Once the Cold War was over, globalism was widely expected to expand but has since lost its momentum due to the credit crunch stemming from the sovereign debt crisis in Europe and the ensuing economic recession around the world. As a result, the World Trade Organization gave up in December on concluding the new round of trade rule negotiations at an early date.
Major countries are finding it hard to get out of the current predicament despite persistent efforts to expand their economies by utilizing traditional measures such as interest rate cuts and fiscal outlay augmentation. To overcome the difficulty, they must step up technical innovation, reform their social systems and hone their competitive edge. But they are still groping for ways to achieve "new growth." The question is how Japan can contribute to the achievement of global reforms.
Since the burst of Japan's bubble economy in 1990, its political functions have stagnated, its enterprises have clung to their conventional operational methods and its people have assumed inward-looking attitudes. Since it took power in 2009, the DPJ administration has repeatedly made foreign policy mistakes and Japan's presence in the world is receding. Friends overseas are voicing warnings with a tinge of sarcasm by saying, "Whereas people from China, South Korea and Taiwan are active abroad, what are Japanese doing?"