29 August 2009

Q&A with Michael Auslin

(From RealClearWorld)

Michael Auslin is the Director of Japan Studies at the American Enterprise Institute, he has been named a Young Global Leader by the World Economic Forum, a Marshall Memorial Fellow by the German Marshall Fund, and a Fulbright and Japan Foundation Scholar. He’s the author of Negotiating with Imperialism: The Unequal Treaties and the Culture of Japanese Diplomacy (Harvard University Press, 2006) and Japan Society: Celebrating a Century, 1907-2007 (Japan Society Gallery, 2007). Mr. Auslin spoke to RealClearWorld just prior to Sunday’s election in Japan.

RCW: Will Japan's election on Sunday be a transformative one or merely a temporary repudiation of the LDP?

Auslin: If the DPJ (Democratic Party of Japan) wins, it's transformative -- it's a clear turnover of power in Japan and a clear repudiation of the LDP (Liberal Democratic Party). It would be two elections in a row that we see the opposition gain power and seats. We can say that Japan has entered a new era in politics. But what will the DPJ do policy-wise is the big question. If they don't solve the economic crisis and get booted out of office in the next election, then it might not be as transformative. They might have a candidate Obama problem: How are they going to fulfill all the promises and prove that they can actually rule? They have offered a lot of grandiose plans but very few specifics.

RCW: It certainly looks as if the DPJ is headed for an historic win, but can the polls be trusted?

Auslin: I'd be shocked if the polls were wrong, but you never know. The question now is how big a victory: outright majority, or will the DPJ need to form a coalition, which will make things more complicated? As far as I can tell, the high end of Japanese polls are usually wrong, as here, but I'm not an expert on their polling approaches. This will be a good test.

RCW: How did the LDP, which dominated post-war Japanese politics, get where they are today?

Auslin: This is a unique confluence and somewhat of a long-term trend that the LDP is losing support. Japan's economic crisis really has been going on for 15 years and finally we have reached a tipping point. Their credibility and competence have been chipped away. You really have to look at (former PM Junichiro) Koizumi's ability to personalize Japanese politics as an aberration. He didn't represent the new LDP, or the new era - it's really just one man's uniqueness. You got to a point where finally there was the coalescence of a legitimate opposition party that could pull together all the pieces.

The most important issue is economic recovery because in Japan, the bubble burst in 1989-1990. Even in Koizumi's time, recovery was limited. Wages didn't go up from 2000-2007. Whatever lifetime employment system that existed before was knocked off track and dismantled. The citizens were hammered by the exports plummeting 15%. Those trends formed a perfect storm. There's long-term discontent with the LDP and they haven't been able to bring about the reforms to solve those problems.

RCW: Is Japan headed toward another "Lost Decade"?

Auslin: That's a very complex question. What we do know is that their strategy with an overwhelming emphasis on exports and non-private capital investment -- that has collapsed. They haven't pursued a policy that makes sense. The non-diversification has shown up. They did not get rid of red tape to promote entrepreneurship. It seems clear now what they really need to do is overhaul their economic philosophy. They need to resolve the macro defects instead of fixing micro problems. They have had success in banking deregulation and cleaning up bad balance sheets and now their banking system is on much firmer ground. But their manufacturing sector didn't build up a domestic market. They have not cleaned up all the regulatory problems and no one seems to have a clear economic plan. The DPJ, in its manifesto, says it wants to help the working people and reduce the income gap, but it has no clear plan on how to pay for it and cut waste. So I'm not sure if that's an economic ideology or just shifting around resources and not changing the fundamentals.

RCW: Why is there such apathy in the U.S. toward Japan or Japanese politics?

Auslin: To be honest, it's perversely a sign of strength in terms of a country's relationship with the U.S. Japan in this respect is like Britain, we know they're not an aggressive troublemaker or a potential challenger for us, so we don't care. This is not like in the '80s and early '90s (when Japan was perceived to be a threat). But the fact that we don't pay much attention to the second largest economy in the world and Asia's oldest and most stable democracy is not particularly wise, either. There's all this talk about a G-2 with China ... Japan's economy is bigger than China's in many ways. Americans seem to focus on countries only when we need to. But our policy makers really should understand Japan, know its strengths and weaknesses, and what role it can play and how we can work together.

RCW: Is Japan still U.S.'s most reliable ally in Asia?

Auslin: There are limitations on what Japan can or can't do, with its political and legal restraints from Article 9 (of Japan's constitution). They were quick to join our anti-terror activities. Through the personal initiative of Koizumi and (Shinzo) Abe, there was a 6-year period when Japan was very involved in Afghanistan, Iraq and the Indian Ocean. They are still a reliable ally, it's where our forward bases of troops in East Asia are stationed. Without the bases in Japan we would not have a much of a posture in that side of the Pacific. Japan is also working with us on missile defense. And this is to the benefit of Japan's, too, because if you look around, that neighborhood is getting more dangerous all the time.

RCW: How threatened do the Japanese feel about China and North Korea?

Auslin: Just like us, Japan has a very complex and delicate relationship with China. There's the trading relationship, as China is central to the supply chain in providing consumer goods. Japanese companies are heavily invested in the Chinese mainland, employing over 10 million Chinese in joint ventures. And China is crucial to the Japanese export strategy. That said, China is the only real political and security challenge to Japan in the region, and they have direct conflicts on some of Japan's own security issues. And now China is very active in ASEAN and there Japan is somewhat marginalized by China. North Korea is not an existential threat to Japan - China is the only one. They have nuclear subs, rockets and missile forces. There is a lot of trepidation and concern in Japan about what China is going to do and what signal it's sending. It's frustrating for Japan because militarily Japan doesn't have too many options out there. There are limits on what they can do.

RCW: How is Japan dealing with its alarming population problem?

: Japan is facing a major demographic slowdown. With this trend, by 2050, they'll lose a fifth of their population. On the low end, they may have about 90-95 million - that's an enormous chunk - and only about 105 million on the high end. But there's been no national debate over this issue due to the cultural and social sensitivity. They want to keep seniors active longer. With respect to immigration, they're bringing in skilled specialists, for example large numbers of nurses for hospitals and assisted living facilities from the Philippines. They bring in people they need for functional reasons, but not people who will stay and become part of the societies. But (the population crisis) is a long-term trend. Fertility and marriage rates started falling in the '70s, so the negative replacement rate has been in the making for a generation. It's finally come home to roost. The fact that they don't seem to have a social or political panic and no rational debate, that's very worrisome. The only good news is that Japan got rich before it got old, so they have much more leeway than Russia or China, they got old before they got rich. How the Japanese deal with this is going to be a lesson for the developed world, but right now there isn't much optimism.

RCW: Tokyo is one of the finalists for the 2016 Summer Olympics. Do the Japanese want to host the Games?

Auslin: Everyone wants to throw in their hat and wants to be seen as a great country on the international stage. For Japan, I think that's not any different, particularly seeing how China did it in Beijing just last year. But the Olympics are such an economic drain and boondoggle. I think the Japanese would love to get it, but they've already had three Olympics, so it probably isn't something they care or talk about very much.

RCW: What drew you to Japanese politics and people?

: I originally came to it very academically. I was working on some Sino-Soviet issues, and I took a look at Japan and started reading Japanese history and just found it fascinating and unlike any other history, and also what an extraordinary culture it is. It's had incredible problems, limitations and some horrific violence, yet also an exquisite concept of kinship and artistry, you can see that from the palaces to the cities. It's an amazing story - it's so involved internationally but it holds itself off, partly because of the physical isolation. Asia has changed so much in the last 200 years and Japan is the vanguard of that. I had a chance to teach in the Japanese countryside and saw how kind people were and I really took an interest. I spent a year in a cultural exchange program and then lived there for several years after graduate school.

No comments: