Japan's Daunting Challenge

By Sneider, Daniel | The National Interest, March-April 2013 | Go to article overview

Japan's Daunting Challenge


Sneider, Daniel, The National Interest


The return to power of Japan's conservatives has once again spurred hope that the country can restore its role as an economic powerhouse and the northern anchor of a rebalanced American presence in East Asia. A revitalized Japan could act as a weighty counter to China's apparent determination to assert itself as the new regional hegemon. The newly installed government, under the Liberal Democratic Party (LDP) banner, offers prospects for more stable and competent governance after years of turbulence and lack of leadership.

But there are grounds also for a high degree of caution, not only about the advent of stable leadership but also about where Japan is headed. The new government of Prime Minister Shinzo Abe embraces contradictory national impulses. In the realm of economics, Abe's cabinet includes supporters of a return to old-style pork-barrel spending and export-led growth policies. But it also includes reformers who favor deregulation and open markets to force Japan to compete more efficiently in the global economy. In foreign policy, the cabinet encompasses pragmatic realists who want to expand Japan's security role in close coordination with the United States as well as revisionist nationalists who hanker for a face-off with China and express provocatively unrepentant views about Japan's wartime record.

It is unclear how Abe will resolve these conflicting pulls, especially under the pressure of forthcoming upper-house elections. It isn't even clear just where he personally stands on such matters.

Americans may dream of a pragmatically conservative Japan that restores its economic health through freer trade and offers a reliable security partner for a policy of engaging China while constraining its aggressive expansionism in East Asia. But they could get a nightmare instead--a fortress Japan, isolated within Asia by its nationalism, protecting an economy beset by public debt and an aging populace.

The choices facing Japan today must be set against the backdrop of two decades of stagnation and often-faltering reform efforts. The Japan of the late 1980s, its system praised in business-management books and its arrival as the new global superpower trumpeted on the cover of weekly newsmagazines, seems like a distant memory. The early 1990s punctured the confidence, even arrogance, that had swelled the heads of Japanese policy makers. The state-directed and export-led economy ground to a halt amid the wreckage of the asset bubbles created by the 1985 revaluation of the yen. Persistent stagnation also upended a political system of single party rule and bureaucrat-led governance. The crisis occurred in tandem with the end of the Cold War, which called into question postwar Japan's foreign-policy anchor, its security alliance with the United States.

In 1993, Japan entered a period of political change, beginning with the emergence of its first, short-lived non-LDP government. Less than a year later, the LDP returned to power, first in coalition with the Socialist Party and then with the Buddhist New Komei Party. Then, in the late 1990s, the opposition coalesced into the newly formed, center-left Democratic Party of Japan (DPJ). This represented a serious challenge to the LDP, although its decline was obscured by the unusual, five-year rule (2001-2006) of the personally popular Prime Minister Junichiro Koizumi, based on a policy of economic reform coupled with an assault on his own party's axis with bureaucrats and agricultural-industry lobbies.

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The LDP returned to its old ways, however, under a trio of short-lived premiers, starting with Koizumi's chosen successor, Abe. Ironically, Abe brought back into the party those who had been ousted for opposing Koizumi's pet project, the breakup and privatization of Japan's public-banking and insurance oligopoly run under the aegis of the postal system. With the LDP disavowing Koizumi's reformism, the door was opened for the DPJ, whose 2009 victory was hailed as the birth of a new era of two-party politics in Japan. …

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