June 201513

Land Policy
Property Laws
Hindering Disaster
Recovery
Saving Japan’s
Endangered Regions

Views on China

The Abe Government’s
Security Bills
Time for a Responsible Debate

Tapping the Potentialof Japan’s SDF

What Does China
Want?
Understanding
Beijing’s Foreign
PolicyIs East Asia Headed forWar?

Anatomy of Chinese
Corruption: Can
Xi’s Crackdown
Work?

Development Assistancefor Inclusive Growth

Lessons from World War I

A Field for Japan-US Cooperation?

Japan Perspectives
Japan Perspectives is an English-language journal published by the Tokyo Foundation containing articles from the Foundation’s website. In addition to translationsof the public policy research recommendations made by the Foundation, Japan
Perspectives offers timely insights into and analyses of Japanese politics, economy,society, and culture written specifically for overseas readers.
The Tokyo Foundation is an independent, not-for-profit think tank that brings
together the minds and skills of outstanding human resources through policy research and global leadership development projects to offer fresh perspectives thatlead to positive social change.
Visit the Foundation’s website at: www.tokyofoundation.org/en

All rights reserved. These articles, either in full or as an excerpt, may not be reprinted,
copied, or retranslated without the express permission of the Tokyo Foundation.
Citations must specify the source. The opinions expressed in the articles are those of therespective authors and do not necessary represent the views of the Tokyo Foundation.
Publisher: Masahiro Akiyama (President)
Editor-in-Chief: Akiko Imai (Executive Director)
Senior Editor: Nozomu Kawamoto (Public Communications)
Associate Editors: Kaoru Matsushita (Public Communications)Junko Suzuki (Public Communications)
Mikiko Fujiwara (Public Communications)
Production Managers: Asako Uemura (Public Communications)
Satoko Yanoma (Public Communications)
The Nippon Foundation Bldg, 3rd Floor, 1-2-2 Akasaka, Minato-ku, Tokyo 107-0052, Japan
Tel: +81-3-6229-5504 (Public Communications) Fax: +81-3-6229-5508
E-mail: info@tkfd.or.jp URL: www.tokyofoundation.org/en©2015 The Tokyo Foundation

Recent Articles from the Tokyo Foundation Website
No. 13, June 2015

Contents
National Security
The Abe Government’s Security Bills: Time for a Responsible Debate ................ 3
Tsuneo Watanabe
Tapping the Potential of Japan’s Self-Defense Forces .......................................... 7
Ippeita Nishida

International Affairs
Mixed Marks for India’s Modi ......................................................................... 16
Masahiro Akiyama
Japan-Europe Cooperation for Peace and Stability: Pursuing
Synergies on a Comprehensive Approach ......................................................... 21
Akiko Fukushima
Is East Asia Headed for War? Lessons from World War I ................................. 27
Jitsuo Tsuchiyama
The White House’s AIIB Fiasco ........................................................................ 34
Paul J. Saunders

Land Policy
Property Laws Hindering Disaster Recovery .................................................... 37
Shoko Yoshihara
Saving Japan’s Endangered Regions ................................................................. 40
Katsuyuki Yakushiji

Views on China
What Does China Want? Understanding Beijing’s Foreign Policy ..................... 44
Bonji Ohara
Anatomy of Chinese Corruption: Can Xi’s Crackdown Work? ........................ 50
Hiroyuki Kato

CSR White Paper
Development Assistance for Inclusive Growth: A Field for Japan-U.S.
Cooperation? ................................................................................................... 56
Akiko Imai
Integrating CSR into Strategic Management: A Practitioner’s Perspective ......... 80
Koichi Kaneda

Voices from the Sylff Community
Between 2:00 and 4:00 pm: How a Full-Time Mother Organized aFood-Bank Symposium .................................................................................... 87
Sherilyn Siy Tan
Developing Youth Leadership in the Western Cape: SLI Workshop
Organized by Fellow Xena M. Cupido ............................................................. 93
Althea Whitaker & Errol Brierley
Sylff’s Role in Hungary’s Democratization: Hungarian Academy of
Sciences Celebrates 25 Years of the Fellowship Program .................................. 98
Viktória Ferenc, Loretta Huszák, & Balázs Csiky

National Security
May 7, 2015

The Abe Government’s Security Bills
Time for a Responsible Debate
Tsuneo WatanabeWith voices in Japan and neighboring countries expressing concern over the Abe cabinet’splans to legislate a more flexible defense policy, Senior Fellow Tsuneo Watanabe calls on
the nation’s politicians and government officials to reassure the public of Japan’s commitment to peace by conducting Diet deliberations in a transparent, measured, and constructive manner.
*

*

*

I

n November 2013, the Tokyo Foundation’s National Security Project published a policy proposal titled “Maritime Security and the Right of Self-Defense in Peacetime.” The proposal consisted of a set of legislative and administrative recommendations for updating Japanese security policy in response to achanging security environment, including the potential for “gray zone” situations
during peacetime. In the revised National Defense Program Guidelines and the
National Security Strategy released the following month, the cabinet of Prime Minister Shinzo Abe unveiled the outlines of a national security policy consistent with
our recommendations.
With negotiations between the ruling Liberal Democratic Party and its coalition partner Komeito scheduled to wind up by the end of April 2015, the government is finally ready to submit security legislation for Diet deliberation beginningin May. We believe the substance of the bills, which closely mirrors our recommendations, represents an important step forward, not only for Japan’s national security but also for the stability of the surrounding region.
Nonetheless, from the public reaction, it appears that many people in Japanand overseas regard the impending changes with misgivings. In the years since

Tsuneo Watanabe   Senior Fellow and Director of Foreign and Security Policy Research,
Tokyo Foundation.
3

National Security
World War II, Japanese society has adhered to the spirit of Article 9 of the postwar
Constitution, which renounces war as a means of settling international disputes.
Against the background of the July 2014 cabinet decision affirming Japan’s rightto participate in collective self-defense, the Japanese public seems to view the Abecabinet’s legislative initiative as portending a major shift in Japan’s basic security
posture. This perception—no doubt exacerbated by the difficulty of conveying the larger security picture in terms lay
people can easily grasp—has given rise to a significant
backlash in Japan and abroad.
A Long Overdue Update
What is the government’s basic rationale behind its security
bills, and what importance do they have for Japan at thisjuncture in history?
The bills’ supporters point out that the time has cometo rewrite the laws governing Japanese security policy, given the need for Japan toadapt to the dramatic changes in the security environment. The current legal framework was developed to address the security challenges of the Cold War era—fromthe 1950s through the 1980s. We need to acknowledge the fact that this framework
is obsolete in today’s international security environment. Indeed, given the magnitude of the changes that have occurred in the past 25 years, the government’s initiative has not come a moment too soon.
This is not to suggest that that there have been no modifications to Japan’s
security statutes over the past quarter century. But the legislation introduced duringthat time has been limited and tightly circumscribed in nature. In 1999, for example, after North Korea launched a Taepodong missile over Japan without priorwarning, the Diet passed the Law Concerning Measures to Ensure the Peace andSecurity of Japan in Situations in Areas Surrounding Japan. This legislation opened
the door for the Self-Defense Forces to respond not only to direct attacks on Japanbut also to situations in surrounding areas that, if left unaddressed, would pose adirect security threat to Japan. But even under the new law, the scope of action was
limited to logistic support for US forces and circumscribed by the constitutional
interpretation prohibiting Japanese participation in collective defense operations.
By allowing limited participation in collective self-defense, the Abe government’s bills would pave the way for more seamless and effective cooperation with
US and other forces in the event of a contingency in the region around Japan. Thisis particularly urgent given North Korea’s continued development of nuclear weap4

National Security
ons and missiles and the deep uncertainty surrounding the Kim Jong-un regime. In
the 16 years since the Diet deliberated the Law on Situations in Areas Surrounding
Japan, North Korea has conducted three nuclear tests and six tests of ballistic missiles (in addition to its three previous missile tests).
Responding to Terrorism
After the September 11, 2001, terrorist attacks on the United States, the Diet passed
the Anti-Terrorism Special Measures Law permitting Japanese forces to provide
support for multinational operations fighting terrorism overseas. Under this statute, the Maritime Self-Defense Force was able to carry out refueling operations in
the Indian Ocean to support multinational forces in Afghanistan. But since theprovisions of this law expired after two years, new legislation would have to be
drafted, submitted, and passed in the event of another such situation.
In the meantime, the threat of international terrorism has escalated, claiming
the lives of two Japanese hostages earlier this year. Yet there is very little Japan can
do to meet that threat. Instead of responding to each crisis that occurs with an ad
hoc “special measures law,” the government seeks permanent legislation that would
allow Japan to play a more active role in supporting anti-terrorist operations andparticipating in the kinds of UN peacekeeping operations needed to maintain civil
order and prevent countries from becoming hotbeds of terrorism.
Another important development in Japan’s security environment is the situation around the Senkaku Islands, where threatening incursions by China Coast
Guard boats and Chinese fishing vessels have become commonplace. A major concern here is Japan’s ability to respond seamlessly to armed incidents that fall shortof a full-scale attack on the country. Current law allows Japan to respond withforce if under systematic attack by a foreign state but offers no framework fordealing with so-called gray-zone incidents, such as an attempted landing by armed,
non-uniformed forces. This is not an issue of collective self-defense, and it requires
no reinterpretation of the Constitution. Nonetheless, the laws have yet to beamended to reflect the new reality of Japan’s security environment.
No Change in Japan’s Commitment to Peace
Concerns about the Abe cabinet’s legislative initiative within Japan are understandable. Japan has managed to maintain its security under existing laws and the previous interpretation of the Constitution. Might not an overhaul of the laws governing national defense have the effect of escalating tensions in the region? The
5

National Security
crucial point here is that the new legislation in no way alters Japan’s commitment
to an “exclusively defensive defense” in keeping with Article 9. The Komeito, the
LDP’s coalition partner, was particularly insistent on this point. Japan is subject totighter legal constraints on the use of force than any other country in the world,
and it will remain so after enactment of the new legislation. People should be moreconcerned that current inadequacies in the laws governing territorial defense will
create an all-too-tempting target for hostile states or terrorist organizations, creating the conditions for conflict that could have been avoided.
Another major problem with the status quo is Japan’s inability to provide
timely and effective support for security operations authorized by the international
community. The government of Japan needs to reassure the world that in rectifying
this situation, it is simply doing what is natural for any responsible sovereign state,
and that the changes it seeks do not alter its determination to restrict the use of
military force to defensive purposes, in accordance with the spirit of Article 9.
To reassure the public in Japan and our neighbors, the government needs tomake Diet deliberations of the legislation as thorough and transparent as possible,
using the legislative process to help the Japanese people and the international community understand the bills and why they are necessary. This means steering awayfrom the kind of sterile ideological debate, divorced from practical reality, that has
marred Diet deliberation of security issues too often in the past. Wild accusationsof militarism from the opposition have the potential to create serious misunderstandings abroad—as, indeed, do the lack of persuasive arguments from cabinet
members and leading party officials.
In addition to ensuring the transparency of the legislative process, the government should use diplomacy and public communication to impress on our neighbors
Japan’s enduring commitment to peace, making the most of such opportunities as
the prime minister’s planned statement commemorating the seventieth anniversaryof the end of World War II. But what we need most of all is a responsible and constructive Diet discussion to demonstrate to people at home and abroad that the
government’s defense bills are designed for no other purpose than to contribute to
the security and stability of Japan and the East Asian region.

(Adapted and translated from “Kokkai de no anpo hosei rongi e no kitai,” distributed by Kyodo News on March 9, 2015.)

6

National Security
May 21, 2015

Tapping the Potential of Japan’s Self-Defense
ForcesIppeita Nishida

A recent Tokyo Foundation policy proposal calls for greater strategic emphasis and interagency collaboration in Japan’s foreign aid program. In an interview with Nikkei Business
Online, one of the report’s authors discussed the need for a comprehensive approach to security and the potential of the Self-Defense Forces as a peaceful instrument of Japanese foreign policy.
***

QUESTION: On February 10 this year, the cabinet of Prime Minister Shinzo Abe

adopted the Development Cooperation Charter, replacing the Official Development Assistance Charter [adopted in 1992 and revised in 2003] as the Japanese
government’s basic development aid policy document. I understand that you andyour colleague are advocating dialogue and other measures to build a more cooperative relationship between the development community—represented by JICA
[Japan International Cooperation Agency], which administers Japan’s ODA—andthe security community, specifically, the Self-Defense Forces.
IPPEITA NISHIDA: That’s right. In 2013 the Tokyo Foundation launched a project
titled Linking Foreign Aid and Security Cooperation, the main objective being torethink Japanese aid from a security perspective. Team members conducted a series
of interviews with government officials and researchers, both at home and abroad,notably in Europe and the Horn of Africa, where the SDF conducts two field operations: one in South Sudan as a part of a UN peacekeeping mission and the otherin the Gulf of Aden to counter piracy.
Before the ODA Charter was revised in February this year, we published our
findings and recommendations in a policy report titled “Reviewing Japan’s Foreign

Ippeita Nishida   Research Fellow and Project Manager, Tokyo Foundation.
7© United Nations Photo

National Security
Aid from a Security Perspective (to be translated in 2015).” The thrust of our proposal was the need for program guidelines reflecting a comprehensive and integrated approach to security and development. We’re not suggesting anything unrealistic like direct SDF intervention in a conflict. In fact, we point out that there arethings Japan can do better in this area without overhauling the current framework.
The key will be enhancing interagency cooperation under a whole-of-government approach, but this will present a major challenge in Japan’s rigid government
system, particularly in the area of peace-building, given the cultural and normative
gaps between the development and security communities.
Security and development, though,are two sides of the same coin. This is
one of the lessons the international
community has learned over the pastquarter century from such incidents as
the humanitarian crises in Africa andthe wars in Afghanistan and Iraq. Military intervention in a conflict zone
can maintain relative stability only forthe moment. If you want to build enduring peace, humanitarian and development aid must be directed to rebuilding society, helping to allocate the dividends of peace and facilitatereconciliation and hopefully creating a society resilient enough to absorb future
shocks. Unless you do so, there’s a high probability that violence will return or evenspill over. Just look at what’s happened in Iraq and Syria. The UN has also cometo understand the importance of integrating security and development, with current peacekeeping missions being mandated to channel significant efforts into suchareas as governance, protection of civilians, and civil and social infrastructure rehabilitation.
Or let’s look at an example that involves Japan. The Japanese Maritime Self-Defense Force has been involved in a multinational effort to crack down on piracy in
the Gulf of Aden, part of the maritime corridor connecting the Indian Ocean and
the Mediterranean Sea. However, this only addresses the surface of the problem.
The root causes are the crisis and instability in Somalia—the collapse of government and the deterioration of social and economic conditions in the course ofnearly 20 years of civil conflict. Under these conditions, piracy becomes a rational
economic choice. Through development assistance, we need to create the conditions that allow people to live with dignity, free from want, so that they don’t have8National Security
to resort to piracy. This is just one example illustrating the need for greater policy
coordination between development and security.
Since the ODA Charter was last revised in 2003, when JICA was headed by
Sadako Ogata, Japan has undertaken a number of peace-building projects inpost-conflict and fragile states. These include clearing land mines in Cambodia,
building social infrastructure in Afghanistan, promoting the Mindanao peace process in the Philippines, and rebuilding infrastructure in South Sudan. Such projects
are likely to continue, but generally speaking, the Japanese development community has been less than enthusiastic about cooperating with the SDF. The reason isthat as a general rule, development practitioners are primarily concerned about thewelfare of the local population, while the defense community is more interested insecuring strategic goals. Many aid workers are also mindful of the political sensitivity of the host community to the presence of military forces and thereby try to
avoid contact with them.
On the other hand, from as early as 2004, the security policy community has
recognized the importance of aid in conflict prevention and peace-building. Suchnarratives are then reflected in official policy documents like the National Defense
Program Guidelines. The reaction of the ODA community, though, was, “We don’t
want to be used as a political tool by the government in power.” The ambitions thatstrategists had in mind apparently didn’t coincide with the way development professionals work up projects in the field with the local people. Aid workers mightalso have worried that their budgeting and planning authority would be curtailed
or that the government would cut funding for ongoing projects.
But part of this feeling may have come from what aid workers actually experienced in the field. By nature, humanitarian and development officers in fragile zones
need to work with the military, whether they be on a UN peacekeeping mission,
local troops, or rebel forces. But this can be quite difficult since they’re often not familiar with the language, operations, or tactical assets that the military employs.
Effective cooperation between sectors doesn’t happen overnight. Even in business, you have to lay the groundwork, and that’s all the more crucial in apeace-building setting, where people’s lives could be on the line. We can’t just leaveit to the field officers to figure out. Governments need to build a firm foundationfor operational cooperation by fostering mutual understanding and trust throughdialogue and exchange. Recently, we’ve seen some initiatives along these lines inJapan, with JICA and the Ministry of Defense launching personnel exchanges in
October last year. But progress is slow. I get the impression that people on bothsides are still hesitant to take the plunge for fear of being ostracized by their respective communities.
9National Security
Diversification and Policy Coordination
QUESTION: To ensure effective cooperation, your report recommends establishing
an office of peace building and international security within the National Security
Council to coordinate ODA and other forms of development aid as well as the
SDF’s international operations.
NISHIDA: Until now, the mainstay of Japanese foreign aid has been official devel-

opment assistance to support economic growth and social development in developing countries. While this will remain the general rule, there’s been talk of incorporating other modes of economic assistance that provide more latitude in termsof target and purpose. For example, the new charter expands the types of aid forcountries that have graduated from the DAC list of aid recipients and calls forsynergies between ODA and non-ODA assistance. It also considers the use of development aid to support foreign militaries that are involved in civilian affairs or
are providing disaster relief. In our recommendation, we argue for new tools, likea separate aid account to achieve diplomatic goals, to enable the government tobetter coordinate its security policy.
This is why we proposed establishing an office of peace building and international security, although we realized that this could take some time. The National
Security Council was only established in late 2013. It has just sixty-odd members
at present, which makes it pretty small for a government organ entrusted withnational security policy in the broadest sense. When a situation like the recent ISIS
hostage crisis arises, it may very well take up all the council’s resources. So, while
I’m sure the council recognizes the importance of international security cooperation, it’s naturally going to place top priority on issues with direct relevance toJapan’s own security. So, from the standpoint of the allocation of policy resources,
this might have to wait.
QUESTION: You’ve studied Western countries’ efforts to integrate development andsecurity policy. Do you ever feel daunted by the obstacles to interagency cooperation?
NISHIDA: Well, of course. At an international symposium on the comprehensive

approach that the Tokyo Foundation co-organized in Brussels in 2013, a senior
official involved in policymaking for the EU called it “an evolving concept” thatwas still emerging from a process of “trial and error.” In Brussels, they may draw
up beautiful plans calling for coordination among many different agencies, but
out in the field, it seems that things don’t always go as planned. Certainly there
10National Security
are cases in which the envisioned collaboration never really gets off the ground.
In Japan, we have the opposite problem. People in the field are doing their best
to work together, but there’s no big picture, no coordination at the policy level. A
US military officer involved in civil-military operations in Djibouti told us that thekeys to cooperation are communication, building mutual trust, and ensuring that personnel share a basic vocabulary and understanding ofoperations. That’s why the US government places great emphasis on educational exchange between the civilian
and military sectors. For example, civilian officers in the Department ofState and USAID [United States
Agency for International Develop- The author, third from left, and Tokyo Foundation President Masahiro Akiyama, to his right, at Japan’s instalment] often study at the National De- lation facility for anti-piracy operations in Djibouti.
fense University for a certain period oftime to acquire a basic understandingof military and security matters. The State Department has a Bureau of Political-Military Affairs, which is charged with forging and maintaining partnerships
with the defense community, and it holds a wide variety of workshops and othertraining opportunities.
We learned that the first step is to build this sort of culture of cooperation.
Making the decision to actually collaborate on something comes later. The mainthing is to develop criteria for such decisions by clarifying each side’s strengths andweaknesses and identifying issues. It’s also vital to build interpersonal relationships.
The Japan Ground Self-Defense Force has an International Peace Cooperation
Activities Training Unit that provides training to SDF troops prior to any overseas
operation. And for the past eight years, they’ve been holding annual workshops on
civil-military cooperation with the participation of humanitarian and development
workers as well as scholars. But these are basically oriented to fostering cooperative relations in the field. Coordination is also needed at the policy level.
New Options for Noncombat Security Cooperation
QUSTION: Cultural differences between organizations can raise huge obstacles tocooperation even in the private sector. It seems to me that collaboration imposed
11

National Security
from on high could have the effect of creating an atmosphere of suspicion andparanoia. Would it be impractical to proceed gradually, by supporting and buildingon the kind of collaboration that develops in the field?
NISHIDA: It’s wonderful when people come up with bright ideas for cooperation

while actually working in the field. But if you take the larger view, that may not be
the best way to achieve bigger policy goals. So, while such partnerships can makefor inspiring stories, they don’t necessarily stand up to scrutiny in terms of legitimacy or how well they reflect government policy. The focus of cooperation might
not reflect local priorities, either. As things stand now, too much responsibility isplaced on the individual field offices. We believe there’s a need for a cultural shift
within the organization to correct this.
QUESTION: Prime Minister Abe has set in motion a number of important changes

affecting Japan’s foreign policy—not just the new Development Cooperation Charter but also changes in the government’s interpretation of the Constitution and inJapan’s arms-export policy. What’s your overall opinion of these initiatives?
NISHIDA: I would give them a positive rating in that they’re oriented to a more
integrated approach to security and development. I’ve felt for some time that we
can contribute much more with the resources at our disposal. The changes Abe has
made will open up new possibilities for making use of those resources. However,this will not lead to a sudden jump in the SDF’s overseas engagements. Relaxing
the arms-export ban is a new step, and it should open the door to the transparent
transfer of defense equipment for peace operations.
QUESTION: Are you saying you think we should do more with the SDF as one of
the tools we have to pursue our national interest?
NISHIDA: Yes. But I don’t feel we need to put Japanese lives on the line in order tomake a meaningful contribution to international security. Japan and the SDF are
subject to special historical and societal constraints that prevent us from meeting
all the expectations of other nations. But then, to some extent the same can be saidof any country. Many countries continue to attach national caveat restrictions on
how their troops can be used. What’s important, I think, is to be able to make thecase that we’re doing all we can within such constraints.
Broadly speaking, foreign policy is the mobilization of resources of all kinds toinfluence other countries, regions, and international institutions in pursuit of na12National Security
tional objectives. So, what are the tools of foreign policy? There’s diplomatic negotiation. There’s the establishment of legal frameworks, such as international law,treaties, and alliances. Public diplomacy is also a tool to influence others, shapepublic opinion, enhance one’s image, and so forth. Then there’s the use of economic
power. This encompasses not only economic aid but also trade, international finance, and other modes of involvement in the world economy, as well as sanctions.
And finally, there’s military force. Having credible defensive and power projection
capability can send a tacit message, with the actual use of those resources being
another matter.
To date, many countries have placed great emphasis on military might as a sourceof hard power. But Japan, under the postwar Constitution, has renounced thethreat or use of force as a means of settling international disputes. And most of theJapanese people want to keep it that way. Where economic clout is concerned, we
may be the world’s third-largest economy, but we’re stagnating, and we’re not invery good shape fiscally. The general perception of Japan’s stature and influence in
the international community is slipping in relative terms. Under the circumstances,
we need to give serious thought to crafting a strategy that makes optimum use of
the instruments we have at our disposal. One of those instruments is foreign aid,
which Foreign Minister Fumio Kishida has called “our most important foreign policy
tool.” Another is the Self-Defense Forces, which can help enhance our influence andstature in the international community by contributing to international security.
A Hedging Policy in the Middle East?
QUESTION: I guess the issue is where and how to make use of that capital.
NISHIDA: Right. If we’re going to invest, we should invest in projects with low risk
and a high rate of return. Like what? Well, to begin with, anti-piracy operations
are a no-brainer. Incidents of piracy have fallen from more than 200 a year at theirpeak to about 15 in 2013. And yet Japan has maintained the same level of commitment. Why? Because it’s a good investment. It’s a direct and highly visible contribution to international peace and stability. Moreover, it benefits Japan directly byensuring the safety of our sea lanes. It contributes to regional intelligence gathering,and it’s something we can do in partnership with other countries, especially theUnited States. Since summer 2014, half the deployed assets are participating in
CTF-151, a US-led, multinational, counter-piracy coalition. It supports Africa, aregion in which Japan has high economic hopes and interests. It has all these merits, and yet it’s a relatively low-risk, low-cost operation. In 2012 and 2013, when I
13

National Security
visited Djibouti, some Western diplomatic and military officers asked me if the SDF
would soon be leaving. I told them that they probably wouldn’t, given these considerations. One of the key challenges going forward will be finding other comparably cost-effective channels for involvement.
QUESTION: In other words, you believe there is plenty of scope for the SDF tocontribute to international security without crossing the line in terms of combat or
risk to life and limb?
NISHIDA: Exactly. For example, there’s been talk in the media about government

plans to beef up the SDF’s anti-piracy base in Djibouti. This would meet multiple
objectives, and I think that’s a smart move. The base was originally established for
two P-3Cs to carry out aerial surveillance as part of the anti-piracy effort. I thinkit makes perfect sense to expand and develop it as a base for other contributionsin the region. Djibouti has become an important hub for regional intelligence gathering and international cooperation, particularly with the United States, France,
and the EU. Japan was able to use its base in Djibouti to support the international
response to the Ebola epidemic, flying C-130H transport planes first to Djibouti
and from there to West Africa. I think that experience threw into relief the advantages of having a base there. The next step for Japan is to deepen its involvementin the region and provide substantive support with the help of such existing facilities and transport routes.
QUESTION: If the SDF and Japanese development personnel could develop long-term relationships with local officials and citizens in Djibouti and the surrounding
region, it might be very useful in hedging against potential risks and enhancing ourintelligence gathering so we’re better prepared for situations as they arise.
NISHIDA: Absolutely. In the wake of the execution of Japanese hostages by ISIS,

some people were probably asking why Japan wasn’t able to negotiate more effectively with key players in the region. If we made a real, long-term security commitment to the region, as symbolized by the air base in Djibouti, and established a hub
for logistical and other operations, we’d have more to offer other countries. This
could happen, for example, through humanitarian assistance, which would createa more permissive environment for our presence. Then there’s the intelligence thatmilitary forces share on a need-to-know basis. This sort of exchange fosters mutual
trust and promotes cooperation grounded in a common understanding of the situation on the ground. That’s extremely important.
14

National Security
I think such a base would also be helpful in terms of fostering a better understanding of the SDF’s mission, capabilities, and limitations, particularly among
European military and security officials and personnel. As an Asia-Pacific ally, Japan has been cooperating with the United States on security for a long time, but if
we’re serious about safeguarding the existing international order, we need to enhance our collaboration with Europe as well.
In terms of networks and information sources in the Middle East and Northern
Africa, the Europeans are much better positioned than Japan and have a different
set of utilities to offer from the United States. Besides, in the case of an emergency
in Africa, it would make more sense to rely on European countries, which haveextensive expertise and operational capabilities in the region, than to deploy an
SDF mission to rescue Japanese citizens.
Some Diet members are pushing for a small SDF unit to be stationed in Djibouti for noncombatant evacuation operations in case of an emergency. With limited capabilities entitled to the SDF and weak field intelligence in Africa, thiswouldn’t be a realistic option. Considering its low diplomatic presence and severe
personnel shortages, moreover, Japan’s Foreign Ministry isn’t capable of gathering
up-to-the-minute intelligence on all 54 African countries. After the Algerian hostage crisis in January 2013, the Japanese government boosted the number of military attachés at its African embassies from two to nine. This is an improvement,
but they can’t keep track of everything that’s going on. They’re probably facing
serious communication barriers as well. Besides, SDF troops on peacekeeping or
anti-piracy missions are currently rotated every four to six months. Africa isn’t our
number one priority at the moment, but we do need to know what’s going on, andthe best way to access such information would be to cooperate with France, Britain, the EU, the United States, and other countries. We can gradually expand ourown information network in the process and eventually put ourselves in a position
where we can assist others.
Interagency cooperation can facilitate this process. First, the two communities
need to start sharing information and perceptions on a routine basis to cultivate
mutual understanding. Then we can begin thinking about ways that we can combine our development and peacekeeping capabilities in the field to enhance Japan’sinternational influence in a manner consistent with its basic principles.

Interview conducted by Hiroyuki Yamanaka. Adapted and translated by the Tokyo
Foundation with permission from Nikkei Business Online.

15International Affairs
March 20, 2015

Mixed Marks for India’s Modi
Masahiro Akiyama

Dubbed “the Indian Abe” by some observers, Prime Minister Narendra Modi took officelate last May amid high hopes for his dynamic, reform-oriented style of leadership. Tokyo
Foundation President Akiyama Masahiro reports on Modi’s early successes and setbacks
against a background of legislative gridlock.
*

*

*

I

ndia’s 2014 general election, held during April and May last year, resulted ina resounding victory for the Bharatiya Janata Party and the birth of a new
government headed by Narendra Modi. The BJP-led National Democratic Alliance captured 336 of the 543 seats in the lower house of parliament, and the BJP
alone took 282 of those seats, becoming the first single party in 30 years to win a
simple lower house majority. Voters were clearly looking to Modi—who presided
over an era of rapid growth and development as chief minister of Gujarat—as theirbest hope to get the Indian economy back on track.
Japan was the first major country Modi visited after taking office in May. Hislong acquaintance and good rapport with Prime Minister Shinzo Abe, together
with his warm feelings for Japan as whole, won the hearts of people here andspurred a new level of interest in Indian affairs among the Japanese. Modi’s impressive debut on the diplomatic stage also included trips to the United States andAustralia, and he hosted visits by Chinese President Xi Jinping and US President
Barack Obama.
Prime Minister Modi has invited comparison to Abe, with his nationalist bent,
innovative and dynamic leadership style, and strong foreign policy, particularly
toward China. But the past few months have tended to highlight the differences
rather than the similarities. In the following, I offer a brief review of Modi’s domestic and diplomatic initiatives during his first nine months in office.

Masahiro Akiyama   President and Senior Fellow, Tokyo Foundation.
16

International Affairs

Indian stock prices soared after Modi took office in May 2014. In the September
quarter of 2014, India’s economy outpaced China’s as the gross domestic productposted year-on-year growth of 8.2%. The upturn reflects the high hopes that the
Indian people and the international community have invested in Modi’s plans for
economic reform. Japan enjoyed a very similar surge shortly after Prime Minister
Abe took office in 2012.
But Modi has since run into political obstacles that Abe was able to avoid. The
April–May election gave the BJP solid control of the lower house, but in the upperhouse, the ruling coalition holds only
about one-fourth of the seats. Thismeans a divided parliament and legislative gridlock, a situation Abe has
not had to face since his Liberal Democratic Party regained control of theHouse of Councillors in 2013.
Prospects for breaking the legislative deadlock are uncertain. Because
most of the seats in the India’s upperhouse are elected indirectly, by the 30
state legislatures, the ruling coalition Narendra Modi and Shinzo Abe during a tea ceremony
at the Akasaka Palace in Tokyo, 2014.
must seize control of the state assemblies before it can secure an upperhouse majority. Furthermore, turnover in the upper house is slow, since only a thirdof the seats are contested in each biennial election. Thus, even if the BJP continues
to prevail at the state level, it will take another four years to secure a majority inthe upper house.
In terms of momentum, the results of the February 2015 Delhi Legislative Assembly were anything but encouraging for the BJP. The Aam Aadmi Party scored ahuge landslide in the National Capital Territory of Delhi, which includes New
Delhi, securing 67 of the 70 seats in the legislature and leaving the BJP with just 3(and the Indian National Congress with 0).
The AAP ran a successful campaign targeting corruption, among other issues,
but an undeniable factor behind the voters’ rejection of the BJP was impatience
with the Modi government, which has come under criticism for failing to deliveron its promises to improve living standards and tackle corruption head-on. Now
all eyes are on Bihar and Uttar Pradesh, where legislative assembly elections are to17© Narendra Modi

Early Promise and Setbacks

International Affairs
be held within the year; as two of India’s most populous states, they account for asignificant number of upper house seats between them.
Legislating by Executive Order
Meanwhile, much of Modi’s economic reform agenda has been in limbo, including
vital labor law reforms needed to spur job creation by loosening regulations thatmake it all but impossible to lay off an employee. The upper house had also been
resisting legislation to raise the legal limit on foreign investment in domestic insurance companies from 29% to 49% and loosen the rules governing land acquisition
so as to spur development.
With parliament refusing to act on these and other legislative changes needed torevitalize the economy, the Modi government has begun issuing executive orders instead. Under the Indian constitution, the president is empowered, in certain situations,to promulgate ordinances that have the force of law. Unless they are approved byparliament, however, such ordinances lapse after a period of six months and six weeks.
Apart from legislative action, the other major tool at Modi’s disposal is government spending. It will be interesting to see what sort of economic policies arebuilt into the budget plan for the coming fiscal year, which was due to be released
at the end of February.
Foreign Policy Review
As his first destination outside the immediate region, Modi chose Tokyo, where heand longtime acquaintance Prime Minister Abe greeted each other enthusiasticallyand pledged to strengthen bilateral ties. Japanese interest in Modi and India ingeneral has soared since his successful visit to Tokyo last September.
As a proponent of India’s Look East policy, Modi places great importance onties with the ASEAN nations, Japan, South Korea, China, and Australia. We haveseen his enthusiasm for Japan, and he seems equally well disposed toward South
Korea, which he visited repeatedly as chief minister of Gujarat. He is said to be
actively courting South Korean businesses, especially in the wake of the disappointing withdrawal of several key foreign investors from the Indian market.
Modi’s trip to Australia was the first official visit by an Indian prime ministerto that country in 28 years. His government is also placing high priority on relations with Vietnam and Singapore, which it regards as key partners from a security
as well as an economic standpoint, and it seeks to strengthen ties with Indonesia,
recognizing that nation’s great potential.
18

International Affairs
China presents a more difficult challenge. The two countries are embroiled inserious border disputes, and China’s recent attempts to upset the status quo withforce—as it tried to do in the eighteenth and nineteenth century—have createdtensions that are going to be hard to overcome.
President Obama’s official visit to New Delhi in January this year hailed a newphase in US-India relations as the two leaders pledged to strengthen their nations’strategic partnership. This is a major shift for India, which had maintained a longstanding friendship with Russia. Obama and Modi were also able to reach a“breakthrough understanding” on a stalled agreement that should open the way
for US commercial investment in India’s civil nuclear energy program—a big step
forward for India, given the difficult issues surrounding the country’s nuclear program and the nonproliferation regime. In addition, Obama appears to have heeded
Indian concerns over the long wait facing skilled Indian workers seeking green
cards in the United States. Progress in immigration policies on both sides promises
to facilitate the bilateral exchange of human resources.
Relations between India and Sri Lanka had deteriorated under Sri Lankan
President Mahinda Rajapaksa amid accusations of human rights violations against
Sri Lanka’s Tamil minority. Rajapaksa touted his government’s friendship with
China and allowed a Chinese submarine to dock at the port of Colombo, further
exacerbating tensions with New Delhi. But President Maithripala Sirisena, whotook office in January this year, has been pursuing a more moderate policy, andModi’s visit to Sri Lanka this March should pave the way for a more constructive
relationship going forward.
Relations with Afghanistan are another key focus of India’s foreign policy. Ties
between India and Afghanistan go back a long way, but a major turning point inthat relationship came in 1979, with the Soviet invasion of Afghanistan. Becauseof its close ties with the Soviet Union, India refrained from condemning the invasion and recognized the Soviet-backed regime in Kabul. Thereafter Pakistan became a major training ground for the anti-Soviet mujahideen forces that eventually
gave birth to the Taliban.
The unfolding situation in Afghanistan is of great importance to Indian security, but Pakistan’s influence in Afghanistan limits India’s ability to maneuver. Even
with US troops withdrawing from Afghanistan, New Delhi has been very circumspect about providing military aid or becoming involved in other ways that mightexacerbate regional tensions. Instead, the Indian government is stressing nonmilitary assistance to Afghanistan via economic aid and technical cooperation in areas
like infrastructure and agriculture. This new foreign aid focus offers significant
opportunities for Japan-India cooperation.
19

International Affairs
Treating Everyone as a Friend
Reviews of Modi’s foreign policy overall are predominantly positive. “As a whole,it’s the area in which he’s had the greatest success,” comments a noted Indian political scientist. “He’s taking risks and trying out new approaches.”
But the same commentator faults Modi for naiveté in security matters, especially where China is concerned, complaining that he tends to “treat everyone as afriend.”“As chief minister of Gujarat, one of Modi’s most important jobs was rollingout the welcome mat for foreign investors,” he notes. “But as prime minister, heneeds to adopt a broader strategic perspective. This is something Prime Minister
Abe knows how to do. Modi looks on China as an economic partner and wants to
sweep the security issues under the rug. I think he needs to take a tougher stance.”
The problem is not so much indifference to security issues as a lack of continuity between Modi’s security and economic policies. For example, although theprime minister has expressed an interest in investing in Africa’s energy sector, heseems largely unaware of the role energy can play in security policy. This lack ofstrategic sophistication could continue to raise questions about Modi’s qualifications to lead the second most populous country in the world.

20

International Affairs
June 3, 2015

Japan-Europe Cooperation for Peace andStability
Pursuing Synergies on a Comprehensive Approach
Akiko Fukushima

The scope of Japanese and European development cooperation goes beyond promoting economic growth and includes strengthening governance and resilience in fragile states in bothpre- and post-conflict situations. In assisting such states, writes Senior Fellow Akiko
Fukushima in this Policy Brief originally published by the German Marshall Fund of theUnited States, Japan and Europe share the common goals of building peace, stability, prosperity, and resilience.
***

Introduction
Japan and Europe have long provided development assistance in line with theirrespective geographic priorities. But in an increasingly globalized world, the regions on which they focus their assistance have begun to overlap, in places such as
Africa for example. Today’s security challenges include not only inter-state war, butalso terrorism, organized crime, human trafficking, climate change, and pandemics.
The scope of Japanese and European development cooperation now goes beyond
promoting economic growth and includes strengthening governance and resiliencein fragile states in both pre- and post-conflict situations.
In assisting such states, Japan and Europe share the common goals of building
peace, stability, prosperity, and resilience. As terrorists and criminal groups, notably
the Islamic State and Boko Haram, make new inroads and expand their sphere ofcontrol and influence, Europe and Japan should join together to address these

Akiko Fukushima   Senior Fellow, Tokyo Foundation; Research Fellow, Asia International Center, Aoyama Gakuin University; Lecturer, University of the Sacred Heart.
21International Affairs
concerns. In assisting fragile states, the European Union has pursued a multi-faceted approach in the Horn of Africa and the Sahel, using economic, security andcultural instruments. This approach has come to be known as “comprehensive
approach” in EU, “whole-of-government approach” in some European countries
and “3D” approach as it combines diplomacy, defense and development in the
United States. Regardless of the label, there is a clear need to take a more comprehensive, holistic approach to providing aid.
Although less well recognized than the European initiative, Japan is also taking
a comprehensive approach to foreign assistance. Its Development Cooperation
Charter, announced in February 2015, applies a “human security” approach todevelopment cooperation.1 “Human security” is a concept that affirms the right ofindividuals, through their protection and empowerment, to live in dignity—freefrom fear and want.2 While in the past Japan has placed an emphasis on the freedom from want through poverty reduction and economic development, it is now
poised to enhance its cooperation to promote the freedom from fear. Culture too,is an important feature in the holistic approach to human security. Thus, Europe’s“comprehensive” approach and Japan’s human security approach are similar interms of their modi operandi and objectives.
The 2014 OECD Development Co-operation Peer Reviews took note of Japan’s comprehensive approach, observing that the Japanese government has created “an elevated profile in its global engagement strategy” and “strengthened its
whole-of-government approach at country level.”3 This paper examines possible
areas for new and enhanced cooperation between Japan and Europe, two responsible global partners who share fundamental values and principles in assisting fragile and developing states, particularly in the area of capacity-building assistance.
Cooperating with Piracy Control
At the 22nd Japan-EU Summit in Brussels on May 7, 2014, Prime Minister Shinzo
Abe, European Council President Herman Van Rompuy, and President of the European Commission Jose Manuel Barroso agreed to promote closer collaboration
between the EU’s Common Security and Defense Policy (CSDP) missions and Japan’s assistance and security cooperation initiatives.

Ministry of Foreign Affairs, Development Cooperation Charter, February 10, 2015.
Ibid.
3
OECD Development Co-operation Peer Reviews: Japan 2014, p.14, http://www.oecd.org/development/peer-reviews/Japan-peer-review-2014.pdf.
12

22International Affairs
Such cooperation is not new. Japan and the EU have been working together tofight piracy off the coast of Somalia and in the Gulf of Aden for years. Maritime
Self-Defense Force (MSDF) destroyers have participated since March 2009, alongwith two P-3C maritime patrol aircraft added in June 2009. The MSDF unit provides information to the forces of other states conducting operations in the field,
including EU Naval Force (NAVFOR) Somalia-Operation Atalanta, a Common
Security and Defence Policy military mission that has been in operation since December 2008. On January 18, 2014, Japan-EU cooperation led to the capture of
pirates when a helicopter from the MSDF destroyer Samidare and a P-3C patrolaircraft detected a suspicious dhow and provided this information to the Combined
Task Force 151 headquarters. In response, a helicopter from a French EU NAVFOR naval vessel was dispatched, leading to the capture of five pirates and therelease of the dhow’s crew.
Japan and Europe have been conducting joint exercises since October 2014. In
October and November 2014, MDSF destroyer Takanami participated in exerciseswith Italian, German, and Dutch naval vessels that included such activities as communications, tactical maneuvering, helicopter take-off and landing, and boarding.
As these operations have been successful in controlling piracy in the Gulf ofAden, it may eventually be possible to withdraw the MSDF, at which point addressing the root causes of piracy and building the capacity of local coast guards would
become vitally important. Both Europe and Japan are providing development assistance to Somalia and surrounding countries, and are also helping to train local
maritime security officials. In addition to development assistance to enhance local
governance capabilities and economic development, further collaboration on capacity building should make a significant contribution to local empowerment.
Collaborating with CSDP Missions through Japan’s Official Development Assistance
Following the aforementioned Japan-EU summit agreement, Japan has been cooperating with CSDP missions to provide capacity-building assistance in Niger andMali as well.
The EU dispatched a civilian CSDP mission to provide training and advice toNiger’s security sector in August 2012. This was supplemented in December 2014,
when Japan made a decision to provide grant aid through the UN Development
Program to this CSDP mission. To facilitate coordination, Japan is contributing¥202 million for wireless communication devices to connect regional government
offices with bureaus under their jurisdiction, as well as wireless-equipped vehicles
23International Affairs
Table 1: Japanese Capacity-Building AssistanceLong–Term Education and Training
Cambodia

Training in civil engineering for future peacekeepers (2013–15)

Timor-Leste

Humanitarian assistance/disaster relief education and training of auto mechanics in
the Timor-Leste Defense Force (2012–14)

Short–Term Seminars
Vietnam

Maritime security training with a focus on underwater medicine for the Vietnamese
Navy (2012–14)

Indonesia

Maritime security training with a focus on oceanography and the collection andprocessing of maritime data for the Indonesian Navy (2012–13)

Mongolia

Military medicine seminar at the Mongolian Army Hospital (2012–13)

VietnamAviation safety for the Vietnamese Air Force and Air Defense (2012–13)

Short–Term Invitation
VietnamInvited Vietnamese Navy to SDF medical facilities in and around Tokyo on the subjectof underwater medicine (2014)

Indonesia

Invited Indonesian Navy to MSDF and Japan Coast Guard facilities in and aroundTokyo for training on maritime security, particularly oceanography and the collection
and processing of maritime data (2014)

Mongolia

Invited Mongolian Army to GSDF medical facilities in Tokyo on the subject of military
medicine (2013)

VietnamInvited Vietnamese Army to Sendai for earthquake response drills

for patrolling outlying locations. The equipment will be provided to all seven of
Niger’s regions.
In April 2014, the EU decided to dispatch a civilian CSDP mission to help improve Mali’s security capabilities. In March 2015, Japan agreed to provide grant
aid amounting to ¥492 million for the rehabilitation of Mali’s national policeschool, provision of information technology and other equipment, and the development of human resources.
Japan’s cooperation with CSDP missions was facilitated by its experience ofusing the Official Development Assistance (ODA) budget to help rebuild infrastructure in Iraq during peace operations by the Japanese Self-Defense Forces (SDF).
Similar coordination between ODA and the SDF was seen in the peacebuilding
operations in Timor-Leste and in disaster-relief assistance to Haiti. Currently, an
SDF engineering unit is taking part in the UN Mission in South Sudan (UNMISS),
contributing to peacebuilding efforts by repairing roads and other infrastructure.
24

International Affairs
The ODA grassroots and human security budget has been mobilized for these projects, making Japan’s contributions more effective. These experiences, under theso-called “All-Japan Approach,” have paved the way for Japan’s collaboration with
CSDP capacity building missions.
Cooperating with Capacity Building
Under the comprehensive approach, assistance is not limited to the provision of
infrastructure for economic development. It also covers efforts to strengthen governance and help build capacity in the local community. This is designed to foster
resilience against crises, which is crucial to halting the spread of organized crime
and terrorism. Capacity-building assistance is an area with great potential for future cooperation between Japan and Europe.
Under the comprehensive approach, assistance is not limited to the provisionof infrastructure for economic development. It also covers efforts to strengthen
governance and help build capacity in the local community. This is designed tofoster resilience against crises, which is crucial to halting the spread of organizedcrime and terrorism. Capacity-building assistance is an area with great potential
for future cooperation between Japan and Europe.
Since capacity-building assistance is not explicitly included in the mandate ofJapan’s Ministry of Defense, the logic supporting it is that such assistance can stabilize and improve the international security environment, contributing to Japan’snational security. It can also strengthen relations with the recipient countries andother donors, in turn improving Japan’s standing in the international community.
Revising the Establishment of the Ministry of Defense Law to include international
cooperation as one of the missions of the ministry would give Japan greater leeway
in providing this assistance.
In capacity development assistance through other agencies, for example in thearea of piracy control, the Japan Coast Guard provides training in collaboration
with the Japan International Cooperation Agency, inviting the participation ofcoast guards from Southeast Asia. It also sends experts to the Philippines, Malaysia,
and Indonesia to train maritime security personnel. When Japan provided coastguard ships to Indonesia in 2009, experts were also dispatched to provide training.
This is a model that can be emulated elsewhere.
Toward Future Cooperation
As Japan enhances its comprehensive approach to development cooperation under25

International Affairs
its Development Cooperation Charter along with new and revised security legislation, additional windows of opportunity are opening for cooperation with Europe,
particularly in regions of mutual interest such as Africa and Asia. Capacity-building
assistance is an important means of empowering local people and institutions,furthering the pursuit of both freedom from want and freedom from fear to promote human security. These two goals should be pursued in tandem.
Finally, as capacity-building assistance is a relatively new area, the EU, NATO,and Japan should look to the cross fertilization of ideas amongst interested parties.
This would be useful in building intellectual and policy frameworks for present andfuture activities.

Originally published as a Policy Brief by the Asia Program of the German Marshall
Fund of the United States. It is reprinted here with the permission of the GMF.

26

International Affairs
April 8, 2015

Is East Asia Headed for War?
Lessons from World War I
Jitsuo Tsuchiyama

Rising tensions in East Asia have fueled concerns that the ongoing power shift in the region
could climax in a hegemonic war. International security specialist Jitsuo Tsuchiyama maintains that the real threat to East Asian security is the growing risk of unintended conflict.
*

*

*

A

raft of new books and articles on the subject of World War I appeared in2014, as the world observed the centenary of the Great War. In Japan, thisrenewed focus on World War I—a conflict almost no one anticipated—helped touch off debate on the potential for a comparable conflict in East Asia.
The question itself is not new. Princeton University scholar Aaron Friedberg,
who served as a national security advisor to Vice President Dick Cheney, raised it
back in 2000 in a paper titled “Will Europe’s Past Be Asia’s Future?” Zbigniew
Brzezinski, national security advisor under President Jimmy Carter, drew troubling
parallels in his 2004 book The Choice, comparing China, which “is neuralgic about
Japan, patronizing toward India, and dismissive of Russia,” to imperial Germany,“which was envious of Great Britain, hostile toward France, and contemptuous of
Russia.”For those who see World War I as a hegemonic clash between the “status quo
states,” led by Britain, and the challengers, or revisionist states, led by Germany, it
is not such a stretch to draw parallels with the relationship between the UnitedStates and China today. Those who maintain that Britain’s policy of isolating Germany through the Triple Entente forced Germany into “preventive war” may see
potential for a similar situation in East Asia. (In South Korea and China, meanwhile, some claim that the greatest threat to peace in East Asia stems from the

Jitsuo Tsuchiyama   Professor of International Politics, Aoyama Gakuin University, andDirector, Japan-US Partnership Program, Research Institute for Peace and Security.
27

International Affairs
expansionist ambitions of the Japanese government, manifest in its September
2012 purchase of three of the Senkaku Islands and in the Abe cabinet’s July 2014
bid to permit Japan’s limited participation in collective self-defense.)
Is war in East Asia a real possibility? If so, wherein lies the danger, and how
can we minimize it?
Shifting Power Balance
Why has East Asia become so fraught with tension? The underlying reason is a shift
in the international balance of power over the past quarter century.
Since the end of the Cold War and the collapse of the Soviet Union, American
influence and power have waned, Japan’s clout has dissipated, and China has risen
more rapidly than anyone anticipated.
The result has been a major shift in theregional power balance. Such shifts—
what Robert Gilpin has termed the “uneven growth of power” among states—
are the basic sources of instability andconflict in international relations.
The increasing tension in diplomatic
relations and international politics inEast Asia is the result of just such a shift Jitsuo Tsuchiyama speaking at a Tokyo Foundation
Forum on December 22, 2014.
in East Asia. How long can the UnitedStates maintain the current international
order? Is China hoping to build a new international order to replace the US-centered system? Or does Beijing envision a kind of US-China condominium? (Needless to say, the United States is unlikely to agree to either option.) The uncertain
relationship between an increasingly powerful China and the current international
order has emerged as the biggest issue in international politics.
This flux and uncertainty has given rise to ominous talk of an impending“power transition” between the United States and China. A.F.K. Organski developed his power transition theory as an aid to predicting the outbreak of wars,
positing that rising powers generally initiate hegemonic wars against establishedpowers in the process of overtaking them. But Organski’s theory does not hold up
well, especially in the light of historical events. Power transition was not the directcause of World War I, for example. Moreover, by the estimate of most experts ininternational affairs, a power transition between the United States and China isunlikely to occur anytime soon, even if China does manage to overtake the United28

International Affairs
States in gross domestic product (which looks increasingly unlikely). Indeed, some,such as Michael Beckley, have argued that the gap between US and Chinese poweris likely to increase in the coming years.
War as a Miscalculation
For these reasons, I believe it would be a mistake to predict war in East Asia on thebasis of power transition theory. But that is not to dismiss the possibility of war in
the region.
The fact is that almost all the major armed conflicts of the twentieth century
are attributable in large part to failures of diplomacy or crisis management—strategic errors, misapprehensions, miscalculations, and misjudgments of the situation
or of one’s rival’s intentions. World War I is a prime example.
When a Serbian nationalist assassinated Archduke Franz Ferdinand of Austria
and his wife on June 28, 1914, each of the European powers embraced a crisis-management scenario reflecting its own interests and wishful assumptions.
Austria-Hungary immediately decided to use the incident as a pretext to launch an
attack on Serbia. Aware that it would need the diplomatic and military backing of
its ally Germany to get away with such a venture, the Austrian Foreign Ministry
sent a special envoy to Berlin on July 5, barely a week after Franz Ferdinand’s
murder, and received “carte blanche” assurance that Germany would support any
punitive action Austria took against Serbia.
In pledging Germany’s support for Austria, Kaiser Wilhelm II and his chancellor Theobald von Bethmann Hollweg assured themselves that Britain would choose
not to involve itself in the conflict. Yet when Austria handed Serbia its draconian
ultimatum on July 23, Britain, perceiving Austria’s warlike intentions, quickly took
steps to prepare for intervention, and Russia also embarked on the first steps tomobilization. At this point Kaiser Wilhelm hurriedly issued a “Halt in Belgrade”
proposal to Vienna, but the proposal came too late, as hostilities between Austriaand Serbia were already underway. On August 1, Germany declared war against
Russia, plunging into a two-front war under the misguided Schlieffen Plan.
If we accept this analysis, World War I occurred because the European powers,
especially Germany and Russia, allowed the situation to veer out of control. In
other words, World War I was the result of misapprehensions, miscalculations, andmisjudgments regarding the overall situation as well as the intent and capability ofrival powers.
The same sort of failures of diplomacy and crisis management can be seen prior
to the outbreak of war between Japan and the United States in December 1941 and29

International Affairs
the beginning of the Korean War in June 1950, and on all too many occasions
subsequently.
Failures of diplomacy and crisis management are most apt to occur during
shifts in the power balance, which tend to foster hubris and anxiety among national leaders. Both dominant nations and their rising challengers are apt to fallvictim to hubris and anxiety. This is why the situation East Asia merits our concern.
Understanding Japan-China Tensions
Although the basic source of rising tension in East Asia is the shift in the regionalbalance of power, that tension has manifested itself above all in Japan-China relations. What specifically has triggered the recent deterioration in bilateral ties?
After years of abiding by Deng Xiaoping’s stricture to keep a low profile ininternational politics, Beijing has changed course in recent years, no doubt sensing
a change in the balance of power. It has clashed with Japan over the delimitationsof the two countries’ exclusive economic zones in an attempt to develop undersea
gas and oil fields. In November 2004, a Chinese submarine passed through the
Ishigaki Strait, entering Japanese territorial waters. In 2005, the Chinese government watched complacently as massive anti-Japanese protests broke out all around
China in response to a proposal that Japan be given a permanent seat on the UN
Security Council.
Chinese surveillance ships and fishing vessels began entering Japanese territorial waters around the Senkaku Islands, and after the government of Yoshihiko
Noda made the decision to purchase the islands that remained in private hands,
virulent anti-Japanese protests broke out nationwide. China began touting its anti-access/area denial (A2/AD) strategy, with Chinese fighters flying dangerously
close to US and Japanese aircrafts, and Chinese naval vessels locking fire-control
radar on Japanese targets. China’s military strategy and behavior have become asource of ongoing tension with Japan and the United States, particularly since Beijing unilaterally declared an air defense identification zone covering the Senkaku
Islands in November 2013.
Such developments have doubtless contributed to the 40% drop in Japanese
direct investment in China between 2013 and 2014. But China’s military posture
is not the only cause for worry. The domestic situation is also troubling. A major
concern is when and how China will transition from a one-party dictatorship to amore democratic form of government.
When Japan opened its doors to the West more than 150 years ago, a handfulof realists within the shogunate recognized that to forge a place for itself in the30

International Affairs
international community, Japan needed not only to strengthen its military but also
to reform its domestic institutions. But it took many years for the nation to achieve
true democracy. In South Korea, it was not until 1992 that the country embarked
on the path to genuine democracy with the election of Kim Young-sam—a candidate without a military background—as president, and Taiwan’s first free presidential election was in 1996. The future of East Asian affairs hinges on whether China
can make a peaceful transition to democratic government.
Meanwhile, China is facing a number of serious domestic issues, including the
problem of demographic aging. Much of Asia is facing the same challenge, but
China’s one-child policy has exacerbated and accelerated the trend, which could
have serious economic, political, and diplomatic repercussions as the nation lacks
a fully developed social infrastructure and a mature, urban middle class. Meanwhile, tensions are brewing among China’s ethnic minorities. Faced with such challenges, China is in danger of collapsing from within.
Averting an Inadvertent War
For many years following the normalization of diplomatic ties in 1972, the Japanese viewed China as a friendly nation and regarded the Chinese in a positive light.
But around 2006, China’s external behavior began to have a pronounced impact
on Japanese public opinion. In a recent Japan-China public opinion poll, conductedin Japan by Genron NPO, only 2.6% of respondents characterized the Chinese
people as trustworthy, believing that China prefers to exploit Japan’s cooperation.
Japan and South Korea are also deeply distrustful of one another. Feeding this
distrust is the perception gap regarding Japan’s actions in Asia during the period
spanning the 1894–95 Sino-Japanese War and World War II, as well as ongoing
territorial disputes.
Of course, even longtime adversaries can overcome their mutual suspicion andbuild a stable and cooperative relationship by promoting transparency and fostering awareness of common interests. European countries that fought on opposite
sides in World War II subsequently built an alliance under the North Atlantic
Treaty Organization. Argentina and Brazil were bitter rivals until the 1980s, when
they put their relationship on a cooperative footing with an agreement to use nuclear energy only for peaceful purposes. But it will take great effort and wise leadership to bring East Asia to a similar point.
What can we do to avert an unintended war in East Asia? The most important
challenge for Japan, China, South Korea and the United States is to avoid the dangers inherent in the “security dilemma”—the vicious circle of escalating tension
31

International Affairs
that results when one nation’s attempts to enhance its own security are treated asa threat by its potential adversary, leading to worsening security. Above all, thismeans taking steps to ensure constant and reliable communication so as to avoid
misunderstandings and miscalculations.
Stabilizing the security environment in East Asia must proceed one step at atime, beginning with what is currently feasible. This step-by-step process will gradually foster trust. History never really repeats itself, inasmuch as circumstances arenever exactly the same. But leaders can repeat the mistakes of the past, and this isa very real danger in today’s East Asia.
Historian Paul Schroeder of the University of Illinois has compared World War
I to a massive train wreck involving five trains caused by the failure of engineers totake the steps that they knew from experience to be necessary to avoid an accident.
Just as train systems need detailed rules and safety mechanisms to prevent suchcollisions, East Asia needs to build multiple frameworks to provide mutual reassurance and prevent any diplomatic or military tensions from escalating into war.
By establishing diplomatic and military mechanisms to address a wide range ofcontingencies, we can substantially reduce the risk of an inadvertent war.
For many people, tragedy is an unfortunate series of events that leads to the
Public Perception of Japan-China Relations

Source: Genron NPO, 10th Japan-China Public Opinion Poll, September 9, 2013, http://www.genron-npo.net/en/pp/docs/10th_Japan-China_poll.pdf

32International Affairs
loss of the power, wealth, and prestige one has laboriously acquired. In this sense,
the wars in Vietnam and Iraq were tragedies not only for those nations but for theUnited States as well. Almost no one in East Asia today wants a war, but becauseof the instability created by the uneven growth of power, and because of the hubris
and anxiety to which such shifts often gives rise, East Asia faces a genuine risk of
succumbing to the tragedy of war.
References
Beckley, Michael, “China’s Century? Why America’s Edge Will Endure,” International Security, Vol.36, No.3, 2011–12.
Brzenziski, Zbigniew, The Choice: Global Domination or Global Leadership (NewYork: Basic Books, 2005).
Friedberg, Aaron L., “Will Europe’s Past Be Asia’s Future?” Survival, Vol. 42, No.
3, Autumn 2000.
Rosencrance, Richard N., and Steven E. Miller, eds., The Next Great War?: The
Roots of World War I and the Risk of U.S.-China Conflict (Cambridge, MA:
MIT Press, 2015).
Schroeder, Paul W., “Necessary Conditions and World War I as an Unavoidable
War,” in Gary Goertz and Jack S. Levy, eds., Explaining War and Peace (London: Routledge, 2007).
Jitsuo Tsuchiyama, Anzen hosho no kokusai seijigaku: Aseri to ogori (The International Politics of Security: Anxiety and Hubris), Second Edition, Chapter 12(Tokyo: Yuhikaku Publishing, 2014).

33

International Affairs
March 23, 2015

The White House’s AIIB Fiasco
Paul J. Saunders

The Obama administration’s poor handling of the China-led investment bank has produced a needless public defeat for the United States. Paul Saunders faults the White House
for failing to pursue a strategy more thoughtfully calibrated to US interests.
*

*

*

W

hile all eyes in Washington were focused on Israel’s post-election political jockeying and international negotiations on Iran’s nuclear program, the Obama administration’s poor handling of the emerging
Asian Infrastructure Investment Bank (AIIB) has produced a needless public defeat
for the United States. Despite not-so-discreet pressure from US officials, the United
Kingdom, Germany, France and Italy have all announced predictable decisions tojoin the bank, founded and likely led by China, which appears willing to provide
much if not most of its initial capital. The White House has made a foolish andpotentially costly mistake in haughtily dismissing the AIIB.
In fairness to the administration, leading Congressional Republicans would
probably take an even harder line toward the bank—if they were paying attention—and would almost surely have attacked the president if the US government
had not refused to participate in the AIIB and quietly encouraged America’s allies
to do the same. Nevertheless, avoiding political criticism is hardly adequate justification for a consequential strategic error.
Fight It, Ignore It, or Engage It
China’s growing economic and military power—and its parallel expanding political influence—poses significant challenges to the United States. These challenges

Paul J. Saunders   Executive Director, Center for the National Interest (Washington,
DC).
34

International Affairs
take a variety of forms, from increasingly assertive pursuit of China’s territorial
claims in the East China Sea and South China Sea and an impressive militarybuildup to rising investment in Africa, Latin America, and Central Asia. Each requires a thoughtful response calibrated to US interests and capabilities, China’s
possible reactions, and the wider regional and international environment. Unfortunately, the Obama administration’s policy toward the AIIB appears to have been
almost entirely reflexive rather than thoughtful.
When a rising power like China launches a new initiative, a dominant power
like the United States has three choices: fight it, ignore it, or engage it. Broadly
speaking, the dominant power should fight when the stakes are high or when theprobability of success at an acceptable cost is high. A dominant power can afford
to ignore a rising power’s initiative when the stakes are low, whether because theinitiative is unimportant or because it is unlikely to succeed. Finally, a dominant
power should consider engaging a rising power’s initiative when neither fighting it
nor ignoring it seem likely to work.
The administration chose to fight the AIIB but without any clear logic. US officials limply complained that the world has enough international lending institutions, something that might be true but is utterly irrelevant at a time of massive andvirtually insatiable demand for infrastructure investment in Asia (and elsewhere).
The fact that well over 20 countries (including probable lenders and borrowers)
expressed interest in joining the bank in 2014 should have demonstrated quite
convincingly that many governments saw a real, unmet need.
In this situation, the administration’s second argument—that the AIIB would
not have sufficiently high standards—became a liability rather than a strength.
Once it was clear that the AIIB project was getting off the ground regardless of US
preferences, and that ignoring it was not a viable policy, the bank’s apparent success created strong pressure on those concerned about the its standards to join theeffort and work to improve its approach. America’s socially progressive European
allies were almost certain to feel this pressure more intensely than others did inview of the European Union’s status as a global leader in environmental and labor
standards. The March 31 deadline for “founding members” has steadily increased
the pressure in recent weeks.
A Self-Inflicted Loss
Unfortunately, the United States looks much worse after fighting and losing a battle to prevent US allies from joining the AIIB than it would have after either ignoring it—and allowing it to succeed or fail on its own—or trying to engage with35

International Affairs
China to address specific concerns. In the latter case, Washington could have rallied
its European and Asian allies to press the same issues, increasing the chances for
success. If the US and its allies also contributed significantly to the effort, they
could have heavily diluted China’s control over the bank too.
Indeed, China’s relative inexperience in establishing major international institutions could have provided a major opportunity for the United States and its allies
to employ some of their own considerable strengths in an area of Chinese weakness—to some extent reversing the “asymmetric” strategy that Beijing often attempts to employ.
Rather than taking this approach, the administration appears to have fought
the bank largely because it was a Chinese idea—something that makes its failure
to prevail especially damaging, in that leaders in Beijing could now think not onlythat Washington is reflexively hostile but also that it is too weak to win. Creating
this situation and simultaneously facilitating China’s dominance in the AIIB is aself-inflicted loss.
Perhaps worst of all, the AIIB fiasco demonstrates the extent to which the administration’s rebalancing policy has eroded in the years since its launch, not tomention the weakness of its assertion that the policy is not strictly a military one.
If the United States were truly rebalancing toward Asia, US officials should have
had a much more effective policy response to the AIIB.

36

Land Policy
April 30, 2015

Property Laws Hindering Disaster Recovery
Shoko Yoshihara

Four full years after the “3/11” earthquake and tsunami, recovery efforts in the Tohoku region are mired in legal red tape under a land ownership system that combines rigorous property rights with lax registration requirements. Research Fellow Shoko Yoshihara, an expert
in Japanese land issues, shares her insights in an interview conducted by Nikkei Business.
***— We hear a lot about the slow pace of reconstruction in the tsunami-stricken
areas—whether it’s a question of relocating homes or building public facilities.
What does the land registration system have to do with these delays?
SHOKO YOSHIHARA Simply put, local authorities can’t acquire the land they needto rebuild on safer sites because they can’t identify the owners. And that relates
directly to Japan’s land registration system. In Japan, there’s no legal requirement
to register or record land titles. If the recorded owner dies, and the survivors neverbother to transfer the title, then local records will continue to list the deceased
person as the owner. This situation often continues down through generations, andover time the number of direct descendants or other relations legally eligible toinherit the property can multiply geometrically.
— And how does that cause problems?
YOSHIHARA If the owner recorded in the real property registry is deceased, the law

requires the approval of all the eligible heirs before the government can make apurchase. In one case, the prefectural government identified something like 150
eligible heirs to a small parcel of land that it needed in order to build a road. Just
to establish that they’ve actually identified all the lawful heirs, they have to get

Shoko Yoshihara   Research Fellow and Project Manager, Tokyo Foundation.
37

Land Policy
copies of everyone’s family register and certificate of residence and draw up a tableof consanguinity and get it verified. Then, they have to get all of those people toauthorize the transaction in writing, using their registered seals. And they have tofollow the same cumbersome procedure for each little parcel of land. As a result,the government can’t acquire the land it needs to develop or relocate to higher
ground, and the recovery process has fallen hopelessly behind schedule. The sameproblem has come up in Hiroshima in the wake of last summer’s landslides.
— Why do people abandon their claim to the land?
YOSHIHARA In many rural areas the price of land, forestland in particular, is so

low that the costs of registering and maintaining the title are higher than what one
could get by selling it. This may sound unthinkable to people living around Tokyo,
but in the outlying regions, the abandonment of forestland has become a major
problem.
— But the municipalities levy a fixed-property tax. Aren’t the property owners
listed in the municipalities’ tax register books?
YOSHIHARA It’s true that the municipalities keep a list of fixed properties and theirowners, which they use to assess the fixed-property tax, but the source they use to
update the information is the real property registry, and in Japan the registrationof real property is voluntary. That’s the fundamental loophole in the system.
— Why was such a glaring loophole overlooked?
YOSHIHARA In traditional rural communities, it didn’t make much difference
whether one registered one’s land title or not. In close-knit, stable communities,
everyone knew who owned what piece of land. The landowners were longtime
residents of the community. They were the people who managed the land. But then,as more and more young people migrated to the city, communities began to break
down, and it wasn’t so simple any more. Since the land was cheap, the property tax
didn’t amount to much anyway, so the local tax authorities didn’t think it worth
their while to try to rectify the situation.

— Is there a danger of the same problem occurring in more developed areas, nowthat the Japanese myth of ever-rising land values has been shattered?

38

Land Policy
YOSHIHARA Absolutely. What started out as a forestland phenomenon has spreadto regional cities, and now it’s even begun cropping up in the suburbs of majorurban centers. Unclaimed land can’t be put to use. This is a problem not only forcommunities struggling to recover from a disaster but also for local administrators
trying to revitalize regional communities by creating “compact cities” or to promote urban renewal through redevelopment.
— Is anything being done about it?
YOSHIHARA Japan’s ownership and property rights are among the strongest in theworld, and any threat to those rights is going to encounter tremendous resistance.
Furthermore, as a local issue it only comes to the fore in the wake of some majordisaster; it’s hard to get people interested at any other time. But the present system
can cause other problems as well. For example, if people take possession of abandoned land with malicious intentions, the authorities have no firm legal basis forevicting them. I think there’s a fundamental need to revisit the Real Property Registration Act and reform the land ownership system.

Interview conducted by Hiroyuki Yamanaka. Translated from “Shinsai fukko otoki seido ga sogai suru,” Nikkei Business, February 23, 2015.

39

Land Policy
March 4, 2015

Saving Japan’s Endangered Regions
Katsuyuki Yakushiji

Depopulation threatens the very existence of hundreds of outlying municipalities in Japan,
according to an alarming report published in 2014. The Abe cabinet has responded with a
new policy initiative addressing this concern, but Katsuyuki Yakushiji warns that the government must to do more than create a new budget category if it hopes to solve a crisis thathas been in the making for many decades.
*

*

*

F

oreign visitors to Japan are often astonished by Tokyo’s economic vitality.
This past February, for example, Ginza and Akihabara were swarming withshoppers as Chinese and Taiwanese tourists rushed to stock up on electronics and other Japanese goods during their traditional New Year’s holiday. (Japaneserice cookers are such a popular item that some visitors have been known to buy adozen or more on a single trip.) This winter some 250,000 tourists flocked to Tokyo in the space of one week, spending about 110 billion yen.
Foreign visitors who limit their travel to central Tokyo are likely to go homethoroughly convinced that “Japan is back,” as touted by Prime Minister Shinzo
Abe. But Tokyo is not Japan. After an hour’s drive from the city, the hustle andbustle of central Tokyo give way to a world that moves much slower. Traffic issparse; pedestrians few and far between. The stores clustered around suburban
train stations are almost devoid of customers, and many are permanently shuttered.
(In fact, in many regional municipalities, the main shopping drag is ironically referred to as “Shutter Street.”)Farther out in the countryside, the population consists almost entirely of elderly residents. Japan’s rural exodus has reached the point where good, tillable landis being overrun with weeds and brush for lack of anyone to farm it. By area, about
10% of Japanese farmland is currently lying abandoned, and that figure is sure to

Katsuyuki Yakushiji   Senior Associate, Tokyo Foundation; Professor, Toyo University.
40Land Policy
rise further. The decline of regional Japan is one of the most serious issues facing
the nation today.
Sounding the Alarm
The plight of Japan’s regions was the subject of a publication that created a stirwhen it hit the bookstands in May 2014. Chiho shometsu (Demise of the Regions),
a report issued by the think tank Japan Policy Council, provides an analysis of thedemographic changes that are decimating Japan’s regional communities, alongwith some recommendations for reversing the trend.
Chiho shometsu explains the problem in stark numerical terms, beginning witha summary of national demographic trends. As the authors note, Japan’s population has been declining since 2008, when it peaked at about 120 million. According
to the latest projections, it will fall to about 97 million by 2050 and dwindle to just
50 million—less than half the current population—by 2100. The most fundamental cause is a sharp decline in the total fertility rate—that is, the number of children
a woman is expected to give birth to in her lifetime. Japan’s total fertility rate sankto as low as 1.26 in 2005, and while it has risen slightly since then, it remains well
below the replacement level.
Growing longevity, while contributing to Japan’s rapid demographic aging, has
thus far mitigated the impact of low fertility on total population size. But as age
takes its inevitable toll on Japan’s baby boomers, the rate of depopulation will increase dramatically.
Against this background, the ongoing migration from Japan’s rural and regional communities to the greater Tokyo area continues apace. By 2040, we are
told, about half of the nation’s 1,800 municipalities will experience a drop of 50%
or more in the number of female residents of child-bearing age (20–39), assuming
current trends continue. The JPC calls these 896 communities shometsu kanosei
toshi, “cities that could face extinction.” Of these, 623 municipalities—29% of thetotal—will also find themselves with fewer than 10,000 residents. The report warns
that such communities are at high risk of becoming ghost towns. The authors stressthat residents are often unaware of the danger until depopulation passes a tipping
point, and the community’s decline accelerates. By then, of course, it is too late.
In short, the report sounds a demographic alarm, warning that the combined
effect of the natural decrease stemming from low fertility and the impact of migration—particularly the loss of women of childbearing age—will cause depopulationto accelerate exponentially in many regional communities. Eventually the numberof births will dwindle to almost nothing, and only elderly residents will remain. At
41

Land Policythat point, the fate of the community will be sealed. Small wonder that Chiho noshometsu sent shockwaves through the nation.
Mobilizing Government Finances
Just weeks after the report’s publication, Prime Minister Abe announced a new
regional revitalization campaign and set in motion his by-now familiar process for
implementing major policy initiatives. In September, when he reshuffled his cabinet,
he persuaded Liberal Democratic Party Secretary General Shigeru Ishiba to accept
the newly created post of minister for regional revitalization. Under the auspices of
the Cabinet Secretariat’s new “headquarters for population, community, and job
creation,” the prime minister assembled a group of experts to formulate strategies
for reversing depopulation and reviving local economies. Meanwhile, the Diet deliberated and passed two bills setting goals and establishing administrative processes for the formulation and implementation of revitalization plans. In addition,
the prime minister instructed all relevant ministries to draw up plans and budget
requests for fiscal 2015 programs relating to local revitalization. In December, thegovernment presented its fiscal 2015 budget, including 1.4 trillion yen in spendingon “regional revitalization.”
Ishiba and other officials have been anxious to assure a skeptical public thatthe government is not using the budget for pork-barrel projects targeted to key
Liberal Democratic Party constituencies—a practice for which the LDP has gained
notoriety over the years. They have also emphasized a commitment to maximizing
the cost-effectiveness of the initiative by promoting cooperation and coordination
between agencies, something that has been notably lacking in the past.
But budget watchers have pointed out that many of the projects touted under
the new initiative are existing programs that have merely been reclassified andplaced under the “regional revitalization” heading. Of course, it would be premature to judge the efficacy of the new policy at this stage. Still, the nation’s demographic crisis, the progressive concentration of population around the Tokyo metropolitan area, and the resulting decline of the regions are the outcome of long-term
trends originating in the rapid economic growth era following World War II. They
are not likely to be reversed by the budget initiatives of a single cabinet.
Vacant Homes, Abandoned Fields
A more immediate problem facing regional and rural communities is the alarming
proliferation of vacant homes and abandoned fields.
42

Land Policy
To be sure, vacant and abandoned homes have begun to raise safety andlaw-enforcement issues even in certain neighborhoods around Tokyo and othermajor metropolitan districts. But in the outlying areas, the problem is much more
daunting. When homeowners in these areas die, there is no one to move in because
the children and grandchildren have migrated to the city. In many cases, no oneeven bothers to claim the inheritance because the property has no market value. In
those cases, the house lies vacant and soon becomes dilapidated. Yet cost issues andconcerns about property rights often prevent local authorities from stepping in. In
the more remote and mountainous areas of Japan, entire hamlets have been abandoned, giving rise to “ghost villages.”
A survey by the Ministry of Internal Affairs and Communications counted 8.2
million vacant homes nationwide as of the end of October 2013—a full 13.5% of
all housing units. Needless to say, the ratio climbs as one moves out from the major
metropolitan areas. Local governments must find a way of dealing with these abandoned homes and deserted hamlets even while coping with the loss of property tax
revenue. They are rapidly finding themselves overwhelmed.
More and more farmland and forestland is also going unclaimed as the owners
die. In many areas, these tracts have almost no commercial value. Just transferring
the deed costs hundreds of thousands of yen (several thousand dollars), and thenew owners then find themselves with a piece of unsalable property on which theymust pay annual real estate taxes (however low). Since there is nothing to begained by claiming the inheritance, many people decline to do so. A Tokyo Foundation research project estimated that within the next 30 years, the total area of
unclaimed land could rise to 310,000 hectares—an astonishing 8.2% of the nation’s land area.
This situation has created unexpected headaches for local administrators. Afterthe March 2011 earthquake and tsunami, the town of Otsuchi in Iwate Prefecture
wanted to relocate residents living near the coastline to higher ground. But when
the authorities tried to acquire the land they needed, they repeatedly found that theowners had died, and the heirs had never claimed the property. In some cases theland had been abandoned for generations, and authorities were faced with thenearly impossible task of tracking down and securing approval from each of theenormous number of eligible heirs. Their hands were tied.
This has become a chronic problem for local governments undertaking public
works projects, and it could jeopardize the successful implementation of the government’s revitalization initiative. Addressing the crisis will require major policychanges, including a basic shift in thinking on property and inheritance rights. As
yet, no one has even begun to take on this pressing issue.
43Views on China
May 27, 2015

What Does China Want?
Understanding Beijing’s Foreign Policy
Bonji Ohara

Is China intent on challenging the United States for global supremacy? Is a military clash
between these two great powers inevitable? Research Fellow Bonji Ohara ponders these andother questions in the light of recent developments in Chinese foreign policy.
*

*

*

T

he National People’s Congress, China’s national legislature, convened for
its annual spring session on March 5 and closed on March 15. The NPC,
which the Chinese constitution designates as the highest organ of state
power, is where the course charted by the Communist Party of China becomes
official state policy. The business of the most recent session was to approve thepolicies forged during the fourth plenary session of the 18th CPC Central Committee, held October 20–23, 2014. And since the theme of the plenary session was the“rule of law,” this was also the nominal focus of the policies submitted to andadopted by the NPC.
Judging from the content of the Report on the Work of the Government delivered by Premier Li Keqiang, China’s leaders are preoccupied above all with theeconomy and the need to pursue reforms.1 The emphasis on the “rule of law” is inessence a call to abide by the CPC’s leadership in these matters by complying withthe relevant laws and regulations. It carries with it an admonition to vested interests to accept the coming reforms, however painful, as well as an implicit warningto negligent and corrupt officials.
In his report to the NPC, Li Keqiang announced a comparatively low economic
growth target of 7% and stressed the government’s determination to implement
structural reforms. A similar thrust was apparent in remarks by Yu Zhengsheng,
Bonji Ohara   Research Fellow and Project Manager, Tokyo Foundation.
1

See http://www.xinhuanet.com/english/2014lh/.

44

Views on China
Chairman of the Chinese People’s Political Consultative Conference, who highlighted the theme of the “new normal” and called for a steady rate of growth in the
midst of structural reform. (The “new normal,” or xin changtai, is an expressioncoined by President Xi Jinping in reference to the government’s policy of stabilizing
economic growth at a moderate rate while pursuing economic reform.)
Even as the Chinese economy slows, however, military spending is posting
double-digit growth. At the NPC, the government reported a 10.1% increase overthe previous year, most of it accounted for by spending on the navy and the airforce. One Chinese scholar has noted that while the air force budget has increased
dramatically, the largest portion goes to the navy. The implication is that China sees
its navy as in need of substantial expansion and modernization to support a growing presence overseas. The navy has accelerated its construction of aircraft carriers
and other large warships, most likely with the aim of deploying them strategicallyaround the globe. What are the implications for the international order and global
peace?

Foreign Minister Wang Yi addressed foreign policy questions during the NPC
spring session at a press conference on March 8. Asked by a foreign correspondent
if the Xi Jinping government’s Belt and Road Initiative (see below) was not simply
a strategy for furthering China’s own
geopolitical and military interests,
Wang responded, “The vision of thisinitiative is common development,
and the goal is win-win progress
through cooperation. If I may use amusical metaphor, it is not China’s
solo, but a symphony performed by
all relevant countries.”2
The Belt and Road Initiative encompasses two plans, the Silk Road
Economic Belt and the 21st Century Maritime Silk Road, aimed at building amodern land and sea transportation network to support a vast economic zone
extending from China all the way to Europe. The Belt and Road Initiative is how
Xi Jinping’s government plans to go about implementing the so-called March West2

See http://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1243662.shtml.
45© Andrew Ciceri

Westward Ho!

Views on China
strategy, first articulated by Peking University professor Wang Jisi in October 2010.
In his thesis, Wang Jisi stressed the strategic importance of expanding westward to
pursue China’s economic and political interests, claiming that such a policy would
help “build a balance between China and the United States” and foster “strategic
trust” between the two powers.3
Wang Jisi’s thesis reflects China’s deep concern over what it perceives to be
America’s overwhelming dominance in almost every region of the world. In speaking of the need to “build a balance between China and the United States,” Wang
gives voice to Beijing’s ambitions of achieving parity with American power. At thesame time, the emphasis on fostering “strategic trust” reflects an awareness of theneed to avoid any direct clash with the United States in the process.
As originally set forth by Wang Jisi, the March West strategy also stressed economic development of China’s interior. But Xi Jinping’s Belt and Road Initiative
focuses almost exclusively on external relations. Through this grand strategy, China
is steadily expanding its influence not only in Central and South Asia but also in
the Middle East and Europe.
What Is China After?
China’s expanding influence derives from a combination of economic and militarymight. Direct investment is the main tool by which it exerts its economic influence.
It is also a means of advancing China’s own economic interests. Investment in port
facilities and high-speed rail—both integral elements of the Silk Road initiatives—
will yield dividends by facilitating the transport of energy resources from the Middle East and from South and Southeast Asia and by promoting the export of Chinese goods to every region between China and Europe.
Particularly valuable from China’s viewpoint are those projects that give it jurisdiction and usage rights over port facilities. With such ports as hubs, China can
bypass national borders and secure direct access to European markets—one of the
key advantages to maritime transport. Beijing is counting on Greece, it would seem,to give it a foothold in Europe. On February 19, 2015, Greek Prime Minister Alexis
Tsipras attended a New Year’s reception aboard the Chinese warship Changbaishan at the port of Piraeus. Tsipras hailed Piraeus as a key gateway for the deliveryof Chinese goods to Europe, according to Xinhua News Agency.4 Athens has also
Wang Jisi, “‘Xijin’: Zhongguo diyuan zhanlue de zai pingheng” (Marching West: Rebalancing China’s Geopolitical Strategy), in Huanqiu shibao, October 17, 2012.
4
See http://news.xinhuanet.com/english/china/2015-02/20/c_134007691.htm.
346

Views on China
signaled its enthusiasm for Chinese infrastructure projects that would eventuallylink Greece with Eastern Europe via high-speed rail, providing a direct link between Europe and the modern Silk Road envisioned by China.
Chinese investment doubtless seems like an economic godsend to crisis-ridden
Greece. In addition, media reports have suggested that Greece is using Chinese
assurances of support to bolster its bargaining position as it attempts to renegotiate
bailout conditions with the European Union. By targeting Europe’s troubled economies in this way, China hopes not only to gain influence over those countries
themselves but also secure influential friends and partners within the European
Union. Winning over friends and backers around the world is a key to competingwith the United States in the global arena.
The Greek prime minister’s pledge of cooperation aboard a Chinese warshipwould be inconceivable in a country or region that regards China as a real threat.
The partial operating rights China has secured in the port of Piraeus are of a matter of considerable significance to the Chinese military. They open the way for the
deployment of Chinese naval vessels in the Mediterranean and assure potential
friends and partners in the region that China can back up its commitments withmilitary might. But China knows enough to tailor its alliance-building approach tothe individual region. In the Asia-Pacific region, where many governments view
China as a major threat, such a blatant display of military power would be counterproductive.
Two-Track Approach in Southeast Asia
Let us turn now to China’s policy toward the 10 member states of the Associationof Southeast Asian Nations.
The South China Sea is of vital importance to China. Its value derives not only
from its seabed resources and its key role in sea transport but also from militaryconsiderations: This is where China deploys nuclear submarines armed with intercontinental ballistic missiles, designed as the ultimate deterrent against a nuclear
strike by the United States.
Judging by this military strategy, China’s foreign policy makers are dyed-in-thewool realists. They are proceeding on the assumption that the United States, as theworld’s dominant power, might well resort to military force to prevent the rise of
China as a challenger to US hegemony. China’s perception of the United States as
its only serious rival and of the potential for military conflict are both implicit in
Xi Jinping’s call for “a new type of major power relations” between the two countries.
47

Views on China
From a realist viewpoint, China is bound to continue its quest for complete
control of the South China Sea, even if that involves strong-arm measures against
the Southeast Asian nations that dispute its claims. Realism regards international
affairs as a struggle for survival between great powers. With the nation’s survival
at stake, the moral justification for Chinese or US behavior is beside the point.
According to this school of thought, the Chinese will continue to build up theirmilitary because they believe that the only sure means of guaranteeing China’s
survival is to make it the dominant power. In short, as a great power, China will
inevitably strive for regional hegemony, regardless of who stands at the helm of
government at any given time.
In fact, however, Beijing recognizes that the rise of fiercely anti-Chinese forcesin Southeast Asia would be undesirable from the standpoint of expanding its global
influence, hence the “dual-track approach” for dealing with the South China Sea
issue—a concept first aired by Foreign Minister Wang Yi at the August 2014
ASEAN Foreign Ministers’ Meeting.5 The two tracks are (1) peaceful resolution of
territorial disputes through friendly bilateral consultations between the countries
directly concerned, and (2) maintenance of peace and stability in the South China
Sea through the cooperative efforts of China and ASEAN. Premier Li Keqiang reiterated Beijing’s commitment to the dual-track approach at the November 2014
Asia-Pacific Economic Cooperation summit in Beijing. Since then, the term has
appeared with increasing frequency in the official media.
But what precisely does it signify? While the first track is an extension of China’s strategy of dividing ASEAN so as to maintain its advantage in territorial negotiations, the second track—“maintenance of peace and stability in the South
China Sea through the cooperative efforts of China and ASEAN”—seems to leadin the opposite direction. Media commentary in China hints at the rationale for thedual approach, suggesting that the second track reflects “China’s primary goal ofregional economic integration.”6 This implies that Beijing appreciates the economic
merits of a single, integrated Southeast Asian economic community, and further
that it believes integration will put the region’s pro-Chinese forces in a position to
influence and muffle the anti-Chinese voices. In other words, while negotiating theterritorial disputes separately, on a bilateral basis, Beijing has also opted to cooperate with ASEAN as a whole in order to nurture a pro-Chinese climate in the region.

5
6

See http://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1181523.shtml.
See http://finance.sina.com.cn/china/20141202/171420977701.shtml.

48

Views on China
Why Analyze China’s Motives?
As we have seen, Beijing is pursuing a policy aimed expanding Chinese influence
across Asia and into Europe with the aim of building a vast economic zone centered on China. At present, however, American military power and political influence predominate in East Asia and Europe alike. As China’s influence spreads, theUnited States is bound to react with concern and suspicion. What are the likely
consequences for global peace and stability?
Some schools of thought regard the struggle for hegemony and the attending
clash of major powers as an inevitable, cyclic feature of international politics. Thisis the thrust of both A.F.K. Organski’s power transition theory and John Mearsheimer’s theory of offensive realism, although the two differ as to the precise dynamic behind those conflicts. If, indeed, such hegemonic clashes are inevitable, thenthere is little point in analyzing China’s motives. Instead, Japan and the other nations in the region would do well to begin preparing for the coming war between
the United States and China.
Although it seems clear that China, with its realist approach to international
affairs, is building up its military in preparation for a possible a clash with theUnited States, Beijing has also been assiduous in its efforts to avert such a conflict.
On the other hand, one could make the case that China is avoiding conflict now
merely to buy time as it builds up its strength.
Certainly, realist theory would hold that the only reason we have not seen aclash so far is that China is not yet strong enough to challenge the United States.
That is certainly correct. China’s economy has developed at a breathtaking pace inrecent years, but it is fast approaching the limits of the economic model that hassustained it thus far; Beijing must now turn its attention to difficult economic reforms. As far as military power goes, China has modernized its weaponry, but it
still has a long way to go strategically and operationally. If China begins to pose aserious threat to US hegemony, the United States will doubtless take measures tocheck it.
But does this mean a military clash between China and the United States isinevitable farther down the road? As I see it, the answer depends above all on
whether the United States and China can successfully address their mutual fears
and suspicions. And this means understanding one another’s intentions correctly.
Indeed, a failure to grasp one’s rival’s intentions is one of the key causes of conflict
between major powers. If this is the case, then it follows that efforts to understandChina’s perceptions and intentions will continue to be of the utmost importancefor the preservation of world peace.
49

Views on China
March 31, 2015

Anatomy of Chinese Corruption
Can Xi’s Crackdown Work?
Hiroyuki Kato

How have corruption and economic growth continued to flourish side by side in today’s
China? Combining his own insights with the findings of other scholars, China expert andeconomist Hiroyuki Kato sheds light on this seeming paradox and its relationship to thecurrent crackdown.
*

*

*

S

ince 2013 Chinese President Xi Jinping has been waging a massive campaign
against corruption, vowing to “strike at both tigers and flies.” At a meetingon June 30, 2014, the Politburo expelled four officials from the party for
accepting bribes, among them Xu Caihou, former vice-chairman of the Central
Military Commission and a general in the People’s Liberation Army. In July 2014
the media revealed that Zhou Yongkang, a high-ranking member of the PolitburoStanding Committee Party prior to his retirement in 2012, was under investigation
on suspicion of “serious disciplinary violations.” Such reports suggest that the government is serious about cracking down on corruption and will not hesitate totarget high-profile party and military cadres.
That said, the efficacy of the campaign remains unclear. On January 10, 2014,
the CPC’s Central Commission for Discipline Inspection announced that in 2013
government agencies had investigated about 173,000 corruption cases (up 11.2%
from 2012) and disciplined about 182,000 officials (up 13.3%). These figures canbe adduced as evidence of results. Conversely, they can be seen as an indication thatgraft is as prevalent as ever. Can the current campaign really halt the epidemic ofcorruption?

Hiroyuki Kato   Professor of Economics, Kobe University.
50Views on China
Corruption and Growth
The government’s focus on corruption stems from concerns that the problem could
trigger social unrest and ultimately impact economic growth. So far, however,China has managed to defy conventional wisdom with respect to the impact of
corruption on growth, having maintained a rapid rate of economic expansion amid
a rising tide of corruption.
The figure below plots the perceived severity of public sector corruption (asgauged by Transparency International’s 2012 Corruption Perceptions Index)
against average annual growth in gross domestic product between 2000 and 2012.
The horizontal axis represents the CPI score, which rises as perceptions of public
sector honesty improve; the higher the score, in other words, the lower the perceived level of corruption. At first glance, the graph appears to suggest that a low
level of corruption depresses growth. But this is a misreading of the data. The significant correlation is between per-capita income and corruption. In general,
Corruption Perception Index and Economic Growth
Average GDP growth, 2000–2012 (%)

Note: Higher CPI score = lower perception of corruption.
Sources: Transparency International, 2012 Corruption Perceptions Index (http://www.transparency.org/cpi2012/), and International Monetary Fund, World Economic Outlook Database (http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/index.aspx).

51

Views on China
high-income nations, which inevitably grow at a slower pace, tend to have lower
levels of corruption.
If we focus on countries in the low- to mid-income bracket with high levels ofcorruption, we see considerable disparities in the growth rate. A handful of countries, seen in the upper left quadrant, display very high levels corruption in combination with some of the world’s fastest growth rates. However, with the exceptionof China, all of these are low- or middle-income economies that owe their dramatic
growth to the export of natural resources like oil, natural gas, or diamonds (Azerbaijan, Turkmenistan, Angola, and Belarus). China is clearly in a different category
in terms of scale and development.
China as an East Asian Exception
Economics textbooks will tell you that public-sector corruption hinders economic
growth by diverting resources for nonproductive purposes and inhibiting the development of a healthy business and investment environment. Empirical studies
have, for the most part, confirmed a negative correlation between corruption andgrowth, other factors being equal. But there are well-known exceptions to the rule.
In the larger emerging economies of East Asia (China, Indonesia, and Thailand),high levels of corruption have persisted alongside brisk economic growth, suggesting that a certain brand of corruption common in Asia is not a significant barrier
to business and investment.1
Does this generalization, then, apply to China? Andrew Wedeman, who hasmade a detailed study of corruption in China, argues that there is a need todifferentiate China’s experience from that of other Asian countries.2 Wedeman distinguishes between “developmental corruption” and “predatory corruption.” Developmental corruption is a kind of government-business partnership, or political-economic “machine,” in which the party in power secures the support of theeconomic elite through measures that favor business. Predatory corruption refers
to the kind of economic plunder embodied by officials who rake in huge sums
through graft and spend the money on their mistresses or hide it in overseas accounts. During periods of industrialization, developmental corruption can actuallypromote growth by maintaining political stability amid pro-business policies, as
Indermit Gill and Homi Kharas, An East Asian Renaissance: Ideas for Economic Growth(World Bank, 2007), http://siteresources.worldbank.org/INTEASTASIAPACIFIC/Resources/226262-1158536715202/EA_Renaissance_full.pdf.
2
Andrew Wedeman, Double Paradox: Rapid Growth and Rising Corruption in China(Cornell University Press, 2012).
152

Views on China
previously seen in South Korea and Taiwan. Predatory corruption is by most accounts incompatible with the health and sustained growth of the economy.
In China, as Wedeman points out, there was no need to build a pro-business
political machine, since the CPC had no rivals to power. Accordingly, the corruption that has run rampant in China during the past few decades falls mainly into
the predatory category. How, then, has China managed to sustain such high levelsof growth amid rising levels of predatory corruption? Wedeman’s basic answer isthat in China’s case, growth came first, with corruption emerging later as a byproduct of the reform and opening process and the immense wealth that it generated.
Boiling Water in Small PotsWith this analysis in mind, I would highlight the role of a special mechanism built
into China’s present political-economic system defining the relationship between
the central and local government—what one might describe as “heating water insmall pots.” As political scientist Cao Zhenghan has explained it, the Chinese system differs from the conventionalmodel of centralized power in that it
incorporates an ingenious feature todisperse risk and automatically adjust
the degree of centralized control.3
Let us use the process of heatingwater as an analogy for economic development. Supposing you want toheat 1,000 liters of water. You need toturn off the heat as soon as the waterboils, as continued boiling, under thisanalogy, causes the pot to burst—that is, trigger social unrest, leading to massdemonstrations against the government and major enterprises. Lacking the technology to monitor and control the temperature precisely, you must rely on judgment gained from experience, which is assumed to be accurate 90% of the time,
meaning that there is still a 10% chance the pot will burst. If you heat all the waterin one large tank, this degree of risk would be unacceptable.
So one solution is to heat the water in 1,000 one-liter vessels, each one monitored and controlled separately, and then transfer the heated water back to the
Cao Zhenghan, “Zouchu zhongyan zhiguan, difang zhimin jiu geju,” Nanfang Zhoumou,
June 24, 2010.

353

Views on Chinalarge tank. Given the abovementioned technological constraints, the odds are thatabout 100 of those 1,000 vessels will burst, but you would still be left with 900
liters of hot water.
China has relied heavily on this mechanism to promote economic development
and growth. When China began introducing market-based reforms in the late1970s, it lacked clear-cut rules governing market activity, and local officials, rather
than private entrepreneurs, played the leading role in the development process. This
created a huge gray area of economic activity and subjected officials to great temptation in terms of reaping personal profit through economic development. In thisway, shifting economic leadership to local officials spawned corruption at the sametime that it fueled rapid development and growth.
Crackdown versus Structural Reform
The analogy of “heating water in small pots” can help clarify the relationship between growth and corruption in China. As soon as graft surpasses a certain threshold (in terms of the sums of money involved and the social impact), the government
cracks down. Of course, if officials refrained from all such activity, they would
avoid the risk of prosecution, but in that case the regions and sectors under theircontrol may not grow as quickly, and their own prospects for advancement andpersonal enrichment may diminish. Under these circumstances, officials will tend
to keep a finger to the wind and engage in graft at a level they suppose will bepermissible. Eventually, however, some unlucky official or officials will cross theline and be targeted for investigation and punishment. Here we see how the “smallpot” system disperses the risk. Even if 10% of officials fall victim to the crackdown,
the remaining 90% will survive, and the economy will continue to develop andgrow in spite of an environment of widespread corruption.
The best way to truly root out corruption in China would be to eliminate thegray areas in China’s political-economic system (the very areas that have hitherto
supported China’s rapid growth). This would mean curtailing government officials’role in the economy and taking the privatization of state-owned enterprises to thenext level. At this point, however, there is no indication that the government of Xi
Jinping is prepared to undertake such reforms.
On January 14, 2014, at the third plenary session of the Central Commission
for Discipline Inspection, President Xi called for an intensification of anticorruption efforts through stronger regulations, better oversight, and more public disclosure. He urged the party organization and the CCDI to hold officials accountable
and not allow regulations to become “paper tigers.” If the current government
54

Views on China
hopes to prevent corruption from reaching the highest levels and spiraling out ofcontrol—but without resorting to basic structural reforms—then it has no choice
but to crack down even harder. Assuming the crackdown succeeds in reining in
predatory corruption and preventing it from engulfing the state, then the coexistence of corruption and growth will likely continue in China for the foreseeable
future.

55

CSR White Paper
April 21, 2015

Development Assistance for Inclusive Growth
A Field for Japan-US Cooperation?
Akiko ImaiThis paper considers the feasibility of active cooperation between Japan and the UnitedStates in the provision of development assistance in Asia, with a focus on economic inclusiveness. It argues that addressing social issues (such as women’s empowerment) based on ahorizontal division of labor between the two countries—and with the involvement of thebusiness community and civil sector in both countries—could advance regional human dignity and quality growth. At the same time, such a broad-based, cross-sector approach would
strengthen the Japan-US alliance and enhance their soft power projection in Asia. (This paper was originally part of the 2015 Strategic Japan Working Papers, published by the Center for Strategic and International Studies, Washington, DC. It is reprinted here with thepermission of the Japan Chair, CSIS, in slightly abridged form.)***

The Importance of InclusivenessRapid economic growth in the emerging economies of the Asia-Pacific has boosted
both production power and purchasing power, leading to the emergence of a huge
middle class in the region. However, improvements in countries’ public administrations and markets have tended to neglect the needs of their sizable low-income
populations. Low-income populations are additionally burdened by the “poverty
penalty,” a term which refers to the paradoxical finding that the poor tend to pay
more than their richer compatriots for the basics of everyday life. As a result, an
increasing number of people are being left behind, unable to enjoy the benefits ofgrowth.
A similar phenomenon has been seen in the United States, Japan, and other

Akiko Imai   Executive Director, Director of Public Communications, and Research Fellow, Tokyo Foundation.
56

CSR White Paper
advanced economies as they have grown over the course of the past century. In
India, China, and elsewhere in Asia, a region which accounts for half of the world’s
population, the number of disadvantaged people is substantial. In today’s rapidly
globalizing economy, the engines of growth are shifting at a dizzying pace, andthere is little hope that conditions will improve through the trickle-down effect that
may have operated in the past. Achieving inclusive growth is an issue that needs tobe addressed with deliberate action.
According to the Asian Development Bank (ADB), after years of rapid growth,
many Asian countries have advanced to middle-income status, but the transition tohigher income brackets can be a slow process. As the ADB notes, “More than 15
countries globally have been ‘middle income’ for at least the past 50 years, including three in Asia—Malaysia, the Philippines, and Thailand. . . . China became an
upper-middle-income country in 2010.” Based on its research, the ADB recommends that middle-income economies focus on “upgrading and diversifying theirindustrial bases” to avoid the middle-income trap.1
Inclusiveness is not just a concern for individual countries: its scope transcends
national borders and its root causes must be addressed by the international community as a whole. A chronic situation in which human dignity is slighted andbasic human needs are not met contributes to the growth of crime and terrorism,and exacerbates the effects of pollution and natural disasters. The resulting weakening of domestic structures can pose a threat to neighboring nations’ security.
Recognizing this, countries extending development assistance have been making inclusiveness part of their strategic agendas, seeking to enhance the social capital of recipient countries by creating the foundations for sustainable livelihoods
and freeing the disadvantaged from dependency on aid.
Addressing Social Issues that Government Alone Cannot Resolve
The Japanese public has tended to think of environmental protection, human“Middle-income Trap Holds Back Asia’s Potential New Tiger Economies: 12 Things to
Know,” Asian Development Bank, March 14, 2014, http://www.adb.org/features/middle-income-trap-holds-back-asias-potential-new-tiger-economies-12-things-know. According
to ADB President Takehiko Nakao, the middle-income trap may affect countries that havegrown rapidly and are “no longer benefiting from low wage/low cost production but stillcannot compete against countries producing higher value-added products.” Takehiko Nakao, “Statement by ADB President Takehiko Nakao at the Japan-LAC Business Forum,”
April 24, 2014, http://www.adb.org/news/speeches/statement-adb-president-takehiko-nakao-japan-lac-business-forum.

1

57

CSR White Paper
rights, women’s advancement, and addressing poverty mainly as the job of thegovernment, but the situation has become more complex. There are limits on thecapability of government to deal with public issues. In order to cope with thesecomplex, interconnected issues, we must call on the resources of society as a whole.
For example, when we consider the factors contributing to poverty in Japan—including unemployment, dysfunctional families, and lack of education—it is apparent that the Ministry of Health, Labor, and Welfare, which is notionally responsible
for government policy in this area, cannot resolve the issues on its own. Cooperation with businesses and communities is essential. In the case of large-scale disasters like the Great East Japan Earthquake of March 2011, the impact is felt in every
aspect of people’s lives and cannot be addressed solely within the framework of
public administration.
Every social problem is an amalgam of diverse individual woes, and its solution
must involve efforts not just by the government but by all sectors and strata ofsociety based on a sense of their respective responsibilities. In particular, heightened
expectations are being directed at the corporate sector, a result of its organizational
and technological strengths and funding clout. It is hoped that corporations canbring these strengths to bear in initiatives to fight infectious diseases, such as HIV/
AIDS, malaria, and Ebola, as well as to tackle issues like women’s empowerment,
access to education, and climate change.
Figure 1. Financial Flows from Developed to Developing Countries (nominal
terms)($100 million)

6,000

5,000

Private grants
Private funds
Other Official Flows (OOF)
ODA

4,000

3,000

2,000

1,000

0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012
(Year)

Source: DAC Statistics on OECD.STAT
Nominal terms: Values not adjusted for exchange rates and price fluctuations
Reprinted from Japan's ODA White Paper 2013.

58

CSR White Paper
Figures from the Organization for Economic Cooperation and Development(OECD) on financial flows to developing countries show a marked increase infunds from the private sector around the year 2000. These private flows have exceeded official flows––consisting mainly of official development assistance (ODA)––
since 2005. As of 2012 they were roughly 2.5 times the latter in volume.2 As noted
in Japan’s 2014 ODA White Paper, developing countries (particularly in Africa),
which formerly depended almost entirely on ODA for external funding, are now
drawing attention from the private sector as investment targets and consumer markets. This is a welcome result of globalization.
Another factor behind the increased emphasis on the role of the private sector
in development assistance is the deterioration of public finances in donor countries.
This is a salient concern in Japan, with its sizable and growing national debt. Restoring fiscal discipline is a key priority for the current administration. When Prime
Minister Shinzo Abe decided last November to postpone a scheduled tax hike inthe face of a sagging economy, he made a point of excluding the possibility of further postponement beyond April 2017, even if the economy remains weak. To
underline his administration’s commitment to cutting the deficit, he called a snap
general election in December 2014 to secure a renewed popular mandate for his
economic policy agenda.
Restoring fiscal discipline will be a difficult task in view of the many demands
for public funds. The aging of Japan’s population is causing an inexorable rise insocial welfare costs. Efforts to revitalize local economies rely heavily on revenue
sharing from the national government. Meanwhile, the success of Abenomics (thegovernment’s signature economic policy initiative) may depend on generous outlays for public works. In contrast to these types of government spending, whose
effects are readily visible to the public, the budget for ODA is a hard sell.
This is not just a Japanese concern. The difficulty of securing funding for public services in the face of severe budgetary constraints is evident throughout thedeveloped world. In Britain, public services have been overhauled and are being
provided not just by the national treasury but by tapping financial resources fromsociety as a whole, including the private sector, local communities, and the voluntary sector.
Japan is no longer in a position to hand out the fruits of rapid economic growth
to other countries in hopes of promoting its own national security. Instead it needs
However, it should be noted that a fair share of private flows are remittances, which, because they flow directly to individuals living in the developing countries, usually do notcontribute to societies as a whole.

259

CSR White Paper
to fulfill its responsibilities as a member of the international community throughinitiatives that will promote peace and stability around the world without draining
its own coffers.
However, this does not mean that Japan can stop increasing its ODA outlays.
National security and supporting global peace are primarily the responsibilities ofgovernment. Private funds should be seen as a powerful complimentary tool for
maximizing the impact of ODA, but not as a substitute.
Japan’s New Development Cooperation Charter
Many in Japan’s development community hope for the promotion of economic
inclusiveness and the cooperative combination of public and private funding. In
February 2015, the government set forth its current stance with a Cabinet decision
approving a new Development Cooperation Charter (replacing the ODA Charterfirst adopted in 1992 and last revised in 2003).3
The Cabinet decision referred to “development” as “encompass[ing] such activities as peacebuilding and governance, promotion of basic human rights andhumanitarian assistance,” and noted the importance of “securing the stable foundations of development such as peace, stability, rule of law, governance and democratization.” It referred to “inclusive development that leaves no one behind,” declaring, “It is important to ensure that a wide range of stakeholders in society,including women, participate in every phase of development.” It further noted,“The world is facing more diverse and complex challenges. These challenges are
increasingly widespread, transcending national borders as the world is increasingly
globalized. In a world faced with such difficult challenges, individual countries are
required more than ever to exercise ingenuity and take action.”
The decision also considered the role of nongovernmental actors: “In the present international community, various actors, including private companies, local
governments and non-governmental organizations (NGOs), play an increasingly
important role in addressing development challenges and supporting sustained
growth of developing countries. It is therefore important to mobilize a wider rangeof resources that are not limited to ODA. In this context, ODA, as the core of various activities that contribute to development, will serve as a catalyst for mobilizing
a wide range of resources.”
Other noteworthy features of the new charter are its explicit references to “in“Cabinet decision on the Development Cooperation Charter,” Ministry of Foreign Affairsof Japan, February 10, 2015, http://www.mofa.go.jp/files/000067701.pdf.

360

CSR White Paper
clusive, sustainable and resilient growth” as “essential for the stable growth of the
global economy as a whole,” and its explicit references to Japan’s national interests.
The charter concludes, “To secure its national interests, it is essential for Japan, asa ‘Proactive Contributor to Peace’ [and] based on the principle of international
cooperation, to work together with the international community, including developing countries, to address global challenges.”
Up to now, Japan’s ODA policies have addressed specific countries or issues.
The new charter introduces policies that target entire regions. As Tokyo Foundation research fellow Ippeita Nishida observed in a November 2014 review of apreliminary draft of the charter, the existing set of policies “did not match the actual situation in regions like Southeast Asia and Africa, where the emergence ofregional and quasi-regional institutions is coming to have an increasing political
impact.”4 Nishida also referred to “the need for measures to address cross-borderdevelopments such as large-scale natural disasters, infectious diseases, terrorism,
and piracy,” a need that forms the basis for the adoption of policies for wide-areaassistance.
The new charter notes, “Asia is a region that has a close relationship with Japanand high relevance to its security and prosperity,” and it declares that Japan will
extend development cooperation to the region on the basis of this recognition. The
charter continues: “Japan will support the establishment of the [ASEAN] Community as well as the comprehensive and sustained development of ASEAN as awhole.” It refers specifically to seven focus areas:
1) development of both physical and non-physical infrastructure;2) reduction of disparities within both the region and individual countries;3) strengthening assistance to the Mekong region;4) assistance in human resource development and other areas for countries thathave already achieved a certain level of economic growth to keep them frombeing caught in the ‘middle income trap’;5) strengthening of disaster risk reduction and disaster relief capabilities;
6) promotion of the rule of law, which constitutes the basis for stable economic
and social activities; and7) cooperation with ASEAN as a regional organization to support united efforts to tackle its challenges.
Ippeita Nishida, “‘Hatten kyoryoku taiko’ seifuanwo yomu–sono tokucho to kadai”(Reading Japan’s Development Cooperation Charter—Features and Themes), November
13, 2014, http://www.tkfd.or.jp/research/project/news.php?id=1370 (in Japanese).

461CSR White Paper
Promoting inclusiveness with a view to global security and to humanitarianconcerns involves efforts to address structural social issues that cross national borders. It is an undertaking that cannot be accomplished through assistance from asingle nation, even if private-sector funding sources and civil-sector organizations
work in cooperation with the government. While each donor nation has its own
philosophy of development assistance set forth in a charter or similar mission
statement, the most effective and resource-efficient approach is to cooperateby participating in multilateral undertakings like the United Nations Global
Compact and cross-sector initiatives led by organizations like the World Economic
Forum.
With respect to the ASEAN region, where we hear much talk of the importanceof policy cooperation in areas like maritime security and the rule of law, thelong-established alliance between Japan and the United States can make a major
contribution in the field of development assistance.
Asian Views of Japan and the United States
How are the people of other Asian countries likely to respond to Japan-US development cooperation?
A survey of seven ASEAN member countries (Indonesia, Malaysia, Myanmar,
Philippines, Singapore, Thailand, and Vietnam) commissioned in 2014 by
Japan’s Ministry of Foreign Affairs found that views of Japan were generally
positive. Asked to choose which of 11 countries (Australia, Britain, China,
France, Germany, India, Japan, New Zealand, Russia, South Korea, or the UnitedStates) they considered most reliable, 33 percent picked Japan, more than
twice the figure for the United States, which came in second at 16 percent.
Japan placed top by this measure in every one of the surveyed countries
except the Philippines and Singapore, where the United States was first and Japansecond. This suggests that the environment is good for Japan-US cooperation with
ASEAN.
In addition, 92 percent of the respondents from all seven countries affirmedthat Japan was playing an active role in the development of Asia, 89 percent believed that Japan’s economic and technological cooperation was helpful for theircountry’s development, and 95 percent indicated that they welcomed the expansionof Japanese companies into ASEAN. When respondents were asked to name theareas in which they wished for Japan to contribute to the ASEAN region, “economic and technological cooperation” came first (cited by 77 percent), followed by“trade promotion and private investment” (67 percent). This indicates that respon62

CSR White Paper
dents had expectations for the economic aspects of Japan’s international contribution.5
Regarding Asian views of the United States, the Pew Research Center’s 2014
Global Attitudes & Trends survey found that views of both the United States andJapan tended to be highly favorable in ASEAN countries. In countries where ratings of the US were not so high, such as Indonesia and Malaysia (59 percent and51 percent, respectively), Japan’s figures were higher (77 percent and 75 percent),
illustrating the potential for cooperation that takes advantage of each country’s
respective strengths.
According to the same survey, within ASEAN, Indonesians and Malaysians cite
the United States as the greatest threat (though Indonesians also say that the UnitedStates is their greatest ally, revealing the ambivalence of their feelings).6 However,in the MOFA survey cited above, Indonesians and Malaysians most often cited
Japan as the most important partner for ASEAN, with citizens of both countries
ranking it ahead of China and the United States by large margins.
In the light of these findings, it seems likely that Japan-US development cooperation can help improve views of the United States in countries with highly favorable views of Japan—and that in places where both are viewed favorably, suchcooperation should further enhance views of the United States and Japan as open
economies and democratic countries.
Japan-US complementarity should not be limited to public diplomacy; itshould also be tapped to address concrete social issues. Support packages shouldtake into account each country’s respective strengths and weaknesses, along withthe similarities and differences between them and the Asian countries they seek toassist.
In terms of government organization, Asian countries generally have centralized systems more similar to that of Japan than the federal system of the UnitedStates. They are also subject to similar types of natural disasters, notably earthquakes, typhoons, and tsunamis. As a result, they are likely to find it easier to use
Japan as a model for assigning disaster-related responsibilities to government organs. In the United States, by contrast, it is the corporate sector whose power andflexibility have stood out in cases like the response to Hurricane Katrina. The re“Opinion Poll on Japan in Seven ASEAN Countries,” Ministry of Foreign Affairs of Japan,
April 18, 2014, http://www.mofa.go.jp/press/release/press4e_000271.html. Full survey results available at http://www.mofa.go.jp/files/000036094.pdf.
6“Global Opposition to US Surveillance and Drones, but Limited Harm to America’s Image,” Pew Research Center, July 14, 2014, http://www.pewglobal.org/2014/07/14/globalopposition-to-u-s-surveillance-and-drones-but-limited-harm-to-americas-image/.
563

CSR White Paper
sources that the corporate sector has deployed have, in some cases, been on thescale of a small country’s annual GDP.
When it comes to helping Asian countries develop their national and local
government disaster-response systems, the Japanese government could take thelead, while the US business community could serve as the model for emergency
humanitarian aid and supply of resources. With respect to community rebuilding
and inclusive growth for post-disaster recovery, it would be ideal to draw on collaborative efforts by social innovators from both countries. This sort of cooperation was seen in many cases and worked to good effect in the response to Japan’sMarch 2011 earthquake and tsunami.
The Current Status of Japan-US Cooperation in Development Assistance
On February 10, 2015, the second Japan-US Development Dialogue was held inTokyo (the first was held in Washington in 2014). This senior-level dialogue waslaunched on the basis of an agreement reached during Vice President Joseph Biden’svisit to Japan in December 2013. The “Fact Sheet on United States-Japan Global
Cooperation”7 issued on that occasion referred to humanitarian assistance/disaster
relief and development assistance (particularly focused on Southeast Asia, the Pacific region, Africa, global health, the Millennium Development Goals, and empowering women) as critical areas of cooperation. The dialogue is being conductedbased on the view that “enhanced cooperation on development between the twocountries will widen the scope of the bilateral relations and contribute to constructing more multi-faceted and strengthened bilateral relations.”8The agenda shows a deliberate effort to incorporate the combined soft powerof the two countries into their development assistance policies. According to thejoint press release issued after the session, the two sides discussed “a broad range
of development priorities and challenges on issues such as global health including
the Ebola outbreak, women’s and girls’ empowerment, the Post-2015 Development
Agenda, disaster risk reduction, as well as opportunities for development assistancecooperation in Asia Pacific, Africa, and other regions.”9“Fact Sheet on United States-Japan Global Cooperation: Meeting Modern Challenges,”
The White House, December 3, 2013, https://www.whitehouse.gov/the-press-office/2013/12/03/fact-sheet-united-states-japan-global-cooperation-meeting-modern-challen.
8“Japan-United States of America Relations,” Ministry of Foreign Affairs of Japan, February 10, 2015, http://www.mofa.go.jp/ic/dapc/page3e_000150.html.
9“Joint Press Release: The Second Japan-US Development Dialogue,” Ministry of Foreign
Affairs, February 10, 2015, http://www.mofa.go.jp/press/release/press4e_000633.html.
764

CSR White Paper
By way of historical context, although Japan was a modern state even in the
period before World War II, its postwar economic growth was accompanied by its
development as a democracy and, over the seven decades since the end of the war,
it has become one of the world’s biggest economic powers without once engaging
in military conflict. For the United States, which supported Japan’s development
through the postwar occupation, Japan is a natural partner in supporting and advancing the development of Asia based on freedom and democracy.
Japan can serve as one model for developing countries seeking to free theirpeople from poverty. Japan’s development assistance was originally implemented
as a form of war reparations, but it is now in a position to draw on its experiencein using the fruits of economic growth to strengthen its own social capital as a tool
for assisting other countries’ development.
Three Requirements for Development Cooperation
As a practical matter, it will not be easy for Japan and the United States to collaborate on development assistance. Given the large number of actors involved, making plans, deciding on roles, and moving ahead in tandem toward shared goals may
prove quite difficult.
The idea that I would like to advance, however, is not the creation of an aid-giving club where everybody plays together but an increase in the options that actors
have to tap their particular strengths, to enhance networks linking specialized participants on both sides through collaboration in development, and to better meetthe needs of developing countries.
Social problems that hinder quality growth in developing countries are persistent because in most cases they are rooted in the norms, values, and culture of asociety. They are adaptive challenges for the society.10 To mobilize people to change
in the desired direction, broader social awareness is required, and the best way topromote the inclusion of many strata of society is through a cross-sector approach.
In his book Leadership on the Line, Ronald A. Heifetz of the Harvard Kennedy School
writes “. . . people have problems for which they do. . . have the necessary know-how andprocedures. We call these technical problems. But there is a whole host of problems that are
not amenable to authoritative expertise or standard operating procedures. They cannot be
solved by someone who provides answers from on high. We call these adaptive challenges
because they require experiments, new discoveries, and adjustments from numerous placesin the organization and community. Without learning new ways—changing values, attitudes, behaviors—people cannot make the adaptive leap necessary to thrive in the newenvironment. The sustainability of change depends on having the people with the problem
internalize the change itself.”
1065CSR White Paper
Promoting social reforms, in other words, is better pursued through open andmultifaceted efforts at various levels by various actors using various approaches,
while a “siloed” approach is liable to be wasteful.
To enable cross-sector development cooperation, at a minimum three requirements need to be met.
1. Actors must share a common “theory of change” for creating collective impact;
2. M
 odality of public-interest funding versus for-profit funding;
3. There must be leaders capable of setting clear roles and responsibilities forthe various actors and projects.
I will discuss these requirements in the following sections.
The Importance of “Collective Impact”
In seeking to marshal the power of multiple actors to achieve a common goal, it
may be helpful to refer to the concept of “collective impact” presented by John
Kania and Mark Kramer in an article under that title in the Stanford Social Innovation Review.11 As the authors note, “Social problems arise from the interplay of
governmental and commercial activities, not only from the behavior of social sector organizations. As a result, complex problems can be solved only by cross-sector
coalitions that engage those outside the nonprofit sector.
Kania and Kramer identify five conditions for the achievement of collective
impact, as outlined below.12
1. Common Agenda: All participants have a shared vision for change including
a common understanding of the problems and a joint approach to solving it
through agreed upon actions.
2. Shared Measurement: Collecting data and measuring results consistently
across all participants ensures efforts remain aligned and participants holdeach other accountable.
3. Mutually Reinforcing Activities: Participants’ activities must be differentiatedwhile still being coordinated through a mutually reinforcing plan of action.
John Kania and Mark Kramer, “Collective Impact,” Stanford Social Innovation Review
9, no. 1 (2011): 36-41, http://www.ssireview.org/articles/entry/collective_impact.
12
Kania and Kramer.
11

66

CSR White Paper
4. Continuous Communication: Consistent and open communication is needed
across the many players to build trust, assure mutual objectives, and createcommon motivation.
5. Backbone Support: Creating and managing collective impact requires a separate organization(s) with staff and a specific set of skills to serve as the
backbone for the entire initiative and coordinate participating organizations
and agencies.
Among these, the key determinant of success lies in whether prospective partners can establish a solid backbone of support. To create collective impact, thebackbone organization has to provide leadership in areas like good governance,
strategic planning, community involvement, and evaluation and improvement. A
variety of organizations, including funders, non-governmental organizations(NGOs), government bodies, and steering committees, are able to accomplish thesetasks. Each has its pros and cons; the important issue is whether the backbone
institution can exercise “adaptive leadership: the ability to mobilize people without
imposing a predetermined agenda or taking credit for success,” and secure longterm funding that will support resilient results through gradual improvements overtime.
Among prospective Japanese aid providers, the Japan International Cooperation Agency (JICA), Japanese grant foundations, and corporate CSR activity organizers are well-qualified to serve as backbone organizations. However, because of
the long practice of isolated-impact approaches, where funders seek the mostpromising solution individually and evaluation and reporting systems are often
designed to isolate a particular organization’s impact, it will be very hard for anyof them to catalyze connections for collective impact initiatives.
In the Japanese aid community, there have already been numerous initiatives
between JICA and international institutions, international NGOs, civil society
groups, small- and medium-sized enterprises, BOP initiatives, and foreign private-sector bodies. Many experts involved with these initiatives have expressed
concerns about the increased “transaction costs” of such initiatives.
Two major bottlenecks can be seen here. First, each player has its own mandate
and accountability to pursue with its limited human and capital resources. Hence,
it is often much more cost- and time-effective for an organization to work separately according to its own “theory of change.”
A theory of change provides a divided, layered set of goals toward the ultimate
solution of social issues. For example, in the case of hunger, three stages are set:
shifts in community capacity and conditions; community impact; and formation of67

CSR White Paper
country-led strategies. In each stage, there are subsets of goals relating to the causesof poverty, income generation, gender and human rights, health and nutrition,
education and literacy, and so on.13
One would hope to see a common theory of change for the united impact ofpartners. In a collective impact approach, however, backbone organizations must
understand that each partner—government agencies, grant foundations, and otherpossible partners—has its own theory of change, but these does not preclude cooperation. While these partners all “have unique priorities… [they] increasingly
work together to align their investments.”
In the paper “The Role of Grantmakers in Collective Impact,” Lori Bartczak
points out the need for “network officers,” who spend time in-country learning
about places, ongoing good work, and potential partners.14 In a collective impact
approach, grantmakers or funders must function alongside other actors, rather
than solely acting according to their own theory of change.
There are some examples of best practices that can be found in past cases ofcross-sector collaboration. The KokoPlus project in Ghana was led by the Japanesefood company Ajinomoto Group. In 2009, the CSR division of the company started
to play a role as a backbone organization of an effort to improve the infant mortality rate through their food business. Ajinomoto had a strong incentive to commit
to this project because it was started in order to commemorate the company’s
centenary anniversary and nutritious food promotion matched their corporate mission of improving people’s dietary lives.
Koko, a traditional Ghanaian porridge for infants made from fermented corn,lacks some important nutritional elements when measured against World HealthOrganization (WHO) standards. Ajinomoto decided to develop a supplement forthe porridge, called KokoPlus, developed jointly with the University of Ghana andthe International Nutrition Foundation (an NGO). This eventually led to the formation of a league of 11 organizations including JICA, USAID, Care International,
Ghana Health Service, and a local social marketer.15
In another good example of the collective impact approach, the Nippon Foundation, one of Japan’s largest grantmaking organizations, has been acting as a
“The Hunger Project: Global Theory of Change,” April 7, 2011, http://www.theoryofchange.org/wp-content/uploads/toco_library/pdf/HungerProjectTheoryofChangeGlobal.
pdf.
14
Lori Bartczak, “The Role of Grantmakers in Collective Impact,” Stanford Social Innovation Review, 8–10.
15“The Ghana Nutrition Improvement Project,” Ajinomoto Group, 2013, http://www.
ajinomoto.com/en/activity/csr/ghana/index.html.
1368

CSR White Paper
backbone organization to eliminate leprosy worldwide for about 35 years inpartnership with the WHO, national and local governments, and health institutions. By bringing these actors together to generate collective impact on an ongoingbasis, the initiative has reached the point where eradication is only one country
away.16
Meanwhile, the Melinda and Bill Gates Foundation has undertaken a numberof breakthrough initiatives for global heath, one of which is a partnership with
JICA to eradicate polio in Pakistan. According to an estimate from the Global Polio Eradication Initiative, JICA provided about 5 billion yen in loans to the government of Pakistan from 2011 to 2013. The government worked closely with theWHO, UNICEF, and Rotary International to immunize children against polio
through oral vaccination. When Pakistan met the milestone of their 2011 National
Emergency Plan for Polio Eradication successfully, the Gates Foundation decided
to repay the cost of the program to JICA on behalf of the Pakistani government,
declaring, “The aim of this mechanism is to support the government of Pakistan’scommitment to polio eradication without imposing a financial burden.” It hopes toapply the same mechanism to other similar health initiatives. Bill Gates has a strong
commitment to making the foundation a backbone organization for global healthpromotion. This “pay for success” approach was created on a top-down basis
through almost two years of coordination with JICA. Grant foundations may havesome advantages in making a long-term commitment to forming and sustaining a
coalition backed by strong expertise and plentiful resources, but in both leprosy
and polio eradication the real key to success was the application of collective impact to their initiatives.
For various players in both the public and private sectors to join a collective
impact initiative, a backbone organization has to find the best equilibrium point
for each player (that is the point where the benefits of participation outweigh theassociated transaction costs). In cases such as those described above involving
Ajinomoto and the Nippon Foundation, these groups had strong organizational
incentives to commit as backbone organizations; public organizations require
strong top-down policy mandates in order to commit to cooperation in the face ofhigh transaction costs.
Technical challenges are another bottleneck that raises transaction costs for
public funding. For non-governmental and private partners, coordination with Japanese public funding sources can be time-consuming. Some prospective partners,“Elimination of Leprosy,” The Nippon Foundation, http://www.nippon-foundation.or.jp/
en/what/projects/leprosy/.

16

69

CSR White Paper
especially foreign practitioners, give up on the idea of utilizing them in the face ofcomplicated documentation procedures and bureaucratic supervision, which, fromthe standpoint of public officials, is mandated by taxpayers.
Although “siloed governmental structures and processes are counterproductive,” according to Thaddeus Ferber and Erin White, public sector accountability
to taxpayers can in some cases “allow and incentivize partnerships to create
each of the five conditions necessary to achieve collective impact.” 17 There are
moves to make government more collective-work-friendly, such as the WhiteHouse Office of Management and Budget’s reporting requirement reform: “Theynow allow private organizations that receive money from more than one agency
to consolidate their report.”18 In Japan, JICA and other governmental agencies
could serve as catalysts for more private-public partnerships. But here too, it will
be necessary to increase flexibility and streamline the many rules and reporting
requirements that currently exist. In order for the two countries to cooperate
in development assistance, it will be essential for them to harmonize the requirements their governments impose for this sort of partnership by displaying greater
flexibility.
To tap more private money and expertise for social change, public and non-governmental organizations funding social change will have to nurture adaptive leadership to catalyze connections among prospective partners, which is discussed later.
The Issue of Funding
Concerning the issue of funding to make collective impact possible, Kania andKramer observe:[Funders] must be willing to let grantees steer the work and have the patienceto stay with an initiative for years, recognizing that social change can comefrom the gradual improvement of an entire system over time, not just from asingle breakthrough by an individual organization. This requires a fundamental
change in how funders see their role, from funding organizations to leading along-term process of social change. It is no longer enough to fund an innovative
solution created by a single nonprofit or to build that organization’s capacity.
Instead, funders must help create and sustain the collective processes, measureThaddeus Ferber and Erin White, “Making Public Policy Collective Impact Friendly,”
Stanford Social Innovation Review, 22–23.
18
Ferber and White.
1770

CSR White Paper
ment reporting systems, and community leadership that enable cross-sector
coalitions to arise and thrive.19
This thinking matches the concept of “patient capital” advocated by Acumen,a non-profit global venture fund.
How patient must private sector social investment be? In a time of fiscal retrenchment for many advanced countries’ governments, hopes are that social investment will take up some of the slack in outlays for social projects. In Britain,
Prime Minister David Cameron has been promoting public-private partnerships(PPPs) and private finance initiatives (PFIs), using the slogan “Small Government,
Big Society.” Britain’s PFIs have their roots in the privatization drive undertaken byformer Prime Minister Margaret Thatcher. Her Japanese counterpart, former Prime
Minister Yasuhiro Nakasone took similar moves, privatizing Japan’s national railways and Nippon Telegraph and Telephone. However, spending by the Japanese
government has continued to swell in the 21st century and there seems to be noconsensus on the level of return to be expected from social investment.
Meanwhile, philanthropic funds and CSR outlays serve as sources of social
enterprises regardless of their position on the ecosystem risk axis. This categorization makes it possible to establish a certain degree of order in framing the timing
and roles of different types of support—government funds, CSR outlays, socially
responsible investment (SRI), and others—in keeping with their source’s respective
objectives. This sort of funding “traffic control” may also facilitate the formulationof strategies for achieving collective impact.
However, in order to achieve sustainable, quality growth, it will ultimately benecessary to bring social enterprises into commercial markets. If social problems
are resolved and people’s incomes increase, this will lead to the growth of newmarkets for the corporations involved in collective impact initiatives. Hence, even
if CSR activities are used for impact investment, they should also be undertakenwith an eye to future business potential.
One good example is seen in the efforts of the American firm Proctor & Gamble (P&G), which noted the future potential of the Asian market in the 1980s andstarted distributing sanitary napkins to female students in rural villages and elsewhere. The company also provided maternity education on a philanthropic basis
to them as they matured. These female students have since grown up and become
mothers, and their entire families are now the target for P&G’s daily-use products.
This company’s success was based on the congruence between its CSR activities
19

Kania and Kramer.
71

CSR White Paperand its business strategy, and it has given it a strong lead over its Japanese competitors, which did not recognize the region’s potential until after the turn of the century.20
Another example is Japan’s Benesse, a company in the education business,
which in May 2013 established the Benesse Social Investment Fund with an investment quota of $15 million and a mandate to promote the spread of education indeveloping and low-income countries. The impact investment activities of this fundreportedly include investment in an Indian ICT educational enterprise. What madeBenesse look overseas was the decline in Japan’s population. Facing the continued
shrinking of its domestic market, the company decided that the way for it to keep
growing was by tapping the future potential of emerging countries with growing
populations and rising middle classes. It has undertaken a marketing innovation ofsorts: instead of moving to extend its own operations directly to emerging countries by matching its educational products to their particular needs, it is seeking toacquire know-how by working together with local education-related social enterprises and NGOs through this fund.
In Japan, meanwhile, non-cash-based small-scale financing has picked up in
response to the March 2011 Great East Japan Earthquake. One interesting example is the Securité Disaster Region Support Funds initiative launched in 2011 byMusic Securities, a Japanese crowdfunding firm. The firm establishes funds fornarrowly targeted recovery projects, soliciting participation in units of 10,800 yen(roughly $90). Half of the money is treated as a donation and the remaining half
as an investment. One of the funds was targeted at Yagisawa Shoten, a 200-yearold soy sauce maker in Rikuzentakata, a city devastated by the post-quake tsunami.
Yagisawa Shoten’s factory and storehouse were destroyed, but traces of the precious cultures used in making the company’s soy sauce were found in some of thebroken barrels left behind by the receding waters, and the company’s ninth-generation CEO was determined to rebuild. A sum of 150 million yen (about $1.3 million) was raised from 4,250 investors, and about four years after the disaster thecompany was able to resume production and sales. The scheme was distinctive inthat it drew on the patience of investors and shared the returns with them in an
unorthodox manner—not with stocks or cash dividends, but with bottles of thecompany’s newly brewed soy sauce. Similar financing initiatives have provided
funds to support many specific projects in the quake-struck region.

Kazuki Moribe, “P&G kara Manabu Ajia no Chaneru Kouchiku,” Nikkei, November 17,
2014, http://business.nikkeibp.co.jp/article/opinion/20141113/273799/?P=1.
20

72

CSR White Paper
Developing Leaders: Capacity Building for Development Cooperation
The next issue for development cooperation is to develop leaders capable of turning an assemblage of actors with disparate talents and strengths into a coherent
body for the promotion of social change. The United States is advanced in thisrespect as colleges and graduate schools offer many courses to train such leaders,
and the qualities required for leadership in social innovation are a subject of lively
discussion.
Jeffrey Kushner, a partner at Social Venture Partners Boston who became involved in venture philanthropy after 20 years of experience at hedge funds andother financial services firms, identifies the qualities required of grantees as sustainability, relevance, and leadership, noting that they must be “addressing a criticalneed in a novel and effective manner” and need to have a “credible, effective, andcoachable leader.”21
Meanwhile, Ashoka, Acumen, and other social innovators addressing issues indeveloping countries cite qualities such as empathy, resilience, and commitment askeys traits of the leaders they seek. They provide intensive training in the UnitedStates before sending these leaders to work on social projects in developing countries.
Since 2009 the Tokyo Foundation has been sending Japanese to participate in
the Acumen Global Fellows Program in the United States to receive leadershiptraining in both technical skills and skills relating to adaptability and self-reform.
The areas covered include: (1) commitment to dealing with social issues; (2) tolerance toward others and teamwork; (3) basic knowledge of marketing and corporate finance; and (4) the ability to communicate precise, detailed content in English.
For example, workshops held in rural Massachusetts and disadvantaged neighborhoods in New York City focus on such topics as adaptive leadership, storytelling,and empathy building. The program also includes liberal arts content, such as
readings from Eastern and Western philosophers. The training aims to foster values
such as generosity, accountability, humility, audacity, and integrity. Participants
then go on to spend eight months in a developing country working at social ventures, where they gain experience in management for stability and scaling up of
operations. There they soon realize how difficult it is to be empathetic with local
people and the importance of social leadership education.
The focus in the United States is on creating superior leadership development
Session on “Building Momentum: How to achieve scale, sustainability and social impact,” Social Enterprise Conference 2015.
2173

CSR White Paper
programs that bring together diverse participants in small groups to learn andgrow in friendly competition. The ten Acumen fellows each year come from every
continent, and their backgrounds are reflected in their leadership styles. Japaneseparticipants are accustomed to having their abilities assessed with paper tests, butleadership training of this sort is something they often find more challenging. Evenso, in every one of the past five years a Japanese woman has been among the ten
people selected to participate in this program out of a field of about 1,000 applicants from around the world. These women have gone on to work in various capacities in developing countries: leading the scaling-up of a private-sector ambulance service in India; joining with local farmers in a drive to increase rice yields in
Ghana; and putting the management of a microfinance enterprise in Nigeria on asolid footing.
Japanese leaders generally get good marks for working from morning to night
together with local staff members, for their egalitarian attitude, and for their diligence in arranging for the wheels to keep turning smoothly after their departure.
This “Japanese-style” leadership has been noted frequently in JICA assistance projects in Asia. It is generally based on long-term “participatory observation” of therecipient countries. Some observers suggest that this approach has its roots in Japan’s own experience as an aid recipient after World War II: the amount of aid washuge, but the results were mixed, and the social memory of this experience may inpart explain why Japanese aid workers take time for observation and focus on
working together with recipients. This sort of leadership can function effectively
when Japan and the United States jointly provide social innovation services to local
communities in Asia.
The women who have returned to Japan after completing their training overseas, having acquired precious leadership skills in the process, have, without exception, been unable to find positions in Japan where they can put their experienceand skills to full use. In almost every case they have ended up returning to developing countries and resuming social enterprise work. Japanese society has experienced brain drain by being unable to add the know-how of these leaders to its storeof capabilities. The story is much the same for those who serve in JICA’s Japan
Overseas Cooperation Volunteers (JOCV) program.
A major factor behind this phenomenon is the lack of occupational mobility
among the government, business, and civil sectors in Japan—mobility that would
allow people to take the experience they have gained in one sector and apply it inanother. When young Japanese graduate from college or complete their graduate
studies, the standard next step is for them to join a business or other organization.
Job hopping is frowned on, and taking on more than one job at a time is strongly
74

CSR White Paper
discouraged. Even today, the ideal is to serve a single master faithfully—to join an
organization and stay with it—for one’s entire career. Consequently, the skills thatpeople acquire over the years tend to be specific to the organization they work for,and opportunities to achieve diverse capabilities are limited to members of top
management. This applies to organizations of every type: business corporations,
government agencies, and NGOs. The members of these sectors work in their respective worlds with their respective strengths, and there are few mechanisms tocreate a pool of human resources capable of leading cross-sector innovation.
Moves are afoot though to allow people to hold on to their employment status
while accumulating outside experience within Japan or abroad, and to then use
their new perspectives in promoting corporate and social reforms. One example is
JICA’s Private-Sector Partnership Volunteer System, which helps companies develop human resources for their international business development and serves asa framework for support of local enterprises.
In Western countries, meanwhile, frameworks like Global Pro Bono and International Corporate Volunteers have spread. These allow employees of global corporations and other firms to spend time as volunteers in developing countries,
where they apply their professional skills and leadership abilities to addressing
social issues.22 For global corporations that see the world as their market, personnel
who can exert leadership with empathy are key resources for business development. Moreover, the experiences of volunteers in developing countries are said tohelp them serve as catalysts for innovation in their own organizations. Theseframeworks are also beginning to spread to Japan. At present, there is a social
enterprise in Japan that is partnering with a group in the United States that acts as
an intermediary for frameworks like Global Pro Bono in order to arrange for employees of Japanese companies to take part.
If Japanese ODA is to serve as a catalyst for mobilizing a wide range of resources, we should focus first on capacity building through the development of
human resources capable of leading the development and implementation of initiatives in a manner that avoids increasing transaction costs. This should also promote the domestic and international mobility of Japanese personnel in the field of
economic development, who have up to now been concentrated solely within JICA.
A good starting point for building the number of collective impact innovators
in both Japan and the United States would be the establishment of joint adaptive
Alice Korngold, “International Corporate Volunteering: Profitable for Multinational
Corporations,” Huffington Post, March 7, 2014, http://www.huffingtonpost.com/
alice-korngold/international-corporate-volunteering_b_4920088.html.

2275

CSR White Paper
leadership training programs between similar organizations, such as USAID and
JICA, Keidanren and the Conference Board, and Japanese Government Pension
Investment Fund and CalPERS, which could then be expanded into cross-sector
trainings.
Conclusion
I have considered the prospects for Japan-US development cooperation in Asia andsome of the issues that will need to be addressed to make it succeed. Japan and theUnited States have different types of soft power, and the strengths and weaknessesof the two countries’ government, business, and civil sectors also differ. Pullingthese disparate elements together in a partnership to promote inclusive growth in
the region will not be a simple undertaking. If we hope to achieve this, the mosturgent task at hand is developing the human resources capable of leading the process.
Through joint cross-sector efforts by Japan and the United States in the field ofsocial innovation, we will be able to enhance inclusive growth in developing Asian
economies, create a new format for Japan-US cooperation in pursuit of collective
impact, and deploy this cooperation as a form of shared “soft power” in Asia. We
will need to examine the strengths and limitations of various actors in both countries—including aid institutions, companies, the civil sector, social enterprises, andsocial investors—and match their strengths and weaknesses appropriately. Where
do we start? By putting together concrete projects for collective impact and fostering leaders capable of advancing such cross-sector endeavors—people who have
empathy, respect diversity, and are able to exert adaptive leadership.

76

CSR White Paper

Japan-US Efforts in Girls Education Can Serve as Basis for
Cross-Sector Collaboration
On March 19, 2015, US first lady Michelle Obama and her Japanese counterpart Akie Abe announced a pledge “to strengthen bilateral cooperation in
helping girls around the world
receive an education, especiallyin developing countries.” The
US government will spend $250
million supporting girls’ education in the 2015-16 budget and
the Japanese government will
outlay $350 million or more
under its Official Development
Assistance (ODA) program
during the next three years. Ac- First Lady Michelle Obama, is joined by Akie Abe, theFirst Lady of Japan, and Ambassador Caroline Kennedy
cording to the Japan Times, during a discussion with students following the “Let
“Under the partnership, the Ja- Girls Learn” announcement held at the Iikura Guest
House in Tokyo, Japan on March 19, 2015. Source: Offipan International Cooperation cial White House Photo by Amanda Lucidon, U.S. GovAgency… and the US Peace ernment Work.
Corps, both sending volunteers
abroad, will formalize cooperation and ‘focus in particular on advancing
girls’ education through cooperation on the ground in countries around theworld.’”23
This effort represents a promising starting point for cross-sector cooperation among US and Japanese aid agencies, companies, civil sectors, andlocal social entrepreneurs to create a “Collective Impact” on girls’ educationin Asia. Moreover, this model could serve as a framework for additional
Japanese-US development collaboration utilizing cross-sectoral expertise inways that benefit both countries.

Masaaki Kameda, “Michelle Obama, Akie Abe pledge bilateral effort for girls’
education,” Japan Times, March 19, 2015, http://www.japantimes.co.jp/news/2015/03/19/national/politics-diplomacy/michelle-obama-akie-abe-pledge-bilateral-effort-girls-education/#.VRK87fnF9yw.
2377

CSR White Paper
Both the US government and Japanese government have policy incentives for improving girls’ education; the United States has already started the“Let Girls Learn” initiative under Michelle Obama, and women’s empowerment is one of the key policies that Prime Minister Abe promotes. Women’s
empowerment is high on the agenda and the Asia-Pacific is the priority region for the Japan-US Development Cooperation Dialogue. Japan’s new Development Cooperation Charter aims “to mobilize a wider range of resources… ODA… will serve as a catalyst for mobilizing a wide range ofresources.”
There are several rationales for supporting girls’ education. First, girls’
education will be a powerful drive in the push for inclusive growth in developing countries in Asia. But women’s issues are deeply rooted in the norms,
values, and culture of a society. For a society to adapt and change, broadersocial awareness is required, and the best way to boost the awareness of themany different strata of society is through a cross-sector approach.
Second, over 60 percent of Japanese corporate affiliates are located in
Asia and hope to include lower- and middle-income populations in theirvalue chain. Some educational companies have even established a social investment fund for education in Asia. As the supply-chain extends, Japanese
corporations will have to raise their awareness as responsible corporate citizens in developing countries.
Third, Japan has been developing women’s education for hundreds ofyears, even when social norms did not allow girls to learn with support from
Western girls schools. This is evident in Japan’s many schools for girls’ andwomen’s middle- and higher-education. In addition, increasing numbers ofyoung Japanese professionals are entering the field of social innovation. This
may provide an avenue for Japan’s commitment to mobilize younger generations in traditional Asian societies.
Fourth, USAID and the Japan International Cooperation Agency (JICA)
desire cross-sector cooperation not because it is a top-down policy but because broader participation from the United States, Japan, and recipient
countries, will allow USAID and JICA to obtain further support from taxpayers, as well as people in the developing countries. Finally, Japan-US cooperation on social issues may create a new form of shared “soft power” inAsia.
Transaction costs of partnering may be justified using the rationale

78

CSR White Paper
above, however, there are some bottlenecks, such as how to create backbone
organizations. One possibility is to use the 1.5 track framework, like theTomodachi Initiative, by establishing one common campaign identity andcreating a backbone organization under its name. A philanthropic foundation which has expertise in collaborative work, development in Asia, or education for the poor is desirable.
The backbone organization needs a professional with multi-sector experience to play the role of a “transmission gear” in the middle of different
actors with different stakes. Under this director, the backbone organization
would need a fund manager to assemble public and private funding anddonations. Private funds should be raised in such forms as social investment,
cloud/group funding, or CSR outlays (including in-kind donations such as
educational/daily materials and tools). After the March 2011 earthquake,
information technology-based social finance gradually expanded and now
represents a useful tool, especially among younger Japanese. Corporations
which seek new markets in Asia, too, have to share fair “membership” fees
so that they will be able to collect data and information through the collaborative work.
To empower this public-private partnership, aid experts from governments and international institutions, as well as local professionals with social
enterprises operating in Asian countries, will play core roles in proposing a“theory of change” for cross-sector initiatives with clear benchmarks andexit strategies. Some technical improvements will also be required to decrease transaction costs, such as standardizing reporting formats.
USAID and JICA has long accumulated expertise with overseas volunteers. Involving the business community will give younger generations theopportunity to train leaders, which is the best way to invest in people. Under
the new charter, the Japanese government is encouraging use of ODA money
as a catalyst, so this sort of arrangement would be well-advised.

This paper was originally part of the 2015 Strategic Japan Working Papers, published by the Center for Strategic and International Studies, Washington, DC. It isreprinted here with the permission of the Japan Chair, CSIS, in slightly abridged
form.

79

CSR White Paper
March 12, 2015

Integrating CSR into Strategic Management
A Practitioner’s Perspective
Koichi Kaneda

How extensively have Japanese companies integrated CSR into corporate management?
Koichi Kaneda, senior director for CSR at Takeda Pharmaceutical, examines the evolutionof CSR in Japan as it relates to three key categories of corporate social responsibility: theprovision of goods and services, enhancement of business-process integrity, and corporate
philanthropy.
*

*

*

P

inning down the meaning and substance of “corporate social responsibility”
is no easy task. Expectations vary from one locale to another and evolve
over time. Indeed, even at any given time and place, society (the object ofsocial responsibility) is apt to interpret CSR differently from businesses (the practitioners). Companies may modify their CSR programs and policies as they become
cognizant of these discrepancies, but by the time the changes go into effect, society’s
concept of CSR is likely to have evolved further. Closing the gap is an ongoingchallenge—which helps explain why CSR has been described as an “endless journey.” Still, striving continuously to meet that challenge is an important key togaining a “ticket to operate” over the long term. Moreover, by further integrating
CSR policy into strategic management, companies can enhance their sustainability.
In the following, I survey the process by which Japanese companies have integrated CSR into corporate management, drawing from my own experience as a
CSR officer at Takeda Pharmaceutical and other private companies. I examine thisprocess as it pertains to the three key categories of corporate social responsibility—
the provision of goods and services, enhancement of business-process integrity, andcorporate philanthropy (referred to as “corporate citizenship activities” at

Koichi Kaneda   Senior Director of CSR, Corporate Communications Department,
Takeda Pharmaceutical Co.
80

CSR White Paper
Takeda)—as well as to the disclosure and reporting of CSR information (see Figure1). In this way, I hope to provide a broad overview of the evolution of CSR in Japan
from 1999 to the present.
Figure 1. Relationship between CSR and Sustainability at Takeda

Provision of Goods and Services
The business community takes the position that the provision of goods and services(the first category of CSR) is a social responsibility unique to the private sector, a
responsibility that neither the government nor the nonprofit sector can perform.
As the business community sees it, the pursuit of core business activities in itself
fulfills an important responsibility to society, most especially to clients and consumers, who are among the diverse stakeholder groups that make up society. Some inthe civil sector take issue with this view, questioning the logic of equating day-today business operations with social responsibility and dismissing it as a way ofjustifying profit-driven behavior. Here the gap between the two sectors’ concept of
responsibility appears in sharp relief.
Regardless of one’s position on this issue, there is no doubt that the provisionof goods and services lies at the very heart of business activity. Since this is the case,one might argue that there is no need to discuss its integration into strategic management, since it is an integral part of strategic management to start with.
But one important way in which Japanese companies have integrated CSR into
strategic management in recent years is by exploring ways of enhancing the social
value of their commercial goods and services. This trend has received a major pushfrom the “creating shared value” (CSV) movement pioneered by Harvard University Professors Michael Porter and Mark Kramer. Porter and Kramer have madethe case that corporations can simultaneously create business value and social
81

CSR White Paper
value by treating social challenges as latent market needs that present business
opportunities. I think, however, that profit-making activity must have a positivesocial impact—that is, make a significant contribution to the mitigation of somesocial problem—in order to qualify as CSV.
In 2012 and 2013, I attended a number of major international CSR conferences, including events sponsored by the United Nations Global Compact, BSR(Business for Social Responsibility), CSR Europe, and CSR Asia, with the aim ofidentifying material issues pertaining to social responsibility (Figure 2). The key
message of all these conferences was the growing expectation that the businesssector—with its ideas, technology, and capital—use these resources to exert a positive impact on society.
Figure 2. International CSR Conferences, 2012–13
June 2012

UN Conference on Sustainable Development (Rio+20): Rio de Janeiro

November 2012

CSR Europe Enterprise 2010 Summit: Brussels

May 2013

Global Shared Value Leadership Summit: Boston

September 2013

CSR Asia Summit: Bangkok

September 2013

UN Global Compact Leaders Summit: New York

November 2013

BSR Conference 2013: San Francisco

Business-Process Integrity
Whatever the positive social impact of a company’s commercial goods and services,
however, it counts for little if the company imposes new burdens and generates newsocial problems in the process of supplying them. The second category of CSR is
the maintenance and enhancement of business-process integrity with an emphasison corporate ethics and compliance with laws and standards, which constitute theheart and soul of CSR.
In 1999, UN Secretary General Kofi Annan, speaking at the World Economic
Forum in Davos, called attention to the negative externalities of global businessactivity with respect to human rights and the environment. This marked a turning
point, as global corporations, Japanese companies included, gradually realized that
ethical business practices, particularly as they pertain to human rights and the environment, are integral to any effective strategy for managing risk and maintaining
long-term corporate value. The trend quickly gathered momentum after 2003—of82

CSR White Paper
ten referred to in Japan as “year one of the CSR era”—with the establishment ofvarious groups devoted to CSR and the development of global sustainability guidelines and standards.
With the recent spread of social media, expectations for business-process transparency have risen, and society’s concept of CSR has expanded dramatically inscope. Corporations have come under pressure to conduct their own value-chain
analyses to measure the impact of their businesses on human rights, the environment, and other parameters and to draw up measures to prevent, correct, or counteract negative externalities. At the same time, it is fast becoming the norm to holdglobal corporations responsible not only for their own behavior but also for thatof their external supply chains—that is, independent business entities that provide
them with raw materials and parts and business partners that produce, distribute,or sell their products under contract. Lax oversight of the supply chain has costsome global corporations billions of dollars as a consequence of boycotts, strikes,
and lawsuits. Such developments have accelerated the trend toward integrating
business-process integrity into strategic management as a means of maintaining(that is, averting the loss of) corporate value (Figure 3).
Figure 3. Promotion of CSR Activities across the Entire Value Chain

Corporate Philanthropy
The third key area of CSR policy is corporate philanthropy, which includes direct
corporate donations to charitable and social causes, programs to encourage employee volunteerism, and philanthropic activities by corporate foundations.
The face of Japanese corporate philanthropy has changed significantly in thepast 15 years. In 1999, the typical Japanese corporation spent a negligible portion83

CSR White Paperof its budget on such activities, and few made any active effort to target their programs to the specific needs of the community. Outside of Japan, the bulk of corporate giving was channeled into UN agencies. Within Japan, the main beneficiaries
were organizations with close government ties. While some corporations communicated their contributions to the public as an integral aspect of brand management, others chose the path of “doing good by stealth.” At many companies, corporate executives and officers in charge of corporate philanthropy were reluctant
to sully the “purity” of their charitable programs by treating them as an aspect ofbusiness strategy. There was still considerable debate over such questions as the
propriety of seeking recognition or reward for charitable giving, the incongruity of
having company programs to “encourage” volunteerism, and the pluses and minuses of maintaining separate corporate foundations. In short, the degree to which
management integrated philanthropy into business strategy varied substantiallyfrom one company to the next.
Since then, however, due to pressure from shareholders and investors, more andmore Japanese companies have accepted the need to explain the necessity of corporate philanthropy with a view to creating corporate value and, of course, social
value as well. In recent years many companies have begun grappling with such
topics as criteria for priority setting (for efficient operation of program and brandbuilding), partnerships with nongovernmental and nonprofit organizations (with aview to gaining a fuller understanding of social issues and boosting the impact ofcorporate initiatives), the value of employee involvement in community affairs(from such standpoints as diversity training and employee satisfaction), and corporate philanthropy as a marketing tool (for enhancing corporate image and namerecognition and cultivating future customers). In these ways, corporate philanthropy is increasingly becoming a key consideration in business management.
The latest trend on this front may be a new emphasis on program evaluation.
Not content merely to pursue philanthropic activities, some companies have undertaken to assess the value of their programs through such methods as input-output-outcome-impact analysis, used to evaluate administrative performance andofficial development assistance (Table 1), and social return on investment, whichtranslates social benefit into monetary terms.
Another development that has attracted attention in Japan is the advent of financing schemes using “social impact bonds.” SIBs are issued to raise funds fromprivate investors to support social projects that NPOs or other groups carry out inplace of government agencies, and the government promises to pay returns commensurate with program efficiency and social outcomes. Britain has pioneered theuse of SIBs in a program aimed at reducing prisoner recidivism. Now some Japa84

CSR White Paper
Table 1. Progress on the Takeda-Plan Healthcare Access Program (July 2009–
June 2012)

nese companies are looking at the possibility of contributing to society via the SIB
mechanism, not in expectation of financial gain but as a way to enhance the impactof their corporate philanthropy.
CSR Reporting
Three major milestones in the development of CSR reporting came with the successive release of the Global Reporting Initiative Sustainability Reporting Guidelines (2000), the ISO 26000 international CSR standard (2010), and the International Integrated Reporting Framework (2013).
Among Japanese companies, the appearance of the GRI Guidelines in 2000
provided the impetus for a gradual shift from the publication of separate reports
in areas like the environment and philanthropy to comprehensive CSR disclosureand reporting. In terms of content, the sheer number and variety of indicators in
the guidelines galvanized Japanese companies, stimulating fresh approaches to CSR
and sustainability reporting.
While ISO 26000, issued by the International Organization for Standardization, established guidelines for the implementation of CSR activities, it has also had
85

CSR White Papera major impact on CSR reporting. The standard’s seven “core subjects” of social
responsibility—organization, human rights, labor practices, the environment, fair
operating practices, consumer issues, and community involvement and development—have already begun to appear as the headings of full-page sections in Japanese CSR reports. This has created the physical framework for material disclosure,particularly noticeable in the field of human rights, an area on which many Japanese companies have been reluctant to report. In this way ISO 26000 has encouraged more detailed disclosure regarding the human-rights impact of corporate activity on various stakeholder groups, including employees, consumers, and local
community members.
The International Integrated Reporting Framework, drawn up by the International Integrated Reporting Council, was conceived from the start as a means ofpromoting the integration of CSR into strategic management in the context of reporting. It encourages companies and investors to disclose the impact of CSR-oriented management on the creation of corporate value over the medium and longterm.
The foregoing summarizes the process by which Japanese companies have integrated CSR into business management in four key areas of CSR activity. However, such an overview would be incomplete without some mention of the impactthat the Tohoku earthquake and tsunami of March 2011 had on CSR integrationin all four areas. Examples in the first category of activity—provision of goods andservices—are efforts aimed at the rapid resumption of operations in the disaster’s
immediate aftermath and initiatives to stimulate economic activity during reconstruction. In the category of business-process integrity, companies created sharedvalue during reconstruction by providing decent employment. In the area of corporate philanthropy, they developed systems for the delivery of emergency support
in the form of goods and services, adopted systems to budget funds for long-term
disaster relief during recovery and reconstruction, and instituted programs to support employee volunteer activities. In the area of disclosure and reporting, one
major result was a trend toward the public release of business continuity plans.
As the foregoing suggests, the relationship between CSR and corporate management is undergoing important changes; rather than CSR advocates trying to
influence management, management is taking the initiatives to embrace CSR. Today, all eyes are on the post-2015 UN development agenda currently under preparation. By simultaneously outlining social priorities and highlighting latent market
needs, the post-2015 agenda is poised to become another powerful driver for the
integration of CSR and business management.

86

Voices from the Sylff Community
March 18, 2015

Between 2:00 and 4:00 pm
How a Full-Time Mother Organized a Food-Bank Symposium
Sherilyn Siy Tan

Sherilyn Siy Tan, a Sylff fellow who completed her master’s at Ateneo de Manila University in 2007, used an SLI award to organize a highly successful community conference topromote food donations and improve food security for those in need in the Philippines.
Called “Our Community, Our Resources: Increasing Food Security,” the first food banksymposium in the country featured prominent speakers from civil society, industry, and government and examined such issues as food loss, logistical considerations in recovering andredistributing food, and increasing transparency and accountability. In this report, she recounts how she managed to overcome the challenges of organizing this major event while
also working as a full-time mother of two young children.
*

*

*

E

very so often, we read about the successful projects and achievements ofSylff fellows, and sometimes, instead of feeling inspired, we feel discouraged. We say, “That’s great,
but that’s them, not me,” or “I wonder
how they did that?” In this article, I
share the “how to” of putting a symposium together while working in two
different countries and coping withthe unique set of challenges I faced asa full-time mother of two (aged 2 and
4). The first Philippine food bank symposium, entitled “Our Community,
Our Resources: Increasing Food Secu- Sherilyn, second from left, with her two children.
Sherilyn Siy Tan   Sylff Fellow, 2004–07, Ateneo de Manila University. Is a writer, psychologist, and teacher and a Board Member of Salu-Salo Food Bank Philippines and Kalipunan ng Nagkakaisang Filipino sa Japan (KAFIN).
87

Voices from the Sylff Community
rity,” was held on March 22, 2014, at Miriam College, Quezon City, Philippines.
There were about 100 participants and a powerhouse line-up of speakers that included government, nonprofit, and industry leaders.
Being a full-time mother is probably one of the busiest jobs in the world. Renowned psychologists and marital experts Dr. John M. Gottman and Dr. Julie
Schwartz Gottman drafted a comprehensive list of over 600 chores that parents
with children have to perform. Yet at the same time, it has been said that “if you
want something done, ask a busy person” (a quote attributed to both BenjaminFranklin and Lucille Ball). I often wondered whether this was true and wanted tochallenge myself.
Having stepped out of the professional work world around five years ago, I feltthat my skill set has downgraded to reading picture books in silly voices and washing off stains from bibs and diapers. I had a lot of apprehension as to whether I
was even capable of leading this project. I am extremely grateful to the Tokyo
Foundation for believing in me and in my leadership potential. Completing thisSylff Leadership Initiatives (SLI) project has truly been an empowering experience
for me. Here are some of the key things that have helped me in the process.
Keeping in Mind Why the Project Is Important
The theme of this project is especially close to my heart. I am a foodie—I love toeat, appreciate good food, and enjoy cooking. Now that I am a mother, I love baking my kids’ favorite cookies and cakes. Food nourishes our bodies but also bears
a lot of social and emotional significance, since many of our fondest memories
center around family and friends gathering together at the table.
Now imagine families that do not have this because they cannot provide threesquare meals for their children every day. This is the situation in the Philippines,
where more than a quarter (27.9%) fall below the poverty line (National Statistical
Coordination Board 2013 from http://investvine.com/how-feudalism-will-undo-the-philippine-elections/), where 55% (12.1 million families) self-rated themselves as poor (Social Weather Station October 2014 statistics from http://www.mb.com.ph/survey-reveals-more-poor-families/), and where 18.1% (3.9 millionfamilies) reported being hungry at least once in the last three months, 2.6% of
which reported being severely hungry (Social Weather Station January 2014 statistics from http://www.sws.org.ph/pr20140122.htm).
One would think that in such a social context, food banks would be widespread. However, it was not until 2012 that the first Philippine food bank was incorporated, and development has been slow. With this symposium, I hoped to raise88Voices from the Sylff Community
awareness of the food resources that exist within the community and introduce asustainable system (that is, food banking) that can match the surplus resources
with unmet needs. The symposium would also introduce key stakeholders who canplay a pivotal role in moving food banking forward and highlight some of thechallenges the Philippines faces to promote food banking as a viable resource forthe community.
I first got to know about food banking through Charles McJilton, who started
the first and now the largest food bank in Japan, Second Harvest Japan. Foodbanking is essentially matching excess resources on one end with those who needit on the other end. It really is a very neat solution to address the issue of excess(often wasted) food and, at the sametime, create a food safety net for vulnerable groups.
A food bank is a mediating organization with the capacity to receive
food donations and distribute these to
those who need it. The world’s firstfood bank was St. Mary’s Food Bank
Alliance in Arizona, which was started
in 1967 by John Van Hengel. While
A participant makes a point during the symposium.
helping out at a community dining
room, Van Hengel learned that grocery stores often threw away food that was near expiration or had damaged packaging. He started collecting these for the feeding program with which he was involved but soon had too much. He then created a central location from which otheragencies can collect food. Since then, food banking has spread. (http://en.wikipedia.
org/wiki/Food_bank).
I am a big fan of the work that they do and believe that such efforts make ahuge difference in people’s lives. As a case in point, I have a classmate in my Japanese language class, a full-time mother of two. Her husband is studying to be a
caregiver, and he receives a small stipend on which the whole family depends. As
we chatted, I got the impression that they were having a difficult time making ends
meet. I got her address and arranged for a box of food from Second Harvest Japan
to be sent to their home. Later, she wrote me:
Well, I am just writing to say that today we received a package with a lot ofdelicious food! Lately, I have just been receiving bills to pay, but today I received a present that makes me breathe again….
89

Voices from the Sylff Community
I was very moved by her note. This is exactly the mission of a food bank, toprovide relief in meeting one of the most basic human needs. And this is exactly
what we need in the Philippines. Whenever I felt discouraged in the tough work of
putting the symposium together, I kept in mind why this project was important andhow it would impact the lives of others.
Small Things Often, Consistently
When I said I am a full-time mother, I mean that the kids are with me 24 hours aday, 7 days a week. They do not go to any daycare or kindergarten. My neighborlearned about the symposium I was organizing and said to me, “There’s no way
you can do that by yourself with the kids. You need to hire a nanny. They’re notvery expensive.” I didn’t. My secret is simple: Small things often, consistently.
My kids nap between 2:00 and 4:00 in the afternoon, and that is when I do
everything that requires quiet time: writing, emailing, calling, designing, drafting,etc. With only two hours every day to work, I had to start planning early and work
months ahead of the event. As soon as I received the SLI award, I worked little bylittle, day by day. Thinking in small steps and breaking this big event into small
manageable tasks helped me to focus and not be too overwhelmed. You will be
surprised by how much one can accomplish by doing little things, because in theend, they all add up. We often get excited by the big things, but it is actually thesmall, seemingly insignificant things that add up and push things forward.
I have applied the same strategy to two other events. One is chairing the 2015
Women’s Conference in Izu, Japan. The closer I get to the conference weekend, theless stressed I feel. Again, because I have worked slowly and consistently on thedetails of the conference months and months before in slow increments, I feel likeI have covered the groundwork and will not be scrambling towards the finish line.
The second is the 2015 Tokyo Marathon. I cannot just cram the training in. I haveto train over a long period of time, slowly and gradually adding more and morekilometers each time to build endurance and strength. The closer I get to race day,the more prepared I feel, and the less likely I will injure myself.
Be Flexible, Work within Limitations
In an ideal world, I would have put all my time and energy into my SLI project.
The reality was that there were competing demands for my attention. This meantthat I had to work around the eating, napping, and outdoor play schedules of mychildren and bring them with me to the meetings. It also required some creativity
90Voices from the Sylff Community
in planning which tasks I can do while the kids are awake, which tasks I should
bring with me to the playground, and which tasks I should prioritize when they are
asleep.
And then there are culture- and country-specific constraints. While the Philippines is my country, I have lived in Japan for a while and have grown used to adifferent rigor when it comes to efficiency, planning, and keeping time. Traffic in
Manila is notoriously bad. A 20-minute car trip can turn into a 2-hour ride at rush
hour. This can be extremely frustrating, but I had to constantly remind myself that
I could only do so much in terms of planningahead. People were generally understanding
about delays caused by traffic. Another thingis that Filipinos tend not to RSVP until the lastminute, and sometimes, not even then. Knowing this, I did not panic when the RSVP numbers were low two weeks before the symposium.
Finally in terms of time management of
the symposium itself, I made sure to movethings along as scheduled. The symposium
started promptly at 10 am and was slated to
end at 4 pm. I arranged for registration to startat 9 am and invited participants to come early
to enjoy the free-flowing coffee as well as thephotography exhibit. This lead time was im- Photo exhibit.
portant, as Filipinos tend to be lax aboutpunctuality, and I had to make allowances for bad traffic. As the host of the symposium, I was courteous to each presenter but made sure they ended promptly, as
I knew it would be disrespectful to the others if they lost time on account of someone going overtime.
In an ideal world, things would go exactly and perfectly as we planned, but inthe real world, we need to be flexible and make the best out of a given situation.
Draw from and Build Social CapitalThis project harnessed the social capital accumulated over time. Social capital refers to the value derived from the network of relationships that facilitates cooperation and effective functioning in society. Unlike other forms of capital, social
capital takes time and effort to build, and the returns are not always tangible. But
91

Voices from the Sylff Community
if you take time to invest in building good relationships (or create “human moments”), it becomes easier to draw from them later on.
As a board member of the first incorporated food bank in the Philippines, I
have been networking with various key persons working in NGOs, logistics, foodcompanies, faith-based organizations, and academia. My previous position at Miriam College and the good relationships formed there
made it extremely easy to provide a suitablelocation for the event and coordinate the logistics (such as lodging for out-of-town participants, catering for the event, registration andushering support, and parking facilities). It
was also through a solid relationship with another Sylff fellow I have known for years that
I was able to get one of the speakers, Dr. Ned
Roberto—the most sought-after marketing expert and consultant in the Philippines.
Dr. Ned Roberto speaks on the importance
The symposium generated social capital asof reaching out to those in dire poverty.
well by strengthening ties across various sectors. Participants came away with new information, insights, and energy. There wasincreased shared knowledge of the current situation and heightened interest in foodbanking, with new partners ready to come on board.
I am, again, very grateful to the Tokyo Foundation and the SLI award for theopportunity to validate Colin Powell when he said, “Leadership is the art of accomplishing more than the science of management says is possible.”92

Voices from the Sylff Community
May 22, 2015

Developing Youth Leadership in the Western
Cape
SLI Workshop Organized by Fellow Xena M. Cupido
Althea Whitaker and Errol Brierley

On December 3–5, 2014, Sylff fellow Xena M. Cupido organized a highly successful interactive workshop in Gleemoor, Athlone, Cape Town, South Africa, for 30 youth leaders between 16 and 19 years old. The first day of the three-day workshop, financed with a Sylff
Leadership Initiatives grant, was devoted to improving communication, the second day topromoting leadership, and the final day to expanding opportunities for engagement. Photos
and videos of the workshop can be viewed at http://sayouthleadership.weebly.com.
Cupido received a Sylff fellowship from the University of the Western Cape in 2012.
The following reports were filed by two other UWC Sylff fellows: Althea Whitaker, who coordinated the attendance of fellows at the workshop as observers, and Errol Brierley.
***

Day 2: Facilitating Creative Leadership
Errol Brierley
I was privileged to observe the leadershipsession of this Cape Town SLI project,
and accordingly this report will begin byreflecting on the skill with which the facilitator assisted a group of teenage lead-

Althea Whitaker   Sylff Fellow, 2004, University of the Western Cape. Is a lecturer at theCape Peninsula University of Technology.
Errol Brierley   Sylff Fellow, 2005, University of the Western Cape. Is a human resourcesmanager at Groote Schuur Hospital, Western Cape.
93

Voices from the Sylff Community
ers, who were eager to learn about leadership styles and ways to influence a community. Xena was particularly skillful in helping the young leaders to achieve theseobjectives without taking sides in any deliberations or presentations.
Notwithstanding the fact that the young leaders came from a variety of backgrounds in terms of geographical location, cultural ethos, and the challenges theircommunities faced, they clearly displayed a common tenacity in pursuing specificsocietal values and experiences. The atmosphere among the young leaders was thatof active participants really enjoying
the learning process. I was impressedby the young leaders’ practical knowledge in engaging with the informationthat was taught. Despite their youth
and innocence, they were very awareof and able to understand all topics.
They looked up to positive role models like Nelson Mandela and the many
political activists who have served in
the South African government but at the same time lamented that such role models
were not to be found in their communities at present. The materials presented wereconsistent with the values and guidelines of the National Youth Development Policy Framework (http://www.thepresidency.gov.za/MediaLib/Downloads/Home/
Publications/YouthPublications/NationalYouthPolicyPDF/NYP.pdf).
The emphasis of this policy framework is on the need to give youths the opportunity to develop leadership skills and the competency to recognize poor leaders intheir communities. The young leaders’ comprehension of the principles of leadership and related complexities reflected their sense of purpose and awareness of
their own personal strengths, as well as of the areas requiring further growth.
The facilitator provided impeccable guidance toward creative leadership. Her
presentation highlighted real, practical constraints and reflected social and ethicalconcerns. What I found impressive is the fact that the facilitator had the ability tointervene in ways that encouraged creativity among the participants, rather thanseeking to lead the discussion and taking away the group’s initiative.
The group dynamics clearly reflected differences in the backgrounds and orientations of the participants, and the facilitator was successful in getting all involved in the discussion. The workshop was interactive and enjoyable, thus resulting in a true learning experience. Understanding leadership can be very complicated,but the techniques and tools of the facilitator, as far as I could see, kept the learners
focused on and interested in the workshop material.
94

Voices from the Sylff Community
This suggests that the approach adopted by the facilitator can play a key rolein successfully familiarizing young leaders with what seemed to me to be complex
material. The young leaders understood the content of the training and spoke confidently on various topics. They learned that a leader’s role and position were noteasy to attain and that a leader needed to consider many aspects in that role. In
order to bring about positive social change, a leader must be creative and be able
to influence the behavior of others. By applying the new knowledge gained in the
training sessions, the young leaders will surely be in a better position to make adifference in their communities.
Day 3: Opportunities for Engagement
Althea WhitakerOn entering the room on day three, one immediately got the impression that quite
a bit of work had gone into creating this cooperative atmosphere. The program ofthe day was structured around several
subthemes that consolidated the topics covered over the three days. I observed 30 very enthusiastic young
leaders who participated actively inthe day’s programs.
The first theme was the importance of research in paving the way toeffective leadership. The approach
used was experiential, asking theyoung leaders to write down what
they knew about their research topics. The process was followed by group discussions to come up with new ideas and methods of gathering information.
The second theme introduced the young leaders to the process of selecting
topics and the means of deciding on a focus. They were taught the process of reaching a consensus in a group and of voting to decide on issues.
The third theme was to consider community issues and assets and to discuss
the root causes of the challenges identified. This was an important session, as ittaught the young leaders the importance of embarking on approaches that evolvefrom within the community so as not to impose inappropriate solutions.
The fourth theme was to introduce them to the process of concept mapping
and to identify the causes and effects of community issues. Once the concepts were95

Voices from the Sylff Community
identified and categorized, they moved to the fifth theme, which taught them theprocess involved in the advocacy of the selected issues.
They were taught organizational skills and how to view the community interms of the various infrastructure resources available to support youth-related
programs and topics and to find solutions through the drafting of Neighborhood
Needs Maps and Community Asset Maps, taking time to connect with the neighborhood.
The day concluded with an awards ceremony, where the young leaders had an
opportunity to apply some of the techniques that was imparted over the three daysby validating each person. They were asked to call out the next person after receiving a certificate of participation and to express the value the person imparted onthem over the last three days. This called for careful thinking about and the application of the listening skills they were taught over the three days toward their new
friends. Some of the words of appreciation were very emotional and reflected thejourney the young leaders had travelled over the three days.
I would like to express my sincere congratulation to Xena for the very successful three-day event that she hosted. I could see that the young leaders felt empowered and were proud of the new knowledge they gained—especially about themselves—over the three days. I would like to also thank Xena for her vision and the
Sylff Leadership Initiatives program for supporting this very important leadershipdevelopment program, which Athlone and the surrounding communities of theWestern Cape so badly need. Athlone is a very old suburb created to house historically disadvantaged groups that had been displaced from South Africa’s biggest
economic centers as part of the country’s apartheid policy.
Athlone was established in the 1930s, and compared to newer residential areas
built for the poor, its infrastructure and those of such surrounding areas as Silvertown, Mountview, and Hanover Park—home to residents from working-classbackgrounds—are fairly well developed. As such these neighborhoods have been
largely overlooked by the government’s development aid programs. The highschools that participated in the workshop are Peakview, Mountview, Alexander
Sinton, Belgravia High, Windsor, Maitland, and Oude Molen, located in working-class to poor areas. Most people living in these areas had been employed in the
manufacturing sector in the Western Cape, but due to the closure of many factories,
quite a number of workers have lost their jobs, and their families have fallen intopoverty.
The poverty rate in the Western Cape is lower than most other provinces in the
country, but because of the high rate of migration and the impact of the economic
situation, many communities have been adversely affected. The Western Cape has
96Voices from the Sylff Community
1,452 schools, of which 885 are categorized as “very poor.” The rest are dependent
on state financial support to keep them running and to provide stationery to alllearners. The neighborhoods where the schools are situated must battle to maintainfinancial sustainability. While some schools receive assistance from parents, mostof the funds to meet running costs come from the government. Many of the participating schools have children attending from very poor residential areas,
which impacts on the schools’ ability
to collect fees. This is the general trend
in the public schools of these neighborhoods, where 20% of the population are poor. One major problem affecting youths in the province is drug
abuse.
It is very important that leadership programs are offered to give
youths the opportunity to rise above their circumstances. External support programs are needed to assist the schools and to provide additional outreach programs. I wish these communities every success in building their futures.

97

Voices from the Sylff Community
May 14, 2015

Sylff’s Role in Hungary’s Democratization
Hungarian Academy of Sciences Celebrates 25 Years of theFellowship Program
Viktória Ferenc, Loretta Huszak, and Balazs Csiky

The Hungarian Academy of Sciences received a Sylff endowment 25 years ago—the first
Sylff endowment awarded to a Central European country—on November 9, 1989, the very
day that the Berlin Wall fell. Three Hungarian Sylff fellows, reflecting on this historicalfact, write about what the Sylff program has meant in Hungary and how it has nurtured
leaders much needed by the country, which was then going through a dramatic process of
democratization.
***

Historical Context
On May 20, 2009, Nippon Foundation Chairman Yohei Sasakawa, in his speechat the twentieth anniversary ceremony of the Sylff program at the Hungarian Academy of Sciences, placed the program in historical context:“In 1989, Mr. Németh Miklós, then [minister] president of Hungary, helped
tear down the Iron Curtain. In the same year, the Hungarian Academy of Sciences became the 16th Sylff School. Around that time, Central Europe wasmoving away from communism in the direction of the West. This move required leaders who could build new countries. It makes me very proud that thisViktória Ferenc   Sylff Fellow, 2011–12, Hungarian Academy of Sciences. Works a linguist dealing with linguistic minorities.
Loretta Huszák   Sylff Fellow, 2004–07, University of Leipzig. Is a university lecturer
and an intellectual property professional.
Balázs Csiky   Sylff Fellow, 2005–07, Hungarian Academy of Sciences. Is currently ahistorian.
98

Voices from the Sylff Community

Participants of the meeting celebrating the twenty-fifth anniversary of the Sylff program in Hungary.

academy was the first in Central Europe to have a Sylff endowment to help
nurture these leaders. . . . When the wall between East and West fell, things
began to change. There was political reform in Hungary and other East European countries. A market economy was adopted. Civil society began to develop. The Nippon Foundation wanted to help Central Europe make thesechanges.”1
As Mr. Sasakawa summarized, 1989 was a year of miracles, a unique historicalmoment that transformed Europe and the world—and Hungary was in the centerof the events. On August 19, 1989, civil groups organized a demonstration along
the Austro-Hungarian border, the so-called Pan-European Picnic, where the bordergate was symbolically opened for several hours. Hundreds of East German citizens
used the opportunity to enter Austria.
One month later, on September 11, the Hungarian government officially opened
the border for East German refugees. These were the first holes in the Iron Curtain,
and as the West German Chancellor Helmut Kohl said on October 4, 1990, on theeve of German reunification, it was in Hungary where “the first stone was knocked
out of the wall.”2
On November 9, 1989, the Berlin Wall fell, and on the same day Mr. Ryoichi
Sasakawa signed the Agreement to found the first Central European Sylff institution in Hungary. This was the year when Hungary started its transition to democracy. A comprehensive amendment to the Hungarian Constitution took effect on

http://www.nippon-foundation.or.jp/en/who/message/speeches/2009/9.html (accessed
February 13, 2015).
2
http://www.dw.de/the-picnic-that-changed-european-history/a-4580616 (accessed
February 13, 2015).
1

99

Voices from the Sylff Community
October 23—on the anniversary of the 1956 Hungarian Revolution. This was also
the birthday of the new Republic of Hungary.
According to the new preamble of the Constitution, the revision was needed“in order to promote the peaceful political transition into the rule of law realizing
the multiparty system, parliamentary democracy and social market economy.”3 The
transition from state socialism to democracy and capitalism would be a long process, requiring new approaches and young leaders.
Last year was a historic landmark for Central Europe. It marked the twenty-fifth anniversary of the biggest event in recent European history: the fall of the
Berlin Wall on November 9, 1989. Germans recalled the “sheer madness” of thenight in 1989, when thousands of East Berliners streamed across the border andthousands of helium-filled white balloons were lifted off one by one into the night
sky to mark the wall’s fall. Last year’s Lichtgrenze was a light installation running
through the city center that recreated this image.4
The Iron Curtain was a symbol of the suppression of fundamental rights in the
Eastern bloc during the Cold War and represented a violent and ultimately ineffective episode in postwar history. Its downfall, and also the fall of the wall in Berlin,
was emblematic of the end of the Cold War, setting the course for the reintegrationof Eastern Europe into the Western economic, political, and security frameworks.
The commemoration of the collapse of the Iron Curtain is marked by a degreeof poignancy because there is a palpable sense that peace in Europe is still fragile.
In her speech at the wall memorial, German Chancellor Angela Merkel explicitlyemphasized the geopolitical context of the twenty-fifth anniversary:“We have the strength to shape things, to turn things from bad to good that is
the message of the fall of the wall.”5Similar sentiments were also expressed by Mr. Yohei Sasakawa in his message
at Sylff’s twentieth anniversary in Hungary:Gábor Halmai, “The Reform of Constitutional Law in Hungary after the Transition,”
Legal Studies: The Journal of the Society of Legal Scholars, Vol. 18, No. 2 (1998), p. 188.
4
Lichtgrenze: Das Jubiläumsprojekt zu 25 Jahre Mauerfall 2014. http://lichtgrenze.de/ (accessed January 20, 2015).
5“Rede von Bundeskanzlerin Merkel anlässlich der Eröffnung der neuen Dauerausstellung
der Gedenkstätte Berliner Mauer am 9. November 2014.” www.bundesregierung.de/Content/DE/Rede/2014/11/2014-11-09-merkel-gedenkstaette-berliner-mauer.html (accessed
January 20, 2015).
3

100

Voices from the Sylff Community“Much has changed in the world since the program was first conceived. With
the collapse of the Cold War structure, we have seen the emergence of a global
society, one that is composed of many different value systems. Today’s world is
a complicated place. It resembles a mosaic of disparate political, ethnic, culturaland religious viewpoints. It confronts us with many challenges, ranging fromethnic and religious conflicts to widening inequality. To find solutions to these
problems, we need people who are committed to making the world a better
place. Nurturing such people has been Sylff’s goal from the outset.”6
Consolidating Democratization
The endgame of communism in Hungary during the second half of the 1980s wasmore convoluted and confusing than in other East European countries. This wasprimarily because both the regime and the opposition were more visibly fragmented
than in other East-bloc states—and the fragments were less synchronized with one
another.7 Shedding the communist past has not been easy, moreover, as the legacyof almost half a century of communist rule was deeply embedded in the country’s
political institutions and social structure. The radical transition entailed, in somecases, heavy costs, but it also opened up major new opportunities.
Social scientists and political actors are in agreement on the significance of thetransformation that former communist countries have undergone since 1989–90.
The transition from communism to capitalism is widely regarded as the complete
substitution of one social system for another—a rare example of a wholesale system change.8 The consolidation of democracy included shaping public policy topromote independent governance, basic rights, and economic reforms. The necessity of achieving an effective economic, political, and social transformation simultaneously became known in the social sciences as the dilemma of simultaneity:“The only circumstance under which the market economy and democracy can be
simultaneously implanted and prosper is the one in which both are forced upon asociety from the outside and guaranteed by international relations of dependency
and supervision for a long period of time. . . . Otherwise, there reigns everywhere
http://www.tokyofoundation.org/sylff/about/message_sasakawa#sthash.UAptIsHK.dpuf(accessed February 14, 2015).
7
Joseph Rothschild and Nancy M. Wingfield, Return to Diversity. A Political History of
East Central Europe Since World War II (Oxford: Oxford University Press, 2000), p. 239.
8
Helmut Wiesenthal, “The Dilemma of Simultaneity Revisited, Or: Why General Scepticism about Large-Scale Reform Did Not Apply to the Postcommunist Transformations”
http://www.hwiesenthal.de/downloads/no_dilemma.pdf (accessed January 25, 2015), p. 2.
6101

Voices from the Sylff Community
an (at least) asymmetrical antagonism: the market requires the development of ademocracy, but democracy does not demand the emergence of a market.”9Thus, when the Hungarian Academy of Sciences signed the Agreement in 1989
to introduce the Ryoichi Sasakawa Young Leaders Fellowship Fund program, Hungary was in the midst of great political changes. Since the catalyst for the politicaltransformation in Eastern Europe was the commitment of the elites to the creationof democratic institutions,10 their role was crucial in fostering and consolidating
democratization.11 Democracies require competitive elites who are committed tomaintaining fair, transparent, and open-minded governance, and they were the ones
primarily responsible for the political and economic transition in Eastern Europe.
In this respect, the political and functional elites have played a decisive role in themultilayered process of societal transformation.12
This is true even today, 25 years later, as relatively young democratic institutions
are still cultivating the requisite political culture and trying to achieve an optimum
balance between political-administrative regulation and civil society.13 Transparency
in Central and Eastern Europe remains an issue, and only a few professionals—
mainly those active in the entrepreneurial sector of the economy—have attained theeconomic and social status typical in countries with a long history of parliamentarydemocracy. Others, mainly those working in the public sphere, are still hindered by
the consequences of unequal opportunities. This makes the social cohesion and solidarity of the new middle strata rather fragile.14 As a consequence, the post-socialist
political (and to some extent economic) elites are still fragmented or even divided.15
Claus Offe, “Capitalism by Democratic Design? Democratic Theory Facing the Triple
Transition in East Central Europe,” Social Research, Vol. 71, No. 3 (2004), pp. 501–28,
particularly pp. 509–10.
10
Nina Bandelj and Bogdan Radu, “Consolidation of Democracy in Postcommunist Europe,” paper 06-04 for the Center for the Study of Democracy, University of California,
Irvine, 2006, p. 4.
11
Jan Zielonka and Alex Pravda, Democratic Consolidation in Eastern Europe, Vol. 2:
International and Transnational Factors (Oxford: Oxford University Press, 2001).
12
Heinrich Best, Ronald Gebauer, and Axel Salheiser, “Political and Functional Elites in
Post-Socialist Transformation: Central and East Europe since 1989/90: An Introduction,”
Historical Social Research, 37 (2012) 2, p. 7–13.
13
Charles Krupnick, “Expecting More from Democracy in Central and Eastern Europe,”
The Whitehead Journal of Diplomacy and International Relations, Seton Hall University
Press, Summer/Fall 2005, p. 149–65.
14Pavel Machonin, Milan Tucek, Petr Hartosand, and Martin Nekola, “Czech Economic
and Political Elites after 15 Years of Postsocialist Transformation,” ed. György Lengyel,
Elites in Central-Eastern Europe (Budapest: Friedrich Ebert Foundation, 2007), p. 35–61.
15
Ibid. p. 37.
9102

Voices from the Sylff Community
International support, however, always provides an impetus for democratization and plays an essential, irreplaceable role in safeguarding citizens’ legitimate
rights and interests. In that sense, the signing of the Sylff Agreement in Central andEast European states like Hungary undoubtedly had an impact on democratic
consolidation in those countries. The benefits were not just financial; the spirit
nurtured among the fellows definitely helped Hungary stay on track toward democratization.
One aim of the Hungarian representatives who helped prepare the Agreement
was to support talented young students and send them to the international “arena”
so they could spearhead the reintegration of Hungarian scholars in the humanities
and social sciences into the international mainstream.16 Now, looking back over thepreceding 25 years, we can definitely say that the fellowship recipients have becomea determining factor in the formation of professional opinion in the country, andmany of them have become leaders in their respective fields. As such, they have hadgreat political and socioeconomic responsibility. Making democracy work requires
a certain degree of political competence and commitment on the part of the nation’s citizens and, especially, leaders. Particularly in Eastern Europe, where thevalues nurtured during the communist era needed to be changed with the rules andnorms of a capitalist, liberal democracy, education was an important means ofachieving those changes.
Anniversary Gala and Brainstorming
On November 17, 2014, on the occasion of the twenty-fifth anniversary of the Sylff
program at the Hungarian Academy of Sciences (HAS), a gala event was organizedin Budapest entitled “Past, Present and Future: Gala and Brainstorming.” The event
was officially part of the Festival of Science in Hungary 2014, a month-long seriesof events held under the theme of “Far-sighted Science.”
A visible sign of HAS’s support for the Sylff anniversary event was the presenceof HAS President László Lovász. Takahiro Tanaka, second secretary at the Embassyof Japan in Hungary, was also among the prominent guests. Organizers also invited
past and present fellows, members of the Sylff Steering Committee, tutors, andsome young scholars who may become future applicants. Around 50 guests participated in the event to celebrate the anniversary.
Balázs Hámori, “For Talented Young Scholars,” ed. Mariann Tarnóczy, 20 Years Reporton the Activities of the Sasakawa Young Leaders Fellowship Fund in Hungary 1989–2009.
Budapest, pp. 40–42, particularly p. 42.

16

103

Voices from the Sylff Community
After the welcoming remarks, speakers in the plenary session summed up thehistory of the Sylff program in Hungary and considered future possibilities andchallenges. The anniversary proved to be a good occasion to monitor the activities(both the strengths and weaknesses) of Sylff in Hungary. The highlight of the event
was a session in which past Sylff fellows, now recognized scholars in theirown fields, were invited to talk about
their academic achievements and professional careers so as to offer hints
for the younger generation. The Sylff
fellows were notably proud to be invited and underlined various positive
aspects of the Sylff program in Hungary that helped to advance their aca- A review of the last 25 years at the Presidential Hall of
the Hungarian Academy of Sciences.
demic careers.
The fellows making presentations were: Professor Éva Kiss, scientific advisor
at the Geographical Institute, HAS; Dr. Eszter Csonka-Takács, director of the Intangible Cultural Heritage Department of the Hungarian Open Air Museum; Professor Ferenc Hörcher, director of the Institute of Philosophy, HAS; Dr. Gábor
Nagy, senior research fellow at the Regional Research Institute, HAS; Dr. Júlia
Frigyes, psychiatrist, certified midwife, doula, and regular guest lecturer at thePerinatal Expert Consultant Training Program of ELTE University; and Dr. Ferenc
Bódi, senior researcher at the Institute of Political Sciences, HAS.
One of the things the Sylff fellows emphasized was the role of the program in
their “early career development” planning phase. In the early 1990s, fellowships
were provided for a maximum of three years. This ensured two to three years offinancial security and established balanced conditions that enabled fellows to set

VIPs attending the meeting included three past Hungarian Sylff fellows, of whom we are particularly proud:(from right to left) Gábor Nagy, Ferenc Hörcher, and Ferenc Bódi.

104

Voices from the Sylff Community
ambitious, long-term goals. The fellows were able to concentrate on their own research, without needing to undertake other projects out of financial considerations.
Today, unfortunately, this framework is no longer possible due to financial reasons.
Present-day fellows receive a scholarship for 10 months.
To meet future challenges and further develop the fellowship system, Sylff fellows made several recommendations. They proposed strengthening the leadershipaspect of the program, such as by enhancing management skills under a morepractical-oriented approach. They also pointed to the potential for closer cooperation with other East-Central European countries, both at the individual (Sylff
Research Abroad, for example) and collective (promoting joint activities among
Sylff fellows associations) levels. The “Sylff fellow” status should be communicatedmore prominently in one’s professional career (such as through inclusion in CVs),
they said, as indicating membership in a prestigious and recognized fellowshipcommunity.
During the afternoon brainstorming session on how to raise the efficiency of
the Sylff network, a roundtable discussion was held focusing on three topics: reinforcing a functioning national network (through a database, facilitating communication, etc.), creating an inter-generational network (with past fellows serving as
mentors for new applicants), and forging closer international links (with otherCentral-East European Sylff institutions, Sylff Research Abroad, international projects, and the Sylff Fellow Forum 2015).
The celebration confirmed the pride Hungarian fellows feel about having beenpart of the worldwide Sylff family for a quarter of a century. The event highlighted
the significance of the past 25 years and its unbroken continuity, which in itself, wefeel, is an outstanding achievement.
An added value of the event was that it generated fresh momentum for closer
networking among the Sylff fellows. In mid-January 2015, fellows organized another meeting to establish working groups for various proposed objectives. In the
future Hungarian Sylff fellows intend to strengthen their links within this networkand make better use of this enormous talent pool. Cooperation and joint efforts
with other schools and fellows should yield additional benefits. The 25-year anniversary event has been a tremendous boost for the future of Sylff activities in Hungary.

105