The Sick Man of Asia

With a collapsing export sector dragging its economy into the steepest recession since World War II, and the country's political system paralyzed by a power struggle between the ruling and opposition parties, Japan is in the midst of a potentially revolutionary transformation of the political and economic systems that have held sway throughout its postwar history. The coming transformation will have dramatic repercussions for Japanese society, but some are also beginning to ask what this means for the rest of the world.

The political and security role that Japan plays abroad is often not well understood in the West, but it plays a key part in keeping East Asia stable and is vital to U.S. interests in the region. If, as is possible, the worsening crisis leads the country's leaders to turn inward and abandon Japan's growing international role, many may finally come to understand just how important Japan was.

The current political and economic turmoil has taken Japan into uncharted territory. Analysts have been predicting the end of the country's half century of nearly uninterrupted one-party rule for years, but it now appears a real possibility for the first time. During the past decade, the internal faction system of the ruling Liberal Democratic Party (LDP) has weakened, and its electoral popularity in urban areas and even the countryside has waned under sustained attack from the opposition Democratic Party of Japan (DPJ).

The DPJ took control of the upper house of the Diet in 2007, but unfortunately, the result has not been a robust two-party system. Political paralysis has been the order of the day, as DPJ leader Ichiro Ozawa has attempted to stymie LDP policies and position his party for the next general election. He hopes to take power of the lower house and thereby become the next prime minister.

Similarly, Japan's export-driven economic model has occasioned numerous debates over its long-term viability, but only now is it being fundamentally questioned. Exports plunged 49 percent in February; some sectors, such as automobiles, dropped as much as 70 percent.

Although there is always the potential for Japan to continue to muddle along and begin a slow, soft decline into middle-rank status, there is also the possibility for radical upheaval.

Although there is always the potential for Japan to continue to muddle along and begin a slow, soft decline into middle-rank status, there is also the possibility for radical upheaval.

However murky its ultimate fate, there's no question that it matters how Japan reacts to change. Asia accounts for nearly a third of global output, even with the economic crisis. Access to the region's ports, shipping routes, and the like is vital to the world economy. The Asia-Pacific region is home to the world's most populous countries, China and India, and some its most vibrant democracies, as well as the most tyrannical regimes. It is also one of the most heavily armed regions of the world, one that is rife with territorial, nationalistic, ethnic, and other disputes--and it has the potential to become highly unstable yet again.

Despite all these tensions, the Asia-Pacific region has remained largely peaceful for most of the six decades following World War II, and particularly since the wars in Korea and Vietnam. This is no accident of history. The permanent U.S. military presence in the region has helped maintain freedom of the seas and served to deter large-scale intraregional conflict from erupting. Central to that success has been the U.S. alliance with Japan and a slow, but steady Japanese deepening of its role in Asia and beyond. From overseas development aid to counterterrorism training, from humanitarian relief to maritime security exercises, Japan has played a usually quiet, sometimes controversial, yet important role in helping maintain regional stability.

For decades, the United States and Japan have worked together on surveillance and patrols of crucial northeast Asian waterways, and Japanese P-3 aircraft were indispensable in tracking Soviet submarines, a role that Tokyo assumes it will play vis-à-vis China in coming years. Japan's quick response to the 2004 Indian Ocean tsunami, sending Maritime Self-Defense Force ships that provided potable water and crucial supplies, showed the country's ability to contribute to humanitarian efforts in Asia.

There has been a debate in Japan the past several years over whether, and how, to expand the country's foreign role. The Japanese increasingly self-identify with democratic, liberal states, and there has been much talk of "universal values," such as human rights and civil society, in Japan of late. Indeed, such formulations were at the core of former Prime Minister Shinzo Abe's short-lived administration.

However, limited by a constitutional interpretation forbidding collective self-defense, pressured by a shrinking military and foreign-aid budget, and worried about regional blowback, Japanese leaders have downplayed the expansive Abe platform and have yet to articulate their vision for Japan's future global position. Political deadlock and economic stress might foreclose the option of becoming more active regionally and globally.

In the short run, expect a slow retrenchment in Japan's foreign and security policies and a parallel rise in China's clout. In particular, Chinese weight in initiatives of the Association of Southeast Asian Nations will likely increase. Japan has recently pushed the body to adopt values-based democratic policies and to this end, supported expanding the summit to include India, Australia, and New Zealand to counter Chinese influence.

As Tokyo's financial resources dry up, China's largesse in Southeast Asia and Africa will become more important. As domestic politics prevent Japan from aggressively pursuing large free trade agreements, Beijing's ability to sign expansive trade pacts will make it a more attractive partner. With constitutional restrictions limiting Japan's ability to support international security operations, China's willingness to contribute troops to U.N. peacekeeping operations or quickly respond to overseas threats, as in Somalia, will make it a more reliable political actor on the world stage. For many in Japan's foreign-policymaking circles, this is just the type of global environment they fear, where Japan will be eclipsed by a rising China.

Meanwhile, Washington will increasingly back away from the early Bush administration rhetoric of a "global alliance" with Tokyo. A more risk-averse or less capable Japan cannot be a transregional partner for the United States the way that Britain, Canada, and Australia consistently have been. Japan might try to blunt criticism of its inability to play a larger global role by stressing its importance on niche issues such as climate change and global health.

More specifically, the United States will have to make important decisions about its security goals and posture in Asia should Japan turn inward. U.S. forces will almost certainly retain their bases in Japan and hence their forward position in Asia. Yet, force realignment, including moving some elements of the Marine Corps off Okinawa to Guam, has the potential to lead to a lighter U.S. footprint. A Japan less able or willing to contribute to security operations could possibly hasten such a move, though there is very little chance of that happening in the near future.

A circumscribed Japanese role would present real difficulties for the United States. Without Japanese resources, expertise, and will to participate, ballistic missile defense and antisubmarine warfare operations will be increasingly untenable for U.S. forces. Currently, Washington considers Tokyo to be its key ally on both fronts, and Japan places a high priority on them as well, given the chest-beating from North Korea and the inherent threat of China's missile forces. Yet funding such operations and maintaining the Self-Defense Forces' capabilities in the future will be increasingly difficult, and Tokyo may decide to scale back its activities, leaving Washington to shoulder more of the burden. Joint efforts such as ballistic missile defense may fail to develop beyond the current stage of testing and monitoring.

Simply put, without the Japanese strategic and political base, the United States may find itself less able to play a flexible and effective role in providing stability, public goods, and humanitarian aid in the Asia-Pacific region.

Some will welcome that development, believing that America should cede its position to Asian actors who will shape the region according to their own visions. Yet it is a leap of faith to believe that any vacuum caused by a diminished U.S. role in Asia (with or without Japanese retrenchment) will be smoothly filled. Even absent aggressive policies on the part of the region's countries, miscalculation and distrust might well lead to tragic outcomes. In that sense, Japan remains the lynchpin of the U.S. position in Asia as well as a powerful voice for democratic governance, civil rights, and peaceful national policies.

If Japan truly desires to play a more significant role in Asia, there is much it needs to do. It must be seen as willing to provide for the common regional good. It must satisfy critics' demands for a more open accounting of wartime atrocities. It must clearly articulate not only a vision of its role, but of greater freedom for all peoples in Asia (and around the world). A Japan that increasingly turns inward will have less influence over its neighbors and less of a working relationship with its closest partners.

No one can deny that Tokyo, and the Japanese people, face difficult choices in the coming years. It might, in fact, not be possible to maintain the type of global role that Tokyo has played so far. If that happens, the world may finally understand just how vital that role was.

Michael Auslin is a resident scholar at AEI.

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