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April 10, 2006

  [talk] Global Eyes On post-Koizumi Japan

John Brinsley: Reporter, Bloomberg

Born in 1966 in Los Angeles. John Brinsley graduated from Wesleyan University in Connecticut with a degree in English in 1990, and obtained a master's degree in Journalism from Northwestern University in Chicago in 1994. He first came to Japan in 1991 and lived in Hyogo-ken for 3 years as an English teacher and editor. He has lived in Japan three times for a total of 10 years, seven as a journalist. He began working for Bloomberg in 2002 as a reporter covering mostly the economy and politics. He is married, has three children, and practices aikido.

Angela Kohler

Born 1951 in Neustadt/S. Germany. Angela Koehler spent most of her professional life abroad as foreign correspondent of German News Agencies, different Newspapers, Radio and TV-Stations and Magazines in Africa and Asia. She was based in Ulan Bator, Daressalam, Salisbury/Harare and since 1987 in Tokyo, where she is on her third assignment. After graduating from the University of Journalism at first she worked as sportscaster, later she specialized in international affairs and world economy. Today Angela Kohler is the Far East Bureau chief of the leading German business weekly WirtschaftsWoche and the lifestyle magazine Fivetonine both published by the Handelsblatt Publishing Group in Dusseldorf. In Addition to Japan and Korea, she is covering subjects in South East Asia and India. Angela Kohler is married with one son.

David Simon Pilling: Tokyo Bureau Chief, Financial Times

David Pilling has been Tokyo Bureau Chief of Financial Times since January 2002 after having served as Pharmaceuticals correspondent from 1998. Before that he was Deputy/Acting Features Editor of Financial Times from 1997. Previously, he served as Argentina correspondent and Chile correspondent from 1993 through 1996. He graduated from Cambridge University with a degree in English literature in 1986 and obtained a post-graduate diploma in journalism from City University in 1988.

Linda Sieg: Chief Correspondent, Reuters

After graduating from Temple University with a bachelors degree in anthropology in 1972, she studied as a foreign researcher at the Faculty of Law and Political Science of the University of Tokyo for two years. She obtained a master's degree in journalism from Colombia University and a doctorate in Japanese history from Temple University, both in 1983. She then began working for Reuters, Tokyo Bureau as a general and economic correspondent and has held the positions of Editor-in-Charge of Corporate News and Chief Economics Correspondent before taking up her current post as Chief Correspondent, General News, Reuters, Tokyo Bureau.

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 Economist and 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 of the MOF task force on global capital flows. Jesper Koll holds a master's degree from the Johns Hopkins University, SAIS and graduated from the Lester B Pearson College of the Pacific in 1980. He has published many articles in Japanese, English and European publications as well as one book, "Towards a New Japanese Golden Age." He has been living in Japan since 1986 and is a German national.

Jesper Koll::
Thank you all very much for coming today to discuss your views on Prime Minister Koizumi and his legacy. Before we start the debate, could you please introduce yourselves. John, we’ll start with you.

John Brinsley:
My name is John Brinsley. I cover politics and the economy in Japan for Bloomberg News. I’ve lived in Japan on and off for a total of 10 years.

Angela Kohler:
I am Angela Kohler, working for the German Business Weekly “Wirtschaftswoche”. I have been here for six years now, but it is my third assignment to Japan overall.

David Pilling:
I’m David Pilling. I’m with the Financial Times. I cover politics, the economy, foreign policy and all kinds of broader issues.

Linda Sieg:
My name is Linda Sieg. I am the chief Correspondent at Reuters. I cover mostly politics, diplomacy, security policy, and disasters. I’ve been in Tokyo for 21 years now.

Koll:
Great, let me start out with a very general question. Koizumi has been in power for a long time and now he going to get out this September. What do you think is the most important legacy he is going to leave behind?

Pilling:
I do not see Koizumi as a policy reformer per se, but more as a political reformer. So, the most important legacy I would say is the way he has changed the LDP. One shouldn’t use words like irreversible or irrevocable, but the LDP changed quite dramatically. Of course not only because of Koizumi. He has expressed a change that was probably going on anyway. But now the LDP has certainly become an urban party or a party which now has an important urban constituency. Before it was a party that relied more on the rural vote. And in changing from a rural party to an urban party, I think it will have to adapt its policies to satisfy that constituency. To some extent this means that there is probably no going back to the old-style, rural based LDP. What we used to associate with the LDP is money politics, taking money from the cities and spreading it out to the countryside. I think that LDP is now gone and Koizumi has been an important catalyst for that change.

Sieg:
I certainly agree with that. Two other things spring to mind. One is his skill at manipulating the media. He has been exceptionally skillful at changing the interaction between politicians and the media. He has brought a new kind of populism and has brought back politics as entertainment. Just before I came, he was hosting a group of fashion designers and models doing a catwalk in the Prime Ministers Office. I don’t think we saw that sort of thing before. He is quite adept at sound bites.

The second thing is Japan’s security policy. Again, this is not something that Koizumi began in any sense, but he certainly has continued the line that was begun in the late ‘90s. He’s been trying to push for a greater global and regional role for Japan.

Koll:
So it’s official now – Japan is the unsinkable aircraft carrier for the Americans?

Sieg:
Well, no I wouldn’t quite put it like that. Japan has always been an unsinkable aircraft carrier for America so that is not a change. But sending troops to Iraq, moving in the direction of revising Article 9, just generally taking a broader role, which as I say is something that goes back beginning in the early ‘90s when Japan got so upset about their lack of appreciation for their money in the first Iraq war. It seems to me that it has accelerated. Part of that is 9/11 and Koizumi hitching his security policy more and more on the U.S. So in my view, Koizumi’s use of the media and his assertive international security policy are key aspects of his legacy.

Kohler:
Of course I agree with this. What impressed me the most is that he really has changed the style of policy. He’s made policy interesting because he is so stylish. He is so different from all the other politicians and he first of all won the hearts and the interest of Japanese women. That is for me very important. All of a sudden, because of him, the women got interested in politics, started discussing about it. And of course he also got the youth interested in politics. Women and youth – that’s the key for me. If I look at all the prime ministers before him, I can only remember Nakasone as a personality. Koizumi is simply the best because of his style and because of being so different.
In terms of action, what really impressed me the most is that he weakened the factions within the LDP. He did this against tremendous opposition against and created many enemies but in the end he was strong enough. Many of us had big doubts about him in the beginning but his destruction of the LDP factions has certainly been a powerful and constant theme of all of his ambitions.
On the policy reform agenda, well, he is not very successful in implementing reforms, but at least he has started some reforms. He has got the awareness of the public that it is necessary to have reforms. Just look at postal reform. I don’t know if it’s really that important, but at least he has pointed out the need for some changes and the people follow him and say, yes, it is necessary that the country must change. This is a huge achievement for a politician, to get the awareness of the public that it’s necessary, that Japan has to change. There are so many reform projects that he has initiated, and we have to see what happens now to them.

Brinsley:
I want to add the Koizumi impact within the LDP. The people that opposed him, he cast out of the party. He said that he would nominate his cabinet members without listening to the factions, and he did do that. So there clearly has been a weakening of the factions.
It seems people here seem to know more of what he’s done in terms of politics than in terms of policy. Like Angela, I’m not sure what the Japan Post effect is really going to be, but soon after he took office, his economic advisors said there’s going to be slow growth in Japan for the next two or three years, if we do what the Prime Minister is suggesting. After some time there will be private demand-led economic growth Koizumi did start cutting fiscal outlays as soon as he could. He did fight with the bureaucracy to reign in spending. He did cut spending to the Japan Highway Corp. And he did appoint Takenaka to push the banks to cut off bad loans. So I do think he deserves credit for the positive economic impact of his policies. There has been a return to optimism. Global investors are putting money into Japan in some part because they believe that banks are doing what they said they were going to do. And as a result they’re going to be lending more money. They’re going to be more proactive. And I think that Koizumi deserves some credit for that.

On the other side, there is also a legacy of his repeated visits to Yasukuni. He is going to leave a party that either has to be as nationalistic or more nationalistic or face doing some sort of an about face. The person who succeeds him is either going to have to say, ‘Yes I agree and I’m going to visit Yasukuni once a year,’ or start some sort of internal debate that says ‘We can’t go on this way because of foreign policy.’ And this is certainly not because of popular opinion in Japan, which seems not to mind it right now, because otherwise Koizumi wouldn’t have had the kind of electoral victory in September that he did. But Yasukuni is going to be a big issue for his successor. China is increasingly powerful and China is not happy about Yasukuni.

Koll:
Let me follow on that point. Do you think the Yasukuni issue is just Kiozumi personally? Or do you think that he used the Yasukuni Shrine to promote some of the other elements of his political agenda that you have alluded to? Namely, that politics is now sexy. That politics is now about the city, not the countryside, that it is attracting the younger generation rather than the older generation. Do you think that there is something deeper going on here, that this new nationalism is at the core of Japanese politics over the next 10-years? Or is it just a one-off thing that passes when Koizumi is gone?

Sieg:
That’s a very good question. I think he was initially appealing to a constituency within the LDP. His Yasukuni visits were not a populist act, because his promise came when he was running for LDP president. I think that nationalist constituency has always been within the LDP. But now the situation has changed. They are now able to be much more vocal with even some appeal to the broader population. It is my feeling, although I don’t know how quite to prove this except in some of the polls, but that the right wing of the LDP is still significantly more nationalistic and right wing than the populace as a whole. The LDP has traditionally been more conservative than the population as a whole. Where that goes in the future, and whether more politicians feel compelled to appeal to that constituency, clearly we see it not just on Yasukuni, but we see it on social issues as well. This whole notion that the word gender is not to be spoken, that sex education is excessive in schools, that kind of thing. It seems to be in a way a mirror of a conservative phenomenon in the U.S. and elsewhere as well. How far that goes, I personally find it very difficult to gauge.

Pilling:
I think Yasukuni has become a symbol, although a rather unfortunate one. I wouldn’t have said actually of nationalism, because I think that’s a very emotive word and can be misunderstood. And I really don’t think it’s accurate, at least not at the moment. But it is of a certain kind of wish to draw a line. To say that: “the relationship with China just cannot go on like this. China is no longer a poor country that Japan needs to keep apologizing to. It is now an increasingly, economically and politically important country. One day China will clearly, if thing go on as they appear to be, more important than Japan. And Japan needs to work out some kind of new relationship with China.” And I think Yasukuni has by some kind of accident become this kind of line in the sand. It would be better if it were a line in the sea. I mean the gas dispute between Japan and China would be much more sensible thing to argue about. Energy resources, Here you have something similar to what Europeans had to patch up their very deep differences after two wars that began in Europe using resources - steel and coal. The Japan-China gas dispute could build some kind of practical alliance, which eventually could turn into a political alliance and that would be more sensible. But unfortunately I think Yasukuni has become a kind of substitute and a really rather ill-fitting substitute for that desire to work something new.

Brinsley:
I think it’s possible that Koizumi saw promising to go to Yasukuni and going to Yasukuni as a salve to the right wing, to cover his desire for certain kind of market reforms that they might not have been in favor of. That in some sense he can sort of cover his flank by saying, ‘Look if I show this, if I go to Yasukuni, if I prove my credentials on this, I’ll be allowed to give more leeway to pursue these more sort of market-oriented reforms.’ This is a guess. I think that like David, it may have gotten away from him. I don’t think he anticipated, although he should have anticipated, the kind of reaction that they get from China and are continuing to get from China. And I think some of it really does come out of a sense of insecurity about the rise in China’s economic and military power. Why is Japan giving ODA money to China and why is Japan continually apologizing to China? Their view on history is not particularly objective, so criticizing Japan for doing this is hypocritical.

The other thing is that, for many of these politicians, the people in Yasukuni are their uncles and their grandfathers, and they’re finally standing up and saying, ‘We may have made these mistakes. On the other hand, these are our families that are lying there, and we have to support that.’ And I think that Koizumi gets a lot of political capital from doing that.

Kohler:
I agree with all of that but I would say it’s personally as well because he has said before the election he is going to the Yasukuni Shrine and he is famous for doing what he says. So of course he was obliged.

Sieg:
Except when he doesn’t.

Kohler:
Okay. That’s what many Japanese said. But in the Yasukuni case, he has done it. For me, as a German,, it is a little bit hard to understand what happened there. Of course I would never imagine Koizumi doing anything like chancellor Willy Brand did with his famous kneefall and deep apology to Poland. It’s quite impossible because the relationship with China and the understanding of history are so very different. But, I mean, what I can’t really understand is that he just watches the relations between China and Japan going down without doing anything. So this is really unbelievable for me because so many other things he has done so pragmatically. So I don’t know why he hasn’t found any way or any trick or anything to change Japan and China relations around.

Koll:
Let me follow up on this by turning the debate around. During his five years in power, what are you most disappointed with? What is the one thing that he promised and he has completely failed to deliver?

Pilling:
Well I would actually just go back to Yasukuni I’m afraid. But it’s not a reneging on what promised. The problem was he promised and he delivered.

Koll:
But to you you’re disappointed that there is not a constructive, that he hasn’t turned Yasukuni around and turned it into an issue of true statesmanship and leadership?

Pilling:
I don’t think he should have gone. I think it was a mistake to go in the first place and he’s been backing himself into a corner ever since. I think that it will be seen as the biggest failing of his prime ministership that he really soured relations between two very important nations. It is salvageable actually. One day one might even say just drawing a line could lead eventually to these two countries working out some kind of pragmatic relationship and that it took this kind of messy period to bring that about. That’s certainly what Koizumi believes.

Sieg:
I just have to quote Nakasone. I believe he said something to the effect that it’s easy to do something. What’s very difficult for a politician is to stop doing it.

Brinsley:
In some ways Koizumi was the victim of his electoral success and popularity because he went. He said he’d go every year that he was prime minister. Well, he’s been prime minister longer than anybody since the end of the war, except for Yoshida. For me, the other issue that has been a disappointment is Japan Post. He made a brilliant political move by saying he was going to dissolve parliament if it didn’t pass and everybody laughed at him. And by dissolving parliament when it didn’t pass and kicking out people that didn’t agree with him, he got the kind of urban vote that David was talking about. He got rid of some of the dinosaurs that have been holding the party back. But I actually haven’t heard any coherent explanation as to what the privatization of Japan Post is really going to do, considering that he watered down some of his proposals anyway to get it passed in the first place. Once it’s privatized, seven years from now, people are going to say okay, now what?

Koll:
Okay, so we got the Yasukuni and Japan Post. Any other disappointments?

Kohler:
Of course Yasukuni. But there is also the very one-sided foreign policy focus on only the United States. He has really missed the chance to put Japan a bit more on the international arena. Look at the German Chancellor Angela Merkel and what she is doing now. She is really making a new, pro-active foreign policy. And she’s getting lot’s of credit for doing so, both at home and abroad. I think Koizumi has missed that chance.
If you look what state guests come to Japan it sometimes is just really funny. These are mostly little states who want to have some aid, small and minor countries who want Japan’s money. There’s no active foreign policy in Japan. I mean if you really want to create some balance or a counterforce against rising China. Koizumi should have done more and be more interested in international relations. He has missed India. He went so late to India. China was already there. That was a big lost opportunity.

Brinsley:
Yes, I agree and would add that the whole Yasukuni issue came at the same time Japan was trying to get a seat on the UN Security Council. By definition you need China voting in your favor, so Koizumi locked out Japan’s chances.

Sieg:
I would agree. His failure is more generally, beyond Yasukuni, to have really an Asian diplomacy.
He never had a diplomatic agenda. I don’t know whether you can read anything more into Yasukuni than some very domestic reason for going. I don’t know if it was the sort of thing that you’re suggesting or the line in the sand. Personally, to me, at the time, everybody who was running for president of the LDP except Hashimoto said, ‘Yes, I will go to Yasukuni.’ I don’t know if you want to say Hashimoto was a brave person, but it took someone who maybe didn’t care if they didn’t get the job to say that at the time. I think, if I remember looking at Koizumi’s platform when he was running to be LDP president, foreign policy was two lines saying we will strengthen the alliance with America while furthering cooperation with Asia or words to that effect. I think that’s about all he had in there, and furthering cooperation with Asia was perhaps very much an afterthought. And he never really went beyond that.

Pilling:
I would like to turn to economic policy. Because on economic reform, obviously he’s known as this reformer. Personally, I’ve never been at all sure what this means. The word “reform” just means good change, and of course that just depends on one’s definition of what that might be. But in a sense, he said he would do certain things and in my opinion didn’t do them. And in my opinion that was good.
For instance he said when he came in that he was going to cut the budget and cut debt issuance to under 30 trillion. But he didn’t do that. Not at first anyway. Certainly now that the economy is a bit stronger he has done that, but I think the sequencing of those events was very important. And who knows what would have happened if he had slashed budgets during a recession. It certainly wouldn’t have helped the economic recovery and it could absolutely have stifled it at birth. So not delivering on his promises, in this case, was very good.
There’s another thing that he didn’t do. There was this phrase, too big to fail, and they were going to let banks and companies collapse. And again in my opinion that would have actually been a rather silly thing to do, even though it would have been done in the name of economic reform and rationality. But a very big turning point to my mind was the bail out of Resona and you could argue that that was anti-reform.
There were people at the time saying they should have let Resona go. But in the sense that they got a very good balance I think it was characteristic that the management of Resona itself was called to account. And that money was injected in, it was saved, so it sent the signal to the market that the government was standing behind, in terms of systemic risk and that things wouldn’t be allowed to collapse and the dominoes wouldn’t fall. On the other hand, people would be held accountable and things needed to be done. So that probably did accelerate the clean-up of the banks. But not in the way I think that the so-called reformers wanted.
And let us not forget that whatever Koizumi said about domestic economic reforms he was first and foremost very lucky in terms of the external support he got. When he said “no growth without reform” what was really going on was “No growth without China”. That would have been a more accurate portrayal of the way the economic winds have blown, very much in his fortune.

Sieg:
I can say the more we talk, the more I begin to wonder whether Koizumi really is that different and if in the end it wouldn’t have made much difference had, for example, Obuchi, not passed away in an untimely fashion and gone ahead with what he was going to do. Obuchi was already cutting back on spending and if what you’re suggesting about banking reform was more gentle than perhaps it sounded. I wonder, setting aside the foreign policy, how different would it really have been. It would have looked very different, although I would also add that Obuchi was a very media-aware prime minister, extremely media-aware, and so was a prototype Koizumi in that way. So it’s quite interesting. Clearly Koizumi is unique, but how much difference would it have made?

Brinsley:
You don’t think for example the appointment and support of Takenaka that in terms of pushing the banks, you don’t think that Obuchi…

Sieg:
Wait a minute, Takenaka was an advisor to Obuchi.

Brinsley:
Yes, but I think Obuchi didn’t give him the same kind of power base and credibility.

Pilling:
I think that Takenaka was very important, and clearly getting the banks sorted out is important psychologically and for Japan’s future. However, someone was pointing out to me only yesterday that if you actually analyze the bank’s role in this four or five year recovery, it’s not quite clear what it was. They haven’t lent anybody any money and they haven’t helped the BOJ with the transmission mechanism.

Sieg:
They didn’t fail.

Pilling:
Quite. What they did was not to go bust. But quite how they’ve aided the recovery is not so clear. Certainly there’s been a psychological effect. I don’t deny that. People say the banks are sorted out now.

Koll:
Don’t forget that people made a lot of money from the Koizumi / Takaneka bank policies. Nothing succeeds like success and there can be no doubt the bank policy did start a virtuous cycle that had a positive impact on the economy well beyond any bank lending data.
But let’s move ahead what are the expectations that you have for the guy who is going to run the country at the end of September? Who do you think is going to be the guy? Does it matter who is the next Prime Minister?

Brinsley:
I think it’s pretty clear it’s going to be Abe. If it’s not Abe it could be Fukuda.

Kohler:
I wouldn’t be that sure.

Brinsley:
There’s nobody else I think that could get the kind of votes within the LDP. I think there is something else, though, just in terms of what’s very important going forward. Japan has a rapidly aging society and a dwindling reproduction rate. Yes, the country is extremely wealthy but also has many quality of life issues. Koizumi was presented in some sense with a five year stint, which is rare for a Japanese Prime Minister. He didn’t do anything to address what really is going to happen to this country in terms of its quality of life 10 or 15 or 20 years down the line. And whoever succeeds him is going to have to deal with the education system and with the welfare system and higher taxes. Koizumi just says ‘Yup, we need higher taxes and I’m not going to be the one to do anything about it.’ And I think that those are the kinds of things, that by putting off, he is going to put that much greater burden on whoever succeeds him. And I do think it’s going to be Abe although I could be wrong.

Kohler:
I wouldn’t say it’s Abe because he has such high popularity rates and he has the support of Koizumi so it looks like a straight shot from one to another. Deep in my heart I think it is not that simple. Many Japanese friends tell me that Abe is simply too young. We have a very young opposition leader who has been ambitious and has been trying to make a big splash. Unfortunately, Maehara-san has miscalculated badly and almost all his tactics have backfired. Sure, the LDP is notr like the Democrats, but I think Abe is just too young.
Abe, against Fukuda will be very interesting to watch between now and September. Remember that Fukuda has no official position so he can’t make anything wrong. He’s got all the time in the world to prepare the groundwork and come out like a knight in shining armor. In contrast, Abe is totally exposed every day. He’s bound to make mistakes and Fukuda will benefit.
Also remember that many business leaders in Japan are very unhappy with Koizumi’s Southeast Asia and China policy. Abe is directly linked to that policy. I think many business leaders would like to have a prime minister who will change Japan’s foreign policy. I doubt that Abe will get the backing from the business community. In contrast, Fukuda is really a very balanced guy with a pragmatic approach to China, Korea and business. He can be very aggressive and at the same time he is very focused. So I think that many Japanese see him as a quite good choice.

Pilling:
I don’t want to predict who is going to be the next prime minister, but I’m pretty sure it won’t be somebody who goes after the rural vote, who doesn’t care about his standing in terms of popularity with the public, and who is advocating big government. So in that sense things have changed. Whoever it is will have to be media savvy and court the public, will have to put forth policies that are appealing to urban voters and will have to carry on the rhetoric if not the practice of smaller government, private sector where private sector can play a role, and those kind of things that Koizumi has articulated and I think that is in a sense more important than the individual. That of course leaves aside the question of foreign policy, which has been left hanging by Koizumi’s premiership.

Sieg:
I don’t want to make any prediction. I think that no one in the past decade or so has predicted correctly who would be the next prime minister two or three months before the election. We all try, but it has never worked. Why should it now? I don’t really think we’re now in a situation that is any more predictable than it was before previous LDP presidential elections.

Koll:
Let’s take a step back and consider the broader picture. I think it is possible to argue that Koizumi has had it exceptionally easy. Start with economic policy. When Koizumi came to power, Japan really was on the brink of economic crisis. Deflation and the banking crisis were the obvious big issues that needed to be tackled. Some decisions had to be taken and that Koizumi and his team led by Takenaka did exactly that. Now the banks are fixed and the economy is fine. From here on, all economic policy decisions are very difficult ones. Japan is going to have to raise taxes, hike pension and heath care contributions, cut social security benefits. During crisis, it is easy to make decisions. During normal times, decisions are much more difficult to be implemented, If it ain’t broken, why fix it?
So the question is whether this means Japan’s next focus is going to be foreign policy. Similar to Angela Merkel today in Germany. She has a lot of unpopular deciusions to make at home, but uses a pro-active foreign policy as her popularity booster. Is it possible that Japan’s foreign policy will move to center stage under the next Prime Minister?

Brinsley:
In a country that has no foreign policy?

Sieg:
No, I don’t think so.

Brinsley:
Japan has one foreign policy and that is “let’s make our relationship with the United States stronger.” There is nothing else.

Koll:
What if the next Prime Minister runs on a manifesto that declare: “I’m going to implement a free trade agreement between Japan and the People’s Republic of China.’ Is that going to get him votes? Is that what David pointed out, the rural vote, the urban vote, is that going to keep me in power?

Sieg:
Unless you run on a foreign policy that is very domestic in it’s orientation, it doesn’t get you votes. And that’s the sort of foreign policy that would be anti-immigration or anti-China or something like that. I don’t think people run to the polls and say, ‘Oh he’s for a free trade agreement with China so I’ll vote for him”.

Brinsley:
Whoever is going to succeed Koizumi is not going to face a popular vote. He’s going to face a vote within the LDP and that’s it.

Sieg:
The LDP always has the next general election in mind.

Brinsley:
They do, but the next is when, 2007? In the Upper House. But we’re sort of talking about two different things.

Sieg:
I don’t think that they’re going to go back to a situation where they elect someone who they think can’t win elections.

Brinsley:
Right, like Mori.

Pilling:
I agree that making a strong foreign policy stand could be a distraction, as you say, to difficult decisions that maybe people don’t want to make at home. But it’s not necessarily clear to me what those foreign policy decisions would be.
I mean in the four years that I’ve been here, one thing that I’ve noticed is that if politicians like Koizumi says things enough times, public opinion seems to swing behind him. You saw it in Iraq. You saw it actually initially in China where he was very positive on China when I arrived and China was getting a battering in the press for selling cheap mushrooms to Japan. It was a terrible sin. But Koizumi actually made quite a number really rousing speeches, which were quite new at the time, about China being Japan’s great opportunity and you saw public opinion swing. I do see public opinion here has been quite volatile so I could see a pro-China or anti-China foreign policy articulated in the right way, garnering support. And that’s perhaps not a very kind thing to say, but I do see things as sort of swinging around quite wildly.

Kohler:
If you only look at the NHK news at 7pm you get a sense of how low the interest in foreign policy is. Most days there is absolutely nothing, no news reported from the world.

Brinsley:
Except for the States.

Koll:
It depends on whether Matsui-san or one of the other Japanese baseball players hit a home rune, right?

Kohler:
Yes, but I would not count that as real international news, no?

Koll:
What about the other way around. Is the world that interested in Japan? More and more newspapers closed their Tokyo offices recently. Does the world care about Japan?

Kohler:
Well, less than before. I can see it from Germany. Germans want to know about China and increasingly to India. I was sent to India three times in the last three months. I spent more time in India than in Japan and I think this is a trend. I don’t like it very much. I like India, but I do think Japan is just as important.

Pilling:
There’s a kind of frothy interest in Japan at the moment. But I think that is probably all it is. Japan was very interesting when it was going to take over the world. It was very interesting when it was going to collapse and take the world down with it.

Kohler:
Now Japan is normal. And normal is boring.

Pilling:
Well, Japan does have cool cartoons. Yeah. I mean there are a number of things that will always keep Japan a kind of solid story. There’s kind of cute, wacky, wonderful Japan. There’s Japan makes the cars we drive in and the gadgets that we have. And a lot of readers use these things and people do realize that even though it’s invisible, Japan’s financial power, whether it’s buying my government bonds or potentially merging with my company or whatever. Japan always has a global presence. But the world takes Japan a little bit for granted, and even though China is smaller, even though India is far smaller in terms of GDP, they are considered much more exciting stories because they’re clearly moving faster.

Koll:
So for the rest of the world then it doesn’t really matter who becomes Koizumi’s successor?

Pilling:
Well, it matters on the margin. It’s not of essential concern. Obviously if things got very nasty between Japan and China that would become a very big issue. And if fences are quietly mended, that would be noted. The world would move on.

Brinsley:
If Japan changes its constitution, it would become a big issue

Sieg:
Yeah, I mean I find a fair amount of interest in security issues and I think regionally that’s even greater. I think, to whatever extent, if Koizumi can be credited with fixing the economy or the banks, he also brought Japan back as a media story. At least in the early years. Now people have gotten used to it and he’s not seen as so strange anymore. But there has been a lot of interest in him, because he was so different.

Koll:
There is one final issue I want to raise. In my discussions with politicians there now is constant reference and concern about the rising inequality, the rising gap between the rich and the poor. Certainly that is to some extend associated with Koizumi, you know, Mr Horie and the newly rich living in Roppingi Hills, while most other people still are stuck in rabbit hutches. Are you concerned about this? Japan used to be “communism that works” – high economic performance together with very stable income equality. Now this has changed and increasinbgly politicians are campaigning on the slogan “I’m going to look out for the weak”. What do you think?

Sieg:
It’s been made such a huge deal of but if you look almost anywhere else, isn’t the gap just ever so much bigger? In Japan, people get excited about a gap that anywhere else no one would notice. I may be wrong, but that’s what the figures suggest.

Brinsley:
Yes, that is what the figures say.

Sieg:
So I’m not sure how real this story is. It may be something very convenient to attack the LDP with, though.

Kohler:
I think there has always been a gap between rich and poor in Japan. It’s just that the rich did not show off in the past.

Sieg:
Yes, it has become more conspicuous. That was also true during the “bubble economy”.

Brinsley:
I am baffled by why there is not some sort of policy to encourage people to leave the cities and use telecommunications and use the land, that is arable, where people still have room and houses. There are these villages with a lot of space, and everybody is 65 years old.

Kohler:
I was in Kofu recently. It is frightening. The city is empty. Just 90 minutes from Tokyo and every second shop is closed. You walk through the main street and don’t meet a single person.

Brinsley:
It’s interesting. What is correct is that the LDP has focused on the urban voters and they have sacrificed the rural voters without actually anybody trying to address the possibility that there could be a way of enticing or helping encourage young voters to go back to their rural areas. And there’s nothing like that at a time when working on the internet and having cell phones. You don’t have to live in Roppongi Hills.

Koll:
You think that’s a government regulatory issue?

Brinsley:
No, I don’t think it is a government regulatory issue, but they haven’t addressed in any shape or form on even a philosophical level.

Pilling:
I don’t think that the egalitarianism of the post world war was quite all that it appeared to be and I think those gini coefficients are a little bit misleading. But I do think that in the next few years anyway, at least, the story will actually begin to go away, because I think some of what you saw was just the stresses and strains of the ‘90s.
For instance, the casualization of labor, which obviously did increase wage differentials While I don’t think there’ll be any going back to status quo ante but I do think that in the next two or three years anyway, you’re going to see companies taking on more workers on a full time basis, and some of these problems will be seen to be going away. So I’m not saying the issue goes away entirely, and clearly Japan is moving very steadily to a different sort of society. But I think that it will go off the political boil for a bit as an issue.

Koll:
Finally when you look at Japan, what is your number one concern that you think needs to be addressed with some sense of urgency by whoever succeeds Koizumi?

Pilling:
China.

Kohler:
China and aging society.

Brinsley:
China and education.

Sieg:
China and Asia relations.

Koll:
So it’s all about China

Pilling:
Well China is the answer to all of Japan’s problems, isn’t it? I mean it’s got the population that Japan doesn’t have, the markets that Japan doesn’t have, the workers that Japan doesn’t have.

Brinsley:
It also has the army that Japan doesn’t have.

Koll:
Thank you very much for your time and your thoughts.

投稿者 gnpo : 11:13 AM