Signs of movement in Tokyo

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See the Sol Sanders Archive By Sol Sanders SPECIAL TO WORLD TRIBUNE.COM

When Pres. Bush meets Prime Minister Koizumi next month in Tokyo, they will share one political fact of life: friend and foe have underestimated both after they came to office in an unconventional manner. Bush arrives on his East Asia tour strengthened that his countrymen think he has adequately picked up the challenge of “terrorism with a global reach”. Koizumi, considered a “flake” by many inside and outside Japan when he came to power, continues probably the most popular post-WWII prime minister — even in the face of an increasingly worsening economy.

Hanging crepe for Japan, the second largest economy in the world and the U.S.’ No. 1 ally in Asia, is fashionable just now. Rightly so. After a stagnant decade, Japan has gone into its second recession. Prescriptions on what to do fly thick and thin. But traditional government pump priming has come to a dead end. Something new has to be put in place to head off a major rupture in the world economy as well as deterioration of Japan’s vaunted lifestyle.

It might be time to recall that old cliché about the difference between Japanese and American/Western problem solving: Americans think deductively; latching on to a hypothesis and trying to prove/implement it. The Japanese think inductively; piling fact on fact, finally arriving at a conclusion. More than one Western dealmaker can attest to how excruciating this makes a negotiation with Japanese. But once decided, the Japanese armed with all the operating detail, can move with lightning speed.

Koizumi may, just may, be getting into position to effect changes that everyone, Japanese and foreigner, agree have to take place. What’s needed is a whole new system to replace the half-century [and older] mould that produced the world’s greatest economic miracle. Obviously that success formula is hard to abandon even in the face of disaster. But there are signs of movement:

Tokyo appears to have decided to devalue [15 percent since September]. A cheaper yen would boost exports. It would make repayment of internal debt easier, especially if, as expected, it leads to inflation. It would make imports more expensive; facilitate dismantling Japan’s Byzantine import barriers.

Koizumi’s repeated statements on Japan’s number one problem, its debt-ridden banks, have become sharper. He hints, given a pretext like a run on a bank, he will use public funds [a half trillion dollars in foreign exchange reserves, up $10 billion last year] to refinance them.

Koizumi’s effort to play a world strategic role may be coming into focus. The amended U.S.-Japan Mutual Defense Treaty makes Tokyo a more equal partner.

Japan has begun to patrol sealanes to Singapore — an anti-piracy campaign obviously reducing U.S. navy’s responsibility for the Mideast oil route. Japanese forces are deployed in noncombatant support of the U.S. in Afghanistan. Japanese surveillance is being upgraded with its own satellites. A recent North Korean spyship episode was handled professionally – taking it up with Beijing after pursuing it into waters the Chinese call their “economic zone”.

Koizumi added what Poppa Bush would call “the vision thing” in Singapore in mid-January. It was the proper place — in the middle of the 100 million Overseas Chinese who have been Japan’s most important partners in Asia in the postwar period. He proposed a new regional market. True, it was reaction to an earlier proposal from China to the Southeast Asians — one they aren’t likely to entertain what with Chinese labor costs already their greatest exports concern, and threatening their domestic markets [already the case in Vietnam]. But it staked out a new claim to regional leadership. Perhaps most important: Koizumi appears to have revolutionized Japanese politics by reaching over the old Liberal Democratic Party barons to the voter. He may be on the way — despite his recent old-style imbroglio with Beijing over cheap agricultural imports — to recognizing Japan’s realities as an urban society. That could mean eventually rearranging the gerrymandering favoring rural areas.

None of these moves are without risk. China has already protested the softening yen, anticipating it might force a much feared devaluation on Beijing. Malaysia joined in, fearing a beggar your neighbor round of devaluations which could trip off another 1997 Asian financial crisis. Lower prices for Toyotas — after last year’s further erosion of Detroit’s market share and the troubles at Ford — won’t be welcomed in the U.S. Sec. Of Treasury O’Neill publicly challenged the yen devaluation [apparently after a different private conversation and although his White House counterpart, Mr. Lindsey seems of a different opinion].

But in a less than perfect world, Bush may be encouraged that another allied politician is taking the hurdles, if not in stride, picking up speed. And a decade of examination — plus growing urgency — may have produced more hidden Tokyo initiatives soon than is the conventional wisdom.