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Japanese sailors facing right of frame yet heads turned towards camera
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Japan Maritime Self-Defense Force troops

Source: Franck Robichon/Corbis

stormy horizons

What's Next for Japan?

Why you should care

Because this whirlwind of money and power could turn everyone’s heads to Japan and its neighbors soon.

There’s a storm brewing in the East.

No longer a fallen empire, Japan is caught up in an intense debate on two issues that are key to the country’s future and its international posture. First: the role of its military, long confined to a strictly defensive role. And second: how to make its faltering economy more competitive.

Japan’s mandated pacifism, initially and for years embraced by its people and politicians, has over time begun to erode…

Proactive pacifism?

Much of this debate revolves around the perennial question of whether Japan can ever be a “normal” country — a question that has been asked with reference to the near-total pacifism enshrined in the post-WWII Japanese constitution. That document, drafted in 1947 by the war’s victors, explicitly bans the use of force.

Japan’s mandated pacifism, initially and for years embraced by its people and politicians, has over time begun to erode, in step with shifting security dynamics in Asia. Shinzo Abe, one year into his second stint as prime minister, is driving the debate with a new defense policy he laid out last month and a push to change the constitution to loosen the limits imposed on Japan’s military by its straitjacketed defensive posture.

Restricted as it is, however, the country of 127 million still maintains a very capable military, with the fifth-largest budget in the world (the U.S. is first, followed by China). Abe’s new proposals would amp up the budget by about 5 percent (to $247 billion) over the next five years. But he also envisions adding more weaponry with offensive capabilities, such as amphibious assault vehicles and U.S. Osprey tilt-rotor aircraft.

Abe may be making inroads with his brand of “proactive pacifism,” but the greatest obstacle to reconceiving Japan’s military is the constitution. Specifically Article 9, which bans the threat or use of force to settle international disputes. Abe’s plan to circumvent the article faces many hurdles, starting with parliament, where two-thirds approval is required in both houses. Support is strongest in the lower house but falls short in the upper one. Abe has an answer for that, too: He also wants to change the law mandating a two-thirds approval. So far, however, public support is tepid, with only 38 percent of people in favor of changing the war article.

The real flash point in the China-Japan dispute is over rights to the tiny Senkaku Islands, which may lie in a region of oceanic oil reserves.

3 soldiers in camouflage gear carrying military weapons running towards the camera

Source: Issei Kato/Reuters/Corbis

Japan’s Ground Self-Defense Force 1st Airborne Brigade in an annual New Year’s military exercise, east of Tokyo, January 12, 2014

Chinese aggression

The situation turns urgent now with China’s increasingly aggressive stance, particularly regarding maritime rights. Claiming 90 percent of the South China Sea and a substantial part of the East China Sea, China frequently gets into territorial scuffles with Japan, Vietnam, the Philippines and South Korea.

The real flash point in the China-Japan dispute, however, is over rights to the tiny Senkaku Islands, which may lie in a region of oceanic oil reserves. China recently declared an air defense zone around the islands, prompting both sides to beef up air and sea patrols and raising the risks of a collision or miscalculation by local commanders. China and Japan lack basic avenues for communication — like a hotline — and have no military-to-military relations, circumstances that make the chance of escalation significant.

The rest of Asia watches with alarm, wary not just of China’s behavior but also of Japan’s shifting military posture. Abe didn’t help matters last month by feeding concerns about his nationalism with a high-profile visit to Tokyo’s Yasukuni Shrine. The site recalls the 2.5 million Japanese soldiers who died in WWII — and also commemorates more than a dozen former officials convicted of war crimes in post-war trials.

The China-Japan standoff attracts only episodic attention in the West, but this is clearly one of the most dangerous places on Earth.

America’s stance

U.S. policy is the second factor pushing Japan toward a more assertive stance. Harder to document and not openly discussed by government officials, Japan’s concerns relate to America’s position toward China, of course, and the Middle East.

Although Tokyo wants to stay in close step with its U.S. ally, it undoubtedly worries that problems in the Middle East are sucking up most of Washington’s energy, despite the Obama administration’s pledge to “rebalance” toward Asia. And although Japan cannot doubt Washington’s alliance commitment (quantified in part by the 50,000 American troops on Japanese soil), it must trouble Abe that our geostrategic and economic equities with China could complicate our decision-making in a crisis.

6 men sitting in a semi circle with U.S. and Japanese flags behind them as Abe Speaks

Source: Koji Sasahara/Epa/Corbis

Japanese Prime Minister Shinzo Abe (center) speaks to U.S. Secretary of Defense Chuck Hagel (left) and U.S. Secretary of State John Kerry (second from left), October 2013

Abenomics

And then, of course, there’s Japan’s economy and its $4.6 trillion GDP, which Abe is trying to shake up in a big way. The 1980s, referred to as the years of “Japan Inc.,” saw annual growth in the 4 to 6 percent range, thanks to the close relationship between government and industry and the country’s enormous export success. But growth has dropped sharply since; economists offer varying interpretations, but many have labeled the last 20 years “lost decades.”

Abe will have to fight entrenched interests every step of the way, and the outlook is not good.

Abe’s response, starting with the easiest of changes, was to enact monetary policies and a fiscal stimulus that boosted exports and pushed the Nikkei stock index up nearly 60 percent in 2013, with the IMF projecting a 2014 growth rate around 1.8 percent. And now he is focused on more fundamental reforms that previously stymied his predecessors: tax reform and basic restructuring in the corporate, financial, industrial and agricultural sectors. Abe will have to fight entrenched interests every step of the way, and the outlook is not good.

These major changes on the horizon — Abe’s push for a stronger economy and more independent defense capability — are forcing other Asian countries to take notice and balance their anxieties about China with their lingering unease with Japan’s troubled history.

For America, the implications are similarly mixed. On the one hand, a stronger and more militarily capable Japanese ally could lift some of the burden from our shoulders for maintaining stability in Asia. But on the other hand, Japanese head-butting with China (however justified) could force agonizing choices on a Washington that has consistently seen there is little to be gained from confronting Beijing.

All of which makes for a very stormy forecast — and no obvious safe harbor.

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