助成Institute forInternational Policy Studies
・Tokyo・IIPS International Conference“Reidentifying Japan for the 21st Century”
Tokyo, October 27-28, 2004

“Japan’s potential world role”
ByMr. Bill Emmott
Editor-Chief
The EconomistUK

Japan’s potential world roleInstitute for International Policy Studies
Tokyo October 27th 2004
Bill Emmott

It is a great pleasure and honour to have been invited to take part in thissymposium here in Tokyo, the city that I think of as my second home.
The topic before us is that of Japan’s potential yet to be realised. That is aninfinite potential. For Japan is a great country, with a great people, full of talent,energy, intelligence and capability. No one can guess today what that potential mightbe. It is there to be created, by the people of Japan individually, and as a nation.
What we can focus upon now is what are the barriers to the expression of that
potential, and what are the current limits to Japan’s role in the world. If those barriers
are never lifted, if those limits are never breached, then there will be no chance forJapan to realise its potential.
The biggest of those barriers is at home, here in Japan. It is the whole range ofrestrictions on individual enterprise, on initiative, that have conspired to prevent newgenerations of entrepreneurs from being created in Japan. The economy has been
fairly stagnant during the past decade, and it is easy to blame banking problems, ordeflation, or the stockmarket bubble, for that state of affairs. And there is much truthin that explanation. But behind it lies a deeper explanation. It is that the bubble would
not have occurred if the reform process in Japan had taken place freely from the1970s onwards, if the full entrepreneurial potential of the Japanese potential had beenunleashed. The bubble was a consequence of the unwillingness to begin a proper
liberalisation of the economy from the late 1970s onwards, a sort of financial
substitute for innovation in the real economy of businesses and individuals.
During the 1980s, when Japan’s economy was growing so rapidly and with it
the country’s status as a creditor nation, exporting capital all around the globe, it wascommonly stated that with such vast economic power would inevitably comeeconomic power. It was only a question of when that political power would come, andthen a question of how Japan would seek to use that political power.
That assumption was rather too simplistic. The connection between economic
power and political power is not quite so straightforward. But at any rate it is surely
true that without economic power, and international economic interests, global
political power or influence will not come. So the stagnation of Japan’s economy
during the 1990s has, of course, brought silence to this debate about Japan’s politicalpower.
Now, at last, the economy is reviving, with more than a year and a half ofuninterrupted economic growth. It is still early days, and the recovery is still quite
dependent on exports to China. Price deflation has not yet been brought to an end, anddomestic consumption is weak. Nevertheless, we can see the beginnings of a virtuous
cycle of corporate restructuring, falling levels of bad debts at banks, rising corporate
investment, rising incomes for households and, next, rising consumer spending.

1What has not happened yet, to a very large extent, is the removal of barriers tonew enterprises, both in the form of the large government influence in many parts ofthe economy and in the form of direct regulations that limit competition andinnovation. That needs to happen if Japan is to regain the industrial and economic
vigour that characterised it in the past. But it can and must happen.
This economic revival, if it can be sustained, is vital for many reasons. The
biggest is a selfish one for Japan: not just should Japan want to stay rich, but also itneeds to stay rich and economically strong if it is to be able to afford the ageing of its
own society, as the population gets older very rapidly during the next decades and as
it even begins to shrink. Without an enterprising economy, an economy producing a
new generation of great entrepreneurs to match those who founded such companies asSony and Honda in the 1950s, Japan will not be able to cope well with the stresses
and strains of its changing demography.
Also, though, without such a sustained economic revival, amid a new periodof liberalisation, Japan will not be in a position to play the sort of big internationalrole that it would like to, and that its friends in the rest of the world would like it to.
Nor, in fact, will Japan be likely to accumulate what Joseph Nye, the former
dean of the Kennedy School of Government at Harvard University, calls “soft power”,
the influence that consists of a growing ability to get other people to want what youwant, to do what you want to do. Soft power comes from a respect for the values of asociety but also, crucially, from the attractiveness of a society as a place in which tostudy at university, to visit, to go to do business, to be in contact with in order toexchange ideas.
Japan already has considerable amounts of soft power, thanks to its wealth, its
reputation as a great industrial economy, its culture both ancient and modern, and theway its universities and schools attract foreign students and teachers. But, in myopinion, that soft power is far below its potential, and it is vulnerable to the competing
economic and social and cultural influence in the future of China.
Japan’s great advantage, compared with China, is its democracy and its much
more open, freer society. If Japan’s soft power is to be maintained and even increased,I would suggest that more will need to be done to make society here more open,
especially in terms of openness to immigration. If talented people, especially from
Asia, feel they cannot come to live here, to start new businesses and to live with theirfamilies, then they may well conclude that it is not worth their while to make theinvestment of time and energy that is needed to learn the Japanese language andunderstand the country. America and Britain benefit from the immigration of poorer,
unskilled people but also, crucially, from the immigration of skilled, talented,qualified people.
Like Britain, Japan needs to do more to reform and modernise its universities
if it is to have a chance to attract such talented immigrants, whether as temporary
visitors or more permanent residents. In both of our countries, our universities havefallen behind America’s halls of learning in all subjects.
Unlike Britain, with our lucky possession of the English language, Japanneeds to work harder at making it possible for such social, cultural and economic
contacts to flourish. But I am sure it could be done. Japan could and should be thecultural, intellectual and social hub of Asia, or at least East Asia. In some ways, italready is. But not as much as it could be. And time is short, given the increasing
attraction of China as a place for young, talented people to realise their ambitions.

2So, Japan needs a sustained economic revival, and it needs to foster its soft
power, through becoming a more open society and by building its universities tobecome world class institutions once again.
But what should Japan want to do around the world, what role should it want
to play?
The answer to that must begin with Japan’s own interests, though they are ofcourse shared in many ways with the interests of other free, democratic societies.
At the most general level, Japan has a strong interest in fostering a stable,
peaceful and prosperous development of the region of the world in which you live.
Americans have long talked of wanting to “make the world safe for capitalism anddemocracy”, and that must be Japan’s interest too. As a great, rich, populous country,with commercial contacts and interests all over the globe, you also have interest in
working to build that stability and prosperity outside your immediate region.
In the past 60 years, much of that role within your region has been expressed
through your alliance with the United States. In my view, the time has come toprepare for a weakening of that alliance, a weakening of America’s role and influencein the region. That does not mean a complete withdrawal by the Americans, nor any
particular hostility between Japan and the United States. But I think many factorsmake a lessening of America’s role quite likely. America looks likely to me to go
through another period of economic adjustment, even weakness, during the next
decade. It is also heavily engaged elsewhere, especially in the Middle East, and willcontinue to be. And American politics are quite likely to go through a period in which
taking on all the burdens of being the world’s policeman becomes unpopular again.
This will leave a gap, a gap that in part Japan should want to fill. For we allknow that the world is a dangerous and unstable place. And we all know that the rapid
economic development in China is changing the dynamics of the region, changing thebalance of power. That development is overwhelmingly a positive one, but it still
carries with it political dangers of all kinds.
So what should Japan do? Two main things, in my opinion. First, Japan should
want to be the leading driving force behind the development of regional institutions,for trade, security, finance and other matters. Second, Japan should want to be one of
the main countries within the region capable of sending military forces abroad when it
is necessary to maintain stability or rebuild troubled nations.
Of course, in many ways, Japan is already doing the first of those things. Asia
has regional institutions, and Japan is one of the most important members of them.
However, those institutions are not very well developed or yet of fundamental
importance, and my perception is that Japan is not able to or willing to, drive thatdevelopment deeper and faster.
Probably, such deep and fast development will not happen until and unless
Asia’s two greatest powers, Japan and China, agree that it is necessary and desirable.
Just as France and Germany have driven the development of the European Union, so
only Japan and China can really drive the development of East Asian institutions.
To put it perhaps in far too simple terms, in East Asia Japan is the equivalentof Britain and Germany combined. Like Britain in Europe, Japan is a reluctant,slightly distant partner, one that also has a close relationship with the United States.
Like Germany, however, Japan has historical problems that make it difficult toachieve close, trusting relationships with its neighbours, but that also arguably make it
more important for you to do so.

3Like Britain, Japan needs to combine its close association with the UnitedStates with the capability of exerting its power and influence independently. Like
Britain, it can do this in three ways: through the soft power already mentioned;
through regional institution-building; and through the availability of military
resources for use separately from those of the United States.
Like Germany, however, Japan is not going to be able to do those things
unless it can deal effectively with the legacy of history. And it is not going to be able
to do those things without partnerships or agreements with neighbouring countries,
especially China but also South Korea and even, in the future, Indonesia and far-offIndia.
Historical issues are thus both a reason why Japan needs alliances, and a
blockage to forming such alliances.
And they are, of course, the main blockage to Japan fulfilling the second of
my desired functions, that of providing military solutions for regional or evensometimes global problems. In the past five years, much progress has been made ineasing that blockage, progress for which the contingent of Japanese troops now in Iraq
are prime evidence. That is just the beginning, however.
Britain is again a good analogy for the sort of military role Japan could play.
But perhaps Australia is an even better one. Despite having a small population,
Australia plays an important role in regional stability, supplying skilled forces inrecent years to help with such problems as East Timor or in the Pacific islands, not tomention Iraq itself.
Why shouldn’t it be possible, say in 10 or 20 years time, for Japanese troops toplay the sort of role Australian troops play, in some future equivalent of East Timor?
Maybe not on their own, maybe together with the Australians?
History, again, is the reason for scepticism about this development. But
history does fade, as long as statesmen and diplomats work hard to help make it fade.
In Japan’s case, one can conclude at the same time that diplomats and others
have worked very hard to solve the problems of history, and that they have notworked hard enough. Yes, much has been done. Yes, the list of apologies is a long
one and yes, there have been many efforts in cultural and social and economic
exchanges to compensate for the legacies of history.
But it has not been enough. It has not been enough because issues such as
history textbooks and the Yasukuni shrine have not been dealt with. It has not beenenough because of the continued insistence, in diplomatic terms, that all matters weredealt with in the 1951 San Francisco treaty, when in common sense and human terms
they plainly were not. It has not been enough in part because the very pluralism ofJapan’s democratic society leads to doubts abroad that the efforts are sincere, or deepseated, or sufficiently widely accepted. And it has not been enough for reasons
beyond Japan’s control, namely the fact that the main country with which Japan has
needed a rapprochement, China, has been a closed communist dictatorship,
simultaneously poor, jealous and power-hungry. Japan has been Germany, but it has
not had its France.
Now, however, that is changing, as China’s economy develops and its society
becomes more open. A hugely important historical opportunity is emerging for Japan.
It is not an easy one, nor one that is fully ripe to be exploited, given the fact that therising economic power of China remains a dictatorship. But it is still going to be vitalto try to grasp that opportunity.

4Some might say that Japan and China will always be rivals. Some, outside
Japan and the region, might say that a partnership between Japan and China could
pose a threat to others, especially the United States.
Surely the truth is that, yes, Japan and China will always be rivals, but thequestion is whether they are constructive competitors or destructive ones. And surely
the truth, also, is that without some sort of partnership between Japan and China,
analogous to but not identical to the partnership between France and Germany inEurope, the world will be a poorer, less stable place. It is overwhelmingly in theworld’s interests for Japan and China to find a way to deal with the past and to work
together to build the future.
Without that, Asia will never have the sort of institutional arrangements thatbind countries together and bring about the deep habit of co-operation. And without
that, Asia and the world will never have the sort of Japanese role and influence which
could bring so much future benefit.
Without solutions to history, without a closer partnership with China, theworld will not see Japan achieve its true potential role as a major force for peace,stability and prosperity.
Thank you for listening.

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