A Report on Domestic Administration and External Affairs
(Security, Foreign policy - the role of the Japan-US alliance in the security of East Asia)
1. The reality of Japan’s defense forces
While China has been pursuing its national interests and is ready to protect itself at full strength, we Japanese have found ourselves in a chaotic situation where we do not know clearly what direction to pursue. Since we have traditionally been a rather isolated island country, we perhaps lack some of the skills necessary for handling foreign policy, national security and risk management.
Japan’s national security is supported by two pillars, namely its own defense forces and a military alliance, while most other countries’ national security is based on one pillar, its own military forces.
Germany, like Japan, was defeated in World War II, and both nations have therefore been compelled to refrain from having military forces that could make them self-dependent and instead to conclude a military alliance and engage in role sharing with their allies.
The Self-Defense Forces in Japan are the nation’s military and though they are considered as having a high capability, there are only two points among the military competences, I believe, in which they greatly exceed the international standard. The capability of submarines in the Japanese Maritime Self-Defense Force has been continuously the second best among the nations of the world, and the Japanese Air Self-Defense Force’s capacity to protect Japan from any threat in the sky has been the third or fourth best in terms of interception frequency.
We will need a larger budget in order to maintain such high quality in these two forces. Our defense expenditure budget this year is around 60 billion dollars and 44.5% of that is allocated for the salaries of soldiers and their food expenses. Only 30-40% of the defense expenditure is to be spent uniquely on maintaining the level of military capacity. Therefore, within such budget constraints, if we try to maintain the level of these two strengths among Japan’s defense forces, our efforts will result in our possessing a high quality weapon whilst also having to accept an overall average capacity, which means our military forces will become unbalanced.
2. The US-Japan alliance is vital for global security
Since Japanese military power is not very balanced, as I have said, the US-Japan alliance is considered vital for the national security of Japan.
Some might consider US-Japan relations as superior-subordinate relations, but this is wrong, because Japan is the most important ally for the US as well, and the number of military facilities in Japan that the US Army can use totals 134, including bases only for the US Army and the Japanese Self-Defense Forces’ military posts, facilities and ranges. These facilities support almost the whole US Army active in one half of the earth, namely the whole western area from Hawaii, including the whole Indian Ocean and two-thirds of the Pacific Ocean. Japan is supporting the US military in its activities in all these seas in this region. No other country would be able to play the same role. The US military in this region is massive in scale and is armed with the most advanced high-technology weapons. The qualifications for a country that can support such a military are clear, and that country also needs to be close to the US in terms of its economic power. More specifically, it needs industrial power and technology and above all financial power.
In this light, if Japan withdraws its support from the US military, the US would lose 80% of its military competence in this half of the earth and would not be able to restore it. Thus, the US-Japan alliance is not only key to the security of the US and Japan but also to global security.
3. Okinawa Marine Corps, crucial forces for the US-Japan alliance
A deterrent effect means having a force that will prevent other countries from attacking our own country. The US-Japan alliance has such a deterrent effect for Japan. An attack on Japan, an invaluable strategic point for the US, would trigger a counterattack by the US Army. In reality, the US has been continuously saying that any attack on Japan would be considered as an attack on the US itself. It has told the Soviet Union in the past that it would retaliate with nuclear weapons, and also China and North Korea. These countries have then had to refrain from provoking the US. Such a military balance has also been achieved by each military force - the US Army, Navy, Air Force and Marines - achieving its own missions.
The US Marine Corps is stationed in mainland Okinawa, for historical and geographical reasons. In the region surrounding Japan, there are two main critical points that could provoke a war. One is the Korean Peninsula and the other is the Taiwan Strait. The US Marine Corps in Okinawa is having a deterrent effect with regard to these two areas. For the Korean Peninsula, the role of the Marine Corps may not be so great, since the South Korean Army and the US Army stationed in South Korea are already playing a substantive deterrent role. However, its deterrent effect on the Taiwan Strait is very important.
Though China is not likely to attack Taiwan, if neighboring countries are not sufficiently cautious it might happen that China could threaten Taiwan at very short notice, such as a day or even half a day, and make this an accomplished fact. The US Marine Corps on the ground is the only military force that has a deterrent effect against this possibility. Under such circumstances, they could confront the Chinese army within a couple of hours. China would hesitate to take such action, since this confrontation would mean overall war against the US. Any such power that makes China hesitate is a deterrent power.
The importance of the US-Japan alliance has been increasing recently under the politically unstable situation in North Korea, with its transition of power, its launch of a rocket and continuing nuclear experiments. We should be actively engaged in promoting security in East Asia on the basis of the US-Japan alliance. I think for this purpose that communication among legislators, such as through our US-Japan legislators exchange program and US-Korea-Japan legislators exchange program, will be extremely important.
(Economic, International finance)
1. European sovereign debt crisis continuing
The European debt crisis triggered by the Greek crisis in 2010 has become critical again, as shown by the rapid increase of the return on Spanish national bonds in April and the interest rate on 10-year national bonds having risen to 6.2% temporarily. If such a critical situation starts affecting the so-called PIGS countries, there will be concerns about further stagnation and a recession of the global economy. In the last G20 meeting, a plan to strengthen the financing capacity of the IMF was agreed upon and more than 430 billion dollars would be added to consolidate the funds of the IMF. However, this will only expand its finances for dealing with a crisis and will not cover the risk of an expansion of the debt crisis towards Spain and other countries, and thus it cannot be considered a fundamental solution.
In order to resolve the European debt crisis, each European country needs to repay its debts and bring them under safe control in terms of its own national revenue. However, this is a very difficult path. Although their monetary policies are integrated, each member country’s fiscal policy is different. Unless this fundamental problem in the current EU system is resolved, such a debt crisis will happen again a number of times over the next 10-20 years. The UK has foreseen this and even though it remains in the EU, it maintains its independence in both monetary and fiscal policy. Therefore, the UK economy on the whole has not been greatly affected by this crisis, even though some of its banks have been affected.
Unless this European crisis is fundamentally resolved, it will be difficult to achieve a stable development of the world economy. For this purpose, I believe that we should change the system of the EU itself.
For example, the following are ideas for reform of the EU:
1) To achieve an evolution of the EU by integration of the member countries’ fiscal policies just as in the case of their monetary policies
2) To turn the EU backward by restoring each national currency through an independent implementation of each member country’s monetary policy
3) To divide the EU members into two groups, such as one consisting of countries like Germany which joined the EU at the beginning and the other consisting of the countries like Greece which joined at a later stage, and apply a different rule of management to each group.
Of course, it should be the EU members themselves that determine such a new framework. However, in the light of the possible big impact of the EU crisis upon the world economy, I think it might be necessary for an international organization such as the IMF to propose a new framework.
The current countermeasures are only giving the EU a shot in the arm and this will have only a temporary effect upon the economy. We need to propose a fundamental solution.
Whereas the economic growth of developed nations is slowing down due to the European crisis, many of us would expect the newly emerging countries’ strong economic growth to contribute substantively to global growth. Unfortunately at this moment, their economies are losing momentum. The rate of the growth of house prices in China has turned negative in some cities recently and the high economic growth that we saw once in the past has been slowing down, and further there is a concern about a bursting of the bubble economy.
India and Brazil are also having difficulty achieving economic growth and price stability at the same time and thus it will be difficult for them to achieve stable growth.
Under such circumstances, the US economy and the restoration of the Japanese economy could be expected to push global growth. However, looking at the percentage of non-performing loans at US banks, since the Lehman shock this percentage of housing loans has leveled off, which could be a risk to the US banks’ management. In the Japanese economy as well, though we can see signs of recovery from the negative shock caused by the disaster last year, our economy cannot yet get out of a long run of deflation, and so we will need more monetary and fiscal stimulus. In spite of this, the current administration still insists upon an income redistribution policy rather than a growth policy and is trying to increase taxes without any long-term economic growth strategy, a reckless measure which is unprecedented.
I agree on the need to raise taxes in the future. However, unless we create a future growth strategy, a fiscal framework to achieve it and a reform of social welfare programs necessary for it, a simple tax increase will most likely end up having only a negative impact upon the economy.
Given this unstable global economy, the strong recovery of the US and Japanese economies is expected. We should try to do our best to achieve stable growth for our economies by eliminating the risks I have mentioned, and to that purpose we should reinforce our links and interaction among legislators and policy staff and cooperate closely with each other.
Since the change of power from the LDP to the DPJ, the issue of Japan’s security has become rather confused, as symbolized by the issue of the Futenma military base or the collision involving a Chinese fishing boat in the sea near the Senkaku Islands.