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June 23, 2005
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投稿者 enatural : 05:14 PM
June 22, 2005
[talk] International Assessment of The First Koizumi Cabinet
Linda Sieg: Chief Correspondent, Reuters
After graduating from Temple University with bachelor degree in anthropology in 1972, she worked as a foreign researcher at Faculty of Law and Political Science, University of Tokyo for 2 years, followed by master’s degree in journalism from Colombia university and doctorate in U.S. and Japanese history from Temple University in 1983. Starting her career as an assistant to the Dean at Temple University Graduate School while in school, she started working for Reuter, Tokyo Bureau as a general and economic correspondent. Experiencing Editor-in-Charge, Corporate desk, and Chief Economics Correspondent, she is now the Chief Correspondent, General News, Reuters, Tokyo Bureau.
James Brooke: Japan Correspondent, The New York Times
James Brooke had been working as The New York Times Correspondent for Tokyo since August 2001 after having served as correspondent for Canada since August 1999. Before that he was Rocky Mountain bureau chief, in Denver, since August 1995. Previously, he served as Brazilian bureau chief in Rio de Janeiro from February 1989 through July 1995. He graduated from Yale University in 1977 with a degree in Latin American studies.
Stephan Finsterbusch: Far East Business Correspondent, Frankfurter Allgemeine Zeitung
Coming Soon .....
Jesper Koll: Chief Japan Analyst, Merrill Lynch Japan
Before becoming the Chief Economist for Merrill Lynch in 1999 he was a Managing Director of Tiger Management L.L.C. and he was the Chief Economistand Head of Economic and Market Research for J.P. Morgan in Tokyo. He has been serving on several Japanese government advisory councils, including the MITI committee on "Big Bang 2001" Japan's financial system reform." Currently, he serves as a member ofthe MoF task force on global capital flows. Jesper Koll holds a master's degree from the Johns Hopkins University, SAISand graduated fromthe Lester B Pearson College of the Pacific in 1980. He has published manyarticles in Japanese, English and European publications as well as one book,"Towards a New Japanese Golden Age." He has been living in Japan since 1986and is a German national.
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Jesper:
Japan has had two and a half years of Koizumi in power. That's a long time, enough to assess his accomplishments and his shortcomings. What do you think has gone right and what do you think has gone wrong?
James:
I often look back at the other countries I have covered. I was in brazil for a while when Kola Demelo shifted the ship of state quite decisively. I think Koizumi has been just as successful. Japan's ship of state has started to turn. He has moved things in a definite global free market direction. Certainly the public discourse is now there. Now people are thinking along the lines of free enterprise, the need for more private sector initiatives and less public sector interference.
Now, when you look at the reality, of course, there are still some very concerning signs. Looks at Rezona Bank. Here we have a $17billion dollar bail out, nationalizing the countries fifth largest bank. Then the half way battle against the public highway corporations, where frankly I do not see that much was achieved. Same for the postal service privatization. Yes, Japan is going in the right direction, but wherever I look the speed at which it is traveling is still very slow.
And then we still have this enormous public deficit. I am told that in 2004 Japan's budget will be funded by more money borrowed from the market than by tax revenues. In any other country this sort of obviously reckless fiscal management would cause 200% or 300% inflation very quickly because no one would believe that the government will ever be able to honor its debt and obligations to the people. Here you can get away with it because people believe in the Japanese government. That's good, but it certainly does not mean that Japan is on a basically sound and stable economic course. So I think Koizumi has shifted the debate in the right direction, but that a lot of hard work still needs to be done to actually change the actual course of the ship of state.
Jesper:
Are you worried about the wide gap between the debate and rethoric going the right way, but the basic economy still going the wrong way?
James:
Yes, and I think that if real hard policy reforms are not implemented faster Japan is going to face a real crisis in 8 or 10 years.
Jesper:
Linda, you've lived in Japan for over 20 years and followed many different Prime Ministers during that time. What do you think about Koizumi's track record so far?
Linda:
I guess what I look at more than economics are Koizzumi's political achievements. First of all, he has kept the LDP in power. When Mori was Prime Minister the party looked doomed, so I think it really is quite an achievement. The question then becomes, is it a good thing or a bad thing that he's kept the LDP in power and brought it back to strong popular appeal. Personally, I do not think this is so good. Yes, I agree with James that Koizumi is pushing in the so-called reform direction, fundamentally it will remain basically impossible to speed-up the change as long as you have always only the same party in power. I think you need to cut the LDP off from power at least once for a substantial period of time. While the actual policies may not be that different, any government needs to be forced to give up power to allow true revitalization.
Jesper:
Stephan, you're from Germany and have seen a lot of political stagnation in your own country. What do you think about Koizumi? Does he have what it takes to reform both the LDP and Japan?
Stephan:
I think that when Koizumi came to power, he did it with a very strong reform agenda. And what we have seen over the last couple of years is that he went through it step by step. Small steps, yes, but he did move forward in his agenda. To me, the most impressive achievement is that he put Japan in a new, strong position on the global political and policy agenda. When Tony Blair came to Japan a couple of weeks ago, his first statement was that he strongly supports for Japan to play a more active role in the UN Security Council. And look at this. Here we have Japan's Prime Minister playing a key role in global negotiations with North Korea. He even went to Europe in the spring of this year to negotiate and improve the relationship between America and Europe. I know that his success was limited at best, but before Koizumi it was unthinkable to suggest that a Japanese Prime Minister might ever try and mediate between Europe and America. No doubt about it, Koizumi has put Japan back into a very respectable position in global politics.
Jesper:
That's a good point. But let me just play devils advocate here for a moment. Yes, Japan is back as a player in global diplomacy, but isn't all this little more than Japan confirming its position as the unsinkable aircraft carrier of America? Isn't Koizumi just passively following orders from Washington?
Stephan:
No I don't think so at all. Look at Iraq. At the end of the day, they said to Washington, yes, go ahead. However, they did so only after several independent Japanese fact finding missions. It very much looked to me like Japan was moving in the direction of Paris and Berlin. In the end they had to give in because Japan does need the Iraq oil more than France or Germany. The Europeans can get supply from Russia much more easily than Japan. However, I do see this as a signs that in the future there will be other options presented rather than just following Washington.
Jesper:
James, what do you think, is Japan little more than the unsinkable aircraft carrier of America?
James:
I think they played their cards very cleverly. I don't know if Koizumi did it intentionally or not but he and his staff identified the one issue that the Bush administration really cares about - security. And they delivered on all fronts, and very fast too. So the Bush administration can portray Japan as a solid ally, a true friend. In return, Treasury Secretary Snow and all the other economic policy makers have completely stopped Japan Bashing. No criticism of trade policy, no complaining from the White House about Japan spending 70billion dollars to undervalue the yen, which hurts American manufacturers.
So Koizumi found that hot button issue that the White House really cares about. All the US diplomats will tell you that US/Japan relations are probably the best they've ever been. And why is that? I think it is because all of a sudden the Japanese perceive an external threat and they are scared. Japan is scared about North Korea. All of a sudden Japan is openly talking about missile defense and where they can get that. There there is only one country that can deliver missile defense, there is only one country that can protect them against the 600 or 700 missiles which are aimed at Japan. So all of a sudden when faced with a common external threat, Japan has realized the value of the American alliance. But when there was no external threat, Japan was getting more and more critical of the presence of US troops here. That is very much on the back burner now because of the tremendous concern of North Korea. So, once again, the Japanese played their cards very well, and I think there is a sincere new appreciation for the alliance and an understanding that the missiles cannot be physically blocked without American technology and support.
Jesper:
Linda, do you agree that the extrenal threat posed by North Korea has been a key catalyst for changes in Japan, maybe more important than Koizumi's promisses of reform?
Linda:
I think North Korea has given the Koizumi government administration an opportunity to push an agenda that was there even before Koizumi came into power. Koizumi's genius was to seize the opportunity and use it to increase his popularity and power. In his very first press conference, he made a direct comment about the need to revise Japan's constitution. I think he was the first Prime Minister ever to do this in his first press conference. So clearly this is something he believes in. This was well before North Korea became an issue. Now he is using the new Korea circumstance to push harder for his original agenda.
Jesper:
So you think there is a domestic agenda that's more important than the international one?
Linda:
Clearly, although I would say the key is Japan national security policy. This is a domestic issue, not just an issue because America says so. It is Koizumi's issue.
Stephan:
Yes, but the question is what are the consequences. Will Koizumi change Article 9 of the constitution? Today Japan has an army, but it's not caled an army but the self defense forces.
Linda:
Exactly, so its already there. Changing the words and changing the constitution will be just a formality.
James:
I think that changing Article 9 is a red flag to Asia and to all the unresolved problems of Japan's history. On Sunday I spent two and a half hours at the Yasukuni shrine museum, the new military history museum and frankly, it would be terribly offensive for any Korean or Chinese to go through there. It is disturbing because it is not a tacky regional provincial museum somewhere in the middle of nowhere, but is is right in the center of the capital city of Japan. It is designed to bring through bus loads of high school students, impressionable and uneducated high school students. And it perpetuates the victimization myth - why Japan had to invade china, why Japan had to invade Korea. This really doesn't go very far in mending fences politically with the Asian neighbours.
Look, Koizumi has been in power for two and a half years and has been unable to visit Beijing, which is a totally bizarre situation. Can you imagine the Chancellor of Germany not being able to go to Paris or the President of Spain not being able to go to Argentina or Mexico? Of course the Chinese and Korean are also playing up this myth and are doing their share to obstruct a nomalisation of the understanding of history. However, at this stage any change in Article 9 of Japan's constitution will instantly cause far reaching trouble.
Now, let's look at the details of what Japan's defense policy is actually doing. Japan is getting air to air refueling. Why do you need air to air refueling? You need air to air refueling to hit missile sites in North Korea and then to come back. They are not getting air to air refueling so that they can get from Okinawa to Hokkaido, they are getting air to air refueling so that they can go out somewhere and come back. So I think that Japan is already well on the track to start looking out for its own defense. Changing Article 9 would just raise unnecessary trouble because it would make it so obvious what Japan is actually doing.
Linda:
Yes, Article 9 is less and less of an obstacle. If Japan wants, they can easily drop the self-imposed ban on collective self defense if they want to without changing the constitution. And I think there is far less opposition to that domestically because most people don't even know what that means. So as James says, you can keep Article 9. The real issue is whether Japan will go nuclear. That's a real decision that would shake the very basics of Japan's security and defense policy. For one, it would seriously undermine an important foundation of the US-Japan security alliance. However, at this point, I do not think anybody is seriously think about going this far.
Jesper:
Should Asia be afraid of Japanese re-armament?
James:
Of course not. A lot of Asia is frozen in the fighting of the last war. There are political reasons for Japan bashing. But the real facts are different. Japan is an aging population where 30% of the population will be over 60 in about 25 years. Japan is not an imperialist Britain that needs something to do with their eager and virile young 18 year old men. Japan is a country that today is worried about sending a couple of medical teams to Iraq. Japan is not an outwardly aggressive country.
Sure, Japan will be aggressive in the case of North Korea if they see those missiles being fired up. Yes, sure they will do all they can to knock them out. But we are not talking about a country who is going to take over the Korean peninsular and establish a new colony. That was the last war, when Japan was also exporting its surplus of young eager men and women to Peru, to Brazil and to Hawaii.
Stephan:
What is really interesting is when we look at Europe and how they handled the past compared to Asia and Japan. When the Chinese government announced this big railway project for a link between Shanghai and Beijing and the Japanese stepped in and said they might export the Shinkansen, there was a huge outcry in China. There are a lot of people against transferring Japanese formal colonial power and technology to China. That tells you how badly history is being handled in Asia. Compare that to Europe. Where Europe stands right now, the German-French relationship. History has helped to build a new, unified state of Europe. Asia is nowhere near this.
There are, of course, reasons for this. China is still a communist power. North Korea is a Starlingist power and South Korea moved in a completely different direction. But what will happen when the last frontline of the cold war is collapsing, how are we to integrate North Korea and how should we move China in a more capitalist direction? And which role is history playing in the minds of people? I do not see any answers to these key questions provided by Koizumi. When he goes to the Yasukuni shrine, all we see the outcry in Seoul and we see the outcry in Beijing and in Bangkok as well, so it's a point on which he really has to work much harder.
Jesper:
Are there any lessons from Germany? If you had 2 minutes of advice, what would you suggest for Koizumi to do to build better Japan - Asia relations?
Stephan:
I think Japan must speak out frankly about its history, the crimes that have been committed. All Asia wants is an apology and a sincere admission that something bad and wrong has been committed in the past.
Linda:
My sense is different. There have first of all been many apologies over the years. Many, many apologies, some done more sincerely than others. But the time when Japan was prepared to do that yet again, has passed. My feeling is that Koizumi and hi s followers are going in the other direction. He seems to think that, first of all, the past is past. No need to worry about it any more. And second, it wasn't all our fault. So I don't see another big apology coming, certainly not under the Koizumi administration or any LDP administration in the future. Clearly the Japanese are interested in greater integration in the region, economically and perhaps even in security terms but if the prerequisite for that means you have to make yet another apology, I see that as quite difficult.
Jesper:
This is sort of the point that I am personally interested in. Two and a half years after the start of the Koizumi administration I sense there is a new confidence amongst the Japanese. The first year was very tough, no one really knew what was going on, what the reform agenda meant, what Koizumi's government was actually going to achieve. Now here we are in the late summer of 2003, and more and more success stories are coming through. The economy looks a little better, the banking problem is improving. One can debate the sustainability of it all, but I certainly sense that a new optimism, a new confidence is sweeping through the country. Well, at least through Tokyo, right?
James:
Sure I think that Tokyo certainly is looking better, I mean you go to Shiodome, you go to Marunouchi, or Roppongi Hills. Tokyo is revitalized. I cannot think of many cities that are so glamorous and elegant in terms of cutting edge, architectural style. Recently there was a Time Magazine cover on Japanese style. Japan is cool, yes.
I want to go back to the relationship with China which is so crucial and which is so clearly handled badly by politicians. The Shinkansen example is a very good one because that is a prestige symbolic project and could be a wonderful way to symbolize new Japan-China teamwork to build a common, prosperous future. Unfortunately, it isn't going to happen because Japanese politicians, including Prime Minister Koiuzumi, cannot make it work.
Japan is one of the top 3 investors in China. There is a huge amount of investment, a huge amount of air traffic and people exchange. Starting September 1st this year it is no longer necessary to get a visas to go to China. You will probably see next year, more Japanese going to China than going to the US for the first time in history. Hawaii is going to be killed by this. Why go to Hawaii when you can go to Shanghai and check it out. Japanese tourist packages are offering a 4 day weekend in Beijing for 400 dollars. It costs much more than that to go to Kyoto and come back. So, the crass-roots exchange of people, the investment, the ties between Japan and China are growing. The two people are incredibly curious about each other.
At the same time, I go to Korea discover that there are 6 Korean cities that have direct flights to Shanghai and only 2 that have flights to Tokyo. We are going through a massive re-organization of Asia's people flows and China is re-emerging as the natural center. Already the flow of people and the flow of money is telling you that we are going back to an Asia where China stands firmly in the center. China is already the number one Asia economy, setting the tone for everyone else. China actually occupied this role for last 10 centuries. Only the 20th Centruy was an exception. All peripheral countries, including Japan are going to have to readjust to this. The deflation in Hong Kong, in Taiwan, the problems in South Koreans and Japan all have their origin in the re-assertion of China as the central power in Asia.
For Japan, a key challenge will be the coming collapse of North Korea. I mean, the real issue is the boat people and refugees that are bound to come as soon as the North Korea regime looses its grip on power. I mean if you saw what happened with the people leaving Albania to go to Italy, then you saw what will happen when the North Korea regime falls. Everyone is going to get the first boat out of there. So that's going to be a very complicated issue for the Japanese to deal with.
Jesper:
Interesting that so far we've only talked about defense and foreign policy in your assessment of Koizumi. Does the economy no matter anymore, is it just on some sort of auto pilot?
James:
Well, the defense issue is a sexy issue that grabs my readers attention. In contrast, Japan's economy is really boring. I mean, thirteen years of bad debt problems. I do not think I could write another story on this.
Jesper:
Is that a sort of standard issue? Nobody in the world cares about Japan's economy anymore? What can of stories do the editors of Reuters want from your Japan bureau?
Linda: We are actually devoting a lot of new resources to cover Japanese companies, not to mention Japanese policy. Japan's corporate sector is a considerable issue. And where politics comes into the interface with the security issues, the Korea issues and china issues, then there is instant interest.
Jesper:
And German readers?
Stephan:Japan's macro economy story is indeed a bit boring, but the micro stories about individual companies are very sexy. A lot of things have happened in the 90s, companies like Sony and Toyota are still the forerunners in their own businesses. In many case, Japanese companies have actually gained global market share.
Even on the macro, there is the lesson to learn on how to handle the fiscal policy. After the World War II period was over, we saw strongly grown economies like Germany, Japan, France and Britain and we have seen a lot of inflation problems. Now we are going into the period like the late 19th century where deflation played a much more important role. Now Japan is the world's most advanced deflation country and all the other countries are following, one by one. Look at the policy researchers and advisers at the American Federal Reserve Bank and even in the European Central Bank. They study Japan and try and learn lessons on how to avoid a "lost decade" or outright deflation.
James:
It is not very clear cut. I have a prejudice in favour of places that grow. Like Brazil. That was very exciting when it got hold of its inflation problem and attracted foreign investment. The China story fascinates everyone because it is so dynamic. The Japan story in stagnation, it is just kind of sitting there, and maybe growing about 1%, maybe 2%. Yes, there is dynamism in individual companies but overall it's not exciting. A case of point: in May this year, Japan spent $17 billion to bail out Reson Bank. That same week, Samsung Electronics Korea announced that they will invest$17 billion in flat screen TV technology because they want to become the best and biggest electronics company in the world. There you have it: South Korea betting on the future, betting to get hold of new technology, creating new employment and growth and wealth and all that kind of exciting stuff. And meanwhile, Japan is using tax payers money to help a bunch of small- and medium sized companies in Osaka and Kyoto. That is not very exciting. In fact, it is depressing.
I did a story last year about the foreign press bureaus shutting down here. The editor at the Guardian in London said, why should I keep someone in Japan when all the readers want to know about is China, because it is dynamic. It maybe unfair but the outgoing editor told me that Stockholm was interested when they though that Japan was going to overtake the US as an economic superpower.
Linda:
Even if they have the best macro economic policy, it still wouldn't change so much. Japan still wouldn't turn into China. It's a very different story and if the foreign newspapers don't want to commit the resources, so be it. That doesn't mean there is no Japan story.
James:
When I was given this job, I asked a question which is, can a country with a sinking population grow? Now the answer is yes it can but can Japan with 127 million people in 2003 have a bigger economy at the end of end of the century with only 65million people? The china thing is a huge demographic dynamite with 10 times the population. Once again they made it. It's a very pleasant, very affluent society where everyone is taken care of. They made it and now it is just a question of managing the relative decline.
Jesper:
Do you agree that that's the fate of Japan - decline gracefully?
Stephan:
Yes, the demographics are a fact of life here. But look, just because the country spends a lot of money on bailing out a bank does not mean that there is no investment in the future. Toshiba, Sharp and other electronic companies are investing huge sums in future flat screen technology development. Samsung may grab the headlines, but the many Japanese corporations are quietly investing in very successful strategies for future growth. Also, this China mania is a bit worrying to me. What happens oif there is political instability in China? Nobody can know the future, but it certainly is possible that the Chinese experiment in rapid economic development will create so many frictions that it may disappoint many. Japanese stability may well be a good thing.
Jesper:
I want to pick up on a point that Linda raised which is that Koizumi has kept the LDP in power. What about the opposition parties? Is there any hope?The opposition parties have reunited recently, they seem to be on a honeymoon period right now. Are we going to see a more constructive opposition here in Japan? Is the LDP power base in danger?
Linda:
Certainly more in danger than it would be if the Liberals and the Democrats were not a bed together. If Ozawa and Kan manage to cooperate then they have a much better chance of reaching power. I just do not know whether they really want power.
Stephan:
What is interesting is that when Koizumi started out here, everyone was talking like he could come up with a good domestic reform agenda. But seeing him after two and a half years, he looks very much like Gorbachev. Both are doing obviouly well only in foreign policy, while on the domestic front the people are increasingly sceptical.
Linda:
I think the interesting phenomena about Koizumi and his economic policy is that he gets criticized wildly from all directions. Some people think he is going too far and other people think he is not going far enough. Economists are always so dogmatic about Koizumi. Either he is viewed as a total disaster or he is moving in the right direction. Certainly everyone has a strong opinion about him and his policies. Everybody feels passionate and very strongly about his policies. This makes Koizumi very powerful. He's brought back passion in Japanese policy making.
James:
Japan is just like Mexico. It's run by a party that has been in power far too long and so it can no longer perform. One day there will be a crack, a crisis and true re-alignment of politics will happen.
Jesper:
But where does the crack come from, is it China?
James:
I think it's the fiscal deficit. One day in the not too distant future the Japanese people will lose confidence in government bonds. Look at the pension problem. Japan just simply is running out of money to honor obligations. It is all very predictable it is just a case of when people will lose confidence and they will only want to borrow bonds with very high interest rates. You are an economist, what do you think about that, is it an issue?
Jesper:
I think it is an issue but I think they can resolve it in the Japanese way. Take the pension contracts. They are now being broken, with the benefits payments cut and the contribution rate increased. Amazingly, the response of the Japanese people is to not be upset. In Germany, the Unions would go on the street and demonstrate until the government falls. In America, the people would file huge class-action lawsuits. In Japan, the fact that contracts are not honored does not seem to cause social unrest or a true political momentum. Not yet, at least.
Let me try and wrap it up by asking one final question. If you had one piece of advice to Koizumi, one policy change that you would definitely want him to implement, what would that be?
Stephan:
I think that after winning the elections, he should push forward his reform agenda much more aggressively than he has done so far. He's got nothing to lose. His ideas are right, but he must be more drastic on really reforming pensions and health care so that the Japanese people can trust the government again.
Linda:
Yes, if the LDP stays in power after the lower house elections, he will have an unstoppable mandate to lead the country. Then we'll find out what he really wants to do, whether he's got what it takes to be a true statesman. Let's hope he actually does have a plan. The world will be watching.
Jesper:
Thank you very much.
投稿者 gnpo : 12:48 PM
