The National Strategy Office: Delays, ambiguity and the real agenda.

Just three days after coming to power, Hatoyama and Kan Naoto (Vice-PM) opened the National Strategy Office. One of the DPJ’s policy pledges had been the creation of such an Office, to provide an overarching “vision for Japan” and policy coordination across departments. Although the terms of reference have since changed, and will likely change again, the NSO potentially a major innovation in how Japanese politics is conducted.

In normal usage, “national strategy” would refer to matters of foreign policy – particularly national defense. That is not what it means here however, as the NSO is currently charged mostly with matters referring to the budget, taxation, and economic management in general. Although, the Minister of Finance Fujii has stated that matters pertaining the budget will be ultimately decided by Ministry of Finance (not the NSO).

In fact, the NSO has been established to win domestic political battles, national security is not specifically mentioned as yet (although it is still early days). The NSO is first and foremost aimed to help the DPJ “defeat” the bureaucracy, which they perceive as an illegitimate shadow government still too strongly attached to the LDP.

This is apparent in having the NSO being headed by Kan Naoto, a politician whose contempt for bureaucrats is (unfortunately) well known. Kan has forced bureaucracies to reveal embarrassing internal reports (in particular, as Welfare Minister in 1996 Kan revealed the extent of Aids contaminated blood for transfusions and slammed the ministry for sitting on its hands). The NSO`s anti-bureaucracy purpose is also apparent in Kan’s desire to, in the manner of Britian’s Policy Office, stock the NSO with politically appointed private persons (i.e. non-politicans/non-bureucrats).

However, Kan’s goals have been dealt a series of setbacks. The most important of which is the “rank” of the NSO – which has not yet had the requisite laws passed to start formally inserting itself into policy. The NSO’s current status also means it has no mandate, no authority and (essentially) no staff. Worse still, the passing of these necessary laws is likely to be put back to when the Diet meets in regular session.

Indeed, Kan currently sits in limbo. This fact is compounded by the winding up of the Policy Research group within the DPJ (which Kan had headed). It is no longer apparent how Kan and the NSO will impact on policy.

Hatoyama remains popular

Yesterday’s Mainichi reported on results of public polling. It found that Japanese public still overwhelming support (72%) Hatoyama’s government. While dipping somewhat from his highest (77%) immediately after forming government one month ago, this is still surprisingly good. The previous three PM each lost 10% in their first month, as did the more historically similar Hosogawa Administration of the mid-nineties.

The honeymoon is clearly still on, but there are some reasons to think that it will last awhile yet. Firstly, Japanese expectations are not very high. Secondly, Hatoyama is proving himself more media savvy than expected. Thirdly, the administration is actually pushing ahead with policy.

With regard to the first point, Japanese are not expecting all that much of the DPJ. If the DPJ can get Japan through the crisis, then that is success. In responding to the question “do you think your living standard will improve due to DPJ policy, 45% said that they do not think it will change. But just on numbers, two thirds of those should be DPJ supporters. In other words, even maintaining the status quo should be enough to satisfy the majority of Japanese a win a second term.

In addition to this, the dominant reason for supporting the DPJ (78%), was “belief that they can change the way politics is done”. This underlies the importance of the DJP’s attempt to shift Japan into a kind of Westminster-type system, at least with regard to government-bureaucrat relations. Even if the DPJ is unable to actually improve the lot of the average Japanese, providing political reform is seen to be progressing then a good deal of its support should stay.

Secondly, Hatoyama is surprisingly media-savvy. Whether through accident or design, Hatoyama has managed to humanize himself very successfully. The relationship with his wife (Miyuki) has clearly played a role here, but his native humor (something suppressed during the elections) also counts. Anecdotally, Hatoyama carried himself much better at the Sumo than Aso did – engaging in light repartee with Asashoryu (Photo in previous post).

Hatoyama’s administration also benefits from the continued wrangling within the LDP. The chairman of the LDP (not quite the Leader of the Opposition) Tanigaki is not very popular, with 55% not expecting he will really do anything. While a fine politician, Tanigaki’s moves to create a shadow cabinet within the LDP are still delayed, and his appeals for new conservative revival are not likely to distinguish him from the “bad, old LDP”.

Thirdly, and perhaps most importantly, Hatoyama’s cabinet is appears to be driving policy along a good clip. Of the 178 policies promised during the election, Hatoyama’s administration already begun implementing half (49%). Admittedly, only three of those policies have advance beyond the initial stage, but still well ahead of the LDP in terms of dynamism. Even contentious policies, such as Yanba Dam, the DJP have pushed along aggressively, trumping local objections by arguing national mandate. Making Expressways toll free may prove a bridge too far.

Of course, the wild card in all this is the World Financial Crisis 2009. Hatoyama has had a pretty good crisis so far - i.e. he was not at the wheel during the crash. And just by luck, his first month has coincided with some not so bad numbers. Consumption is up, Industrial Activity is up, the unemployment rate has stopped hemorrhaging and Japanese exports are recovering slowly. That will all help Hatoyma and it is all true – but only relative to last month; compared to year ago...well, Japan still a long way to go. If the worsening of the people’s livelihood is placed at the DPJ’s door, then Hatoyama’s popularity will crash – along with a chance to push through his promised reforms. Whether he ends up being blamed in anyway is a question of stage management.

An interesting note, more men support the DPJ than women. I wonder why. Maybe men are by nature more willing to take a risk (on the DPJ) or less forgiving (of the LDP’s incompetence). Any cross country studies on gender and voting patterns?

Hatoyama and Asashouryu

This week's post is at the East Asia Forum, here.

I will leave you with a photo I took last week at the Sumo.

Social Constructivists are right.

Theoretical debates in International Relations are interesting, but too often the so-called "great debates" are pathetic spectacles in which each sides advances differing views of human nature. As much as it pains the idealists, the in-group/out-group dichotomy (identity) is a necessary insight into how human in fact behave.

However, getting to these valuable insights requires an inter-disciplinary approach, and a certain adventurousness of the mind. And IR scholars are simply going back to the same material.

I stumbled across this nugget in a neuro-science journal. It establishes that empathic feelings (of pain) are stronger within the same ethnic group, and much weaker across groups. It perhaps provides the best explaination as why a liberal, democratic country such as America would remain in Vietnam, and perhaps now Iraq, for so much longer than expected .

To whit, ethnic out-group apathy in International Relations theory. Social Constructivists got it right.

The Asian Develop Bank’s Regional Cooperation and Integration Strategy: Merits and Issues. Part 3

As outlined last week, the ADB’s RCI strategy confronts two problems which the close country focus does not, specifically coordination problems arising from negotiating with multiple actors at once, and the free rider problem. Today I will address the second of those, the free rider problem. Here, the ADB has sought to resolve regional countries’ concerns about a free rider in two ways.

Firstly, in cases where the client countries’ are unable to reach a consensus on burden sharing, (what this means practically is that the countries’ pledges sum to less that 100% of the expected cost of a projects), the ADB has sought to “pay the difference” from its own pockets. Of course, the ADB is unable to simply provide compensatory cash payments to the “losers” of any project, and so Bank has been required to use a more round-about method for achieving the same. Specifically, the ADB has sought to lengthen the shadow of the future by “bundling” each individual regional project in with other such projects. This bundling allows the ADB to spread out the ‘losses’ over time. Of course, in any one project some country/s might “get” more than others, but with the ADB taking a longer term view and communicating its vision to the client-nations, these individual projects can go ahead with each country feeling that it is being treated fairly. But it is hardly optimal, despite the best of intensions, and may likely create its own set of problems.

Indeed, it is precisely because the ADB is not mandated and equipped to function like the European Commission’s Structural Funds mechanism that the ADB is having difficulty with effectively and efficiently evening out the costs and benefits of regionalism.[1] In the future this might be changed; having the ADB adopt such a role is indeed a logical extension of the RCI, but for the time being the ADB risks institutional overreach in its attempts to help the poor of Asia to help themselves.

The second way the ADB has sought to ameliorate the free rider problem is rather to get someone else to “pay the difference.”[2] Here, however, there are only two candidates; Japan and China. This is because neither the US or Europe are much interested in such schemes, indeed it seems that the US is unfriendly towards the regional cooperation agenda.[3] These two regional powers have both the necessary deep pockets and deep political interests in the region to allow taking on such a role, but of course there are very obvious risks.

The most obvious of these risks is that these Great powers will start to play games in southeast’s backyard. This is precisely what has happened with North-South corridor and the East-West corridor. The North-south corridor (funded by China) links Yunan Province to the Mekong. While the East-West corridor (funded by Japan) opens an better access to the same markets for Japanese goods arriving by sea (likely at the port of Da Neng in Vietnam).

More insidiously, China has become skilled in taping the regional allowances outlined earlier, usually in combination with its own PRC Special Fund, to direct the ADB towards financing regional projects that benefits China. One example involves a project aimed at “facilitating sustainable, environmental-friendly regional power trading in the greater Mekong subregion”, co-financed by the ADB and the PRC Special Fund. The purpose of this project for “developing the hydropower plants for exporting power to Yunan province or other potential hydropower sources for inclusion in the power trade” to the tune of 2mil.[4] Another example involves providing trade negotiation training via Regional Technical Assistance to countries with which the China is in the process of negotiating trade deals. Which ought to raise some eyebrows.

The ADB is risking its reputation by letting, or appearing to let, the big powers influence and direct the RCI. If the RCI is to be “done right”, and to win approval and acceptance which will see it live past the end of Kuroda term, the ADB will need to maintain scrupulous, and unquestioned, ethnical standards. As always it is a question of money however. If the ADB is to undertake such regionalist activities, then it ought to be given the resources to successfully do so.

[1] Giovanni Capannelli, "East Asian and European Economic Integration: A Comparative Analysis," in Working Paper Series on Regional Economic Integration (Manila: Asian Development Bank 2009).
[2] "Regional Cooperation and Intergration Strategy," (Asian Development Bank, 2006). See, Article 94. “Additional financial resources will also be required. Two types of financial resources are needed to implement　the strategy effectively. First, with regard to the lending component of the strategy, for the immediate future, it is　proposed to use existing OCR and ADF resources within available headroom and to catalyze additional public　funding (particularly from larger economies).”
[3] The US is one of the few countries willing to be on record as opposing a proposal at the Board of Directors, for its own reasons the US has consistently voiced its opposition to regionalist approaches. The US opposed the creation of the Regional Cooperation and Integration Fund on the 22 March, 2007. However, US opposition can also look mean-spirited, such as the opposition in November 2005 to a Communicate-able Disease Control Project for the Mekong.
[4] "Indicative Rolling Regional Cooperation Operations Business Plan," (Manila: ADB, 2007). 8, 22

English in Japan

A while ago I heard Eisaku Sakakibara talk about why Japan needs to improve its english competence. I was not totally persuaded because I felt at the top there was enough language competence. But behold the response to Novel Influence! On the GOJ homepage no less!

I hope more serious matters get better proofing.