Is Australia ready for a new look Japan?

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.