FROM THE EDITOR

NEW ADMINISTRATION LAUNCHED On September 16 a new administration was launched in Japan, headed by Hatoyama Yukio, president of the Democratic Party of Japan. At its first meeting, the Hatoyama cabinet decided on the establishment of two new organs, a National Policy Unit and a Government Revitalization Unit, with Deputy Prime Minister Kan Naoto assigned responsibility for national policy and Minister of State Sengoku Yoshito for government revitalization. The establishment of the National Policy Unit was one of the proposals set forth in the DPJ’s electoral manifesto (in which it had been tentatively named "National Strategy Bureau"); the new unit has been charged with policymaking concerning the outlines of tax and fiscal policy and basic policies for economic management. The Government Revitalization Unit, meanwhile, has been charged with renewing the shape of the national government as a whole from the perspective of the citizenry.

On September 18 the new administration decided to review the ¥14.7 trillion supplementary budget compiled by the previous administration. The government wanted to make some cuts in this budget to provide part of the ¥7.1 trillion required to implement the major new policies that the DPJ had pledged, such as allowances for families with children and effectively tuition-free high school education. It was able to come up with about ¥3 trillion, as it had hoped, with an October 16 cabinet decision cancelling some of the previous appropriations. The biggest cuts were made in planned spending by the Ministry of Land, Infrastructure, Transport, and Tourism, which was reduced by ¥917 billion.

On September 29 the Hatoyama administration decided on its basic policy for compilation of the fiscal 2010 (April 2010 to March 2011) budget. Under the previous administration of Prime Minister Asô Tarô, the budget requests for fiscal 2010 had been submitted by the ministries on August 31 based on the ministry-by-ministry ceilings set by the cabinet in July, but this decision voided these figures. The requests for the coming year under the previous ceilings had totaled a record-high ¥92.1 trillion, but the additional spending promised by the DPJ is likely to push the figure even higher. To keep the budget from ballooning, the cabinet decided to call on ministries and agencies to make vigorous cuts at the request stage and to aim for major reductions in public works and other existing appropriations. As Prime Minister Hatoyama put it, up to now cabinet ministers have sought to maximize their ministries’ budgets, but under the new administration their job is to cut wasteful spending; he directed all members of the cabinet to reduce their ministries’ budget requests. In fact, however, when the new requests were announced on October 16, they came to a total of ¥95 trillion, even higher than the level set under Asô. Only a few ministries actually presented requests lower than the August 31 ceilings. The performance of the cabinet members in living up to Hatoyama’s directive that they be waste-cutting "budget reevaluation ministers" was distinctly uneven.

FROM CONCRETE TO PEOPLE In line with the slogan "From concrete to people," the new administration has been reviewing the budgetary allocations made by the government when it was controlled by the Liberal Democratic Party; one can clearly see that the Hatoyama cabinet is trying to switch the focus to spending that will support people’s everyday lives. But the total budget figure has swollen, because the cuts made by the administration fell far short of the amounts required to implement the pledges in the DPJ manifesto. The DPJ had proposed a system under which the National Policy Unit would determine the overall outline of the budget and the Government Revitalization Unit would root out wasteful spending by government organs. But the National Policy Unit has yet to be fully fleshed out, and it is still unclear what role Deputy Prime Minister Kan Naoto, who also has the title of minister of state for national policy, is to play.

Meanwhile, tax revenues are contracting significantly. The government does not have a master design showing how it intends to pay for its new measures within the context of the outlook for the economy and estimated tax revenues. Prime Minister Hatoyama has already suggested that it may be necessary for the administration to backtrack on some of the measures pledged in the DPJ manifesto if revenues fall too short and the public shows strong opposition to increased borrowing in the form of government bond issues. It seems that it will take a while before a new budget compilation process becomes established.

FEARS ABOUT FOREIGN POLICY Since its launch, the Hatoyama administration has come under criticism of various sorts, both domestic and international, for its approach to foreign policy. In its electoral manifesto, the DPJ pledged to "develop proactive foreign policy strategies and build a close and equal Japan-US alliance" and to "establish intraregional cooperative mechanisms in the Asia-Pacific region with the aim of building an East Asian Community." Those who emphasize the importance of the Japan-US alliance fear that the ideas of an "equal" alliance and of building a regional community in East Asia are inconsistent with a stance that places the alliance with the United States as the cornerstone of Japan’s foreign policy. They see the new administration focusing on Japan’s national interests as a country caught between the United States and China, and they are concerned that promotion of a regional community may lead to exclusion of the United States. As they see it, in seeking a "close and equal" relationship, Japan is liable to aim for the position of a "balancer" between the United States and China, much as South Korea did under former President Roh Moo-hyun, whose stance strained ties between Seoul and Washington. By contrast, those who stress the importance of ties with other Asian countries welcome the Hatoyama administration’s stance, which they hope will bring Japan back into the Asian fold. Instructive in this connection is the article in this issue by Terashima Jitsurô, honorary chairman of the Japan Research Institute, who is said to be one of Hatoyama’s unofficial advisors. Terashima suggests, "To manage this trilateral relationship [among Japan, the United States, and China], Tokyo must pursue diplomatic strategies toward both countries with a view to keeping the sides of the triangle as equal as possible."

For the record, I do not agree with this line of argument. I believe that the regional security system of which the Japan-US alliance is the cornerstone serves as the foundation for stability in East Asia, and the other countries of East Asia all take this alliance as a given in formulating their own national security policies. If the future of this bilateral alliance comes into doubt, the regional order will quickly become fluid. The worst scenario is one in which the United States shifts to an offshore balance strategy and pulls all its military forces from the region back to Guam and Hawaii. In this case, Japan will need to devote a much larger share of its resources to its own defense, and if Japan beefs up its defense capabilities, China is likely to strengthen its military even further, and South Korea and Vietnam will probably do the same. This will shift the priority for resource allocation in East Asian countries from the economy to defense, and the political will for building an East Asian Community will be lost.

Be that as it may, it is wrong to think of the Japan-US alliance and construction of an East Asian Community as being mutually exclusive options. The DPJ’s manifesto says nothing about reviewing the Japan-US alliance, building a Japan-China axis, or constructing an East Asian Community that would exclude the United States. The alliance with the United States continues to be the cornerstone of Japan’s foreign policy, and the relationship with China continues to be a "strategic relationship of mutual benefit"—in other words, something short of an alliance. So in terms of state-to-state relations, it is fundamentally impossible for Japan to act as a "balancer" between the United States and China or to aim for a three-way relationship in which it tries to equalize the sides of the triangle. Prime Minister Hatoyama, Minister for Foreign Affairs Okada Katsuya, and other senior members of the administration have made this clear on repeated occasions.

Even so, some have expressed concern lest Japan’s enthusiasm for regional community building end up harming the alliance with the United States. And on occasion top figures have made remarks that seem to feed such worries. For example, at his meeting with the leaders of China and South Korea on October 10, Prime Minister Hatoyama suggested that Japan might have been depending excessively on the United States, declaring that, while the Japan-US alliance was important, he wanted to establish a policy placing greater emphasis on Asia.

Why does this sort of thing happen? In a word, it is a problem of language. When we discuss international relations, we tend to talk about states as if they were individuals and to think about the balance of power among them from that perspective. This is the language of realism. It is the source of worries that if Japan gets closer to China, it will draw away from the United States. But today’s international society is not the world of complete anarchy that realists assume. There is no global government, to be sure, but there are international rules and norms of a sort, and economic interdependence has progressed to a great degree, as the most recent global financial crisis has made clear.

The same can be said for East Asia. Economic interdependence within the region has progressed greatly since the 1980s through the expansion of cross-border business networks. Whereas formerly the term East Asia referred to the sphere of Confucian civilization, now it refers to a region with a degree of economic cohesion, extending from Japan and South Korea to China, Hong Kong, and Taiwan, and on to Southeast Asia. Growing interdependence gives countries (and their businesses and people) a greater stake in global and regional order and stability. It is for this reason that the language of liberalism, which discusses international relations in terms of interdependence, rules, and norms, is useful in addition to the language of realism, which focuses on the balance of power among nation-states.

As China continues to rise, the regional order in East Asia is bound to change. But it is important to see to it that this process of change is evolutionary, not revolutionary. For this purpose it behooves us to maintain the Japan-US alliance so as to avoid causing a sudden, sharp shift in the regional balance of power. And we should also keep working at the establishment of common rules and promoting economic interdependence in the name of the prospective East Asian Community, thereby giving China a growing stake in regional stability and prosperity.

The creation of a regional community, far from being incompatible with the Japan-US alliance, actually depends on the existence of the latter. If the new administration wishes to achieve a "grown-up" relationship between Japan and the United States, it should turn its attention to the issue of collective security and to the conclusion of a bilateral free trade agreement. Such an FTA could be a steppingstone to a broad Asia-Pacific free trade pact, assuring that the East Asian Community would be open to the rest of the world.

Since its launch the new administration has come out with a number of bold moves, such as cancelling the Yanba Dam construction project and proposing to turn Tokyo’s mainly domestic airport at Haneda into an international hub. If it can produce similar bold initiatives in the area of foreign policy, people’s concerns about its caliber will be assuaged. (Shiraishi Takashi)

© 2009 Japan Echo Inc.