Observing Japan

Waiting for trickle down

noreply@blogger.com (Tobias Samuel Harris) — Wed, 19 Jun 2013 17:38:00 +0000

Another day, another round of statistics to parse in an attempt to determine whether or not Abenomics is working. The latest are Japan's trade figures, which found that Japanese exports in May yielded 10% more than in May 2012, although the volume of exports fell for the twelfth straight month. The spike in export earnings, however, was matched by a $10 billion trade deficit for May.

What does this all mean for the average Japanese household? Unfortunately, for now, it seems not much.

As Jonathan Soble concludes in the Financial Times:

The prime minister is counting on exporters to divert at least part of their expanded earnings to wage increases and investment in factories and equipment.

But the continued decline in the physical volume of exports has given companies little reason to bulk up their domestic operations, since they do not need new factories if they are exporting fewer goods, even if those goods are earning more yen.

Thus far, Japanese corporations are still hoarding their profits, holding record amounts of liquid assets according to a Bloomberg report by Toru Fujioka and Mio Coxon. Hence the periodic exhortations by Abe and other government officials encouraging companies to invest more and pay more.

The flip side of higher-than-expected export earnings is higher costs for domestic producers and households dependent upon imported energy, raw materials, and foodstuffs, as Bloomberg's Jacob Adelman and Ichiro Suzuki reported recently. The Finance Ministry's trade report for May (jp) shows just what Japanese are paying more to import. May's 10% increase in the value of exports was matched by a 10% increase in the value of imports. The report breaks down both figures by the contribution of different categories of product to the total figure. In May, Japanese importers paid:

12.3% more for foodstuffs than in May 2012 (including 37.2% more for grains).
20% more for raw materials including timber (59% more), non-ferrous metal ores, iron ore, and soybeans (38.7%).
2.7% more for fuels, although that may reflect the fact that imports of coal, liquified natural gas, and liquefied petroleum all dropped by significant margins, and despite importing 9.8% less LNG than in May 2012, Japan paid 8.2% more for what it imported. Japan also spent 6.4% more on crude oil imports even though it only imported .7% more.
8.7% more for chemical products.
6.7% more for intermediary goods like steel and other metal products.
10.7% more for general machinery.
23.7% more for electronics and electrical equipment, including 35.6% more for semiconductors and 58.6% more for communications devices.
14.3% more for transportation equipment.
12.2% more for miscellaneous products, including scientific instruments, clothes, furniture, and the like.

Of the 10% increase in the cost of imports, MOF's report suggests that at least 40% comes from costlier food, raw materials, and intermediate goods like steel, and fuel. If we assume that "communications devices" refers mostly to mobile phones and other personal electronics, consumer goods may account for 25% of the increase in import costs, with the remaining third going largely to capital equipment. Although we won't know for sure until we see the May industrial production data, it does seem that Japanese producers are paying more for imported inputs but not producing or exporting more goods. And if imported inputs cost more, it seems unlikely that Japanese producers will at the same time pay their workers more. In particular, if small producers find their production costs rise without a corresponding increase in profits, it is hard to see how their workers and therefore Japan's consumers will benefit from a weaker yen.

Because, after all, the firms that employ the majority of Japanese workers earn less from exports than the large corporations. According to the government's 2012 economic census (jp) roughly 50% of workers are employed by companies employing fewer than thirty people, and 70% of workers are employed by companies employing fewer than 100 people. Only 15% of the workforce are employed by the large corporations that benefit most from the weaker yen. According to data provided (jp) by the Small- and Medium-Sized Enterprises Agency at the Ministry of Economy, Trade, and Industry (METI), in 2012, those large corporations earned just shy of 40% of export earnings, compared to the 15% earned by small- and medium-sized enterprises (SMEs) employing fewer than 300 workers. The remainder and largest share went to corporations composed of small and large firms.

Not only are Japanese workers unlikely to reap the benefits of greater earnings from exports, but they are in all likelihood paying more for food, since, after all, Japan only produces around 40% of its food supply, and is almost completely dependent on imports for wheat and beans (hence the sharp increase in outlays for grain and soybean imports). Perhaps the Japanese diet will change over time to include more foods in which Japan is relatively self-sufficient — especially rice — but in the meantime, Japan's low rate of self-sufficiency in food production will not just contribute to trade deficits but, more importantly, will pinch household finances.

In short, the latest trade data confirms what the latest public opinion data suggests, namely that most Japanese have not personally experienced the Abe recovery. Until the big companies invest more, employ more, and pay more, Abenomics cannot be said to be working for the average Japanese household, whatever the headline figures say.

How long will the Japanese people support Abe (and Abenomics)?

noreply@blogger.com (Tobias Samuel Harris) — Fri, 14 Jun 2013 22:12:00 +0000

The most remarkable contrast between Abe Shinzō's tumultuous first term as prime minister in 2006-2007 and his current term is the degree to which Abe has been able to rely on significant public support. By this time in his first government — approximately five-and-a-half months after his inauguration — Abe's disapproval rating had surpassed his approval rating and would remain that way en route to defeat in the upper house election in July and resignation in September.

This time around his support has remained buoyant: in the latest round of poll his approval rating is 67% in Yomiuri (jp), 62% in NHK (jp), and 59% in Asahi (jp). The reason for Abe's popularity is apparent. The Japanese public has embraced Abenomics.

As the data from Asahi's monthly polls shows, Abe's popularity overwhelmingly rests on the popularity of his policy program. The Japanese people did not suddenly fall in love with Abe or the LDP in December 2012, but rather responded with enthusiasm when presented with a government that appeared to be serious about overcoming Japan's prolonged economic stagnation. Arguably, Abe has also benefited from lowered expectations, thanks to the poor performance of his DPJ and LDP predecessors, who struggled both to articulate and to execute policies to revitalize and reform Japan's economy. Support for Abe and Abenomics seems to be based less on calculations about the virtues of the "three arrows" when it comes to improving economic conditions and making life better for Japanese households than a kind of naive optimism that the government is working. As Asahi's monthly poll has shown, respondents have wavered when it comes to their belief that Abenomics will result in higher wages and more hiring.

Simply put, the Japanese public seems willing to give Abe the benefit of the doubt.

It bears asking, however, how patient the Japanese people will be. Asahi's June poll contained some hints that the public is beginning to lose faith in Abe's program. When asked whether they believed that Abe's economic policies "hold promise for growth in the Japanese economy," only 51% of respondents said they did, which, while still a majority, is the lowest number since January, when the Japanese people were still figuring out what the Abe government planned to do. In the same poll, when asked whether they've personally felt economic recovery since the outset of the Abe cabinet, only 18% said they had, as opposed to 78% who said they had not. Obviously a sizable portion of the latter are still optimistic that Abenomics will result in recovery, but there does seem to be growing doubts about the efficacy of the Abe government's policies.

The next month may be particularly challenging for Abe. Abe and the LDP are kicking off campaigns for Tokyo assembly elections and next month's upper house elections in the wake of volatile market activity that has raised questions about the efficacy of Abe's policies. But more importantly, during the campaign the Japanese public will probably hear more criticism of Abenomics than during the first six months of the second Abe government. The DPJ may be unable to prevent the LDP from winning a majority in the upper house, but if they hammer Abenomics every day, across the country from now until the election they may sow more doubt among the Japanese people, which, if combined with more market volatility, could seriously undermine Abe's public support. Abe could win the election and still see his approval rating erode. For this reason, perhaps the LDP is right to be worried, as this Asahi article (jp) suggests some members are. Because as Abe's support erodes, the likelihood of intra-LDP turmoil and jockeying for position by potential rivals increases, which could force Abe to change course in the fall as he tries to get pieces of his growth strategy through the Diet.

Everything, in short, depends on retaining strong public support, which in turn depends on Abe's policies delivering tangible results. And if tangible results aren't possible, as some skeptics suggest? Then the Abe government may be shorter lived than seems possible now.

The US and the history wars in Asia

noreply@blogger.com (Tobias Samuel Harris) — Fri, 14 Jun 2013 14:10:00 +0000

Jeffrey Bader, former senior director for Asia at the National Security Council earlier in the Obama administration, has drawn attention for remarks criticizing comments made by Abe Shinzō and other Japanese leaders about Japan's wartime past. As Kyodo reports:

Bader...also warned the U.S. government could be more "vocal" if Japan reviewed past statements in which the government formally apologized for wartime aggressions in other Asian countries.

Bader's statement provides an interesting contrast to more enthusiastic accounts of US-Japan cooperation under the second Abe administration.

On the one hand, the US-Japan alliance will not be fundamentally undermined by Abe and other senior LDP politicians' questioning past apologies for Japan's wartime behavior. US-Japan security cooperation is too important regionally and too institutionalized to be much affected by impolitic statements. The US military and the Japanese Self-Defense Forces will continue to train together no matter what Japanese politicians say.

On the other hand, the US-Japan alliance is not the only US relationship in East Asia and if other allies, say, South Korea, voice their disapproval about Japan's leaders directly to the US president, the US cannot be indifferent. (Japanese right wingers say the US cannot be indifferent because of the influence of Asian-American interest groups, but I don't think it's necessary to cite the nefarious influence of lobbying groups to explain why the US might have a problem with tension between its two major allies in Northeast Asia.)

So what can the US do about the "history wars" in East Asia? Is being more vocal the answer? Ideally, the first step to US involvement would be to establish just what kind of comments or behavior would draw reproach from senior US officials. Would Abe's remarks about whether Japan "invaded" its neighbors qualify? Or the US only step in when the Japanese government undermines official apologies? Would visits to Yasukuni by the prime minister or cabinet ministers draw rebuke? What about statements like Osaka Mayor Hashimoto Tōru's comments about comfort women? Would Hashimoto be criticized even though he is not a national official?

Second, would the US response be limited to rhetoric action, or would it be matched by symbolic gestures? Would the US administration withhold state dinners or invitations to Camp David?

However, the more one thinks about Bader's suggestion and its implications, the more it seems that the US is already fairly vocal about Japanese prevarication about history. In recent years there is no shortage of examples of legislators and administration officials criticizing the words and actions of Japanese leaders. As Dennis Halpin writes (pdf) in a note on President Park's address to a joint session of Congress last month, when an address by Koizumi Junichirō to a joint session was being mooted during Koizumi's valedictory trip to the US in 2006, the late Congressman Henry Hyde wrote to Speaker of the House Dennis Hastert, saying that to have Koizumi, a regular visitor to Yasukuni Shrine, speak in Congress would "an affront to the generation that remembers Pearl Harbor and dishonor the place where President Roosevelt made his 'Date of Infamy' speech." Of course, the House of Representatives also rebuked Japan in 2007 when it passed House Resolution 121, calling on Japan to "formally acknowledge, apologize, and accept historical responsibility in a clear and unequivocal manner" for the wartime "comfort women." The executive branch has done its part as well. For example, during Abe's visit to Washington earlier this year, Danny Russel, Bader's successor at the NSC, called for Japan to do more to encourage historical reconciliation.

A more interesting question, then, is what effect US intervention has had thus far on Japanese leaders. I think one can make the case that statements by US officials have at least helped blunt talk of revising or replacing the Kōno statement on the comfort women and the Murayama apology for the war. Perhaps it has also kept Abe from visiting Yasukuni while serving as prime minister. However, it is hard to imagine US intervention in the history wars achieving more than it already has. It is unlikely that US intervention will change what anyone thinks about history, and it may even result in more provocative statements by right-wing Japanese politicians and commentators outside government, the kind of Japanese conservatives who have found a political home in Hashimoto and Ishihara Shintarō's Japan Restoration Party. These conservatives, after all, already believe the US holds Japan in contempt — as Air Self-Defense Forces General-turned-talking-head Tamogami Toshio writes (jp) in his defense of Hashimoto — and so would perhaps even make a point of defying US criticism. To the extent that Japan's neighbors treat all provocations equally, more active US involvement in the history wars could exacerbate tensions.

Being "more vocal" may not, therefore, be without risks. There may not be much the US can do other than prevent Japanese leaders from changing the status quo in the history wars. Resolving the history issue may ultimately depend on the Japanese people themselves. As Stanford's Daniel Sneider argues in a new article in Asia-Pacific Review (discussed here), the revisionist narrative is by no means the dominant historical narrative in Japan. The only way for Japanese to change the incorrect image of Japan as a nation of revisionist warmongers is for Japanese speak up when their leaders try to rewrite history, as encouragingly happened after Hashimoto's remarks. To the extent that the US can encourage and praise Japanese behavior in pursuit of historical reconciliation, it might actually be able to do more good than if it were to step up its criticism of Japan's leaders. Of course, whether reconciliation happens will depend on the willingness of Japan's neighbors to acknowledge that most Japanese recognize the wrongs committed by their country and to come to see Japan's right wing as aberrant, not representative.

Japan the model?

noreply@blogger.com (Tobias Samuel Harris) — Mon, 10 Jun 2013 15:20:00 +0000

Joseph Stiglitz has a piece at the New York Times praising Abenomics as "a huge step in the right direction." At the same time, however, he also argues that Japan's malaise was never as bad as the popular narrative suggested. In fact, Japan, Stiglitz writes, should be viewed as a model for the United States as it struggles with its own sluggish economy and mounting inequality.

However, there are a few problems with Stiglitz's account of Japan's recent history and the extent to which it can serve as a model for the US.

First, Stiglitz uses static measurements of inequality in Japan and the US, both in terms of the Gini coefficient after taxes and redistribution and in terms of the average income of the top 10% of earners relative to the average income of the bottom 10% of earners. However, the OECD's data shows that while Japan is more equal than the US, it is significantly less equal than it was in the 1980s. The trend looks the same even if one looks at working age population instead of total population.

When one looks at Japan compared with countries other than the US or with the OECD average, Japan looks considerably less impressive. Here's Japan compared with the G7 countries in terms of its Gini coefficient after taxes and transfers:

Japan's performance is not quite as bad as the US and the UK, but it's not substantially better either.

In short, it's a bit puzzling for Stiglitz to praise Japan as a model for the US on equality grounds, especially since concerns over inequality have been strong over the past decade in Japanese politics.

That brings me to the second question I have about this article. Stiglitz wants to reexamine the "popular narrative" of Japan's stagnation but he doesn't indicate with whom exactly he is arguing. By now, the idea that in per-capita terms Japan's "lost decades" haven't been quite so gloomy seems to have at least made inroads in non-Western discourse about Japan. However, as noted above, arguably the Japanese people themselves still believe that the "lost decades" were in fact lost. How else can one explain the broad public support for the Abe government's economic program? Without a popular narrative of stagnation in Japan there is no Abenomics.

Third, Stiglitz is too quick to praise the Abe government for taking on structural reform. The "third arrow" of structural reform remains nothing more than rhetoric — and will continue to be nothing more than rhetoric at least until the fall's special session of the Diet. Given that Japanese governments have been seeking to promote the "structural transformation" of the Japanese economy since at least the 1980s and given the LDP's historical ambivalence towards structural reform, one has reason to be skeptical, at least for now.

So is Stiglitz right to present Japan as a model for the US to follow? Both in terms of Japan's past performance and the current performance of the Abe government there are reasons to refrain from putting Japan on a pedestal. Even if Japan's economy is not quite as bad as is sometimes argued, it is far from being a shining example of coping with stagnation. The quality of life for many Japanese has worsened, particularly for those living outside of Tokyo. Young Japanese still enter a workforce in which they have limited career opportunities if they fail to secure regular employment upon graduation. As Stiglitz himself acknowledges, poverty among the elderly is not inconsiderable. The US shares many of these problems, of course, but given how much Japan has struggled, not entirely successfully, to preserve the quality of life its citizens once enjoyed Japan is still more a cautionary tale than a model. For now, coming after years of halfway measures or inactivity by the Japanese government Abenomics is perhaps best described as a last-ditch effort to revitalize the Japanese economy rather than as a decisive program to overcome stagnation.

Is constitution revision actually possible?

noreply@blogger.com (Tobias Samuel Harris) — Wed, 29 May 2013 01:23:00 +0000

Last week, the Sankei Shimbun reported that, in the face of mounting public opposition, the LDP would in fact not put revising Article 96 of the constitution at the heart of its upper house campaign strategy. (Naturally, the next day Sankei published an editorial arguing that the LDP should make revising Article 96 central to the campaign as a matter of course.)

But is the LDP — and, more importantly, is Prime Minister Abe — actually backing away from their determination to use the upper house election to gain a mandate for revising Article 96? More importantly, does it matter?

At the very least, we're probably seeing the emergence of what will likely be a persistent pattern should Abe remain in power. Abe and his lieutenants will talk about the need to revise the constitution, Komeito will express its unease about revision, what's left of the left wing will sound the alarm, public opinion polls will reveal skepticism about revision, LDP grandees will suggest backing down...and rinse and repeat.

Barring a dramatic external shock, it is difficult to see how the politics of constitution revision will change in favor of revision. The bid to put revising Article 96 before more substantive revisions has done nothing to defuse opposition to revision. It seems unlikely that Komeito will become more enthusiastic about revision. Depending on the now-toxic Japan Ishin no kai to pass amendments is a non-starter, not least because it is unlikely they will win anywhere close to enough seats to help the LDP. Defending the constitution may be one of the few areas in which the Japanese left is still be able to mobilize citizens. It will presumably take some event that reveals the constitution to be woefully inadequate for coping with the challenges Japan faces — one of the arguments used by revisionists — for these political obstacles to vanish.

As long as Abe doesn't pay any political costs for stumping for revision, there's no reason to think he'll back down entirely, even if from time to time constitution revision takes a back seat to other issues. But no matter how much Abe talks about revision, for the foreseeable future I have a hard time seeing how it will ever get traction. There are just too many people either skeptical about or completely opposed to changing the postwar constitution. More importantly, Japan's conservatives are much better at preaching to (haranguing to?) the converted than winning new converts.

The power of positive thinking?

noreply@blogger.com (Tobias Samuel Harris) — Fri, 17 May 2013 19:23:00 +0000

Prime Minister Abe Shinzō Abe spoke with Jonathan Tepperman, managing editor of Foreign Affairs this month in an interview published under the heading "Japan Is Back."

The interview is fairly comprehensive, discussing Abenomics and Japan's economic problems, history issues, territorial disputes, the constitution, and security policy. Tepperman was not shy about confronting Abe, especially when it comes to Japan's imperial past.

The interview provides another glimpse at how foreign policy narratives coalesce. Reflecting on his first term as prime minister and discussing what he is doing differently this time, Abe said, "I have...started to use social media networks like Facebook. Oftentimes, the legacy media only partially quote what politicians say. This has prevented the public from understanding my true intentions. So I am now sending messages through Facebook and other networks directly to the public."

In other words, Abe is sensitive to the need to control the narrative at home and abroad. The narrative that Abe is trying to establish is that no problem is so daunting that Japan cannot overcome it. While he does not say that "Japan is back" in this interview, that was the title of the speech he gave at CSIS in Washington, DC in February. As in that speech, the challenge for Abe is to acknowledge that his country faces serious difficulties — how else could he justify his program? — but then to show that Japan is more than capable of overcoming them. As Abe says, "I know that the current situation is difficult, and the world economy will have ups and downs. But that is the mandate I was given, and we are elbowing our way through."

Of course, in propagating this narrative, Abe has help from the "legacy media" around the world. For example, the cover of The Economist this week features a soaring Abe — garbed in Superman's tights — flanked by fighter jets.

Abe is determined to project an air of inevitability about his policies. Of course, in monetary policy, projecting an air of certainty may signal the credibility of the Bank of Japan's commitment to a higher rate of inflation, so perhaps there's something to Abe's positive thinking. As The Economist writes in its briefing, "Promoters of Abenomics say that changing perceptions will create a virtuous circle. Bigger company profits will engender wage rises, which will boost consumption, which will lead to renewed business investment, which will lead to profits."

But one must be sensitive to the fact that this is all an exercise in narrative formation. Though Abe has promised to "elbow through," he has not in fact done so yet. As Michael Cucek shows, there are competing narratives even for the first quarter GDP figures that are being hailed as early indicators of the government's success. There are still blanks the government must fill in when it comes to its growth strategy. The demographic challenge continues to loom, and will not be elbowed through so easily, unless Abe is sitting on a plan for mass immigration. The point is not that there aren't encouraging signs or that Abe isn't in a favorable position to make progress, but rather that the "Japan is back" narrative requires minimizing or ignoring the challenges.

There is a bigger question of what exactly it means that Japan is "back." Will it be more assertive diplomatically or militarily? Will it spend more on its military? Will it remove the remaining restraints on its use of force at home and abroad? Abe gave some hints in his CSIS speech — "A rules-promoter, a commons' guardian, and an effective ally and partner to the U.S. and other democracies, MUST Japan be" — but it is still unclear what Abe's restored Japan would do differently, especially given that the Obama administration, "pivot" notwithstanding, has been exceedingly cautious in Asia. In other words, no matter how successful Abe's economic program, Japan will still be hemmed in by an ally that seems primarily interested in regional stability, by neighbors that distrust an assertive Japan, and not least by the Japanese public, which is not entirely keen on lifting all restraints on Japanese security policy.

These concerns, taken together with lingering questions about Japan's economy and whether Abenomics can produce sustainable growth, suggest caution is still in order.

Cognitive biases and the rise of China

noreply@blogger.com (Tobias Samuel Harris) — Thu, 16 May 2013 19:30:00 +0000

Harvard's Alastair Iain Johnston has a must-read article in the Spring issue of International Security in which he dissects the spread of a meme of China's "new assertiveness" spread among policy analysts, the media, and scholars in the US in 2010. (Available for free as a pdf, at least for the time being.)

As Paul Pillar notes, Johnston not only raises questions about whether China's foreign policy has become more assertive since the 2008-2009 financial crisis, citing numerous examples of continuity, but he provides an important examination of how foreign-policy narratives form in the twenty-first century. By using memetics — the process by which an idea or belief spreads from mind to mind — Johnston provides a new way of thinking about how conventional wisdom forms. As Johnston notes, the media has played an agenda-setting role before, but with the emergence of the blog and the rise of Twitter as a medium for the exchange of serious ideas, foreign-policy discourse, especially in the US, seems qualitatively and quantitatively different, not just moving faster but also occurring in much greater volume than ever before.

After all, not too long ago to receive the latest conventional wisdom on foreign policy you had to wait for the latest issue of, say, Foreign Affairs to arrive in the mail, with a steady diet of newspaper op-eds and weekly magazine articles to tide you over. Now in the time between issues of Foreign Affairs you can read daily the fifteen blogs at the website of the Council on Foreign Relations (which publishes Foreign Affairs), not to mention the fifteen blogs at Foreign Policy's website and numerous other blogs hosted by think-tanks and publications, and the Twitter feeds of the contributors to these blogs and magazines. This all amounts to what Johnston calls a "discursive tidal wave."

Johnston talks about first-mover advantages and herding when it comes to the formation of prevailing narratives in foreign-policy discourse, but there is another, related problem Johnston doesn't explicitly mention but more or less illustrates in his essay. Namely, with so much data streaming past our eyes, the dangers from the cognitive biases are surely heightened. As Daniel Kahneman writes in Thinking, Fast and Slow, the human mind is "a machine for jumping to conclusions." Presumably the more information analysts must sift through, the more they're likely to fall victim to confirmation biases, the halo effect, the availability heuristic, and other mental shortcuts that can lead to erroneous conclusions. Human beings did not need to invent the Internet to struggle with these biases — and one can easily argue that policymakers have always fallen prey to them — but the Internet is uniquely suited to encourage Kahneman's "fast thinking" (intuitive thinking in the face of uncertainty).

Johnston's article, then, is a note of caution to be sensitive to how foreign-policy narratives form today, a warning to analysts to not take shortcuts but instead to use careful scientific reasoning before reaching conclusions and, in the case of China, to be sensitive to history, to avoid making inferences from a small sample size, and to be clear about what they think is driving China's behavior. There probably isn't much that can be done about the state of foreign-policy discourse today, but one can hope that the high-speed, high-volume discourse is at least more amenable to self-correction than the older discourse.

(For other comments on this essay see Daniel Drezner and Graham Webster. Drezner's comment that Johnston falls victim to ahistoricism himself is probably right — I would have liked to see a bit more discussion of how conventional wisdom formed in US foreign policy in the past, beyond a handful of references to media studies articles on the media's role as agenda setter.)

Don't declare victory for Abenomics yet

noreply@blogger.com (Tobias Samuel Harris) — Sat, 11 May 2013 21:35:00 +0000

With the yen's falling to below ¥100/$1 for the first time since 2009 and the Nikkei’s posting five-year highs, analysts have begun declaring victory for the Abe administration’s campaign against deflation and slow growth. Paul Krugman, the intellectual godfather of Abenomics, has not quite begun his victory dance yet, but he is optimistic that under President Kuroda Haruhiko the Bank of Japan has credibly signaled that it will continue monetary expansion until it reaches its 2% inflation target.

But it is far too early to draw conclusions about the success of Abenomics — given that deflation continues — and there remain a number of unanswered questions surrounding the Abe government’s economic program.

Ultimately, the success of an economic program must be measured not just in terms of corporate balance sheets, but also in the economic wellbeing of average citizens. If wages remain stagnant or if Japan experiences a jobless recovery, can Abenomics be declared a success? What will Abenomics mean for the Japanese worker? As a New York Times article by Hiroko Tabuchi and Graham Bowley suggests, it remains to be seen whether monetary stimulus will translate into wage hikes or higher employment — though the government is trying to encourage corporations to hire more workers and raise wages. It may also depend on whether the government is able to reverse the rise of Japan’s non-regular workforce, the short-term contract workers who enjoy few benefits, little to no job security, and virtually no opportunities for advancement. Non-regular workers comprise between a third and a half of the labor force, and as the government acknowledges, the non-regular sector constitutes a tremendous waste of human capital.

However, without a plan to overhaul the Japanese labor market, the danger exists that exhortations to raise wages will result in corporations’ raising wages for regular workers but maintaining or cutting low wages for non-regular workers, thereby deepening the inequality that exists between regular and non-regular workers. The Abe government and the LDP are not blind to this problem — last month, for example, LDP Vice President Komura Masahiko said (jp) that more had to be done to improve the status of non-regular workers and provide equal pay for equal work — but thus far it is not clear how the government plans to resolve it. (For more discussion of the problems in Japan's labor market, see here.)

The same goes for gender balance in the labor force. Noah Smith (a onetime guest blogger here) has identified how underutilized women are in the Japanese labor force, and expressed his hopes that the Abe government will act to increase female participation in the workforce. Abe has, to his credit, said the right things about gender equality.In his 19 April speech at the Japanese National Press Club (jp), Abe spoke of gender equality as not a social policy issue, but as a central piece of his growth strategy. The reality is, however, that we just don’t know what he will be able to do to change the role of women in the economy. Pretty much the only specific proposal Abe mentioned in his speech was the proposal to increase the number of women in corporate management positions, but that proposal affects a fairly small number of women. Abe is not the first politician to pledge to do something about gender inequality — for the past decade Japan has had a cabinet-level minister of state for gender equality — but we still don’t know what Abe will do to succeed where previous governments have failed.

Reforming the labor market is part of the so-called “third arrow” of the Abe program, the Abe government’s growth strategy. Once again, Abe’s rhetoric is at least encouraging — talk about public-private partnerships to move Japan from inefficient to high-value-added sectors — but until the government’s detailed plans are released in June, it is difficult to say anything conclusive about whether the Abe government will succeed at transforming Japan’s economy. It is worth noting that the Abe government is not the Koizumi government redux: whereas Koizumi talked of moving from the public sector to the private sector, in his speech last month Abe stressed the role of government in promoting growth in new sectors, industrial policy for the new century, with all the risks that come with efforts by government to pick winners.

Abenomics (and the latest round of quantitative easing in the US) has raised fears of currency wars breaking out between Japan and its competitors. The effects of the BOJ’s stimulus program are already being felt outside of Japan. South Korea’s central bank has already moved to cut rates in light of the ongoing decline of the yen against the won, as did Australia’s central bank earlier this week. European exporters — especially Germany’s — are feeling the pain from the yen’s decline against the euro. Of course, no government will admit that a currency war is afoot, but if other governments engage in competitive devaluation with Japan the benefits to Japanese exporters from a weaker yen will be muted (if they aren’t already muted). Though the G7 finance ministers' meeting in the UK this weekend did not necessarily single out Japan for criticism, the fact that the meeting was held does suggest that Japan's policies are under close scrutiny abroad.

There are also lingering questions about Japan’s fiscal situation. With the BOJ stepping in to buy government bonds, the Japanese government will continue to be able to borrow without having to worry about rising interest rates. But the risks of Japan’s ever-growing debt remain — and if the BOJ has in fact succeeded at convincing market actors that it is committed to raise inflation, there is the risk that it will be unable to control inflation once it has met its target, hastening the day when interest payments will rise and break the government’s budget. The government is in a race against time. It needs to trigger sustainable long-term growth that can raise tax revenue before interest rates rise. The Abe government has indicated if economic conditions are still sluggish, it will delay the consumption tax increase passed under the Noda government, thereby postponing a useful means of closing the government’s annual deficit of 10% of GDP.

Finally, the question of Japan’s demographics looms over the debate about Abenomics. Edward Hugh offers a sobering account of how demographics may forestall the Abe government’s program. Hugh basically asks whether Japan has experienced a prolonged balance-sheet recession and is in a liquidity trap, as argued by Krugman, Richard Koo, and others, or whether Japan’s persistent demand shortfall is the result of a “shrinking population trap.” Hugh is skeptical that either fiscal or monetary policy will fix Japan’s economy and that the government’s monetary policy experiment risks triggering capital flight as elderly Japanese investors seek higher returns elsewhere. Hugh’s post is lengthy and I cannot do it justice with a short summary, but it should be taken into account when deciding whether Abenomics has succeeded.

The point is that it is impossible to know whether Abenomics has succeeded until we actually see the whole program put into action. Generating inflation is, as the Abe government says, just one arrow in a comprehensive plan to rejuvenate Japan’s economy. Stock market gains and a weaker yen may be helpful indicators but they should not be mistaken for signs for change in the real economy. Similarly, promising rhetoric about reform is encouraging, but after decades during which many Japanese politicians have talked a lot about reform but failed to follow through, it seems that a “wait-and-see” attitude is still appropriate.

Abe probably has about as favorable a political environment as a Japanese prime minister could ask for — dysfunctional opposition parties, few challengers within the LDP, and high public approval ratings — suggesting that he may well be able to follow through on his ambitious agenda. That being said, if Abe cannot reverse Japan's economic woes even with all of these factors working in his favor, I have to wonder if anyone can.

Abe's neo-statism

noreply@blogger.com (Tobias Samuel Harris) — Thu, 09 May 2013 13:59:00 +0000

This week Prime Minister Abe Shinzō criticized right-wing demonstrations in Koreatowns in Tokyo and Osaka, stating, “The Japanese way of thinking is to behave politely and to be generous and modest at any time.” While it is, of course, good that Abe made a point of criticizing hate speech, it's important to recognize that Abe is pursuing a different program than some of the cruder conservative revisionists in his own party, the conservative media, or the right-wing demonstrators who terrorize the ears of Tokyoites with their sound trucks. The problem with the word "nationalist" is that it obscures more than it reveals.

In an astute article about Abe's program, the FT's David Pilling notes Abe's agenda can rightly be summarized using the Meiji slogan, Fukoku-kyohei (rich nation, strong army). What I wonder, though, is whether it is best to think of Abe as a nationalist or whether it is more appropriate to think of him as a statist, not unlike his Meiji forebears. The distinction is important. The right-wing demonstrators criticized by Abe are little more than chauvinistic ethnic nationalists, intent on showing the superiority of the Japanese people. Abe is interested in the survival of the Japanese nation in international competition, with the state as a kind of avatar of the Japanese people. His way of thinking is steeped in Hobbesian and social Darwinist conceptions of the state, in which the state and people exist in a sort of organic solidarity and in which the state is focused largely on protecting lives and property from enemies foreign and domestic. To compete with other nation-states, the state must be capable of organizing and drawing upon the country's resources and the people's energy in order to compete.

Accordingly, when Abe talks of breaking free of the postwar regime or creating a normal nation, it is with this idea in mind. Nationalism is a means to the end of strengthening the state. Encouraging national pride is useful to the extent that it makes Japanese citizens more amenable to constitution revision, more supportive of an assertive Japanese military, and more eager to stand up to provocation by China or North Korea, just as revitalizing Japan's economy is useful to the extent that it improves the state's fiscal position, swells its coffers, and bolsters national confidence.

The question is whether Abe's neo-statism poses risks to peace and security in East Asia. On the one hand, China arguably views the world along similarly social Darwinist lines, and one can therefore make the case that national survival for Japan depends on embracing a similar way of thinking, making Japan less vulnerable to bullying by China. However, the danger of Japan's embracing a social Darwinist conception of international competition is that it would make every problem between Japan and its neighbors harder to resolve, because every issue would become a question of status in the international hierarchy. When combined with fewer restraints on the use of force by Japan, the risk of outright war would surely increase.

There are still a number of hurdles Abe must overcome before he can remake Japan according to his neo-statist vision — and he must still convince the Japanese people of its wisdom, especially as far as constitution revision goes. But it is important to understand just what kind of nationalist Abe is, and to be aware that whatever short-term tactical concessions he makes, he has a long-term vision of where he wants to take his country.

Resisting the urge to "just do something" in US foreign policy

noreply@blogger.com (Tobias Samuel Harris) — Wed, 08 May 2013 23:07:00 +0000

Edward Luttwak has a brief piece at Foreign Policy in which he praises the restraint with which the Obama administration has approached the ongoing conflict in Syria. Luttwak argues that the importance of managing China's rise means that the US should get out of the business of determining the nature of political regimes in the Middle East:

The United States has other new responsibilities: To respond effectively to a rising China, it is essential to disengage from the futile pursuit of stability in North Africa, the Middle East, and Afghanistan. Their endless crises capture far too much policy attention and generate pressures for extremely costly military interventions that increase rather than reduce terrorist violence.

In other words, Luttwak is calling for the US to focus on a strategic goal that it has proved capable of pursuing in the past: preventing the emergence of a hegemon on the Eurasian landmass, using a mix of alliances, bilateral and multilateral diplomacy, deterrence, and, if necessary, war. As Luttwak notes, pursuing this goal in the face of a rising China is trickier in the past, not least because of economic interdependence and the degree to which China — at least until relatively recently — has avoided the naked aggression of rising powers of the past, and therefore requires nuance, subtlety, and Washington's full attention.

Of course, even without the need to get Asia's future right, there's a good argument for the US government's being less involved in the makeup of Middle Eastern governments: even before Iraq, the US did not exactly have the best record when it came to picking and supporting Middle Eastern regimes.

The problem, however, is neither restraint nor strategic prioritization seem to have much purchase in American elite discourse. As Salon's Alex Pareene noted in the midst of North Korea's saber rattling last month:

Making matters worse is that our political press frequently moonlights as our foreign affairs press. And that press thrives on partisan conflict and has an innate bias in favor of “action.” (Every Sunday show features a foreign policy panel in which multiple participants inevitably agree that America needs to “do something” about the situation in some other country. “Do something” is always considered sound, serious advice.)

Because the default position whenever anything happens anywhere for many American foreign policy and media elites is "do something," it becomes exceedingly difficult for an administration to exercise restraint without appearing weak. So the real question is whether the US can break some of the bad habits of the unipolar '90s, when many elites convinced themselves that the US could be everywhere and solve every problem. By refraining from armed intervention in Syria (thus far), the Obama administration has at least taken a step in the right direction.

The pivot to Asia cannot just mean shifting resources and personnel. It can only work if it is accompanied by self-restraint and discipline, which means resisting the urge to solve any problem that arises somewhere in the world, no matter how thorny.

Following the leader

noreply@blogger.com (Tobias Samuel Harris) — Sun, 05 May 2013 14:29:00 +0000

Michael Cucek catches a comment from LDP Secretary-General Ishiba Shigeru at a public appearance in Kagawa.

Ishiba said, "The Liberal Democratic Party is a party for doing what?...First and foremost, it a party for the revision of the Constitution."

Cucek raises some useful questions about what this statement means, but I wonder whether Ishiba wasn't just being extremely literal.

After all, revising the constitution is right there in the party's founding documents. In the party platform of 15 November 1955, the sixth and last (but arguably not least) proposal says that the party will "plan for independent revision of the current constitution and reexamine Occupation-era laws, changing them to conform with national conditions." The same plank says "in order to protect world peace, state independence, and popular freedom," the LDP will create a self-defense force and prepare for the removal of foreign troops stationed on Japanese soil (i.e., the US military).

But to try to answer Cucek's questions, I don't know if the Westminsterization is really all that stealthy. If a prime minister knows what he wants to do, has the public behind him, and faces no real opposition from within his own party, one should not be surprised that even a politician with an independent base of support like Ishiba would have to follow the leader, right down to his rhetoric.

There doesn't seem to be a whole lot standing in the way of Abe Shinzō's completing the work of his grandfather and the other fathers of the LDP.

A cleaner, leaner Observing Japan

noreply@blogger.com (Tobias Samuel Harris) — Sat, 04 May 2013 17:46:00 +0000

::Sweeps away dust and cobwebs::

*cough cough*

Is anybody here?

I've been away so long that Google completely redesigned Blogger's dashboard, so that it took me a little while to figure out how to use it. Anyway, as you can see, I've cleaned up the blog, switched to a more minimalistic template, and removed dead links and obnoxious buttons and ads.

As for content, I'm still deciding what exactly I'm going to do with Observing Japan henceforth. It may be a little strange to revive the blog when wags are declaring that the age of the blog is over, but then, I've always had anachronistic tendencies. I don't think I'll match (or even try to match) the prolixity of years past. At the very least, I'll provide links to what I say and write elsewhere. Stay tuned for more soon.

Kan tries again on trade

noreply@blogger.com (Tobias Samuel Harris) — Sat, 22 Jan 2011 00:29:00 +0000

When the DPJ was campaigning to unseat the LDP in 2009, its manifesto included a pledge to "conclude" a free-trade agreement with the United States. The agricultural lobby flexed its muscles, and shortly after releasing its manifesto the DPJ issued several "clarifications," changing its pledge to reach an FTA with US to a pledge to "begin negotiations." Kan Naoto insisted that it would not conclude any agreement that harmed Japan's farmers. While the party claimed otherwise, the issue was effectively dropped for the duration of the campaign and the DPJ's first year in power.

After his victory over Ozawa, Kan, now prime minister, brought the issue of trade openness back onto the agenda in the form of Japanese participation in the Trans-Pacific Partnership. Simply put, Kan's initial attempt to clear the way for Japanese involvement in TPP was stymied by the agricultural sector — with help from members of the DPJ. The lobby argued that participation would devastate Japanese agriculture, and forced the government to make a weak commitment to "study" participation, a climb down considering the soaring rhetoric with which the PM announced that his government would study participation in his policy speech at the start of the autumn Diet session.

However, with the start of a new year and a new Diet session, Kan, far from being chastened by the earlier defeat at the hands of the agricultural lobby, is positioning his government to begin the campaign anew. As Corey Wallace notes, the "themes" of this reshuffle were tax and pensions reforms and TPP. Regarding TPP, the most significant change was the appointment of Kaieda Banri as minister of economy, trade, and industry. Moreover, Hachiro Yoshio, a former farmer, was replaced as Diet affairs chairman by Azumi Jun. Combined with Maehara Seiji's staying on at the foreign ministry — Maehara has repeatedly called attention to the importance of economic openness for Japanese foreign policy — Kan managed to put into place a team that will be committed to the fight for free trade. His cabinet quickly agreed to TPP participation as a basic policy of the latest Kan government.

The question is whether Kan will be able to translate this ambition into reality. At the very least, the Kan government (and the DPJ) appear to have found their purpose. After fumbling around in search of a major issue or two to devote its energies to, the DPJ-led government has decided to tackle two rather pressing issues, which, combined with the challenges in Japan's bilateral relationships, passing the budget and budget-related bills, and managing life as a de facto minority government will be more than enough to keep the Kan government occupied.

But in pursuing an open Japan — Kan's New Year's message was devoted to his goal of a third opening, a "Heisei opening" that would mean not just a Japan open to more imports but open to cultural, intellectual, and social exchanges across borders — the Kan government arguably faces an even steeper battle than Koizumi faced when he took on the postal system, meaning the postal workers and their allies in the LDP. Between the rural bias in parliamentary representation (which, given the size of the DPJ's parliamentary caucus, inevitably means that there will be battles within the DPJ), the opposition of local governments in rural areas throughout Japan, and the outsized power of Nokyo, the Kan government faces formidable and perhaps insurmountable obstacles to bringing Japan into TPP.

A basic understanding of international political economy is that free trade falters because its costs are concentrated while its benefits are diffuse. Plenty of states have joined free-trade agreements, suggesting that this fundamental tenet may not be all that fundamental. But what can the Kan government do to overcome the determined resistance of the agricultural lobby and its allies? For starters, the government needs to build a coalition of its own to rival the anti-TPP coalition. Business peak organizations like Keidanren will be indispensable partners for the Kan government if it is as serious about TPP as it says it is. Given the frosty relations between the DPJ and big business, the "anti-business" planks of the DPJ's manifesto, and the party's ties with organized labor (and big business's traditional ties with LDP), building this coalition will take some work, although this meeting between Kaieda and Keidanren's Yonekura Hiromasa is an encouraging start.

But it will take more than the help of friendly interest groups for the government to succeed. Ultimately, TPP may be the first big test for the DPJ's parliamentary-cabinet system. On paper, the DPJ's new policymaking process ought to (1) enable the government to coordinate its strategy on TPP across the relevant ministries (METI, MAFF, MOFA, etc.), (2) keep all cabinet ministers on board with the policy, (3) silence opposition within the ruling party, and (4) make strong, direct appeals to the general public about the necessity of the government's program. It is not a perfect analogue, since the upper house, now controlled by the opposition parties, gives the opposition parties procedural weapons they lack in the UK. However, the Kan government still has considerable tools at its disposal. The question is whether it uses them. As Andy Sharp argues at The Diplomat, it may well take a Koizumi-style PR blitz for the Kan government to win on this issue. It needs to hammer home why TPP — and greater openness more generally — are good and necessary for Japan. The idea that trade policy is an arena where groups with "objective" interests derived from their position in the global economy is overstated. Even among urban residents, thought to be the natural constituency for free trade, support cannot be taken for granted. The policy will not sell itself; an pro-TPP interest coalition needs to be constructed. The government's plan to convene town halls across Japan in February and March to explain the benefits of the policy are a good first step. But more talk will be needed. And side payments in one form or another will be unavoidable.

There is considerable risk in taking on TPP at the same time that the government will be debating a consumption tax increase linked to pensions payments, which, if not handled properly, could produce public opposition that could overwhelm the patient work of building a consensus on TPP. Nevertheless, as the Kan government and the DPJ begin a new year in power, they seem to be finding their bearings on policy. This government may yet leave a positive legacy.

The wages of uncertainty

noreply@blogger.com (Tobias Samuel Harris) — Tue, 23 Nov 2010 17:54:00 +0000

The exchange of fire between the North and South Korean militaries that left two ROK Marines dead and at least a dozen wounded (see the roundup at Wired’s Danger Room blog), following closely on the heels of revelations regarding a new North Korean uranium reprocessing facility, strengthens hopes that the US and Japan might be able look past Futenma and strengthen their security relationship. The relationship has, of course, had a bit more wind in its sails since the standoff between Japan and China over the maritime collision near the Senkakus.

Can we really draw a straight line from regional instability to closer security cooperation between the US and Japan? Arguably this logic has worked in the past, with North Korean provocations from 1994 onward stirring Japanese policymakers to bolster Japan’s capabilities and launch new bilateral initiatives with the US, ballistic missile defense being perhaps the most notable example. And there are signs that the DPJ-led government is remarkably more realist in its approach to the region than many expected. I think Foreign Minister Maehara Seiji spoke for many in the DPJ when he told an official Chinese foreign affairs publication that he is “by no means a hawk but a realist who values idealism.” The distinction between “hawk” and “realist” is meaningful and says a lot about the DPJ’s approach to foreign and security policy.

To be a hawk in Japanese politics is not just to support a certain set of policies: it is more a cultural identity than a policy stance. It is a worldview that, in addition to wanting to dismantle political and legal constraints on Japan’s security policy, questions the value of Japan’s postwar regime (that which former Prime Minister Abe Shinzō wanted to "leave behind"), supports revising the constitution (not just Article 9), opposes “masochistic” interpretations of history, and promotes traditionalist values. While they cite the threats posed by North Korea and China to justify their policies, the idea of Japan as a great power is valued in its own right — it is not driven by material considerations.

Meanwhile, to be a realist in Japan means much the same as it does in other countries: valuing the sober assessment of national interests, and thinking clearly about how best to secure those interests using the means available. While I think “realism” is often associated with a predisposition towards military capabilities and the use of force, it need not be. As Eric Heginbotham and Richard Samuels argued in a 1998 article in the journal International Security, postwar Japanese leaders have been “mercantile realists,” thinking of Japanese national interests in broader terms that prioritized Japan’s economic position.

The DPJ has thus far been far more realist in its foreign and security policies than has been generally recognized. Like earlier LDP governments it is working to maintain some sort of constructive relationship with China, however difficult, while building closer bilateral ties with other countries in the region that are also concerned about Japan’s rise. The government has signaled that it is willing to invest in Japan’s security, for example announcing last month that the MSDF will increase its purchase of new submarines from sixteen to more than twenty. As this post at Sigma1 notes there are signs that the government’s new National Defense Program Guidelines, which the DPJ has been considering since it took power, will contain a number of sensible proposals to enhance Japan’s security, including a relaxation of the arms exporting principles and relocation of SDF personnel from the north to the south. Is Japan “rearming”? Arguably not. But we are not seeing a passive and pacifist Japan either, despite the idea that the DPJ is “left wing.”

But what about the relationship with the United States? On the face of it, the dispute with the US over Futenma has shown the limits of the DPJ’s realist tendencies, allowing its position on the bases to be driven by domestic political considerations instead of the “national interest.” However, is it really in the interest of either Japan or the US to force bases on an unwilling Okinawan public? The point is not that the DPJ has been particularly sober minded in its approach to the issue, but that it is not altogether clear how the bases in Okinawa serve Japan’s interests, which leads to the larger question of how the US-Japan alliance can best serve the interests of both countries.

This is the big question hanging over the alliance, the question that the two countries may finally be in the process of addressing as they begin consultations in advance of a bilateral summit that is expected to be held sometime in the spring. Will North Korean provocations or Chinese maritime adventurism push the alliance in new directions? If anything, I think regional uncertainty reinforces the trend towards a “strong but limited” security relationship focused deterrence in and around Japan instead of more expansive or grandiose plans for the alliance. And given Okinawan opposition to US bases and the uncertainty regarding the US economy, the countries should be talking about politically and economically sustainable deterrent capabilities.

As such, while developments in the region may lend a certain urgency to bilateral talks about the future of the alliance, it is unlikely that they will push the US-Japan alliance in a drastically different direction than it was already going.

Observing Japan, now on Twitter!

noreply@blogger.com (Tobias Samuel Harris) — Mon, 22 Nov 2010 02:47:00 +0000

After having resisted Twitter, I've decided to try it. I'm not sure whether I'll stick with it, although I'm enjoying it so far.

You can find my Twitter feed here.

Why don't Japanese take to the streets?

noreply@blogger.com (Tobias Samuel Harris) — Wed, 17 Nov 2010 06:02:00 +0000

The Eurasia Group's Ian Bremmer has an op-ed in the IHT in which he argues that despite widespread pessimism among Japanese regarding their country's future, things may not be so bad. Basically he suggests that the DPJ may well be learning to get along with business elites and bureaucrats, Japan and the US may be rebuilding their relationship after a remarkably bad year for the alliance, and, finally, the Japanese people have not taken to the streets in opposition to their government.

I'm not sure I buy his argument, at least not entirely. His first two arguments are more or less acceptable, although I find little to praise in how the Kan government prevaricated and ultimately failed to lead on the issue. And I don't think Japan's foreign relations follow the "China down, US up" pattern Bremmer suggests — the Kan government is no less committed to fixing relations with China than it is committed to maintaining a healthy relationship with the US, consistent with the DPJ's position that Japan is not in a position to choose between the US and China.

What I'm interested in is Bremmer's argument about the relative stability of Japanese politics as measured by the lack of demonstrations, riots, and rallies with people carrying signs likening the country's leader to various twentieth-century dictators. In this superficial sense he's right: over the past two decades Japan has seen none of the upsurge in extra-parliamentary politics that one would expect a country in dire economic straits to experience. Bremmer's argument — that two decades of stagnation — is perfectly reasonable. It is difficult to see how a deflationary economy would lead people to take to the streets, particularly without the benefits cuts that have produced demonstrations and riots in Western Europe.

Would Japanese continue to abstain from extra-parliamentary politics if, say, the Kan government pursued austerity with the same zeal as the Cameron government? And if they would continue to stay out of the streets, why? What's so different about Japan that the Japanese people seem content to express their dissatisfaction in public opinion polls and in the voting booth (which they have done regularly for decades, for despite the LDP's success in general elections there is a history of the LDP being punished in local and upper house elections)? I don't know the answer, and I certainly can't hope to come up with the answer in a blog post. However, the decline of Japanese extra-parliamentary politics since the 1960s, particularly compared with other rich democracies, is one of the more interesting puzzles in postwar Japanese politics and I don't think this puzzle has an obvious answer.

Is it political culture, for example the lack of an anti-government subculture like in the United States? If so, what changed since the 1960s? The decline in the kind of organizations that might facilitate collective action (student groups, unions, etc.)? The lack of the kind of welfare benefits that, when cut, can cause to demonstrations in defense of the status quo? The result of a half-century of LDP rule, which habituated citizens and interest groups to a certain approach to politics that left little room for public demonstrations?

If Japan is in fact more stable than other rich democracies, it would be helpful to understand why, not least because if Japan were to pursue benefit cuts in order to shrink the deficit, it might enable us to predict whether Japanese politics will continue to enjoy "relative domestic tranquility."

Selling free trade

noreply@blogger.com (Tobias Samuel Harris) — Fri, 29 Oct 2010 22:33:00 +0000

Bogged down by an unfavorable political situation in Tokyo, the Kan government has few avenues for policy innovation. In recent weeks, however, it seems that the Kan government has decided to consider joining the Trans-Pacific Strategic Economic Partnership (TPP), a multilateral free trade agreement that currently includes only Chile, New Zealand, Singapore, and Brunei, but which the United States, Australia, Peru, Vietnam, and Malaysia are negotiating to enter.

The DPJ sent mixed signals on trade during the 2009 campaign: the initial draft of the party's manifesto stated that the party would "conclude" an FTA with the United States, but, criticized by farmers' groups, the party softened its proposal to "begin negotiations with the United States" and added a clause that it would only conclude an FTA with the US if domestic agricultural production could be safeguarded. Since the DPJ took power, trade has more or less vanished from the agenda — until now.

Following Kan's declaration in his policy speech that his government is considering TPP, Maehara Seiji, the foreign minister, has emerged as the government's leading advocate for greater trade openness, arguing in his speech earlier this month at the Foreign Correspondents' Club of Japan that since Japan's foreign policy is only as effective as its economic strength, diplomacy that enhances Japan's economy should be the government's top priority. (To make the point he pointed to South Korea's superior competitiveness as something that Japan should emulate.) To that end, he outlined a three-pillared approach that included (1) building a free trade system, (2) diversifying sources of food and natural resources as a hedge against risk, and (3) ensuring that Japan has the technology and infrastructure necessary to export.

When it came to concrete proposals to expand free trade, however, Maehara balked. He said that taking steps to join the TPP would be a test for Japan, but did not promise anything. He talked about trade negotiations with the US either bilaterally or within a multilateral framework, but offered little in the way of specifics. Given the thorny politics of free trade in Japan, Maehara's circumspection comes as little surprise, and the debate that has occurred within the government since his speech has been similarly tentative. To this point the government is still collecting opinions on the matter and has not decided whether it will pursue negotiations to join the TPP. Genba Koichiro, head of the national strategy office, said that the government will make its decision late next week. It has the support of Maehara and Kaieda Banri, the minister for economic and fiscal policy, as well as Sengoku Yoshito, the chief cabinet secretary, who said that TPP could be coupled with measures to support farmers harmed by imports (the logic behind Sengoku arch-rival Ozawa's income support plans). But these advocates are of course opposed by the ministry of agriculture, forestry, and fisheries — and by Nokyo, the peak association for agricultural cooperations, whose chairman has declared the TPP will mean the destruction of Japanese agriculture. The PNP, the DPJ's partner in government, and the Social Democrats, its erstwhile partner, have also come out against TPP, and Hata Yuichiro, chair of the DPJ's upper house parliamentary strategy committee, has said that he opposes joining the trade agreement "at this time."

Given the opposition arrayed against TPP, it is perhaps wise that the Kan government has not committed to the policy and is instead floating trial balloons. However, I wonder if there will ever be a good time for a Japanese prime minister to pursue an ambitious trade agenda. By proceeding cautiously now, did the government simply give its opponents time to mobilize and thus ensure that once again the issue will be postponed? It strikes me that if Japan is ever to participate in an ambitious free trade agreement like TPP (or the hypothetical US-Japan FTA), the only way it will ever get done is if the prime minister owns the issue, building a coalition in favor of free trade and selling the policy to the public in the same way that Koizumi sold postal reform. As the political economist Helen Milner once wrote (I'm paraphrasing), for economists, the puzzle is why states would ever done anything other than free trade — for political scientists the puzzle is why states would ever practice anything but protectionism.

If the government decides next week to make joining TPP a priority, it better be prepared for a three-pronged fight: among political parties in the Diet (remember that the government needs to cobble together upper-house majorities to pass legislation), among interest groups, and in the court of public opinion. The trade agreement will not sell itself. The government will have to commit to it fully. Anything less and the government is likely to suffer yet another defeat.

After the showdown

noreply@blogger.com (Tobias Samuel Harris) — Wed, 06 Oct 2010 06:06:00 +0000

Japanese Prime Minister Kan Naoto and Wen Jiabao, his Chinese counterpart, have met briefly in Brussels on the sideline of the ASEM summit, marking an end to the bilateral standoff following the collision between a Chinese trawler and Japanese Coast Guard vessels in the vicinity of the disputed Senkakus.

As expected, Japan and China reiterated the importance of the strategic, reciprocal partnership initiative. High-level talks and cultural exchanges will resume. All in all, it is difficult to say what has changed strategically as a result of the dispute. That China will fiercely resist any perceived change to the status quo in its maritime disputes? That China has greater leverage at its disposal? That countries — not just China — don't like having their nationals held by other countries, particularly when, Sourabh Gupta argues, there may have been little basis for Japan's holding the Chinese fishermen in the first place?

Meanwhile, the conventional wisdom that the US is the biggest winner from the dispute is probably overstated. The allies will not find it any easier to resolve the Okinawa dispute, which continues to loom over the alliance. More importantly, however, the dispute appears to have merely reinforced the DPJ government's basic approach to China: having little choice but to forge a working political relationship with its neighbor, Japan will redouble its commitment to building constructive relations with China. In short, the dispute, rather than signaling that Japan must change course entirely, may simply lead the Kan government to try harder.

The basic idea that has animated foreign policy under the DPJ from the day it took office — that Japan, living in a region dominated by a rising China and a declining but still powerful US, needs to find a way to navigate between and live with both power — remains intact.

That being said, the dispute with China has obviously had consequences within Japan, not least for the Kan government's public approval ratings. Despite having received a remarkable bump in his support after defeating Ozawa — nearly twenty percent in some polls — Kan's numbers are back to around fifty percent thanks to his government's perceived mishandling of the dispute. Peter Ennis makes a strong case that the Kan government actually handled the issue well, getting the assurances it needed out of the US while resisting Chinese pressure long enough for the government to claim that the captain's release was the result of a decision by the prosecutor's office in Naha and not the central government. But the Japanese people apparently do not see it the same way. In Yomiuri's poll, for example, eighty-three percent of respondents were not convinced by the prime minister's claim that there was not political intervention. The same poll found a ten-percent increase in the number of respondents who said foreign and security policy should be a top priority for the Kan government; in early August only four percent said it should be a top priority. Whether this change in the public mood is more than temporary remains to be seen, but the drop in the government's approval ratings give Kan that much less room to maneuver as the prime minister tries to coax the opposition parties to cooperate with the government.

Indeed, the LDP has rushed this issue to the top of the agenda as the autumn extraordinary session of the Diet begins. The party has declared that the "abrupt" release of the captain was the worst foreign policy failure in postwar history. The LDP is sure to build its response to the Kan government around this issue, together with the latest Ozawa indictment, meaning that the largest opposition party has two tangential issues with which to attack the government — with the sanction of the public, thanks to the public opinion polls showing that these issues matter — and put off talk of cooperation on an economic agenda. The LDP will of course get an assist from the Japanese media, particularly its more conservative precincts, which appear to have found their voice again after a dismal couple of years during which their issues vanished from the agenda as the global financial crisis unfolded and then the LDP was unseated by the DPJ.

The dispute with China not only has given ammunition to an LDP desperate to obstruct the Kan government and force an early election — it has also provided an opening for dissent within the DPJ, stirrings of which could be found in the petition signed by forty-three DPJ members, including Nagashima Akihisa, and submitted to Sengoku. The petition goes out of its way to soften its criticism of the government, but it does suggest that China policy could create some space between the government and the ruling party. However, since Kan's cabinet has been united on the issue, grumbling within the DPJ can be safely ignored for now.

So did Kan lose? I cannot agree with Ennis entirely that the government handled the dispute well. The government's biggest mistake was stressing that it was a matter for the Japanese legal system to handle. This stance may well have contributed to China's raising the stakes on the issue (because it could not accept this stance without tacitly acknowledging Japanese sovereignty) but it also ensured that the rule of law would be tarnished in the event of a Japanese climb down. If the Japanese government was indeed prepared to allow the legal process to run its course I suppose this position would have been acceptable, but I doubt that Tokyo really was prepared to wait that long (unless the Kan government was actually caught off guard by Beijing's response). The Kan government should have treated the issue like the diplomatic dispute it was from the very beginning instead of staking the credibility of Japanese institutions on the outcome. That it did so at least partially explains the public's opposition to the government's handling of the issue.

By holding out for as long as it did Japan may well have forced China to think twice about how hard it will push Japan in the future, perhaps won Japan more support from other countries locked in disputes with China, and provided an opportunity for Japan and other countries to take steps to mitigate China's economic leverage (as in the case of rare earth elements), but these gains may have come at the expense of Kan's credibility at home. Without public support, the prime minister, already the head of a de facto minority government, will find it that much more difficult to move an agenda centered on fixing Japan's economy, which in turn is critical to maintaining Japan's influence in the region (as argued by Maehara Seiji, Kan's foreign minister, at the Foreign Correspondents' Club of Japan Tuesday). Whatever the medium-term benefits to Japan from the dispute, it may not have been worth the short-term costs for Kan.

The end of the "strategic, reciprocal" relationship?

noreply@blogger.com (Tobias Samuel Harris) — Thu, 23 Sep 2010 21:49:00 +0000

Since Abe Shinzō succeeded Koizumi Junichirō in 2006, the focus of Japan's China policy has been the promotion of what has been called in official documents as a "strategic, reciprocal relationship" between Japan and China. Acknowledging the importance of the bilateral relationship for peace and stability in East Asia, the two countries agreed to build a political relationship based on mutual trust, increase cultural and educational exchange, bolster economic cooperation, and collaborate to build an East Asian order founded on openness, transparency, and inclusiveness.

As the showdown between Japan and China over the fate of the Chinese fisherman now in Japanese custody intensifies, it is worth asking what the process of "unfreezing" the Sino-Japanese relationship since 2006 has accomplished, and whether that process will survive this dispute — or whether this standoff marks the beginning of a new, uncertain period in the relationship.

With each passing day it becomes clearer that the answer to the first question is "not much." The two countries' leaders have talked more frequently and exchanged state visits. Japanese leaders have avoided the deliberately provocative actions regarding wartime history that led to the deep freeze in the first place. Chinese leaders have at various times acknowledged and praised Japan for its peaceful development during the postwar period. But arguably no progress has been made to defuse the truly potent issues in the relationship, starting with the Senkakus.

This dispute was a hard test for the "new" Sino-Japanese relationship, as it concerns important symbolic issues — sovereignty over the Senkakus and the incarceration by Japan of a Chinese national, an "abduction" of sorts in Chinese eyes — and is therefore precisely the kind of issue that appeals to Chinese insecurity about its regional and international status, making unlikely to be resolved by Tokyo's appeals to handle the issue calmly and without resorting to nationalistic posturing. Of course the strategic, reciprocal relationship failed the test. China has steadily applied pressure on Japan, canceling cultural and political exchanges and possibly banning the export of rare earth elements (although for the record, the Japanese government has not confirmed whether there is in fact an export ban and the Chinese government has denied that there is any such ban).

As important as the resumption of normal relations between Tokyo and Beijing has been, it is worth asking whether the "strategic, reciprocal" relationship agenda will ever result in the kind of bilateral relationship rooted in trust that would limit the ability of this kind of issue from escalating into a more serious crisis. As long as anti-Japanese sentiment remains widespread, making a hard line towards Japan in disputes politically expedient, as China's policymaking process remains opaque, making it difficult to know how or why decisions are made, and as China remains acutely sensitive to insults to its national pride, it seems unlikely that the underlying dynamics of the political relationship will change. The economic relationship will undoubtedly remain important, but it is unlikely that economic interdependence will spill over into the political relationship — in either country. While Bruce Einhorn argues at Business Week that Japan "can't afford" a fight with China, Daniel Drezner suggests that attempts by China to use economic links to exert pressure on Japan could very well backfire and lead Tokyo to dig in its heels. Contrary to Einhorn's presumption, the impact of economic interdependence on Sino-Japanese political ties is arguably negligible. If anything the impact has been negative, leading China to believe that it has more leverage over Japan than it might otherwise have.

What about the Kan government's response to this dispute? Peter Ennis notes that there has been no sign of disagreement between Kan, Chief Cabinet Secretary Sengoku Yoshito, and the new Foreign Minister Maehara Seiji, all of whom have not responded to Chinese pressure by upping the rhetorical ante or responding in kind. This stance suggests that far from hearing the "wake-up call" that Dan Twining believes China is sending to Japan, the Kan government remains committed to the "strategic, reciprocal" program, persisting in the belief that forbearance by Japan will bear fruit over the long term if it leads China to learn to trust its neighbors.

In other words, in the aftermath of this dispute the Kan government will likely recommit to the pursuit of constructive cooperation with China, however unlikely it is that this approach will produce tangible results in the short run. The DPJ will be criticized by people like Abe for being "not understanding international politics," but it is unlikely that it will change course in foreign policy, and certainly not in the direction favored by hawks in Washington. When considering Japan's approach to China it is necessary to note that while the Japanese public wants their government to stand up for Japan in disputes with China, Japanese citizens are not clamoring for defense spending increases to match China's military modernization program or more assertive diplomacy to contain China's growing influence. As such, the Kan government's response to China's posturing may not be herald a "new realism" in the DPJ's foreign policy thinking but is instead perfectly consistent with its approach since taking power last year. (I've argued repeatedly that, Hatoyama's woolly-headed rhetoric notwithstanding, the DPJ has been remarkably realist in its diplomatic maneuverings since the beginning of its tenure.)

In doing so, the Kan government will be gambling that over the long term engagement will work. Given how little has been accomplished since 2006, it is an unappealing gamble — but the alternatives are worse. Economic interdependence may not make political cooperation inevitable, but it means that the Japanese government has an interest in talking with China regularly. The approach pursued by Japanese governments since 2006 essentially means keeping the Sino-Japanese relationship in a holding pattern, finding areas to cooperate while maintaining the status quo over issues like the East China Sea, perhaps in the hope that over time China will become more satisfied and less predisposed to forcing changes in the status quo. It may be a foolish gamble, but the alternative, the creation of a de facto Asian NATO, would be far worse, providing hardliners in Beijing with signs of encirclement and virtually guaranteeing that China will not limit itself to small maritime "provocations." It would be a fine example of what Bismarck said of preventive war, "committing suicide for fear of death."

Despite being an unsatisfactory option, the "strategic, reciprocal" relationship may well here to stay.

Kan presses the reset button

noreply@blogger.com (Tobias Samuel Harris) — Sun, 19 Sep 2010 13:31:00 +0000

Having successfully fended off Ozawa Ichirō's challenge to his leadership of the ruling Democratic Party of Japan — indeed, having defeated Ozawa by an unexpectedly large margin, not only winning the vote among Diet members but also receiving the support of 249 of 300 district-level party chapters and sixty percent of the vote among local representatives — Prime Minister Kan Naoto finally has an opportunity to govern. After all, since succeeding Hatoyama Yukio in June Kan has spent much of his time focused on elections, first with the House of Councillors election in July and then the showdown with Ozawa.

Perhaps it should come as no surprise that within days of his victory Kan reshuffled his cabinet and the DPJ leadership. I am generally skeptical of the efficacy of cabinet reshuffles. Doling out cabinet and sub-cabinet posts is, of course, one of the more important tools in a party leader's toolbox as he tries to induce good behavior on the part of backbenchers. But too much turnover at the head of ministries can stymie policy change. Every change of minister comes with a period of inactivity as the minister learns the job; reshuffle too frequently and by the time the minister is ready to lead, he will be on the way out. This problem was characteristic of LDP rule in particular.

During its first year in power, the DPJ avoided a wholesale reshuffle, despite its declining popularity (the usual time for a reshuffle) — even Kan held off when he took over from Hatoyama. However, having secured his control of the DPJ, giving him a two-year term as party leader during which the government will not have to face the electorate if it doesn't want to, I suppose it is only natural that Kan would want to appoint a cabinet of his own making. And the DPJ certainly benefits from more party members getting experience in government, giving that virtually none had any experience of power before the DPJ won last year.

The new cabinet is being billed as a "non-Ozawa" cabinet. No member of Ozawa's group received a cabinet post, although Kaieda Banri, who, while not being a longtime Ozawa associate, supported Ozawa's challenge, was appointed as economy minister. There will be little turnover in the cabinet's most important positions. Sengoku Yoshito stays on as chief cabinet secretary and Noda Yoshihiko will continue to serve as finance minister. With Okada Katsuya's becoming DPJ secretary-general, Maehara Seiji, formerly responsible for transport and Okinawan affairs, will move over to the foreign ministry. Kitazawa Toshimi stays on as defense minister, ensuring a degree of continuity as far as Futenma is concerned. Renhō and Genba Koichirō will stay on the cabinet's administrative reform posts. The cabinet also includes former Shimane governor (and non-MP) Katayama Yoshiro as minister of internal affairs and communications, with an additional portfolio for regional revitalization and Kano Michihiko as agriculture minister (a post he held in 1989 in the Kaifu government).

Kan has presented his new cabinet as a cabinet that will "make good on its promises." That remains to be seen, as the prime minister has a difficult road ahead.

Kan spent his time on the campaign trail talking about "jobs, jobs, jobs." But talking about employment is one thing — doing something about it is a different matter entirely. The rising yen has triggered more hollowing out in the manufacturing sector, as businesses relocate to cheaper countries within the region. A recent METI survey found, for example, that forty percent of manufacturing sector respondents would move factories overseas were the yen to continue to rise. In the immediate aftermath of the DPJ election the Bank of Japan did intervene in foreign exchange markets, which has at least temporarily halted the yen's rise (although Felix Salmon suggests that since the BoJ did not sterilize its intervention this time, it could have anti-deflationary effects).

But as Richard Katz argues in the Financial Times, intervention to weaken the yen is little more than a temporary fix. He notes that a weak yen does nothing to help wean Japan off export-dependent growth, and cannot reverse the long-term trend towards a stronger yen. (And if Japan's is but the first in a series of competitive devaluations with its trading rivals in the Eurozone, it is hard to see what Japan will gain from intervention.)

The problem for Kan is that the path from short term to long term is perilous. In the short term, economic success will depend on the traditional export-led model, meaning that when a survey reveals that Japan's manufacturers will accelerate offshoring if the yen continues to strengthen, a government focused on economic recovery has little choice but to pressure the BoJ to intervene. But over the longer term, Japan needs to revitalize the service sector to produce a more balanced growth model (while trying to put the government's finances on a healthier trajectory).

This objective, easily the overriding purpose of the Kan government and its successors, would be difficult enough in the best of political circumstances. These are not the best of political circumstances.

First, although Kan has a new mandate as DPJ president, he still has work to do consolidating his control of the party. Whether Okada will be able to help him in the post as secretary-general remains to be seen — as Michael Cucek notes, Okada may not be the ideal man for the job, seeing as how his appointment to the post was not uncontested. The main problem within the party may still be Ozawa. While Kan's margin of victory may silence Ozawa for the moment, it remains to be seen how Ozawa will react to Kan's decision to exclude Ozawa's lieutenants from the cabinet and party leadership. I do not expect Ozawa to leave the party, not least because it is far from certain that he would get many to follow him out, especially now that the Kan government has a bit more buoyancy in the polls. Having failed to unseat Kan, Ozawa may recede into the kind of role I thought he might take earlier, that of an elder statesman, periodically declaiming on or critiquing the government's decisions but not actively organizing an intra-party opposition.

But while Ozawa may be less of a problem, Kan will still have to contend with backbenchers unhappy with the direction taken by the government, as Kan implicitly acknowledged by suggesting that he will have a "cabinet of 412" (referring to the number of DPJ legislators). The inclusion of DPJ MPs in policy deliberations is unavoidable as the Kan government tries to revise or scale back the party's promises in the 2009 manifesto, but it need not be cumbersome if the prime minister is able to take control of the policy agenda.

Whether he is able to will depend on the opposition. Kan still has to find a way to coax the opposition parties to support his proposals, without which they will die in parliamentary proceedings. That the Kan's approval ratings have shot up to the same level as when he took over should help him — if he does not squander public support through indecision or inaction. Arguably the only way Kan can succeed is by doing what Koizumi did: appealing to the public directly in order to break the resistance of opposition parties and opponents within his own party. But to bring the public along Kan has to offer something in the first place. The challenge for Kan, then, is to develop an economic program that includes macro- and microeconomic policies, that attacks wasteful spending, includes deregulation and tax reform, and promises something better for the public. If the government is incapable of developing this program internally, Kan should take a page from the playbook of prime ministers past and convene a blue-ribbon advisory council headed by Kan and composed of prominent figures from business, labor, academia, the bureaucracy, and the political opposition. The commission would have to be as much a public relations exercise as a policymaking exercise, regularly issuing statements and drafts that reveal the emerging program and allowing the process to dominate public discussion.

The turn to advisory-group policymaking would be at odds with the DPJ's professed desire for cabinet-led policymaking, but at this point I'm not sure that the Kan government has much choice. I've lost count of the number of "growth strategies" the DPJ-led government has issued over the past year, but whatever the number, it's too many. The public is willing to give Kan and the DPJ another chance, but it is clear that what they have been doing isn't working.

If Kan is unable to bring the public along with him, the outcome will be easy enough to predict: low public support, opposition obstructionism, and unrest within the DPJ, the same cycle that has brought low every prime minister since Koizumi.

Previewing the DPJ election

noreply@blogger.com (Tobias Samuel Harris) — Tue, 14 Sep 2010 06:34:00 +0000

I was on CNBC Asia again today to preview the Kan-Ozawa showdown.

In case you're wondering why I've been silent during this campaign, the reason is simple. The DPJ scheduled its election the same week as my doctoral exams (how rude! - ed.) and so I have not been able to follow this electoral campaign to anywhere near the degree I would have liked. Apparently appearing on TV to talk about Japanese politics is how I unwind after a day spent writing.

Talking Ozawa and the economy on CNBC Asia

noreply@blogger.com (Tobias Samuel Harris) — Tue, 31 Aug 2010 02:05:00 +0000

I was on CNBC Asia's Asia Squawkbox today to talk about the Ozawa situation and the state of economic policy.

Oddly enough, I was on CNBC Asia one year ago exactly talking about the DPJ's victory the previous day. What a difference a year makes.

Ozawa's last stand?

noreply@blogger.com (Tobias Samuel Harris) — Thu, 26 Aug 2010 04:14:00 +0000

"All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs." — Enoch Powell

Returning to his familiar role as Ozawa Ichirō's trusty factotum, former Prime Minister Hatoyama Yukio announced Thursday that he will be supporting Ozawa in a bid to unseat Prime Minister Kan Naoto in next month's DPJ party leadership election. Ozawa himself has yet to make an official announcement, but much like when Hatoyama was DPJ secretary-general under Ozawa, Ozawa conveyed his intentions to Hatoyama, and Hatoyama revealed them to the public. Naturally Hatoyama's backing Ozawa after earlier indicating his support for Kan is an insult to the prime minister.

I have held off from commenting on the possibility of an Ozawa run at the party leadership and premiership because the idea struck me as patently absurd (for reasons that Michael Cucek captured well here and here).

And yet here we are, with Ozawa on the brink of entering the ring once more. I suppose on the plus side, at least he's competing for a public post, one that would force Ozawa to assume public responsibility instead of hiding out of sight.

There is no shortage of speculation about Ozawa's motives for running, having to do with his tenuous legal position, his desire to reinsert himself into the policymaking process by running, losing, and then bargaining for an important post, or his genuine desire to, in Hatoyama's words, "to risk his life on behalf of the country." I have long since given up trying to read Ozawa's mind and am willing to believe that any, or all, or none of these reasons is the real reason for Ozawa's decision.

Whatever his reasoning, the consequences could be dramatic. The best-case scenario would be that Ozawa is simply unable to muster enough support and goes down to an embarrassing defeat that is a prelude to his departure from politics. It is unclear just how much support from the party's parliamentary caucus Ozawa can count on — for my part, I have always thought that the media has exaggerated the extent to which Ozawa can rely on an "army" of young MPs indebted to him for his assistance. Even more unknowable is the extent of Ozawa's support among the party's rank-and-file members, who will also be voting in the party election. Given the near-universal public disapproval (including DPJ supporters) of Ozawa, it is worth asking whether there are still enough pockets of support for the former party leader to make his candidacy viable.

And if he were, somehow, to defeat Kan and take the premiership? Many seem to think that Ozawa's becoming DPJ leader would be the catalyst for the long-awaited political realignment (although Your Party's Watanabe Yoshimi insists that the DPJ will break regardless of what Ozawa does). It is easy enough to see how Ozawa could trigger the realignment. Remember the "purge" of Ozawa loyalists that marked the transition from Hatoyama to Kan? Presumably the "magistrates" who opposed Ozawa and have occupied important positions under Kan would have little to look forward to under Ozawa, and would have two options outside of the cabinet: build anti-mainstream "factions" within the DPJ to challenge Ozawa, thereby completing the LDP-ization of the DPJ, or leave the party altogether to join with Watanabe or form yet another new political party.

The reality is that while at another point in his career Ozawa might have been able to deliver a miracle, untwisting the Diet by encouraging members of other parties to defect or hammering out a new governing coalition, there is good reason to believe that Ozawa is out of miracles. As Kan has found as he has tried to coax the opposition parties to cooperate, with the DPJ reeling the opposition parties have the upper hand. The DPJ will pay a steeper price than the opposition parties for inaction, particularly as the economy worsens. Add Ozawa's unpopularity and his notoriety as a living symbol of the bad, old politics and the opposition's advantage grows. And if a Prime Minister Ozawa were the head of a nominally united but fractured DPJ his bargaining power would be undermined even further. Whoever wins the party election will still face a miserable political situation. Having Ozawa as prime minister would only make the DPJ's situation even more difficult.

It is ultimately for that reason that I suspect that Ozawa will provide another demonstration of Enoch Powell's maxim, adding a final defeat to a lengthy political career that has seen its share of defeats along with extraordinary victories, arguably none more extraordinary the DPJ's victory a year ago next Monday. Ozawa simply does not have a compelling case for why he should take charge of the government at this juncture — and I think that the party's voters know it.

The politics of Kan's apology

noreply@blogger.com (Tobias Samuel Harris) — Thu, 12 Aug 2010 16:47:00 +0000

"I would like to face history with sincerity," said Japanese Prime Minister Kan Naoto in a statement issued on 10 August, the 100th anniversary of Japan's annexation of Korea. "I would like to have courage to squarely confront the facts of history and humility to accept them, as well as to be honest to reflect upon the errors of our own."

In what is now being referred to as the Kan Statement, the prime minister acknowledged the suffering caused by Japan's "colonial rule" and apologized to the Republic of Korea, and also pledged to return the remains of Koreans as well as cultural artifacts removed to Japan during the annexation.

Cynics will undoubtedly be quick to note that this is only the latest in a lengthy list of apologies issued by Japanese leaders for Imperial Japan's behavior — and one need not be a cynic to ask what value one more apology will have for Japan's relationship with South Korea or its standing in the region more generally. Japan's conservative ideologues, never shy in their opposition to what they see as "masochistic" behavior on the part of Japan's leaders, have vociferously opposed the statement. In a lengthy editorial published the day after the statement, the Sankei Shimbun, a revisionist right-wing daily, criticized the government for "imposing" a "one-sided view of history," denigrating the achievements of Meiji Japan in the process. The paper stressed that it is necessary to balance the "shadow" of Japanese rule with the "light," which came in the form of education and railroads.

In its coverage, Sankei also raised questions about the procedure by which Kan secured cabinet approval for his statement, claiming that Kan foisted the statement on his cabinet and the ruling DPJ, over the objections of party members.

Two days after the statement an "emergency citizens' meeting" met in central Tokyo to demand the withdrawal of the apology. Headed by Odamura Shirō, a leading conservative figure who was involved in opposition to the infamous "comfort women" resolution passed by the US House of Representatives in 2007, the meeting passed a resolution calling for a bilateral relationship based not on feelings of moral superiority for one party and guilt for the other and questioning the legitimacy of prime ministerial apologies. (Of course, the resolution also called attention to the role played by Japan in triggering Korea's economic development.)

The revisionist right's reaction to Kan's statement has less to do with South Korea, however, and more to do with the right's program for Japan. Its reaction is, above all, narcissistic: what does Japan lose by apologizing to those harmed by Japanese imperialism? As Kan himself noted, there is nothing cowardly about frankly acknowledging one's transgressions without hedging or equivocating. And while the list of apologies to Japan's neighbors is lengthy, it is precisely because conservatives question the legitimacy of those apologies — most notably the Murayama statement — that prime ministers are compelled to keep issuing new ones. The revisionist right believes that a "proper" and "truthful" historical perspective are critical for national pride, which it believes to have been corroded by the left-wing academics and media personalities and pusillanimous politicians. While they claim to be interested only in historical fact, their selective reading of history belies a blatantly opportunistic approach to Japan's imperial past that belittles the claims of Japan's victims and presents a blatantly self-serving (and at least in this telling contradictory) narrative in which Japan was not a colonizer, and even if it was, it was a benevolent one that hastened the demise of those wicked European empires.

Japan's revisionist right, of course, is not the only political group that propagates a self-serving account of its past that explains away inconvenient enormities (cf. the United States and Hiroshima, among other examples). But the revisionist right's attitude has persistently placed a stumbling block in the path of better relations with South Korea and China. As Kan makes clear in his statement, a good relationship with South Korea is critical in the years to come. While I do not doubt that Kan's apology is sincere, it also comes with strategic benefits, as President Lee Myung-bak appears no less interested in building a close relationship with Japan. Since taking power last year, the DPJ has steadfastly worked to build closer bilateral relationships throughout the region. This latest apology is but another step in that program.

And so the battle over Kan's apology pits two very different world views against each other. For Kan and members of his cabinet, Japan's future is in Asia, which means maintaining partnerships with important countries in the region. If apologizing to South Korea again strengthens Japan's position and clears the way to closer and deeper exchanges not just with Koreans but other Asian peoples, it is an exceedingly small price to pay. For Japan's revisionists, any unambiguous admission of Japan's guilt is evidence of "masochism" and an indication that Japan's leaders are simply not up to the challenge of competing with China for predominance in Asia. If Kan's view is strategic (although, again, not only strategic), the revisionist right is absolutist, and were it embraced by those in power it would result in an ignoble and ultimately self-defeating isolation for Japan in the region.

Of course, there is actually little risk of the revisionist agenda being implemented. Even Abe Shinzō, the most unabashedly revisionist conservative prime minister Japan has had in recent years, recognized the value of strong relationships with both South Korea and China and was willing to make concessions on the history issue, whatever his personal beliefs. Since Abe's downfall in 2007 the revisionists have been increasingly marginalized in Japanese politics, their influence virtually non-existent under the DPJ despite having sympathizers within the party. Indeed, their influence may be inversely proportional to the amount of noise they are capable of generating through various media outlets.

As Jun Okumura suggests, it is now up to South Korea to accept Kan's apology in good faith. That, of course, points to the central problem with apologies between nations: no matter how sincere the apology (and the acceptance of the apology), it is difficult for one leader to bind the hands of his successors. Nevertheless, by building a closer bilateral relationship, Kan and Lee can do their part to minimize the harm that can be done by political actors in both countries who wish to exploit history for political gain.

What can the Yakuza explain anyway?

noreply@blogger.com (Tobias Samuel Harris) — Fri, 30 Jul 2010 01:42:00 +0000

Having read and enjoyed Jacob Adelstein's Tokyo Vice, it was with considerable interest that I read his article "The Last Yakuza" in the World Policy Journal (h/t to Corey Wallace).

Like Wallace, I have no particular expertise with which to assess the role played by the Yakuza in Japanese society. But also like him, I am skeptical about what political outcomes we can actually attribute to organized crime.

In brief, Adelstein argues that after decades of deep ties to the LDP — which organizations didn't have deep ties to the LDP when it was Japan's hegemonic ruling party? — leading Yakuza organizations have shifted their allegiances to the DPJ as it took control of the upper house in 2007 and then the lower house and with it the cabinet in 2009.

The main consequence of this shift, Adelstein suggests, is that the Hatoyama cabinet included Kamei Shizuka, head of the People's New Party, who is known to have links to organized crime. Without questioning those links, I think there is a far simpler explanation for Kamei's presence in the Hatoyama government, an explanation that does not require any reference to the Yakuza. Wanting to streamline decision making in the new coalition government, the DPJ included both Kamei and his SDPJ counterpart Fukushima Mizuho in the cabinet and created a special cabinet committee to coordinate policy among the ruling parties. Kamei, I think, was there so as to concentrate coalition negotiations within the government. The ease with which Kan Naoto cut Kamei loose once he challenged the new prime minister suggests that repaying the Yakuza was low on the DPJ's list of priorities when it came to Kamei.

But this case raises the larger question asked in the title of this post: what does the Yakuza explain anyway? What political outcome over the past half-century or so of Japanese politics is different because of the influence of the Yakuza in Japanese politics?

The most obvious answer is that the pervasive influence of the Yakuza explains the impunity with which gangsters have been able to act since the end of the war (which makes the 1992 anti-organized crime law mentioned by Adelstein a puzzle worth explaining).

But what about bigger questions? The durability of LDP rule? The rise and fall of prime ministers? Foreign policy and relations with the U.S.? What is different because of the Yakuza's power? What can the Yakuza explain that other theories cannot? I suspect not much. It's possible that gangsters may have influenced the outcome of LDP leadership elections during the former ruling party's heyday, given the shady pasts of some leading LDP politicians and the wholly opaque manner in which the LDP selected its leaders for much of its history. If it were possible to identify prime ministers who came to power only because of Yakuza support, it would perhaps be possible to identify indirect consequences of Yakuza influence, but as Adelstein's own career shows, becoming a Yakuza expert requires time, energy, and no small risk to one's person — all for exploring what may be nothing more than an auxiliary explanation.

That's not to say that the Yakuza are of no interest to political scientists who study Japan. One question worth addressing is why the Yakuza are so pervasive in the first place, at which point attention naturally turns to Italy, that other Axis power occupied by and then allied with the United States (which failed to purge and in fact developed links with far-right elements) and governed by a hegemonic conservative party for the duration of the cold war. Additionally, it may be fruitful to study the Yakuza in comparison with other interest groups that had long supported the LDP only to watch their fortunes wane during the lost decade(s). After all, Yakuza groups are interest groups, of a sort: interested in the regulation of organized crime. Like other interest groups, they had to adjust their political strategies in response to uncertain political and economic environments.

As such, while the Yakuza are an unlikely explanation for major political outcomes in Japan, they are a part of the landscape and observers should be cognizant of their role. For that we are lucky that Adelstein is working so hard to expose the inner workings of Japanese organized crime.