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Japan in a European club?

by Pamela Cox and Kevin Rafferty

Special To The Japan Times

Hitherto unknown and self-styled “loach” Yoshihiko Noda must learn to swim in an ocean of problems as Japan’s new prime minister of the year. He has more than a plateful of domestic issues, but he should also realize, as his predecessors forgot, that Japan needs to re-engage the world if it is to find a way out of its depressing economic and political predicaments.

Most commentators have seen Japan’s international failures centered on political chestnuts such as U.S. bases on Okinawa, ministerial visits to Yasukuni Shrine and comments about Japanese militarism. Though important, they miss the bigger question of Japan’s economic role in the globalizing world.

Noda should understand: As finance minister, he huffed and puffed and threw ¥4.5 trillion to forestall the currency’s rise, but several weeks later, the yen is hovering close to postwar highs. Unilateral intervention is temporary, expensive and self-defeating. Multilateral cooperation will not come without Japan taking time and trouble to understand and improve relations with the world, realizing that Japan, with 1.8 percent of the world’s population, puts out 8.5 percent of its GDP.

Japan is highly vulnerable because of the yen’s rise, which threatens exports — accounting for half of growth; China’s looming massive economic (and political and military) shadow; and the government’s heavy indebtedness, which means it will soon be hard-pressed to meet health, welfare and pension obligations. All this hits hard when 30 percent of Japan’s population will soon be older than normal retirement age.

The country has opportunities in its sophisticated high-tech industries, its precision work, its literate and numerate population, and long experience in economic and industrial development using meager resources. It will not be an easy task to accentuate the positive as it means reinventing Japan and discovering new relationships with the world.

The new government could well start by dipping into McKinsey and Co.’s recent book, “Reimagining Japan: the Quest for a Future That Works,” a flawed but stimulating set of 80 essays.

The concluding essay, by Heang Chhor, former head of McKinsey Japan, sets out some demanding priorities: “Restructuring and globalizing Japanese companies, changing the educational system, adapting to troubling demographic trends, attracting foreigners, and building closer ties with Asia. One consistent element running through this list … is the need for more openness and collaboration with the rest of the world.”

Japan must find a new way in Asia, including how to cooperate with China without kowtowing. It also has to deepen relationships with America and Europe. For all the ballyhoo of the coming of a new Asian world order, China is still less than 10 percent of world GDP, the European Union is still the biggest trading bloc, and the United States and the EU together still account for 55 percent of global GDP.

It is time for Noda — and his successors — to think far outside their traditional boxes. I have a radical serious suggestion — that Japan should seek membership in the European Economic Area, which comprise the EU plus Iceland, Liechtenstein and Norway. Since the freeloading Swiss, who refused to join either the EU or the EEA, also enjoy privileges of the area, why shouldn’t Japan, which is a bigger European investor and provider of jobs than many EEA countries? Such a move would benefit both sides, particularly in promoting free movement of people and ideas.

Otherwise, with the consolidation of the EU, which permits virtually free movement of its 501 million citizens anywhere inside Europe, non-Europeans are becoming marginalized, and Japanese are at risk of being lumped together with Chinese, Pakistanis, Peruvians and Somalis as “other” citizens.

It pains me to say so, but my own country, the United Kingdom, which is almost as mongrel as the U.S. in its racial and religious makeup of residents, is taking the lead in showing hostility toward non-European strangers. No doubt Her Britannic Majesty’s Ambassador to Japan will write some eloquent waffle claiming that the U.K. welcomes all genuine visitors and has a long and distinguished history of friendship with Japan going back more than 150 years. This cannot obscure the fact that the way the friendship is administered is becoming unfriendly.

For Britain, Japanese are not “visa nationals” — on a long list of countries including South Africa and Vatican City, as well as Burma (aka Myanmar), China, India, Iran, Pakistan, Sudan, Syria, Vietnam and more than 100 others, whose citizens must get a visa to visit the U.K. Nevertheless, if a Japanese wishes to work, study, get married — even for a brief marriage ceremony at one of Britain’s many historic or scenic venues before returning home — or live in the U.K., he or she must obtain a visa.

The visa maze involves being photographed and fingerprinted — as only criminals were previously subjected to (like Japan) — and paying a hefty, nonrefundable fee on submitting the application, which must include proof of funds, bank statements, proof of qualifications, proof of job or study course. The application is shipped with passport to Manila for processing.

Surely, Japan should protest against a foreign government sending a Japanese passport to a third country!

I have just returned from visiting eminent British universities (Oxford, Cambridge and London), where professors I spoke with complained about the expensive, lengthy and inefficient visa process for foreign, including Japanese, students. An English clinical doctor with a Ph.D. from a renowned Japanese university (earned and examined in Japanese), threw his hands up in horror: “We are powerless, and the visa officials are bean counters who do not understand research or what universities do.”

He told me of two Japanese postdoctoral researchers with good funds from Japan who had been accepted at Russell Group universities (the U.K. equivalent of the Ivy League) for medical research. One was rejected for a visa; the other gave up because the processing took too long.

Workers and managers at Japanese companies seconded to the U.K. face the same tortuous processing. It is a silly, expensive and unnecessary game for leading Japanese companies like Toyota, Sony and others, which contribute so much to the U.K. economy.

A British Home Office study found that the British economy could lose up to $5.8 billion in the next four years because of the student restrictions alone.

The EEA would benefit from Japan’s membership, and Noda could think of pegging the yen to the euro. But Japan would also gain from an infusion of new ideas and people since it would have to reciprocate and take a wider worldview.

Kevin Rafferty is editor in chief of PlainWords Media.