The disturbing thing about Japan today is that it lacks a clear sense of national purpose even though the 21st century is close at hand. The economic slump of the 1990s is often described as a “lost decade” or a “second surrender” (after the defeat in World War II). But it is not just the stagnant economy that has created a sense of national paralysis; Japan also drifts in the fields of politics, diplomacy and education.

Yet our political leaders do not seem willing to establish a clear-cut national strategy. To be sure, some bigwigs like former Prime Minister Yasuhiro Nakasone are advocating a “grand design.” But Nakasone’s recent book “Nippon no Kokka Senryaku” (Japan’s New Strategy) has not received much attention. The nation as a whole lacks a sense of crisis. Politicians seem concerned mainly with short-term problems, shunning hard-hitting debates about long-term concerns. This myopia could be a recipe for national disaster.

True, the economy is now on the recovery track. The banking sector, though still beset by structural problems, is restoring a measure of health. Consumers are no longer gripped by gloom, although unemployment stays high and spending is slow. The Bank of Japan, citing improvement in economic conditions, has lifted its zero-interest rate policy over the strong objections of the government and the ruling parties. The market has reacted calmly.

But it is also true that public finances are in a mess, with the government’s debt burden exceeding the nation’s gross domestic product. That makes Japan the most heavily indebted major industrialized nation. The budget cannot possibly be balanced in even 10 years unless drastic steps are taken. Yet the government, anxious to get the economy moving faster, is doing nothing to trim the bloated deficit. Political pressure from special interest groups blocks every attempt to change the status quo.

Prime Minister Yoshiro Mori is drumming up support for public investment in information-technology projects. He also wants to reduce the “digital divide” between rich and poor nations. That is welcome. But the chief player in the IT revolution should be the private sector, not the public sector. The government’s main job is to promote deregulation and help bring down connection fees. It seems Mori is just trying to ride the IT bandwagon — to play up his image as a trendsetter — while putting off difficult reforms.

Meanwhile, the international situation is changing rapidly and becoming more complex. This is evident in inter-Korean moves toward rapprochement and in delicate China-Taiwan relations following the inauguration earlier this year of Taiwan’s President Chen Shui-bian. These circumstances, coupled with the outcome of the coming U.S. presidential election, are likely to prompt the United States to develop a more flexible and multifaceted strategy for Asia.

As for Japan-North Korea relations, Pyongyang is demanding that Tokyo offer an apology and compensation for the colonization of Korea as preconditions for the establishment of diplomatic relations. Implicit in these demands for the “liquidation of the past” is a desire to extract maximum economic concessions. Japan, for its part, is demanding a settlement of the abduction issue — which involves Japanese civilians allegedly kidnapped by North Korean agents — as a prerequisite for the normalization of relations. How the normalization talks will develop is anybody’s guess, but one thing is clear: Japan must engage North Korea through economic cooperation. In the long run, Japan’s role and status in Asia depend critically on how it deals with North Korea.

As for China, Japan needs to curtail its economic aid in light of the tight fiscal conditions. China gave up its claims for war reparations at the end of World War II, but this is no reason why Japan should continue to give it generous aid. Official development assistance is designed to help needy nations. Yet Japan continues to finance infrastructure projects in relatively developed regions. Helping a nation that is rapidly building up its arms is also against the basic rules of ODA. Japan should re-examine its ODA policy toward China, with priority given to technology transfer. On that basis, aid should be limited to carefully selected projects, such as those in underdeveloped inland areas and environment-related programs.

Politically, Japan and China often disagree on the “historical perception” of what Japan did in China before and during that war —- and this even though more than a half century has passed since the end of World War II. Beijing continues to demand that Japan take a “correct view of history” and apologize for what it did. Why not look forward, not backward, and discuss ways for the two Asian giants to cooperate for peace and stability in the region?

China also continues to take a rigid posture against Taiwan, often making a threatening show of military force. This attitude can only worsen Japanese feelings toward China. Japan should also restructure its strategy toward China.

Mori raised Tokyo’s international profile recently by meeting Palestinian leader Yasser Arafat as well as the leaders of India and Pakistan. His diplomatic foray revealed, however, that Japan lacks a global strategy of its own. Ideology no longer divides nations. As a result, national interests are becoming ever more complex. In order to stake out a solid position in the 21st century, Japan must have a clear-cut strategy of its own. It must build new systems to reinvent its economy and promote globalism, rather than merely follow the Anglo-Saxon standards. Making bold changes to that end is the responsibility of political leaders.

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