New Leaders Forum

What Future for Japan?

The Tohoku earthquake in March was a devastating blow for Japan. But could it spark a national renewal?

By Daniel M. Kliman for

The devastation wrought by the Great Tohoku Earthquake has reinforced perceptions inside and outside Japan of the country’s seemingly irreversible slide from economic superpower to sick man of Asia. Yet it would be premature to count Japan out as a factor in international politics.

Three futures appear possible for Japan. The first is an inward turn as the country’s long slump continues and accelerates. The present contains indications of this future. For example, the number of Japanese students studying abroad has fallen, particularly in the United States. Further cuts in Japan’s foreign aid budget, in part triggered by the cost of rebuilding after March 11 also suggest a neo-isolationist trajectory, as does the country’s absorption in domestic politics that remain in a permanent state of flux. To be sure, in a globalized world, Japan won’t revert to the ‘closed country’ policy it maintained for hundreds of years under the Tokugawa Shoguns, but Japan could substantially reduce its international presence.

Another potential future is Japan’s retrenchment into a middle power that while less dynamic, remains globally engaged. The present contains indicators of this trajectory as well. Japan has moved to strengthen its alliance with the United States in areas like missile defense and maritime security. The scale and effectiveness of bilateral relief efforts after the Great Tohoku Earthquake have only reinforced Japan’s already unquestioned commitment to sustaining this alliance. Moreover, in recent years, Japan has upgraded security and economic ties with countries along the Indo-Pacific rim. It has established strategic partnerships with Australia and India, and inked economic partnership agreements with them as well as seven members of the Association of Southeast Asian Nations. Closer to home, Japan has improved strategic coordination with South Korea. Economically, Japanese firms continue to operate worldwide and remain formidable despite a more competitive environment.

A third possible future is national renewal. There are at least a few glimmers of this future amidst a grim present. To start, Japanese politicians and the public recognize the external and domestic challenges their country confronts. In particular, across the mainstream political parties, the rising generation of younger lawmakers seems to grasp Japan’s predicament and chafes for reform. Popular dissatisfaction with the government’s handling of the Great Tohoku Earthquake will quicken the pace at which this rising generation takes power from an older generation of politicians that dithered as Japan declined. The Japanese private sector contains pockets of excellence, such as robotics, clean energy, and health technologies, that could become the drivers of future economic growth—especially if Japan can create a business culture that celebrates failure as the first step on the road to entrepreneurial success. And Japan has yet to fully tap the potential of its women, who have a labour force participation rate below that of other developed countries. Helping one half of its population realize a better work-life balance would give Japan’s economy a significant boost.

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So will Japan’s long slump continue? March 11 was an inflection point in Japan’s trajectory, but toward what future remains unclear. One thing, however, is sure; eventually Japan will run out of time to successfully embark on a course of national renewal.