Japan: renewed mandate for the government

S P SETH

Japan’s Prime Minister Shinzo Abe is feeling quite confident, having recently sought a new electoral mandate and received it midway through his parliamentary term.  Not that he did anything remarkable or even hopeful for his country plagued with multiple problems, but he exuded confidence and a can do spirit to pull Japan out of its prolonged morass. For instance, he came to power after Japan was still in the throes of the 2011 tsunami that killed and swept away thousands of Japanese and crippled its nuclear energy sector by disabling the Fukishima nuclear power plants. Apart from massive human and property losses, the shut down of Japan’s nuclear power complex massively increased Japan’s oil import bill. The then ruling Democratic Party of Japan was blamed for mismanaging this unprecedented crisis. The brief interlude of the Democratic Party of Japan, which won a landside victory in 2009 with great expectations, was an abject failure that brought back the Liberal Democratic Party to power with Sinzo Abe as the country’s new prime minister in 2012. People looked to him for solutions, and he promised to transform the country in all sorts of ways.  But not much was achieved during his two years and his government was coming under criticism. To stem the tide of such criticism developing a momentum of its own, Abe decided to pre-emptively seek a popular mandate midway through his term, and give himself extended time to hopefully change things in some recognizable ways.

Will he be able to do it? Japan’s biggest problem is that its economy has been stagnant and entered a deflationary phase over the last two decades. So far, during two years with Abe as Prime Minister there hasn’t been any appreciable improvement. His government has sought to put Japan on a growth trajectory by easing monetary policy and through increased public spending, even if that would mean a further increase in the country’s already enormous debt, much of it raised internally. The idea behind easy money supply is to make credit cheaper and easily available for businesses to grow, create new jobs, and build up consumer confidence so that people would start spending more, thus creating a virtuous cycle of forward economic movement. But despite some initial kick off from the new policies, it hasn’t made any appreciable difference to the country’s economic environment. The government believes that it needs more time for its policies to work, and the new extended term will enable them to produce results. During this period, the Abe government might also open up the Japanese economy to foreign investments and liberalize trade barriers in restricted sectors like agriculture. It must, however, be said that any structural change to the economy would run into strong opposition from the agricultural sector that also happens to be the ruling Liberal Democratic Party’s (LDP) power base.

Apart from reinvigorating the country’s economy, the ruling LDP has a very strong nationalist agenda, which includes making Japan into a ‘normal’ nation. Which means scrapping/amending Japan’s pacifist constitution allowing it to function like any sovereign country able to use its defence forces to take on an enemy and/or come to the aid of its friends and allies. Under Abe Japan has increased its defence expenditure. It has also sought to do some ‘creative’ interpretation of its pacifist constitution to make it more responsive to external challenges.

The most compelling factor driving this is a perceived threat from a resurgent China. With his renewed electoral mandate, the Abe government is expected to take this process of nationalist revival further. And as part of this process, the government is likely to become more unapologetic about its wartime atrocities, indeed whitewashing or denying their occurrence. Which is likely to accentuate problems with China, on top of the sovereignty dispute over islands in the East China Sea. It is important to point out here that although many Japanese are worried about a perceived security threat from China, they do not necessarily agree with Prime Minister Abe’s attempts to tinker with and/or amend Japan’s pacifist constitution. Ever since the end of WW11 leading to Japan’s defeat, the country has developed a strong tradition of pacifism in terms of abjuring another war.

Another area where Abe might be swimming against strong opposition from many of his countrymen is his policy to re-start the country’s many nuclear power reactors. The Japanese still have fresh memories of the Fukushima disaster with nuclear meltdown at some of its plants, with neighbouring areas turning into ghost towns. Japan was gripped with fear and there was talk then that even Tokyo might be affected. And this is still fresh in many people’s memories, and they are allergic to any talk of restarting the nuclear industry. But buoyed by his renewed electoral victory, Prime Minister Abe will go ahead with restarting the country’s nuclear industry.

How is he getting away with it, when many Japanese are not supportive of some of his important policy initiatives? His economic policies haven’t really worked to create confidence among people to start spending and lift the country out of its long deflationary phase. Many Japanese oppose his revamping of the country’s pacifist constitution. And people are not particularly enthused about whitewashing the country’s wartime record. At the same time, there is significant opposition to restarting the nuclear industry.

There are two important reasons for this.  The first is the long time familiarity of the Japanese people with the ruling LDP that has been in power for a long time except brief interruption by the opposition. And the last time the opposition Democratic Party was in power, it made a hash of things comprehensively. Much was expected and it failed miserably creating conditions for the return to power of the LDP in 2012, now reelected midway through the normal parliamentary cycle. The opposition was fragmented and unelectable. In other words, the renewed mandate for Abe and his LDP is not essentially an endorsement of its policies, but a lack of any credible political alternative.

The second reason is that even though the Abe-led government’s strong nationalism, sometimes bordering on jingoism as with denying its wartime crimes, is worrisome there is a general unease among Japanese people with China’s own muscular nationalism that reflects an attitude of ‘righting the wrongs of history’ as Beijing sees it. And the Abe government provides a counter narrative and way of confronting China, if need be. And part of this narrative, apart from strengthening Japan’s defence posture, is further strengthening its US alliance and building regional linkages against China’s expansive nationalism. The Japanese might not like what is happening but they sense a need to do something to prepare if China were to turn its attention to Japan. All this is dangerous stuff based on calculations of balance of power, which can go awry as it did in WWI, and lead to catastrophic results.

Note: This article was first published in the Daily Times.

Contact: sushilpseth@yahoo.com.au

 

    

How vulnerable is Putin?

S P SETH

In his recent annual state of the union address, President Vladimir Putin of Russia was trying to put the best face on the problems arising out of the conflict with Ukraine that is backed by the US and European Union (EU). He defended the “reunification” of Crimea with Russia, which set the ground for a widening rift with the west. He reportedly likened Crimea as holy land for Russians, like the Temple Mount in Jerusalem for Muslims and Jews. According to Putin, “It was here in Crimea in ancient Khersones, or Korsun as the chroniclers called it, that Count Vladimir was baptized [in the 10^th century], to then baptize the rest of Rus [Russia].” And Crimea is also “strategically important”. Crimea might be invested with holy status but Russia’s strong stand in Ukraine is mostly strategic. The eastward expansion of NATO and EU to the Russian borders was considered a threat and Moscow wanted to give a strong message that it won’t be tolerated, whatever the cost. And the cost is becoming clear as Russia’s economy comes under increasing pressure from western sanctions and the falling oil prices. At his press conference, the other day, President Putin admitted that, “We are going through a trying period, difficult times at the moment…” but he was determined to tough it out.

The most obvious sign of “difficult times” is that the Russian rouble is in free fall, having lost (at the time of writing) 40 per cent of its value against the US dollar. The intervention of the Russian central bank to support it has not worked so far. The western sanctions are quite comprehensive, denying it access to financial markets, and restricting/barring investments in Russian energy projects and other economic activities. Even as western sanctions were hurting, the steep fall in oil prices, the bread and butter of the Russian economy, has worsened the situation with no sign, as of now, of a lift in oil price any time soon. While a good proportion of the fall in oil prices is dictated by a mismatch between supply and demand caused by a glut in the markets due to weak or zero economic growth in Europe, slow rate of growth in China, increased oil production in the US from shale oil and gas extraction; it is also caused by the convergence of strategic interests between the US, Saudi Arabia and other Gulf producers to punish Russia and Iran by adding to the glut. This was clearly revealed at the recent OPEC meeting in Vienna where Iran and Venezuela’s pleas to restrict production to bolster oil price was not heeded by Saudi Arabia. Both these oil producers (OPEC members) and Russia derive much of their revenues from oil exports.

How will Russia cope with its economic problems from western sanctions and falling oil prices? First, Russia is seeking to diversify its markets. A recent $400 billion dollars gas deal with China was an important breakthrough. Another instance is a proposed undersea pipeline to Turkey, which will receive concessional price for gas supplies from Russia. In this way, Russia will create a new channel for gas supplies to southern European countries. Which would suggest that Russia is working hard, with President Putin personally pushing alternative/supplementary deals, to diversify his country’s economic relations. Putin’s recent visit to India to clinch a raft of economic agreements, including in the energy sector, is another example of the same process of diversifying economic ties. These initiatives might not immediately relieve the economic pressures from western sanctions and falling oil prices, but they do signal a strong determination by Russia to stand its ground.

Another aspect of the crisis is that with their tough economic sanctions, the west is pushing Russia into China’s embrace. As Ivan Tsvetkov, an associate professor at Petersburg State University, has written, “Of course the confrontation between Russia and the West is a true godsend for China…. [with] Moscow’s ability to destroy the US-centric world order by starting to play the China card…” Normally, Russia has been very cautious about creating economic dependence on China but, according to Tsvetkov, “Putin has decided that the threat of China’s economic and demographic domination of Russia is less serious than the threat of US provoking a ‘colour revolution’ in Russia”, as happened earlier in Georgia and Ukraine. That would be aimed at toppling Putin and putting together a compliant regime.

However, despite economic difficulties, Putin’s popularity at home so far is very high at around 80 per cent in the wake of the Ukrainian crisis.  He has been a fairly effective leader ever since he became president. After the collapse of the Soviet Union, which Putin called the greatest geopolitical tragedy of the 20^th century, Russia was drifting and going nowhere and virtually faced bankruptcy in 1998, having defaulted on its debt. After Putin took over from Boris Yeltsin as the country’s acting president in December 1999, later returned after elections, he was able to turn the country around, establishing his reputation as a strong leader. He was able to suppress the insurgency in Chechnya, which was causing a lot of insecurity in the country from random attacks by the insurgents in the country’s heartland. However, the rebels recently made a bloody appearance in a shoot out in Chechnya’s capital, Grozni, with 20 fatalities even as Putin was reading his annual address. Despite this, the situation in Chechnya is nowhere near the mayhem of the nineties.

All in all, he introduced an element of stability to a chaotic country that seemed in free fall and likely to face further division from Islamic insurgency in Chechnya, Dagestan and the surrounding region. And with the income from oil and gas exports, he was able to restore a certain degree of economic respectability for Russia, further reinforced by putting up strong opposition to NATO/EU expansion to it borders, reminding them that Russia was a strong military power with a nuclear punch. Which, in a sense, created the Ukrainian crisis, and the resultant western economic sanctions.

As noted earlier, these sanctions are hurting Russia and the pain is likely to increase in the short to medium period.  And this would adversely affect Putin’s popularity at home. But the strong nationalist narrative in which the west is accused of creating the Ukrainian crisis in the first place with a view to weaken and threaten Russia might rally people around their leader, even if it meant some economic pain. This will be tested in the months to come.

In such charged atmosphere, the potential danger comes from turning the Ukrainian crisis into a contest of power that might lead to a military conflict. In this regard, George Soros, an influential US investment banker and public intellectual, has advocated strong and united action against Russia’s ‘aggression’ in Ukraine. Writing in in the New York Review of Books, he deprecates “…the current European attitude toward Ukraine that fails to recognize that the Russian attack on Ukraine is indirectly an attack on the European Union…” And urges that, “All available resources ought to be put to work in the war effort even if that involves running up budget deficits.” Without that, “Not only the survival of the new Ukraine but the future of NATO and the European Union itself is at risk.”

One only hopes this kind of war cry doesn’t catch up because such talk, if translated into warring action, might not only prove disastrous for the ‘combatants’ but rest of the world too.

Note: This article was first published in the Daily Times.

Contact: sushipseth@yahoo.com.au

    

Changing global power balance

S P SETH

It is amazing how fast the global strategic balance is changing. What it means is that since the collapse of the Soviet Union, and the ascension of the United States as the only global superpower in the nineties, the world is transiting into a state of multi-polarity. While the US still remains the most powerful military machine in the world, its position is strongly challenged by Russia and China. Take, for instance, the Ukrainian situation. While the US and its western allies have sought to pressure Russia through a regime of economic sanctions, they have so far avoided any military action to confront it. Indeed, President Putin at one point cautioned the NATO alliance not to mess with Russia, which has nuclear weapons.

In the case of China, even as it was flexing its political and military muscle in South China Sea and East China Sea, the US was avoiding any military confrontation. The contrast was quite marked with mid-1990s when the US sent its naval flotilla towards Taiwan Strait when China was seeking to thwart presidential elections in Taiwan by a show of military force. But now while China is  asserting its power and making sovereign claims on islands in South China Sea and East China Sea, the US is mostly confining its role to criticizing Beijing’s unilateral action. The situation has eased a little bit since China withdrew its oilrig from the vicinity of Hanoi-claimed South China Sea islands, as well as going easy on its air identification zone over and around the contested (with Japan) group of islands in the East China Sea. But the tensions can re-surface any time as China is determined to assert its ‘sovereignty’.

An interesting development in this changing strategic calculus is Japan’s active defence policy. Under its US-designed post-WW11 constitution, Japan is a pacifist nation not allowed to wage war. It has a substantial self-defence force but it is not meant for operations outside the country. And its defence is basically under-written by its security alliance with the United States. But lately, since Shinzo Abe became Japan’s Prime Minister in 2012, Japan is reacting to China’s assertion of power in the region with a certain creative re-interpretation of its pacifist constitution to enable it to be an active security partner with its allies and friends.

Even though it was the US that imposed the pacifist constitution on Japan after its defeat in WW11, it would now welcome Japan playing a defence role to supplement US’s over-stretched military commitments in the region and around the world. As long as the US was both the dominant Pacific and world power, the regional countries at odds with China over territorial and maritime disputes were quietly confident that the US would underwrite their security, not just for their sake but also to maintain its own naval supremacy. Things have changed since then as China is becoming more powerful and more assertive. And such assertive power projection has happened much more under President Xi Jinping, who took over the presidency around the same time, early in 2013, as Shinzo Abe who became Prime Minister late-2012. In other words, the region is becoming unstable with both China and Japan determined to tough it out. Indeed, this almost led to aerial and naval incidents over their contested East China Sea Islands.

While the US seems keen not to let the regional situation get out of hand between China and its regional allies/partners, the tensions in the region have the potential of developing into something ugly at any time. China sees US behind all the regional challenges to its power, which historically it regards as its own. By that logic, the US is an outside power with no business to be flaunting its reach. But the United States is equally determined to remain engaged as an Asia-Pacific power with its own strategic, economic and political interests as well as by virtue of its security and other commitments to regional countries. Indeed, during his recent visit to Australia to attend the G-20 meeting in Brisbane, President Obama  reiterated US “pivot” to Asia-Pacific, with the deployment of a substantial part of its navy to the region. In other words, the US is not letting China strategically appropriate the Asia-Pacific region to its own sphere.

That might be so. But China seems determined to alter the existing regional order designed by the US-led western alliance. For instance, China has floated a parallel regional economic architecture of an Asian Infrastructure Investment Bank (AIIB) purportedly to help regional countries develop their economic potential. Under US pressure, Australia and South Korea opted to stay out of it, obviously regarding it as rivaling the Asian Development Bank and the World Bank. In the same way, China is actively pursuing an Asia-Pacific free trade area to rival the US-led Trans-Pacific partnership from which China is excluded. In other words, we are witnessing greater competition and rivalry between China on one side, and the US and its Asian allies, like Japan and Australia, on the other. And that portends trouble for the region.

It is not just Asia-pacific region that is a center of strategic rivalry. Elsewhere in Europe, Russia and the US-led EU/NATO are involved in a serious confrontation with Russia, with Ukraine as its epicenter. Russia was supposed to see sense from US-led economic sanctions as they are hurting its economy and the pain is likely to increase. At the recent G-20 summit in Brisbane, President Putin was warned that further sanctions awaited Russia if President Putin didn’t back off from Ukraine. But so far it would seem that it was having the opposite effect. Moscow is expanding its military reach far and wide. As Russian defence minister, Sergey Shoigu, has reportedly said, “We have to maintain military presence in the western Atlantic and eastern Pacific, as well as the Caribbean and the Gulf of Mexico.” Indeed, lately, Russia and China are drawing closer. Moscow and Beijing recently signed a multi-billion dollars gas deal. And their navies are reportedly holding naval exercises in the Pacific and indeed in the Mediterranean next year.

Moscow is also strengthening its relations with Iran in the area of nuclear energy by undertaking to build two nuclear reactors, with six more likely to follow. These power plants will operate under the International Atomic Energy Agency (IAEA) safeguards. But the timing of Moscow’s announcement to coincide with the deadline of November 24 for a nuclear deal between Iran, and its dialogue partners in the matter, wasn’t appreciated by the US.

The US Secretary of State, John Kerry, has likened the new global power balance to the 18^th and 19^th century. To quote Kerry, “In many ways, the world we’re living in today is much more like 19^th century and 18^th century global diplomacy, the balance of power and different interests, than it is the bifurcated, bipolar world we lived in the Cold War and much of the 20^th century.” In whatever way one looks at it, it points to greater instability.

Note: This article first appeared in the Daily Times.

Contact: susshilpseth@yahoo.com.au