Japan in Crisis: What Will It Take for Japan to Rise Again?

290 Pages·2012·1.61 MB·English

by  Bong Youngshik

JAPAN
IN CRISIS
JAPAN
IN CRISIS
WHAT WILL IT TAKE FOR JAPAN TO RISE AGAIN?
Edited by Bong Youngshik and T.J. Pempel
JAPAN IN CRISIS
Copyright © The Asan Institute for Policy Studies, 2012.
Softcover reprint of the hardcover 1st edition 2012 978-1-137-35743-4
All rights reserved.
First published 2012 by The Asan Institute for Policy Studies
First Published in the United States in 2013 by
PALGRAVE MACMILLAN®— a division of St. Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-137-35744-1 ISBN 978-1-137-35071-8 (eBook)
DOI 10.1057/9781137350718
Library of Congress Cataloging-in-Publication Data is available from the
Library of Congress.
A catalogue record of the book is available from the British Library.
First Palgrave Macmillan edition: September 2013
10 9 8 7 6 5 4 3 2 1
EDITORS
Bong Youngshik
Bong Youngshik is a Senior Research Fellow and the Director of the
Center for Foreign Policy at the Asan Institute for Policy Studies. Be-
fore joining the Asan Institute, Dr. Bong was an Assistant Professor at
American University’s School of International Service in Washington,
DC from 2007 to 2010. He was also a Freeman Post-Doctoral Fellow
at Wellesley College and Assistant Professor of Korean Studies at Wil-
liams College in Massachusetts. His research focuses on the interplay be-
tween nationalism and security issues including Dokdo and other island
disputes in Asia, anti-Americanism and ROK-US alliance. He holds a
Ph.D. and an M.A. in Political Science from the University of Pennsyl-
vania and a B.A. from Yonsei University.
T.J. Pempel
T.J. Pempel is the Jack M. Forcey Professor of Political Science at the
University of California, Berkeley. He served as the Director of the In-
stitute of East Asian Studies from 2002 until 2006. His research focuses
on comparative politics, Japanese political economy, and Asian regional
issues. His most recent publications include, Security Cooperation in
Northeast Asia (New York: Routledge, 2012, Co-editor with Lee Chung
Min) and “Soft Balancing, Hedging, and institutional Darwinism: Th e
Economic-Security Nexus and East Asian Regionalism” (Journal of East
Asian Studies, 2010). He received his Ph.D., M.A., and B.S. from Co-
lumbia University.
Editors 5
CONTENTS
Preface Hahm Chaibong ·········· 8
Introduction T.J. Pempel ·········· 10
PART STARTING WITH FUKUSHIMA
1
CHAPTER 1 Masakatsu Ota ·········· 31
The Fukushima Nuclear Crisis and Its Political and Social Implications
PART THE POLITICAL ECONOMY OF SLOW GROWTH
2
CHAPTER 2 Gregory W. Noble ·········· 53
Japan’s Economic Crisis: More Chronic than Acute—So Far
CHAPTER 3 William W. Grimes ·········· 81
Japan’s Fiscal Challenge: The Political Economy of Reform
PART HURDLING POLITICAL OBSTACLES
3
CHAPTER 4 Tetsundo Iwakuni ·········· 107
Governance Crisis in Japan: Return to the Basic Building Blocks of
Democracy
CHAPTER 5 Jun Saito ·········· 135
The Ghost of the Second Republic?
The Structural Weakness of Parliamentary Bicameralism in Japan
PART TOWARD A MULTICULTURAL SOLUTION?
4
CHAPTER 6 Kim Mikyoung ·········· 163
Embracing Asia: Japan’s Expat Politics
PART IMPROVING RELATIONS WITH THE ASIA-PACIFIC NEIGHBORS
5
CHAPTER 7 Kazuhiko Togo ·········· 195
What Will It Take for Japan to Rise Again?
Vision, Regional Initiative, and Japan-Korea Relations
CHAPTER 8 Kim Sok Chul ·········· 217
Regional Situation Awareness as a Basis for Northeast Asian Regional Cooperation
in Dealing with Transnational Nuclear Disasters
CHAPTER 9 Michael Auslin ·········· 235
The US-Japan Alliance and Japan’s Future
CHAPTER 10 T.J. Pempel ·········· 255
An Economic Step toward Revitalizing Japan and US-Japan Ties
List of Contributors ·········· 288
Index ·········· 290
PREFACE
Japan’s decline since the economic bubble burst in the early 1990s has
been as spectacular and as confounding as its rise during the preced-
ing decades. Once a model of rapid economic development and good
corporate governance, Japan has since become a case study on how
political and economic missteps and missed opportunities can lead to
precipitous national decline. “Japan Inc.’s” inability to re-group after
the “lost-decade,” is a lesson on the importance of sound politics for
a sound economy, among other things. Th e fall from grace of many of
Japan’s industrial giants such as Sony and Sharp has revealed the limits of
Japanese corporate culture and governance structure. Th e Tohoku earth-
quake and the Fukushima nuclear disaster revealed not only the vulner-
ability of some of the most advanced industrial installations to the wrath
of nature, but also how much political and bureaucratic ineptitude can
add to the people’s suff ering.
For South Korea, its closest neighbor, former colony and one-time
would-be emulator, the drama of Japan’s triumphs and tribulations have
been especially poignant. Ever since its independence from Japan in
1945, catching up with Japan became a national imperative for South
Korea. At the same time, Japan became the model as well as a major
source of technology transfer and capital investment for the develop-
ment of South Korean industry. By the middle of the last decade, South
Korea succeeded in catching up in certain sectors. By 2009, Samsung
Electronics’ operating profi t was more than twice the combined oper-
ating profi t of Japan’s nine largest consumer electronics companies. In
2012, South Korea’s credit rating became higher than that of Japan for
the fi rst time in history.
However, South Korea can hardly rest on its laurels as there are
striking similarities between South Korea’s growth trajectory and Ja-
pan’s. South Korea’s birth rate is the lowest among the OECD countries
8 Japan in Crisis
and its population is ageing at an even faster rate than Japan’s. Welfare
populism has become a political imperative even as welfare spending is
already beginning to skyrocket. South Korean politics is proving to be
as divisive and polarizing as Japan’s. Learning from Japan has become an
imperative, albeit for diff erent reasons than in the past.
Japan’s decline has profound implications for the region’s geopoli-
tics as well. Once the lynchpin of prosperity and security of East Asia,
Japan’s alliance with the US has begun to fray. It has become an object
lesson in alliance (mis)management. More importantly, the relative de-
cline of Japan (and the US) has coincided with the rise of China and
North Korea’s nuclear armament. Th at Japan needs to contribute its fair
share to the maintenance of peace in this region is obvious. Whether
it has the political will and sophistication to overcome historical issues
and settle territorial disputes that continue to plague its relations with
its neighbors all the while reasserting its role as a major power will prove
crucial for the region’s power balance.
Despite the immediacy as well as the importance of these issues
surrounding Japan, they have yet to receive the full treatment that they
deserve. Th e Asan Japan Conference of 2011 was planned to fi ll this
gap. I would like to take this opportunity to thank all the participants to
the conference, especially Professor T.J. Pempel for taking on the ardu-
ous task of editing the present volume. Most of all, I would like to thank
Dr. Bong Youngshik, Director of the Center for Foreign Policy Studies,
and Mr. Lee Ji Hyung (John), the center’s program offi cer, for seeing this
project through to completion.
Hahm Chaibong
President, Th e Asan Institute for Policy Studies
Seoul, November 2012
Preface 9
INTRODUCTION
T.J. PEMPEL
This volume is the result of a conference held by the Asan Institute
for Policy Studies in November 2011. Organized in the aftermath
of the crisis presented by the triple disaster that struck the Tohoku re-
gion of Japan the previous March 11, the conference had as its overarch-
ing theme “Japan in Crisis: What Will It Take for Japan to Rise Again?”
Many authors began by addressing the question of what it would take
for Japan to “recover” from 3/11 but, while that disaster was on ev-
eryone’s mind, it was just the latest in a series of challenges that have
plagued the country since the bursting of its economic bubble at the
end of the 1980s.
To most of the chapter writers, for Japan to “rise again” would
mean recovery not simply from the triple disaster—the March 2011
earthquake, tsunami, and nuclear meltdown—but from 20-plus years
of almost unilateral economic stagnation, political fumbling, and de-
terioration in the country’s regional and global infl uence. Returning
to the halcyon heyday of Japan’s economic successes in the 1970s and
1980s might be too much to wish for, but the authors were largely in
agreement that recreating a sense of optimism about the future direction
of the country’s economy and politics would surely be essential to any
meaningful “rise.”
Th e most obvious concerns to many were dealing with the series of
troubles associated with 20 years of slow-to-no economic growth; one
of the industrial world’s largest levels of public-sector debt; decades of
10 Japan in Crisis
unbalanced national budgets with debt repayment taking an ever larger
segment of those budgets; an aging population and the rising health and
welfare costs associated with that demographic shift; rising unemploy-
ment and underemployment, particularly among the country’s youth;
and declining labor and capital productivity—to name only the most
obvious of the country’s more formidable problems.
But Japan’s lost two decades refl ected more than economic troubles.
Th e lethargic political response from Tokyo to the crisis of 3/11 seemed
but the most recent manifestation of the deeper problems within the
country’s politics and the political system’s persistent inability to gener-
ate eff ective problem-solving leadership. Th e country’s prime ministers
and cabinets had the shortest tenure within the 20-plus rich democ-
racies in the Organisation for Economic Co-operation and Develop-
ment (OECD), agencies seem to devote as much energy to turf battles
as to resolving the country’s monumental structural problems, policy
stumbles and fumbles were frequent, and citizen trust in politics was
laughably low.
Japanese society confronted problems of rapid aging and declining
birth rates. But few solutions seemed palatable, including serious moves
toward gender equality in the workplace, a less xenophobic resistance
to immigration, or granting full citizen rights to Japan’s long-suff ering
Korean minority.
Adding to Japan’s myriad troubles were problems in its foreign rela-
tions. Its alliance with the United States showed signs of mutual frus-
tration; Japan’s Asian neighbors, but most especially South Korea and
China, remained deeply mistrustful of its trajectory; and even coopera-
tion on regionally common problems such as disaster preparation have
been slow to develop.
Such an array of problems would be monumental for any country
to confront. Dealing with all of them as a prelude to a new rise would
likely confi ne Japan to immobility. Clearly some of the problems were
hardly unique to Japan, and far more manageable to solve than what the
country’s and the outside world’s often hyperventilating media might
suggest. Nor did the conference participants have any illusions that some
magic wand could be found that would eradicate them all with a wave.
Introduction 11