Remarks to the IISS GSR Conference
Yukio Okamoto
September 13, 2009
Geneva
We have only lived through the first decade of this century.
But the structural change in Asia has been spectacular, particularly in China and India. Ten years ago, the GDPs of China and India combined made up 21% of the GDP of total Asia. At that time Japan was an overwhelming economic power in the region having close to 60% of Asia’s total GDP. Until the late 1990s, Japan was the world’s largest donor of ODA. It was the largest investor in Southeast Asia.
All these figures were translated into the political influence of Japan in Asia.
The situation has changed at great speed. Today, after less than a decade, China and India combined doubled its share to 40.7% of total Asia, and the Japanese share shrunk to 35.4%.
It is even possible that the GDP of China will likely surpass that of Japan next year. In two decades or so, India will also surpass Japan. With the huge population of these two countries, their surpassing Japan in terms of GDP is a natural course of development. Nevertheless, the speed of this process is so amazing.
While the speed at which China and India are growing, the question has been why has why has Japan showed almost no economic progress?
One of the main reasons is the low level of private consumption. Statistics indicate a fact that should startle you. If one considers the national net personal financial assets, that is to say personal financial assets after subtracting personal debt like housing loans or automobile loans, 79% of total personal assets are owned by the people who are 60 years old or older, that is to say by non-consumers.
One hope for the Democratic Party of Japan, or the DPJ who will lead Japan is that their distribution policy can stir up the domestic demand.
On the other hand, the past 50 years of diplomatic policy under the conservative Liberal Democratic Party, or LDP, has functioned well. For Japan, it has been the acquisition of “foreign policy on the cheap.” With light rearmament and the Japan-U.S. Security Treaty, in 1953 , Japan could acquire peace and security at a low cost.
Next week Japan is switching to the government of DPJ for the first time in the last half a century.
As I went out to campaign on behalf of many Diet Member candidates, visiting many electoral districts, I can say with confidence that what happened was not the great victory of DPJ but it was the catastrophic loss of LDP.
Why did LDP lose so badly? It was partly because of the unpopular Prime Minister , but also because of the gradual erosion of the support base of LDP, after, ironically, the successful reforms of the Japanese economy by Prime Minister Jun’ichiro Koizumi which alienated the traditional support groups of LDP.
Is there a return of the LDP? LDP’s loss in the number of seats in the Diet is so devastating that it is unlikely for LDP to regain the Diet majority in the next election. My personal projection is that the DPJ will be in power for at least the next 8 next years.
What is clear from the survey conducted on the members of the DPJ, is that the party is pro-welfare, pro-redistribution and not so much for growth. The central axis of the DPJ is the weaker people. The largest supporting organization of the party, is the 6.8 million-member Trade Union Confederation “Rengo”. One worry is their not-so-friendly attitude towards business, which may lead to a rise in taxes upon large corporations. If pro-union, anti-big-business stance is to take place, this may even force Japanese corporations to move out of the country.
Another concern is the fiscal effect of flowery policy promises but I will not go into detail. In sum, there is a hope, but also an inherent risk of Japan’s economic stagnation to continue, at least during the incipient stage of the “change”, and that will not help the gradual fading of Japan’s political influence in Asia which seems to have started already .
What will be the foreign policy of the Hatoyama government?
One cannot deny that new administration will be somewhat indifferent toward the global economy, and will not be as cooperative to the US agenda as the former governments, and will try to draw closer to the countries of Asia.
DPJ’s inclination to insist that Japan must chart a course politically independent of the United States will thrill those in the United States who believe that for the national security, U.S. needs to have much closer relations with China. When Japan says that it must distance itself from United States, in the eyes of these people in Washington, there is no longer any reason to be restricted by the wishes of Japan.
The pace of change in Asia will most certainly accelerate. What is most desirable for the regional stability is that Japan, China and India establish a three-cornered structure of cooperation. What is not desirable is that China, India and Japan form a linear relationship and competing for influence and power. Japan will not have much chance if it engages with a zero-sum game with China.
While the attention of the world is turned to the Middle East, the security environment of the East Asia has been steadily changing. Unfortunately, the trend is to the direction of instability.
The DPRK has made a clear decision to become a recognized nuclear power. In order to become a full-fledged nuclear power, DPRK will likely repeat the tests as necessary. The reasons for the DPRK needing long-range ballistic missiles are obvious. Once it possesses missiles and warheads capable of reaching California, it will no longer need to go begging to the United States for security guarantees. Furthermore, in the future negotiations with the ROK over the unification, DPRK will feel it has the advantage. DPRK can also sell its missiles and technology for foreign currency.
Well, if a missile can reach California, that missile, if fired west-bound, can reach Central Europe. DPRK will be an undeniable nuclear nation.
In my very personal view, Japanese Government did not do a good job, but the United States may have been understating the threat. We have not seen a strong enough US commitment to eliminate the existing nuclear weapons of DPRK. The message to admit the nine countries including DPRK to possess nuclear weapons but to draw an absolute line of injunction, between the ninth and the tenth, namely Iran, does not pose a convincing ground.
We must continue the Six Party Talks but at the same time have to realize that DPRK will not change its position despite our best amicable approach. It is only when DPRK leaders realize that their strategy will not have the intended military effect that they will come to the real negotiating table. It is for this reason that Japan-U.S. joint missile defense system is essential.
In terms of nuclear missiles, the greater threat for Japan comes from China.
When U.S. President Bill Clinton visited China in 1998, the Chinese government declared that it would no longer have their missiles targeted on the United States. So once you have detargetted the U.S., are all the 180 missiles exclusively for Taiwan, or there is one more country targeted?
Since nuclear weapons are something never to be used, one might think that 99% of the nuclear threat is political.
However, for Japan, and this time for many countries in Southeast Asia, there is a much more realistic, definitely 100% threat posed by China: its aggressive blue-water strategy. It is already underway. According to the Territorial Seas Law of 1992, China declared that the South China Sea and the islands are its territorial waters and its territories.
The lines of islands that stretch from Japan’s southernmost main island of Kyushu, down to Okinawa, then Taiwan and the Philippines is referred to as “The First Island Chain.” According to the declared policies of the Chinese government, China considers the waters to the west of this line to be their sea with their Navy having the controlling power.
Chinese Navy’s important goal involves the waters beyond the First Island Chain. There is a second chain of islands, from Tokyo’s Izu Islands, to the Bonin, Saipan, Guam and the Marianas. Chinese goal is to possess a denial capability, that is to say, an ability to destroy U.S. Navy ships sailing in the waters between the First and Second Island Chains. It is a well known story that an admiral of the PLA Navy suggested to the U.S. counterpart that China and the U.S. split the Pacific west and east of Hawaii. This argument of “Pacific Condominium”, is it just a joke, or has deeper implications?
The national defense budget for Japan has been cut repeatedly by recent LDP government almost as if to say that regardless of the security environment the smaller the defense budget, the better it is . The defense budget and pocket book issues had been equated. This is a vastly different approach from countries with national defense strategy, such, for example, as Australia. Australia projects that by the year 2030 China will likely be in control of the Pacific and has decided to double the size of the Australian submarine fleet over 20-years.
DPJ has been advocating the concept of “collective security” as the means to guarantee Japan’s security. In Asia there are dramatic differences in between the countries in terms of government structure, political values and military strength. There is no realistic base on which to build “collective security” in Asia. There are of course common issues and problems in Asia to be solved through regional cooperation, but I have to frankly question if there is a common agenda with shared goals in Asia for which countries will have to yield and give up one’s interests in order to come to an overarching agreement.
However, if DPJ continues to pursue collective security, and as a result, the military alliance with the United States is weakened, then the stability of the Asia-Pacific region will become fragile because the most important goal of the Japan-US alliance is to preserve the status quo of the Far East. For the stability of the Pacific, there must be a framework of closer cooperation among the three maritime nations, Japan, Republic of Korea and Australia, in tandem with the respective alliance these countries have with the United States.
I have heretofore painted the outlook with somewhat gloomy image, but I would like to offer a message of hope as well.
The DPJ has a tradition of having friendly relations with China. And the party has more liberal ideological inclination. These thing mean that when they come to power next week, the chances of Japan confronting the issue of history will increase.
Japan cannot establish a long-lasting mutual trust with its neighbors without the thorough examination of its past and be ready to assume the blame in an honest manner. Moral judgments of what Japan did should not come from the Tokyo Tribunals. Japan has to carry out a self-examination. It has to look at the acts of invasion in China prior to the Pearl Harbor starting from Manchuria in 1931.
For the Republic of Korea, Japan must begin its self-examination even earlier, with the Annexation of Korea in 1910. Without such actions, no rapprochement with the neighbors is possible.
While the management of the Japan-U.S. relationship remains a source of concern, it is possible that a new horizon will open up for Japan’s relations with the countries of Asia.
If so, then the Japanese voters’ selection of a revolutionary change will result in a historical positive for Japan and the world.
