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24.09.2013 г.

Japan. Time for a System Change?

Konstantin Sarkisov

The 21 July 2013 elections for the upper house of parliament identified a new balance of political forces in Japan. Now the ruling Liberal Democratic Party of Japan has sufficient political power in both houses to try to implement radical reforms. In fact, Prime Minister Shinzo Abe has already announced them. First, they relate to macroeconomics - a significant reduction in the tax on investments and, conversely, an increased consumption tax. Second, to politics, namely the revision of the Constitution and - for this - revision of its Article 96 that calls for two-thirds of the votes to revise it. Finally, the government will have to adopt an administrative decree to the effect that the country's current Constitution does not deny the right of Japan to collective security, and, therefore, allows the use of armed forces beyond the country's borders.

Attempts to "change the system," as Abe himself calls it, were undertaken before, especially in the 1950's and 1960's, but they never brought about any results. Will Abe, with his significant mandate for reform, dare to change the system now, i.e. do what other conservative leaders of the postwar period had failed to achieve?

The draft of the new Constitution was promulgated on April 27, 2012, when the Liberal Democratic Party was still in opposition; it proposed a new political ideology of the country's basic law. In contrast to the current text, the proposed Preamble did not begin with the words "We, the Japanese people," but with "Japan, a country with an ancient culture and the emperor - a symbol of the nation's unity ..." The most significant change was introduced to Article Nine of Chapter Two. The draft proposal replaces its original title from the "Renunciation of War" to "Provision of Security." This refers to creation of the "Army of National Defense" and some other provisions that provide the right to use it in operations outside the country.

Japan's Constitution was a kind of "sacred cow" throughout the post-war period and until the mid-1990s. Starting in 1993, however, public sentiment seemed to indicate that more than half of the Japanese favor its revision, with only a third opposing it. In the new century, the pendulum swung back in the direction of those who are against the revision of the basic law, and the relationship to date remains approximately the same.

Will Japanese society accept the changes to the basic law proposed by LDP? How convincing are the arguments in favor of a revision and the public's vital interest in it? So far, there is no serious argument to support the notion that the current Constitution is an obstacle to realization of national goals. The only real motive in favor is national security. Tensions with China and South Korea increase the society's inclination to revise the Constitution as a measure to improve the country's security. Whether this help resolve the problem with these two countries, or, conversely, result in a dead-end and force those countries to unite on an anti-Japanese basis is not clear at this time at all.

When Japan yielded to China its second position in the world economy two years ago, it has been vigorously looking for new reserves of economic growth, internal stability, and security from external threats and challenges. The reasons were not only the phenomenal and psychologically frightening growth of the new giant that is, moreover, a neighbor, but also the feeling that Japan is losing its former potency and the ability to maintain rapid growth, growth that outpaces the global average.
Is this an indication of the "sunset" of Japan and its descent into the category of minor powers doomed to tag along in the shadow of the other great power? Can one view the "regime change" proposed by Abe as a radical means to avoid this? There are no clear answers to these questions and the public reaction to them is rather emotional. What is certain is that the era when Japan, along with Europe and the United States, formed the "triad" of economic giants that controlled about 70% of world GDP, has come to an end. Nevertheless, one can put up with this and focus on growth of quality parameters of the economy, on increasing its viability and flexibility in responding to heightened competition and market collapses.

For all that, Japan remains one of the leading players in the global economy. While it falls behind China by 15 percent of its GDP, Japan's GDP is 45% greater than that of Germany, the next one in line, and, and twice as much as the economy of France and England combined. The qualitative parameter (GDP per capita) of the Japanese economy looks pretty well compared with the economies of the number one and number two: its 48,488 dollars in 2011 tally well with the U.S. at 45.903 and are nine times greater than that of China (5,430).

Unlike a structural reform, any reform of the system is only undertaken in extreme necessity. Seen in the context of the needs of the Japanese economy and the revival of its former vitality, a revision of the Constitution is unlikely to produce any results. On the contrary, if carried out according to the LDP scenario, the prospect of "a militarily strong" Japan may well give rise to an "allergy" not only in China, but also in other Asian countries. The political implications of such developments will have consequences for economic relations.
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