Global Affairs

Japan rises again

PM Abe seeks a global partnership that defends the current order as China strengthens

LONDON • The past month has been kind to Japan. The nation has just hosted the Group of 7 (G-7) summit of leading industrialised states, a timely reminder of the country's membership in what is touted as the world's most exclusive political club.

Mr Barack Obama also became the first US president to visit the memorial to the nuclear bombing of Hiroshima, not in itself an act of repentance or reconciliation but certainly one of a historic reassessment, an acknowledgment that alongside the tens of millions murdered during Japan's wars of aggression, millions of ordinary Japanese also perished, often in horrifically inhumane circumstances. That is a reassessment which previous generations of Japanese politicians sought, and one which Prime Minister Shinzo Abe has now achieved.

To add to the good news, latest statistics indicate that the Japanese economy grew during the first quarter of this year. And better still, the country's birth-rate figures are also up and currently stand at their highest level in two decades.

Of course, such good news remains at best inconclusive: Japan's economy is still sluggish and its population is still ageing. Nevertheless, they are a reminder that Japan should not be written off, for it is both able and capable of addressing its problems. It is also a country which remains vital for Asian and global security. In short, Japan is hardly yesterday's story.

The country which once inspired fear and was confidently predicted to overtake the United States as the world's biggest economy has recorded over the past 25 years an average gross domestic product growth rate of only 1.3 per cent a year, roughly half that registered by the US over the same period. "Stagnation" and "slump" are the terms now most associated with Japan's economy.

Its population projections are grimmer still. The Japanese National Institute of Population and Social Security Research predicts that by the end of the current century, the country's population would decline from its present 127 million to around 50 million. By 2350, claims the institute, there would be only one million Japanese, and by the year 3000, precisely 62 people would inhabit the Land of the Rising Sun.


Unsurprisingly, the image of Japan as a helpless giant in terminal decline has now taken hold worldwide. And for many of its own politicians and civil servants, simply managing this decline became the key objective. Such Japanese leaders rejected the radical reforms which Japan needed not because they disagreed with commonly prescribed cures, but because they did not believe in their nation's ability to tolerate change. Some even went as far as justifying the do-nothing approach as a virtue in itself: "Deflation has been, to some extent, a price that Japanese society has paid to secure maximum employment," intoned Mr Masaki Shirakawa, the then governor of the Bank of Japan, a few years ago.

The Abe administration seeks to put an end to this aimless drift. A great wave of scepticism greeted the onset of "Abenomics". And some of it remains justified. The hard work of structural reform, which Mr Abe himself admitted is essential, has barely begun. Nor is it very obvious that a Japanese bureaucracy accustomed to mediating between interest groups rather than taking them head-on is able to inflict the pain required by radical change. And despite the fiscal stimulus and monetary easing, there are no signs that the Japanese economy is galloping.

But it is also a fact that Mr Abe's economics critics were not proven right either. Before being forced into early retirement, bank governor Masaki Shirakawa warned that Mr Abe's policies risked a catastrophic loss of credibility in government policy and a sharp increase in interest rates on Japanese bonds. But precisely the opposite has happened: Japanese bonds now attract negative interest rates, which means that investors are willing to pay the Tokyo government for the privilege of lending it money.

It's also worth recalling that the story of Japan's decline has always been exaggerated. As anyone who has been to the country would testify, its transport infrastructure is second to none, the nation remains in love with high-tech innovations, its unemployment is very low, its streets are spotless and crime-free, its labour force remains educated and disciplined, and its governance standards are among the highest in the world. Furthermore, when adjusted for population decline, Japan's average annual growth rate over the past quarter of a century stands at around 1.6 per cent, broadly on a par with that of Germany, hardly a stellar performance, but not that bad either.

Nor should Japan's dire birth-rate projections be taken too seriously, for just about the only predictable element in any analysis of population growth is that it turns out to be wrong. Few predicted the baby boom after World War II, or the population decline in industrialised nations from the 1980s onwards. So, it's quite possible that the statisticians will be proven wrong in Japan now; the sudden rise in the number of women aged 40 and above who are now becoming mothers in Japan is precisely such a surprise.

Besides, Mr Abe's refusal to accept decline as his country's "natural" destiny is a revolution in itself, and one which continues to enjoy an unprecedented level of electoral popularity. Mr Abe is guaranteed to win elections for Japan's upper parliamentary house next month; the only question is whether he will get the two-thirds majority required for the constitutional changes he has in the offing. He is also determined to amend his ruling party procedures, so that he could remain in power until the Tokyo Olympics in 2020.

Outsiders who know little of Japan are tempted to ascribe Mr Abe's enduring popularity to his nationalist stances. But that's nonsense for, if anything, his robust assertion of his country's global interests is an electoral hindrance at home, rather than an asset. But Tokyo feels it is obliged to reassert itself on the global stage and, far from generating new dangers, this should be regarded as one of the key potential sources of stability in Asia.

Although they wouldn't say so publicly, Mr Abe and his closest advisers have now accepted that Japan has no chance of regaining its position as Asia's top power; for the first time since the Meiji Restoration of the mid-19th century, Japan has to contend with an inferior position to China.

Yet having started his rule by putting forward a rather crude model for a security structure designed to contain China, Mr Abe has now evolved a more sophisticated approach, one which seeks to present China's rise as not only an Asian problem, but also a global matter, and one which requires the support of all of Japan's international partners.

Tokyo feels it is obliged to reassert itself on the global stage and, far from generating new dangers, this should be regarded as one of the key potential sources of stability in Asia.

Behind the scenes of the latest G-7 summit, Mr Abe told his colleagues that Russia and China should be seen as part of a broader challenge to the existing global international order; both need to be engaged, but at the same time both need to be rebuffed when their behaviour contradicts established international legal procedures. Tokyo's gambit is clear: If the Europeans want support in dealing with an expansionist Russia, Japan should expect support in dealing with an assertive China, while the US is central to paying attention to both. Mr Abe is aiming high, for a global partnership in defending the current global order.

It's too early to tell whether Mr Abe's gambit will succeed; much will depend on not only the results of the forthcoming US elections, but also China's future behaviour. However, the subtle recasting of Japan's international behaviour by moving away from a singular obsession on containing China to the broader concept of defending international order is certainly shrewd.

And it certainly confirms the conclusions of Professor Evelyn Goh from the Australian National University, who years ago pointed out that, far from being a disruptive force in Asia, "Japan provides a crucial public good for regional security" not only through its military alliance with the United States, but also in "socialising China" by making it clear that Beijing can assume its rightful place as a great power only "in exchange for constraints on its exercise of that power".

That's not the policy of a country which remains history's prisoner but, rather, of a Japan which accepts that it has to reinvent itself, and which may yet surprise us with its revival.

A version of this article appeared in the print edition of The Straits Times on May 30, 2016, with the headline 'Japan rises again'. Print Edition | Subscribe