Japan is squandering a chance for real reform

  • 2011•08•16

    Christopher Hobson

    Given the recent troubles of the Eurozone, it is perhaps fitting that the word ”crisis” comes from classical Greek. A term found in the fields of politics, law and medicine, it connoted a decisive moment when a judgment was reached. More specifically to medicine, it represented a tipping point in the progression of a disease or illness, which determined whether the patient would improve or decline. In contemporary parlance ”crisis” is used much more freely, but this idea of it being a pivotal moment remains.

    The triple disaster that hit Japan on March 11, 2011 is one situation where this older meaning of a crisis seems particularly fitting. Japan’s history is punctuated with such instances of shocks bringing about major change. Following the arrival of the black ships of Commodore Matthew Perry, the Meiji Restoration ushered in a period of rapid modernisation in the social, economic and political makeup of the country. Once again, after their defeat in World War II, Japan reinvented itself. It abandoned militarism for pacifism, and quickly established itself as an economic powerhouse. Given these remarkable transformations, it is not surprising their legacies were invoked after the recent disasters. Just as it did after 1945, once again Japan should muster its national strength to rebuild.

    It was also a chance to simultaneously address deeper problems that the country has long been avoiding. The period following the end of Japan’s ”bubble economy” has been referred to as the ”lost decades”, as economic growth has stagnated and the country’s politicians have shown little ability to reverse the slow decline. In this context, Prime Minister Naoto Kan reflected that, ”for the 20 years before this great earthquake disaster, our nation has seemed, in many ways, to be at an impasse. As we overcome the crisis created by this disaster, we must also overcome the preceding crisis, what could be called “Japan’s structural crisis”.

    The hopes that the March catastrophes could become a turning point now look overly optimistic; and references to the arrival of Perry and defeat in the Second World War seem increasingly ill-fitting. While hardly a positive image, a much more appropriate historical comparison may be the Global Financial Crisis of 2008. After narrowly avoiding a complete breakdown of the global market economy, there was a unique opportunity to enact serious change, but despite all the talk, only superficial modifications and limited reforms were made. The underlying problems were left unaddressed.

    Just as the opening for reform following the GFC was missed, the chance that Japan can use the earthquake aftermath to address its economic and political malaise is fast disappearing. Five months on, recovery efforts have slowed after a quick start, while uncertainty surrounding the nuclear accident in Fukushima drags on due to the mismanagement of the government and TEPCO, which operated the nuclear plant.
    Japanese bureaucrats are not known for their flexibility or clarity, and people in the affected regions have felt increasingly frustrated by the lack of information and action. Tentative compensation guidelines for those affected by the nuclear accident have just been announced, but its scope remains limited. Meanwhile, the brief unity shown by politicians has quickly dissipated. Not even the ruling Democratic Party of Japan has been able to commit to supporting the leadership of its Prime Minister. The ongoing attempt by members of both major parties to oust Naoto Kan signals a return to the petty squabbling that has long marked the inert Diet.

    What makes the return of ”business as usual” all the more troubling is that this political culture played a significant role in contributing to the extent of the March disaster. The dangerous and incestuous alliance in support of nuclear power between the government, bureaucracy, and industry shares much of the responsibility for what has become the most serious nuclear accident since Chernobyl. After the dismissal of three senior officials from the Ministry of Economy, Trade and Industry, as a result of the ongoing nuclear disaster, last week’s announcement that they will be replaced by bureaucrats from the pro-nuclear faction of the ministry suggests there has been little change in the thinking of those in charge.

    The self-interested behaviour of TEPCO, the dithering response of the government, the gamesmanship of politicians, and the obfuscations of bureaucrats, have collectively defined the elite’s ineffectual response in Japan’s time of need. This is hardly surprising, given the system of which they are part. Their behaviour is symptomatic of a corrupted political culture lacking in accountability, disconnected from the people they are supposed to serve.

    Public dissatisfaction over the handling of Fukushima remains strong, with support for Kan’s cabinet at an all-time low of 18 per cent, and this anger will likely grow unless the government and TEPCO quickly improve their efforts at bringing the situation under control. And if the government does not speed up the transition from immediate response to rebuilding in the affected regions, frustration will continue to mount. These pressures leave the possibility that this crisis could truly be a turning point for Japan. If this opportunity is lost, however, as it was on a larger scale after the GFC, then the outlook is rather bleak. For if the near complete breakdown of the global economic system, or a massive natural disaster that has caused more than 15,000 deaths and one of the worst nuclear accidents the world has ever seen is not enough to enact serious reform, what will be? What kind of crisis will it take for it to become a pivotal moment when genuine political and economic change begins to occur?