EASTEconomics, Politics and PubliASIAc Policy in East Asia andFORUM the Pacific Vol.11 No.3 July–September 2019 $9.50 Quarterly

Japan’s leadership moment

Kiichi Fujiwara Abe–Trump bromance yet to bring rewards Rumi Aoyama Free trade leadership and China’s economic liberalisation Nobuko Kobayashi Can the Tokyo Olympics rebrand Japan? Ren Ito New strategies redefining Japanese innovation... and more ASIAN REVIEW Christopher Findlay: Can cooperation prevent a digital Iron Curtain? Farzana Haniffa: Sri Lanka’s Muslims after the bombings EASTASIAFORUM CONTENTS 3 kiichi fujiwara Quarterly Abe–Trump bromance yet to bring ISSN 1837-5081 (print) ISSN 1837-509X (online) rewards 5 rumi aoyama From the Editors’ Desk Japan’s free trade leadership and China’s economic liberalisation When Shinzo Abe was given a second chance at the Japanese prime 7 lauren richardson ministership in 2012, Japan was in the throes of a period of intense Japan’s deepening diplomatic crisis with South Korea domestic turmoil. After six prime ministers in six years, the nation was in desperate need of political stability. Abe has not only delivered that but is 9 tobias harris now set to become the longest-serving prime minister in modern Japanese Abe’s mixed achievements history. 11 ben ascione and yuma Abe commenced his second term with an ambitious policy program osaki focused on reinvigorating the nation’s stagnant economy, amending the Japan needs an infusion of fresh political blood constitution to achieve a more ‘normal’ defence and security policy, and engaging proactively in regional and global affairs. 13 john nilsson-wright To what extent has Abe achieved these policy goals? How has he Abe’s unfinished political legacy utilised the immense political capital accrued throughout his leadership 15 christopher findlay tenure? And what will be the legacy that Abe leaves when his prime ASIAN REVIEW: Can cooperation ministership ultimately comes to an end? In this issue of East Asia Forum prevent a digital Iron Curtain? Quarterly, scholars from both inside and outside Japan grapple with these 19 farzana haniffa questions. ASIAN REVIEW: Sri Lanka’s Muslims They also look at the formidable challenges that Abe will have to after the Easter Sunday bombings grapple with in his third and final leadership term. Japan’s long-term 24 MICHIKAZU kojima and fusanori iwasaki alliance with the United States is becoming more transactional than Sea change: Japan leads on marine plastic strategic under the Trump administration. The challenges of an ageing litter society and growing economic disparities demand active political 26 masataka nakagawa innovation. Japan is ageing faster than we think The mercurial US president, Donald Trump, has also initiated a trade war with China, undercutting the multilateral rules-based global trade 28 aizawa nobuhiro regime on which Japan’s postwar prosperity and security have been How immigration will change Japanese politics founded. His initiatives on the Korean peninsula have also undermined Abe’s hardline policy toward North Korea. Meanwhile, Japan’s relations 30 ren ITO with South Korea have reached their lowest ebb in decades, and North New strategies redefining Japanese innovation Korea’s Kim Jong-un has resumed missile testing. On a more positive 32 junichiro haseba note, some challenges have become opportunities for a stronger leadership. Abe has taken a risk on immigration reform. Environmental Japan leads the way in trade with ASEAN issues have become new fields of leadership, while the Tokyo 2020 34 nobuko kobayashi Olympic Games await. The ability of Abe to navigate the challenges and Can Tokyo’s inclusive Olympics rebrand turn them into opportunities will in large part shape his leadership legacy. Japan? Meanwhile this issue’s Asian Review explores the economic and security dilemmas of a 5G digital world and the impact of the Easter COVER: The central role at the G20: Japan’s Prime terrorist attacks on the conduct of Sri Lankan politics. Minister, Shinzo Abe, flanked by US President Donald Trump and China’s President Xi Jinping, at the Lauren Richardson and Aizawa Nobuhiro leaders’ summit in Osaka in June 2019. PICTURE: Kevin Lamarque / Reuters.

2 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 RISKY RELATIONS picture: JAPAN CABINET PUBLIC RELATIONS OFFICE VIA KYODO / REUTERS

Riding together: President Donald Trump and Prime Minister Shinzo Abe golfing in Japan in May 2019. Their personal bond has not produced policies that align with Japan’s interests. Abe–Trump bromance yet to bring rewards

Kiichi Fujiwara names and that Abe’s informal talks for national defence, and a threat with his American counterpart have because unilateral pressure on trade HILE US President Donald been near-perfect. What is the origin relations by America may weaken W Trump’s administration of the Abe–Trump bromance? And Japan’s economy. The need to maintain remains unpopular after more than how successful is this relationship in strong ties with Washington became two years in office, Prime Minister winning favourable policies for Japan? even more urgent with the election Shinzo Abe’s handling of US–Japan The most important priority of of President Trump, as he had openly relations is highly admired—at least in Japanese foreign policy is to maintain challenged both the US–Japan alliance Japan. Takaya Imai, possibly the most good relations with the United and trade relationship in public powerful cabinet secretary supporting States. The United States is both an statements. Abe, reportedly claimed that Abe and asset and a threat to Japan: an asset Abe’s strategy was to embrace Trump refer to each other by their first because US forces are indispensable Trump. He visited the president-elect’s

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 3 office in New York immediately after office, the United States pulled out of EASTASIAFORUM the election with a gift of a golden both the Trans-Pacific Partnership Quarterly Honma golf driver, which was followed and the Paris Agreement on climate by an invitation to Trump’s residence change—two agreements that Tokyo in Mar-a-Lago. The golf-centred supported and viewed as top policy EDITORIAL STAFF bromance led to a series of summit priorities. Issue Editors meetings, continuing up until Trump’s On trade, the United States Lauren Richardson is Director of state visit to Tokyo in May 2019 and imposed new tariffs on steel and Studies and Lecturer at the Asia–Pacific his attendance at the G20 summit in aluminium products. On the US– College of Diplomacy, ANU College of Osaka. There is little question that Japan alliance, Trump openly stated Asia and the Pacific, at The Australian National University. Abe and Trump are on a first-name that the defence treaty with Japan Aizawa Nobuhiro is Associate Professor basis—a relationship between a was unfair and needed to be changed. in Kyushu University’s Department of US president and a Japanese prime With tough pressure on trade and Cultural Studies and a Japan Fellow at minister that in the past has only been hints of geopolitical decoupling, it the Wilson Center in Washington DC seen between Reagan and Nakasone, would be difficult to think of a more Series Editors and Bush and Koizumi. unfavourable set of policies directed Peter Drysdale, Head, East Asia Forum The Abe–Trump relationship towards Japan. The irony of the Abe– and East Asian Bureau of Economic is supported by a stronger role Trump bromance is that, by embracing Research, Crawford School of Public for the Prime Minister’s Office in Trump, Abe createded an impression Policy, ANU. Japan. Traditionally, key ministries that Japan would follow the United Shiro Armstrong, Director, Australia– maintained prerogatives in Japan’s States no matter what. Japan Research Centre, and Editor, East Asia Forum, Crawford School of Public policymaking process, leading to a Policy, ANU. decentralised government with little BE’S approach to Trump can Editorial Staff power left for the prime minister. But A partially be explained by Japan’s Coordination: Brandon Harrington. Abe established the Cabinet Bureau geopolitical concerns over the rise Editing: Benjamin Clarke, Alison Darby, of Personnel Affairs in 2012, casting of China. Frustrated by the Obama Oliver Friedmann, Sam Hardwick, his influence on the choice of 600 key administration’s approach, which Illiana Jain, Dorothy Mason, Arun positions in the government. This failed to stop Chinese advances in the Murali, Maya Salma, Jake Read, David Wu, Catherine Yen, ANU. move tamed the power of individual South China Sea, the arrival of Trump Editorial Advisers: Peter Fuller, Max ministries, for they had no choice but seemed to offer a new opportunity Suich. to give in. for the United States to confront the Production: Peter Fuller, Words & Pics. In foreign policy, the role that was geopolitical challenge posed by China. Email [email protected], previously played by the Ministry of The unpredictability of the Trump [email protected]. Foreign Affairs has now been taken administration—while a matter of over by the Prime Minister’s Office, concern for the rest of the world— Views expressed are those of individual authors leading to what pundits have called could work out as an asset for Japan, as and do not represent the views of the Crawford kantei gaiko (diplomacy from the it was thought that Beijing might give School, ANU, EABER, EAF, or the institutions to Prime Minister’s Office). There have in to increasing US pressure. which the authors are attached. been cases where prime ministers, Developments in the first year-and- Nakasone and Koizumi among them, a-half of the Trump administration have tried to make key foreign policy moved in this direction. In the context decisions, but their efforts were far of Trump’s frightening choice of words short of the expanded role of the prime around North Korea’s missile and minister in the Abe administration. nuclear tests, China began to support However, although Abe enjoys economic sanctions on North Korea, Published by ANU Press a strong personal tie with Trump, possibly in fear of the consequences of The Australian National University the puzzle is that the bond has not a unilateral US strike on North Korea. Canberra ACT 2601, Australia Email: [email protected] produced US policies that align with However, different perspectives Web: http://press.anu.edu.au Japan’s interests. After Trump assumed mean that the United States and Japan

4 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 FTa EXPERIMENTS bring different priorities to their China policies. For Japan, China is Japan’s free trade predominantly a geopolitical source of anxiety and a rising military power that challenges the regional balance of leadership and China’s power. On the other hand, the United States—or at least Trump—sees China primarily as an economic foe, economic liberalisation a ‘currency manipulator’ with a huge trade surplus. Rumi Aoyama mega-regional trade pact among 16 This difference in perspectives has nations—10 ASEAN members along led to US policies that do not match HILE the threat of with Japan, China, India, South Korea, Tokyo’s priorities. Trump reversed his W protectionism is looming Australia and New Zealand—may initial aggressive policy toward North thanks to the trade war between also be within sight. Fuelled by shared Korea and met Kim Jong-un in person, the United States and China, trade- fears over the US–China trade war, while imposing high tariff rates on a dependent middle power Japan has China and Southeast Asian countries wide range of imported goods from stepped up as a free trade champion. are now seeking to finalise the trade China. Although Tokyo shared US The 11-member Comprehensive and pact by the end of 2019. RCEP aims concerns with China’s economic Progressive Agreement for Trans- to cover areas such as trade in goods, policies, economic engagement with Pacific Partnership (CPTPP), covering trade in services, investment, rules China was also an opportunity for 13 per cent of the world’s GDP and of origin, intellectual property and growth in the Japanese economy. 500 million people, came into force on electronic commerce. Japan has been There was recognition that trade 30 December 2018. One month later, pushing for high-standard rules during regulations on China’s exports could the Economic Partnership Agreement negotiations. lead to a global economic recession. (EPA) between Japan and the Japan’s leadership in global trade It is quite ironic that a tough China European Union took effect, heralding has had an unexpected impact on policy from the United States is the largest open trade zone in the China’s free trade agreement strategy, now causing more anxiety than world—accounting for nearly one- as well as its domestic economic and appreciation in Japan. third of global GDP and 635 million financial reforms. China is pushing Foreign policy experts in Japan people. strongly for RCEP and initiating were aware of the gap in priorities The Regional Comprehensive experimental measures in its domestic between the United States and Japan Economic Partnership (RCEP), a free trade zones with the aim of ‘wide and the possible chaos of Trump’s ranging and high standard’ FTAs. The unpredictable behaviour. But here Japan’s leadership in central government is speculating the effect of kantei gaiko kicks in. publicly about adopting rules from The voices of the professionals have global trade has had an the CPTPP and the Japan–EU EPA in been silenced by the huge power areas such as negative lists, investor– accumulated in the Prime Minister’s unexpected impact on state dispute settlements, intellectual Office, leading to a series of policy property, environmental protection failures such as Abe’s visit to Iran, China’s FTA strategy, and worker protection. which had a negligible impact on Iran’s RCEP, along with other FTAs, aggressive policies. Abe may enjoy as well as its domestic has always been a top priority in good relations with Trump, but any China’s foreign policy. At the 18th reward that may come from it is yet to economic and financial National Congress of the Chinese be seen. EAFQ Communist Party (CCP) in 2012, the reforms Chinese government set forth a policy Kiichi Fujiwara is Director at the of accelerating the establishment Institute for Future Initiatives, of FTAs. In 2015, the ambition ‘to University of Tokyo. establish a global FTA network’ along

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 5 the Belt and Road region was written government’s newly released Report on into the 13th Five-Year Plan. Then US China has reached the the Development of China’s Free Trade president Barack Obama declared that Pilot Zones conceded that reforms in the United States would participate tipping point where no the financial sector have largely lagged in the TPP, stating that ‘we can’t let behind those in the trade sector. countries like China write the rules of further real economic Policies introduced in the Shanghai the global economy’. Leading scholars Free Trade Zone, which aim to hasten with close ties to top leaders in China liberalisation is possible the process of internationalising the asserted that RCEP without the United renminbi, are not consistent with States could and would coexist with without substantial existing policies outside the zone. the TPP. RCEP and FTAs, in the This makes policy implementation eyes of China, were seen as the best political reforms extremely difficult. Financial platforms to blunt the TPP’s negative liberalisation may also require impact. political reforms aimed at ensuring While US President Donald Trump an independent judiciary, while also has taken the United States out of standard’ FTAs has emerged as one building trust in the central bank and the TPP, the CPTPP and Japan–EU of China’s highest-priority policy in government accountability—all EPA are now in place. Given that the goals. In the past five years, the of which are impossible missions European Union is China’s largest Chinese government has established for a government that has explicitly trading partner while Japan ranks 12 pilot domestic free trade zones dismissed notions of Western-style fourth, China is still making efforts to and announced the establishment polity reform. propel RCEP negotiations forward. In of six more partly in response to the Prime Minister Shinzo Abe’s order to keep India in RCEP, China has conclusion of the CPTPP and Japan– leadership on global trade has brought promised India that it would further EU EPA. The Shanghai Free Trade out unexpected yet promising liberalise its market in exchange for Zone, the first test area, was approved changes in China. The CPTPP and India’s acceptance of tariff-elimination in July 2013 and started formal Japan–EU EPA hold the possibility under RCEP. In the meantime, China operations in September that year. of provoking market reform of the has also proposed an ‘ASEAN + 3 FTA’ Even when the prospects for the TPP Chinese economy, since the Chinese as the first step towards RCEP. were still unclear, policies had been government is testing the water for The CPTPP and Japan–EU crafted in the Shanghai Free Trade further liberalisation in the pilot economic partnership arrangements Zone to meet the standards of TPP. free trade zones by adopting the have also ignited China’s enthusiasm In this pilot free trade zone, most rules set by Japan and is considering for furthering long-overdue economic experimental policies are centred possible changes in policies regarding and financial reforms. The Xi Jinping on the financial and trade sectors, environmental standards and data administration sees that the rules since the goal is to turn Shanghai flows. But despite the promising set by the CPTPP and Japan–EU into an international financial centre effects of Japan’s global leadership, EPA demonstrate a vision for future and free port. The government has China has reached the tipping point global standards. These trade pacts gradually introduced policies to where no further real economic entail rules and procedures of origin, liberalise interest rates and capital liberalisation is possible without reduce non-tariff measures and service accounts, while it also founded the substantial political reforms. Given trade barriers, and aim to improve China (Shanghai) Pilot Free Trade that President Xi is prioritising the mutual market access for government Zone Court of Arbitration in 2013. elimination of all political risks that procurement. Still, China so far has If successful, the experimental may jeopardise the survival of the been reluctant to compromise in some policies and procedures adopted in CCP, real reforms are unlikely in the areas such as environmental standards, the Shanghai Free Trade Zone are near future. EAFQ data flows and intellectual property expected to be extended to other protection. regions. Rumi Aoyama is Professor at the Against this backdrop, the But economic liberalisation is not Graduate School of Asia-Pacific creation of ‘comprehensive and high a foregone conclusion. The central Studies, Waseda University.

6 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 STRATEGIC DIVERGENCE picture: KIM HONG-Ji / reuters

South Korean protestors pause to take a selfie during a rally outside the Japanese embassy in Seoul in August 2019. Demonstrators were demanding an official apology for wartime forced labour. Their signs read ‘No Abe!’. Japan’s deepening diplomatic crisis with South Korea

Lauren Richardson in their longstanding history which are also shaping the contours problems drove Tokyo and Seoul of diplomatic friction, and these have APAN’S relationship with South to this crisis point. South Korean largely been overlooked by analysts. J Korea is not amicable at the President Moon Jae-in reneged on a In short, there has been a major best of times. Yet it in recent months diplomatic accord in 2018 that was divergence in Seoul and Tokyo’s it has entered a rapidly descending purported to ‘irreversibly’ settle the strategic views toward North Korea. diplomatic spiral of unprecedented ‘comfort women’ issue. The South This began to develop in January depth and scope. Mounting bilateral Korean judiciary, moreover, has 2018 when Seoul embarked on a friction over the intractable ‘history grown increasingly incessant in its rapprochement with Pyongyang, problems’ has been steadily bleeding demands for Japanese companies to while Tokyo’s policy on North Korea into the economic and security realms pay damages to Koreans mobilised for remained fundamentally unchanged. of the relationship. The result has been wartime labour. This strategic divergence, which a bilateral trade war with potential These bilateral developments are has continued to deepen with time, repercussions for the global supply doubtlessly playing a central role in undermined the ability of Japan and chain of high-tech devices. the deterioration of Tokyo–Seoul South Korea to cooperate in the On the surface, it would appear that relations. Yet there are broader security realm. By extension, it also a series of contentious developments strategic parameters to this dispute reduces the diplomatic incentives to

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 7 manage their history problems. rapprochement and a round of maritime patrol aircraft. By way of illustration, North regional summitry. To ensure that This downward spiral in Tokyo– Korea’s belligerence throughout the diplomatic door remained Seoul relations has been compounded 2017 encouraged Seoul and Tokyo to open to Kim, Moon was reluctant by their mutual US ally taking contain their diplomatic problems. to provoke him, which meant that more of a backseat than usual in As North Korean leader Kim Jong-un trilateral exercises with Japan became the dispute. Normally, Washington rapidly advanced his nuclear program, problematic. would be strongly encouraging its his missiles were frequently traversing Yet from Tokyo’s point of view, little two key Asian allies to maintain their Japanese airspace. Continental had changed with regard to North security cooperation, in spite of their United States also came under threat Korea. Japanese Prime Minister Shinzo diplomatic issues. However, this is now with Kim’s successful launch of an Abe was not prepared to risk political complicated by the fact that Trump intercontinental ballistic missile. suicide by following suit with his South supports—at least in practice—South These events provoked a rhetorical Korean and US counterparts. Indeed, Korea’s rapprochement policy towards war between Kim and US President the issue of Japanese abductees takes North Korea and is thereby deepening Donald Trump that threatened to precedence over the North Korean the Tokyo–Seoul strategic divergence. escalate to a de facto war. Indeed, nuclear threat in Japan, and Abe’s Although Pyongyang has now media reports emanating from the domestic political success is explained resumed missile testing, it is doubtful United States indicated that Trump in part by his hardline stance towards that this development will incentivise was seriously considering a preventive Pyongyang on the abductee question. Japan and South Korea to repair attack—a ‘bloody-nose’ strike—against Consequently, Tokyo became sidelined their relations. This is because Moon North Korea. from the regional summitry. is likely to continue pursuing his This precarious security Amidst this growing strategic rapprochement policy with North environment provided strong divergence, Moon unilaterally Korea and there has already been too incentives for Seoul and Tokyo to dissolved the ‘comfort women’ much bilateral damage done in Tokyo cooperate in the defence realm, and accord in November 2018. In the and Seoul’s current dispute. their strategic outlooks on North same month, Tokyo announced that There is no clear way out of this Korea were aligned closely at the time. it would appeal to the International diplomatic crisis. What is evident, Both sides were in favour of strong Court of Justice over a South Korean however, is that Seoul and Washington sanctions, intelligence sharing and court ruling concerning Korean forced are likely to persist in engaging trilateral military exercises with the labourers. Relations took a further North Korea and working towards United States. Defence cooperation downturn in January 2019, when the denuclearisation—at least in the necessitated keeping their ever- two governments disputed whether foreseeable future. In light of this, present history problems in check, as a South Korean Navy destroyer had if Tokyo and Seoul wish to pave a collaboration in this sphere has always locked its targeting radar on a Japanese foundation for mending their ties, been tenuous. Against this backdrop, they must recalibrate the strategic Moon expressed opposition to the Seoul and Washington parameters of their relationship. Their 2015 ‘comfort women’ agreement but relations will need to be predicated remained ambiguous as to whether or are likely to persist in on mutual engagement with North not he would dissolve it. Korea, rather than the mutual isolation Yet when North Korea initiated engaging North Korea of the past. To achieve this strategic an about-turn in January 2018, the convergence, Tokyo will need to strategic views of Seoul and Tokyo and working towards endeavour to end its longstanding quickly began to diverge. Kim impasse with Pyongyang. EAFQ extended an olive branch to Moon denuclearisation—at least in his 2018 New Year’s address, Lauren Richardson is Director of suggesting that the two Koreas jointly in the foreseeable future Studies and Lecturer at the Asia– compete in the Winter Olympics. Pacific College of Diplomacy, ANU Moon seized upon this conciliatory College of Asia and the Pacific, at The gesture, ushering in an inter-Korean Australian National University.

8 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 TENTATIVE BALANCE picture: YOSHIO TSUNODA / AFLO / reuters

Leading from the front: Prime Minister Shinzo Abe campaigning with candidate Yoshiro Toyoda in Ichikawa, Tokyo, in July 2019. Abe’s mixed achievements

Tobias Harris institutions to strengthen Japan’s commensurate to his ambitions or ability to cope with the challenges of the promise that his status as Japan’s N 20 November 2019, Japanese the post-Cold War world. He has never strongest, most durable prime minister O Prime Minister Shinzo Abe been interested in power for power’s foretold. will become the longest-serving sake, but rather to wield it to overcome While accusations that Abe prime minister since the position longstanding crises and build a strong practices ‘dictatorial politics’ are was created. It is a noteworthy and prosperous Japan. overblown, there is little doubt that achievement, but it is particularly Despite his transformational he is institutionally and politically remarkable given that it was unlikely ambitions, Abe’s legacy may be more stronger than any of his predecessors. that Abe would get another chance to of a cautionary tale about the limits Institutionally, he has been the lead Japan after he resigned as prime of strong leadership in advanced beneficiary of more than 30 years minister in 2007 following a disastrous industrial democracies—particularly of reforms to strengthen Japan’s one-year tenure. in the face of long-term, far-reaching executive. Abe built upon these Still, his legacy as a leader remains and perhaps even existential problems. reforms after taking office by creating uncertain. It is not that he has achieved little as a national security council and a Throughout his career, Abe has prime minister. Abe can point to real cabinet personnel bureau, giving the stressed his personal mission—driven and enduring changes delivered by prime minister the power to select the by the ideas of his grandfather, his prime ministership in every policy highest-ranking bureaucrats across the Nobusuke Kishi—to uproot postwar area, but these achievements are not government.

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 9 Politically, he has led the Liberal unconventional policies from which so by deepening Japan’s reliance on its Democratic Party with fewer there appears to be no easy way out. ally for its security. Japan is spending institutional sources of dissent and Abe may have a better case to an increasing share of its defence even fewer serious rivals to challenge make when it comes to his impact budget on purchases from the United him for power. The Democratic Party on Japan’s place in the world. When States and is still placing cooperation of Japan struggled to regain public Abe welcomes athletes and visitors to with the US military at the centre of its trust after being driven from power Tokyo for the Olympics in July 2020, efforts to strengthen national defence in 2012 and shattered irreparably in he will do so as the leader of a nation capabilities. 2017. In these circumstances, Abe that has become significantly more Abe has drawn closer to the United has benefited from the public’s desire global during his tenure. Japan has States despite signs, under both the for political stability and has enjoyed become more welcoming to foreign Obama and Trump administrations, healthy levels of support in opinion goods, capital, workers, tourists, that Washington may be unwilling polls without interruption. But these and even ideas. His globe-trotting to invest in promoting Asian peace, sources of strength have not translated diplomacy has deepened ties with key prosperity and stability in the years to into transformational change. strategic partners in Asia and Europe. come. Abe has long boasted of the positive He has reinvented Japan from While Abe achieved some results of Abenomics—his three- a reluctant participant in trade important political victories, he pronged economic program, including liberalisation to a leader of the Trans- has struggled to overcome some large-scale monetary easing, fiscal Pacific Partnership bloc after the of the thorniest challenges. He stimulus, and a strategy to develop United States withdrew in 2017. He often shied away from confronting new sources of long-term growth. has also strengthened bilateral ties political, economic, demographic The positives include having reversed with the United States while building a and international issues that are deflation, created one of the longest more stable relationship with China—a fundamental in determining Japan’s booms in postwar Japanese history, balancing act that few countries have future wealth, power, and influence. record-low unemployment, record- managed as well during the Trump He is also unlikely to achieve perhaps high numbers of foreign residents years. his most-cherished political goal, and record-high corporate profits. Yet revising Japan’s postwar constitution, these policies have not fundamentally BE’S Japan is a more visible particularly after the pro-revision altered the outlook for Japan’s A regional and global player than bloc in the Upper House lost its demographics, and thus its future before, but his diplomacy has not been supermajority in the 2019 elections. economic prospects and international an unalloyed success. His vigorous Abe has been cautious despite clout. pursuit of a diplomatic settlement with his longstanding desire to overturn It remains to be seen if Abe’s Russia has led to Japanese concessions Japan’s postwar state, adjusting his relentless focus on growth in the short but no peace treaty or territorial expectations to what is politically term yields fruit over the long term. concessions by Russian President possible rather than what he desires It could be years before the results Vladimir Putin. Diplomatic overtures most as a politician. This leadership are apparent. Population decline to North Korea have gone nowhere style has ensured that he survived long is now guaranteed, even if Abe or and Japan has been sidelined as the enough to set new endurance records, his successors eventually alleviate United States and South Korea pursue but it may not be sufficient to stave off the impact through investments in their own talks with Pyongyang. Japan’s long-term decline in a rapidly labour-saving technologies, measures Relations with South Korea may be at changing Asia. EAFQ to promote gender equality in the their worst since 1945. workforce or a new willingness to Although Japan and China have Tobias Harris is Senior Vice President welcome foreign workers. stabilised their relationship, deep at Teneo Intelligence, and Economy, Pursuing short-term growth will distrust remains. Long-term vision Trade, and Business Fellow at the also leave Abe’s successors with a on cooperation to build a regional Sasakawa Peace Foundation USA in structural deficit set to swell as baby order is lacking. And while Abe has Washington DC. He is working on a boomers continue to age and the strengthened the bilateral relationship biography of Shinzo Abe that will be Bank of Japan remains tethered to with the United States, he has done published in April 2020.

10 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 AFTER ABE Japan needs an infusion of fresh political blood picture: KYODO / reuters Ben Ascione and Yuma Osaki

N 20 November 2019, Shinzo O Abe will become Japan’s longest serving prime minister since the inception of parliamentary politics during the Meiji Restoration. When he first took on the top job in September 2006, there was speculation that this might herald a new wave of younger Japanese politicians. Yet more than a decade later, Japanese politics looks likely to continue to be dominated by political dynasties (seshu giin) and the old boys of the ruling Liberal Democratic Party (LDP). LDP Secretary-General Toshihiro Nikai has suggested that party rules could be changed again to allow Abe to serve a fourth consecutive three- In his father’s footsteps? Shinjiro Koizumi, a Liberal Democratic Party politician and son of former prime year term as LDP president—and minister Junichiro Koizumi, announces his planned marriage with TV presenter Christel Takigawa. The stay on as prime minister—after his media call was held at Prime Minister Shinzo Abe’s official residence on 7 August 2019. current term ends in September 2021. This indicates that there is a serious often prickly relations with regional Self-Defense Forces. lack of contenders for Japan’s political neighbours and the need for deft and In the post-Abe era, however, leadership. When Abe does step down, creative diplomacy. institutional barriers to the emergence where will Japan’s next generation of Before Abe’s second stint as prime of fresh leadership and innovation in leaders come from? minister, Japan suffered from a prime Japan’s political process look set to Fresh leadership is needed as ministerial merry-go-round that remain. Japan faces critical policy challenges saw six prime ministers take office One barrier is the long-time that require innovative responses, in as many years (2006–2012). This dominance of the LDP. As research statesmanship and political vision. lack of stability hampered the ability by Daniel Smith highlights, Japan Perhaps the most critical is the need of governments to meaningfully has an unusually high prevalence for deeper structural economic formulate and implement substantial of dynastic politicians for an reforms—beyond the mantra of policy changes. Abe’s political economically advanced democracy. Abenomics—to boost productivity resilience (Abe-ikkyo) means he This is apparent in the LDP, where the and manage the burgeoning national is able to leave his mark through number of dynastic politicians peaked debt as society ages and the tax base such initiatives as Abenomics, at over 40 per cent in the early 1980s shrinks. Potentially, reforms might reinterpreting Article 9 of Japan’s and remained at around one-third include a more open immigration constitution, and attempts to explicitly after the 2017 lower house election. policy. Another key challenge is Japan’s recognise the constitutionality of the Other research shows that dynastic

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 11 politicians secure greater subsidies for eventual split of the DPJ into the remedy this, the government passed their constituents. Of Japan’s previous Constitutional Democratic Party and the (non-binding) Gender Parity 10 prime ministers, a staggering seven the Democratic Party for the People Law in 2018 encouraging political came from political dynasties. Two of divided the anti-LDP vote, further parties to field ‘as much as possible’ the three non-political-dynasty prime weakening the opposition. equal numbers of male and female ministers were from the Democratic Following these developments, candidates in elections. Party of Japan (DPJ)—Naoto Kan and voter turnout in the July 2019 Upper While most parties fielded Yoshihiko Noda. House election fell below 50 per cent— improved numbers of female The high proportion of dynastic the second lowest rate in the postwar candidates in the July 2019 Upper politicians is perhaps explained by the era. Some see a ray of hope in Taro House election, the LDP fielded so-called ‘three ban’ credentials for Yamamoto, an actor-turned-activist just 14.6 per cent. And despite the winning national office as explained and political innovator. His new party, increase in female candidates, the by Nobutaka Ike in 1957. Jiban Reiwa Shinsengumi, won two Diet number of women who won seats in (foundation) refers to the cultivation seats. Both were gained by disabled the Upper House remained somewhat of a core group of supporters, kanban candidates, a powerful message of unchanged, at 22.6 per cent. (signboard) refers to reputation and inclusion for Japan’s most vulnerable. The number of female legislators name recognition, and kaban (satchel) But overall, opposition parties are in Japan’s local-level governments is connotes electoral campaign funding. failing to articulate an alternative also highly limited. Until 2018, 20 per These are often passed on from father economic vision to Abenomics that cent of Japan’s 1788 city and town level to son and support the LDP’s election is capable of capturing the public’s assemblies had no women members machinery. Since Japan has had only imagination and serving as a platform at all. Short of Japan passing binding four non-LDP prime ministers since for leadership. measures such as a quota system, 1955, this trend is likely to continue A third barrier is the limited significant progress in female political and will limit the pool of potential opportunities for female politicians. representation is unlikely in the near leaders. Japan ranks 163 out of 193 countries future. Greater efforts are needed This may help explain the for female representation, having to develop pathways to increase the popularity of Shinjiro Koizumi. He only 10 per cent of female MPs in numbers of female politicians and promises a balance between the LDP the Lower House—the lowest among cultivate a change in cultural attitudes brand’s stability and maverick reform OECD, G7 and even G20 nations. To towards women in positions of in the image of his father, former leadership. prime minister Junichiro Koizumi. Greater efforts are There are some small signs of The strategic announcement of his optimism that Japan’s political sclerosis recent marriage at the Cabinet Office needed to develop might be overcome and new sources boosted his popularity and leadership of innovative leadership developed. prospects. pathways to increase Yet significant changes are needed to Another barrier is the weak state promote greater meritocracy within of opposition parties and widespread the numbers of female the LDP, to rebuild credible opposition political apathy. Electoral reform parties that can hold the government that passed in 1994 was expected politicians and cultivate accountable and provide platforms to push Japan toward a stable two- for leadership, and to advance the party system with genuine electoral a change in cultural participation of women in Japan’s competition, but the DPJ’s three political leadership. EAFQ years in power (2009–2012) proved attitudes towards women disastrous for both the party and Ben Ascione is a researcher at the Japanese democracy. Political in positions of leadership Crawford School of Public Policy, The infighting coupled with the triple Australian National University. earthquake-tsunami-nuclear disaster Yuma Osaki is a PhD candidate at the saw a public loss of confidence from Crawford School of Public Policy, The which the DPJ never recovered. The Australian National University.

12 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 UNREALISED AMBITIONS Abe’s unfinished political legacy picture: Henrik Montgomery / TT News Agency / reuters John Nilsson-Wright is partly because the international environment has become far more NDER the premiership of Prime challenging, unpredictable and U Minister Shinzo Abe, Japan threatening. The spread of populist appears to have found its feet as a politics, the re-emergence of regional and global actor. Gone are the nationalism and the growing strength merry-go-round annual changes of of authoritarian regimes globally are prime minister that were the hallmark all undercutting the multilateral norms of Japanese politics from 2006 to and values that have served Japan so 2012. By providing political stability well. and policy continuity at home, Abe’s Despite successfully hosting governing Liberal Democratic Party the G20 in Osaka in June 2019, for (LDP), along with its Komeito ally, instance, the substantive achievements have secured the support of a Japanese of the summit have been modest. The electorate that values economic South Korean President Moon Jae-in: unhelpfully failure to make progress in key areas prosperity, is risk averse when it evoked controversial historical narratives. at Osaka has been striking, including comes to foreign policy and has shown no explicit rejection of ‘protectionism’ little confidence in Japan’s fractured He has presided over a much needed in the summit’s communique and no opposition parties. increase in the country’s military formal re-commitment to a ‘rules- But does this record of success capabilities and overseen the based international system’ despite at the ballot box amount to proof of expansion of Japan’s strategic options Japan’s longstanding support for such leadership ability? From a historical beyond its traditional reliance on the a message. At best, there was also perspective, Abe compares favourably United States. limited success on global priorities: with his postwar predecessors. In By advancing a new vision of a ‘free both traditional ones such as climate terms of political longevity, Abe is a and open Indo-Pacific’, Abe has shown change and new proposals such as clear success. He will soon become an appetite to engage in the difficult Abe’s push for greater coherence on the country’s longest serving prime process of laying out a long-term global digital standards through the minister and is likely to remain in foreign policy plan that reflects Japan’s ‘Osaka track’. office until 2021. national interests. Recent efforts to For all of Abe’s considerable When it comes to diplomatic improve ties with China such as Abe’s investment of time in establishing engagement and energy, few can visit to Beijing last October and next a personal rapport with Donald match the hyperactivity of this year’s anticipated visit to Japan by Trump, his approach has had little peripatetic premier. Abe’s willingness President Xi Jinping also reflect Abe’s influence in insulating Japan from the to travel the globe to establish Japan’s tactical pragmatism. By hedging, the US President’s brutal transactional credentials as a ‘proactive contributor government is shrewdly avoiding approach to international diplomacy. to peace’ has given Japan an excessive dependence on the United The suggestion by John Bolton, uncommon visibility and a sustained States and anticipating the dangers Trump’s national security adviser, that presence that has enabled him to associated with a more confident and Japan increase five-fold its host-nation establish a personal rapport with other regionally assertive China. contribution to the financial costs of national leaders. There are limits to what this the bilateral partnership and Trump’s On security policy, Abe’s credentials inherently rational and forward- undiplomatic questioning of the as a pragmatic realist are impressive. looking approach can deliver. This US–Japan Mutual Security Treaty are

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 13 deeply unsettling to Japanese officials. and mass opinion has narrowed. The has occurred in the aftermath of Not only are the security Abe government’s approach to South the start of a new imperial era in fundamentals of the alliance being Korea appears anything but coherent Japan, following Emperor Akihito’s challenged, but Abe is being pushed by or measured. The sharp deterioration abdication and the accession to the the United States to deploy Japanese in relations with Seoul, prompted throne of Emperor Naruhito. military assets in the Strait of Hormuz. by disputes over wartime Korean For some critics of Abe, especially Japan’s reluctance to accede to these labourers and ‘comfort women’, and on the political left, a more requests reflects the ambiguity Japan’s decision to restrict exports of unapologetic and nationally confident surrounding their constitutionality critical semi-conductor technology posture by Japan’s conservatives is a and public nervousness about Japanese to South Korea, has injected an problematic if not retrograde step. forces being caught up in a potential unfamiliar emotionalism into the Abe It smacks of historical revisionism, a conflict. government’s approach. narrowing of public debate, and helps Pressure from the White House for Both sides have undoubtedly to explain the increased salience of a bilateral trade deal with Japan under contributed to the worsening in the issue of constitutional revision in the threat of punitive tariffs is further ties. South Korean President Moon Japan. Abe remains firmly committed proof of Washington’s heavy-handed Jae-in has unhelpfully evoked to this goal despite his failure to secure approach and willingness to impose controversial historical narratives that a two-thirds majority in the recent substantial political costs on Abe, who have amplified the grievances of the Upper House elections. In making has already expended considerable South Korean public. For Abe and this commitment, the prime minister political capital at home in seeking his government colleagues, and not needs to confront the potential to internationalise and liberalise the a small part of the Japanese public, contradiction of advancing goals Japanese economy. something appears to have snapped. driven by emotional (and often deeply Abe has shown himself to be a The forbearance and patient, legalistic divisive) needs rather than rational, qualified risk-taker when it comes to approach of the past has been replaced strategic objectives. embracing controversial economic and with a new mood of irritation and Ultimately, deciding how to social policies at home—particularly anger. resolve such contradictions requires on issues such as indirect taxation and This shift reflects the revival of an explicit and transparent public immigration. For this, he should be identity politics and competing discussion about Japan’s own political commended. Yet the country remains nationalistic impulses globally and values and how they should influence mired in a slow-growth, high-debt specifically in both South Korea its foreign policy. Abe, to his credit, deflationary trap, reinforced by the and Japan where politicians are has called for more Diet debate on latest downgraded GDP growth grappling with highly contested and some of these themes. It is unclear statistics for 2019 of 0.9 per cent, sometimes mutually contradictory whether Abe has the leadership down from 1.3 per cent. notions of nationhood. It is probably capacity to lead this debate in a In foreign affairs, Abe’s attempts to not coincidental that this worsening genuinely inclusive and unifying achieve breakthroughs with Russia, of ties between Seoul and Tokyo manner. If he does, this will help Iran and North Korea have yielded him build on his existing foreign little progress. Despite the importance Deciding how to resolve policy achievements and establish of the country’s Indo-Pacific vision, it his political legacy in ways that might is also not immediately clear that this such contradictions prove unexpected. EAFQ adds up to a coherent strategy. As was often the case in the past, there is a requires an explicit John Nilsson-Wright is a Senior gap between the policy ambitions of Lecturer in Japanese Politics and Japan’s elite and a Japanese public that and transparent public International Relations in the Faculty remains sceptical about the merits of of Asian and Middle Eastern Studies, more active involvement in foreign discussion about Japan’s University of Cambridge, and Senior affairs. Research Fellow for Northeast Asia in On one important foreign policy own political values the Asia Pacific Programme, Chatham issue, however, the gap between elite House.

14 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 ASIAN REVIEW: TECHNOLOGY Can cooperation prevent a digital Iron Curtain? Christopher Findlay

IFTH-generation mobile network F technology (5G) offers higher speeds and greater capacity. This is critical for cutting-edge technologies that are being developed, such as autonomous vehicles, factory automation and virtual reality applications. But there is much more than this. The development of 5G is also expected to drive innovation towards many things not yet imagined. It is likely to be truly transformative. The demand for a transition to 5G was driven initially by the rapid growth in the use of smartphones, which led to a larger number of devices with good screens and increased demand for better video-streaming capabilities. The first step of implementing 5G can be built on the existing 4G infrastructure, but the personal benefits to mobile users is not the main story. It also offers low latency and high reliability, which is critical for innovation related to communication between devices. Getting these benefits, though, will require much more investment to provide for the many more devices which will be constantly communicating with each other across large areas. No country has given 5G more attention than China, and Chinese technology firm Huawei has high market shares in the components of 5G telecommunications networks. While the firm is well regarded in its sector for its management and innovation, the views of policymakers A presence around the world: a Huawei corporate mascot in a store in Vina del Mar, Chile, in July 2019. differ. There have been questions over While the company is well regarded for its management and innovation, policymakers in some countries the prudence of allowing Huawei to be have questioned ‘the prudence of allowing Huawei to be involved in building 5G infrastructure’. picture: Rodrigo Garrido / reuters

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 15 ASIAN REVIEW: TECHNOLOGY involved in building 5G infrastructure, in order to operate at the speed all allegations of wrongdoing. particularly in countries such as expected. The alternative is to use More generally, there is rising Australia and the United States. The higher frequencies, as some countries, concern about cyber intrusion, which United States has responded with including the United States, propose. has accelerated since the cyber attack plans for bans related to investment But those signals can be subject to on Google in 2010, which was linked and exports. Australia has adopted a interference from other objects and to Chinese hackers. Much attention is policy which has the effect of banning don’t travel so far. That means more also given to the National Intelligence Huawei from being a vendor to its 5G infrastructure would be required, Law in China, which says that private network. which adds to costs. China, therefore, firms need to ‘provide assistance and A more efficient solution, it is has opted for a model that also uses cooperate in national intelligence argued here, is to identify the real risks lower frequencies, where it is also work’. involved and to design regulatory or reported to have more available Given its history and the national business responses which meet the bandwidth than the United States. intelligence provision, questions principles of good public policy. This is As China has focused on 5G, have been asked about the prudence also a matter for regional cooperation, Chinese firms providing capacity for of allowing Huawei to be involved the outcome of which can feed into that sector have also grown. Huawei in building 5G infrastructure. The global strategy. is the leader. It offers competitive continuing concern creates a great There are four elements to China’s pricing, leading technology and challenge for Huawei. interest in 5G. First is demonstrating global standards, and it now offers Three risks are highlighted in the how to build a successful ‘standalone’ ‘end-to-end’ services. Its competitive application of 5G. One is system 5G network (which offers all the position is based on its research and failure. In a 5G world more data will dimensions necessary to enable development spending. Its network be moving about, so it will be more the ‘internet of things’), rather than equipment embodies standards which difficult to identify malicious data. just a first-stage add-on to 4G. are at a global level (and which now There will be a lot of activity in the Second, demonstrating to other also drive standard setting at that cloud, so opportunities for cyber customer countries how the ‘China level). intrusions will be greater. There will model’ works. Third, capturing the also be a lot of devices connected, and opportunities of exporting to members HILE Huawei is regarded as a so more potential points for malicious of the Belt and Road Initiative along W highly innovative organisation devices to connect. Given the rising the ‘digital Silk Road’. Finally, getting with a positive reputation in dependence on these systems, the the system working will generate the industry, in policy circles in impact of a bad event will be much even more data (another advantage predominantly English-speaking greater than with 4G. Second, there to China in this area) that will, in countries there are concerns about are risks associated with data flows the context of current and potential elements of its history. These that involve loss of privacy and loss applications of artificial intelligence, include Huawei’s business practices, of information of commercial value. help to drive innovation in new particularly in its dispute with CISCO, Third, there are matters specific to applications, creating more benefits allegations of sanctions-breaking defence. Military systems rely on and adding to the payback on the set- and concerns about the supply of networks, so there is a concern about up of the network. equipment to rogue states. Some actions that might impede military The reference to the ‘China of these are linked to the arrest of operations, or deflect or distort model’ concerns the choice of signal Huawei’s Chief Financial Officer, Meng information. frequencies to be used on mobile Wanzhou. Also topical are the origins In the face of these risks, the networks for 5G connectivity. Low- of the company: its apparent military United States has responded by frequency signals in many countries connections, its access to government full bans related to investment are already being used for existing finance in its foundation period and and Chinese technology exports. technologies, including those with the lack of transparency about its These include declaring a national security and military capabilities. That corporate structure and governance— emergency and blocking the use of restricts their use for 5G where the even the lack of a public profile of any component, equipment or service signal must be free from competition CEO Ren Zhengfei. Huawei has denied provided by suppliers who are under

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picture: ALY SONG / reuters for those components. Companies present their technologies to meet the standard and the best technology wins in a merit-based system. Meeting some standards may require access to a patented technology and, if selected, successful companies receive royalties as others incorporate their technology into components that meet the standard. Competitors in this process primarily come from Europe, China, Japan, South Korea and the United States. Significantly, Huawei has a strong reputation in this process in relation to meeting cybersecurity goals. Chinese firms may hold about 40 per cent of 5G standard related patents, which is a big increase over the 4G world. Apparently Huawei Huawei founder Ren Zhengfei: the firm leads in providing capacity for 5G services. can get royalty income but may not actually build products if the ban the jurisdiction of an adversarial the United States if it applies these proceeds. However, another scenario government. It also has added Huawei measures. They include lost profit is that Huawei gets pushed out of the and its 68 global affiliates to the Entity for US companies that are linked to ITU standards process, causing China List, which has the effect of banning Huawei. In the longer term, there to lead in setting up an alternative exports to the listed companies. will be a perception of political standards system and creating a In principle this ban also applies risk in buying US inputs, including bifurcated global 5G environment. to foreign suppliers to those listed Google services, leading to decreased Implementation of the ban on using companies that use US inputs. On demand. The United States will be certain equipment in the United States the investment side, other countries, left less connected to ICT supply will take some months to organise like Australia, have joined the United chains in Asia and China and firms and its scope remains vague. The States. Some countries like the United will reluctant to place research and Commerce Department is continuing Kingdom are considering other development facilities in the United to work on the application of the options, given the costs of following States. There will be fewer competitors export ban and as a first step it has the US model. in consumer markets and prices in granted 90-day temporary export There is debate about the impact the United States may rise. Overall, licenses. There were reports that of the export ban on Huawei, since world markets look less reliable and President Donald Trump had changed there are reports that it has stockpiled those arguing for reform based on his position on the export ban but relevant materials such as chips and world market integration have been subsequent clarifications from the has subsidiaries operating in the areas weakened in their domestic political White House explained that the ban where supply is threatened, even in debates. remained but that more licenses might the design of operating systems. In the be issued. longer term it can rebuild its supply HERE is a risk of creating One scenario, therefore, is that the chains in these areas, though its ability T a digital Iron Curtain. The mechanisms for these measures will to do so will depend on the pressure context is that the International be put in place but business will be applied by the United States to trading Telecommunications Union (ITU) allowed to continue. There would be a partners that might be involved. lays out components of the 5G system continuing threat that access would be There will be significant costs to and creates a list of global standards withdrawn if, for example, technology

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 17 asian review: TECHNOLOGY theft was suspected, or even if there cooperative solution. And indeed, value of putting high fences around was a lack of progress in trade talks those concerns do look similar. China’s a few (carefully chosen) items. Gates with China. The main impact of the Cybersecurity Law, for example, looks also mentioned a maxim attributed to measures is the uncertainty which they a lot like other such laws across the Frederick the Great: ‘He who defends create. globe, with reference to personal everything defends nothing’. In response, President Xi Jinping information protection, the notion of A resolution will also require has referred to a new ‘long march’ and critical information infrastructure, the international cooperation, such the Chinese government has countered security responsibilities of network as the alignment of regulations in specifically in a number of ways. It has operators and the security certification this area, the definition of such issued the white paper China’s Position of equipment. concepts as personal data and critical on the China–US Economic and Trade Given an apparent alignment information infrastructure, the design Consultations, drawn up its own list of purpose, a political solution is of IP protection systems in this of unreliable entities and is drafting conceivable where the US backs off its sector, and principles governing the new regulations on procurement for absolutist approach and engages with application of artificial intelligence information infrastructure. It has also its trading partners, including China, with respect to ethics, privacy and demonstrated support for the rare to build a new regime that supports safety. The principles driving these earths sector, where it is a significant their common interests. processes might also be documented exporter, and is providing tax in trade agreements. Article 19.15 of incentives for the technology sector. HE design of this regime would the United States–Mexico–Canada The situation will be difficult to T be based on the principles of Agreement provides a model of how resolve in the context of the ‘punch good public policy and it would to proceed. There is also value in and counter punch’ environment in proceed by addressing a series of promoting the adoption of APEC’s which China and the United States questions. First, what is the problem Cross-Border Privacy Rules System are now conducting their relationship. to be solved? That is, what are the which applies to data flows across a Adding to the complexity, there security risks associated with actions larger number of countries. Japan, as are apparently views in the United by international providers of services host of the G20, arranged for most States that support a longer-term and infrastructure, and where do they members to sign onto the Osaka Track disconnection with China, with originate? Are they in the network framework within which there is scope the expectation that doing so will core, in devices or in the radio to discuss standard rules relating to impede China and maintain the communications system? The answer cross-border data flows. geopolitical position of the United will be a matrix of risks (as in the Within recent history, therefore, States. Significant success in this United Kingdom’s approach to these there is the core of the solution to a respect seems unlikely, given China’s matters). Second, what are the options big risk in the trading system. Within other options to adapt to the for dealing with these risks? In some our immediate environment though, situation, though the rate at which cases, the answer will not be a policy its adoption by at least the key players China approaches the scale of the US intervention but new processes or looks difficult. In the meantime, those economy may still slow. The more new technology, which the market of a like mind can imagine a new likely consequence would be a new would provide. Where policy is the global regime based on good public global digital divide, a lower degree of answer, then the most efficient would policy and can cooperate on the design integration across the Pacific in these be chosen from a menu of options and of its elements. EAFQ key sectors and slower growth for all. that would also ideally be the least Another world, however, is trade-distorting. Christopher Findlay is Honorary conceivable, one differentiated by a This is a risk-based approach to Professor of Economics at the Crawford path to resolution in an environment the design of a solution. Analysts School of Public Policy, ANU College of cooperation. To begin this proposing such an approach have of Asia and the Pacific, The Australian experiment, ask the question: What drawn on the wisdom of former US National University. are China’s concerns in the cyber Secretary of Defense Robert Gates world? If they are like those of others, who, in the context of debate about then there is greater scope for a another export ban, referred to the

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picture: Dinuka Liyanawatte / reuters

A nun walks between commando guards to attend a special mass at St Lucia Cathedral, Colombo, for the victims of the bombings.

Sri Lanka’s Muslims after the Easter Sunday bombings

Farzana Haniffa incident of violence after the end of retaliation, however, by Muslim groups the war between the government and to these attacks. A response to putative N Easter Sunday 2019, nine Tamil rebels in the island’s north and Muslim disaffection on the scale of O militant Muslim suicide east in 2009. the bombings was unheard of. Muslim bombers detonated themselves in six There is no locally relevant social or youth damaging statues in Buddhist, coordinated attacks across Sri Lanka. communal cause which could explain Christian and Hindu places of worship The attacks were targeted at churches the attack. Christian–Muslim relations in 2017 in Mawanella were the first and at five-star hotels. They caused are largely cordial in the country. The vague indications of such a possibility. the deaths of close to 250 people and mobilisation of Buddhists through Investigations currently seem injured hundreds. The militants were anti-Muslim rhetoric after the war’s to confirm what commentators members of the National Tauheed end in 2009 led to several incidents had initially suggested: that the Jamaat and the Jamathei Millathu of anti-Muslim violence, with large- bombings were carried out by a local Ibrahim (JMI). The attack shocked the scale riots in Aluthgama in 2014 and group enamoured of the ideology country. It was the most devastating Digana in 2018. There has been no and methods of ISIS and looking

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 19 asian review: A COMMUNITY BESIEGED to be endorsed by that group. For for it—at least in the immediate the gamut of transformations they had local Muslims, this act of terrorism aftermath. Changes in Muslim gone through in recent decades were was incomprehensible. Muslim religious practices that had occurred understood in those terms. ‘radicalisation’ hitherto had been in the past 30 to 40 years were Sri Lanka’s Muslims trace their mobilisation in support of one or understood to be preconditions for origins to pre-Islamic Arab traders other religious or reformist group the radicalisation. Because of Zaharan and today constitute 9 per cent of that directed its ire at other similar Hashim’s association with the group the country’s population. They are religious groups, mostly from the same National Tauheed Jamaat, Tauheed demographically dispersed throughout village, kin or class group. became a bad word. Suddenly any the country and represent a diversity The figure of the Muslim militant Muslim practice that was considered of regional, educational, occupational has been a longstanding rhetorical objectionable could now be pointed and class backgrounds. device of anti-Muslim campaigners out, and everyone felt they could Sinhala–Muslim tensions have and there has been little evidence of legitimately demand that Muslims been present in Sri Lanka since their actual existence. Therefore, in change. The state, too, participated colonial times. The widespread 1915 Sri Lanka the figure of the potentially in rendering some Muslim religious Sinhalese–Muslim riot is the most murderous jihadist was better known practices illegal. cited incident of pre-independence for its effectiveness as a rabble-rousing It was momentarily forgotten anti-Muslim violence. More recent instrument than as a credible concrete that the rhetoric of finding Muslim events have been less noted and threat. This now has changed. The practices objectionable had long been more localised. Violence has been need for security against terrorism has cultivated by an organised movement documented as occurring in 1976, re-emerged. And it is not yet clear that mobilising caste prejudices, electoral 1982 and 2001, and more recently the terrorist threat that made itself politics and global Islamophobia. The in 2014, 2017 and 2018. Attempts known on 21 April has been effectively rhetoric identifying Muslimness as to articulate anti-Muslim sentiment neutralised. a problem was used not just by the at the national level were made in It is tempting to argue that anti- rabble-rousers but in commentary the early 2000s but they were most Muslim activism brought the jihadist by senior journalists and the left- successful in the period after the end project into being. What is more likely leaning and liberal intelligentsia as of the war in 2009. is that it was a combination of the well. Everyone was immediately an The Bodu Bala Sena (The Army of pressure brought to bear on Muslims expert on Wahhabism, and the entire Buddhist Power), instigators of the by Buddhist-identifying bigots and Muslim population of the country and postwar anti-Muslim movement, was the ready availability of rhetoric and registered in May 2012. By March 2013 avenues for radicalisation in a global The state response in it was making a significant impact in context. The bombers’ individual Sinhala-speaking areas of the country. biographies also seem to be significant the aftermath of these There was tacit consent from the in their radicalisation. political regime for the propagation What is known of the attackers— organised attacks was of hate and perpetration of violence Zaharan Hashim, his brothers and his against Muslims. During the father, from a low-income background lackadaisical and the anti-Muslim violence in Aluthgama in in the Eastern Province, and the June 2014, mobs identified as Sinhalese urbane and wealthy Ibrahim family event cemented the fact attacked the homes and businesses from Colombo—points to such an of Muslims in the area and caused interpretation. Questions remain as that anti-Muslim riots three deaths and massive amounts of to where they received the training, property damage. The government expertise, support and money to carry in Sri Lanka were now a deliberately constructed a narrative of out the complex and meticulously Muslim culpability and described the planned attacks. political staple violence as a ‘clash’. The social fallout of the bombings Violence broke out again in Digana was such that every single Muslim in the Kandy district in 2018. The state in the country was called to account response in the aftermath of these

20 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 asian review: A COMMUNITY BESIEGED

picture: Dinuka Liyanawatte / reuters

A show of community solidarity: Buddhist monks take part in a demonstration against the attacks directed against Muslims in some places after the Easter Sunday bombings by Islamist militants. Many Sri Lankans realised that, in the aftermath of the bombings, ‘minimising hate against Muslims was important’. organised attacks was lackadaisical regime used any possible measures to Aththe Gnanasara, who initially led and the event cemented the fact that deflect responsibility and attention. Sri the massive campaigns through which anti-Muslim riots in Sri Lanka were Lanka’s political leadership’s credibility Muslim hate was mainstreamed, was now a political staple. This incident was already battered from the fallout in jail on charges of contempt of court happened under a political regime that of the president’s failed attempt to oust at the time of the bombings. Part of had emerged to electoral victory on a the prime minister in October 2018. Gnanasara’s rhetoric had been that platform that eschewed inciting ethnic They again exhibited their bankruptcy ‘Muslim extremists’ were harbouring animosities. Anti-Muslim sentiment, of vision and leadership in the ‘jihadist cells’. Newspapers applauded however, was maintained by interested aftermath of the attacks. Gnanasara for his prescience and on parties even under this regime, with Showing little or no understanding 23 May 2019 he was released on a the state taking little or no interest in of the needs of the moment and how presidential pardon. seeing an end to it. This is the context the country at large was struggling For Muslims, the shock and distress within which the bombings of Easter to come to terms with the tragedy, of the bombings was soon overridden Sunday took place. the president and the prime minister by the realisation that they now had It is now well-known that resorted to blaming one another to act as penitents and live like the the bombings occurred despite and to looking for scapegoats. The second-class citizens that the anti- intelligence indicating the possibility divisive sentiments propagated by Muslim movement had long insisted of attacks and that the ongoing the country’s postwar anti-Muslim they were. Regrettably, it was not feud between President Maithripala movement were permitted and just the state representatives who Sirisena and Prime Minister Ranil encouraged. felt that Muslims should do penance. Wickremesinghe had affected the The chief spokesperson of the The All Ceylon Jamiatul Ulama, a country’s security response. In the anti-Muslim movement, the Secretary body representing Muslim religious aftermath, sections of the political General of Bodu Bala Sena, Galaoda leadership, also saw that some

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 21 asian review: A COMMUNITY BESIEGED symbolic expression of self-censure seemed as if that was the reason for on the bombings shifted amidst the was required, whereby Muslims were the arrests. realisation that discussions of Muslim seen to accept or at least acknowledge There are stories of how some culpability were dovetailing too easily their new stature. They asked that Muslims panicked about their book with the stance of the anti-Muslim Muslim women refrain from wearing collections, their ceremonial swords movement. The organised nature of the niqab. and their symbol-festooned prayer the violence became apparent to many. Under emergency regulations, the mats. Some set fire to their Qurans or In progressive forums the rhetoric government also announced a ban sent them off with the garbage man. shifted almost immediately to the on different forms of face covering. Others who maintained presence of prevention of racism against Muslims. This is one of several measures to mind sent their books to the mosques. Many commentators across the strip Muslims of practices considered Some Muslims who may have political spectrum realised that in the excessively religious. The Madrasa received a phone call at one time or fallout from the bombings, minimising curriculum is being amended to another from a member of the suicide hate against Muslims was important. include secular education. There is also bombers’ families were held for weeks But it is not clear if the sentiments the possibility that amendments to the without bail. about Muslim culpability that were Muslim Marriage and Divorce Act— The tensions reached a fever pitch expressed by all areas of the political deadlocked in disagreements between in mid-May and violence broke out spectrum immediately after the activists, Muslim politicians and the in the towns of Kuliyapitiya and bombings has shifted markedly or if Ulema—will be pushed through. Minuwangoda in the country’s North there is any increase in politicians’ or More egregiously, grandstanding Western Province. Well-known civil society pundits’ knowledge about monk activists and minor politicians members of the anti-Muslim Muslims in Sri Lanka. The trope of the used the moment for political mileage. movement were seen in the area good Muslim versus the bad Muslim— In the immediate aftermath, a monk, and signs of familiar institutional in Sri Lanka, the ‘traditional Muslim’ who was also a member of parliament, complicity were everywhere. Many versus the ‘Wahhabi’—seems still to be insisted that two Muslim leaders who were then reminded of the readily viable and available for use. were alleged to have connections with available political instrument of ethnic Politicians’ and pundits’ knowledge the suicide bombers immediately riots that have been exploited in Sri of the country’s Muslims is based not resign from their positions. This Lanka since independence, with the so much on interaction or informed resulted in the resignation of all the necessary ingredients of anger against reading but through global media Muslim members of the cabinet in Muslims cultivated well prior to the representations filtered through protest. Later, in June, the chairman bombings. Islamophobia and geopolitical of a local government institution At that point the conversation priorities far removed from Sri Lanka’s in Wennappuwa banned Muslim own interests. The local anti-Muslim traders from the market, although a Any possibility of movement’s own contribution to magistrate overturned the ban within this knowledge is significant. If two days. rendering the anti-Muslim commentators and policymakers base There were several other egregious decisions on this form of knowledge developments in the immediate sentiment illegitimate has alone, the future of Sri Lanka’s security aftermath of the bombings. The and of the country’s Muslims seems military carried out cordon and been swept away by the dire. search operations with the media The economic consequences of the in tow. When the security situation outpouring of grief and attacks are also everywhere. Muslim remained tense and the military was businesses are still barely patronised still uncovering new evidence about distrust in the bombings’ and smaller shops have shut down. the suicide bombers, everything No one is renting to Muslims and ‘Muslim’ seemed doubly suspect. aftermath longstanding tenants have been asked People saw that those arrested had in to vacate. There are websites and social their possession copies of the Quran media groups urging boycotts and and other religious texts. It sometimes listing Buddhist-run alternatives.

22 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 asian review: A COMMUNITY BESIEGED

picture: Dinuka Liyanawatte / reuters The economic impact of the endemic to the country since before bombings is not specific to Muslims. independence. The bombings have The tourism industry has ground to a solidified the status of Muslims standstill. Many establishments have as suspect among the country’s drastically cut staff. Everyone from population and that is something food suppliers to transport companies new. Any possibility of rendering the to entertainment providers is feeling anti-Muslim sentiment illegitimate has the pinch. The tourist season in the been swept away by the outpouring Central Province town of Kandy has of grief and distrust in the bombings’ just resumed and the arrivals seem aftermath. promising. It remains to be seen if the With presidential elections numbers will touch the previous years’ scheduled for December, candidates highs. feel the need to be minority-friendly. Today, while the country is limping In this context the posturing monks’ back to normalcy, anger against the and minor politicians’ antics are not country’s Muslims remains on slow appreciated or applauded by national burn. Warakagoda Gnanarathana party representatives. It is unclear Thero, one of the most respected however, if this trend will continue Buddhist monks in the country Galaoda Aththe Gnanasara, ‘chief spokesperson after the elections. Anti-Muslim and the head (Mahanayaka) of the of the anti-Muslim movement’, who claimed that violence in the future is not just likely Asgiriya chapter of Siam Nikaya, extremists were harbouring ‘jihardist cells’. but probable. accused Muslims in June of trying to The manner in which politicians affect Sinhala women’s fertility and in a national newspaper report in manoeuvred and manipulated encouraged boycotting Muslim shops. May 2019 of sterilising some 4000 people’s distress after the bombings Political actors regularly stoke these Sinhala women. He was accused of without providing the country with a sentiments and media organisations surreptitiously damaging patients’ narrative of resilience, recovery and collude with them to maintain the fallopian tubes when carrying out togetherness was clear to many. The anti-Muslim narrative. While some caesarean sections. The doctor was populace at large is slowly becoming clearly see the political manipulation arrested but was released on bail privy to a critical understanding of the of public sentiment in the aftermath of in July 2019 after several weeks of country’s crisis. Many also realise that the attacks, many do not. dramatic testimony in the Kurunegala the country must be primed not only Most distressing to date has Magistrate’s Court. The investigating for the challenge of overcoming this been the case of Segu Shihabdeen officers found no evidence to support security threat but also for avoiding Mohamed Shafi, a Muslim doctor any of the allegations. Expending another descent into a war over in Kurunegala who was accused state resources investigating a case ethno-religious politics. There is a based entirely on population growth countrywide understanding since the anxieties propagated by the bombings that this can only be done EASTASIAFORUM anti-Muslim movement merits through mounting a serious challenge Quarterly comment. It indicates the extent to to the country’s political elite. There our next issue . . . which the anti-Muslim hysteria has are many organisations and alternative sedimented in popular sensibility as political voices that are beginning to well as how easily such sentiment can emerge. It is still too early to see if they Economics be whipped up into a frenzy under the will have any success. EAFQ prevailing conditions. and The possibility of violence against Farzana Haniffa is Senior Lecturer at Muslims in Sri Lanka predates the the Department of Sociology, Faculty of security events of 21 April 2019. Anti-minority Arts, University of Colombo. violence—currently anti-Muslim violence—is a political instrument

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 23 WATER-BORNE POLLUTION Sea change: Japan leads on marine plastic litter

Michikazu Kojima and make better use of recycled materials The opposition member Fusanori Iwasaki and to design easily recyclable condemned the decision for its products. Between 1995 and 2002 backward attitude and voiced criticism ARINE plastic litter has been Japan also developed five new from domestic environmentalist M recognised as one of the world’s recycling laws focused on packaging, groups. Minister Nakagawa replied: greatest environmental challenges in home appliances, food waste, ‘Due to concrete contents such as recent years and several international construction waste and automobiles. setting a numerical target with a term forums have started to take action on Collaboration between local limit in the charter, Japan decided to the issue. In June 2019, G20 member government and the private sector forgo participation because we need to countries agreed on the Osaka Blue also has reduced the use of single-use consider its potential impact on daily Ocean Vision at the Osaka Summit. plastics—especially plastic bags. life and industry in order to realise the Japan led the way in concluding the Japan has also led the way in reduction of use of all kinds of plastics, Vision, through which G20 countries promoting better waste management including household items’. But he aim to reduce additional marine in Asia and the Pacific. After added that ‘Japan shares the same plastic pollution to zero by 2050. implementing the domestic enthusiasm for reducing plastic waste But last year Japan, together with regulations, the Japanese government that the charter aims for.’ the United States, did not agree to proposed the 3R Initiative—reduce, adopt the Ocean Plastics Charter at reuse and recycling—at the G8 FTER the G7 summit, Japan the G7 summit in Charlevoix, Canada. Summit in 2004. After some A redoubled its efforts to Why did Japan lead the Osaka Blue preparatory meetings, the Japanese combat plastic waste. The Japanese Ocean Vision while it refused to sign Ministry of the Environment (MOEJ) government had already begun the Ocean Plastics Charter in 2018? and United Nations Centre for working on a Comprehensive Strategy The Ocean Plastics Charter declared Regional Development (UNCRD) for Plastic Material-Cycling in the that G7 leaders would commit to organised the Inaugural Regional 3R lead-up to the G7 summit in 2018 and action towards a resource-efficient, Forum in Asia in 2009. The conference published the draft paper in October lifecycle management approach to has been held in an Asian or Pacific that year. The final document was plastics in their economies. This country almost every year since. launched at the end of May 2019—one would be done through sustainable These domestic and international month before the G20. design, production and after-use efforts show that Japan is capable of In the months after the G7 summit, markets; better waste collection leading the international movement the Japanese government also started and management; promoting for solving plastics issues. So why to show a willingness to develop an sustainable lifestyles and education; didn’t Japan sign the charter? effective framework on marine plastic more research, innovation and new On 14 June 2018, just five days after litter as part of its G20 presidency technologies; and coastal and shoreline the G7 summit, the Minister of the in 2019. In the lead-up to the Osaka action. Environment, Masaharu Nakagawa, summit, Prime Minister Shinzo Abe Although it did not sign the charter, explained the reason behind Japan’s announced that ‘Japan will promote Japan has been making efforts to decision when responding to questions effective international cooperation reduce plastic waste since the 1990s. from a member of the opposition such as support for the introduction In 1991 it enacted the Law for the party during a session of the House of waste management infrastructure Promotion of Effective Utilization of of Councillors’ Committee on and will lead international efforts to Resources, requiring businesses to Environment. achieve the goal of preventing marine

24 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 picture:Anuwar Hazarika / reuters

Cause for concern: a boy rows his boat in the polluted waters of the Brahmaputra river at Guwahati, India, on World Water Day in March 2018. pollution’. Foreign Minister Taro Kono Implementation Framework for possible that the Japanese government also emphasised the importance of Actions on Marine Plastic Litter. This considered the fact that the Trump including the emerging economies would facilitate the implementation administration had backtracked on as part of an effective approach for of the G20 Action Plan on Marine environmentally friendly regulations. managing marine plastic litter. Litter—originally launched at the G20 Despite having both the experience Just months before the G20 Hamburg Summit in 2017—through and the capacity, Japan was not ready meetings began, reducing marine voluntary national action. to lead the fight against marine plastics plastic emerged as a key agenda item litter in 2018. But thanks to an increase in the country’s presidency. In a URING the past year the in public concern, the Japanese meeting with United States President D Japanese government faced government has since increased its Donald Trump in April 2019, Prime domestic and external pressures to efforts. Its commitment to the Osaka Minister Abe again picked up the show its positive attitude towards the Blue Vision in 2019 signals a shift marine plastics issue. A month later, marine plastics issue. In response, it towards more sustainable practices Abe gave a speech introducing the gradually prioritised this issue as one across the region. EAFQ issue as one of three main agenda of the main agenda items of its G20 items at the coming G20 summit. presidency. It has implemented the Michikazu Kojima is a senior On 15–16 June Japan hosted the Strategy for Plastic Material-Cycling, economist and Fusanori Iwasaki is G20 Ministerial Meeting on Energy and adopted an action plan as a result a senior research associate at the Transitions and Global Environment of inter-ministerial coordination. Economic Research Institute for for Sustainable Growth in Karuizawa. In 2018, Japan decided not to ASEAN and East Asia (ERIA). At this meeting, G20 ministers sign the Ocean Plastics Charter with agreed to establish the epochal G20 the United States. In doing so, it is

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 25 the ‘oldest old’ Japan is ageing faster than we think

Masataka Nakagawa At this time, a much smaller younger Japan’s elderly population to occur in population will face the task of metropolitan regions, where there are OPULATION projections from supporting this large number of elderly currently relatively large working-age P the UN Department of Economic Japanese. populations. and Social Affairs confirm that Japan The conventional indicator of an In some prefectures in non- will remain the world’s most aged ageing population—the proportion of metropolitan regions, on the other country for at least the next few people aged 65 and over—may lead to hand, the size of the elderly population decades. The 2019 Revision of World its extent and impacts in Japan being has already peaked and has started to Population Prospects, released in underestimated. IPSS projections decline. In these areas, the proportion June 2019, predicts the proportion suggest that the country’s population of the elderly in the local population of people aged 65 years and older in aged 75 and over will increase by 20 continues to increase because the Japan will increase from the current per cent from 2020 to 2040, while the younger component is shrinking at an level of 28 per cent to 38 per cent increase will be limited to around 8 per even faster pace. A notable example by 2050. During this period, Japan’s cent for those aged 65 and over. The is Akita prefecture, located in the population will shrink by nearly 20 per most significant growth is projected northeast region of the main island, cent. These demographic trends set for the ‘oldest old population’: 65 per where the proportion of people aged the fundamental context for challenges cent for those aged 85 and over, and 65 and older is expected to increase and changes to Japanese society in the more than 250 per cent for those aged from the current level of 34 per cent coming decades. 100 and over. to over 50 per cent by 2045. The total Japan’s population has been getting The ‘ageing of the elderly population size will shrink by over 40 older over the past 100 years, but population’ has implications for per cent in the same period. this process accelerated at the turn the public systems of medical These regional variations in of the century when the large cohort and long-term care, pensions and demographic prospects are due to of postwar baby boomers, born in social protection for older people. heterogeneity in the population the late 1940s to early 1950s, began Much attention is being paid to structure, rather than trends in vital joining the elderly population. During the provision of care services, components of population change the period 2000–10, the country’s and in this regard knowing where such as mortality and fertility. Despite population aged 65 and over increased older people live is fundamental to efforts by local governments to by an unprecedented total of over ensuring appropriate public policy recover the fertility rate and reverse seven million. This population is likely and community responses. IPSS population flows to large cities, the to increase by another seven million subnational population projections rural population profile has become by 2020. expect the most significant growth in ‘too old’ to restructure in the short According to the government’s term. The ageing population problem official population projections Japan’s depopulation is has reached the stage where the conducted by the National Institute skewed age distribution causes of Population and Social Security moderated by the growing demographic deficits through negative Research (IPSS), the elderly population natural increases (numbers of deaths will continue to grow—though at a number of foreign exceeding numbers of births). slower pace—until it peaks around Ageing and depopulation in these 2040, when the second baby-boomer residents rural and non-metropolitan regions generation (the children of the postwar result in diminishing pools of potential baby boomers) passes the age of 65. young migrants to major metropolitan

26 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 picture: TORU HANAI / REUTERS

An elderly woman walks past jizo statues, dedicated to the growth of children and grandchildren, at a Buddhist temple in Tokyo. The nation’s population is predicted to shrink by nearly 20 per cent by 2050.

regions, particularly the Tokyo categories for qualified foreign workers It is still too early to assess the metropolitan region. Tokyo has the in 14 industrial sectors, including impact of the 2019 amendment to the lowest fertility level in the country nursing care, agriculture, construction Immigration Act. From a demographic and its current population growth is and manufacturing. perspective, it is important to keep sustained by population inflows. IPSS The new visa categories are in mind that the ‘targeted sending subnational population projections probably the most significant change countries’ will face labour shortages expect Tokyo to maintain its in Japan’s immigration policy since themselves, particularly of care population growth until around 2030, the 1990 amendment that removed workers, in the not-so-distant future. before it becomes the last prefecture to restrictions on entry and residence According to the latest UN population enter population decline. for foreign-born people of Japanese projections, many Southeast Asian At the national level, Japan’s descent to facilitate economically countries will undergo population depopulation is moderated by motivated migration from South ageing at an even faster pace than the growing number of foreign America. They have been absorbed Japan, due to drastic declines in residents, who presently account for into the low-skilled end of the fertility. What is expected from the just over 2 per cent of the country’s labour market, particularly in the global front-runner in ageing are total population. As Japan’s natural manufacturing sector, which has lessons and solutions from its evolving population decline is escalating, undergone intensive restructuring experience in building and maintaining expectations have been rising since the early 1990s. It is hoped that public systems for an ageing society. for the demographic and labour- the 2019 amendment will increase EAFQ market contributions to be made by the pool of nursing and care workers, international migrants. In the face of presumably from Southeast Asian Masataka Nakagawa is Senior acute labour shortages, the amended countries. Japan has already accepted Researcher at the National Institute Immigration Act came into effect such workers through bilateral of Population and Social Security in April 2019 to introduce new visa economic partnership agreements. Research (IPSS), Tokyo.

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 27 tightrope How immigration will change Japanese politics picture: malcolm foster / reuters Aizawa Nobuhiro

HE Japanese government has T decided on a revised Immigration Control and Refugee Recognition Law that could expand the entry of non-skilled foreign workers into the Japanese workforce. The law introduces the Specified Skilled Worker Category 1 to open up new professional fields for unskilled foreign workers, and is expected to attract around 345,000 workers in the next five years. Fourteen professional sectors where there is a critical lack of workers were chosen for the scheme, including aged care, construction, agriculture, fishing, tourism and food services. The law also theoretically entitles these non-skilled workers to a path to permanent residency should they pass professional testing and successfully renew their status. Prime Minister Shinzo Abe first Thai workers harvesting vegetables at Green Leaf farm, in Showa Village, Gunma prefecture. Agriculture publicly proposed the necessary legal is one of the sectors identified under the amended act as having a critical lack of workers. arrangements on 20 February 2018 at the Council on Economic and Fiscal meant to save ailing but strategic and regions. These political fault Policy, followed by an outline in the industries as well as the ageing local lines signalled the beginning of a Basic Policy on Economic and Fiscal economy. Yet the revised immigration new politics of immigration in Japan Management and Reform in June control act was much more than an and could be a critical turning-point 2018. After electing Abe as Liberal economic policy—both public and in Japanese politics in the coming Democratic Party (LDP) Chairman political opinion was split. decades. In this context, there are for his third term in September 2018, Objections came from both the three areas that will likely become key the LDP finalised a draft law. It passed opposition and from within the LDP battlegrounds. through parliament—where the LDP itself. According to The Nikkei polls, First, the terms ‘foreign workers’ holds a majority—in December 2018 the law garnered more backing from and ‘immigration’ have now become and took effect in April 2019. supporters of the Constitutional selling points in Japanese politics. Chief Cabinet Secretary Yoshihide Democratic Party of Japan than The more strongly the government Suga emphasised the necessity and from LDP supporters. Hidden refused to mention the revision act urgency of the new policy in economic disagreements were evident among as an ‘immigration law’, despite the terms by explaining that the law is party members, between generations path to permanent residency that it

28 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 incorporates, the more it stimulated to provide public services for new worker management. This growing the existence of a strong anti- migrant workers. While the current interdependency between the demand immigration political platform and immigration policy decision itself is a for foreign workers and appropriate silent social discontent towards the prerogative of the central government, administrative standards could issue. Sensitivity to these terms was it needs to find a new equilibrium on become a new governmental and prevalent in the internal LDP review power and burden sharing. So the long social platform through which to when drafting the law. process of striking a suitable power integrate Asian countries. On the An unprecedented five-day scrutiny arrangement will also become an other hand it could also become by the legal commission of the LDP important part of the political agenda a liability, as the countries will in October 2018 attempted to answer in the decades to come. potentially need to balance domestic various concerns. These included Third, the law marked the beginning xenophobic antagonism with friendly Japanese nationals having to compete of an inescapable new foreign policy bilateral relations. It will take for jobs against foreigners, the lack issue. Japan will now increasingly be diplomatic skill and savviness on the of necessary social arrangements and ‘tested’ in its responsibility to protect Japanese side to find a way to achieve legal protection to prevent an increase foreign workers on home soil. This will this balance. in illegal workers, and the absence of require constant information-sharing Considering the political climate social security for foreign workers in and administrative harmonisation in 2018, prioritising speed over the cost–benefit analysis of the law. between the sending and receiving consensus-building with strong With these questions left unanswered, countries. Overseas worker leadership might have been the only the government has been pushed onto joint management will become a way to push this sensitive and divisive the defensive and will be accountable reoccurring topic of negotiation in policy forward before it was too should anything occur. Every violation, all bilateral and regional talks. For late to save the businesses and local abuse or misconduct by foreign example, in July 2019, while signing regions experiencing labour shortfalls. workers can easily be politicised as a a memorandum of cooperation on Yet without public consensus and weapon to attack the leadership. overseas workers with Indonesia, an adequate social safety net for Second, this opened up new Japan chose to commit to following foreigners, Japanese resilience towards political fronts for central–local and Indonesian systems for placement and immigration scandals is in doubt. local–local government relations. administration services for Indonesian The abuse and misuse of foreign The core purpose of the law is to migrant workers. workers by Japanese enterprises, meet the compelling requests of As this example shows, Japan politicians exploiting the imperfect small- and medium-sized enterprises is willing to be led and evaluated institutional arrangements, civil in some regions and to maintain a by its counterparts on foreign and criminal misconduct by foreign political platform for their support workers or a single terrorist act by addressing their needs. Local LDP Overseas worker joint could sensationally ignite the anti- branches from prefectures such as immigration movement in Japan. The Gunma, Shizuoka and Akita gave LDP management will become strong leadership by Abe that pushed executives much input to convince this historical law forwards has also them of the need and demand for a reoccurring topic of pushed Japan’s politics on to a new unskilled foreign workers. Yet the rules tightrope. EAFQ outlining administrative and social negotiation in all bilateral burden sharing in accepting foreign Aizawa Nobuhiro is Associate workers are yet to be determined. and regional talks Professor in Kyushu University’s This led some local governments Department of Cultural Studies and to raise their concerns over the a Japan Fellow at the Wilson Center policy’s feasibility despite the main in Washington DC. He specialises in beneficiaries being regional businesses. Southeast Asian politics, international Regions with compelling demands for relations, overseas Chinese studies and foreign workers also lacked sufficiently comparative politics. large local government budgets

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 29 INVESTMENT SWITCH New strategies redefining Japanese innovation

Ren Ito start-ups was merely 5 per cent, one of funds for high-risk investments and of the lowest rates among advanced supportive government policies for APANESE innovation has economies. The United States—the start-ups. J long been synonymous with start-up superpower—had nearly 16 But as the figures show, there is craftsmanship and design excellence, per cent, while India doubled Japan. still some way before the start-up from the Sony Walkman and Nintendo Start-ups account for over 8 per cent ecosystem in Japan becomes a major game consoles to hybrid cars, in the United Kingdom, and Brazil source of economic growth. Japan’s futuristic toilets and high-speed rail. outperforms the United States at more immediate potential lies apart But a new and less tangible form of almost 18 per cent. from Japanese companies starting new innovation is quietly taking hold—one Based on the volume of start- businesses from scratch: it needs to that could transform Japan into one of up investment, China has rapidly distance itself from the obsession with the world’s most important drivers of strengthened its start-up status to homegrown start-ups. the global technological revolution. become the second largest venture Japan’s great growth could come Japan has a proud history of capital world power after the United from Japanese corporations investing innovations that it has offered the States. It captured a quarter of this in companies and businesses outside world. Sony’s Walkman revolutionised investment in 2016, while India and of Japan’s borders. Just as Japanese the music industry by allowing users Japan absorbed 2.6 per cent and 0.7 manufacturers used to look abroad to to take their music outdoors, while per cent respectively. Reflecting the high-growth markets to drive Japan’s the Nintendo Entertainment System wider global start-up boom, a few export-oriented growth, a small but brought into homes video games unicorn companies—start-ups valued increasing number of Japanese firms that could previously only be played at over US$1 billion—have surfaced in are now attempting to achieve growth in arcades. These and numerous Japan in recent years, such as software by investing in the fastest-growing others are all stellar examples of developer Preferred Networks and tech companies outside Japan. Japanese prowess at monozukuri Ebay-style flea market app Mercari. (the art of making things) and these But there are still nowhere near HIS hypothesis is supported innovations—backed by high levels enough Japanese start-ups in terms of T by statistics from the Bank of of technical expertise and production numbers. Japan and the Ministry of Finance. efficiency—have been drivers of Fortunately, signs of improvement Individuals hold the cash equivalent Japanese soft power alongside karaoke, are on the horizon. Young Japanese are of US$9.3 trillion and Japanese anime and sushi. increasingly taking on the challenge organisations have built up US$4.2 But recently Japanese success of setting up their own start-ups, trillion in reserves. If done correctly, stories of this scale have become far with less concern about stability and deploying these vastly underutilised less frequent. Japan missed the dotcom risk, although their numbers are resources can be a key and viable revolution, resulting in few front- still small. Ventures are gradually source of Japan’s growth. running high-growth IT or tech start- becoming a viable career choice for There is no reason for Japanese ups originating in Japan. It is widely some of Japan’s best talent. There is companies only to invest locally. In acknowledged that Japan is a difficult steady growth in the flow of gifted order to internalise the high overseas place for start-ups to flourish. youth from educational institutions growth, Japanese companies can use According to the Global like the University of Tokyo and from the vast surplus funds to purchase Entrepreneurship Monitor in 2018– established employers like major stocks of some of the fastest-growing 19 the percentage of Japan’s adult banks into new ventures. Japan is also tech start-ups outside Japan. This is population involved in early-stage seeing solid expansion in the supply a powerful growth and innovation

30 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 picture: YOSHIO TSUNODA / ALFO / REUTERS

Arm robots manufactured by Japanese robot maker Fanuc pack food in a demonstration at the International Food Machinery and Technology Exhibition in Tokyo in July 2019. Many Japanese firms are now moving into tech start-ups in other countries: ‘a reversal of the traditional Japanese way of thinking’. strategy for Japan. Realising innovation the US$97 billion Vision Fund 1 by Europe and Israel. through the power of investment is a leveraging its own cash and Japanese These movements could mark the reversal of the traditional Japanese way risk capital to assemble risk capital beginning of an evolution from a Japan of thinking, going beyond the typical from abroad. The fund invested large that manufactures to a Japan that idea of a workman creating objects or sums of money into mega-unicorns invests abroad, an idea once thought to an illustrator creating content to be such as Uber and Oyo, as well as be ‘heretical’ for a country with deep commercialised. companies working on research and faith in its manufacturing industry. The art of investing overseas should development for autonomous driving. The overseas technologies that attract be grasped as a proudly Japanese Softbank is expected to set up investments can then be brought innovation, while setting out to create Vision Fund 2 at a similar scale, about back to Japan to bring about more a global IT company originating from US$108 billion, in the latter half of innovation through their application Japan. 2019. Similarly, the Japan Bank for to Japan’s social problems, such Japanese telecommunications International Cooperation—Japan’s as its ageing society. Shifting from company Softbank decided not to use government-backed development manufacturing to investment might its enormous, stable cash flows from bank—contributed equity to a fund just be the key to Japan innovating domestic business to merge, acquire for start-ups in the Nordic and Baltic innovation itself. EAFQ or invest in other Japanese businesses. regions. This was followed by other It chose instead to invest in overseas Japanese firms which set up similar Ren Ito is CEO of Mercari Europe. tech companies, particularly artificial corporate venture capital funds for He is also Senior Fellow at New York intelligence innovators. It established investment in the United States, University School of Law.

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 31 SMOOTHING THE WAY Japan leads the way in trade with ASEAN

Junichiro Haseba increase free trade and investment. another treaty country—it would In the case of trade under FTAs, not make sense for goods that have ENS of thousands of Japanese the importer submits a Preferential been simply processed in the treaty T companies operate in ASEAN, Certificate of Origin to customs countries to be subject to preferential and their number is increasing year by when importing. The format of tariffs. For this reason, a certificate year. the certificate of origin is different of origin proves that exported Japan is establishing chambers according to each FTA, and the goods meet the criteria defined in of commerce in many areas and importer must follow each agreement. each agreement. It can be said that many companies are participating Normally, the most favoured nation the certificate of origin issued by a in their activities. These chambers (MFN) tariff rate is applied—a lower government agency or chamber of of commerce are members of the rate than the General Tariff Rate, commerce proves the ‘nationality of Federation of Japanese Chambers of Temporary Tariff Rate or Tariff Rate goods’. Commerce and Industry in ASEAN of the World Trade Organization. But There is an agreement called (FJCCIA), a group consisting of 10 among FTA countries, goods can be ASEAN Trade in Goods Agreement Japanese chambers of commerce in imported at an even lower preferential (ATIGA) between ASEAN member nine countries, excluding Brunei. Their tariff than the MFN tax rate. countries. To use ATIGA, a certificate objective is to improve the business To be eligible for preferential tariffs, of origin named Form D is required. environment for Japanese companies the goods to be imported must be The Common Effective Preferred in the ASEAN region. The number manufactured in the treaty country. Tariff, in which tariff rates for most of members of FJCCIA—the total The reason is that the preferential goods are zero, is applied to intra- number of member companies of the tariff should not be applied to goods ASEAN trade by using Form D. The 10 Japanese chambers of commerce— imported from a third country into goods that Form D is attached to are reached 7394 in May 2019. one treaty country and exported to certified as of ‘ASEAN nationality’ and Since 2008, FJCCIA has held a will receive preferential treatment in dialogue with the Secretary–General There has been success the ASEAN region. of ASEAN every year. This gives In a simple trade, company A passes Japanese companies in ASEAN and in improving the goods to company B, and company B the Japan External Trade Organization pays company A. But actual trade may (JETRO) the opportunity to make operation of certificates involve more complex arrangements. proposals for improving the business For example, physical distribution environment to ASEAN. The Japanese of origin, which are may be directly from Thailand to side uses this framework to improve Vietnam, but commercial distribution its business environment. There necessary to give is sold from company A in Thailand has been success, for example, in to company B in Singapore, and then improving the operation of certificates preferential treatment from company B in Singapore to of origin, which are necessary to give company C in Vietnam. Of course, preferential treatment to mutual goods to mutual goods in the company B sells to company C with in the ASEAN region's trade. a margin added to the purchase price Why is that important? Bilateral ASEAN region’s trade from company A. This is known as or multilateral free trade agreements intermediary trade. (FTAs) can be signed to reduce tariffs In the past, there was a rule that the and eliminate non-tariff barriers to Free on Board (FOB) price must be

32 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 picture: issei kato / reuters

Toyota employees assembling Mirai fuel cell vehicles at the company’s Motomachi plant. Trade facilitation in ASEAN is a priority for Japan. described in Form D when company A moved to another ASEAN country. of origin (e-Form D). Indonesia, exported it. The FOB price, paid for by At the 45th ASEAN Economic Malaysia, Thailand, Singapore, the buyer, refers to the transportation Ministers' Meeting held in Brunei in Vietnam and Brunei have already and liability costs added on to the price August 2013, it was finally agreed that introduced e-Form D, and Cambodia, of the goods before they are loaded the description of the FOB price would Philippines, Myanmar and Laos are onto a ship or an airplane. This Form be unnecessary. Since January 2014, all expected to introduce it this year— D, in which the FOB price of company companies have been able to conduct meaning all of ASEAN will be using A is described, arrives at company C. intermediary trade without worry that the new format. The main problem with this the price will leak. This is the result of Trade facilitation continues to system is that it allows company C to the Japanese side persuading ASEAN progress in the ASEAN region know the margin being charged by of the benefits of not describing FOB through the efforts of all stakeholders, company B. Since the Second Annual prices at official and informal meetings demonstrating the value of Japan’s Dialogue between the FJCCIA and over five years. style of engagement with ASEAN and the Secretary–General of ASEAN in In 2019 the 12th Annual Dialogue its potential for further breakthroughs. 2009, the FJCCIA has asked that the between the FJCCIA and the EAFQ FOB price be removed from Form D. Secretary–General of ASEAN was Company B can also be anywhere in held in Pattaya. At this meeting, Junichiro Haseba is former Senior the world, including Australia, as long the ASEAN side proposed the Investment Advisor of JETRO Bangkok. as the goods were made in ASEAN and introduction of electronic certificates

EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 33 2020 vision Can Tokyo’s inclusive Olympics rebrand Japan? picture: ISSEI KATO / reuters Nobuko Kobayashi

OKYOITES have started the T one-year countdown to host the Summer 2020 Olympic and Paralympic Games. Enthusiasm has conquered initial scepticism. In January 2019, 205,000 people had registered as volunteers, exceeding the organising committee’s goal of 80,000. In May, the first-round lottery for tickets awarded 960,000 passes to winners from a pool of 5.1 million applicants—equal to roughly one- seventh of the 35 million people in the metropolitan area. Preparations for Tokyo 2020 have borrowed heavily from London 2012—another mature host city. The spirit is to build less and reuse more. Instead of constructing a new facility, for example, the cycling event will occur at an existing track in Izu, 120 kilometres away from Tokyo. All 5000 medals will be made from 100 per cent recycled metal retrieved from 6.2 million used mobile phones and other A robot of the Tokyo 2020 mascot Miraitowa, which will be used during the Olympic and Paralympic IT gadgets collected nationwide. Games, exchanges a high-five with a boy during the robot unveiling event at Tokyo Stadium in July 2019. From plastic bottle recycling The Olympics ‘offer a powerful marketing venue for the host nation’. to zero-emission fleets, all wheels are in motion to promote Tokyo Globalisation has receded. Rather sporting celebration. Respect for as a technologically advanced and than enlarging the entire economic pluralism is the dominant spiritual environmentally conscious city. This is pie, countries are rushing to secure value of the Olympic Games, which an important message particularly in their own slice. With the world’s two extends beyond sports. Japan has the face of the global climate challenge. largest economies—China and the a rare opportunity to shine by But this is not the only message Tokyo United States—seemingly at odds in personalising this spirit as host. aims to convey while in the spotlight every aspect of ideology, economics The Olympic Games offer a for summer 2020. and society, the global order as we powerful marketing venue for the host The world has shifted since have understood it appears to have nation. Pre- and post-Games, Britain September 2013 when the Japanese evaporated. improved its image according to a Olympic Committee won the bid Japan in 2020 will be the playground survey by the national tourism agency for the Summer Olympics 2020. of the most visible international VisitBritain. Can Japan do better?

34 EAST ASIA FORUM QUARTERLY JULY — SEPTEMBER 2019 Fortunately, Japan is positioned best entertainers. in Japan, Tokyo 1964, showcased a to be an unexpected breath of Second, Japan can strategically young and thriving nation rebounding fresh air. As a stable and relatively highlight its array of host towns. from the wounds of the last war. The homogeneous society, it has been With subsidies from the Japanese Games propelled new constructions off the centre stage of the world’s government, 323 towns from such as Enoshima Yacht Harbor, political upheaval and quietly suffering Hokkaido to Okinawa have the Tokaido Shinkansen and the from the economic impacts of volunteered for these roles. They offer Metropolitan Expressway. The deglobalisation. Japan appears less pre-Games training camp sites for message to the world was Japan’s pessimistic because its narrative has athletes and will host cross-cultural resurgence as an industrial power. already been pessimistic over a much and sports events before and after the Unfortunately, as a price to longer period, plagued by post-bubble Olympic and Paralympic Games. economic growth, serious pollution stagnation and a declining population. The city of Ise in Mie prefecture, and worsening living conditions were On the other hand, for Japan to for example, will host a team of para- swept under the rug. In fact, it was not promote the respect for pluralism athletes from Laos and plans cross- until the so-called ‘Pollution Diet’ in is not without unique challenges. cultural events post-summer. Host the late 1970s that Japanese politics Granted, under its core concept towns will spread engagement with the confronted these environmental issues of ‘Unity in Diversity’, Tokyo 2020 Games beyond Tokyo and demonstrate by passing as many as 14 laws. This pays homage to inclusivity. Efforts the diversity and openness of rural was a turning point that painfully and are underway to make the nation’s Japan. These impressions will outlive methodically paved the way to the transportation barrier-free, from train the Games. clean sky Tokyo enjoys today. stations to universal design taxis. The advantage of social media is Fifty-six years later, Tokyo’s second But there remains a larger question. that local anecdotes can travel fast and Olympics is less about building How is the overall perception around wide with visual information. Olympic hard infrastructure and more about a country that it is still too insular highlights are not necessarily all about being ecologically mindful and to be truly integrated into the world achieving world records. They can be technologically smart. Mature Japan community, let alone lead the rest of about discovering the friendly and can play a new role in a troubled world the world, to be shifted to a spirit of charming side of the host country. using the Games as a springboard to mutual respect? The challenge is not The first Summer Olympic Games turn around its perceived inward- about hard infrastructure but rather looking image. about people’s sentiment, which takes Mature Japan can play If Japan can rebrand itself as an years to build. With less than a year to open and embracing host nation, the go, there are things that can be done. a new role in a troubled soft legacy of Tokyo 2020 will be a First, volunteers are on-the-ground success. The world will see Japan in ambassadors. In interacting with world using the Games a new light and it will awake Japan both athletes and overseas visitors, from the complacent pessimism in their genuine friendliness is the key as a springboard to turn which it has stewed over the past three to changing the inward-looking decades. EAFQ perception of Japan. around its perceived Even though the phrase omotenashi Nobuko Kobayashi is Ernst & Young – (hospitality spirit) may have inward-looking image Japan – Transaction Advisory Services sealed the win for Tokyo in 2013, Managing Director and Partner. She overemphasising service quality specialises in the consumer sector may inadvertently kill the fun. Some with a special focus on multinational volunteers are worried about their corporations operating in Japan. ability to communicate in English. But their accented English is often good enough for many visitors, in many cases non-native English speakers themselves. Relaxed hosts make the

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