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Thursday, July 28, 2011

Japan's opportunity for global re-engagement


By IAN MCCABE and SHURI FUKUNAGA
Special to The Japan Times

Few would doubt that Japan's economic relevance was already being questioned by some in the global community before the tragic events of March 11.

This was due to such things as years of economic sluggishness, the rise of China as Asia's leading economy and key driver of global economic growth, and Japan's high-cost economy due to the strength of the yen. Also working to undermine Japan's international economic relevance were perceptions of years of political inertia hindering development and implementation of a long-term economic reform program.

The recent crisis has put Japan center stage on the international agenda, and the country's response to the current economic, environmental and humanitarian challenges will clearly determine how it will be perceived by stakeholders around the world for many years to come.

Fukushima is shaping how nuclear energy is perceived globally — both by countries with nuclear power plants as well as those considering the role of nuclear power in their own infrastructure planning.

For example, in the wake of the crisis, Germany has decided to turn away from nuclear energy and has ordered all nuclear power plants to be closed by 2022. Other countries may soon reach the same conclusion as efforts to contain this crisis drag on.

Given the global impact of this disaster, the Japanese government must ensure that the international community is part of the discussions about the extent of the challenges that are presented by this crisis, the options to address them, and the plans to contain it and rebuild.

As the government works to carry out reconstruction efforts, there are signs that Japan has not yet come to terms with an important fact: No one is expecting the Japanese government or the people of Japan to face this crisis alone.

As was shown by the significant outpouring of relief and support immediately following the earthquake and tsunami, the world is ready to assist Japan at its time of need, just as Japan has helped many other nations address their challenges. Openly welcoming this participation in the reconstruction effort can have both practical and strategic benefits.

Chief among these are the strengthened links that Japan gains with those governments, companies, organizations, and individuals that are part of the process.

For this to happen, the Japanese government must communicate with those international stakeholders who clearly have a vested interest in Japan's success. And the faster Japan reaches out to them the better, because the world's attention on Japan's reconstruction will dissipate with time.

This engagement should not be restricted to radiation and reconstruction issues. The government should also take into account factors affecting its recent sovereign downgrade and the fact that Japan has been slipping off the radar screens of international investors, traders and even tourists. The signs of this are everywhere.

In Tokyo's bustling Roppongi, a proprietor of a popular soba restaurant frequented by both resident expatriates and travelers confirms, "The composition of our clientele has changed completely." Today his customers are no longer an international mix, they are predominantly Japanese.

Strengthening ties with the international business and financial communities will be critical to the restoration of confidence in the long-term prospects for Japan's economy and is essential to the improvement of Japan's sovereign credit rating, which will ultimately reduce the cost of the public and private sector borrowing that will be critical to the reconstruction process.

Experience shows that targeted international communications with the business and financial communities can help restore confidence in a nation, in its economy, industries, regional markets and as a whole. But that process will only succeed if the central government can demonstrate clear recognition of the challenges that are at the root of the reduced economic confidence and then show that it has an equally clear plan to address them. The end result of such an initiative in Japan's case would be international credibility for its messages and new recognition for the country and its economy. This would ultimately create long-term benefits that go far beyond an improved sovereign rating.

Japan has time and again shown its resilience and there is no question that it will succeed in addressing this current crisis. As the 58 percent of Japanese respondents to a recent poll by the Pew Research Center Global Attitudes Project believe, Japan has a chance to emerge from this disaster as a stronger nation.

There is also an opportunity for Japan to use its response to this crisis to reinforce its global relevance. A renewed commitment to engagement with the international community and effective communication of the country's economic recovery plan and its implementation achievements are essential to making that possible. Key to this will be the government acknowledging the ticking clock and carrying out this engagement before the world's attention and interest in Japan's recovery wanes.

Ian McCabe is managing director of Asia-Pacific public affairs and government communications practice at Burson-Marsteller. Shuri Fukunaga is managing director and chief executive officer for Burson-Marsteller Japan.


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