Japan’s long-sought economic revival at home has hit growth roadblocks that will only be overcome through global engagement, particularly through increased trade and tourism, a former ambassador to Russia, France and Saudi Arabia said during a visit to Atlanta.
Yasuo Saito, who served as Japanese consul general in Atlanta from 1997-2000, told a World Affairs Council of Atlanta audience that after 15 years of deflation, Prime Minister Shinzo Abe’s three policy “arrows” have helped the economy stave off the worst of its malaise.
“The first priority was to eliminate deflation, and he made the bold move of monetary easing and applying flexible fiscal figures and policies. These two have hit their targets,” but the third arrow — boosting private-sector growth — has proven more elusive, Mr. Saito said.
Even after moves to deregulate agriculture and health care, Japan’s economy is “barely on a sustainable path” and needs more international tourists and trade.
“We are on an initiative to attract more tourists, have labor market reform and promote women in the workplace,” he says. “We need to make the economic pie bigger through international trade.”
As part of this strategy, Japan is at the forefront of the negotiations of the Trans-Pacific Partnership (TPP), a pact among Japan, the U.S. and 10 other Pacific countries that he says is in the “final stages of approval.”
Mr. Saito alleged that the previous government was hesitant to take agricultural reforms fearing a negative reaction from farmers.
“Agriculture has been a protected industry for a long time. We need to grow our agriculture and add innovation and reform to it so it can be a competitive industry. Japanese farmers are growing fruits such as peaches, melons and apples now.”
There has also been an increase in tourists, which has brought more than 1 million new jobs. Wage levels have risen to their highest in the past 15 years, he says. In 2014, 13 million tourists visited Japan; in 2012, that number was 8 million. Almost 2.5 million of those visitors came from China.
On the strategic side, Mr. Saito noted the biggest challenge was how to “deal with the ever expanding China.”
China now has a larger economy than Japan’s and is rapidly expanding its military spending. Mr. Saito echoed the arguments of America’s policy makers on the TPP, who say it’s a chance to establish a rules-based system to offset China’s rising heft.
“As China gets larger economically, the international community must make sure that they do so by abiding by the international norms and rules, and that is why it is so important for the international community to conclude the TPP.” he said.
Although China is Japan’s number one trading partner (and Japan is China’s second), this economic relationship could be strained by what Mr. Saito called “China’s territorial claims of the Senkaku Islands.” The islands, located northeast of Taiwan, were claimed by Japan in 1895, surrendered after World War II and then returned to Japan by the United States in 1972. China says its to what it calls the Diaoyu Islands goes back to the 14th century. At stake, economically, is potential undersea oil reserves that were discovered in 1968.
“There was a summit meeting last November, which was a significant step on building relationships and a maritime relationships in the East China Sea. Tensions have been high, icy,” he says.
In terms of relations with South Korea, the former ambassador admitted that the “Outlook is rather dim, and there is no summit meeting between them.” He acknowledged, however, that the two countries have a shared in dealing with North Korea’s nuclear ambitions.
He also promised that Japan would be “proactive in the war on terrorism and that Japan needs to be more active in the international fight and to better coordinate with its partners, including the U.S. ISIS is barbaric, and we will fight hand in hand to combat them and other terrorists. We will never give in to terrorists.”
Kazuo Sunaga, consul general of Japan in Atlanta, welcomed the luncheon crowd by emphasizing the importance of the U.S. and Japan relationship, both from a political and economic standpoint.
“There is a long friendship, and we both play a key role in stabilizing East Asia. The key to increasing trade between the U.S. and Japan and Georgia and Japan is the Trans-Pacific Partnership,” Mr. Sunaga said.
Ambassador Charles Shapiro, president of the World Affairs Council of Atlanta, introduced Mr. Sunaga, and Alex Gregory, chairman, president and CEO of YKK Corp. of America, introduced Mr. Saito.
Following the keynote address, Kim Reimann, director of the Asian Studies Center at Georgia State University, led a panel discussion on new initiatives in a number of industry segments. Speaking were: Kiroshi Tsukamota, executive director of Science and Technology in Society, Tetsuo Mamada, former vice president of Mitsui Bussan Steel Trade Co., Chitose Nagao, chief planner at Dentsu and Mio Iwai, a student at the University of Tsukuba.
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