Japan Seems Pleased With Signs of Activist US Economic Policy
A NEW MODEL?
SMILES of self-satisfaction are spreading among leaders in Tokyo as they watch President Clinton pursue a Japanese-style industrial policy for the United States.
But Tokyo officials are more than flattered about this American imitation of Japan's economic strategy, one in which the Japanese government has intervened to help key industries become more competitive in world markets.
Clinton's moves help reassure Japan about its new assertiveness both in promoting the Japanese model of capitalism as one that is better than Western models for developing nations and in shaping a global economic order after the cold war. "It is a mistake to think that the capitalism of a matured European or American economy is the only kind of capitalist economy," said Yasuhiro Nakasone, a former prime minister, at a recent forum.
Japan's postwar economic policies, regarded widely in the West as mercantile and unfair, have included such practices as protection of emerging high-tech industries from foreign competition and government "guidance" in technology research, as opposed to the laissez-faire faith in free-market forces often practiced in the West.
Many of Japan's barriers to foreign competition still remain, US Ambassador Michael Armacost said in a recent speech. The Japanese "establishment regards these [barriers] not as aberrations from international norms, but as practices whose appropriateness is confirmed by Japan's success," he added.
In China, Russia, and other nations, as well as in multilateral lending banks, Japan has eagerly begun to push its economic lessons, while criticizing traditional Western advice to developing nations.
Until now, Japan has been rather modest in presenting its development policies to the rest of the world, according to Isao Kubota, a deputy director general in Japan's Finance Ministry.
Last year Japan asked the World Bank to study Japan's post-war economic policies as well as the success of five other East Asian nations: South Korea, Malaysia, Indonesia, Thailand, and Hong Kong.
East Asia's fast-growing economies "recognize their economic development has been achieved through a set of shared Asian values," says Eiichi Furukawa, director of the Japan Center for International Strategies. Such values, he says, include a strong work ethic, group loyalty, consensus decisionmaking, esteem for education, and development of democracy amid political stability.
Since Japan is now the second largest contributor to the World Bank and its sister organization, the International Monetary Fund (IMF), it seeks more influence in the institutions, and claims that the policies and personnel of the banks are too Western.
World Bank adviser John Page heads up the World Bank's "Asian Miracle" study, which is due out by this summer and is aimed at providing "lessons" for the Bank. About a dozen Japanese academics have been hired to contribute to the final report, as well as one academic in each of the other nations.
In a recent Tokyo forum, former Singapore Prime Minister Lee Kuan Yew said that, except for South Korea, no other country in East Asia has followed the Japanese model completely. But he said that the various Asian models "will be the saviors for the economies of Latin America, Africa, and the Middle East."
One reason for Japan's request for the World Bank study was its strong reaction to the IMF's advice to Russia.
In particular, Japan criticized the lifting of price controls in Russia before industrial monopolies had been broken up and privatized. "Electric bills went up 1,500 percent in Russia," says Noboru Hatakeyama, a vice minister in Japan's Ministry of International Trade and Industry (MITI). "A privatized monopoly is the worst one."
Former Prime Minister Nakasone adds: "The countries which were communist economies, such as in Eastern Europe and the former Soviet Union, have to learn from our example." Russian bureaucrats have been invited to Japan to study the nation's postwar economic rebirth.
Compared to the West, "we are more interested in microeconomic policies than macroeconomic policies," Mr. Hatakeyama says. "I don't know if Japan is gaining influence [in the IMF] but microeconomic policies are gaining."
Also last year, China asked Japan for advice on setting up its own version of Japan's MITI, the agency that has guided Japanese industry into penetrating foreign markets.
In Vietnam, Mongolia, and other Asian nations, Japanese officials are offering advice on industrial policy, despite Japan's current recession and a reassessment of its economic structure.
"After the war, we had to use a planned economy," says Ryutaro Hashimoto, a former finance minister. But since the fall of communism and the lost appeal of socialism, he says, Japan has sought to come up with new values.