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Saturday, Dec. 25, 2004

Waiting for Japan to change -- or can it?

LOS ANGELES -- For as long as I write this column on Asia, which enters into its 10th year next month, I doubt I'll ever witness anything as amusing or telling as the flareup that took place at the close of the University of Southern California's Asia Conference last month.

Until the very end, the two-plus-day event -- on "Japan's New Economy for Foreign Investors" -- had gone swimmingly. Everyone on the panel, from Toshiaki Ogasawara, the well-known publisher of The Japan Times, to the dynamic USC Annenberg School Dean Geoffrey Cowan, had agreed that Japan's economy was indeed a globalized flower garden opening up to outsiders faster than an overnight burst of spring. The consensus in the large hall at the elegant Shilla Hotel in Seoul was seemingly harmonious -- until a single dissonant voice boomed out.

The consensus-breaker was a normally placid Thai businessman who, like a Buddhist monk, ordinarily kept his true thoughts to himself. But he just couldn't take it any more and lambasted the entire panel for being in denial about the reality of Japan. He recounted a recent all-too-typical business trip in which he encountered at every step Japanese brick walls, closed Japanese minds and zipped-up Japanese markets.

If Japan is now trying to convince people it is suddenly entirely different, this foreign visitor wasn't buying.

And his view isn't simply contrarian. Japan hardly seems to have made up its mind about which way to go. Like the French, the Japanese have a word or two for such a phenomenon. They use the term tatamae for the things people say out loud only because it seems to be the right thing to say. And then they use the term honne to refer to the real and true situation that often goes unsaid.

Take the question of the alleged Japanese economic recovery. The tatamae is that Japan grew at a remarkable 3.8 percent annualized pace from early 2002 through early 2004. In fact, as The Oriental Economist, the authoritative New York-published monthly on Japan, reports in its December issue, the growth rate was at best 2.6 percent and perhaps barely 2.1 percent. This honne is actually a slower growth rate than the so-called economic recovery of 1995-96. And now a major investment bank in Japan is predicting a 2005 growth at barely 0.5 percent.

Those figures would be enough to get the Thai to cry out again. For if the world's second-largest economy is going to remain mired in a slump for another decade or so, is it realistic to think that the world will continue to avoid global recession?

"You overemphasize Japan's willingness to reform itself," a longtime reader and former UCLA student e-mailed me recently. "The Japanese don't like change."

That's just not true, assert many Japanese observers, and West Coast-based professor David Matsumoto, of California State University, San Francisco. In lectures, and in his superb little book, "The New Japan," the professor seeks to debunk common "myths" about Japan -- the famed collectivism, for example, as well as the minimalized personal emotions.

The truth, he says, is that Japan is a simmering caldron of change, fueled by generational cleavage, a youth revolt and the unavoidable impact of globalization. His deep-seated fear is not so much that Japan is unchangeable but that unavoidable changes may catapult it into sudden social disorder, if not revolution.

"In short," he writes, "Japan is erupting into a different culture . . . plagued with a sense of confusion, unrest and anxiety."

Perhaps it is this insight that helps explain the seeming paradox of Junichiro Koizumi, the forward-looking prime minister who's trying to thaw the encrusted economy by, for example, privatizing the vast postal service, yet who stubbornly trudges to those controversial war shrines and cemeteries that remind everyone else in Asia of the dangerously militaristic imperial Japan.

Perhaps Koizumi contains within himself both the tatamae baloney that enrages Asians like our friend, the ordinarily quiet Thai businessman, and the honne honesty of Matsumoto, the ultimate optimist.

Writes the professor: "Effectively dealing with its emerging cultural dualism in what was once a more homogeneous, unicultural society may be Japan's biggest challenge, and contribution to its legacy, for generations to come."

Japan's subterranean cultural revolution is one of the world's most important -- and chilling -- under-reported phenomena. Sure, someday the real Japan will stand up. But when it does, is it going to knock other people over -- economically or otherwise?

UCLA professor Tom Plate, a member of the Pacific Council on International Policy, is founder of the Asia Pacific Media Network. Copyright 2004 Tom Plate

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