Is Australia ready for a new look Japan?

Change has come to Japan. The new Democratic Party of Japan Government, which ended more than half a century of almost unbroken rule by the Liberal Democratic Party with its stunning victory three months ago, is fulfilling its election promise to take the country in a new direction.

And while early moves by the triumphant DPJ are already beginning to cause domestic upheavals, they also present significant challenges for the countries that deal with Japan including, of course, Australia.

This is the verdict of some of the country’s most experienced Japan watchers based at the Australian National University’s Japan Institute. Professor Peter Drysdale spoke for many of his colleagues when he said the days of easily predictable, comfortable relationships between the two countries are over.

“There has been a huge change in the system of government there and that will affect the way we do business with them,” he said. “I don’t think this is well understood in Australia as yet.

“It is going to require a great deal of diplomatic energy and effort to understand what is going on there and I am not sure if we are up to it - whether we have the resources to manage it in government, the universities or in the community more broadly.”

The problem is that during more than 50 years of Liberal Democratic rule, hardly anything changed in the way Japan operated on the political, economic and social fronts. Generations of Australian diplomats grew up knowing exactly which buttons to push, which to leave alone, where to go to get answers and, almost always, what those answers would be.

Relations with our largest trading partner have been running on autopilot. Now we have to take over the controls, but the flight manual is out of date and almost useless.

This complacency was highlighted by another Japan Institute member, Professor Kent Anderson. Speaking during a panel discussion on the new government, held jointly with the ACT Branch of the Australian Institute of International Affairs, he suggested a similar seminar on China would have drawn twice the audience and one on India perhaps half as many again.

He admitted that at the time of the election he had been sceptical. “We expected radical change in 1993 with the Hosokawa Government and again with the Koizumi period, but after they went subsequent leaders returned to the old way of doing things,” he said.

“It is very easy to be radical when you are in opposition, and the DPJ is not the most coherent grouping of people - you’ve got former LDP members on the right and former socialists on the left and the only thing they seemed to be united on was getting the LDP out of power.”

However, time spent in the country since the election has convinced him his early assessment was wrong. “Change is real. I am seeing something I have not seen in all my experience of following Japan.”

Professor Drysdale characterises this as a move away from government by bureaucracy behind closed doors. “We have had situations in the past where senior bureaucrats basically declared government policy with little or no reference to the political process, this has changed. They are now no longer allowed to make independent statements,” he said.

Prime Minister Yukio Hatoyama has also signalled a new emphasis on welfare issues such as child allowances, homelessness and free education. However, plans in this area have come under intense scrutiny, mainly because the government has been vague on where the additional money, estimated at around $80 billion, is going to come from.

While there has been talk of “major cutbacks” in other areas of public spending, many North American economists claim there is no alternative to an unprecedented borrowing splurge, with the New York Times reporting on “the nightmarish prospect of a sovereign debt crisis, currency meltdown or both”.

Speculation was not helped by the testimony of Former International Monetary Fund Chief Economist Simon Johnson who told a US Congressional Committee that Japan’s public debt was out of control and there was a “real risk” that Japan could end up in a major default.

The Japan Institute’s Jenny Corbett said that economic experts closer to the action in Tokyo described this view as laughable. “However, we have seen the rate of interest the Japanese Government pays for its debt rising because people are nervous.”

Added to this are problems resulting from an ageing population and the continuing haemorrhaging of productive capacity overseas, mostly to China. Professor Corbett said that while the DPJ is saying it will redistribute resources “people are saying what resources and where?”

Perhaps the most important changes for the long term are occurring in foreign policy, with the Government taking a fresh and critical look at Japan’s long-standing relationship with the United States. In opposition it voted against security agreements made with the Bush Administration and was a vehement opponent of the Iraq War.

A major test will come with the decision over the relocation of the US Marine helicopter base in Okinawa, sitting in the middle of a densely populated area, which residents want closed. No clear decision has emerged on how to handle the sensitive issue, with the very real possibility this may provoke a split among the many factions that make up the government.

One thing is clear, under Mr Hatoyama; Japan’s interests will be more closely aligned with its Asian neighbours. He is an advocate of an East Asian Community - a proposition that differs from that of Australian Prime Minister Kevin Rudd only in its details. Negotiations on a joint proposal are essential if this project is to have any chance of success.

Another area of engagement is the process by which the G20 replaces the G8 as the main economic forum of wealthy nations. This has been a major victory for Australia, which now gets a seat at the table, but has enraged the Japanese bureaucracy, used to the cosy arrangements and the influence the country wielded in the smaller group as the world’s second-biggest economy.

Professor Drysdale says the G20 should be an urgent subject for talks with Japan. “And they will have to be managed at a high political level, not with bureaucrats who are hankering for the simple order of the past,” he said.

It is one of the quirks of history that Mr Hatoyama’s grandfather, Ichiro Hatoyama, was the LDP’s first Prime Minister in 1955.

The Convenor of the Division of Pacific and Asian History and a member of the Japan Institute, Tessa Morris-Suzuki, said Ichiro Hatoyama had set out to give his country a more independent stance in what was developing into the Cold War, successfully resuming relations with the Soviet Union and making overtures towards the People’s Republic of China.

Fierce US opposition eventually stymied the elder Hatoyama’s plans and by the 1960s Japan was firmly in the American orbit, where it has remained ever since.

It is still to be seen whether his grandson can succeed where he failed and craft a truly independent stance for Japan in a rapidly changing global order. Whatever the outcomes of the next few months and years it would be in Australia’s interests to pay close attention.