After
fifteen years of crisis the Empire of the Rising Sun finally sees
daylight at the end of the tunnel: the world's second economic
power has at last resorted to reforms designed to make it the
protagonist once again.
Alessandro Manzoni wrote about Napoleon Bonaparte: "Twice
in the dust, twice on a pedestal". We could say the same
words about Japan today: virtually turned to ash by World War
2 it first experienced a spectacular boom, which led it to compete
with the United States for the economic leadership of the world,
and then a recession-stagnation that lasted fifteen years. And
now the time for recovery has come, taking the very analysts by
surprise under certain aspects. Almost to celebrate this return
to the international.
scene, in September the Japanese gave a spectacular election victory
to Junichiro Koizumi, the first really reformist prime minister
of the post-war period. Frustrated by his own party's resistance,
he dissolved the Parliament in advance with the declared purpose
of removing from the scene those who were not willing to follow
him along the modernisation course. Probably the most conservative
country in the world, which has built even the great economic
success of the '70s and '80s on rules handed down by samurai,
it has really decided to turn a new leaf.
The time for financial socialism, as the Japanese system was called,
seems to have declined forever and one of the most effective political
jokes in recent years is topical no more. A friend asks a group
of Chinese students at the University of Tokyo why they group
up among them without mixing with their Japanese colleagues.
He answers: "Because we fear they will teach us Communism".
During the election campaign which peaked with the triumph of
Koizumi, I visited Japan for the 7th time and personally experienced
how much it had changed compared to my previous visits.
Kaikaku, reforms, was the key word mouthed by all parties. To
Koizumi kaikaku especially meant relaunching the postal service's
privatization project, which a group of rebels in his Liberal-Democratic
Party had tried to shelve in the High Chamber. He believes this
project is vital for the country's modernisation.
To Minshuto, the main opposition party, it rather meant reviewing
the pension and health system and drastically cutting down the
expense of public employment. Even the small socialist and communist
parties filled their mouths with the magical word. The air was
charged with the clear feeling that after many years of an ultraconservative
policy public opinion had at last been persuaded by the need to
update institutions to lead the country out of the economic crisis,
which has gripped it for fifteen years with some brief moments
of respite, in other words from the explosion of the famous speculative
bubble, which made the stock exchange's Nikkei index triple its
current levels and rated the centre of Tokyo higher than the whole
of California, at least on paper.
During his first five years of rule Koizumi has already tried
to change things, but with seesawing success: he has often been
blocked by his own party, which despite the name was never very
liberal nor very democratic, but rather conservative in the worst
sense of the word.
Now that the elections have enabled him to get rid of his fiercest
internal opponents by first expelling them from the party and
then by bringing into the scene against them an equal number of
loyalists chosen from society to prevent his rivals from winning
back their respective seats as independent candidates. He should
thus be freer and also obtain an extension to his mandate, which
expires in September 2006 according to the party's internal rules.
An election campaign centred on the postal service's privatization
could seem strange to an outside observer, especially considering
that the reform will be "spread" in twelve years and
- even now that it has been approved by the new Parliament's majority
- it would really start influencing the situation only towards
the close of the decade. In practice Japan's postal service's
dimensions and duties are much more extensive than in the West:
there are post-offices even in the most isolated villages. Besides
collecting savings and life insurances of tens of millions of
people - an amazing treasure of 2,500 billion euros - they also
perform collateral duties ranging from support to invalids to
a form of territorial surveillance.
In rural Japan the "master postman" is an institution
many citizens - especially the elderly - could not do without.
Japan Post is an integral part of the social fabric. Unfortunately
through the years it has also become a tool of power for politicians
who have made use of it to finance pointless public works, give
loans to their supporters and thus build a network of clients
who could guarantee their re-election. Now all this should come
to a close and Japan can at last make the most of a huge reserve
of private savings, which is either frozen or even wasted today.
Concurrently the Postal Service's privatization will reduce the
role of a state, which, as the above mentioned joke runs, still
has abnormal dimensions for a modern capitalist country. During
the years of the economic boom power interwoven among the high
bureaucracy, executives of the great conglomerate and heads of
the banking system was effective because it guaranteed social
cohesion and channelled resources towards sectors that were designed
for development. But the crisis' explosion has revealed the systems
defects comprising corruption, wastage of public money and bias
caused by the extremely rigid labour market. The banks with hands
full of credit they could not demand were on the verge of a collapse,
the productive system found itself with huge unexploited capacity
and citizens found their purchase power had drastically dropped
despite the absence of inflation. With interest rates that had
virtually plummeted to zero the State unrestrainedly followed
Keynes' policies especially based on public works without successfully
leading the country out of the tunnel but rather compromising
financial solidity. Suffice it to say that during the "crossing
of the desert"- in other words from the 1990 crisis to date
- Japan's public debt has risen to almost 170% of its GDP and
the deficit will amount to 6.4% of the same during 2005 too. This
is heresy for European countries, which must abide by Maastricht
parameters; besides it is especially an unsustainable tendency
if the goal is to prevent rating agencies from steadily declassing
Japanese treasury bonds till they turn them to "dirt".
Japan has thus become an international case also due to the fact
that the halt in international economy's "engine" in
the '90s has been charged with negative repercussions for all.
For fifteen years the Japanese have been repeatedly told ad nauseam
that the country's decline would become irreversible if they failed
to soon resort to radical reforms. Even recently famous foreign
economists have handed out both reproaches and advice in books
on the decline of the Japanese model.
The country's reaction has been slow and remarkably below par,
but in line with the nature of its people. However starting from
the mid-'90s it has introduced a series of small changes, which
have gradually altered the old balance making the machine more
agile. In the chorus of criticisms against Japan as often as not
we forget that Toyota is the world's most efficient automotive
firm today. Even in lean times Japan inc. continued to invest
3.1% of the GDP in research (vs. the European Union's 1.9% and
the United States' 2.8%). Japan's leading electronic industries
are often five years ahead of their western counterparts. All
this will once again bear fruit now that the country has experienced
a shock, firms have started investing again and citizens are increasing
the consumption rate. Naturally many problems are still being
studied and one in particular seems to be "weather proof"
even to the new reforming spirit, which pervades the Liberal-Democratic
Party. Starting from 2006 the number of Japanese, who are little
less than 128 million today, will gradually diminish to one hundred
million in 2050 according to the most optimistic estimates, and
to 86 million according to pessimists, who consider the growing
percentage of working women who, failing adequate care facilities,
will end up by bringing less children into the world.
While the European demographic crisis tends to be compensated
by non-EC immigration, the ethnically homogeneous and basically
xenophobic Japanese society still hesitates to accept this solution.
Koreans, Filipinos, Thai and even Chinese workers called to perform
work, which by now the young Japanese refuse to do, are kept at
the fringe of society. Only rarely are they authorised to take
up permanent residence, which enables their families to join them.
But the contraction
in the labour force and the parallel increase in the number of
pensioners require a reorganization of the national health and
welfare systems, which frightens all a little - as in Europe -
and is hence postponed every year. These factors will also gradually
slow down the development pace and this can only be compensated
by increasing productivity to ensure it is higher than in rival
countries: this will mean more robots and less workers.
Another challenge that will stiffly test the skills of resurrected
Japan is the new regional organisation.
Despite having renounced the dreams of hegemony of the '30s and
'40s, before the great crisis the former Empire of the Rising
Sun was the only great financial and industrial power in Asia.
On awakening from its fifteen year lethargy it found itself faced
with China, whose development is spiralling upwards at a staggering
rate, with South Korea ranking as the world's eighth industrial
power, India entirely changed by globalisation and South East
Asia's steady development.
Besides, relations with these neighbours are all but idyllic because,
unlike Europe, the wounds inflicted by World War 2 have not entirely
healed as yet in the Far East. Former victim nations of Japan's
merciless expansion still demand apologies and claim damages and
an apparently irrelevant event like Koizumi's yearly visit to
a war memorial, which also recalls some war criminals, has become
a source of poisonous controversy.
Relations with Beijing are very tense. In recent months impressive
anti-Japanese demonstrations have taken place there - organised
or at least tolerated by the government - due to Tokyo's refusal
to fully recognise their faults towards China and to subsequently
introduce changes to school books. The Chinese have stressed the
message by forbidding the assignation to Japan of a permanent
seat in the Security Council in reward for its financial contribution
to the UN. But Koizumi turns a deaf ear on this issue.
The answer given to those who attacked him during the election
campaign concerning bad relations with China was that everything
will finally solve itself considering the growing dimensions of
commercial exchange.
On the other hand even the common Japanese do not feel a great
need for reconciliation with their historical enemies:
they do not regret the horrors inflicted on the Chinese population
by the imperial army in the '30s and '40s, they publish a large
number of anti-Chinese books and their nationalist wing headed
by Ichihara, the governor of Tokyo, is convinced that sooner or
later we shall come to a showdown.
The Chinese in return call the Japanese "small devils"
and build hatred through targeted propaganda.
The theory of a new war between the two giants is currently quite
a remote chance, also considering that - as Koizumi remarked -
the two economies' basic complementariness will finally soften
the clash. But the perspective of China's growing assertiveness
- besides the country is also furnished with nuclear weapons -
places very serious problems. The alliance with the United States
remains Tokyo's landmark to such an extent that the anti-Bush
party, which is so active and widespread in Europe, is virtually
non-existent in Japan.
However pacifism without ifs and buts, which inspired Japanese
foreign policies till the '90s, is weakening and if the economic
recovery will be consolidated, military expenditure too will most
likely increase in parallel with China.
Livio Caputo
Translated by interpres sas
