The Japan‐US alliance and the Asia‐Pacific region

For the past fifty years the Japan‐US alliance has provided the framework for Asia‐Pacific security, says Jusuf Wanandi, Chairman of the Centre for Strategic International Studies in Indonesia and former research fellow at IIPS. The region's political and economic dynamics are changing, Wanandi says, and the Association of South East Asian Nations (ASEAN) supports an increased Japanese security role, with regional organizations acting as a conduit. But before Japan will win the confidence of some Asian neighbors, he says, Japan must open its economy, reform its domestic politics, and come to terms with its militaristic past.     

Japan's fiscal policy and the East Asian financial crisis

Japanese economic policy has been identified as one possible cause of the East Asian financial crisis that began in July 1997. In this article, Yoichi Okita, Professor of Economics at the National Graduate Institute for Policy Studies, Tokyo, discusses Japan's role in the recovery of East Asian economies. Can and should Japan contribute to that recovery? To what extent is the recession in Japan an important cause of slow recovery in the region? Okita explores and develops the concept of economic policy coordination. Although changes in the Japanese economy were not the origin of the East Asian crisis, he says, prolonged stagnation in Japan is, nevertheless, a drag on the economies that are in trouble. However, one country's fiscal actions alone cannot solve the crisis; rather, all countries in the region should work together to redress the problem.     

The continuing evolution of Japan's business model

We need to recognize the abiding strengths of the Japanese business model and adapt them to a changing world, says Yoshinori Usui, Director of International Affairs at the Institute for International Economic Studies in Tokyo. In this article, Usui points out that rekindling economic expansion in Japan is indispensable to economic recovery in Southeast Asia and to the lasting growth of the global economy. He discusses the merits of the Japanese business model and argues that its basic elements remain entirely sound and effective. Japan's lack of competitiveness in non‐manufacturing sectors, he says, is more due to excessive regulation than to any failings of its business model. Usui speaks in optimistic terms about the potential for combining the best elements of the traditional Japanese model with the worthy elements of the Anglo‐Saxon model.     

Japan-Asia economic relations: Trade, investment, and the economic crisis

Japan has been and will continue to be an important economic player in the Asian region through its internationalization policy involving trade, foreign investments, aid, technical and other forms of economic cooperation. More recently, despite its own domestic problems, Japan has extended financial and other forms of assistance and support to the Asian economies which have been hit by the economic crisis. As it is in its interests that the Asian region survives and recover, Japan will indeed continue to lend a helping hand to Asia, either through unilateral or multilateral forms of assistance or both. Due to growing interdependence, Asia needs Japan and Japan needs Asia. This article analyzes Japan's economic relations with Asia. In particular, it hopes to present an overview of Japan’s involvement in Asia through trade and investments prior to the Asian economic crisis which began in July 1997. Moreover, this article provides an assessment of the crisis and identifies Japan’s responses and involvement towards the economic recovery of the crisis-hit economies in the region. The article draws from earlier versions of various papers presented at conferences and seminars in Washington, D.C. (1997), Japan and Mexico (1998), and Singapore and Thailand (1999).     

Russia and the United States: Still cold in Northeast Asia?

The US has been reluctant to acknowledge Russia's relevance to the Asia‐Pacific, the author says, because “too little time has passed since the interests of these two former adversaries collided in the region.” Russia has the longest Pacific coastline and borders with China, Japan, Korea and Mongolia. Despite the end of the Cold War, however, Russia is still not an integrated participant in Northeast Asian economic cooperation. Vladimir Ivanov is a Visiting Fellow at the Economic Research Institute for Northeast Asia in Niigata. He argues that Russia has made a clear choice between “guns and growth,” and that the country should be allowed to come in from the cold and join this region's development.     

ASEAN and Northeast Asian energy security: Cooperation or competition?

For several decades, Northeast Asia has invested heavily in ASEAN’s fossil fuel industries. This investment has been fundamental in ASEAN’s industrial and regional development and has also been a main source of foreign exchange. In recent years, however, while energy demand in Japan and Korea has been slowing down, it has begun to increase rapidly in ASEAN at a time when some of its own oil and gas fields are beginning to decline. The sharp rise in ASEAN's demand for energy is partly the result of massive FDI from Northeast Asia in manufacturing enterprises. This investment is enabling ASEAN to become less dependent on the export of fossil fuels for foreign exchange. Indonesia has already announced it is reducing its energy exports to Japan because it wants to use the fuel domestically. Without doubt, the other ASEAN energy exporting countries will also soon be reconsidering their energy export contracts with Northeast Asia.     

New challenges for a post‐Cold War Japan

Najmul Saqib Khan was Pakistan's ambassador to Japan from 1985 to 1988. He says of Japan, “The country made a profound and lasting impact on me. The economic achievements of a resource‐poor country, the retention of cultural identity by a synthesis of tradition and modernity, and the innovativeness and communitarian values of Japanese society were genuinely impressive. Japan showed a virtually untapped potential to play a more active and independent role in the world.” Khan subsequently wrote a book that distilled the lessons that Southwest Asia could learn from Japan.’ He argued that countries undergoing modernization should shed their elitism and concentrate on attaining a high standard of capability for the average citizen. In this essay, he analyzes the challenges facing Japan in the post‐Cold War era.     

Why Japan still matters

This article challenges the prevailing view that China is displacing Japan as Asia's leader and the pre-eminent power in Asia. On the contrary, it argues that in understanding the future of Northeast Asia and the broader Asia–Pacific, it would be a mistake to look only to a rising China and to relegate Japan to a diminishing position. China's rise does not automatically herald Japan's decline. Japan is an emerging, not a retreating power. The rise of China is both obscuring and accelerating the transformation in Japan's regional and global position. Japan is increasing its economic power, technological capabilities, military reach, soft power and diplomatic influence. Furthermore, the rise of China makes Japan strategically more important to the United States and to other countries in the Asia Pacific. Japan will become the main regional counterweight to China and an indispensable partner in America's strategy of balancing China.     

Getting It Right: Japan and Trans-Pacific Partnership

This paper explores the opportunities presented by the Trans-Pacific Partnership (TPP) to Japan to revitalize its trade policy, bolster economic growth, and increase participation in regional multilateral fora for the 21^st century. Despite its strengths, Japan has continued to face problems caused by its economic, political, and strategic policies. The Japanese economy has been stagnant for the last several decades, and Japan needs to take bold steps to ameliorate this situation. Politically, domestic political paralysis has had a negative impact on Japan's alliances and partnerships and eroded Tokyo's ability to act as a major player in the increasing vital and important Indo-Pacific region. Connected to this, it is imperative for Japan to engage itself deeply in Asia in ways that increase strategic trust. This paper will also highlight the necessary reforms Japan must undertake to take full advantage of the benefits of the TPP, as well as what the TPP might mean for its relationship with both the US and other regional partners.     

The financial crisis in East Asia

The East Asian financial crisis has proved far more contagious than anyone imagined likely when devaluation of the Thai baht in July 1997 gave the first indication that something was wrong, and the implications it could have for the entire world financial system mean that any response must involve more than just the nations affected directly. Nobuyuki Ichikawa says Japan, as the locomotive for the Asia‐Pacific region, must move quickly to achieve an early economic recovery by increasing domestic demand and reforming its financial system, in order to increase imports from East Asia and shore up the weak yen. He suggests that one effective measure might be for the yen to become the key currency for Asia in lieu of the dollar. Ichikawa works for the Bank of Japan and was seconded to IIPS in 1995.     

Apec beyond Osaka: A balanced approach

Good ideas for economic cooperation within APEC must be adapted to Asia‐Pacific realities, says Andrew Elek, Senior Fellow at Australian National University's Australia‐Japan Research Centre. Emphasizing that “APEC will not make decisions, Asia‐Pacific governments will make decisions,” Elek asserts that APEC can draw on EU experience, while avoiding the creation of a regional bureaucracy, through a voluntary but orderly process of concerted, unilateral decision‐making. At Bogor, APEC governments agreed to reduce obstacles to economic development and integration within the region, without discriminating against the rest of the world. Elek notes that the November 1995 high‐level APEC meeting in Osaka provides the opportunity to clarify the historical Bogor vision. In this article, he proposes concrete measures for realizing APEC's potential as an open economic association.     

How Japan Can Contribute to a Peaceful World

This article discusses Japan's contribution to world peace both in the past and in the future. Japan's domestic, historical, and strategic circumstances shaped its concept of comprehensive security focused on international economic cooperation since the 1970s. Three decades of constructive relations with neighbors, including reconciliation with Southeast Asia built a strong foundation for Japan's new security role, one driven by new domestic and external imperatives. The article also documents the evolution of Japan's security policy and role in international peacekeeping, and concludes by arguing that Japan–ASEAN partnership is a key component of Japan's new security role, including permanent membership in the United Nations Security Council. In developing this new role, it is critically important that Japan engages its neighbors in ASEAN (and elsewhere) to gain their support for this new role.     

Resolving problems in the current international monetary system

The current international monetary system, characterized by floating rates among major currencies and by the US dollar's de facto role as the most important asset and transaction currency, exhibits several problems, says Nobuyuki Ichikawa of the Bank of Japan and a senior research fellow at IIPS. Under this system, resolving current account imbalances is difficult and exchange rates tend to fluctuate widely, harming economies, says Ichikawa. The dollar's de facto role, he argues, spares the US the incentive to coordinate its policies. He proposes that the yen and the mark supplement the dollar's role and analyzes the policies that Japan must adopt to achieve an ideal monetary system.     

Escaping the resource curse: The case of Indonesia

Abstract

Numerous studies have suggested that natural resource abundance is bad for development. In this context, Indonesia's rapid growth during the 1970s and 1980s seems remarkable. Why was Indonesia able to grow strongly and what are the implications of its experience for other resource abundant countries? I argue that its rapid growth was not simply a matter of policy elites making rational economic policy choices, but rather reflected two more fundamental factors: (i) the political victory of counter-revolutionary social forces over radical nationalist and communist social forces in Indonesia during the 1960s; and (ii) the country's strategic Cold War location and proximity to Japan. Accordingly, the main implication of its experience is that improved economic performance in resource abundant countries requires shifts in structures of power and interest and the emergence of external political and economic conditions that provide opportunities for growth.     

The Bush Administration's 'Alliance-Based' East Asia Policy

The US will face major foreign policy challenges in East Asia in the twenty-first century. In this article, Ralph A. Cossa, president of the Pacific Forum CSIS, Honolulu, examines the Bush administration's policy towards East Asia which he argues continues to be alliance-based. The principal issues include: the precarious situation on the Korean Peninsula; China's potential emergence as a regional power and the sensitive topic of the Taiwan Strait, Japan's struggle with economic and constitutional reform and an unstable Indonesia. The administration's stated commitment to missile defense has been well publicized and the security implications of this for the region are also examined by Cossa. Although a ''Vision statement'' on the Asia-Pacific is still lacking and needed, he argues that the basic components of the Bush administration's Asia strategy appear to be well-formed.     

Japan's security strategy: Meeting the needs of a new era

A new era has dawned, but the US and Japan remain in a security relationship of parent to child, says Toshiyuki Shikata, professor of inter‐cultural studies at Teikyo University and retired lieutenant general in Japan's Ground Self‐Defense Force. He draws on his familiarity with security issues to examine Japan's strategic challenges in the new era, Japan's role in the alliance, and Japan's defense modernization. He denounces avoiding international security responsibilities due to alleged constitutional constraints, and says that a seat on the UN Security Council would allow Japan to share the full risks and responsibilities in discharging international obligations.     

战后日本“重返”东南亚与英国的应对

二战后,英国政府不希望日本经济复苏过快,并且不愿看到日本经济过多地染指东南亚。1954年英国促成日本加入由它倡导的科伦坡计划,以便把日本在东南亚的活动尽量纳入其可控范围之内。除此以外,在50年代和60年代前期,英国对日本在东南亚的企图进行了重重阻挠。但是进入60年代中后期,随着日本的经济飞速发展,国力日渐增强,英国已无力阻止日本进入东南亚。英国在日英首脑会晤的场合,不断敦促日本加强对东南亚国家的援助,而日本却一再敦促英国维持在东南亚的军事存在。     

A new phase in Japanese economic cooperation

The merging of the Overseas Economic Cooperation Fund (OECF) and the ExportImport Bank of Japan to form the Japan Bank for International Cooperation (JBIC) signals a new phase in Japanese economic cooperation. In this article, Akira Nishigaki, former president of the OECF , describes the role and significance of Japan's official development assistance and considers recent policy trends and issues. It is essential for the peace and prosperity of Japan and of the world as a whole, he says, that Japan maintain favorable relations of interdependence in the international community. In this spirit, he expresses his hope that in funding and implementing assistance the JBIC will continue to strengthen Japan's considerable contribution to the development of developing countries.     

Reflections on Japan's past

Fifty years after the devastation of World War II, Japan's remarkable long‐term, export‐driven economic success is known as the East Asian development model and East Asian economies have become the engine for the world's economic growth. Yet the collapse of Japan's 1980s over‐inflated “bubble economy” has created apathy and pessimism, says former Prime Minister Yasuhiro Nakasone. In May 1995, on the occasion of his seventy‐seventh birthday, after more than 45 years in the Diet, IIPS Chairman Nakasone reflects on Japan's modern history and issues a call for renewal in the following speech. Above all, he says, “Japan does have a few mavericks” and “people with true convictions [should] come forward . . . the Japanese are waiting for genuine leadership.”     

Japan's future defense capability

The primary role of Japan's Self‐Defense Forces, says Atsumasa Yamamoto, is to safeguard the independence and liberty of Japan. He notes, however, that in the post‐Cold War world, the SDF must be prepared to play a supplemental role: to help Japan fulfill its international obligations to foster global and regional stability. Whether Japan's SDF will have the capability to perform these functions in the future is the focus of this study. Major Yamamoto was seconded to IIPS in 1993 from the Japan Defense Agency, where he is a member of the Intelligence Division in the Internal Bureau.