be sorely disappointed.

On finance, Prime Minister Taro Aso initially trumpeted Japan's qualifications to take a leading role in the 2008 international financial crisis (the nation having successfully dealt with its own banking crisis in the late 1990s). In the end, however, Aso passed up the opportunity to host the third G-20 meeting, fearing that Japan would have to shoulder too much responsibility for establishing a new international financial order.

On trade, Japan can't lead because it is neither a mega-market nor an engine of growth for the world economy. Its defensive position on agricultural liberalization blocks any chance of its mediating the middle ground at the World Trade Organization (WTO). Domestic protection of services and agriculture also preclude Japan from fully embracing free trade agreements, leaving it behind the game in a race toward deepening global market integration.

On the environment and climate change, Japan can't lead because it lacks a public policy and business response that embraces mandatory cuts in greenhouse gas emissions. Japan's much-vaunted energy efficiency and proposals for a post-Kyoto Protocol framework belie a reality of increasing energy consumption, rising emissions, and over-reliance on technological fixes as a way of dealing with climate change.

On human rights, Japan can't lead because of long years of reticence on human rights issues in international politics. Although Japan pledged to use its aid power to promote democracy and human rights in recipient states, its actions were inconsistent, at best, and token efforts, at worst. Further, in Japan the state remains paramount--individuals are viewed primarily as members of the collective, with such values as "public order" and "individual responsibility to society" taking precedence over individual rights. In the clash between the state and the individual, the...

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