Japan has been hit unexpectedly hard by the global economic  recession.  Although Japanese financial institutions were not  seriously damaged by the initial financial crisis in the United  States, the economy has been staggered by an unprecedented drop in  exports.  With the economy likely to shrink by five to six percent  in 2009, Japan faces the worst economic downturn in over a half  century.  Policy responses to this situation have been complicated  by the uncertain political situation, with an unpopular prime  minister and a looming election for the lower house of the national  Diet.

What does all this mean for relations with the United States?   There are several important developments.  First, one impact of the  crisis is a shrinkage of Japan's current-account surplus, implying  that (at least in 2009) Japan will be a much smaller net supplier  of capital to the United States and the rest of the world.  Second,  the government appears to be willing to respond to the crisis with  strong fiscal stimulus, which should please the Obama  administration.  Third, even with stimulus in Japan, economic  recovery will lag behind that of the United States because real  recovery will depend on an upturn in exports.  Fourth, it is China,  not Japan, that will be the key among Asian countries.  China will  continue to grow, and is also applying fiscal stimulus, so it will  likely play a significant global role in enabling an end to the  recession.
All of these factors will play into bilateral relations,  complicated by the political uncertainty in Japan.  Bilateral  relations are close, and will remain so in the Obama  administration.  But the administration is likely to view Japan as  playing only a limited role in the global effort to cope with the  consequences of the financial and economic crisis.

About the Speaker:

Edward J. Lincoln joined NYU in 2006 to be director of the Center for Japan-U.S. Business and Economic Studies and clinical professor of Economics at the Stern School of Business. Professor Lincoln teaches courses on the global economy.

Professor Lincoln’s research interests include contemporary structure and change in the Japanese economy, East Asian economic integration, and U.S. economic policy toward Japan and East Asia. His latest book, on the underappreciated importance of economic issues in international relations and American foreign policy, is Winners Without Losers: Why Americans Should Care More About Global Economic Policy, published in 2007. He is the author of eight other books and monographs, including East Asian Economic Regionalism (The Council on Foreign Relations and the Brookings Institution, 2004), Arthritic Japan: The Slow Pace of Economic Reform (Brookings, 2001), and Troubled Times: U.S.-Japan Economic Relations in the 1990s (Brookings, 1998). An earlier book, Japan Facing Economic Maturity (Brookings, 1988) received the Masayoshi Ohira Award for outstanding books on the Asia-Pacific region.

Before joining NYU, Professor Lincoln was a senior fellow at the Council on Foreign Relations, and earlier a senior fellow at the Brookings Institution. In the mid-1990s, he served as Special Economic Advisor to Ambassador Walter Mondale at the American Embassy in Tokyo. He has also been a professorial lecturer at the Johns Hopkins University School of Advanced International Studies.

Professor Lincoln received his Bachelor’s degree from Amherst College, his M.A. in both economics and East Asian Studies at Yale University, and his Ph.D. in economics also at Yale University.

Is Japan Adrift?

The political drift in Japanese politics and the meteoric rise of China have led many analysts to begin discounting Japan as a major player in the international system. However, beneath the frustration caused by Prime Minister Taro Aso's abysmal poll ratings and opposition leader Ichiro Ozawa's campaign finance scandal, Japan continues moving steadily forwrd in pursuit of a more active national security strategy. While Japanese poliics are in structural paralysis, Japanese political thought is not. Indeed, a consensus is apparent in a series of unofficial strategic documents issued by scholars and politicians this last year. Meanwhile, the Japan Self Defense Forces have recently stood up their first fully independent and joint operational commands to deal with the North Korean missile launch and Somali pirates.

Japan has always been a conservative society, slow to change well established institutions and patterns of behavior in the face of new strategic circumstances. But Japan has also historically been finely attuned to three strategic coordinates:the power of the world's leading hegemon, the power of China, and the threat from the Korean peninsula. All three are in flux, and so too is Japan's future strategic trajectory

About the Speaker

Michael Green is a senior adviser and holds the Japan Chair at CSIS, as well as being an associate professor of international relations at Georgetown University. He served as special assistant to the president for national security affairs and senior director for Asian affairs at the National Security Council (NSC) from January 2004 to December 2005. He joined the NSC in April 2001 as director of Asian affairs with responsibility for Japan, Korea, and Australia/New Zealand. From 1997 to 2000, he was senior fellow for Asian security at the Council on Foreign Relations, where he directed the Independent Task Force on Korea and study groups on Japan and security policy in Asia. He served as senior adviser in the Office of Asian and Pacific Affairs at the Department of Defense in 1997 and as consultant to the same office until 2000. From 1995 to 1997, he was a research staff member at the Institute for Defense Analyses, and from 1994 to 1995, he was an assistant professor of Asian studies at the Johns Hopkins University School of Advanced International Studies (SAIS), where he remained a professorial lecturer until 2001.

Green speaks fluent Japanese and spent over five years in Japan working as a staff member of the National Diet, as a journalist for Japanese and American newspapers, and as a consultant for U.S. business. He graduated from Kenyon College with highest honors in history in 1983 and received his M.A. from Johns Hopkins SAIS in 1987 and his Ph.D. in 1994. He also did graduate work at Tokyo University as a Fulbright fellow and at the Massachusetts Institute of Technology as a research associate of the MIT-Japan Program. He is a member of the Council on Foreign Relations, The International Institute for Strategic Studies, and the Aspen Strategy Group and is vice chair of the congressionally mandated Japan-U.S. Friendship Commission. He serves on the advisory boards of the Center for a New American Security and Australian American Leadership Dialogue.

Europe is increasingly investing in research through its Framework Programme for Research. A European Research Council has been created to foster basic research of the highest quality. Business and industry are encouraged to take R&D initiatives. Attempts are also being made to coordinate research between EU Member Countries to achieve critical mass and avoid duplication of efforts. The new research program is also becoming more internationally oriented. Will Europe succeed in becoming the most knowledge intensive region in the world?

Kerstin Eliasson is an expert on national and international research and science policy. She is currently Director, Ministry of Education and Research, Sweden. From 2004-2006, she served as State Secretary, Ministry of Education, Science and Culture. Mrs. Eliasson has been the chief negotiator for Sweden's participation in two international research facilities in Germany. She serves as Member of the Board of the Joint Research Centre (European Union) and Member of High-level Strategic Forum for International S&T Cooperation (EU).

In 2009, buffeted by the global economic slowdown, Malaysia’s economy is predicted to shrink.  Deputy Prime Minister Najib Razak is expected to replace unpopular Prime Minister Abdullah Badawi as Malaysia’s top leader early in April.  On 23 March the government banned the two main opposition newspapers, Suara Keadilan and Harakah.  Earlier in March an opposition lawmaker was forced out of the national parliament after demanding that Najib answer allegations of involvement in the gruesome murder of a Mongolian model, Altantuya Shaaribuu, in 2006.  The killing has been linked to a 110-million-euro “commission” paid to a close confidante of Najib by a French firm for the sale of submarines to Malaysia.  In February Najib used local parliamentary defections to take over Perak, one of the five states won in March 2008 by the opposition in elections whose results embarrassed the government.  An independent poll shows that Najib is even less popular than Badawi.  Prof. Chin will address the implications of these and other aspects of current political turbulence in Malaysia.

James Chin has written widely on Malaysian politics and the Chinese diaspora in Southeast Asia, among other topics.  Minority rights, ethnic politics, and good governance are among his current interests.  Before his Monash appointment he headed a business school.  Before that he worked as a financial journalist.  He has a doctorate from Victoria University in Wellington, New Zealand.

A Workshop in honor of Professor Michel Oksenberg
Shorenstein Asia-Pacific Research Center and the Stanford China Program

We continue to honor the legacy of Professor Michel Oksenberg (1938-2001), a core faculty member of the Walter H. Shorenstein Asia-Pacific Research Center, senior fellow at the Freeman Spogli Institute for International Studies, and one of the country's leading authorities on China and on U.S.-China relations. Professor Oksenberg was one of the most powerful voices advocating a consistent and thoughtful policy of American engagement with China, and with Asia more broadly. The annual Shorenstein APARC Oksenberg Lecture has recognized distinguished individuals who have carried on this legacy of advancing understanding between the United States and China, and the nations of the Asia-Pacific region.

This year, the 60th anniversary of the founding of the Peoples Republic of China and a time of global economic crisis, Shorenstein APARC is broadening the Oksenberg Lecture to a full afternoon workshop to examine the future of US-China relations and China's new role in this turbulent world.  Invited speakers are experts who have had deep experience in the academic, business, and policy worlds.

Agenda:

Seymour Martin Lipset famously claimed that the more well-to-do a nation is, the greater the chance that it will sustain democracy.  This "law" fits the experience of several countries in Northeast and Southeast Asia.  Formerly authoritarian South Korea and Taiwan grew rich and became stable democracies with active civil societies, as Lipset would have expected.  His "law" fits the Philippines and Thailand as well- -poor countries with tenuous holds on democracy where uncivil societies have mobilized to defend elite hegemony against mass-based electoral challenges.

The case of Indonesia, in contrast, limits Lipset's Law.  Poor yet stably democratic, Indonesia is free of regime-threatening social conflicts.  Arguably, despite its poverty, its democracy is already consolidated.  India's record of sustaining democracy is another case in point.  These poor yet successfully democratic polities amount to large stakes in the heart of modernization theory.

Prof. Thompson will contend that Indonesia's democracy is neither middle-class-based nor dominated by big business, but is instead still characterized by traditional cross-cutting ethno-religious cleavages that limit the impact of money politics, reduce the risk of populism, foster elite consensus, and thereby encourage democratic stability. He will link his argument not only to Lipset's Law but to the intellectual legacies of Alexis de Tocqueville, Antonio Gramsci, and Barrington Moore among other students of democracy and modernity.

Mark R. Thompson is a professor of political science at the University of Erlangen-Nuremberg in Germany.  A Chicago native, he took his first degree in religious studies at Brown University followed by postgraduate work at Cambridge University and the University of the Philippines.  Fascinated by Philippine people power, he wrote his dissertation at Yale University on the anti-Marcos struggle (Yale University Press, 1996).  After moving to Germany, he witnessed popular uprisings in East Germany and Eastern Europe, inspiring him to conceptualize democratic revolutions in essays later published as a book (Routledge, 2004).  He is in residence at Stanford from February through April 2009.