• STRATFOR GEOPOLITICAL DIARY

    A status report on Japan’s revival

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    SPEAKING at a symposium of Asian political and business leaders on Thursday, Japanese Prime Minister Shinzo Abe announced that over the next five years Japan would provide $110 billion in infrastructure investment and aid to the region. The pledge represents a 30 percent increase in Tokyo’s spending in Asia over previous years. More important, it reinforces the idea that a new era in regional great power competition is taking shape.

    The announcement’s significance rests in its context. After coming to office in late 2012, Abe set his administration’s sights on reviving Japan’s regional economic, political and military standing. For most of the past two years, the administration has focused on reinvigorating Japan’s economy as the foundation for pursuing the country’s longer-term security and strategic interests. Naturally, reigniting an economy that for all intents and purposes has not grown in two decades has proved difficult. The process has been subject to obstacles, uncertainties and troubleshooting. But signs of renewed strength in Japanese manufacturing, along with rising domestic corporate investment and even the beginnings of a rebound in consumer spending, indicate that “Abenomics” is starting to pay off.

    For Japan’s leaders, domestic economic recovery has never been the final goal. It is a means to a broader strategic end. Throughout its modern history, Japan has had an acute sensitivity to shifts in the region. Its extraordinary capacity to remodel its domestic political institutions and economic structure to accommodate those shifts has been a hallmark of Japanese behavior. Japan’s forced opening to international trade in 1853 swiftly gave way to the Meiji Restoration of 1872, which in a few decades transformed the island nation from an isolated backwater into a world power. The subsequent breakdown in global political and economic order in the 1920s and 1930s spurred Japan’s turn to fascism and military rule and its attempt to win security by force. And thus Japan adopted a determined self-subordination to US economic, political and security norms and interests in the wake of its catastrophic defeat in World War II.

    The Abe administration is no exception to this pattern. The past two decades of economic stagnation, political dysfunction and relative withdrawal from regional affairs reflect the loss of the post-World War II strategic architecture in which Japan was able to make its extraordinary economic transformation. Now, however, China is accelerating efforts to translate economic heft into regional political and military influence. Meanwhile, the United States is cultivating partners to counter China’s rise. These are clear contours of a new strategic environment in East Asia. As the amorphousness of the post-Cold War era — during which most of East Asia focused its attention inward while the United States looked elsewhere — gives way to a strategic architecture built on China’s budding role in the region’s affairs, Japan is responding. And just in time.

    Japan’s pledged $110 billion in investment and aid is one small piece in this process. Like the administration’s efforts to pass an economic recovery program, access the Trans-Pacific Partnership, normalize the country’s defense forces and open long-protected industries to outside competition, the pledge cements Japan’s return to the East Asian and world stages. It is no coincidence that Abe made his announcement less than two months after the deadline for countries to join the Asian Infrastructure Investment Bank, which Beijing hopes will become a regional counterweight to the Asian Development Bank, World Bank, International Monetary Fund, and the US- and Japanese-led status quo these institutions represent. And recently, with greater focus and fanfare than it has had in years, Japan has made clear its desire to play a greater role in regional and global affairs — and in turn, to constrain China.

    Whether the Abe administration’s measures will be sufficient to achieve its goals or whether the moves are merely precursors to more profound changes in Japanese behavior is less clear. Japan will still have to deal with issues such as the government’s deteriorating fiscal position, ballooning sovereign debt, aging population and rapidly shrinking workforce. China’s military modernization and expansion will continue to motivate Japan’s revival for years to come. But the above factors, among others, will hamper Tokyo and its desires.

    © 2015 STRATFOR GLOBAL INTELLIGENCE

    Republishing of this analysis by The Manila Times is with the express permission of Stratfor.

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