Publisher’s Note

Can We Save the World from Chaos?
By Masakazu Toyoda
Is the world in complete disorder and in chaos? Sadly, we must
admit that it is.
On the international political front, the Ukraine crisis resultsfrom an aggression by a specific country against another country.
Such a situation is clearly in violation of the UN Charter andcould have been stopped or alleviated by a resolution of theSecurity Council. The views of its members being divided
rendered the Council helpless to do anything tangible. The IsraelHamas conflict is adding to the confusion so much so that bothsupport for Israel and support for Palestine have gradually moved
towards the isolation of Israel. Regrettably, the ceasefire proposals
remain in limbo and too many innocent people are killed daily inboth regions. Above all, the world is clearly no longer unified andhas become divided into separate clusters such as the G7 countries
representing the developed world, China and Russia, and/or theGlobal South. Each group is claiming its own recognition andlegitimacy.
A similar confusion applies to trade and finance. The WTO
dispute settlement function under the two-judge system isdysfunctional, with no Appellate Body member appointed. The
swift Regulations, introduced early on as part of the economic
sanctions against Russia after the Ukraine crisis, have not beeneffective.
With such current political, trade and financial issues, theapplication and definition of the ‛rule of law’ have been reduced toa drop in the ocean.
Why has this chaos in the international order arisen? Several
factors are likely to be at play.
Among those factors, the first one is the decline in economic
power of the G7 countries with their share of the world’s GDP
diminishing from 70-80% to less than 50%. The second is theturning inwards of the United States, which used to be the leaderof the G7 and effectively the leader of the world. With a US
national opinion clearly divided, the country is showing less andless leadership and is no longer the world’s policeman. The third
factor is that the world’s second largest economy, China, issharpening its confrontation with the US, which feels threatened.
The fourth one is linked to the emergence of the Global South as a
new key player. The Global South is adding an extra layer ofcomplexity to both the West and, China and Russia, which arebecoming impatient to take sides. The result of all this has been todisempower the UN and WTO and to make the rule of law askeleton. These factors lead to the catastrophic inability to resolve
short to long term world issues.
What kind of goals should the world be aiming for?
First, reform the UN and the WTO to re-institute the ‛rule of law’.
Second, promote free trade and economic security to all nations.
Third, avoid a Taiwan contingency to maintain peace in Asia.
Fourth, support the healthy economic development of theGlobal South.
Finally, deepen the dialogue with China to avoid a SinoAmerican conflict.
Reaching those goals for an ideal international order is essential
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because not achieving them could possibly lead to disasters(including World War III). The problem is to find “How can achaotic world achieve those goals?”
One possibility would be for an independent country, such as
Japan, to act as a catalyst. The Japan Economic Foundation
established a Study Group to report on ‛Japan’s CreativeContributions’ for a New International Order1. The following are
the main pillars.
The first pillar is Japan’s contribution for ‛the rebuilding of therule of law’. As it will most probably take time to strengthen thefunctions of the UN, Japan should first strive to reform theSecurity Council by becoming a quasi-permanent (or long-term)
member of the Council. Japan’s official position is to aim for apermanent seat on the Security Council, but when the Council is
not functioning properly as it is at the moment, Japan as anindependent body and an officially recognized member, couldwork towards rebuilding the importance of consensus while
preventing veto abuse, etc. As for restoring the functioning of theWTO, Japan could work towards persuading other countries toagree to restore the Appellate Body by devising ways to handle
security matters, etc.
Another pillar would be Japan’s ‛contribution as one of the flagbearers of free trade’. In the context of the US-China
confrontation, for example, it is crucial to recognize economic
security as most important while recognizing the need and reality
for specific economic restrictions policies for a small number oftechnologies, often referred to as ‛Small Yard, High Fence’. Someform of cooperation with the EU should also be considered, using
the UK’s accession to the CPTPP2 as an opportunity. From theperspective of economic security, export controls and othermeasures should also be strengthened.
Furthermore, and with a sense of crisis, it would be a minimum
to strengthen our deterrence efforts, that a ‛Taiwan contingency’ isa ‛Japan contingency’ or an ‛Asian contingency’. Most
importantly, with common world issues such as global warming,
the ageing and increasing of the population, it is vital to deepen
the dialogue with China and recognize the need for cooperation
with the Global South. As such, we must strengthen ourcooperation with Southeast Asia and South Asia and focus on
making the voice of Asia a One Voice. The Economic ResearchInstitute for ASEAN and Asia (ERIA), established in 2008 on
Japan’s initiative, should play a major role in those objectives.
[1] Chairperson: Professor Emeritus Shinichi Kitaoka, Universityof Tokyo[2] CPTPP (Comprehensive and Progressive Agreement for TransPacific Partnership)

Masakazu Toyoda is chairman and CEO of the Japan Economic Foundation(JEF). He previously served as chairman and CEO of the Institute of Energy
Economics, Japan, after having been vice minister for International Affairs at theMinistry of Economy, Trade and Industry.
Japan SPOTLIGHT • July / August 20241