Showing posts with label Hillary Clinton Asia trip. Show all posts
Showing posts with label Hillary Clinton Asia trip. Show all posts

Wednesday, April 22, 2009

Benign neglect at work?

After President Barack Obama met with Prime Minister Aso Taro at the White House in February, I suggested that " the administration may be prepared to follow through on an unstated policy of benign neglect: having given Japan its assignments (civilian reconstruction in Afghanistan, progress on realignment, etc.), the administration will now turn its attention elsewhere."

In recent weeks there have been several more indications that this is the Obama administration's preferred course of action on Japan policy. It is increasingly clear that the new administration will place less emphasis on the prevailing agenda of alliance transformation that pressures Japan to revise its constitution and play a more assertive security role regionally and globally, an approach to the alliance that requires more effort than the Obama administration will be capable of mustering for the foreseeable future — effort that would be wasted on a Japan in the midst of political transition and uncertain about what role it will play as a security actor, if any.

The first sign comes from Asahi, which reported last week that when Secretary of State Hillary Clinton visited Japan in February, Defense Minister Hamada Yasukazu suggested that the US and Japan should issue a new joint security declaration like the declaration signed by Hashimoto Ryutaro and Bill Clinton in 1996. Hamada argued that a new declaration would be "a good opportunity to reconsider the alliance's ultimate significance and the way the alliance ought to be," particularly in light of new security challenges and the alliance's fiftieth anniversary in 2010. Clinton, Asahi reports, avoided saying anything in response to Hamada's proposal. Hamada plans to raise this idea in a forthcoming meeting with Secretary of Defense Robert Gates while visiting Washington during Golden Week.

It is possible that Clinton's non-response is reflective of the state of the administration's Asia policy team. The nomination of Wallace Gregson as assistant secretary of defense for Asian and Pacific affairs was only sent to the Senate on Monday of this week, Kurt Campbell has been cleared to succeed Chris Hill as assistant secretary of state for East Asia and the Pacific but his nomination has not been submitted to the Senate yet, and while Mainichi has become the latest Japanese newspaper to report on Joseph Nye's appointment as ambassador to Japan, there is still nothing official on Nye's appointment. But that said, there are few signs that the Obama administration will be devoting political capital to drafting a new security declaration when the old one is serviceable and, more importantly, when there is so much uncertainty regarding who would be signing the declaration on behalf of the government of Japan. Why spend the time and energy drafting a largely symbolic document only to have a Prime Minister Ozawa come into office and demand substantial revisions or oppose the declaration altogether? For the foreseeable future the Obama administration will be doing all it can to fix long-standing problems (cf. Cuba) while containing newer and more dangerous challenges — and the US-Japan alliance is neither broke nor in danger of breaking.

That explains the neglect.

The administration also showed the "benign" portion of benign neglect last week when Richard Holbrooke, special envoy for Afghanistan and Pakistan, said unambiguously in an appearance at the Foreign Correspondents' Club in Tokyo that the US does not want Japan to send troops to Afghanistan, but would rather Japan devote its efforts to shoring up the Afghan government and economy. The Obama administration will not be ignoring Japan — far from it. Instead it will look to Japan to help the US solve urgent problems within Japan's constitutional limits, much as Secretary Clinton said in her speech to the Asia Society in February. The result will be a relationship that is perhaps less "special" than it was when George W. Bush was escorting Koizumi Junichiro to Graceland, not least because, as David Rothkopf writes, the US needs "to cooperate with China on everything." But it will be something more than Japan passing. The Obama administration appears to be simply lowering the bar in light of both Japan's short-term political constraints and its longstanding institutional constraints.

I do not think that this approach will be temporary, for reasons that I will outline in a future post.

Thursday, February 26, 2009

The beginning of benign neglect?

Aso Taro has returned from his meeting with Barack Obama, the first such meeting between Obama and a foreign leader at the White House, as the Japanese media has repeatedly emphasized. The LDP website invokes this phrase like a mantra in its summary of the prime minister's visit, as if citing the name of the US president could save the party from ruin: "Prime Minister Aso Taro — the first among the world's leaders to meet with President Obama at the White House." (I feel like the phrase needs an exclamation point.)

Others have been less effusive.

The Sankei Shimbun, a leading cheerleader for a more active security alliance, is perhaps foremost among media outlets in voicing its doubts about the visit. Far from celebrating the visit, Sankei notes that Aso's visit was overshadowed by media coverage of Obama's Tuesday evening address to Congress, an address that shortened Aso's visit. The paper also notes that unlike Murayama Tomiichi's 1995 visit to Washington, another short, informal visit by a Japanese prime minister, Aso stayed at a hotel away from downtown Washington instead of at Blair House.

But behind these questions lurks a greater concern: that far from being indicative of the new administration's interest in a stronger alliance, Hillary Clinton's making her first stop in Tokyo and Aso's being Obama's first foreign guest are signs that the new administration will be devoting little attention to Japan from now. Uesugi Takashi calls this Japan's "unrequited love" foreign policy and questions the notion that the US will be devoting all that much attention to Japan. (At the same time, Uesugi provides a useful corrective to the "sky-is-falling" school of conservatism that says that the US is itching to abandon Japan for China. "The US," he says, "will not simply discard Japan for China.") Uesugi instead takes a similar position to that in an article I wrote with Douglas Turner last year: "In short, in the US-Japan alliance both excessive hopes and affinities, and excessive disappointments are useless." It pays, in other words, to correct unreasonable expectations in the relationship, especially on the Japanese side.

Richard Lloyd Parry of the Times captures Japan's "unrequited love" well in this post. As he suggests, almost by process of elimination Japan was the perfect country for Obama and Clinton to deal with first: "Where better to start than Japan, where there are no serious bilateral problems, no danger of demonstrations, and where the press never asks aggressive or embarrassing questions?" Japan, in other words, is diplomatic low-handing fruit. For all the fretting during the late Bush administration about the alliance drift, the headaches are comparatively small compared to other items on the foreign policy agenda — and most of Japan's leaders are unable to consider an alternative to the present relationship with the US, Ozawa Ichiro, of course, being an exception. The Obama administration, in other words, may have just checked the "Japan" box on the agenda and can now turn to more serious matters. Considering that nominees for a number of working-level positions and the ambassadors to Tokyo and Beijing remain unconfirmed, it may be months before the Obama administration even looks in Japan's direction.

All of which goes to suggest that the administration may be prepared to follow through on an unstated policy of benign neglect: having given Japan its assignments (civilian reconstruction in Afghanistan, progress on realignment, etc.), the administration will now turn its attention elsewhere.

Little wonder that Ozawa and the DPJ want a bit more distance from the US. An alliance based on unrequited love is an unhealthy alliance. As such, Aso's twenty-four-hour visit, as wasteful as it was (anyone find it a bit hypocritical for the prime minister to fly halfway across the world for a day to discuss, among other things, climate change?), was still useful. A new relationship is being born, even as US officials remain sensitive to the symbolic politics of the US-Japan alliance.

Tuesday, February 17, 2009

Aso follows Mori's path

"President Bush will welcome Prime Minister Yoshiro Mori to Washington for a working visit March 19. In addition to their important shared security objectives in the Asia-Pacific region, the United States and Japan have common interests on a broad range of global issues. The President looks forward to exchanging views with Prime Minister Mori on regional and global issues and to discussing ways to strengthen the alliance and overall bilateral cooperation." — 12 March 2001

"President Obama will meet with Prime Minister Taro Aso of Japan at the White House on Tuesday, February 24, 2009. Japan is a close friend and a key ally of the United States and the President looks forward to discussing ways in which the two countries can strengthen cooperation on regional and global challenges. The two leaders will consult on effective measures to respond to the Global Financial Crisis and will discuss North Korea and other issues." — 17 February 2009

In a surprise move, Secretary of State Hillary Clinton extended an invitation to Prime Minister Aso Taro to visit Washington next Tuesday, which the prime minister gladly accepted, which will make him the first foreign leader to visit President Barack Obama.

But upon seeing the news of Mr. Aso's forthcoming trip, I immediately thought back to March 2001, when Mori Yoshiro visited George W. Bush. Former President Bush was then barely two months into his administration. Mr. Mori had been prime minister less than a year, and a little more than a month after his visit, he was replaced by Koizumi Junichiro. And the rest is, as they say, history. In June, Messrs. Koizumi and Bush played catch at Camp David, in September Mr. Koizumi acted quickly in supporting the US following the 9/11 attacks, and from then on the alliance was remade (from the perspective of 2009, perhaps only momentarily).

Why was it so urgent that Mr. Bush meet with Mr. Mori? By the time Mr. Mori went to Washington he had already faced Kato Koichi's attempt to overturn his government in November 2000. In February, the bottom virtually fell out of the Mori government. On February 9, Mr. Mori came under fire for continuing to play golf after learning that the USS Greeneville had collided with the Ehime Maru. On February 19, Asahi published the figure that will forever be attached to Mr. Mori's name: 9% public approval. The poll prompted Mr. Koizumi, whose popularity was beginning to grow as he traveled the country, to call for the prime minister to give up. (Incidentally, Mr. Mori is only the second least popular prime minister in the postwar period: Takeshita Noboru bottomed out at 7%.) The rest of the month was spent in debate on when Mr. Mori would resign and how the LDP would choose his successor, before Mr. Mori finally indicated on March 11 — note the date — that he would resign once the 2001 budget passed. In other words, the day after Mr. Mori indicated that he would resign, the White House announced that he would be coming for a visit the following week. Naturally the planning for the meeting occurred before, but was no one in the administration aware that Mr. Mori was fighting for his political life? Did no one ask whether it would be better off waiting for a new prime minister?

What was Mr. Mori doing in Washington?

The joint statement released following the Bush-Mori summit has the answer: not much at all. The two leaders affirmed that they were committed to continuing to improve the US-Japan relationship in all its facets, bringing the agenda forward from the latter years of the Clinton administration. All well and good, but nothing that merited sending an outgoing prime minister to Washington to perform a task that could just as easily have waited for a new prime minister. One of the benefits of face-to-face meetings, after all, is in the working relationships that emerge between leaders that last over time and provide some support for the working-level officials laboring on alliance management. This importance of relationships between leaders can be overstated — and was overstated in the case of the Bush-Koizumi relationship — but it should be a consideration when leaders, particularly of allied countries, meet.

And so we come to February 2009. While not as embarrassing as the Bush administration's announcing Mr. Mori's visit the day after he announced that he would resign, the Obama administration's invitation overlapped with the embarrassing resignation of Nakagawa Shoichi, Mr. Aso's finance minister, following accusations of drunkenness at the G7 meeting in Rome. In the latest Asahi Shimbun poll, the poll in which Mr. Mori reached 9% back in 2001, Mr. Aso's approval rating is at 14%, and is trending downward. (Mr. Nakagawa's resignation may be enough to push Mr. Aso into single digits in the Asahi poll.) Mr. Aso has already broken the 10% barrier in at least one poll, and will likely do so in other polls soon. But unlike in 2001, not only is the prime minister deeply unpopular, but his party has been surpassed in the polls by the DPJ, as the voting public looks increasingly willing to give the DPJ an opportunity to govern, possibly within the year, as an election must be held by September.

The result is that beyond the public opinion figures, Mr. Aso has lost the ability to govern. Mr. Aso has entered a vicious cycle in which the failure to act in response to the economic crisis has damaged his popularity, which has undermined his authority, which makes it that much more difficulty to respond to the crisis, which lowers his popularity further, and so on until he steps down or calls an election. As the Financial Times put it in an editorial today, "At this moment, it is dangerous for an administration to continue in office when it has already lost power." What will a meeting between President Obama and Prime Minister Aso accomplish that has not already been accomplished by Hillary Clinton's visit to Tokyo? By sending Mrs. Clinton to Tokyo as her first foreign destination, surely the Obama administration has made an appropriate symbolic gesture to show that it is still committed to the US-Japan alliance. (As Mrs. Clinton said, repeating the standard line, "The alliance between the United States and Japan is a cornerstone of our foreign policy.") Doesn't Mr. Obama have bigger things to worry about at this point? What is so important that Mr. Aso has to hurry to Washington instead of waiting for a meeting on the sidelines of the G20 summit in London in April? This trip — which Mr. Aso is clearly desperate to take, as foreign travel is the last resort for an unpopular prime minister — is nothing more than a photo opportunity for the prime minister, an attempt to bask in the glow of a leader who enjoys the confidence of his people (and the Japanese people) in the hope that he might enjoy an Obama bump. (Cf., Colbert, Stephen.)

At some level, the US government should be blind to political conditions within Japan, but given the turmoil within Japan, wouldn't it be sensible to wait and see first whether Mr. Aso survives long enough to pass the 2009 budget and govern into the new fiscal year? The start of the fiscal year conveniently coincides with the G20 meeting. After Mr. Nakagawa's resignation, however, Mr. Aso's survival is even less certain than before. It would have been better to see whether Mr. Aso will survive the next few weeks — during which his government could conceivably be toppled when the bills related to the second stimulus package come before the lower house a second time — and then meet with Mr. Aso in London instead of agreeing to a meeting that will be held largely for reasons of Mr. Aso's domestic standing. Not that it will make much difference. At this point I don't think the Japanese public will be particularly impressed by images of Mr. Aso conferring with Mr. Obama.

Interestingly, when Mr. Mori traveled to Washington in March 2001, who do you suppose was traveling with him? None other than Aso Taro, then the minister of state for economic and fiscal policy.

Sunday, February 15, 2009

The Clinton-Ozawa meeting

After some waffling, Ozawa Ichiro has agreed to accept visiting US Secretary of State Hillary Clinton's request to meet. They will meet on Tuesday.

Jun Okumura wonders how Mr. Ozawa will handle the range of issues on which he has criticized the alliance, leading some American Japan hands to dismiss Mr. Ozawa as an unreliable friend of US-Japan relationship.

I do not expect any drama on this occasion. Mr. Ozawa himself has said, "There are no particular subjects of discussion; it's just an introduction." With that in mind, MTC is right to question the DPJ's leadership's initial response to the US request. Once the request was public, the DPJ should have not hesitated to say yes. Mrs. Clinton is under no compulsion to meet with Mr. Ozawa, but she and the administration in which she serves are clearly trying to illustrate symbolically that the Bush era is over. She is also acknowledging the importance of the DPJ in looking to meet with its leader, an acknowledgment the DPJ should have rushed to pocket and parade about.

Dithering has reinforced the image of a DPJ incapable of leading or, even worse, a DPJ incapable of managing the alliance, which in turn enables DPJ critics like Nakagawa Hidenao to argue that Mr. Ozawa is anti-American.

This whole debate will likely pass over the heads of the general public; I do not expect the DPJ to lose any votes for hesitating to accept the US request. But the DPJ is mistaken if it thinks that public relations only involves the voting public. The DPJ also has to convince the Japanese establishment that it is a reliable ruling party, which means playing the part of a potential ruling party. Part of playing the part of a potential ruling party means accepting the theater of the US-Japan alliance. The challenge for the DPJ is reconciling appearing to be a responsible steward of the alliance while still presenting to the public a poignant critique of how the LDP-Komeito government has mismanaged the relationship, a critique that cannot simply be dismissed as anti-Americanism.

By not rushing to accept Mrs. Clinton's request, the DPJ failed to exploit a golden opportunity to show that even while the party criticizes certain alliance policies, it is committed to a strong US-Japan alliance. Naturally the establishment will continue to sow doubts about what will happen to the alliance under a DPJ government.

Friday, February 13, 2009

"We are supposed to be the problem solvers"

Secretary of State Hillary Clinton spoke at the Asia Society in New York on Friday on the eve of her departure for a trip to East Asia that will include stops in Japan, Indonesia, South Korea, and China.

Her speech is worth a look, because I do think she succeeds at indicating how the Obama administration will differ from the Bush administration in its approach to Asia.

During the presidential campaign, I suggested that the difference between an Obama administration's and McCain administration's Asia policies would be the difference between problem-oriented and partner-oriented approaches.

At that time I wrote, "Mr. Obama...seems to share the outlook of Mr. Fukuda and Australian Prime Minister Kevin Rudd, among others. Disinclined to divide the region into democracies and autocracies (or non-democracies), Mr. Obama would seek to work with any and all appropriate partners, not just formal allies, in addressing regional challenges — necessarily meaning more cooperation with China, because as the Bush administration has learned, few of the region's most intractable problems can be solved without China's involvement."

It bears recalling because the theme of "solving problems" ran throughout Mrs. Clinton's speech Friday.

The United States, she said, "is committed to a new era of diplomacy and development in which we will use smart power to work with historic allies and emerging nations to find regional and global solutions to common global problems."

This is a marked shift away from the "values diplomacy" used by the Bush administration to bind democratic US allies closer together, which in practice appeared to be a means of isolating China, banishing it to the rogues' gallery with Burma and North Korea. Mrs. Clinton did speak of shared values, but it was in the limited context of Southeast Asia, the values that bind the countries of ASEAN. She did not use the word democracy, and while she did speak of religious freedom for Tibetans and Chinese and political freedom for North Koreans, it is clear that Japan's leaders are not wrong to anticipate greater engagement with China by the Obama administration.

"As members of the Asia Society, you know very well," she said, "how important China is and how essential it is that we have a positive, cooperative relationship. It is vital to peace and prosperity, not only in the Asia-Pacific region, but worldwide. Our mutual economic engagement with China was evident during the economic growth of the past two decades. It is even clearer now in economic hard times and in the array – excuse me – in the array of global challenges we face, from nuclear security to climate change to pandemic disease and so much else."

In short, despite the lack of shared values — at least by the previous administration's assessment — the Obama administration sees in China an indispensable partner in solving the problems facing the region.

That does not mean that Japan will be ignored.

If anything, the Obama administration will challenge Japan. Mrs. Clinton signalled that the administration will shift the focus away from security; aside from mentioning a new accord regarding the relocation of US forces to Guam, she mentioned Japan's civilian contributions abroad, and said, "We anticipate an even stronger partnership with Japan that helps preserve the peace and stability of Asia and increasingly focuses on global challenges, from disaster relief to advancing education for girls in Afghanistan and Pakistan to alleviating poverty in Africa." In other words, it seems that the new administration will accept the political difficulties Japan has in sending its armed forces to contribute abroad, but it will ask for other, perhaps more meaningful contributions instead. The Japanese government may find that dealing with the Bush administration was easier, in that the previous administration set a fairly low bar for Japanese contributions, being more content that Japan was "showing the flag" and "putting boots on the ground" than in the gains from Japan's contributions. The Obama administration appears less interested in how Japan contributes than in the fact of Japanese involvement in solving regional and global problems.

While Mrs. Clinton will be meeting with the families of the abductees (an unfortunate legacy of the Bush administration), with this speech it does appear that the Obama administration is making a clear break with a Japan-centered Asia policy. Japan's value will not be valued intrinsically, as a bastion of democracy in East Asia, but for the role it plays in solving problems.

The LDP may have a problem with this, accustomed as the LDP's conservatives have become in recent years to using the alliance as a means to promote the long-standing revisionist agenda of remilitarization, constitution revision, and a hawkish foreign policy towards China and North Korea. They may find the idea of contributing abroad for the sake of solving global problems hard to swallow.

Wednesday, February 11, 2009

Mrs. Clinton and Mr. Ozawa

The US State Department is reportedly sounding out the DPJ on the possibility of a meeting between Secretary of State Hillary Clinton and DPJ President Ozawa Ichiro when Secretary Clinton visits Japan next week.

Sankei reports that it would be the first ever meeting between a US secretary of state and the leader of a Japanese opposition party. The DPJ and Mr. Ozawa, however, are treading carefully before committing to a meeting. Mr. Ozawa reportedly told the party leadership, "If the schedule works, we'll meet, but election preparations are my top priority."

On one level, meeting with Mrs. Clinton should be a no brainer for Mr. Ozawa. A meeting would show that the alliance is in the process of transitioning to a post-LDP alliance. The DPJ could signal that the alliance would be safe in its hands, that it is keen to forge a new relationship with the Obama administration that rectifies the mistakes the DPJ believes were made under the Bush administration in cooperation with the LDP.

But on the other hand, it is worth asking whether the DPJ would gain anything from a meeting. Washington will not pick the next government; the Japanese people will. And at the moment the Japanese people do not seem to be interested in business as usual in the alliance. Inevitably the public script for a Clinton-Ozawa meeting would involve some sort of reaffirmation of the importance of the alliance, a photo op to reassure the folks back in Washington, undercutting the DPJ's message of calling for a revision of the realignment agreement that moves US forces from Okinawa entirely. Private discussions between the two would be little more useful, as Mr. Ozawa is not in power yet. Jun Okumura sees similar problems with this meeting.

But now that the story has been leaked that Mrs. Clinton wants a meeting, Mr. Ozawa will undoubtedly be pressured to accept, lest he be lambasted in the press — with the help of LDP politicians — for "unstatesmanlike" conduct. (Just as he was criticized after missing a meeting with Indian Prime Minister Manmohan Singh last year.) Ultimately the opportunity to forge some link with the Obama administration, plus the possible public relations blow to the DPJ's reputation, will lead Mr. Ozawa to meet with Mrs. Clinton.

As for the wisdom of the meeting on the part of Mrs. Clinton, I appreciate that the Obama administration is reaching out to the largest opposition party instead of treating the DPJ (or Ozawa, anyway) like an enemy at the gates of the alliance, as, for example, this article more or less does. It is the US-Japan alliance, not the US-LDP alliance, although after more than fifty years of LDP rule it is understandable that it is hard to tell the difference sometimes.

At the same time, however, perhaps it would be better off if Mrs. Clinton stayed away from Japan altogether in the midst of the tumultuous political situation. Naturally the US government is officially blind to the domestic politics of its allies. But US interference in Japanese politics since the occupation, from comparatively benign gaiatsu to the CIA's distribution of funds to Kishi Nobusuke and other conservative politicians (and activities to suppress left-wing activities) is a matter of the public record. More recently, the Bush administration played an undeniably important role in raising the profile of former Prime Minister Abe Shinzo, giving him access to senior administration officials while he was just an LDP functionary (as opposed to a government official), which raised his profile and helped him leapfrog more experienced politicians and succeed Koizumi Junichiro. The point is that given this history, the new administration should be extremely wary of doing anything to influence the outcome of the forthcoming general election.

It may be unlikely that Mrs. Clinton's visit has any impact on the political situation, but it is not impossible, especially if she meets with Mr. Ozawa or the abductee families.

There are other reasons for Mrs. Clinton to stay away, of course, starting with the vacancies in the ambassadorships in Tokyo and Beijing. Joseph Nye still hasn't been officially named the ambassador-designate, and the Senate has yet to confirm other Asia policy officials, including Kurt Campbell, Mrs. Clinton's assistant secretary for East Asia and the Pacific.

Everything about this trip smacks of a hasty scheme to assuage Japanese fears with symbolic gestures. But symbols can have consequences, whether for the alliance or for Japanese politics.

Monday, February 9, 2009

A new course on the abductees

Kawamura Takeo, the chief cabinet secretary, told reporters Monday that the government is working to arrange a meeting between US Secretary of State Hillary Clinton and the families of Japanese abducted by North Korea.

As MTC wrote of a dinner Secretary Clinton had with Asia experts in advance of her trip, "Members of the Bush Administration Asia team committed a major blunder in failing to speak bluntly to the Japanese government and the Japanese people about the DPRK abductions issue. Having the Yokotas visit with President Bush was a nightmarishly bad decision, setting the stage for an ultimate, inevitable 'betrayal' of Japan over the DPRK terrorism delisting."

I cannot stress this point enough.

The Bush administration, for all of its good work on behalf of the alliance, nearly allowed itself to get entrapped by the Japanese right. Japanese conservatives sought not only to make Japan's North Korea policy center on the abductees — a goal largely achieved — but also to center US North Korea policy on the abductees. The US was to be the instrument by which the Japanese people would be made whole again, because US pressure in tandem with Japanese pressure would force North Korea to provide a full account of its abductions and release any surviving abductees.

Of course, if the conservatives were really focused on recovering the abductees, they would have been making overtures to China, presumably the only country with enough leverage over North Korea to get it to do anything (which may overstate the extent of Chinese influence in Pyongyang). They did not look to China for help on the abductees. Could that be because they had little interest in recovering the abductees but rather in using the abductees as a lever to take a harder line against both North Korea and China, a way to justify a more hawkish foreign policy?

Similarly, the abductees were also used as a bludgeon against the US. Consider that once the US opted to embrace the abductees by scheduling face-to-face meetings with the families for former President Bush and former US Ambassador J. Thomas Schieffer, it became difficult for senior US officials — even the vice president — to question openly the Japanese government's emphasis on the abductees. Naturally some Bush administration officials believed in the importance of abductee issue, but as the about-face on North Korea showed, not everyone believed it, because ultimately the US was able to break the bargain on the abductees and commit to negotiations with North Korea. Assistant Secretary of State Christopher Hill, however, was left to take much of the blame for "betrayal," with the president reassuring Japan even as the US proceeded to remove North Korea from the list of state sponsors of terrorism.

The point is that if the Obama administration is going to rest on symbolic gestures, like meeting with abductee families and taking care to stress the problem at every opportunity, it better be prepared to follow through on those gestures — or be prepared to damage the alliance.

My frustration with last year's "crisis" in the alliance was that it was completely foreseeable, and yet the Bush administration did nothing to soften the blow, nothing to convince Japanese officials to shift their focus and try to turn the attention of the Japanese public from the abductions to other pressing concerns regarding North Korea. The administration wasn't wrong to treat other issues as more important; it was wrong to continue to signal to Japan that the abductees were important to the administration when clearly the administration had other priorities in its final years.

I only hope that Secretary Clinton is conscious of this dynamic. Yes, Japanese are wondering about the durability of the US commitment to Japan following the "betrayal" of 2008. But is the way to renew the US commitment simply repeating the same empty promises that led to the sense of betrayal in the first place? It would be one thing if the Obama administration were prepared to commit political capital to solving the issue (although if it were I would have grave concerns for the administration's priorities). But I suspect that the abductees — and the alliance in general — are not among the top five priorities. So why continue the game of using the beleaguered relatives of the abductees as pawns to show that the US cares about the abductees? The alliance is desperately in need of a reassessment of each ally's expectations of the other.

Accordingly, I hope when Mr. Kawamura speaks of Mrs. Clinton's "busy schedule," he is preparing the way for the secretary's not meeting with the abductee families, for the good of the alliance of course.

Saturday, February 7, 2009

A twenty years' crisis

"Japan is an economy that is almost certainly producing well below its productive capacity - that is, the immediate problem facing Japan is one of demand, not supply. And it gives every appearance of being in a liquidity trap - that is, conventional monetary policy appears to have been pushed to its limits, yet the economy remains depressed. What can be done?"

So wrote Paul Krugman in his 1998 analysis of Japan's prolonged economic crisis, in which he argued that to escape its liquidity trap, it was necessary for "the central bank to credibly promise to be irresponsible - to make a persuasive case that it will permit inflation to occur, thereby producing the negative real interest rates the economy needs."

Four years later, then-Fed governor Ben Bernanke, in his noteworthy speech on deflation, echoed Krugman, arguing "We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation" — but then concluded that Japan's prolonged crisis was not the result of ineffective monetary policy but reluctance on the part of political actors to implement structural reforms, reforms that, Krugman argued, may be necessary but would do little to "induce people to spend more."

A decade after Krugman, Japanese authorities are once again stuck trying to stimulate aggregate demand.

Economist Ikeda Nobuo, in considering Japan's sluggish aggregate demand, concludes, like Bernanke, that the high liquidity preference of Japanese households — nearly half of Japanese household assets are held in cash or low-risk, low-return bank accounts — is a response to inefficient Japanese companies. Pessimistic that the Japanese government is capable of stimulating Japanese demand in the absence of foreign demand for Japanese goods, Ikeda concludes that the lost decade never ended: Japan is in the midst of a "lost twenty years."

A group of fifteen LDP lawmakers, however, has decided to embrace Krugman's solution, calling for the government to run the printing presses, expanding the money supply by 50,000 billion yen independently of the Bank of Japan in order to finance further economic stimulus. The "Diet Members League to consider the issuance of interest-free government bonds and government money" will hold its first meeting on Tuesday, with upper house member Tamura Kotaro chairing. Former finance ministry official Takahashi Yoichi will address the inaugural meeting.

The group's motto is essentially "desperate times call for desperate measures." Acknowledging that running the presses has positive and negative consequences, the group believes that the economic situation is sufficiently dire to merit the risk of hyperinflation. Quoted in an FT article, Mr. Tamura clearly has read his Krugman: "We are facing hyper-deflation, so we need a policy to create hyper-inflation. We have to do something to undermine the central bank and government’s credibility or else we won’t be able to halt the yen’s rise. So, while we know this is drastic medicine, we will do it."

The new study group has drawn the opposition of senior LDP and cabinet officials. Yosano Kaoru, minister without portfolio for economic and fiscal policy, suggested that the government should issue more bonds instead of printing currency. Shirakawa Masaaki, president of the BOJ, insisted that the policy would do precisely what its proponents intend, namely undermine the credibility of his bank and the health of the currency. The heads of the LDP's factions were equally critical of the proposal, with Tsushima Yuji, the eponymous head of the Tsushima faction, likening the proposal to the enten ponzi scheme.

In other words, this is yet another policy upon which the LDP is divided and unsure of how to proceed, yet another sign of the governing party's flailing about in hope of finding some way to save itself (and Japan).

Not being an economist, I cannot say whether this group's proposal is appropriate. After years of weak domestic aggregate demand, it may be that only drastic inflation may be the only way to make Japanese spend at home — or demand less liquid assets with higher returns — no matter how politically risky it is for the LDP. Pensioners, already angry at the government, will presumably be no less angry as they watch inflation erode their fixed incomes.

But however appropriate the inflationary proposal, it may be beyond the power of the Aso government to implement. Whatever legitimacy the LDP-Komeito government had is now in tatters. The prime minister's latest misstep is to call for the revision of the postal privatization scheme, the very basis of the government's parliamentary supermajority. Mr. Aso questioned whether it is appropriate to divide the postal system into four companies, and stated that now is the time to revise the privatization scheme. He blithely stated that this position is wholly unrelated to the 2005 election that gave the government its mandate. Public opinion may have changed since 2005, but to backtrack now makes a mockery of democratic legitimation. If the government wants to revert from a policy that was critical to returning the coalition to power, it should have to go to the people and ask for approval to change course. (Nakagawa Hidenao made this argument at his blog, as did DPJ member Nagashima Akihisa.)

Naturally LDP proponents of postal reform have been quick to criticize the prime minister for his naked appeal to find some issue that will rescue his sinking government. (It bears noting that Mr. Aso has spoken of preserving the quality of postal services, a major concern of the public when it comes to privatization.) Koizumi confidante Takebe Tsutomu was perhaps the most succinct in his criticism: "What nonsense! I wish he would be more discrete in his speech."

In short, the prime minister is gradually losing whatever ability he has to rally his party and the public to an agenda. He is incapable of setting priorities or taking decisive action. The halls of power echo with rumors of plots to unseat him.

It is unlikely that this shiftless prime minister is capable of deciding on so risky and decisive a policy as proposed by the new league.

This prime minister, his party, and his government are bereft of authority and legitimacy — and they appear determined to drag Japan into the abyss with them.

As MTC so eloquently observes, hopefully Secretary Clinton will take heed of the stench of decay when she visits Japan later this month.

Wednesday, February 4, 2009

Is she or isn't she?

Despite reports that Secretary of State Hillary Clinton will be going to Asia on her first foreign trip, none seem to have the State Department's confirmation that she will in fact be going to Japan, South Korea, and China in the coming weeks.

CNN cites "diplomats familiar with the planning."

The LA Times cites "a foreign diplomat knowledgeable about plans for the trip."

Sankei is even more vague, saying that "it is understood" that Secretary Clinton will be in Tokyo on Feb. 16th, where she will meet with Prime Minister Aso, Foreign Minister Nakasone, and Defense Minister Hamada. The agenda, Sankei says, will include talk of the economic crisis, Afghanistan and Iraq, the realignment of US forces, and, of course, North Korea.

There's a hole in your department, dear Hillary, dear Hillary...

Nevertheless, while I am still concerned about the new administration's pampering Japan, I suppose it is encouraging that the Obama administration recognizes that it has work to do in Asia.