Political squabbles condemning Japan

Kevin Rafferty sees a powerhouse's downward spiral into indebtedness

PUBLISHED : Saturday, 03 November, 2012, 12:00am
UPDATED : Saturday, 03 November, 2012, 2:54am

It's hard these days to have much faith in Japan as the Rising Sun, a global economic power and Asia's industrial and technological powerhouse, as the country's political, bureaucratic and economic leaders squabble in a headlong rush to turn the country into an over-indebted third-world country.

The faltering economy, crippled with government debts of 240 per cent of gross domestic product, higher than Greece's, and an overvalued yen driving companies offshore and hollowing out industry, is bad enough. Tensions with China, Japan's biggest trading and investment partner, have merely added a damaging downward twist to the economic spiral.

But worst of all is what can only be called mindless political shenanigans. Leaders are playing children's games to try to gain power. This is a tragedy for Japan, but it is also a danger for Asia and the world.

Events of the past week demonstrate the close links between tragedy and farce. Independent audit bodies discovered that much of the money already spent from a 19 trillion yen (HK$1.8 trillion) fund to help put the earthquake- and tsunami-devastated region of northeastern Japan back on its feet has been diverted.

Beneficiaries include road building in Okinawa, far from the disaster zone, subsidies for a contact lens factory in central Japan, protection for Japan's controversial whaling fleet and help for selling nuclear technology to Vietnam.

About half of the reconstruction money remains unspent because of arguments about how to rebuild the area. Eighteen months after the disaster, almost 300,000 people are still displaced and don't know when they will be able to return home, if ever.

Japan's politicians today are indulging in wild mating dances before the next lower house parliamentary election due by August next year. Shintaro Ishihara gave up his powerful job as Tokyo governor to take his aggressive nationalism into mainstream politics.

Ishihara's move is bad news for relations with China, given his provocative plan as governor to buy the disputed Senkaku/Diaoyu islands for Tokyo. He has vigorously claimed that the rape of Nanking was a fiction invented by the Chinese.

His is only one of many moves in the changing kaleidoscope of Japanese politics, with alliances and new parties forming and reforming. Worryingly, most of the moves are based on personality, not principle, and driven by hunger for the spoils of power. There has also been a loss of civility, which this week saw the prime minister barred by the opposition-controlled upper house from making his policy address there.

Prime Minister Yoshihiko Noda is on a slippery slope. The Liberal Democratic Party now fancies its chances at regaining power and seems set to harry Noda to call an election, whatever the cost to the economy or Japan generally. In power, the LDP, with allies like Ishihara, would seek to make Japan great again, starting with changing the constitution to get rid of Article 9, which renounces war, and turn Japan into a "proper" nation with its own armed forces.

Such moves might make politicians feel good. But they would be precisely the wrong moves. The continuing collision course between China and Japan over the disputed islands is the last thing either country needs.

Japan needs better diplomatic, economic and trade relations with its neighbours and the world if it is to sort out its main problems of a sluggish moribund economy set in an increasingly ageing society.

There is no magic wand to solve the problems. The results of Japan's electronics giants, with Panasonic forecasting a US$10 billion loss, show Japan is losing to nimbler South Korean, Taiwanese and other rivals.

Japan would get a boost if it encouraged more women into the workforce, but a society dominated by old men cannot contemplate this.

"I would love to have a proper career," says one bright 40-year-old woman who gets up at 5am every day to wash clothes and prepare breakfast and lunch boxes for her husband and two teenagers before going to her own part-time sales job. "But the men run things and expect you to stay in the office until nine or 10 at night."

Kevin Rafferty is author of Inside Japan's Powerhouses, an account of Japan Inc and internationalisation