TOKYO and LONDON — The 17th annual meeting of the U.K.-Japan 21st Century Group — the bilateral think tank set up by Prime Minister Yasuhiro Nakasone and British Prime Minister Margaret Thatcher way back in the ’80s — took place this year on Awaji Island in Kobe Bay, island of gods and puppets and, of course, of earthquake fault lines — a chill reminder that the whole landscape of life can shift suddenly and violently and that nothing is totally secure or permanent in human affairs.
The central theme at the gathering was the predictable and obvious one that all foreigners bring to such international meetings nowadays, namely: When is Japan going to recover, revive, restructure, turn around, pick up, catch up, take off again, stop stagnating, go forward or however you like to phrase it?
The question is simple, the answers extremely complicated.
For a start, can the country with the highest per capita income in the world, with technology and innovation roaring ahead, with skyscrapers shooting up in its enormous cities, with the streets packed with shoppers, with the most advanced train system on the planet, with huge new projects like the incredible Chuo shinkansen in the pipeline, with a mobile, e-enabled telephone in almost every hand or handbag, be said to be stagnating at all?
Ah, say the economists and analysts, never mind what you see or cannot see around you, its all in the statistics. What the figures show is that many of the banks are still financially under water, credit is scarce, the government is mired in ever deepening debt, unemployment is rising, productivity is faltering, exports are drooping, consumer confidence is weakening, price deflation is spreading and economic growth is nonexistent.
Can both these conflicting perspectives be right? Yes, in a way they can. Japan is an immensely prosperous and very smooth-working society for which the consensual approach and amazing social cohesion have done wonders over the last half-century.
It has been offered endless outside advice, much of it misguided or plain wrong, about how to reform, how to reflate and how to keep the engine of economic growth purring — all of which must be very vexing for a society that has other important values besides more and more material production.
But at the same time, Japan occupies a very big space in the human universe and the rest of the world is fully justified in wanting to know about the current health of the huge Japanese economy and about how Japan intends to fulfill its share of global responsibilities in the close-linked and fragile network world we all now inhabit.
In fact, the Awaji Island meeting reflected signs of growing concern on both these fronts. The economic pessimists saw the prospect of a slowing U.S. economy, a weakening Asia and a faltering Japan all combining to sow the seeds of global slowdown and deterioration, for which growth in Europe would not be able to compensate.
The security experts wanted to know when and by what means Japan was at last going to pull its full weight in the complex tasks of policing the globe. Had the time come for Japan to step out from its protective shell as a global civilian power and assume a more burdensome role in keeping the world peace?
Put these two perspectives together — domestic rethinking and outside world concern — and some tentative answers about the way forward do emerge through the fog of debate.
First, Japan can afford to move slowly. It has plenty of resources to cushion it. Rushing into half-baked, destabilizing recovery plans, egged on by outsiders, is neither necessary nor wise.
By the same token, there should be caution about assuming that salvation can come solely through politics and politicians. There is plenty enough wrong with the Japanese political system, as with many others, and there are plenty of political obstacles to radical reform and liberalization of the economy. So it is in every society.
But the idea that some strong leader, a sort of Japanese Thatcher, can be conjured up to take all the unpleasant decisions is an escapist illusion, a product of the fallacious theory that one country’s political culture can be transferred to another, quite different type of society.
The one important lesson than can indeed be transferred from Britain to Japan is that emulating Britain’s welfare-state experience, with its embedded belief that state spending can solve the major social problems of the new age, would be a great mistake. On the contrary, the social problems that Japan now faces offer a major opportunity for innovative thinking about these matters, built round the realization that modern central governments simply cannot cope and that new types of social entrepreneurship, combining the best of officialdom, of nongovernment agencies and of private enterprise, are now needed.
As to other cures for Japan’s ills, the truth is that any commentator can write down a health list of the things a modern society ought to be doing to maintain its vitality: Increase competition, raise profitability, help out the good banks and sink the bad ones, underpin pension funding, radicalize politics while keeping the politicians in touch, encourage foreigners in, downgrade short-term economic maneuvering — “fiddling with abstracts,” as the new U.S. Treasury secretary calls it — and upgrade deregulation and marketization at every point in the economic system.
All easy to write down, but the real question is how to make any of it happen, or how to make enough people want it to happen. Only the Japanese people themselves can answer that most central of questions. And they should not be hustled by outside alarmists. There is no great leap forward to be devised or quick-fix medicine to be swallowed. It is going to take years of steady grind and gradual change.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.