Saturday, June 10, 2006

Alliances for the new Century Part 2 – Japan

As the world changes around us, where are America’s future interests and potential allies? In a word, Asia. Therefore, first and foremost amongst our newly important allies is Japan. Though Japan is in a similar downward spiral as Europe, they exercise little of their power today, so if they use any in the future it will be more than they do today. By all measures Japan is very powerful country with an economy of $4.8 trillion, a population of 127 million, and a military budget of $45 billion. She is the second most powerful nation in the world, and will stay in the top 4 for the foreseeable future. Japan is absolutely critical to us for multiple geopolitical, economic, and military reasons.

Clearly a nation the size of Japan carries a lot of heft around the world and especially in East Asia. It is very useful to have a second voice at times, the more so the more powerful that voice is. Our main geopolitical challenge in East Asia is obviously China. Our general goal is to form an alliance of countries surrounding China so as to limit her ability for trouble making. The Japanese are the most important part of that ring. Not only because they are by far the most powerful member of that group, but also because they can reach out to the other members. For example, after we sign a trade or technology deal with India the Japanese can follow us and sign similar deals to further sweeten the pot. In many cases, due to Japan’s closer proximity, they can offer a better deal that we can. Japan can also work more closely with nations, such as Vietnam or Laos, which are difficult for us to deal with. All of this also applies outside of East Asia. Japan is rich and strong enough to have influence in Africa or Latin America in a way other countries like say South Korea or Taiwan cannot. This includes the U.N. where Japan is a useful member and second largest contributor. Combined with our contribution, we make a team that the U.N. cannot operate without. These are useful attributes especially combined with Japan's wealth.

That Japan is a very wealthy country is well known. At $36,700 they are the only large country with a per-capita income near our $41,600. Not only that, but Japan is a well known nation of savers.
They will save over $1.3 trillion this year while investing just under $1.2 trillion inside Japan. As they age, they need a better yet safe place to invest their money than Japan since it is oversaturated with investment. We need a source of large amounts of capital to invest in our ever growing country and economy. We’ll only save about $2 trillion this year while needing around $2.6 trillion for investment. What better combination for the future than the biggest saving country and the biggest investment country? We are also major trading partners with over $210 billion in trade last year. To further encourage this trade there is even talk of a U.S.-Japan Free Trade Agreement, but it is admittedly a long way off. However, it would do much to advance our alliance. In addition to the hundred billion in excess savings available for overseas investment, Japan provides around $9 billion in foreign aid per year. The geopolitical aspect of this is obvious.

Along with the diplomatic and economic reasons, Japan is a valuable ally from the military standpoint as well. Japan’s military budget is one of the largest in the world and has much room to grow in the future. With a budget of $45 billion and 240,000 soldiers, the Japanese have a good spending per soldier ratio of $188,000. They have focused on funding a small force that is almost trained and equipped to our standards. This allows for easy co-operation. It also allows for future expansion. Japan needs protection in their unruly neighborhood and we need an access point to and support in the very same neighborhood. We have recently made many strides in regards to our military relationship.
We have agreed to a new defense treaty that resolves the longstanding issue of the Marines on Okinawa and has Japan take a great role in East Asian operations. They are also the largest partner in our missile defense program. The Japanese have agreed that a Chinese invasion of Taiwan is matter of national security. Ultimately, as China becomes a bigger issue in East Asia, we need a powerful military in the region that other countries trust will always stand up for them. Sadly, we do not have the best reputation for standing by allies (which the media driven panic over Iraq is doing nothing to assuage) and many East Asian nations suspect that we will sell them out to China in the end. They would not worry about a powerful and confidant Japan selling them out since Japan has no where to go should they do that.

Given the changes in the global power structure, it is critical that the U.S. government recognize and act on them. One of the changes is that Japan is now the most critical future ally we have and any responsible administration would place her above all others. That is exactly what President Bush is doing. We have become closer to Japan than at any time in our history (Except maybe in the decade after World War 2). So long as we continue giving Japan the attention they deserve even though it may be at the expense of Europe, we can look forward to a long fruitful friendship.

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