SEMINARS

Training and education in international affairs:
Japan, Palestine and the Middle East (1999)

 The Axis of Japan's Foreign Policy

The Japanese approach towards the peace proc­ess has always been very simple: we want to see changes on the ground, or more specifically, a vast improvement in the various aspects of the daily activities of the Pal­estinian people. When I first came to this proc­ess, it was still under Shamir and each time this word ‘Palestine’ came up, the Israelis would replace it with ‘Judea and Sa­maria’. Later, they referred to the ‘Palestinian Oc­cupied Territories’ and now we are talking about ‘Palestine’, so things have certainly changed. I started dealing with the process, the environment and various other issues at the time of the Jericho Agree­ment, and I must say that I have noticed some tremendous improvements.

Many of my colleagues, Japanese and foreign alike, who are involved in day-to-day foreign pol­icy formulation are facing a problem, which is the rapid speed of economic and cultural ‘globalization’. Some people refer to the result of globalization as the ‘borderless society’, where activities are no longer within the tradi­tional gov­ernment setup. The other side of this globaliza­tion is the growing hostility amongst those who believe that it is not to their advan­tage. During the course of last year, we at the OECD were negotiating what we call the Multi­lateral Arrange­ment in International Investment. We wanted to formulate an international code for investment, being well aware that those who feel they are not benefiting from globalization regard international investment in a very poor light. Amongst these groups are the labor unions in the United States and Europe and the envi­ronmentalists, who insist that international trans­national investment is detrimental to the envi­ronment. Even today, many human rights or­ganizations are saying that inter­national in­vest­ment is harmful to the underprivi­leged and leads to social evils, such as child labor. My personal belief is that if we were to have a code of be­havior with regard to international in­vest­ment, we would be able to mitigate some of its nega­tive impacts. The organizations that are calling for countries to be allowed to retain their own cultural identities say that international in­vest­ment could undermine this cultural individu­ality, so at the same time as there are forces that are pushing for globalization, there are also coun­ter forces, which is making the economic discus­sions increasingly complicated.

In order to achieve the European Union’s (EU) Maastricht criteria, many countries introduced some austere provi­sions and the people who are against globaliza­tion say that because of those measures certain sectors of the society have been hit very hard, which is true: in many countries the provisions for the fairly lucrative welfare system had to be cut and the educational budget streamlined. To put it simply, there are countries that can keep up with the rapid speed of global­ization and there are those - such as the African states – that can­not.

Another fundamental problem that we are facing concerns the ideological differences. The Rus­sian Federation is now applying for OECD member­ship, while only two days ago we wit­nessed a ceremony in Washington to mark NATO’s accep­tance of Hungary, Poland and the Czech Repub­lic. The OECD was based on this differentiation between the so-called Western industrialized de­moc­racies versus the socialist camp, which was utilized very conveniently in fostering solidarity amongst the former. Right now, however, every­body is talking about mar­kets, about the OECD’s expansion, etc., and the ideological differentiation is gone, while the roles and missions of an inter­national organiza­tion like the OECD are becom­ing increasingly difficult to define, especially as some countries would appear to be obsessed with furthering their individual interests. It is ex­tremely difficult given this globalization and the loss of this easy ideological demarcation to fa­cilitate coordina­tion amongst the different coun­tries of the world.

Globalization is a very tiring process as one has to try to coordinate things whilst consider­ing eve­ryone’s position. Unfortunately, now that the Cold War is no longer there to draw people to­gether, national interests would appear to have become many people’s major concern. Conse­quently, it is often difficult to reach a consensus on the difference between a so-called ‘diversi­fied threat’ and a ‘global issue’. Take North Ko­rea, for example, is it a global issue or merely a diversi­fied geographical threat? At this point, it should be noted that threats are sometimes diver­si­fied not only in geographical terms, but also in terms of nature and modality.

Japan is still surrounded by divided nations, i.e., the Korean Peninsula and China. The Asian se­curity climate is certainly much different to that of Western Europe, and whereas in the past such issues could be easily understood and shared by almost all the different countries, the tendency now is for countries to talk about their own lim­ited na­tional interests and to pay little attention to those of other states that do not – or so they believe – concern them. Ask any Japanese poli­tician, for example, for his position on Kosovo and you will find that he does not know or care; you will find exactly the same thing when you ask any European politi­cian to state his position on the Korean Penin­sula.

In Asia, unlike in Europe, for instance, the diver­sity of the nations in the region is very striking. For instance, I believe that in Europe, the richest country is maybe five or six times richer than the poorest country, so it is difficult to have a sort of homogenous region. The Japanese GDP is larger than that of the rest of the Asian countries put together, we still have two countries that are strongly professing the communist ideology, we have the largest populated country in the region – China has a population of 1.4 billion – which is taking a somewhat different political stance from the rest of the region, and so the diversity of the states in our region is very striking. As the second largest economy in the world, Japan’s position is to ensure that the security and stabil­ity in the region are maintained but, due to its past experience, to do so without playing any kind of military role, even though we have a very strong presence in other regards. Japan’s decision not to become a military superpower is one of the fun­da­mental elements of Japanese foreign policy, and on the basis of that, a number of systems and arrangements have been built, a key element of which is the security alliance with the United States.

In 1945, Japan had little choice concerning its potential as a military power as it had lost the war and been ordered by the occupying force to re­frain from building a military capability. How­ever, since regaining independence there has been a conscious decision on the part of the Japanese people to stick to this path, which, in fact, is now an important element of the Japa­nese identity. There are some older Japanese who still remem­ber the war with a certain senti­mentality, but I could say that 90-95 percent of the Japanese people would be against the idea of Japan be­coming a military superpower.

Japan contributed to the Gulf War but only in the form of providing and sending in a few mine­sweepers. I was in charge of the Middle East at that time and I still remember my first visit to the region in Novem­ber 1990, when I went to Baghdad to bring back what President Saddam Hussein called ‘house guests’. One should not forget, of course, that Japan relies heavily on its oil supply from the Gulf, its largest suppliers being the UAE, Saudi Arabia and Kuwait. The strong alliance with the United States was an­other reason why Japan sup­ported operation ‘Desert Storm’, as was the fact that Japan did not accept the invasion of one (Arab) country by another. Japan’s role in the Gulf War was actu­ally the subject of a big domestic debate because in order to fund the operations, certain taxes had to be raised. Fortu­nately, people eventually re­alized that this had to be done to ensure the sta­bility of the Gulf area, particularly the southern part, and to stabilize the international energy market.

The Japanese-American relationship is strong but very complex. Apart from the security ar­range­ment, the United States is the largest mar­ket for Japan and Japan the single largest market for the United States, excluding Canada. Thus, the Japa­nese-Ameri­can relationship is in fact a key ele­ment in Japanese foreign policy. Many of the Asian countries believe that Japan is too close to the Americans, but in spite of what they say publicly, most of them welcome this very strong relationship. In the past, the United States was complaining about the strength of the Japa­nese economy, whereas for the last couple of years it has been complaining about its weak­ness. Cer­tainly, Japan’s economic situa­tion is very diffi­cult and the Japanese market is con­tracting rather than growing. Accordingly, the major eco­nomic agenda between Japan and the United States in recent years has involved find­ing ways to restore the growth of the Japanese economy.

There is also a very complicated debate going on in Japan concerning the defining of roles and missions on the part of Japanese involved in the US-Japan Security Treaty, labeled the ‘defense guideline debate’, which centers around the criti­cal situation in the Asia-Pacific region and the roles and missions of the respective forces. This is certainly a difficult issue but we have to deal with it because of the diversified threats that still exist in the Asia-Pacific region. In the mid­dle of last year, for example, North Korea started ex­peri­menting with this so-called satellite launching program, but the ‘satellite’ was actu­ally a ballistic missile, and at the mo­ment, the issue is at the center of a big dispute involving Japan, China and the United States. In addition, the China-Taiwan problem has yet to be solved and we are still faced with a divided Korea, so the situation in the Asia-Pacific region definitely requires a more specific definition of the roles and mis­sions of the various forces in the region. With regard to North Korea, nobody can predict what course of action it may or may not take; it is a secluded country and we do not know any­thing about what is going on there, except that the North Koreans are spend­ing nearly 30 per­cent of their GDP for military purposes. Japan has been trying to es­tablish some form of ‘nor­mal’ diplo­matic rela­tions, but it is not such an easy thing to do.

China, on the other hand, is a more open country and we have normal relations with it, although, of course, the Chinese leaders are constantly talking about the resurgence of militarism in Japan, partly because of the missile defense pro­grams that is being carried out jointly with the United States. The one major unstable and un­known element in the Asia-Pa­cific region, how­ever, is North Korea. As to our position on the China-Taiwan relation­ship, we recognize one China and do not have any diplomatic rela­tions with Taiwan.

Participant: How does Japan look at the nuclear competition between Pakistan and India?

HE Yoshiji Nogami: Japan is the only country that has ever suffered from this nuclear prolif­eration in the history of mankind and it strongly condemns any form of nuclear prolifera­tion, which is why it suspended relations with both countries and is asking them to sign the CTVG.

Participant: What about the Israeli nuclear pro­gram?

HE Yoshiji Nogami: The Israelis - like the South Africans in the past – are not organizing any testing.

Another important element in Japanese foreign policy is the relationship with Russia. Japan has not yet normalized its relationship with Russia nor signed a peace treaty, although it is sup­port­ing Russia’s recovery and development and wel­comes the idea of a strengthened and demo­cratic Russia, partly because it would enable Japan to negotiate the return of the territories taken by force after the end of World War II. Quite re­cently the Japanese Prime Minister met with Presi­dent Yeltsin and Japan and Russia will continue to work on their peace treaty based on three principles: realism, historical justice, and mutual benefit. As a part of this exercise, Japan is trying to set up a mutually acceptable border­line with Russia and there is no doubt that once this aspect is settled, a peace treaty will be signed. Apart from this, there is the fact that Russia is a neigh­bor and Japan does not like to see it in an eco­nomically distressed situation. The problem with Russia is that while two thirds of the Russian ter­ritory is in Asia, two thirds of the Russian popu­lation is in Europe, and the Russians have yet to come up with a foreign policy concerning their Asian neighbors. In ad­dition, Russia has been suf­fering from an ex­tremely high rate of infla­tion and a substantiated negative growth rate over the past couple of years, whilst its discussions with the Interna­tional Monetary Fund (IMF) are not proceeding very well, which are further reasons why Japan has already provided it with nearly US$23 bil­lion.

Although the Japanese would like to see Russia return Japanese land, they understand that in order to have a more meaningful discussion with Russia on the issue of the territory, the Russian economy has to improve. Russia would probably like to normalize the relationship with Japan, not least of all because it wants to take advantage of the Japanese economic and tech­nological capa­bility. At the same time, however, the Russians know that their economy is in a very difficult situation and they do not want foreign countries to take advantage of them. Neverthe­less, I be­lieve that the severe economic condi­tions will help the government in explaining to the Russian people why they should try to un­derstand the merits of normalizing the relation­ship with Ja­pan. How­ever, one must remember that the Rus­sians have been suffering from the Cold War mentality for many years and that there are still members of the Russian Parliament whose vi­sion is not broad enough to allow them to see the merits of Japan and Russia resuming normal relations.

Although US$23 billion is a huge amount of money, it is less than half of what Japan gave dur­ing the past year to the countries in Southeast Asia that are suffering as a result of this eco­nomic crisis - Indonesia, Malaysia, Thailand and Korea - to whom we gave US$55 billion. From the summer of 1996 onwards, many Asian coun­tries have gone through this very difficult eco­nomic situation, which started in Thailand then moved down to Malaysia, Indonesia and the Phil­ippines. Hong Kong and Korea were also affected by the so-called ‘Asian financial crisis’. The cur­rencies of these countries were overval­ued for a very long time, which resulted in an ever-increasing current account deficit. Devel­oping countries can normally afford to have this kind of deficit because there is a growing need for development, but if you have a current ac­count deficit, you need to have funding; if you have a current account deficit and long-term funding, over time, the goods and capital that are im­ported will help you to cover this deficit. There­fore, developing economies will have a current account deficit in order to strengthen their future export capacity or domestic devel­opment. The source of funding is crucial. Long-term funding is very useful, but direct invest­ment is even better because you do not have to pay it back. Unfortunately, many countries in Southeast Asia relied heavily on short-term capital, and found themselves in a mess when this funding started to decrease, re­alizing too late that the money im­ported from overseas sources had not been prop­erly utilized. The ones - mainly banks - who were putting money into Malaysia and Indonesia did so be­lieving that the money would be okay be­cause of the increase guaranteed by the govern­ment, so there was this concept of implicit guar­antee, what we call ‘moral hazard’; the lenders thought that the money would be okay not be­cause of the proj­ects themselves, but because of the backing while the borrowers also thought that the money they borrowed would be okay. Those are the causes of the Asian crisis. Every­body thought that it was a wonderful economic miracle and wanted to be a part of it, but no one had bar­gained on the failure of this implicit guarantee, meaning more hazard, a lack of gov­ernance, and the fact that the money was not spent effectively, which is why every time some­thing happened, the lenders would withdraw their money. Be­cause of this sudden collapse of the eco­nomic bubbles in the Southeast Asian coun­tries, they are undergoing a very strict process of restruc­turing. One of the major aspects of Japa­nese foreign policy is to help these countries by pro­viding both money and technical support and by assisting in bringing in more glob­alized stan­dards pertaining to accounting sys­tems and pub­lic bankruptcy procedures, etc.

I believe that the Southeast Asian countries will come out of this crisis because they have a strong production capability. Despite the depre­ciation of their own currencies, they are regain­ing export competitiveness. One major problem at the mo­ment is that there are not so many big markets for their exports. The American econ­omy is now the only truly booming economy but the Ameri­cans are saying that they do not want to be the market of last resort, while the Euro­pean market is contracting, so another important task is for us to restore the growth in Japan. Once the Japa­nese economy is back on its nor­mal path, Japan’s support to the Southeast Asian countries will be strengthened.

Participant: Is it not true that Japan gave US$10 billion to Indonesia under Suharto and that econo­mists and politicians were very critical, saying “Why give US$10 billion to a country where the system is corrupt?”