“OTHER countries in the world are opening themselves up and forming free trade areas, and I am concerned that our country has been left behind,” Prime Minister Naoto Kan told the Japanese Cabinet on Nov 10. He was right. While countries across Asia have been signing free trade agreements with major trading partners such as the US and EU in recent years, Japan hasn’t concluded even one.
WILL Japan’s leadership vacuum never end? Prime Minister Naoto Kan, who took office in June as the country’s fifth leader in three years, may have survived a leadership challenge last month, but he still lacks sufficient support to pass laws in Parliament.
ECONOMISTS who argue that Asia will lead the global economic recovery this year are usually quick to exclude Japan from the prediction. This makes sense. After all, the heavily indebted North-east Asian country is widely expected to grow by no more than 1.7 per cent this year.
With the conservative Liberal Democratic Party (LDP) having won the December 16 parliamentary elections, Japanese foreign and domestic policy will shift to the right. The new prime minister is Shinzo Abe - a nationalist well-known for his hard-line stance against North Korea and his denial that Japanese forces abducted "comfort women" during the Pacific War.
But fears that he may worsen already strained ties with China over ongoing territorial disputes are probably exaggerated. Mr Abe proved to be very pragmatic in his dealings with China when he was prime minister from September 2006 to September 2007.
Despite the LDP's win, Mr Abe is not popular among voters, and he may have problems getting the cooperation of the upper house when it comes to domestic policy.
But the new prime minister will probably get his way with the central bank. With BoJ Governor Masaaki Shirakawa's term ending in April, Mr Abe will be able to select a successor more supportive of his desire for yet another round of quantitative easing.
WHAT TO WATCH FOR:
My name is Dr Bruce Gale and I am a senior writer with the Singapore Straits Times. I studied at LaTrobe University (BA Hons) in Melbourne and later at the Centre for Southeast Asian Studies at Monash University (MA). My PhD thesis, which focussed on Malaysian political economy, was completed at the Malaysian National University (Universiti Kebangsaan Malaysia) in 1987.
From 1988 to 2003 I was Singapore Regional Manager for the Hong Kong based Political and Economic Risk Consultancy (PERC).
I have written several books and articles on Southeast Asian affairs, including Political Risk and International Business: Case Studies in Southeast Asia (Pelanduk Publications, 2007). Books on language include Mastering Indonesian: a guide to reading Indonesian language newspapers (Pelanduk Publications, 2008)