The Japanese Dilemma (By Paul Chong)

The second largest economy in the world is facing a mental crisis – the dilemma of change.

Beneath all that gloss & shine lies the problematic issue of change in order

to grow & progress. It is running out of options and solutions are difficult

in the face of aged old traditions & conservative social system.

The world market has long been dominated by such big names as Toyota, Honda, Sony, Seiko, Panasonic among others, proving its greater economic power over the US, if not militarily. Hilary Clinton, US Secretary of State, made Tokyo her first destination of call in her inaugural Asian outreach, and to top it up, I believe the first foreign dignitary to be invited by Obama to the White House is none other than the Japanese Prime Minister Taro Aso – reflecting Japan’s importance on the world stage.

However, they say that all that glitter is not gold. Japan is facing the economic headwind of the global crisis, with its economic system breakdown responsible for its post-war economic success. As international trade collapses, demand for Japanese goods diminishes.

Life in Japan, socially, economically & politically, is not a bed of roses any more. Since its war aggression & shameful exit from the world stage after its defeat in WW2, Japan has sort of retreated into its own protective sphere. Its emergence as an economic power came about as a great “imitator” of western produce. It draws its experiences from the western models which paid off in handsome dividends. Of course, it had massive outpouring of aid & help from US.

Basically, Japan has become a nation of bureaucrats. Its social fabric is so deeply entrenched with conservative traditions & archaic cultural values, making changes difficult. What’s needed is a mental revolution in keeping with changing times & circumstances.

Japan has long held the concept that its Emperor is direct descendant from Heaven & is the Son of Heaven to be revered. Armed with this self-esteem they set out to conquer Asia & the rest of the world in WW2, but sadly they were vanquished & made its shameful exit.

Japan suffered war humiliation. The first atomic bomb was dropped in Nagasaki & Hiroshima. After its shameful surrender, it retreated under the protective arm of bureaucracy of safety & predictability. Bureaucrats controlled every phase of their daily life. The Japanese became a nation of lifetime employment with a large middle class where people are similarly equal.

This however is quite contrary to the traditional Japanese life where social hierarchy long existed with class distinction and unequal distribution of wealth & privileges. This egalitarian society was a creation of the 1970s with its progressive taxation, redistribution of wealth, subsidies and the dampening of competition through regulation. Protection works well so long there’s no major upheaval in global situation. People can become lame ducks when they rely or become over dependent upon the bureaucrats.

Much of Japanese innovative ideas have been based upon outside models by perfecting on others’ creations. Since the middle of 19 century, Japan’s economic success could draw upon lots of outside models – from communist Russia’s ideas of planning to the US industrial development. This arena is now exhausted – but the Japanese are now totally unprepared for a “tsunami” of global doom & gloom.

Unlike the West, where success is achieved more on an individualistic basis & the dare to venture, in Japan success is totally on a collective basis, bureaucratic order & placement. People are beginning to feel insecure when employment is no longer a hallmark of guarantee. People are at a loss. The national health & pension plans are tattered, Depressed & suffering, Japanese are prone to suicide. Japan has the world’s highest rate of suicide & “Hikikomori” (acute social withdrawal) among the rich nations.

The most pressing social problem is that of a declining & ageing population. If the present trend were to continue, without the replacement intake of new migrants, the present 130 million is likely to go as low as 90 million in 50 years, more or less. Some 40% of the Japanese would be over 65.

It’s taboo to advocate or even talk about immigration. The Japanese have always considered themselves as a superior race & their Emperor as “Son of Heaven”. They would for all purposes & intent continue to keep their race “pure” & keep outsiders out. The modern concept of human resources is based on vitality & productivity. If the open door policy is unacceptable, perhaps Japan might think about doing it on a selective basis by welcoming only the “brainy” ones with incentives, as what Singapore has adopted.

Politically, Japan has seen a number of frequent changes in its leaders, which do not augur well for political stability. Prime Minister Taro Aso’s rating is low & for want of a better choice, the country seems to be devoid of good strong leadership.

I have often advocated the concept of “to grow, to progress is to change”. Obama used the keynote of “change” to propel himself from obscurity to the stage of respectability in the White House – by no means an easy task for the first Afro-American. Japan needs the same dose of medicine to change if it’s to maintain its leading economic position or to compete with its giant of a neighbour, China – now a true mighty dragon awakened from its peaceful slumber, & its rise as a regional superpower & world power!

Paul Chong

A Chinese by Descent

An Australian by Consent

Wednesday, 4 March 2009