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Japan must rise again, for the common good

 Japan must rise again, for the common good

Published: 23/01/2013 at 12:00 AM

Newspaper section: News


Prime Minister Shinzo Abe's recent swing through three of the largest members of Asean has signalled a fluid start to the new year in East Asia's high-stakes regional mix.

Mr Abe hopes that his second time at the top will be the charm that moves Japan forward and out of its slump of more than two decades. At issue is whether the new Japanese premier's early momentum will last and jolt Japan into action and activity, or whether it will end up being yet another false dawn in Tokyo's efforts to revitalise itself.

Mr Abe's choice of destinations was instructive. He meant to visit Washington as a first preference but United States President Barack Obama's second inauguration complicated the scheduling. Visiting his newly elected counterpart in Seoul, Park Geun-hye, made sense in view of the bilateral controversy over South Korea's Dokdo islands, which Japan claims and calls Takeshima.

Both Japan and South Korea are long-time allies of the US, which provides a backdrop to the bilateral spat and common ground to mend fences.

But president-elect Park had not yet formally taken office. A Beijing visit would have been too hot to handle because of growing tensions over Japan's Senkaku islands, which China claims under the name Diaoyu.

Asean, as a contested backyard of both China and Japan and as the new theatre of America's rebalancing strategy, became the right place for the first foreign foray of Mr Abe's second term. His foreign minister had already visited the Philippines, Asean chair Brunei, and Singapore. Vietnam, Thailand and Indonesia were Mr Abe's ports of call. Each is important in its own right. Vietnam has a similar territorial dispute with China, rendering Hanoi a natural ally. In addition, Japanese investment has made substantial inroads in Vietnam, a large consumer market of 88 million. Lining up with Vietnam strategically outflanks Beijing. Indonesia is the largest member of Asean, a market of more than 240 million, and Asean's perennial leader. Thailand's rising spending power and strategic location as the hub of mainland Southeast Asia and a corridor to Myanmar and beyond make Bangkok a firm choice. Many of Japan's regional production networks are also based here.

Unsurprisingly, the main agenda was infrastructure development in these three countries. But the significance of Mr Abe's visit and renewed investment and development commitments centres on the sense of Japan having fallen behind.

While the Japanese have poured in huge resources in investment, trade and development aid to Southeast Asia for more than five decades, the Chinese have reaped some of the low-hanging fruits of cooperation and development, as Beijing has grown dominant in the region, especially in Cambodia, Laos and Myanmar.

Japan rightfully feels jilted. Together with China's regional penetration over just the past decade, Japan's tussle with Beijing has led to Tokyo's growing sense of insecurity. While China throws its weight around and the US shifts its resources and muscles to East Asia, Japan has been in strategic limbo, underpinned by its baggage of history from World War II and, more critically, by its dysfunction and sclerosis at home.

Even South Korea, with its economic dynamism and cultural capital in the face of an existential enemy to the north, has surged ahead. Today, South Korea has the look and feel of Japan two decades or more ago.

But for Japan to regain its footing, it must first put its own house in order.

Enter Mr Abe in his sequel of leadership. His fiscal policy expansion, already dubbed Abenomics, is designed to pump some US$150 billion, about 2.6% of GDP, into the Japanese economy. Mr Abe also has pressured the Bank of Japan to loosen monetary policy with measured success as the yen has declined 12% in less than three months. If Abenomics can kickstart Japan's economic locomotives, stimulate innovation and renew confidence, then it may be worth the growing public debt mountain of more than twice the size of GDP. If the pie enlarges, the debt will be manageable as a virtuous growth cycle will kick in.

But if dysfunction and sclerosis persist in the face of these expansionary efforts, Japan's continuing doldrums will be detrimental not only to Japan but also to Asean states that are looking for a more balanced regional mix. Unlike the recent past when Japan's activism was roundly viewed with suspicion, China's rise and consequent territorial controversies it has engendered leave unprecedented space for Japan to reassert itself.

A stronger Japan rooted in a regional framework of allies in a shared regional prosperity is good not just for Japan but for all of East Asia.

Thitinan Pongsudhirak is director of the Institute of Security and International Studies, Faculty of Political Science, Chulalongkorn University.

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