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Monday, Jan. 5, 2004

Pro-U.S. stance on the line


U.S. political scientist Francis Fukuyama once predicted that the end of the Cold War would usher in an age when economic power would be the source of national strength. It seems his prophesy was off because of the policy stance of the Bush administration.

The prediction was highly encouraging for Japan, which has no choice but to depend on economic power for its national strength. But Washington's "neocons" believe that military power and its use are the source of national strength, and tend to consider international relations in the context of confrontations between "a strong America and a weak Europe."

A decade after the Cold War ended, serious discord has developed in the Christian civilization of the West. The rift has yet to become irreparable perhaps because Britain has never wavered from its pro-U.S. policy. I don't understand why Britain has been so loyal to the United States. A major question for Japanese diplomacy is: Will it continue its traditional pro-U.S. stance, or will it shift to a multilateral diplomacy with more emphasis on East Asia?

Aside from proposed amendments to its no-war Constitution, Japan is likely to remain weak in military terms compared with the U.S., the military superpower. If Japan continues to give moral support to the U.S. neocons, though, it will inevitably invite discord with other nations in Europe and Asia and will become a U.S. vassal. Dissension with other Asian countries would be a grave problem for Japan's economic future, since there is growing talk of an East Asian economic zone.

I have predicted that East Asia will become an economic zone dominated by mainland and overseas Chinese. The question for Japan is how to get involved in the zone. The "new vision" of the Japan Federation of Economic Organizations is that Japan should take a strong initiative in establishing an East Asia economic zone. To do so, Japan must have political influence that other East Asian nations respect. It must also possess strong cultural leadership, negotiating power and legitimacy that demand respect from neighboring countries.

Japan must push for structural reform in its economy, politics, government, education and other fields. Otherwise, Japan will become the "Switzerland of the Orient," having little to do with the economic zone dominated by mainland and overseas Chinese. While some people may not object to that scenario, others will.

Japan has a population of more than 120 million, compared with several million for Switzerland. The national management of Japan entails totally different problems from that of Switzerland.

Singapore, with a population of 4.13 million, is pushing a national project to develop a health-care industry as a major source of export revenue. Under the plan, Singapore will recruit top-notch foreign medical researchers at high salaries to develop a large-scale system for exporting pharmaceuticals, medical equipment and health-care services.

Singapore is a nation of ethnic Chinese and Malaysians. Pharmaceuticals approved for use in Malaysia on the basis of clinical tests are likely to win acceptance in China and Indonesia. Singapore, now dependent on information technologies, has created the health-care industry development program for the next source of national strength.

Japan, with its population, could never survive on health-care-related export revenues alone. Japan is having trouble enough working out policies to get out of a nearly 13-year-long economic malaise mainly because its economy is too large and cumbersome. To end the slump, Japan must push technical innovation, stop the deterioration of its human resources and redirect capital to high-return investment opportunities.

Toward that end, it must shift quickly to a postindustrial society based on high-tech manufacturing and nonmanufacturing industries. Furthermore, Japan must tackle structural reform for swift and appropriate adjustment to globalization, which it began late in the 20th century.

In pushing reform, Japan must pay close attention to the process and tempo. At the same time, Japan must restructure its diplomacy while pondering whether to continue its pro-U.S. stance or to change to a multilateral diplomacy with more emphasis on East Asia. This will determine the fate of Japan in the first decade of the 21st century.

Takamitsu Sawa, professor of economics at Kyoto University, is also the director of the university's Institute of Economic Research.


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