Japan’s “rather rosy” start in 2008, as a senior Foreign Ministry official described it recently, with all the back-patting over commitments to climate change and African development reached at key summits hosted by the nation, soon faded in the face of domestic political chaos and the global economic crisis.

Stepping into 2009, Japan faces both chances and challenges as it struggles to make its presence felt — the opportunity to take a lead in assisting other economies ride out the economic storm, and the difficult choices anticipated in building its relationship with the incoming U.S. Democratic administration, experts said.

It is often said Japan enjoys better relations with the U.S., its closest ally, under Republican administrations. Some Japanese officials acknowledge the anxiety in Tokyo and say the government has already begun consultations with U.S. President-elect Barack Obama’s aides.

“I do think there are many fronts where Japan and the United States can work together, as we did with the previous government,” such as on Afghanistan, Iraq and Africa, said Masato Kitera, director general of the ministry’s International Cooperation Bureau.

“But there is no time to waste. We are hoping for good communication from the very beginning of the administration,” he added, noting his concern over the length of time usually required in the U.S. for a new administration to begin full-fledged operations.

With Obama seemingly inclined toward a bigger U.S. military presence in Afghanistan, requests from Washington for Japan to contribute more in operations there will undoubtedly present hard choices for Tokyo, given the Constitution’s limitations.

Japan has just completed the withdrawal of its five-year Kuwait-Iraq airlift support mission in December, leaving its refueling operations in the Indian Ocean as its only ongoing deployment. This duty is part of the U.S.-led war on terrorism.

“We will have to find an answer between black and white, something Japan can do within its legal restrictions but also satisfy U.S. expectations,” another senior ministry official said on condition of anonymity.

Some analysts said conflicting interests between the world’s two largest economies in the financial crisis may pose challenges to the alliance, such as the continued appreciation of the yen and Washington’s approach to stimulating the economy through fiscal spending.

“The United States is going to follow a very Keynesian policy of increasing deficit spending, so it would want other countries, including Japan, to do the same,” said Robert Dujarric, director of the Institute of Contemporary Japanese Studies at Temple University’s Japan Campus. “This is going to create conflict with the Japanese, who want to focus on fiscal consolidation.”

Meanwhile, on the positive side, the importance attached to human rights by the Democrats will provide an opportunity for Japan to make the abduction issue more of a common agenda with Washington when dealing with North Korea, as compared with the George W. Bush administration, which placed more priority on denuclearization.

“On the issue of North Korea, Obama takes a similar stance (as Japan) in the sense that he places importance on the resolution of the abduction issue, not only of Japanese citizens but also of (South) Korean citizens,” said Yasuhisa Kawamura, the ministry’s deputy press secretary. “Japan hopes to advance cooperation with the Obama administration.”

If realized, this may help to mend the rift between the allies after Washington delisted North Korea from its blacklist of state sponsors of terrorism, despite Japan’s repeated calls against such a move before the abductions had been resolved.

Similarly, Hajime Izumi, a professor on Korean affairs at the University of Shizuoka, said, “If Japan takes a comprehensive approach, which is to deal with the abductions, nuclear (arms), missiles, and its promised compensation to settle (the colonial-rule) past with the North altogether, then Japan and Obama’s overlapping interests will enable better coordination.”

But Izumi also pointed out that for Japan to be able to make progress in resolving the cases of missing Japanese abducted by North Korean agents, domestic political stability will be crucial.

“Japan must have an administration that can last at least one to two years. Otherwise, North Korea would not engage seriously in negotiations with Japan,” Izumi said.

He was apparently referring to the current ailing administration of Prime Minister Taro Aso — just three months into office — and the back-to-back resignations by his two predecessors, both in just a year’s time.

Aside from North Korea and the six-party denuclearization talks, which critics and ministry officials say are likely to continue to stall as Pyongyang takes a wait-and-see attitude to analyze Obama’s policies, China will also remain a target of Japanese diplomacy in Asia.

An Asian diplomat in Tokyo said he believes China will be Japan’s main Asian preoccupation in 2009 given China’s growing international influence and the importance of its relatively robust economy amid the current financial crisis.

“Of course the denuclearization of the Korean Peninsula and the abductee issue will remain on the Japanese radar, but Japan’s eyes will be firmly fixed on China,” the diplomat said, declining to be named. “In addition to security concerns, Japan will also be hoping the Chinese economic locomotive keeps steaming ahead.”

Relations between Japan and China, as well as with South Korea, have improved significantly in recent years, as signaled by the landmark trilateral summit held in Japan in mid-December.

The amicable ties are likely to continue in 2009 as both Beijing and Seoul will be preoccupied by worries over their economies and with their expectations for Japan’s support and cooperation amid the financial crisis, thus experts believe the two nations will try to avoid clashes with Tokyo.

“With the recession in the United States and Europe, we must work jointly with Asian partners to increase internal demand,” said the ministry’s Kitera, who was involved in Japan’s aid to Thailand in the 1997 Asian financial crisis. “We are working on what Japan can do to assist our Asian partners in implementing domestic growth measures.”

However, the long-standing disputes with China and South Korea over wartime history and territory that are now dormant may erupt again if public sentiment deteriorates.

For example, the March review of high school textbooks may possibly reignite outrage in South Korea over the sovereignty of Takeshima, a set of Seoul-administered islets known as Dokdo in Korean.

“This may result in a vicious cycle, in which criticism from the South Korean side would cause some Japanese to argue against providing support to defend the depreciating South Korean won amid the financial crisis, and this in turn generates further anger on the Korean side,” said the University of Shizuoka’s Izumi.

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