Japan Center for International ExchangeVol. 3 No. 4 | September 2008

The Crisis of Global Governanceand the Rise of East Asia
Hitoshi Tanaka, Senior Fellow, JCIE
With the November US presidential election quickly approaching and the attention of the foreign
policy community turned toward East Asia’s rise, JCIE is releasing a special edition of East Asia
Insights. This issue incorporates and expands upon a number of elements raised in previous issues,
examining them in the context of the global governance system and the expectations for US leadership in reforming that system.
A dramatic transformation of the global system istaking place as the distribution of power shifts from
West to East. Ongoing crises over Iraq, Afghanistan,Iran, and North Korea and the sharp rise of oil andfood prices as a result of the swift upsurge in demandfor primary commodities in the emerging economies have thrown systemic problems in the current
global system into sharp relief. Viewed from Tokyo,
these developments, together with the recent decline
in US global leadership, have cast doubt on the future sustainability of the existing network of international institutions. The most recent G8 Summit in
Hokkaido, which involved the limited participationof a number of emerging economies and intergovernmental organizations, provided ample evidence
that the advanced democracies are no longer capableof solving global challenges by themselves.
Henceforth, global leaders must carry out farranging reforms so that obsolescent institutions

more accurately reflect contemporary realities andare better able to deal with emerging 21st century
challenges. To achieve this objective, the global ordermust be reshaped to incorporate and constructively
engage a host of rising powers—most prominently
China and India, but also others such as Brazil, Russia, and South Africa.
A necessary component of this effort is the development of a regional architecture in East Asia,a region that is rapidly becoming a central player
in world affairs and is currently in the midst of aremarkable—and potentially destabilizing—transformation. The rise of China and India, coupledwith a vast number of emerging regional challenges, makes it clear that a more stable regional order will not only complement efforts to strengthen
global governance but will also be an integral building block for the future global system. It is crucial
for regional powers to more proactively contributeto the consolidation of a regional and global order.
Although Japan, as the leading advanced democracy and economic power in the region, is the nation best positioned to lead this effort, it will not
be able to do so alone; close cooperation between
Tokyo and Washington will be essential.
Under a new administration, the United States
has the opportunity to reengage East Asia and therest of the international community and reestablish
its global leadership. Although the nature of thisleadership must necessarily adapt to changing international circumstances, there is no doubt that theworld is better off with an imperfect United States
behind the helm than no leader at all.

the rest of the world. According to a 2007 WorldBank report, average growth in sub-Saharan Africa
was 5.4 percent in 2005 and 2006, and more thana third of Africans live in nations that have maintained annual GDP growth rates of over 4 percent
for the past 10 years.
The changes brought about by this rapid economic development, however, have had serious
ramifications for the effectiveness of global governance. For example, while at the time of its formation in 1976 the G7 members accounted for 64
percent of global GDP, that number has now fallen
to 56 percent. Meanwhile, the economies of the socalled G5 nations—Brazil, China, India, Mexico, andSouth Africa—have expanded and now account for
approximately 12.7 percent of global GDP, a figurethat will continue to rise in the coming years. Taken
together, this expansion—the most rapid and widescale in history—heralds a fundamental shift in economic transactions away from the West.
The significance of this particular current economic expansion in the developing world, however,lies not only in its massive scale. A comparison withthe emergence of Japan and Germany in the postwar
era proves useful in clarifying why the current transformation has implications that extend far beyond
the realm of economics.
Japan and Germany emerged from the Second
World War with their economies in tatters. However, with substantial assistance from the Western
powers, both states were able to reconstruct theireconomies. Building on past experiences with democracy, they developed liberal and accountable
political systems and eventually regained the trustof the interna­tional community by aligning themselves with the US-led Western order and actively
participating in the institutions of global governance. The fact that both states were enmeshed insecurity alliances with the United States from anearly stage and shared similar threat perceptions
throughout the Cold War ensured that neither
state’s emergence had a negative impact on global
stability. Furthermore, US security guarantees not
only allowed both states to avoid constructing
costly and destabilizing military deterrents, they

Shifting Global Power
Although the recent weakening of global governancederives from a number of causes, two developments
stand out as being particularly influential: the systemic shift in the global balance of power from advanced democracies to emerging developing nations,and the gradual evaporation of US leadership. Bothof these trends have served to steadily undermine
the efficacy of the global system.
The rapid economic growth currently taking
place in China and India is only the most impressive example of the shift in balance of power, andmost available indicators suggest that this is not a
short-term phenomenon. That these countries willpass Japan to become the number two and three
economies in the world is no longer a questionof “if ” but of “when.” In the meantime, these two
Asian giants—representing 2.6 billion people—willcontinue to pull along the other emerging economies in East Asia (in particular Southeast Asia andits 575 million people). Their rise carries with it therising fortunes and expectations of more than 3 billion people.
Although East Asia may be leading the charge,
the current transformation is clearly a global phenomenon. Not only have the economies of Russia,
Mex­ico, and Brazil grown significantly in recent
years, but the economies of a number of African
nations, long characterized by widespread collapse
and stagnation, seem to be finally catching up with
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also ­ensured that neither would become a nuclear­power. Although relations were not without occasional economic frictions, neither state was seen
as a challenge to the United States’ preeminent­position in global political and security affairs or
to the Western system as a whole.
In stark contrast to the circumstances surrounding the rise of Japan and Germany, ­current ­economic
growth in the developing world is spearheaded by
China, a state whose existing political institutions
seem to be incongruous with the existing global order. Additionally, not only are the so-called BRIC
nations (Brazil, Russia, India, and China)—with
the lone exception of Brazil—independent nuclear
powers, but their threat perceptions also often differ greatly from those of the Western nations. Although these countries have more or less embraced
the Western economic system, there is no guaranteethat they will fully adopt Western norms of behavior
in the international community.
This seeming incompatibility provides yet another reason why an increasing number of observers have begun to question the continuing relevanceof existing international institutions in the new
century. For example, one need only look back to
the G7’s response to the surge in oil prices following the second oil shock in 1978–1979—essentiallyan agreement among the seven members to voluntarily impose import ceilings on oil and restrain
domestic consumption—to realize how much theworld has changed. Even if the G8 were to passsuch an agreement now, which is highly unlikely,
the absence of any binding effect on China, India,
and many other key developing states would dramatically limit its impact. In short, it is abundantly
clear that current problems demand new solutions
and institutions capable of effectively tackling 21stcentury challenges.

power on several traditional measures of ­national
strength may be inevitable, there is no doubt thatdiminution in US influence overseas has been exacerbated by fallout from several of its recent foreign
policy decisions.
Although the United States’ history of unilateralist tendencies certainly predates September 11, 2001,
its actions in the seven years since have had a negative impact on its image overseas and have severely
damaged its moral authority to act as the “leader ofthe free world.” The US decision in 2003 to take military action against Iraq without definitive United
Nations Security Council (UNSC) approval undermined the solidarity of the Western alliances, and thewar itself has failed to achieve its goal of introducing
stability into the Middle East.
Continuing US intransigence over climatechange—sure to be one of the most significant
challenges of the 21st century—has sparked serious debate about two related issues: first, to what
extent the United States is able to look past narrow
national interests and act for the wellbeing of theinternational community and second, whether theUnited States is still qualified to be the global leader.
Particularly damaging was the US rejection of the
Kyoto Protocol, an act that not only demonstrated
to the rest of the world that the United States—until
2007, the world’s largest emitter of CO2—could not
be counted on to lead the fight against global warming, but also provided an excuse for other major CO2
emitters to shirk their responsibilities as well. The
failure of the United States to step up to the plate
and proactively confront emerging challenges suchas global warming has done incalculable damage
to both the world’s confidence in its leadership andmany of the institutions of global governance.

Restoring Global Leadership
There is an emerging consensus both overseas andwithin the US foreign policy community that the
global unipolar moment is at its end and that thechallenges of the 21st century will increasingly require leadership that is asserted not by demonstrations of military might but through diplomacy andmultilateralism. With sufficient will in Washington

The Decline of US Leadership
The second major factor behind the weakening of
global governance in recent years has, ironically, been
the foreign policy of the nation primarily responsible for creating the current international system:
the United States. Although a relative decline of US
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under a new administration, the United States canreestablish its global leadership by working to rebuild its damaged alliances and reengage the outside
world as an internationalist power.
It is an unfortunate reality of international relations that the ability to lead and influence ­global
affairs continues to depend heavily on militarystrength, and limited use of force may occasionallybe necessary to maintain global peace and stability.
Internationally sanctioned use of preventive force toforestall a terrorist attack, hinder the proliferation of
weapons of mass destruction, or stop a gross violation of human rights (e.g., genocide) is one example
of “legitimate force.” It is abundantly clear, however,that the use of force has a very disruptive impact
on international stability. While the United States isthe preeminent military power and thus the nation
best situated to exercise force, force must always betreated as a last resort, only to be used after all diplomatic means have been exhausted and unequivocal
international legitimacy has been acquired.
The dramatic shift in the US approach to the outside world that emerged during the second term of
the Bush administration, which reintroduced multilateralism and diplomacy into its foreign policy
toolbox, is a positive sign. The resulting progress in
the Six-Party Talks is a clear manifestation of the advantages of this diplomatic approach. Far from being
limited to the North Korea issue, a multilateral andcomprehensive approach should be applied to all
global challenges, such as the international community’s current attempt to achieve a resolution to the
Iran nuclear issue. Both US presidential candidates
have already publicly endorsed this kind of foreign
policy approach. While it of course remains an open
question whether this shift heralds a fundamental
transformation in US foreign policy, the widespreaduse of such rhetoric on the campaign trail is a welcome development.
The issue of legitimacy, however, presents a far
more frustrating challenge. Although a numberof international meetings have been held among
foreign policy intellectuals in recent years in an attempt to define “international legitimacy,” anything
approaching a consensus remains distant. A ­variety
EAST ASIA INSIGHTS

of proposals for new institutions have emerged
from these meetings, ranging from a plan to undertake a comprehensive overhaul of existing international institutions to calls for the establishment of
new values-based and exclusive institutions, suchas a league of advanced democracies. While eachof these proposals has its merits, it is abundantly
clear that many of the challenges brought about by
the systemic transformation of the global balanceof power can only be effectively addressed with action legitimated by inclusive institutions such as
the United Nations.
At the same time, however, the UNSC represents
one of the major institutions of global governance inneed of comprehensive reform. The Security Council’s permanent membership is an anachronism, reflecting the global power distribution of 1946 rather
than 2008. The international community must reform this institution to more accurately reflect contemporary realities of the global system, such as
the expanded influence of global powers like Japan,
Germany, India, and Brazil. It is incumbent upon
the United States to aggressively lead the charge forreform. Although this will no doubt prove to be an
arduous task, the world cannot afford to allow the
UNSC to descend into irrelevance.
At the same time that the United States must aim
to reform and expand inclusive global institutions, it
must also work to consolidate links among advanced
democratic powers and ensure that this group does
not forsake its integral role as the driving force behind global governance and international peace andprosperity. The direction and moral leadership necessary to achieve this goal can only be provided byadvanced democracies and only the United States iscapable of reconsolidating the ties among this groupof countries. To this end, the United States must work
to strengthen existing relationships, in particular its
global network of bilateral alliances and NATO. Additionally, the G8 must adopt a more proactive rolein coordinating the economic, political, and security
policies of its members in order to provide a modelfor the norms and principles that should underpin
the future global system.

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East Asia’s Challenge and Global
GovernanceEfforts to revitalize global governance are inexorably linked to developments in East Asia. The region’s
newfound status as the primary driver of global economic growth and its rapidly increasing influence inworld affairs make it abundantly clear that the manner in which East Asia evolves in the coming decades
will have a substantial impact on global governance,
for better or for worse. In order to minimize thepotentially deleterious effects of East Asia’s transformation, it is imperative that the international
community work to fortify existing institutions anddesign novel frameworks capable of effectively addressing emerging challenges. Going forward, it is in
the interests of all nations with concerns in the region—in particular Japan and the United States—toensure that the region emerges in a manner compatible with the norms and principles of the current
global system.
Although East Asia receives considerable attention for its remarkable growth rates and expanding
intraregional economic interdependence, the numerous challenges it faces outside of the economic
sphere—the rapidly changing balance of power
within the region and the emergence of a growing number of transnational threats to stability—
also have very important implications for global
stability. These developments pose a direct threat
not only to the security of individual states in theregion but also to the sustainability of economic
growth. The longer the region continues to lackan effective mechanism to tackle these issues, thegreater the possibility of disruptive spillover into
the global system will become.
Perhaps the most significant challenge in East
Asia is presented by the rise of China, a nation whose
rapid economic growth and increasingly assertive
foreign policy have transformed the geopoliticallandscape in the region. This development has presented a unique challenge for policymakers in manyneighboring countries, many of whom seek policies that balance cooperation and engagement with“hedging” against uncertainty concerning China’s
future course.
EAST ASIA INSIGHTS

India is also experiencing rapid development anda concomitant increase in global economic and political influence. Although India has traditionallybeen perceived as lying on the periphery of East Asia,
its linkages with the region are growing and many
governments see it as a potential contributor to regional stability, a view manifested most clearly in the
successful campaign to invite India to participate in
the East Asia Summit. Nevertheless, continuing instability on the Indian subcontinent leaves India in asomewhat precarious position.
Although the international press devotes thegreatest amount of attention to the rise of China
and India, the transformation of East Asia is not
limited to those two countries. In Northeast Asia,
Japanese domestic opposition to a more assertiverole in the region is on the decline in response tochanging threat perceptions toward its neighbors.
As a result, Japan’s security policy has undergone
a significant transformation as Tokyo seeks a moreproactive and “normal” role. Meanwhile, the longterm implications of rising nationalism in China,
Japan, and South Korea, and of festering resentment
among these countries over unresolved territorial
disputes, remain unclear. Finally, despite seeming
progress toward a resolution of the North Korea
nuclear issue, until verifiable denuclearization isachieved, the situation on the Korean Peninsula will
most likely remain a potentially destabilizing security and geopolitical flashpoint for several years. In
Southeast Asia, several ASEAN countries continue
to struggle with serious domestic governance issues. As seen in other parts of the region as well, in
several Southeast Asian countries economic growth
has come hand in hand with corruption, environmental degradation, and an expanding disparity
between rich and poor.
Throughout East Asia, transnational environmental challenges including global warming andair pollution, health challenges such as HIV/AIDS
and avian influenza, and nontraditional security
issues such as human trafficking and maritime
security all pose grave threats to national and regional stability.

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Establishing a Regional Architecture
The rapidly expanding influence of China and India,
coupled with the significant challenges illustrated
above, make clear that the rise of East Asia pre­sents the current global system with a serious challenge. The first step to ensure that this development
does not seriously disrupt global stability will be to­establish a regionwide architecture that is compatible with the existing rules and norms of the international system. Enmeshing East Asian nations insuch a rules-based system will lead to a more stableand prosperous region and facilitate further reformof global governance. World leaders must begin byasking themselves what kind of regional architecture would most effectively forestall the materialization of any of these potential threats to regional andglobal stability and then stipulate a list of clear principles to guide the process.
Unfortunately, however, the United States continues to be distracted by issues in the Middle East andhas failed to play an active leadership role in shaping
East Asia’s transformation. The conspicuous absenceof any sort of long-term vision for the region’s emergence or explanation of the kind of role the UnitedStates plans to play in its evolution militates against
the future prospects for the United States to influence its outcome. In addition to making a greater
effort to elucidate its preferences, Washington mustalso make clear to the world—particularly to Japanand its other friends in the region—that the UnitedStates continues to see East Asia as a region of strategic importance.
Although the spread of liberal democratic politicalsystems throughout East Asia would certainly expedite East Asia’s integration into the existing global system, the current reality is such that democracy mustremain a long-term objective. For the time being, thefocus should be on two complimentary fronts: working to prevent the materialization of existing threats—
i.e., minimizing risks—and working to deepen trustand increase prosperity by maximizing opportunities
that have emerged as a result of widespread economic
liberalization and regional integration.
In order to minimize risks, existing US bilateral security alliances with states in the region, in
EAST ASIA INSIGHTSa­ ddition to “minilateral” institutions such as the trilateral fora for strategic dialogue among Japan, theUnited States, and Australia and among Japan, theRepublic of Korea, and the United States, should be
used as a hedge against the materialization of potential “traditional” security threats.
At the same time, leaders should expand multilateral cooperation on functional issues through inclusive regionwide frameworks. When combined withmultilateral dialogue in the context of existing regional fora, proactive and cooperative action to address issues of common concern will go far toward
strengthening intraregional ties and consolidating
trust and confidence among nations. Doing so willallow all nations in the region to benefit from theopportunities created by East Asia’s rise.

A Functional Approach
Given the vast diversity of values, religions, and political systems among East Asian nations, it is clearthat a regional architecture must be predicated on arecognition of common interests rather than divisive
issues. In other words, what is necessary at this point
in time is an innovative framework of initiatives thatplace emphasis on “functions”—i.e., specific tasks orpractical objectives—rather than shared values. Thiskind of approach will be the most effective way toconsolidate peace and stability in East Asia and canconstitute the keystone of an eventual regionwide,
rules-based architecture.
In efforts to ensure regional security, the UnitedStates and Japan should champion an action­oriented approach and proactively collaborate with
China and other East Asian powers. One key aspectof this approach would be the creation of a new East
Asia Security Forum, discussed in previous issuesof East Asia Insights, to tackle transnational security
issues such as maritime piracy, resource scarcity, disaster relief, environmental degradation, infectious
disease, and nuclear proliferation. Taking the Proliferation Security Initiative as a model, this new forum
would adopt a proactive and operational approachto regional security. Member states would be boundtogether by rules and operations and cooperatively
address shared threats through joint operations. It
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should be stressed that the proposed forum is notintended as a replacement for the ASEAN Regional
Forum (ARF). Rather, it would be designed to serve
as a complement to—or even possibly as part of—
the ARF, which has played an important role in facilitating regular regionwide ministerial dialogue
for well over a decade. After all, the primary objective is not to create superfluous institutions but toengage regional states in substantive and actionoriented cooperation.
In order to ensure that the new forum’s mandate is
not spread too thin, membership should be ­restricted
to the ASEAN+6—i.e., the 10 nations of ASEAN plus
China, South Korea, Japan, Australia, New Zealand,
and India—and the United States. Given that theUnited States is not geographically situated in Asia, its
membership may be met with some resistance fromother nations in the region. However, it is abundantly
clear that US participation is a prerequisite for thiskind of action-oriented security institution to have alegitimate chance of success. In order to mitigate resistance, the United States should make a strong casefor its inclusion in the forum. It can do so by demonstrating a clear commitment to continuing its role as
East Asia’s primary security guarantor and by resolutely silencing fears that it intends to withdraw fromthe region. Japan, for its part, must make every effort
to convince regional actors to welcome US involvement, for example by encouraging Washington tosign a Treaty of Amity and Cooperation and accede to
the East Asia Summit as soon as possible.
Recent progress in talks over the North Korea
nuclear issue have demonstrated the important contribution that subregional forums can provide toregional stability. It has also manifested the integralrole that the United States plays in regional secu­rity
affairs and the importance of its leadership. Although
the Six-Party Talks mechanism was created to deal
specifically with North Korea’s nuclear problem, it
can continue to make a valuable contribution to regional stability even after resolution of the nuclear
issue as a subregional forum for addressing othersecurity concerns on the Korean Peninsula. As stipulated in the February 2007 Joint Statement, a number of obstacles remain before North Korea can be
EAST ASIA INSIGHTS

fully brought into international society, such as normalization of Pyongyang’s relations with the UnitedStates and Japan, a formal peace treaty to ­officiallyend the Korean War, and North Korea’s economic
development. Continued interaction among the six
states in pursuit of solutions to these issues, which
may take a considerably longer time than was originally expected, will not only lead to a final resolutionof the issues themselves, but also serve as a valuable
confidence-building measure.
Although inclusive multilateral frameworks willplay an integral role in efforts to improve the security environment within East Asia, this undertaking
is sure to fail without close cooperation among theregion’s great powers. In light of the essential rolethat the United States, Japan, and China must play
as guarantors of East Asian peace and stability, annual trilateral security summits should be initiatedas soon as possible in order to provide a venue fordiscussing the various security challenges facing theregion. Regular dialogue would also serve to reducemutual suspicions, increase transparency, and consolidate trust among the three global superpowers.
Finally, in the field of economics, the gradualembrace of the market mechanism in East Asia has
led to remarkable progress toward economic integration. Since the turn of the century, an impressive array of free trade agreements have been signed
and still more are currently under review. The task
ahead for leading states is to ensure that the region
becomes further integrated and that the economic
ties between countries are rules-based and linked
to global institutions such as the WTO. In order toensure that this community does not evolve into an
isolated bloc, stronger linkages must be developed
between East Asia and North America through the
APEC framework and between Asia and Europe
within the context of the Asia-Europe Meeting.
In sum, policymakers in Washington, as well as
in Tokyo, can best contribute to peace and stability in East Asia by actively encouraging regional
cooperation and working with regional partners
to consolidate a multilayered security architecture:strengthening existing bilateral security arrangements and minilateral strategic links and dialogues,
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extending and expanding the subregional Six-Party
Talks mandate beyond the nuclear issue, and leading
the charge for the creation of an East Asia Security
Forum as a regionwide, inclusive mechanism forproactive efforts to combat nontraditional security
threats. Stability in East Asia will complement efforts
to strengthen global governance and be an integral
building block of the future global system.
The US-Japan relationship can and should playa central role in efforts to address these challenges.
Although Japan’s relative influence as an economic
superpower is bound to decline in the coming decades, its qualitative value as an advanced Asian democracy with prowess in the fields of industry andtechnology is sure to increase. The two allies haveovercome many difficulties over the past 60 years—
ranging from economic frictions to disparate views
on security—and the challenge of engaging eachother to create a stable regime in East Asia will once
again provide a formidable test of the strength oftheir relationship.
The existing global system faces a number of serious challenges. It is abundantly clear that a proactive
effort must be made to reinvigorate global governance so that this dramatic transformation does
not foment global instability. The creation of a newrules-based architecture in East Asia will be an integral aspect of global governance in the 21st century.
As part of this process, renewed leadership from theUnited States under the next administration andclose cooperation between Tokyo and Washington
will be sine qua non.

Hitoshi Tanaka is a senior fellow at JCIE. He ­previously
served as Japan’s deputy minister for foreign affairs.

East Asia Insights
East Asia Insights is an occasional newsletter focusing on East Asia community building
from the Japanese perspective.
Published by: Tadashi Yamamoto, President, JCIE
Please direct any comments or questions to eainsights@jcie.or.jp.
Japan Center for International Exchange
www.jcie.or.jp

EAST ASIA INSIGHTS

Japan Center for International Exchange, Inc. (JCIE/USA)
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8© 2008 Japan Center for International ExchangeVol. 3 No. 4 | September 2008