A core assumption of international relations is that a state’s power is strongly correlated with its wealth. Besides being able to deploy this wealth directly through economic statecraft, it can also indirectly be converted into military power through investment in military capabilities. By this logic, Japan’s “lost decades” should have turned it into a geopolitical pygmy in the highly-contested Indo-Pacific region.
Yet according to Mireya Solis, director of the Center for East Asian Policy Studies at the Brookings Institution, the exact opposite has happened: Despite experiencing a decline in its economic power since the heyday of its “bubble economy”, Japan has in fact become a more consequential player in the Indo-Pacific. In her new book, Japan’s Quiet Leadership: Reshaping the Indo-Pacific, she highlights that embedding itself into global networks and playing a more active role in regional affairs have contributed to the growth of Japan’s relevance to the region.
Speaking at the book’s launch on Sept 6, Solis says Japan is used to playing defensive on trade and has avoided an explicit regional political role. However, that’s changing. She sees Japan emerging as a network power. “That is far from what we are seeing today,” she adds, attributing this trend to Japan’s resilience to populism and the rise of executive leadership and whole-of-government decision-making. The latter, she argues, has allowed Japan to develop a grand strategy that defines its approach to foreign affairs.
Solis’ work focuses on the most salient questions of Japanese politics ranging from its attitudes towards immigration to the legacy of the “lost decades”. Solis unpacks the complexities behind oversimplified popular myths about Japan to present a deeper understanding of what makes the country tick. Despite its reputation as a conservative and insular country, the rapid changes in the global economic and political environment have meant that Japanese society has not stood still.
One interesting example is on-the-ground attitudes towards immigration in the country. Japan has a reputation for being an insular country that is hostile to foreigners. Yet, Solis finds that Japanese political parties do not politicise and weaponise immigration and xenophobia. Moreover, pro-immigration policies do not appear to cause a discernible shift in public opinion towards a more negative attitude towards foreigners. Local governments, moreover, have spearheaded moves to give non-Japanese citizens a greater say in local affairs through foreign resident assemblies and local referenda.
This non-politicisation of immigration stems from the surprising lack of populism and polarisation in Japanese politics, where the establishment LDP-Komeito ruling coalition dominates. A key weakness of the book, however, is that it does not explain the reason for the lack of support for political populism in Japan despite setting this up as a key characteristic of its political system. While the book’s treatment of the perils of political apathy and its comparison of Japan’s democratic challenges to that of the US is interesting, one wishes for more elaboration on why populist politics is not as prevalent as is the case in other democracies in the age of populism.
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Enter the network power
Solis’ framing of Japan as a network power, however, is fascinating and refreshing in the context of more contested geopolitics in the Indo-Pacific. Solis credits much of Japan’s more purposeful global networks to reforms by former prime minister Abe. The consequential premier, who was assassinated on July 22, sought to articulate a more ambitious vision of Japan’s role in the region and centralise government processes to allow for a more coherent and streamlined decision-making process.
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According to Solis, the root of this more active Japanese foreign policy stems from Abe’s move to centralise policymaking in the national security sphere. He streamlined national security policymaking by forming a National Security Council, which helped facilitate exchanges of information outside bureaucratic silos and provide for the formation of a long-term strategic direction. Japan released its first national security report in the first year of Abe’s second term, articulating a coherent grand strategy based on serving as a “proactive contributor to peace”.
The centralisation of decision-making processes saw Tokyo pursue a foreign policy of unmatched coherence and ambition in the post-war era. Having previously shied away from great power politics in light of its wartime past, Japan articulated the concept of a “free and open Indo-Pacific”, which called for a regional order in the Indian and Pacific Oceans emphasising freedom, the rule of law and the market economy. That this concept has subsequently influenced how the US and Asean think about the region highlights the country’s pivotal role in shaping the complexion of the emerging Indo-Pacific regional order.
Similarly in the trade sphere, Japan has worked hard to expand its role in regional trade despite historically being a “laggard” in trade diplomacy. Seeing the CPTPP or Comprehensive and Progressive Agreement for Trans-Pacific Partnership as a means to overcome Japan’s economic and demographic limitations and entrench a liberal regional order, Tokyo centralised authority to conduct negotiations via a “TPP headquarters” in the Cabinet Office. Most importantly, Japan played a significant role in rescuing the deal in the first place, exercising leadership to preserve the agreement following the withdrawal of the US.
Southeast Asia, in particular, has been a significant beneficiary of Japan’s growing regional role. Tokyo is currently Beijing’s main peer competitor in the field of infrastructure finance, providing US$37 billion ($49 billion) compared to China’s US$42.3 billion to a region with desperate infrastructure needs. In contrast, the US has only provided US$1.1 billion and Australia US$1.8 billion. Japan also leads in terms of investment flows into Asean, providing US$138 billion as compared to China’s US$71.7 billion.
No surprise then that Japan’s reputation in Southeast Asia is particularly strong. In the past four years, the ISEAS Yusof-Ishak State of Southeast Asia survey found that Japan ranks top for the “most trusted nation to do the right thing to contribute to global peace, security, prosperity, and governance”. It is also considered by Southeast Asian elites to be the region’s preferred partner for hedging against a US-China strategic rivalry, with trust in Washington and Beijing running lower despite their larger economic clout.
Adapting to survive
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Despite these successes, however, Solis is well aware that Japan continues to face significant security and economic challenges. Like most regional states, Japan faces a trade-off between security and openness, with its strength as a network power potentially stressed by a fragmenting international order and a growing need to avoid overdependence on China. A connectivity strategy is less effective if the world is growing less connected.
Japan also needs to play catch-up on digital transformation, green transformation, and human capital transformation. In particular, Tokyo needs to work on immigration reform to ensure a sustainable supply of labour at all skill levels amid growing labour scarcity — an effort hampered by strict lockdown on foreigners entering the country during the Covid-19 pandemic.
Ultimately, however, Solis disagrees with the narrative of stagnation that emerged from Japan’s “lost decades”. Her book successfully shows how Tokyo has been creative in playing its limited hand to not only survive but thrive in a more uncertain global environment. Japan’s ability to redeem its lost decades, it seems, will depend on its willingness to continue adapting and changing to a world in constant flux.
