JAPAN'S FOREIGN POLICY faces new challenges and difficult decisions in the 1990s. The 1980s had seen enormous changes in the distribution of international economic power and the political influence that accompanies it. Japan had become the world's largest creditor nation and the second largest donor of foreign aid. Japanese industries and enterprises are among the most capable in the world. High savings and investment rates and high-quality education are expected to solidify the international leadership of these enterprises during the mid- to late 1990s. Its economic power gives Japan a steadily growing role in the World Bank, the International Monetary Fund, and other international financial institutions. Investment and trade flows give Japan by far the dominant economic role in Asia, and Japanese aid and investment were widely sought after in other parts of the world. It appears to be only a matter of time before such economic power would be translated into greater political power.
The collapse of the Soviet Union and the growing preoccupation of its former republics and the East European nations with internal political and economic problems increased the importance of economic competition, rather than military power, to Japan. These formerly communist countries were anxiously seeking aid, trade, and technical benefits from the developed countries, such as Japan. The power of Japan's ally, the United States, was also seen by many as waning. The United States status in the 1980s had gone from the world's largest creditor to the world's largest debtor, and it was forced to look increasingly to Japan and others to shoulder the financial burdens entailed in the transformation of former communist economies in Eastern Europe and other urgent international requirements that fall upon the shoulders of world leaders.
Inside Japan, both elite and popular opinion expressed growing support for a more prominent international role, proportionate to the nation's economic power, foreign assistance, trade, and investment. But the traditional post-World War II reluctance to take a greater military role in the world remained. A firm consensus continued to support the 1960 Treaty of Mutual Cooperation and Security and other bilateral agreements with the United States as the keystones of Japan's security policy. However, Japanese officials were increasingly active in using their economic and financial resources in seeking a greater voice in international financial and political organizations and in shaping the policies of the developed countries toward international trouble spots, especially in Asia. Meanwhile, there was some doubt in both Japan and the United States as to whether Japan-United States security arrangements, predicated on the Soviet threat, could be transformed to meet the new strategic realities of the 1990s.
Throughout the post-World War II period, Japan concentrated on economic growth. It accommodated itself flexibly to the regional and global policies of the United States while avoiding major initiatives of its own; adhered to pacifist principles embodied in the 1947 constitution, referred to as the "peace constitution"; and generally took a passive, low-profile role in world affairs. Relations with other countries were governed by what the leadership called "omnidirectional diplomacy," which was essentially a policy of maintaining political neutrality in foreign affairs while expanding economic relations wherever possible. This policy was highly successful and allowed Japan to prosper and grow as an economic power, but it was feasible only while the country enjoyed the security and economic stability provided by its ally, the United States.
The need to revamp Japan's foreign policy posture had become apparent during the 1970s and particularly following the middle of the decade, as major changes in the international situation and the nation's own development into an economic world power made the old diplomacy obsolete. Japan's burgeoning economic growth and expansion into overseas markets had given rise to foreign charges of "economic aggression" and demands that it adopt more balanced trade policies. Changes in the power relationships in the AsiaPacific quadrilateral--made up of Japan, China, the United States, and the Soviet Union--also called for reexamination of policies. The deepening Sino-Soviet split and confrontation, the dramatic rapprochement between the United States and China, the rapid reduction of the United States military presence in Asia following the Second Indochina War (1954-75), and the 1970s expansion of Soviet military power in the western Pacific all required a reevaluation of Japan's security position and overall role in Asia. Finally, the oil crises of the 1970s sharpened Japanese awareness of the country's vulnerability to cutoffs of raw material and energy supplies, underscoring the need for a less passive, more independent foreign policy.
Japanese thinking on foreign policy was also influenced by the rise of a new postwar generation to leadership and policy-making positions. The differences in outlook between the older leaders still in positions of power and influence and the younger generation that was replacing them complicated formulation of foreign policy.
By 1990 Japan's foreign policy choices often challenged the leadership's tendency to avoid radical shifts and to rely on incremental adjustments. Although still generally supportive of close ties, including the alliance relationship with the United States, Japanese leaders were well aware of strong American frustrations with Japanese economic practices and Japan's growing economic power relative to the United States in world affairs. Senior United States leaders were calling upon Japanese officials to work with them in crafting "a new conceptual framework" for Japan-United States relations that would take account of altered strategic and economic realities and changes in Japanese and United States views about the bilateral relationship. The results of this effort were far from clear. Some optimistically predicted "a new global partnership" in which the United States and Japan would work together as truly equal partners in dealing with global problems. Pessimists predicted that negative feelings generated by the realignment in United States and Japanese economic power and persistent trade frictions would prompt Japan to strike out more on its own, without the "guidance" of the United States. Given the growing economic dominance of Japan in Asia, Tokyo was seen as most likely to strike out independently there first, translating its economic power into political and perhaps, eventually, military influence.
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