GISPRI No. 15, 1997

"Japan in the 2lst Century
- Flourish or Fade ? "

Global Industrial and Social Progress Research Institute (GISPRI) and Yomiuri Shimbun CO2, held an international symposium "Japan In the 2Ist Century - Flourish or Fade ? -" on 30 September, 1996 (Monday) at Keidanren Hall, under co-sponsorship of U.S.-Japan Foundation. This symposium was to present the reports on the Japan Vision Programme conducted for the past 3 years by GISPRI. The programme of the symposium and summary of presentation were as follows: Further details were reported on the Yomiuri Shimbun on their article of 3 October 1996.

PROGRAMME 10:30-10:45 Opening remarks :
Mr. Shinji Fukukawa, the Senior Adviser to the Global Industrial and Social Progress Research Institute

10:45-11:00 Special Lecture :
Amb. Julia Chang Bloch, the President of U.S.-Japan Foundation

11:00-12:30 First Session
"Japan's diplomatic reform"
Chairman :
Amb. Kazuo Chiba, former Ambassador to U.K.
Presenter :
Prof. Shinichi Kitaoka, Rikkyo University
Panelists :
Amb. Hisahiko Okazaki, former Ambassador to Thailand
Prof. Heizo Takenaka, Keio University
Amb. Julia Chang Bloch, the President of U.S.-Japan Foundation
Hon. Charles Hamfrey, Minister, British Embassy, Tokyo

13:30-15:00 Second Session
"Scenario of Japanese security policy and its reformation"
Chairman :
Mr. Shinji Fukukawa, the Senior Adviser to the Global Industrial and Social Progress Research Institute
Presenter :
Prof. Terumasa Nakanishi, Kyoto University
Panelists :
Dr. John D. Steinbruner, Director, the Brookings Institution
Amb. Kim Tae Zhee, Ambassador Extraordinary and Plenipotentiary to Japan
Prof. Tadashi Nishihara, National Defense Academy Mr. Mutsuyoshi Nishimura, Deputy Director General, Foreign Policy Bureau, Ministry of Foreign Affairs

15:15-16:45 Third Session
"Japan's long term strategy - Flourish or Fade?"
Chairman :
Mr. Mitsuo Kono, Director, Global Industrial and Social Progress Research Institute
Presenter :
Prof. Haruo Shimada, Keio University
Panelists :
Prof. Kent E. Calder, Princeton University
Mr. Yoshihiro Suzuki, Senior Executive President, NEC Co.
Mr, Tomio Tsutsumi, Former Administrative Vice Minister, Ministry of International Trade and Industry
Mr. Isamu Miyazaki, Former Minister of State for Economic Planning Agency

1. Summary of remarks

by Ambassador Julia Chang Bloch,
President of United States-Japan Foundation

I am happy to represent the United States-Japan Foundation to participate in this seminar. Also, I am pleased that the United States-Japan Foundation has supported the timely and important Japan Vision Project which forms the basis of our discussion today.

In order for the U.S.-Japan relationship to endure and prosper into the, 2lst century, two countries need to reconsider and rebuild their ties so as to establish the relationship of further understandings and mutual cooperation. The fundamental issue for Japan is for Japanese people to face the tough questions about the. future of Its economy, the structure of its political system, and the role in the world. At the same time, the United States need to recognize the increasing multilateralism in political and economic powers of the world for post cold-war, and learn to share authority as well as responsibilities.

Today's overall relationship between U.S. and Japan is certainly positive. Yet there are flve areas where furthering of leadership and cooperation between two countries will make a difference in international community. Let me explain about them. First, as the world's largest and second largest economies, accounting for 40% of the total volume of world trade, U.S. and Japan have a special responsibility to take leading roles for the liberalization of global (free) trade and direct investments. Not only must they set an example through judicious management of their important bilateral trade relationships, but especially Japan, which has been a major beneficiary of GATT (General Agreement on Tariff and Trade), should demonstrate leadership by opening its market completely and promote deregulation. Japan also needs to promote inbound investment further, and to step up involvement in key international trade bodies such as WTO .

The second area is the cooperation and competltion with the dynamic Asia Pacific region. In the last 20 years, the Asia Pacific economies grew at an average 7% while the industrialized West stayed at annual growth rate of 2.5%, signifying a fundamental shift of economic power away from the West to the East. Only few Americans, however, understand this or even have interests upon this fact. Under this circumstance, Japan, as America's most important ally in Asia, can have a special role, if it will take it, to help define for the American people, what Asia means to the U.S. in the world of post-cold war, what are the mutual interests we share, and why the U.S. should continue to take active economic, political and security role in the region. Many prominent Japanese have talked about Japan's special role as a bridge between the East and West. In light of the historical factors that constrain Japanese action in the Asia region, Japan may want to work with the U.S., for example, within the frame-work of APEC, to build an Asia-Pacific community that can meet the challenges of the 2Ist century.

Thirdly, the U.S. and Japan should cooperate in their policies toward China. The interests of two countries have not always coincided toward China, nor, given geographic, historical and other factors, should we expect them to coincide in the future. But both countries have an overriding interest in cooperating to he]p China develop policies and practices that are in harmony with the accepted norms of international behavior.

The fourth area where the U.S. and Japan need to turn their attention is mutual security. For nearly five decades, the U.S.-Japan security alliance has been the foundation of the region's prosperity. With the post cold-war disappearance of the common enemy, the present arrangement must evolve into more effective, better understood, and accepted ties that will meet the need of both countries and Asia. To maintain the effectiveness of U.S.-Japan mutual security relationship, further strengthening of Japan's role is required, and at the same time, U,S. side needs to understand Japanese sensibilities and the domestic political climate in Japan as well as the concerns of other Asian nations.

The fifth and final area is the need for Japan to take larger global role. Japan' s experience during the post-war perlod has been that of a follower rather than a leader. Thus, for Japan to become a leader will require major changes in Japan's national mindset. Perhaps, the Japanese people are ready to consider a bigger inter-national role for their country. What is needed, however, is political leadership and vision in creating a new, more responsive relationship between the people, politics, and public policies.

With power comes inescapable challenges and responsibilities. Is Japan ready to embrace a global role more commensurate with its economic stature and shoulder a bigger share of the leadership and world's diplomatic policy burdens of the 21st century as a world leader'? Only the Japanese people can answer this question. Not only Japan's future depends on the response to this questions, but also the United States, Asia and many other countries have a significant stake in how Japan responds.

2. Future Course of Japan's diplomacy

Prof. Shinichi Kitaoka
Rikkyo University

One individual who set the course of Japan's post-war diplomacy was Shigeru Yoshida. In his efforts to ensure Japan's national security while realizing swift recovery in post-war Japan, he sought to build closer relationship with the U.S. At the same time, he tried to contain military burden to the minimum for a time being, in consideration of the world politics and Japan's limited economic resources of that time.

It was certainly a wise decision. Its impact, however, entailed too much and too long that what he originally intended as a pragmatic choice of the moment became a dogma. Despite the Yoshida's intention, Japan hardly have contributed any role in the security of international community even after it has become the economic superpower of the world. This is not benefitting for the maintenance of international order in the world of post cold-war.

In today's world, there is scarcely any possibility of military advancement initiated by wealthy and liberalized countries, since they can have most of what they want non-militarily with no need to employ exceedingly costly military actions. Rather, there may be some countries among those less developed and less democratized that may find - or believe to find - advantages in military actions. Today's advancement in weaponry technology has enabled even the least developed country to own highly advanced military power. For preventing the armament of such countries, it is necessary to develop international coordination among industrialized countries. In this sense, Japan has not ful-filled the responsibility and capability required in the International community.

Concerning the East Asia region, the countries with potentials to provoke disorder from militaristic disturbance are, In short term, North Korea, and, in mid- to long-term, China. China's ambitions and goals are not likely to bring danger by themselves, but there is a risk of their economic growth to make political sys-tem unstable. This may open the possibility of their military expansron.

To discourage such actions, the Japan-U.S. Security Treaty sys-tem should be maintained firmly. But this is no longer simple or easy. It Is necessary to lessen the unproportionate burden of Okinawa by reducing the numbers of U.S. bases located there, while the mutuality of the treaty system should be increased by the installment of nation-wide cooperative system to respond military emergency.

The above argument does not imply any attempt to contain China, rather it is to create a situation in which China finds difficulty in pursuing military expansion. At the same time, we need to build an international security framework that embraces China.

Japan's role in the region is not only to maintain order in the East Asia. As the second largest economic power of the world and as a member of Asian nations, Japan possesses high potential to help binding the United State which has the world' s largest economy and is the strongest military power, and Asian nations which have enormous potential for future. In this view, I intend to make several proposals in future.

3. Japan's security in the post-cold war world

Prof. Terumasa Nakanishi
Kyoto University

Today, the review in the national security policy of Japan is called for in search of Japan's options for future. Although Japanese people's vlewpoints on this Issue is still divided ever since the end of World War Second, the major context of the book of our history seems to urging us to make a new choice. First, there is the "end of cold war." The consequential change in the world's political structure is questioning us whether the traditional national security policy of Japan will be allowed to continue.

The second historic context is the "end of post-war period" in the course of Japanese society. Spawn from the generational shift, the changes in Japan's views on constitution and national security policy may have a significance in determining the future of its national security policy.

Thirdly, there is the establishment of Japan as an economic superpower. Its responsibility as a world's economic super-power certainly demand a change in its national security policy.

All these historical trends surfaced from the end of 1980's till the early part of 1990's. Combined with the fourth trend of "rise of Asia", these trends begin to add the historical significance on Japan's selection of national security policy.

On the other hand, there is a rise of greater uncertainties in view of the national securities, today. For example, will the world order In post-cold war revolve around the United Nations, or may it really bring the large flow of "conflict of cultures"" This should influence Japan's selection for national security policy. Another issue that will exert greater implication Is the view of current and future strategic environment in the neighboring East Asian region

Presently, we find concurrent trends of (1) collapse of cold war structure, (2) growth of regional cooperation system, and (3) rise of new national conflicts, in East Asia. Which of these trends will become dominant is remained to be seen. Despite the rising possibility of major shift in Japan's national security policy, its actual course of systematization is not clarified yet. A vital point in riding through this transitional phase will be to prepare for the historical selection in view of the large trend of changes, while being ready to respond to any factors of instabllity awaiting us today.

Current major issues of Japan' s national security policies including the policy to address potential instability in Asia are ( 1) further development of security cooperation between Japan and USA, (2) streamlining Japan's security policy organization, mainly in communication and information exchange fields, (3) addressing the wider security issues including energy, environment, food supply, etc., and other issues. More attentions should be paid to the importance of item (2).

4. Flourish or fade - Iong term economic strategy of Japan

Prof. Haruo Shimada
Keio University

After the end of cold war, the world politics that lost the axil of conflicts in ideologies entered an era of turmoil. Japan was no exception, and have had a series of political confusions.

This may, of course, be a price the democratic societies must pay to raise a new axil of a new era. However, the price was not cheap. As many vital policies and measures were put off, the remaining debts may become too big to be resolved in future.

Now, Japan faces a key turning point in its long history. It must make an important decision on the selection of its future course. What are the options? What kind of consequences will it bring? I would like to discuss these focusing on three sectors.

First one is the economic structure. With the existence of considerable price differences between domestic and International market, the investment capitals of Japan continue to flee the country, which may end up in a true hollowing of Japanese economy. It will not be too long before Japan becomes the nation of twin deficits in national budget and trade balance, that will lead to the economic decline with weaker Yen, inflation, unemployment, and real wage decrease. In longer prospect, also, it iss evident that there will be extensive aging of population, decreased rate of savings, and reduction in labor force. How extensive the implementation of administrative restructuring, deregulation, and revitalization will determine the future of Japan.

The second issue is the redistribution systems such as taxes and social welfare. The rapid aging of population will inevitably inflate the social cost needed for annuities. medical services, and home cares, etc. The problem is how to economize the cost of such social services without raising anxieties among population or sacrificing qualities of services, and how to redesign and restructure taxation and employment system for motivating workers.

Third is the problem of international relationship and national security. It is a must for aging and maturing society of Japan to win the trust and confidence of international community while securing the national security. Japan needs to actively contribute for addressing global common problems, and to earn national and international understandings in establishing clear national security strategies based on Japan-USA Security Treaty.

The next general election is a step to determine Japan's future course. The result will indicate how much Japanese people have learned or have not learned from the political confusion of past years.