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Twilight of Japan?

HAMBURG: Recently I visited a country I had lost sight of for some years -- Japan. When last there in the 1980s, it was full of self-confidence. Now it is singing the blues.

Overconfidence is always illusory. Japan lived in a dream world, admired as a model for industrial countries everywhere. It was the chief source of international capital. Protected by America, surrounded by a detente-eager USSR, a divided Korea, and a China awakening from economic backwardness, it had no real security problem. By its own standards and those of the world, Japan was an unmitigated success.

The blues are the fruits of this success: because things worked so well for so long, Japanese practices became petrified. Success discouraged change. Though good fortune has ended, its thought patterns linger, making it even harder to introduce needed changes.

This is obvious in finance as well as production. In the years of the bubble economy, Japanese banks handed out money as if they did not care about repayment. Manufacturers gave life time employment. Now the crisis of the country's financial institutions hangs as a dark cloud over the international financial system with many Japanese banks having to pay a premium to borrow on world markets. Big manufacturers are inching away from life time employment.

But many feel that more drastic steps like massive deregulation and a retreat by government from business affairs are needed for Japan to regain its competitive edge. Bureaucrats in the ministries of international trade and of finance, once revered barons of Japan's economic miracle, are increasingly criticized, even degraded.

Yet bureaucrats are merely whipping boys for a political system that fails to deliver the basics of democracy: a government that can lead and an opposition that offers realistic alternatives. The present government is a coalition of the Liberal Democrats, Japan's ruling party for forty years, and the Socialists, Japan's longtime ineffectual opposition. They are united only in wanting to hold on to the old system for as long as possible, confronting an ambitious but loosely organized conservative opposition that wants to change the system.

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A new election law, designed to facilitate choice between policy alternatives, will be applied for the first time in voting this year. No one expects the old system to vanish instantly. Thus not until the next century will Japan have a government that commands respect at home and speaks with authority abroad.

This prospect of certain uncertainty is worrying because it is the most justified of Japan's current blues. In the past, when industry boomed, America protected, and international affairs were predictable, the country could do without a government so long as the bureaucrats functioned. Conditions have changed. Japan desperately needs a government capable of taking critical decisions.

The price for this absence is heavy in the international arena. US relations are strained. Korea faces crisis. China, encouraged by economic success, and afraid to convey weakness in the face of Deng's approaching demise, is becoming increasingly assertive.

Relations with America are the most disturbing. Japan's hapless government seems incapable of turning a rising tide of anti-US feelings. Yet Japan's strategic need for the American alliance is, if anything, greater today than during the Cold War. Who but America can balance the growing power of China? Who but America can provide the back up for constructive Japanese/Sino relations? And if North Korea should seek a way out of economic crisis through nuclear adventures, only American power is capable of deterring or containing such developments. While American leaders remain willing to undertake these tasks, the American public is increasingly skeptical about such involvement. It would require a credible government in Tokyo to make the point with US public opinion. Such a government is not around.

In East Asia, too, Japan needs friends. Fifty years after WWII, it remains incapable of an unequivocal recognition of an apology for Japan's war crimes. A shaming ritual continues; Japan's parliament passes a half-hearted expression of regret, then some government minister publicly denies or belittles Japanese war crimes. Following angry protests in the region, he is forced to resign.

Japan's long isolation, ended barely a century ago, remains a handicap when it comes to meeting the basic mental requirements of the international arena. Yet leadership that could help the Japanese people overcome this is not at hand.

This is unsettling for all who recognize the constructive role Japan can play in the world. There is encouragement in the fact that many Japanese are worried about this too. The arrogance of infallibility has gone, the search for sensible solutions is under way. Japan will ultimately restore authority at home and regain respect abroad. Unfortunately, this will take longer than the country's interests demand -- but perhaps no longer than the patience of Japan's friends can endure.

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