"Far-reaching .... This is a book that will stir much debate.

"
—Henry A. Kissinger

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liro Oza
introduction by Senator Jay Rocke 7
 $25.00

BLUEPRINT
FOR A NEW JAPAN
n this unprecedented one-man political

manifesto, Ichiro Ozawa provides an

entirely new perspective on Japan in

the post-Cold War world. He argues

forcefully that Japan's status as economic
superpower has forced it to reconstruct

and take responsibility for its policies,

both domestic and foreign. The most

pressing task facing Japan today is what
Ozawa calls becoming a "normal" nation:

becoming a responsible member of the

international community, bearing the costs

of peace and freedom, and limiting the
power of the central government.
Blueprint for a New Japan shows the

potential for true political dynamism in

Japan. Through his insight and visionary

breadth, Ozawa offers a superb and criti-

cal evaluation of the realities of present-

day Japanese politics, along with practical
and elegant solutions to the problems he
raises. A must read for businessmen and
Japan watchers.
WORLD AFFAIRS COUNCIL LIBRARY
312SUTTER STREB
SAW FRANCISCO. CA 9^0*
0^ 5%
IW Oz.1

"ICHIRO OZAWA has undertaken a far-reaching mission: no less than

that of transforming the traditional Japanese way of thinking. He
maintains that there must be profound changes in the Japanese ethos
before Japan can fully assume the international responsibilities of a
great world power. It must abandon the cherished concept of deci-
sion-making by consensus — which he believes has stifled political
leadership —and give greater autonomy to the individual.
"This is a book that will stir much debate. But one can assume that
that is exactly what Ozawa has in mind."
Henry A. Kissinger

"AN EXTRAORDINARILY important book. Blueprint for a New Japan

provides a probing and incisive analysis of what is wrong with Japan's
current political system and why a continuation of the status quo
would be costly. It also lays out a bold, compelling vision of concrete
changes that need to be made in order for Japan to function effectively
as a major power in the world."

Daniel I. Okimoto
Stanford University

"A REMARKABLE BOOK. Mr. Ozawa does not skirt tough issues with
mealymouthed cliches. His analysis of the challenges facing Japan is

clear; his proposals for change are bold; and his affirmation of the
importance of freedom central."
Michael H. Armacost
former U.S. Ambassador to Japan

"OZAWA'S PRESCRIPTIONS for reform are bold and comprehensive; his

views will be controversial at home and enlightening to those who
wish to understand modern Japanese politics and government."
Albert Carnesale
Harvard University
"a BLUEPRINT for a liberal reformation of Japan, Ozawa's book should
be read by everybody with a serious interest in Japanese politics. More
than that: it should be read by everybody with an interest in Japan."
Ian Buruma
author of Behind the Mask and The Wages of
Guilt: Memories of War in Germany and Japan

"OZAWA'S REFORM proposals and his call for a fundamental change in

Japanese thinking should be required reading for anyone interested in
the future of Japan and its role in the world."

Gerald L. Curtis
Columbia University

"MR. OZAWA has long been an insider in the opaque world of Japanese
politics, and no one knows its flaws better. If he succeeds in his head-
long efforts to break that system once and for all, history will
undoubtedly give him a place among the great reformers of Japan and
as one of its best postwar leaders."

Time-Life News Service

"THE VISION OFFERED by Ozawa is of a Japan that would put more

value on individuals and innovation ... a Japan that the Clinton
administration would also like to see."
Los Angeles Times

"OZAWA STANDS OUT as one of the few [politicians] with a sense of

vision — for himself and Japan."

Time
The Rethinking of e Nation

Ichiro Ozawa
Introduction by

Senator Jay Rockefeller

Translated by

Louisa Rubinfien
Edited by

Eric Gower

KODANSHA INTERNATIONAL
Tokyo • New York • London

WORLD AFFAIRS COUNCIL LIBRARY

312 SUTTER STREET
SAW FRANCISCO. CA 94108
 note on the translation: Japanese names have been rendered
in the Western order, given name before family name. For clarity s sake,
this translation uses "he/him" for non-gender- specific situations.
The original text, like most Japanese writing, is gender-neutral.

Published in Japanese by Kodansha as Nihon Kaizo Keikaku. Some

chapters have been adapted for the English edition.

Distributed in the United States by Kodansha America, Inc., 114 Fifth

Avenue, New York, New York 10011, and in the United Kingdom and
continental Europe by Kodansha Europe Ltd., 95 Aldwych,
London WC2B 4JF.

Published by Kodansha International Ltd., 17-14 Otowa 1-chome,

Bunkyo-ku, Tokyo 112, and Kodansha America, Inc.

Copyright © 1994 by Ichiro Ozawa

Printed in Japan
First edition, 1994
123456789 10 98 97 96 95 94

LIBRARY OF CONGRESS CATALOGING-IN -PUBLICATION DATA

Ozawa, Ichiro, 1942-
[Nihon kaizo keikaku. English]
Blueprint for a new Japan / by Ichiro Ozawa: introduction by
Jay Rockefeller translated by Louisa Rubinfien: edited by Eric
:

—
Gower lsted.
Translation of: Nihon kaizo keikaku.
1 Political planning —Japan. —
Japan Politics and government 1989-
2. —
— — — —
.

3. Japan Foreign relations 1989- 4. Japan Economic policy 1989- I.

Rubinfien, Louisa. II. Gower, Eric. III. Title.
JQ1631. 09313. 1994 320.952— dc20 94-14599 CIP

ISBN 4-7700-1871-1
 Contents

Foreword 9

Introduction by Senator Jay Rockefeller 15

BOOK I The Urgency of Political Reform 19

Chapter 1 Overcoming Irresponsibility 21

Why Political Leadership Is Important

Staying on the Postwar Path, "Repeating History"
Reestablishing Competition for Power

Chapter 2 Learning from Past Leaders: Okubo, ltd,

Hara, and Yoshida 30

An Acute Sense of Mission
The Dangers of Failing to Exercise Power

Chapter 3 Defining the National Interest 36

The Legacy of "Defeat" in the Gulf War
The Government as "Corporate Lawyer"
The Politics of Indecision

Chapter 4 Strengthening the Prime Minister's

Official Residence (Kantei) 46
Introducing an Advisor System
Keep the Focus on the Prime Minister
Developing Comprehensive Coordination
6 Contents
Chapter 5 Integrating the Ruling Party and Cabinet 54
Are Bureaucrats the Decision Makers?
Bringing 160 Diet Members into the Government
Administration
A Politician- Led Bureaucracy
Chapter 6 The Advantages of Creating Small
Electoral Districts 62
A Set of Four Reforms
Creating a Dynamic Politics

Political Contributions: 120 Million Observers

Policy-Centered, Party- Directed Election Campaigns

Diet Members Belong in the Diet

Chapter 7 Dividing the Nation into 300 "Municipalities" 76

Enacting a "Law on the Fundamental Principles of
Local Government"
Let Local Governments Handle Local Affairs

A Transfer of Both Political Power and Financial Resources

Chapter 8 Wasting the Minds of Our Bureaucrats 83

Building a Crisis Management System

Fundamental National Policy
The Revitalization of Central and Local Government

BOOK II Becoming a "Normal Nation" 91

Chapter 1 Japan's Role and Responsibility 93

What Is a "Normal Nation"?

The Costs of Peace and Freedom
The "Yoshida Doctrine," Misunderstood

Chapter 2 Toward a Peace-Building Strategy 101

Noblesse Oblige
Peace Maintenance and Japan-U.S. Cooperation
Reorganizing the Self-Defense Forces
Peace Activities and the Japanese Constitution
 Contents 7

Chapter 3 U.N.-Centrism 1 1

Founders of a New Age

U.N. Management of Nuclear Weapons
Establishing a U.N. Reserve Army

Chapter 4 Steering the World Away from the Trap

of Protectionism 122

Aggressively Opening Our Own Markets

Creating a "World Trade Organization"

Chapter 5 An Asia- Pacific Ministerial Conference 128

An Accurate Recognition of History

"Flying-Geese Formation" Development
Five Guidelines for Japanese Foreign Policy

The Dawn of Multilateral Diplomacy

Chapter 6 Constructive Uses of Foreign Aid 1 38

An Aid Superpower
ODA as Part of Diplomatic Strategy
100,000 Foreign Students per Year
A Technical Training System for Foreign Workers
Leadership in Environmental Preservation

BOOK III The Five Freedoms 151

Chapter 1 The Japanese Dream 153

"We Wouldn't Want to Be Like the Japanese"

Japanese Society Is Showing Signs of Strain

Becoming a Society that Values the Individual

Chapter 2 Freedom from Tokyo 159

30,000 Hours of "Commuter Hell"

The Limits of Unipolar Concentration
Housing for the Cities, Employment for the Provinces

Generous Investment in Our Residential Environment

Constructing a New Capital
8 Contents
Chapter 3 Freedom from Companies 171

Company Freedom, Individual Confinement

Going Beyond the Rapid Growth Era

The Severity of Individual Taxes

Cutting Income and Residence Taxes in Half

Chapter 4 Freedom from Overwork 180

Planning Our Own Futures

Three Reasons for Shorter Working Hours
An 1800-Hour Work Year

Chapter 5 Freedom from Ageism and Sexism 1 87

The Contributions of Senior Citizens

Senior Citizens in the Workplace

Increasing Choices for Women
Providing Pensions to Housewives

Chapter 6 Freedom from Regulations 197

Anachronistic Regulations
Toward a Rule-Based Administration

Companies, Individuals, and Responsibility

Chapter 7 Establishing Real Freedom 203

Democracy and Citizen Autonomy

Education that Encourages Independent Thinking
On Teaching
 Foreword

I once visited the Grand Canyon National Park in America's

southwest. Its 1,200-meter depth is truly awesome: more than four

times the seventy-story height of Japan's tallest building.
To my surprise, I didn't see any fences. Multitudes of tourists

come to the park annually, but no fences! I saw a young couple

playing on one of the great boulders, but no park official was telling

them to be careful. There wasn't even a sign to that effect. In Japan

there would be fences, "no entry" signs, and park attendants who
come running to warn people away.
I tried to imagine the scenario in Japan if an accident occurred.
The press would criticize the park management in the harshest
terms. The newspapers and television would demand to know how
the authorities could have been so negligent —why there were no
fences in such a touristed area, why attendants weren't keeping
watch, why there were no signs. In Japan, park officials know what
to expect and thus take every possible precaution. That is to say,
they regulate our behavior. Any park visitor who obeys the rules
can count on being safe.

Japanese people take it for granted that we are always under

government protection — that even as adults, choosing our own
pursuits in the freedom of our leisure hours, we are protected by
some government office responsible for our recreation. Of course,
America has its restrictions as well, but, fundamentally, Americans
expect to take responsibility for themselves. Japanese prefer to have
regulations not only to prevent accidents but to govern all societal

needs.
10 Blueprint for a New Japan
During the recent economic boom years (the "bubble" period),
Japanese liked to quip that their nation had a "first-rate economy
and a third-rate politics." Those who, like myself, had made their
lives in the political world were both frustrated and ashamed at the

remark. But there was some truth to it. Just when Japanese compa-
nies were making great strides in the international arena, Japanese

politics was mired in confusion, suffering a notable lack of

leadership.
But at some point the bubble burst, and the business sector that
called itself first-rate asked to be saved by the political leadership

that it had derided. Since World War II — or indeed ever since

the late nineteenth century —Japanese companies have prospered
behind the protective shield of government, like small merchant
ships surrounded by a mighty fleet. Companies competed with one
another, but it was not free competition so much as a contest

within a restricted area.

I don't think it is necessarily wrong for a society to favor regula-

tion. There is no right and wrong in the nature of societies. But

we must ask why Japanese society seeks to be regulated in this
way. Japanese society is based on its particular history and tradi-

tions, and the Japanese people seek regulation because of these

peculiarities.

Japan is a society that respects not majority rule but unanimous

consensus. If even one person opposes a decision, it can't be made.
If anyone persists in pressing his own opinion, nothing can be
decided. The result is disarray. To prevent confusion, individual
opinions are suppressed; everyone has to conform to the general
consensus. Those who do not are quelled or ostracized. Conversely,
though, in this consensus-based, village-type society, individual life

and safety are protected by the entire community. Society regu-

lates, and the individual who obeys the rules is guaranteed security
and a relatively normal life.

Japanese-style democracy, then, might be defined as a system in

which individuals are assured a secure life by the group in exchange
for burying themselves in the group. There is no room in this
 Foreword 11

system for the concept of individual responsibility to develop.

This relationship between individual and society has endured
because, with very few exceptions, Japan has historically been a
homogeneous society with little contact with outsiders.
The initial efforts to change our society came in the Meiji period

(1868-1912), when Japan opened its doors to the outside and,

for the first time, introduced Western principles of democracy.
Subsequently, however, with the failure of party politics and the
ascendancy of the militarists, Japan once again fell into the dog-
matic thinking peculiar to a homogeneous society. Dogmatic
thought did not disappear with our defeat. The Cold War structure
of international politics allowed us to continue to nurture our
inclination for unanimous consensus. We do so even today.
But times have changed. "Japanese-style democracy" is no
longer able to respond adequately to the changes taking place at
home and abroad. We cannot continue to seclude ourselves.
We must reform our politics, our economy, our society, and our
consciousness, to bring them into greater currency with the rest of
the world.
We can no longer enjoy the luxury of devoting ourselves exclu-
sively to our own economic development, as we did during the
Cold War. This is the main reason why we need to reform.

If Japanese politics could once afford to confine itself simply to

dividing up the wealth generated by economic development, that
day has passed. We must learn to respond to the rapidly changing
world around us, and do so with the peace and economic well-
being of the entire world in mind. Our responsibility, now that
Japan has become one of the world's leading economies, is greater
than our people realize.

The second reason for reform is that Japanese society is itself

becoming increasingly international. Increasing numbers of
Japanese are living and working in foreign countries, and many
foreigners are coming to Japan. The homogeneity that made
"Japanese-style democracy" possible will soon be a thing of the
past.
12 Blueprint for a New Japan
We need to change in at least three ways. We must first establish
political leadership. We must ensure that the policy-making

process is clear, and show our own citizens and the world who
bears political responsibility in Japan, what they think, and what
their larger visions are. Second, we must decentralize. Except
where absolutely necessary, power should be transferred from the
national to the local governments. We must respect local auton-
omy. Third, we must abolish excess regulations. We should pre-
serve only the minimum number of rules necessary to govern
economic and social activity, and adopt fundamentally laissez-faire
policies.

The ultimate goal of these three reforms is the autonomy of the

individual. Real democracy begins with this autonomy. Without it,

we cannot be a truly free and democratic society. Nor can we be

autonomous as a nation. People demand that our officials post
warnings and build fences around our canyons. Individuals ask to
be regulated; they renounce freedom. Local governments rely on
the national government, and no one in the national government
takes responsibility for political leadership.
Japan's most pressing need is a change in the consciousness of
our people. Let us begin by removing the fences and educating the
people to their own responsibility for themselves. We can encour-
age local autonomy through a decentralization of political power.
Once political leadership is possible, we can expect politicians to
take responsibility for their rule, and rely on the national bureau-
cracy to engage in creative, national-scale administration once
it is freed from regulating the minutiae of daily life. Ongoing
reform will be possible, too, once democracy and an awareness of
individual responsibility are firmly in place.
In a sense, this book is intended as a prayer for that day. Many
specialists have assisted me with it over the past two years. In
today's political confusion, if this work can serve as a compass for

the reforms that are needed in Japan, it will be a matter of great joy
and honor to me.
Note to the American Edition

The intimate relationship between Japan and the United States has

a long history. Japan's modern age began with the prompting of

Commodore Perry's "Black Ships," which arrived in Japan's waters

from America in 1853. Awakened by America from 250 years — or,

in the larger sweep of history, from millennia —of isolation, Japan

"opened" itself to the world.
Japan chose the new direction of "civilization and enlighten-
ment" at that time, and worked hard to make up for the 250
years of lost time. The calls to build a "rich nation and strong
military" and to "increase production and encourage industry"
were powerful spurs to the people, who responded by eagerly
absorbing American and European industrial technology. Our
forefathers adopted Western political, administrative, and social

systems as well. In some cases they took them on whole, and in

others they adapted them to suit Japanese ways.
However, those who come rushing from behind always bear a
certain handicap. In its anxiety to catch up with the West, Japan
chose a course that had terrible consequences. Japanese and Amer-
ican interests clashed. The result was the Pacific War, followed by

Japan's defeat. Japan's major cities were decimated and its industry
destroyed.
Almost half a century has passed since then. Japan's economy
has developed phenomenally over those fifty years, so much so that
we are now called an "economic superpower." I feel great pride in
this achievement because it is the fruit of each and every Japanese
citizen's efforts. At the same time, we must remember that it was
America's generosity and warm support that helped us rise from
the ashes and rebuild our economy. We must never forget our debt
of gratitude.
Today, however, a new and unwelcome atmosphere of friction
has developed between our two nations. It takes the form of trade
disputes. One of the many causes is that, in fundamental ways,
Japan's markets are not entirely open to America and other foreign

13
14 Blueprint for a New Japan
entrants. Japan is being urged to join the advanced nations of
Europe and America by opening its markets in both name and
reality. America is, in other words, pressing Japan to "open" its

doors for the second time.

At the same time, the collapse of the Cold War structure has
allowed long- suppressed ethnic and religious disputes to surface in
and among many nations. Japan cannot remain a bystander as the

world struggles with these new challenges. The question is what we

should be doing. I believe that we must reaffirm the strength of
our alliance with America. We must also work with the United
Nations, which has new potential to be effective following the
collapse of the Soviet Union. We should assume our economic,
political, and military responsibilities to the world.

To assume these international responsibilities and to open our

country,we must first reform our domestic systems and practices.
This book is an attempt to explicate what reforms are needed and
what their ultimate aims should be.
The first step toward a new political order came shortly before
this book was published in Japan last June, when I and my
colleagues split from the Liberal Democratic Party (LDP). In the
following weeks, Japan saw its first transfer of power since 1955.
The LDP reign ended, and a coalition government, which included
our group, was formed. With the passage of the political reform
bills at the end of January this year, Japan has taken another major
step toward the kind of changes I have called for in this book. I am
confident that the bills will become the springboard for further
reforms in other areas, including economics, government adminis-
tration, and foreign affairs.

I believe that my mission as a politician

it is to work toward
such a transformation. am pleased and honored
I that this book is

being published in America, and it is my hope that it can help

foster stronger, closer ties between our two nations.
 Introduction
by Senator Jay Rockefeller

Politicians in both Japan and the United States used the Cold
War as a compass to steer their countries to a mutually
profitable and remarkably stable relationship. For almost

fifty years, the United States had a great interest in promoting a

strong Japan as the front line against communism in Asia. And

Japan had an equally strong interest in maintaining good relations
with America as the market that fueled its economic growth. This
relationship served us both well, and for that we should be grateful.

Now, however, the end of the Cold War has meant a readjustment
of our priorities and goals, and the political landscape has changed
dramatically in both our countries.
The 1992 election of Bill Clinton, America's first president born
after World War II, marked the beginning of a new era where our
government could shift its focus from fear of imminent global con-
flagration to problems central to people's daily lives, such as creat-
ing more and better jobs for our workers, guaranteeing health care
for all our citizens, and making our streets safe again.

Japan has also begun a new era in its political life. The 1993 elec-

tion of a government not headed by the Liberal Democratic Party

represented a monumental change in its political circumstances.
The LDP, with its traditional power base of farmers and small
shopkeepers, had a political lock on the Japanese Diet for almost
forty years. The new government was elected initially to reform the
political process, but the coalition victory was also a reflection of
the erosion of the power of that traditional source of political sup-
port in favor of urban and suburban salaried workers. And under-
lying this change was the more fundamental question of how Japan
must change to adapt successfully to the post-Cold War world.
One of the clearest voices in that debate is Ichiro Ozawa's.

15
16 Blueprint for a New Japan
Mr. Ozawa is not your typical political commentator banging on
the walls of power from the outside. He is in fact the ultimate
insider. He is a man who rose though the ranks of the LDP, and
whose defection from the party signaled the end of its hold on
power. He also played a significant part in getting the Hosokawa
government's electoral reform package enacted, and he is commit-
ted to free and open trade.

Some may argue with the details of the plan laid out in his
Blueprint for a New Japan. Nonetheless, I suggest that its ultimate
aim —nothing short of a peaceful democratic revolution — is one
that every reader should give serious thought to.
In this book, Ozawa proposes reforms on several levels: internal
politics, international relations and, more radically, social attitude.
On the political front, he calls for the establishment of real govern-
ment leadership and responsibility in the formulation of policy
decisions, both domestic and international. He also wants to decen-
tralize government so that authority is transferred to regional offi-
cials. And he recommends that unnecessary controls and regulations
be absolved to leave a minimum of rules to govern economic and
social activity — a proposal consistent with the principles espoused
some years ago by Prime Minister Nakasone.
The Japan envisioned by Mr. Ozawa is also a country that will
play a role on the global stage commensurate with its economic
clout. This extends to a variety of areas, from a more "hands-on"

involvement in overseas aid development and environmental

preservation, to participating in peace-keeping operations abroad.
Ozawa wants Japan to work directly with the United States and
international organizations to help maintain world peace and
promote free trade.

For Americans, he envisions a Japan that will be more of an

equal partner with the United States, one easier to deal with and
more willing to share the burden of leadership. And for the Japan-

ese, he sees a Japan that will allow its hard-working citizens to

enjoy more of the fruits of their labors.

As a young man I had the privilege of living and studying in

Japan. From 1957 to 1960 I went to school at the International

 Introduction 17

Christian University in Tokyo. I learned the language and devel-

oped many friendships there, some of which still endure and are a
reason why I try to visit Japan regularly. The country as a whole in
the early postwar period was a shambles. Housing had to be built

quickly and cheaply, and the people had to work long hours to put

their industry back on its feet. I was impressed with the hard work
and dedication they brought to bear, and I admired their fortitude

in extremely difficult conditions. But despite the fact that, in the

years since then, Japan as a nation has made giant strides and
become a world-class industrial competitor, I am far from alone in

observing that its standard of living still doesn't reflect its extra-

ordinary economic progress and strength.

Mr. Ozawa hopes to break this trend. He seeks a "Japanese
dream" to rival the "American dream" — a dream that many may
not personally achieve but that all can aspire to. And at the heart of
Ozawa's "New Japan" is the individual. He believes that Japan
must reorient itself to make the welfare of the individual the very
basis of any reforms. To attain this goal, Ozawa has formulated the
idea of five freedoms: "freedom from Tokyo ... freedom from
companies ... freedom from overwork ... freedom from ageism
and sexism ... [and] freedom from regulations."
If this reorientation occurs, it will have a profound impact on
the future of the Japan-U.S. economic relationship. For years,
while I have continued to express my regard for the Japanese peo-
ple and their culture, I have felt obliged to criticize the country's
unfair trading practices, its over-complex distribution system, and
its protection of its own agriculture and manufacturing. Japan's
government —both the politicians and the bureaucrats —has
clearly been oriented toward the national corporations, and its citi-

zens have traditionally subordinated their own needs to those of

the corporations. By turning this situation on its head, as Mr.
Ozawa recommends, the government would, by necessity, focus its
efforts more on those who represent the new demographic realities

in Japan and the changes that have occurred in the structure of its
economy: the urban and suburban salaried workers. This sector
of the population is relatively outward-looking and consumer-
18 Blueprint for a New Japan
oriented, a new power base interested in improving its living con-
ditions and in obtaining quality goods at low prices regardless of
their origin. And these populist aims can only mean positive things
for the trade balance between our two countries.
If Mr. Ozawa and people like him are able to empower the
individual in this way, the desire to change will come from within:
the people, as individuals, expounding their needs and wishes;
bureaucrats, as individuals, expounding their own ideas and pro-
voking competing ideas; and the politicians as representatives of

the people responding to the needs of their constituents. These

concepts are fundamental to Americans, but they will require the
Japanese to accept less predictability and broader responsibility for
the country's direction.
I believe that foreign readers in general will get great value out
of this book because, in describing his path to reform, Ozawa
explains the Japaneseway in a manner that makes it easy for people
who are not experts on Japan to understand where its stands today,
where it came from, where it may be heading, and why it must
change. Japan played a remarkable role in the postwar era; it rebuilt

its economic infrastructure in an unprecedented manner and be-

came a trusted member of the community of nations. Today Japan
is at a crossroads. The Cold War is over, economic growth has
slowed, and the underlying socioeconomic structures are showing
signs of strain. In the future, Japan will certainly change — the ques-
tion is, how? Blueprint for a New Japan presents a plan for how that
might happen.
I am deeply heartened by this book because it shows a promi-
nent politician stepping out of his appointed role to stimulate a
timely debate on serious issues concerning Japanese life and poli-

tics. He makes his own contribution by suggesting answers that

would require changes in policy and philosophy. And he offers a

future with benefits not only for the people of Japan and the
United States, but for other nations around the world.
 BOOK

THE URGENCY OF
POLITICAL REFORM
Editor's note

This book was published in Japan in June 1993. Since then, Japanese politics
has seen many changes. The Miyazawa government, for example, is no longer
in power, and the ruling LDP, in power for decades, has become the opposi-
tion party. In Europe, the EC is now
the EU. However, because some of the
discussions are situation-specific and because in some ways Blueprint is a
document of its time, terms and tense have been left unchanged.
 CHAPTER ONE
Overcoming
Irresponsibility

Why Political Leadership Is Important

Weak political leadership is, for most nations, a domestic concern.
However, once a nation has grown so powerful that its every action
carries international ramifications, lack of leadership is an imper-
missible luxury: it is nothing less than an imposition on other
countries.

Japan now accounts for 16 percent of the world's gross national

product (GNP), second only to the United States. Together, the

two nations comprise almost half of world GNP. Along with
Europe and the United States, Japan is one of the major pillars on
which the world economy rests. Japan's slightest move has an
impact that reaches every corner of the globe.
Like it or not, it is clear that Japan has become a global power
that cannot avoid the responsibilities that come with power. Cold
War-era Japan was content to leave world matters in the hands
of the United States, but present-day Japan can no longer do so.

Strong leadership has clearly become imperative for Japan, but

does it have that leadership?
George Kennan, historian, diplomat, and architect of America's
Cold War policies, once compared pre-World War II America
with the dinosaur. America, suggested Kennan, already had vast
influence in the world, but, like the great beast with its tiny brain,
had not learned to exercise sufficient control over that power.

21
22 Blueprint for a New Japan
Today, the analogy aptly describes Japan. As an international
power, Japan has a global responsibility to frame active, compre-
hensive, long-term, dynamic, and consistent policies. But in fact

we continue to devise only policies that are passive, partial, and

short-term, and even these tend to be the product of last-minute
decisions. Japan has become the ultimate "dinosaur."
The Japanese political system is based on a parliamentary-
cabinet structure in which the ruling party and the cabinet together
govern the nation. Because the leaders of the Diet (Parliament) and
of the executive branch of the government are the same people,
Japan has one powerful entity running the country, unlike the
United States, where the legislative and executive branches are sep-
arate. The prime minister, at the top of this structure, is in theory
all but omnipotent. However, in reality, as we know, the prime
minister has proven anything but omnipotent.
Why this gap between formal and actual power? The peculiar
circumstances of postwar Japanese politics explain the disparity.
Almost half a century has passed since the end of World War II.
During this period, Japanese politics has had only one role: the

supervision of the fair distribution of the wealth generated by the

hard work of the citizenry. Politics, in other words, has been
reduced to the task of apportioning the dividends of "Japan Inc."
It is not my intention to criticize this. Given the conditions in early
postwar Japan, it was in some ways the most important responsi-
bility politics could have.
Japan's economy at the end of the war was in ruins. Japan

became an important strategic base for the United States in a world

dominated by the Cold War. It was in light of these conditions that

Prime Minister Shigeru Yoshida decided on a political strategy giv-

ing domestic economic recovery priority over international politics.

The problem arose in the politics of later years. The economy
overcame the chaos of the postwar years and experienced tremen-
dous, high-speed growth. Unfortunately, the same cannot be said
of politics; its role remained unchanged. It has kept its focus on
apportioning the national wealth. Despite the end of the Cold War,
 Political Reform 23

no effort has been made to change this, and Japan therefore

remains unlike "normal" nations. We continue to receive and not
to give, surviving, as it were, on a single lung.

Postwar Japanese political leaders left to America the larger

responsibility of formulating foreign policy, and concentrated on

spreading the domestic wealth. Strong leadership was not only
unnecessary but unsuitable to the fair distribution of wealth, which
rested on mutual dependence and compromise. The result was a
politics of complete consensus. The only decisions that could be
made were those that somehow included everybody. It is this con-
sensual politics that has enabled the Liberal Democratic Party to
remain in power for nearly fifty years, and that has similarly

enabled the Japan Socialist Party" (JSP) to remain the main opposi-
tion party throughout this period. Ironically, despite the powers
guaranteed by the parliament-cabinet system, the LDP imposed on
itself the restraints of political consensus, ultimately costing the
party both leadership and power. It is my belief that the LDP is

caught in a trap of its own making.

The main cause of the lack of leadership in politics is this

extreme diffusion of power. Although power is technically concen-

trated in the office of the prime minister (who is also, by definition,
president of the ruling party), power in reality is divided between
the party and the government (prime minister and cabinet). This
arrangement might be permissible if the party and the government
each took firm leadership in its own sphere, but neither does. The
LDP, for example, is divided into a handful of factions. It lacks
unity, and serious matters of policy tend to become little more than
tools in factional haggling, as was all too evident in the recent
struggle over political reform. As we will see, the government, for
its part, is also fractured.

Staying on the Postwar Path, "Repeating History"

A second problem is that the policy-making system lacks coher-

ence. The policy-making processes of both the LDP and the
government are highly diffuse.
24 Blueprint for a New Japan
The LDP's Policy Affairs Research Council —which ostensibly
directs party policy — is actually an assembly of diverse and special
interests. Its bukai or committees, are divided along the lines of
y

the bureaucracy (finance, commerce, transportation, etc.) and act in

cooperation with their bureaucratic counterparts. The formal insti-

tutions that exist to coordinate the whole are not, in fact, effective.
The government, meanwhile, is itself scattered among many
institutions and interests. Its ministries and agencies are discrete
entities. No overarching institution exists to coordinate and con-
trol the whole. The cabinet, of course, technically plays this role,

but it has never actually been expected to do so and has therefore

never developed the necessary procedures. Put another way, the
hands and feet of the political structure were created, but the
"brain" to govern them was not. Japan's political framework is a
strong parliamentary-cabinet system in name only.

Numerous problems The cabinet meeting, for exam-

result.

ple —nominally Japan's supreme decision- making body is an —

empty institution. Substantive debate does not take place. "Final
decisions" are made in advance, and the cabinet meeting is reduced
to mere ritual. The same can be said of the Council of Vice-
Ministers, where the highest levels of the central bureaucracies
meet. Since no decisions are made there either, the council meeting
is also just a formality.

In point of fact, it is not entirely clear just where decisions are

made. It is hard to surmise how the various policies of the relevant

offices are integrated, who is making what decisions, or where they

are made. Policy, in other words, is decided without anyone's
taking responsibility for it.

Thus the hands, feet, and tail of the dinosaur that is Japanese
politics accommodate each other; the beast moves, but without a

clear direction or priority. This could be described kindly as a

"grass-roots" decision-making process, a term that makes the
process sound distinctly democratic. And it may in fact have served
commendably in a period of little change. But we will fail to

respond to the tumultuous changes that lie ahead if the decision-

 Political Reform 25

making process continues to be so convoluted that we cannot

decide on a single course.

We must develop a comprehensive, strategic decision-making

apparatus that is firmly focused on the real and pressing issues

facing Japan. At present, no such apparatus exists.

America here provides an extreme contrast to Japan. As I

understand it, the president is presented with a number of policies

that have already undergone thorough scrutiny, from which he

selects. At least this is the ideal American leaders strive to achieve.

The Japanese prime minister, however, does nothing of the kind.

By the time a plan reaches the prime minister, all the ministries
involved have resolved their own procedural details. And since no
one is responsible for overall policy, the real objective of the policy
has been obscured. The prime minister is nothing more than
master of ceremonies for the ritual at hand.
This lack of real leadership is not only burdensome to our
foreign counterparts, it is also dangerous for Japan itself. Prior to
World War II, Japanese policy making was frequently immobilized
because the army and navy were at loggerheads. The army insisted

that the most likely future enemy of Japan was the Soviet Union,
while the navy was emphatic that it was the United States. The two
sides overcame this impasse by compromising and agreeing to
regard both America and the Soviet Union as likely enemies, a

solution that was obviously the height of absurdity. But without

any institution to set fundamental national policy, Japan was
pulled along by the willful actions of its hands and feet, and the
result was this lunatic decision. Again, it was lack of leadership that
ultimately permitted the military to act so recklessly. The fiasco

that resulted was, of course, World War II itself.

Today, those who object to the contribution of troops and other

personnel to international peace-keeping efforts argue that Japan
must adhere to its strict postwar refusal to send military personnel
abroad. To do otherwise, the argument goes, would be to retread a
familiar and tragic path. In truth, we do actually risk repeating
history —but it is by our lack of leadership, by our inability to make
26 Blueprint for a New Japan
political decisions that this is so. If we remainunable to make deci-
we will simply be dragged along by events; we will fail to
sions,

make even humanitarian contributions to the outside world, and

Japan will find itself isolated from the international community.
Isolation is where the true danger lies. The "history" we dread
repeating would be Japan's failure to cooperate with Britain, the
United States, and the other nations of the world. We must not
forget this history.

The fundamental aim of political reform must therefore be to

consolidate in both form and substance the democratic authority
that has become so dispersed, so that we can give those nominally
in charge both the responsibility and the power to make the neces-
sary political decisions.

Reestablishing Competition for Power

A third major weakness of our political structure is the absence of

competition for power. Competition has not always been missing.
Early in the postwar period, intense competition for power was the
norm within the ruling LDP. The prime minister/party president
won his seat on the support of a multi- faction majority. He then
selected the party secretary- general and, frequently, the finance and
foreign ministers from within his own faction. The party president
and his faction therefore bore responsibility for decision making
and implementation of policy. Since opposition factions within the
LDP were vying for power as well, the ruling faction was subject
to severe criticism when it failed to meet its responsibilities. This

was of course merely an intramural contest, but it was a contest

nonetheless. The competition ensured that a variety of social
concerns and needs would be addressed.
However, as the economy surged, LDP factions no longer had
to vie for scarce resources to parcel out; there was plenty to go

around. By the 1980s, competition had ceased altogether. In its

stead the LDP developed what it euphemistically called "harmo-

nious politics." Every faction became mainstream, and the govern-
ing principle became unanimous agreement, whatever the issue.
 Political Reform 27

This meant that the responsibility for any policy failures lay with
everyone and with no one.
Affluence has eliminated the drive to compete. LDP factional

politics focused on dividing the spoils of economic growth, but we

have reached the limits of this excessively narrow view of politics.
The end of intra-LDP competition would not be a very serious
loss if the ruling and opposition parties competed for power, but

that struggle, too, has disappeared. It is true that the opposition

parties put on a bold show. They dig in their heels and vow to resist

the government to the bitter end. Behind the scenes, though, they
are making deals with the LDP; the parties negotiate their respec-

tive points of interest and together reach a compromise. Majority

rule, meanwhile, is denounced as an abuse of power. Unanimous
consensus has — much to the detriment of the national interest

become the overriding principle.

What are the consequences of this pursuit of consensus? The
process by which the Peace-Keeping Operations (PKO) bill became
law in 1992 illustrates how excessive consensus actually under-
mines the democratic principle of majority rule.

The major member nations of the United Nations have for

many years participated fully in peace-keeping operations. The
government's initial (1990) proposal for the recent PKO bill

stopped short of this. Japanese participation was to be restricted to

noncombat missions and subject to other special conditions. The
bill was then diluted further to meet the demands of the smaller
opposition parties, the Komeito (Clean Government Party) and the
Democratic Socialist Party (DSP). But the JSP declared that Japan's
activities must be limited to such activities as overseeing elections.
In other words, the Socialists denied PKO participation in any
form the world would recognize as significant. The JSP then
announced that it would boycott further deliberations on the bill if
its proposal was not accepted.
In sum, the governing party was told to make further conces-
sions, even though compromise had already gained it a majority
in both houses of the Diet. The LDP was effectively forced to
28 Blueprint for a New Japan
compromise until unanimous agreement could be reached. The
media, in keeping with their role as pillars of the politics of
consensus, did not question the behavior of the opposition. In fact,

the major newspapers and television networks insisted that the

Diet pursue consensus for as long as the deliberations lasted.
Let's suppose that the government, driven into a corner by the
JSP and the media, had made such significant concessions to gain
JSP consensus that it distorted its own fundamental position. What
would have been the result? The proposal that had already gained
the support of a majority in the Diet would have been changed
entirely to mollify a minority that acted like a group of spoiled and
fretful children. "Unanimous consensus" turns out to mean the
tyranny of the minority.
But what happens when policy fails? Who takes responsibility,
the majority that holds government power or the minority that

does not? It is easy to imagine a scenario in which the majority is so

repelled by the spoiled-child act of the minority that it avoids deci-
sion making altogether. Who takes responsibility if this inaction
has negative consequences? No one can. We might call this the
tragedy of an excessive pursuit of consensus. Postwar politics in
Japan has undervalued, even ignored, the principle of majority
rule. The result has been a politics without responsibility.
Again, all of this was sufficient as long as the Cold War structure
supporting it was in place. The international environment permit-
ted Japan to be a nation that did not function independently;
that was Japan's place in the world. It is now imperative that
Japan build a system in which those who have been democratically
delegated authority take responsibility for decision making.
It is not enough simply to strengthen governmental power.
Power must be strong, but it must also have clear and appropriate
limits. It must not be so scattered that it is unable to devote itself

to its top priorities, nor so omnipresent that it creates a body of

citizens who are excessively dependent on authority.

How are we to limit power? Exhaustive discussion pursuing

consensus is clearly not the answer. Rather, we first need to reduce
 Political Reform 29

the burden carried by those in power. Anything that does not

absolutely require intervention from the central government
should be transferred over to local governments. In addition, we
must limit power by ensuring that the government periodically
changes hands. We must discard the ill-defined powers and poli-

cies that seem to stay on and on for no good reason. Instead, we

must have a government that takes responsibility for a fixed period

of time, for clearly defined powers and policies.

With these limits firmly in place, we must see to it that the nec-
essary power is concentrated in the government on democratic
principles, and that competition takes place for that power. This is

the way to endow Japan's large and able body with a genuine
"brain."

The Shakaito changed its official English name to the Social Democratic Party of
lapanin 1991. The Japanese name remains Nihon Shakaito, or Japan Socialist Party.
 CHAPTER TWO
Learning from Past Leaders
Okubo, Ito, Hara,
and Yoshida

An Acute Sense of Mission

Japanese are generally fearful of the concentration of power. We
prefer to stumble along, leaning on each other in what could
be termed the politics of collective irresponsibility. This is clearly

inconsistent with modern democratic thought. Competing poli-

cies, the clear demarcation of responsibilities for decision making,
transparent rules that govern exchanges of power: these are the
forms of power truly founded on democratic principles.
In our own modern history, four leaders —Toshimichi Okubo
(1830-78), Hirobumi Ito (1841-1909), Kei Hara (1856-1921), and
Shigeru Yoshida (1878-1967) —stand out for their ability to pursue
bold nation-building efforts amid the dramatic historic changes of

their times.

Toshimichi Okubo played a major role in the 1868 Meiji

Restoration that ended 250 years of feudal rule under the Toku-
gawa government. He led the movement that abolished the feudal

domains and figured prominently in the establishment of a prefec-

tural system. He founded the Home Ministry and, as its first leader,

laid the groundwork for the industrialization of the nation. When

debate arose about sending troops to Korea, he resolutely opposed
military action and crushed the movement to dispatch troops. He
also helped quell the Satsuma Rebellion of 1877, the most serious
anti-government uprising of the period. He was thus a major

30
 Political Reform 31

architect of the centralized state and helped construct the very

foundations of the modern Japanese nation.
Hirobumi Ito forged Japan's cabinet system, became the na-
tion's first prime minister, and drafted the Meiji constitution. He
also promoted revision of the unequal treaties with foreign powers
to assure Japan's independence.

Kei Hara, in his post as chairman of the Seiyukai Party, headed

the first party-led cabinet. Under his leadership, parties became an
established part of Japanese politics and were key in formulating

domestic and foreign policy in post-World War I Japan.

Finally, Shigeru Yoshida, whose power was based in the pro-
Anglo-American camp and in the bureaucracy, negotiated with

GHQ (the General Headquarters of the Allied Powers, which

presided over the occupation of Japan) to achieve the myriad
reforms that followed World War II. Yoshida's work was instru-

mental in assuring Japan's peaceful independence.

These four men were exceptional individuals. They had a firm
grasp of the political system, built strong power bases, and demon-
strated superior leadership. Yet these very qualities earned them
low marks from their contemporaries, because Japanese- style
democracy favors leaders who emphasize consensus.
This is evident in the way their careers ended. Okubo and Hara
were criticized for their "high-handed" politics, and both died at

the hands of terrorists while still in office. Ito, who held numerous
newly established posts including that of prime minister, was ulti-

mately promoted to the Privy Council. He was assassinated some

time later. Yoshida, too—surrounded by political enemies while
serving as prime minister—was forced use to all his political capital

to provide leadership in his post, until finally he sacrificed his

political life.

What enabled these men to exercise such strong leadership? All

shared an intense consciousness of the national interest, a sense of
mission, and the will to use the power they had. They were subject
to severe criticism from all sides, but were focused on fulfilling

their missions. They held firm command of the reins of power and
32 Blueprint for a New Japan
were not afraid of strengthening them where necessary to ensure
the implementation of their vision.
Okubo, for example, was censured as an "autocrat" and accused
of abuses of power. Undaunted, he maintained his efforts to con-
solidate in the central government the power that had previously
been so dispersed. Okubo understood that constitutionalism is, in
principle, the just and proper path, but he was acutely aware that
the paramount issue for Japan during this time was to "catch up"
with the advanced nations of the world. He was convinced that
Japan could achieve this goal only if the government bore complete
responsibility for every aspect of policy. He therefore set about
creating a powerful, centralized government and threw his weight

behind the Satsuma-Choshu (the leading factions in the Meiji

Restoration) alliance. He has been accused of aggravating the
concentration of power in Satsuma-Choshu hands, but it is impor-
tant to recognize that this was the power base that enabled the
government to modernize Japan.
Hirobumi Ito, who served as prime minister several times under
the Meiji constitution, was sometimes criticized for introducing a
system that put cabinets above party control. Yet he anticipated
that the support of political parties would prove indispensable for

domestic political stability, reversed his earlier opposition to par-

ties, and founded his own party, the Seiyukai. When his original

source of support, the Satsuma-Choshu alliance, dissolved as a

result of his actions, he fortified his support within the Choshu fac-
tion even though it meant antagonizing his former Satsuma ally,

Aritomo Yamagata. Ito, born to the regional and factional politics

that dominated the 1870s and 1880s, developed new power bases as

needed in a flexible response to the changing times.

I feel a particular fondness for Kei Hara, partly because we were
both born in Iwate Prefecture. As the successor of Ito and others,

Hara was the first Seiyukai chairman to have been born and raised,
in a career sense, within party circles. His ambition was to bring
both politics and government under unified leadership, namely
that of the Seiyukai. He not only received an absolute majority for
 Political Reform 33

the Seiyukai in the Lower House, but also saw to it that the com-
mittees and study groups in the Upper House were firmly under
pro-Seiyukai leadership. He solidified Seiyukai support in the
Home Ministry and named Seiyukai members to the posts of army,
navy, and justice ministers. With a strong power base in place, he
was able to restrain both the Satsuma and the Choshu factions and
pave the way to an era of friendly relations with the United States
in the 1920s.

"What if ...?" questions do not help us in the study of history,

but I cannot help believing that if Hara had not been assassinated
in 1921, he might have ensured the exercise of firm political leader-

ship by the parties over non-democratic elements. Showa history

might have been utterly different as a result.

Shigeru Yoshida's Liberal Party scored a decisive victory in the

general election of 1949. Yoshida nevertheless had the foresight to
plan the powerful postwar conservative union of the rival Liberal
and Democratic parties, thus creating the LDP. His strategy flowed
from his vision of a democratic Japanese state. He recognized that a
democracy would prevail only if conservative factions set aside

their differences to fight the more fundamental battle between lib-

eralism and socialism. He built on the strength of the nascent con-
servative alliance, exercised fully the power authorized to the prime

minister by the new constitution, and thereby laid the foundations

for the prosperity of the postwar period.

The Dangers of Failing to Exercise Power

Why were these four leaders able to strengthen their bases of power
in the face of constant and severe criticism? I believe it is because
they recognized that, in Japanese politics, even the most excep-
tional and effective of leaders can do little without a solid power
base.

A point of particular interest here is that the Showa period

(1926-89) — in contrast to the previous sixty years beginning with
the Meiji Restoration —produced only one example of firm leader-
ship. It was in this sense a barren age. The prewar and wartime
34 Blueprint for a New Japan
Showa years saw the repeated failure of efforts to establish strong
leadership. The post-Yoshida period did not even see the attempt.
Shortly after the war, the so-called "1955 system" took root with
the emergence of the conservative LDP and the left-wing JSP. Dur-
ing the remaining thirty- five years of the Showa period, these two
parties stood firmly in place and mutually dependent. Strong lead-
ership was not in the least desired, and therefore not forthcoming.
A few prime ministers, of course, aspired to real leadership,

even under the 1955 system. However, the more entrenched the
political framework became, the more rigid and even fossilized the

LDP's administrative organizations and personnel became. The

prime minister was rendered ever more powerless as a result. How,
then, are we to break through today's political paralysis and estab-
lish the kind of prime ministership that can lead Japan into the
twenty- first century?
The four politicians discussed above provide us with outstand-
ing models. Each began with a clear vision of Japan's place in the
world, and demonstrated the necessary will to strengthen and
expand his political power base. Okubo bolstered the Satsuma-
Choshu alliance; Ito recognized the limits of that alliance and
embarked on political party formation; Hara expanded the power
of his party, the Seiyukai; and Yoshida exercised to the fullest the
powers available to him as prime minister and steered the Liberal
Democratic Party.
We need a new and heightened awareness of the powers
accorded the prime minister by the present constitution. By
"awareness" I do not mean the passive consciousness that focuses

on the limits on power in a democracy. Rather, it must be an active

consciousness that seeks to liberate the power of the prime minister

from the empty rituals and harmful habits that developed under
the closed 1955 system. Instead of defining only what the prime
minister must not do, we need to develop a vision of what it is

the prime minister must do. It is essential that we learn from our
predecessors.
There will be no shortage of objections to what I am saying. But
 Political Reform 35

I am willing to expose myself to considerable criticism and risk

because, among the many "dangers of power," there are both the
dangers of exercising it and the dangers of failing to exercise it.

Thus far we have recognized only the threat of excess power. The
political immobility we face today is indicative of the dangers
inherent in not exercising power.
The administrative organizations that today penetrate every
part of society are dividedand subdivided into highly specialized
concerns. Left to themselves, they tend to become only more dis-

parate and scattered, with the result of paralysis in the administra-

tive and political worlds. But the primary cause of our political

impotence has been our tolerance; we have allowed the prime min-
ister to get away with not exercising the power of his office.

In Diet deliberations during the Persian Gulf War, for example,

the Cabinet Legislation Bureau sometimes asserted its own views in
contradiction to the official position of the government. Ostensi-
bly, of course, this office pleads the government position in Diet
questioning. It failed in its responsibilities and, by all rights, should
have been punished. Autonomous action by discrete parts of the
government immobilizes both its political and administrative
functions.
The prime minister needs principles that serve as a compass in

guiding the nation if he is to exercise real leadership. He must also

have the means to apply those principles to concrete issues. That is

to say, he must have constant and comprehensive access to accu-

rate and up-to-date information. Historically, prime ministerial
support systems have been expanded after the administrations of
such men as Okubo, Ito, and Hara, probably because it was recog-
nized that a strong prime minister must have sufficient backup.
Today, we face rapid and dramatic change. The prime minister
should be a politician with a clear sense of mission, the will to exer-
cise authority, and the courage to carry out his ideas. Moreover, a
system- wide reform will be indispensable if the prime minister is to
have the support necessary to lead effectively. These are the lessons
we should learn from the greatest leaders of our modern history.
 CHAPTER THREE
Defining the National Interest

The Legacy of "Defeat" in the Gulf War

What are the costs of Japan's lack of political leadership? Japan's
experience in the Persian Gulf War —an issue in which I myself was
deeply involved — provides an illustration of some of these costs.
It is an article of faith for me that, in foreign affairs, Japan must
adhere to its close alliance with America. It would represent the
failure of Japanese policy if America were to reject international
society and choose the path of isolationism. From this point of
view, the 1990-91 Gulf crisis was a painful lesson for Japan. Our
response during the Gulf War disappointed Japan's friends in
America and gave new ammunition to Japan's critics. Why did this
happen?
When Saddam Hussein occupied Kuwait in August 1990,
America's primary concern was the protection of Saudi Arabia.
Military experts at the time judged that if Iraq attacked Saudi Ara-
bia, Saddam would gain control of the major Saudi oil fields within
two weeks, putting him in command of oil wells in Iraq, Kuwait,
and Saudi Arabia — a full 55 percent of the world's oil supply. The
world price of oil would then be in the control of an unscrupulous
dictator. America's biggest fear was the tremendous blow the world
economies would suffer as a result.

Prior to the crisis, policy coordination between Japan and the

United States on a range of other issues had been making good

36
 Political Reform 37

progress. America therefore expected Japan to stand with it against

Saddam. Japan betrayed that expectation.

Early in the crisis, the U.S. government requested that Japan

deploy transport craft to carry military supplies. The Japanese gov-
ernment refused without giving the issue any serious thought, cit-

ing constitutional restraints. America then requested supply ships.

Japan again said, "No." Next came military tankers. Again, "No."
Non- military ships? Here, Japan did at last respond by sending
three ships, two Japanese and one American, but by the time they
left port at the end of September, the peak demand for transport

had passed. America then requested the deployment of mine

sweepers to the Gulf. Japan refused. The government did ulti-

mately send mine sweepers, but not until the war had ended.
Japan's response came too late; we were unable to cooperate when
we were really needed.
The same happened regarding cooperation in airlift efforts.

America requested an airlift for the immediate transport of sup-

plies and troops from American bases to the east coast of Saudi

Arabia. The Japanese government tried somehow to respond to

this request under the rubric of "aid to the Middle East." Even
then, the discussion between the Foreign Ministry, Transport
Ministry, and Japan Air Lines absorbed long days and nights, and
resulted in a convoluted plan.The airline would make three stops
between Narita (Tokyo) airport and its final destination, transfer-
ring the supplies to different aircraft at each stop. The process
would require seven days, and the airline reserved the right to
inspect the cargo.
In thus arranging to use Japanese civilian aircraft for military
purposes, Japan did make what we could call a real decision, but it

did not come in time to meet actual needs. In the end, Japan
scrapped the plan and instead called an American airline company
and within twenty-four hours concluded a contract to charter
more than eighty flights The Japanese govern-
directly to the area.
ment offered the planes for American use. The American military
naturally responded with enthusiasm, but how different would

37
38 Blueprint for a New Japan
have been the international impression if the planes had flown the
Japanese flag.

Plans to deploy Self-Defense Force craft to transport refugees

were drafted but never carried out. The plan called for SDF aircraft

to fly to Egypt, make Cairo their landing base, and back and
travel

forth to Jordan and Syria to carry refugees from Iraq. The SDF was
ordered to make preparations, and the necessary arrangements
were made with the Egyptian government. When the moment
actually arrived, however, the government could not bring itself to

give the green light. It feared domestic criticism for deploying SDF
aircraft overseas. In the final analysis, Japan was unable to respond
to America's expectations of substantive contributions.
How did Japan fare with capital support?
Some people in Japan charged that a bankrupt America unable
to fight its own battles was going to war on Japanese and German

money. This is patently false. Financial cooperation was only

fourth or fifth among the requests America made of Japan. It was
Japan that, unable to deploy even a single person to the Gulf
region, instead sought to get by simply by writing checks. Japan
chose to become a mere dispenser of cash, and in consequence
found itself paying the staggering sum of $9 billion. It is crucial that

we not misunderstand how this came about.

There is some confusion about the actual amount Japan offered,
but, by any standard, it was an extraordinary amount of money.
This is the consequence when a fully sovereign nation is unable to
cooperate in international security efforts and tries to limit its own
burden to money. Korea and the Philippines deployed troops and
received recognition accordingly. But no matter how much money
Japan spent, the respect of its partners would not be forthcoming.
After the war, an SDF official had a conversation with an Ameri-
can officer who had actually fought at the front. When the talk
turned to the role Japan had played in the war, the SDF officer

strongly defended Japan's contribution: "Japan sent no personnel

but each citizen gave more than $100 to the effort." His calculation
was based on Japan's $13 billion total contribution, including aid
 Political Reform 39

given to Gulf region nations. The American officer answered,

"Fine, I'll give you $100, and you go and fight in my place." The
SDF officer could not reply. I'm repeating the story here second-
hand, but it is a clear expression of the decisive difference between
personnel and capital contributions.
Since the war, America's definition of "ally" has become the
twenty-eight countries that risked their people's lives on the battle-
fields of the Gulf War. Naturally, Japan is not counted among
them. In a psychological sense, Japan distanced itself from Ameri-
ca's image of an ally. As a nation that seeks to preserve its strong
alliance with the United States, Japan cannot but acknowledge that
we suffered a serious "defeat" in the Persian Gulf War.

The Government as "Corporate Lawyer"

No one would deny that Japan is now counted among the world's
great powers. It has repeatedly served on the United Nations
Security Council as a non-permanent member and is a mem-
ber of the Group of Seven (G-7) leading industrialized na-
tions. Japan's power, however, is limited to the economic and the
technological.
Our strengths, that is, lie not with the government but with the
private sector, because the only function our government is

expected to perform is to enable private interests to pursue their

profits to the maximum. Japanese citizens expect nothing more of
their government than that it play the role of "corporate lawyer."
This tendency will only be aggravated unless the government
and bureaucracy learn to behave as impartial regulators. The obvi-
ous danger is that the government and bureaucracy become the
defenders, advocates, and, in extreme cases, hostages of various
special interests. The paramount question that arises is what
constitutes the national interest.
Our inability to define the national interest is another principal
cause of Japanese political weakness. In the most general terms,
the national interest embraces both short-term, specific, tangible
aims, and mid- to long-term, general, abstract goals. The artful
40 Blueprint for a New Japan
combination of these two aspects in foreign policy is said to reflect
the maturity of a nation. But as long as the Japanese government
limits itself to defending private, essentially economic interests, the

"national interest" it pursues will invariably be of the short-term

variety. It will not be the longer-term national-interest that clearly
demanded that we strengthen our alliance with America by making
contributions of personnel to the Gulf War effort.
With this in mind, it is sobering to imagine what would have
happened if Saddam Hussein had not released the hostages, who
included some Japanese, as readily as he did. Unquestionably, the
vast majority of Japanese citizens would have insisted that the

release of the hostages be the government's top priority. The

administration would have been forced to try to ransom the Japan-
ese hostages —however dubious the prospects for success —because
the Japanese people demand of their government only that it

defend their personal interests.

But suppose the government had been overwhelmed by the

public outcry, and had been the first country to make moves to free

its people. It would have meant relinquishing the vow Japan had
made as a member of international society "not to appease
Hussein." The international community would have completely
lost trust in Japan, and Japan would have found itself isolated.
Moreover, though such issues were not given serious consideration
at the time, it obviously would have been a great loss to the long-
term national interest if the war itself had dragged on, as Japan's

economy would have suffered as a result. Despite these realities,

our citizens raise their voices only on behalf of short-term, imme-
diate interests. This inability to define the national interest is a

serious political weakness.

A third cause of Japan's political weakness is the Japanese psy-
chology itself. The fact is that, deep down, most Japanese want to

be able to avoid that troublesome area called "foreign relations."

They want to carry on with their peaceful and comfortable lives,

and live with their age-old systems, practices, and customs without
worries about the future. Simply put, the Japanese people want the
 Political Reform 41

luxury of reacting only when absolutely necessary, and want as

little participation as possible in international society.
For that reason, when Japan does act in conformity with shared
international values and thereby threatens a particular domestic

interest, the domestic interest considers itself unduly sacrificed.

This is the case with the GATT Uruguay Round. When problems
like this arise, we somehow fail to focus on the fact that free trade is

vital to the very life of the Japanese economy, and to the healthy
development of the international economy as a whole.

Let us bear in mind what it was that enabled Japan to become

an "economic superpower." Let us remember that it was the exis-

tence of an international community based on the shared values of

liberty and democracy that nurtured Japan's growth. We could, of
course, in theory choose to return to the insularity of the Edo
period (1615-1867) and its narrow, limited possibilities. But if we
want to maintain and enhance the prosperity we enjoy today, we
must conform to the principles of international society and coop-
erate in order to bring about worldwide development. That is

surely the path along which Japan's national interest lies.

In my view, the "defeat" that Japan suffered in the Gulf War was
the direct consequence of our failure to recognize what constitutes
our own true national interest. We should not make the same
mistake again.

The Politics of Indecision

We should also consider what would have happened even if the
Japanese government had been sufficiently aware of its responsibili-
ties to international society and had had the resolution to fulfill

them. Would Japan have been able to make satisfactory contribu-

tions to the Gulf War effort? Would we have been able to show
America that Japan is a reliable ally? I find it highly doubtful
there are simply too many obstacles.
Japan faces five basic stumbling blocks in formulating foreign
policy. The first, as mentioned above, is the "corporate lawyer"
problem, the expectation that the government act only as advocate
 —

42 Blueprint for a New Japan

for private interests. That is to say, the Japanese government does
not have the authority to lead the entire nation. In the major
nations of Europe and America, the government is equipped with
both the responsibility and the resources, including military
might, to guarantee the security of the nation. "A certain authority
naturally accompanies that role. The Japanese government does
not have that authority. In Japan, the role of national security does
not constitute an "asset." Military power is, instead, treated as
a liability; the public tends to distrust it.

Because the government is expected to serve only private

interests, it has little authority available to it when it asks some-
thing of the people regarding foreign policy. All it can do is try to

"persuade" its citizens, which comes perilously close to pleading

with them. This is one more reason why Japan was slow in

responding to the Gulf War.

In fact, the only reinforcement for the government's pleas has
been pressure from America and Europe, so-called gaiatsu or
"pressure from outside." Efforts such as the Structural Impedi-
ments Initiative have recently been made to reform the domestic
system itself, but these improvements are consistently based on
gaiatsu. Meanwhile, the public's inclination to make "international
contributions" —though insufficient — is growing. Here too, how-
ever, people have the impression that international pressure is

somehow involved, that they are being forced to bear certain costs,
that they have no choice but to contribute if they want to protect

domestic interests. Nothing is more dangerous than policies that

relyon international pressure, but that seems to be the only

method currently available to the Japanese government.
The second obstacle to the formation of foreign policy is that
Japanese democracy —unlike that of Europe or the United States

comes to life mostly in times of crisis. It is my impression that in

America, democracy and the democratic system are at their most
vocal and active during everyday life. When an emergency arises,

however, responsibility for reacting to it is entrusted to a very small

group of people. These people have, of course, been democratically
 Political Reform 43

elected, but their decisions about and responses to the emergency

are evaluated after the fact, not before.
Japan's democracy works in reverse. It is obvious that democ-
racy has not strongly taken root in daily life. But when an
emergency arises, "democracy" suddenly comes clamoring, with
the media in the lead. Even then, it is a democracy that attaches

entirely too much importance to procedural matters. Slogans

abound: "Debate it till everyone agrees!" "Say no to a tyranny of
the majority!"
The situation is very similar to the aftermath of a burglary:
people berate the authorities for not catching the burglar, complain
that the police net is "full of holes," and lecture self- righteously

about how the police could do a better job. Such behavior is imper-
missible in a major nation in the realm of foreign affairs; it is an
indulgence that amounts to an abdication of international respon-
sibility. During the Gulf War, it effectively handcuffed the govern-
ment on the issue of personnel cooperation.

What we need is an about-face in our understanding of

democracy. Where only domestic interests are concerned, it is a
reasonably democratic endeavor to hear a wide array of opinions
and to take time to make the necessary adjustments among them.
However, in foreign relations — particularly in cases like the Gulf
War — the political world must be able to decide and implement its

actions from a foreign policy point of view even if it means disre-

garding purely domestic interests.

The third obstacle is the Diet procedures themselves. They
effectively tie the government's hands. Decision-making based
on unanimous Diet accord is a pseudo-democratic practice so
crippling that even the basic functions of democracy cannot be
carried out.
The Diet was intended to make decisions by majority rule, but
that principle was based on the assumption that the government
would periodically change hands. But because of the LDP's long
unanimous consensus has become a
tenure, fixed principle sought
through negotiation and compromise in the Diet Affairs
44 Blueprint for a New Japan
Committee. As explained in the previous chapter, the result is that
minority parties enjoy disproportionate veto power. The Diet also
finds it increasingly difficult to lay down bold policies and to
respond to crises such as the Gulf War.
The "Diet Resolution" is a good example""of this distortion.
Under the separation of power, the legislative branch, in principle,
uses legislative procedures to check executive power. The Japanese
Diet, however, seeks to completely incapacitate the executive
branch by demanding a unanimity that has no constitutional justi-

fication whatsoever. A "law" may be rescinded or amended by a

majority vote, but a "Diet Resolution" cannot be changed with-
out unanimous agreement. Such unrealistic practices should be
abandoned outright.
The fourth problem we need to address is the weak leadership
of the kanteiy or Prime Minister's Official Residence. Crises like the

Gulf War invariably force governments to make immediate deci-

sions. But the government cannot make policy without initiative

from the prime minister. We need a system in which the kantei can
deliver its own judgment and expect the various governmental
ministries and the party to cooperate. In short, we need a center of
political accountability.

Under this arrangement, responsibility would fall entirely on

the prime minister. Where a given decision had negative conse-
quences, the prime minister would bear the political responsibility.
In Japan, "taking responsibility" all too often means resigning as
soon as the results are known. But this is wholly inappropriate.
Instead, since executive branch stability is desirable, the prime
minister should serve a fixed term of three to four years. At the end
of that period, he should be held completely accountable for all

decisions made during his term. That is the principle of political

accountability at work.
The fifth obstacle is the vertically divided administration, in
which each division of the government is specialized and isolated

and no overall coordination takes place. The most vital policy area,
foreign relations, is at present handled as a bundle of bilateral
 Political Reform 45

relationships between Japan and various individual countries. This

is a reflection of the public sense that international relations
involves nothing more than accumulating bilateral relationships

with one foreign nation after another. But the fact is that, no
matter how strong the bilateral connection, foreign countries do
not exist to serve Japan's interest. We are all members of an inter-

national network of nations, and Japan's relationships with indi-

vidual foreign countries need this global perspective. Though this

issue has been addressed many times by a number of people, there

are no signs of improvement.
We need to widen our vision to include more than one foreign
counterpart at a time; our focus must become multidirectional. For
example, if Japan wants America to bring its considerable influence
to bear on Russia to break the deadlock on the issue of the North-
ern Territories (the four islands north of Hokkaido seized by the
Soviet Union in the aftermath of World War II) we must also con-
sider such matters as the current state of relations between America
and France, Germany, Britain, et al., and the historical relations

between Russia and these nations. If any of these countries requires

particular attention, Japan must be able to assess the weaknesses
of that country, the strength of Japan's own hand, and the best
strategy for achieving accord.

The current vertically divided system cannot meet this need. As

we have seen, this was a major reason for the government's belated
reaction to the Gulf War, evident even in the single example of air-
craft deployment I raised earlier. The Gulf War revealed the myriad
frailties of the politics and government of our country. Any effort

toward political reform will have to address each of these failings.

That is how we may make best use of the lessons of the Gulf War.
 CHAPTER FOUR
Strengthening
the Prime Minister's
Official Residence (Kantei)

Introducing an Advisor System

Any political reform policy needs to address a fundamental flaw in

our political system: the absence of leadership. Reform must focus
on empowering the prime minister to lead the government both in
form and in substance. We need to provide the prime minister
with a responsive staff capable both of evaluating matters of
urgency and of drafting policy with a longer- range vision.
History provides us with several examples of such a system. Just
prior to World War II, the Okada administration (1934-36) estab-
lished a Cabinet Research Bureau to serve the cabinet directly in

drafting policy. It was charged with the coordination of ministerial

policies. In other words, it was responsible for developing unified
national policies that transcended ministerial lines. Three pro-
grams were introduced: the "Comprehensive Deliberation System"
to ensure discussion among all bureau members; the temporary
transfer of fifteen special advisors to the various ministries, includ-
ing the army and navy; and finally the employment of specialists

from the private sector to supplement the official advisors.

This bureau began simply as an appendage of the cabinet, but

after the attempted coup on February 26, 1936, its influence
surged. Even then it did not provide strong support to the leader-
ship of the prime minister. It instead launched efforts to expand
its own jurisdiction, and it eventually became first the Cabinet

46
 Political Reform 47

Planning Board (kikakuin) and later an independent government

agency.
More recently, various coordination offices in the Prime Minis-
ter's Office (sorifu)' were organized into cabinet staff as well. Like
the previous Cabinet Research Bureau, the new arrangement was
intended to assist the cabinet in policy coordination, but it ended
in failure. The new organization never truly functioned as cabinet
staff but became just one more weak agency participating in the
policy coordination process. Moreover, because of its weakness, it

lost whatever coordination powers its separate forerunner offices

had once had.
Like the prewar bureau, the cabinet staff attempt failed because
it was allowed to become such a large-scale organization that it

sought independence from the cabinet. This tendency for govern-

mental organizations to seek independent power is something we
have to keep in mind if we do decide to strengthen the cabinet role.
In 1966, the First Provisional Administrative Reform Council
( rincho) proposed relocating the Budget Bureau of the Ministry of
Finance within the cabinet as a way of putting budget authority
firmly in cabinet hands. This idea is still raised at times, but I can-
not support it. Not only is the Finance Ministry sure to oppose the
change, but the Budget Bureau itself will likely surfer the same fate

as the coordination office. In the process it would lose some of its

current budget regulation authority. Comprehensive budget coor-
dination, something that Japan manages quite well compared with
other nations, would be undermined as a result.
We should therefore remain wary of a reckless expansion of
kantei functions. We must focus instead on strengthening the
prime minister's own advisory network. The following is an outline
of proposals for such a system.
The kantei s main problem today is its size: it is much too small
and therefore is a highly unstable operation. The staff can barely
keep up with the routine tasks, let alone take the time to
make future-oriented plans for prime ministerial action. It cannot
react with sufficient speed or competence in an emergency.
48 Blueprint for a New Japan
Furthermore, because the prime minister cannot possibly keep an
eye on the entire cabinet, he cannot put the cabinet meetings to
constructive use. In other words, the prime minister is simply not
in a position to exercise leadership.

Reform means strengthening the posts of prime minister's aide

(hishokan), chief cabinet secretary, and deputy chief cabinet secre-
tary. They are, effectively, the hands and feet of the prime minister,
and he needs a large and diverse group available to him. He also
needs specialists as advisors.

Keep the Focus on the Prime Minister

The chief and deputy chief cabinet secretaries and prime minister's
aides are today his closest assistants. Their allegiance is to his
administration, rather than to particular ministries, and it is they
who must be the core of the newly expanded staff.

Consider the following type of reform. The chief cabinet secre-

tary becomes a "chief advisor" (shuseki hosakan) in charge of

the Cabinet Advisors' Office. Under him, a coordination advisor

and an administrative advisor —roughly equivalent to today's two
deputy chief cabinet secretaries — appointed. Also
are appointed
are three additional advisors, one each for planning, security, and
communications. The object of replacing the chief cabinet secre-
tary with a prime ministerial advisor is to ensure the prime minis-
ter's place at the center of the cabinet, in both form and substance.
Marshaling the staff around the prime minister should also enable

the kantei to operatemore flexibly.

The chief advisor would naturally have the rank of a cabinet
minister. He would represent the kantei position in cabinet deliber-
ations and lead cabinet meetings alongside the prime minister.
The chief advisor would also perform the vital role of coordinating
the expanded kantei.
This coordination role would have to be addressed in the selec-
tion of the chief advisor. The kind of role played by the White
House chief of staff is probably appropriate. We have already seen
powerful politicians appointed to that post, indicating a growing
 THE PRIME MINISTER'S OFFICIAL RESIDENCE TODAY
CABINET

Prime Minister's Aides* .

PRIME MINISTER'
'(seconded from ministries)

- CHIEF CABINET SECRETARY- CCS. Aides*

— DEPUTY CHIEF CABINET SECRETARY D.C.C.S. Aides*

- DEPUTY CHIEF CABINET SECRETARY D.CC.S. Aides* Ministries

and
— CABINET COUNSELLORS' OFFICE D.C.CS. Aides* Agencies
located in the Prime Minister's Official Residence (kantei)

— Cabinet Councillors' Office for Domestic Affairs

— Cabinet Councillors' Office for External Affairs
— Security Office
— Public Relations Office, Minister's Secretariat
'

— Cabinet Information Research Office

THE PRIME MINISTER'S OFFICIAL RESIDENCE

AS PROPOSED HERE
CABINET

CHIEF ADVISORS located in the kantei

PRIME MINISTER

CABINET
COUNCILLORS'
OFFICE
ADVISORS (5-6 people)
- SECURITY OFFICE
i.e., Administrative Advisor
Prime Coordination Advisor Ministries
Minister's
i.e.,
COMMUNICATIONS and
Aides i.e., Planning Advisor OFFICE Agencies
(seconded i.e., Security Advisor
from
CABINET
i.e., Communications Advisor INFORMATION
ministries,
RESEARCH OFFICE
etc.)

RESEARCH AIDES
(seconded from
AIDES
ministries, etc.
50 Blueprint for a New Japan
awareness of its importance. The chief advisor, however, would
first and foremost be chief of the prime minister's staff. He would
have to suppress his personal political views somewhat and devote
himself to his office. Moreover, the selection process would place
greater priority on his relationship with the prime minister than on
his own political rank.

The chief cabinet secretary currently serves as spokesman for

the government, but I believe that this must change. A single per-

son, no matter how talented, cannot satisfactorily manage both

the role of behind-the-scenes coordinator and that of public
spokesman. It makes more sense to appoint a specialist advisor to
take command of communications or public relations.
The priority in staff selection would naturally be finding people
with qualities suitable to the tasks they are given. It would not mat-
ter whether the person was a bureaucrat or a politician or even
someone from academia or industry, as long as he had the back-
ground and abilities necessary to do the job. But let me emphasize
that the person must not be selected simply because it is his turn in

the rotation, as has become routine in political and bureaucratic

circles.

The planning advisor would assist the prime minister in his pol-
icy statements. As the personal qualities of world leaders become

more and more significant, statements by heads of government

also become more important: political leaders routinely issue

strong statements on a variety of subjects. Japan relies more than

other nations on cabinet ministers to deliver the nation's position.
The statement not only loses impact as a consequence, but also fails
to communicate precisely what it is that Japan thinks. This is a
serious drawback for a nation trying to win the world's trust.

The prime minister must speak out more assertively and needs a
specialist to prepare his statements. Specifically, the planning advi-
sor would do the necessary advance analysis, calculate the reper-
cussions of given positions, and draft statements addressing
international emergencies. The objective should be to provide a
means of communication between the prime minister and the
 Political Reform 51

people, and between the prime minister and the international

community. Basically, the post is that of a communications advi-
sor. The lack of such a post is one reason why foreigners often say
they don't know what the Japanese prime minister has in mind.
The security advisor, as the title implies, would be the prime
minister's foremost advisor on global security issues. Japan's
responsibilities in the world will inevitably grow in the wake of the
Cold War. At some point, Japan will have to consider the role it

will play in United Nations-centered peace-keeping operations.

Our responses will have a direct impact on our well-being, because
Japan needs a stable and peaceful world environment for the
free trade on which it depends. This position will therefore be of
paramount importance.
The roles of coordination advisor and administration advisor
would be the same as those currently performed by the deputy
chief cabinet secretaries, but their relationship with the prime mini-
ster would be more direct. They would also share staff with the

prime minister. Our goal is to enable them to work more inti-

mately with the prime minister than has previously been possible.
The above descriptions of possible advisory positions are simply
examples. All the possibilities would have to be thoroughly
reviewed when the reforms are actually implemented. But one
point remains clear: the prime minister himself must make the
appointments. Some prime ministers will choose bureaucrats,
while others will look to the private sector for advisors. Appoint-
ments will also differ depending on the policy issues dominant at the

time. It is vital that the advisors be chosen by the prime minister.

Developing Comprehensive Coordination

No matter how capable the advisors, they will require expanded

support staff. This area also needs reform.
At the top of the reform list is the Cabinet Councillors' Office.
For the cabinet meeting to be a place of real discussion, the Coun-
cillors' Office must handle the requisite coordination before a
bill is presented at the meeting. That would bring substantive
52 Blueprint for a New Japan
coordination processes under the direction of the kantei. We
should also continue to second councillors from the ministries and
agencies and must try to bring in people from the private sector as
well. The councillors will have genuine coordination powers, thus
encouraging the bureaucracy to field high-level-officials in order to
safeguard the interests of the ministries and agencies.
The cabinet councillors should be responsible for conducting
among themselves the discussions necessary for coordinating
policy. The number of councillors participating in any given
discussion will therefore differ depending on the subject at hand.
Deliberations should not be conducted behind closed doors.
Since discussion is part of overall cabinet planning, the active par-
ticipation of the prime ministerial advisors should be welcome; in

some cases the prime minister himself might attend the discus-
sions, which would serve to highlight their importance.
Thus the Cabinet Councillors' Office would no longer be
divided between domestic and foreign affairs. Instead, the entire
body would form a Cabinet Coordination Office and conduct dis-

cussions of all types. The coordination advisor would bear ultimate

responsibility for coordination activities.

Security specialists would also be indispensable to the cabinet in

its efforts to respond swiftly and appropriately to international
developments. Despite the lessons of the Gulf War, the cabinet
continues to take too long to act on similar issues, such as the dis-
patch of SDF troops to peace-keeping operations in Cambodia and
Mozambique. Not only will the trust of the international commu-
nity diminish as a result of our vacillation, but we will also win little

recognition for our cooperation once we provide it. We must

upgrade the Security Office in both the quality and the volume of
work it can handle.
Likewise, the current Cabinet Information Research Office staff
(presently 124, with a budget of ¥1.8 billion / $16 million) must be
expanded. We do not need an information-gathering organization
on the scale of the American CIA with its sixteen thousand

employees. An organization of this size cannot be cost-effective,

 Political Reform 53

and it is notoriously difficult to control once established. Japan

needs instead to strengthen existing information networks and bet-
ter manage the inflow of information. We should not set up an
independent organization but should manage our smaller agencies
more effectively.
The current office, however, is short of both people and funds.
The present staff cannot analyze even publicly available informa-
tion. A more pressing problem is the lack of specialists. For the
cabinet to keep control of the Information Research Office, we
should continue our practice of seconding personnel from the vari-
ous ministries, but we must also make provisions for bringing area
specialists and experts in other fields on board.
The publicity system, too, must be expanded. Our reforms must
ensure that timely and accurate explanations are made of the
government's stance on high-level political issues, except those

specific to a single ministry. Public relations and public hearings

need to be part of a unified effort.

The role of the kantei is intimately connected to the leadership

of the cabinet and of the prime minister. Hiring and organization
must be flexible enough to facilitate the work and needs of the
prime minister.
Even the building that houses the prime minister's staff needs
an overhaul. It has far too few offices. The rooms are extremely
cramped, even without an expanded staff. Communication
between offices is inconvenient at best. The current building can-
not handle the large volumes of information processing equipment
needed. The overworked staff already have to weave their way
among the guests and journalists who overflow into the hallways of
the official residence. This building houses the nation's highest
level of political activities. We need to build a prime minister's
residence that fits its needs.

* Note the distinction between the "Prime Minister's Official Residence" (kantei) and
The former is the seat of the head of govern-
the "Prime Minister's Office" {sorifu).
ment, like 10 Downing Street and the White House. The Prime Minister's Office is an
administrative institution.
 HAPTER FIVE
Integrating the Ruling Party
and Cabinet

Are Bureaucrats the Decision Makers?

If the prime minister is to exercise true leadership, reforms are
needed in a number of areas. The relationship between the ruling
party and the government, and the nature of the Diet itself, stand
out in particular need of reform.
Under Japan's parliamentary- cabinet system, the majority party
or parties organize the cabinet and bear responsibility for gover-
nance. Because the legislative majority and the executive branch
are comprised of mostly the same people, we would naturally
expect them to exercise strong leadership as they work in concert

with one another. In reality, however, the confederation itself man-

ages to hamper the leadership of the prime minister. Why is this?
The 1947 constitution recognized that the failure of Japan's pre-
war path was the result of the excessive dispersion of power. It

therefore made the cabinet answerable to the nation's highest

authority, the Diet. In short, Japan was to have a parliamentary-
cabinet system in the true meaning of the term. The prime minis-
ter-led cabinet, it followed, would be very powerful.
The prewar bureaucratic system has, however, remained in

place, as has the tendency to believe that true power lies with
bureaucrats, who are viewed with great respect and considered
superior to politicians. Thus, even when a party holds a majority in
the Diet and runs the administration, the impression remains — in

54
 Political Reform 55

the general public as well as in the government — that it lies outside

the real organs of government.
The LDP, for example, routinely submits "requests" to "the

government." This custom likely arose from the sense that "offi-

cials" occupy center stage and that the ruling party stands at the

government's periphery. I cannot help but suspect that people are

not altogether aware that it is the ruling party, with its Diet major-
ity, that in fact manages the administration. In practice, authority

is scattered among the bureaucracies just as it was in the prewar

government.
The same discrepancy persists in cabinet meetings. In a parlia-

mentary system, ministers not only represent the finance and trade
ministries, but are also cabinet ministers and generalists who take
responsibility for national issues. They open cabinet meetings in

their capacity as cabinet ministers. All too often, however, they

fall back into their roles as representatives of particular ministries,

pleading on behalf of the bureaucrats. Comprehensive policy coor-

dination is obviously difficult under such circumstances.
This would not be the case if the prime minister took the lead in

the cabinet. It might in fact be preferable in times of rapid change

for the prime minister to make decisions on his own responsibility
rather than to rely on consultations with the cabinet. As it stands
now, however, the prime minister is barely able to oversee ministe-
rial appointments and dismissals, and has no means of assuring his

power or exercising leadership. Coordination requires making

the rounds in advance to obtain consensus. Any decision thus
demands a great deal of time and energy, leaving little time to con-
sider what should be the priority: policy content, coordination
with other countries, and communication with the Japanese pub-
lic. The result is that we are unlikely to be able to take full advan-
tage of a strengthened kantei of the sort I am proposing here.
How does Britain, the prototypical parliamentary-cabinet gov-
ernment, handle these issues? The British parliamentary- cabinet
system was founded on the principle that ultimate power lies

in the publicly elected Parliament. The cabinet, as center of the

56 Blueprint for a New Japan
nation's government, represented the sovereign king and formed a
"committee" with Parliament. Executive authority (the king's repre-
sentative) came from the legislative branch (or Parliament). That
is to say, the legislative and executive branches merge in the British
cabinet. Authority is concentrated —making strong government
possible —while Parliament's check operates to guarantee democ-
ratic governance.
Japan has many things to learn from the British system. If Japan

pursues political reform to strengthen the leadership of the prime

minister, a fundamental element of the reform will have to include
this integration of the ruling party and the cabinet.
The government currently consists of two parts: the executive
branch and the ruling party. Since each carries out its own policy
coordination, the policy process is not only complex but takes far

too long. If decision making is handled in two places, the cabinet

cannot be held strictly accountable. There is no way of ensuring
responsible politics.
Similarly, Diet members drafting policy not only lack staff of
their own, they do not take responsibility for specific policies. They
rarely have the opportunity to learn much about the policies they
are drafting. Meanwhile, they try to exert their influence on the
government behind the scenes so that the public cannot help but
assume that matters are being manipulated in questionable ways.
Surely this is one source for the common criticism that politics is

hard to understand.
It is the elected parliament, and the cabinet selected by that par-
liament, that must take responsibility for politics. This principle is

at the very foundation of parliamentary democracy. It is vitally

important that we return to this fundamental principle.

Bringing 160 Diet Members into the Government Administration

What, specifically, can we do? We must begin by bringing the rul-

ing party's main posts into the cabinet, and follow this with the formal
establishment of the party policy-making offices under the cabinet.
The party's core offices would thus be part of the cabinet itself.
 Political Reform 57

In Britain, directors of parliamentary operations or those in

charge of specific subjects are typically appointed to cabinet posts.
Japan, too, must make the secretary-general —or whoever in the

ruling party has charge of parliamentary operations — a cabinet

member, so that the cabinet can take full responsibility for present-

ing a bill before the Diet. The cabinet and ruling party will accord-
ingly be united at the highest levels of government and undertake
responsible governance. This integration at the top is not enough
to assure the participation of the majority party in cabinet plan-

ning. It is also essential that the core of the ruling party be united
with the cabinet.
The British government has a number of junior minister posts
(non-cabinet ministerships), including those for ministers outside
the cabinet, ministers of state, and parliamentary undersecretaries.
Their areas of specialty are divided along the lines of the cabinet
posts, and they assume responsibility for responding to detailed
parliamentary questioning. The point here is that the bureaucrats
are not permitted to reply to parliamentary interpellation. Politi-
cians appointed to non-cabinet ministerships therefore organize
themselves into teams within the various ministries to study policy
and prepare their arguments.

Japan's reforms should include the appointment of 150 to 160

ruling party Diet members to the administration. Each ministry
would have two or three parliamentary vice ministers and four to
six parliamentary councillors. They would study policy and partici-
pate in drafting policy in their various areas of expertise. Thus,
even for the planning of policy by ministries and agencies, teams
of politicians would, with the assistance and cooperation of the
bureaucracy, take the lead and the responsibility for policy forma-
tion. Policy making would become the work of "the people" in the
true democratic sense.
Bureaucratic posts do not in principle need to be changed. But
we must avoid the tendency of politicians and bureaucrats to drift
into separate cliques in the policy-making process. Parliamentary
vice-ministers might, for example, form groups with their
58 Blueprint for a New Japan
bureaucratic counterparts to exchange views on policy making.
Ruling-party Diet members who are not appointed to adminis-
tration posts would have plenty of other work to do. Initially, forty
to fifty people would be assigned to work The
in Diet committees.
Diet become more active than it is how; its committee
itself would

members and chairmen would have greater responsibilities and

would require expanded support staff. In addition as will be dis- —
cussed in detail below — parties would become centers for election
activities, placing far greater responsibilities on party staff to direct

party operations, organize election campaigns, and handle public

relations. A considerable number of Diet members would be
assigned to these posts.
As a result, parliamentarians could gain recognition through
their participation in Diet deliberations and eventually work their

way into administration posts.

A Politician-Led Bureaucracy
Cabinet ministers and parliamentary vice-ministers should reply to
Diet interpellation in their specific areas of expertise; bureaucrats
must not be given this role. In a democracy, it is politicians who
have ultimate responsibility for decision making. It is they who
must be called to answer, not bureaucrats. With politicians han-
dling Diet interpellation, they would, by necessity, study policy

more seriously. Bureaucrats would treat their role of assisting

politicians more seriously because issues would be decided on the
basis of their work. The political framework would, at last, begin to
function as it was meant to.

The content of Diet interpellation would likely change as well.

At present, questioning in the Diet is formulaic: those answering

the questions are highly constrained by their relations with the
government ministries. More aggressive debate will be possible
once bureaucrats are replaced by politicians in answering Diet
questions. It should also become easier to make changes in policy
by periodically alternating those responsible for the policies in

question.
 Political Reform 59

Politicians appointed to government ministries and agencies

will have a superior opportunity to acquaint themselves fully with
policy issues, which will in turn benefit their careers. By acquiring
the requisite knowledge and preparing themselves for policy work,

they will earn the citizens' trust of both politics and politicians.
These appointments will require that Diet members no longer
automatically become ministers when they have been elected a cer-
tain number of times. Appointments will have to be based on
merit. Elections reflect the trust of a constituency for its representa-
tive. This is, however, a separate issue from the position he holds in
the central government. Government positions must be earned
with expertise in politics and policy. The reforms described here
are intended to help develop professionals.
Meanwhile, any opposition party eager to rule should be en-
couraged to organize its own shadow cabinet. We must study how
to establish these as institutions. The ruling party has access to the
bureaucracy, but the opposition parties will require considerable
staffs of their own in order to develop these alternative policies.

The staff would be hired by the Diet and the public would bear the
expense. And because transfers of power would at last be a real pos-
sibility, the various ministries and agencies would provide the nec-
essary information and resources to the opposition's staff. The
opposition parties would become able to develop concrete policies
of their own and contribute to a more substantive Diet debate.
Assigning politicians to ministry policy posts and integrating
the ruling party and the cabinet will bring at least two significant
benefits to the nation.

First, the policy- drafting process would become streamlined. As

mentioned above, ruling-party politicians who are not in the cabi-
net today behave as if they are altogether outside the government.
Policy is drafted in two separate channels: the bureaucratic line
and the ruling party's Policy Affairs Research Council. Countless

adjustments and compromises are made between these two chan-

nels, and policy decisions are reached only through a series of com-

plicated steps. The locus of responsibility thus remains ambiguous.

60 Blueprint for a New Japan
What is more, the policy process seems extremely opaque to
outsiders and itself contributes to the public's distrust of the
government.
The locus of responsibility would be clarified and the policy
process would become more comprehensible if the politicians, who
today are only unofficially affiliated with policy areas — the so-
called "policy- tribe" (zoku giin) Diet members who have strong ties

to particular ministries —were instead given public authority,

assigned formal positions in those ministries, and instructed to
participate in drafting policies. The ministries, meanwhile, would
not have to expend so much energy trying to coordinate with those
outside the bureaucracy.
Some in the bureaucracy may be confused about the relation-
ship between their work and that of the politicians assigned to their
offices. But politicians would not be invading bureaucratic terri-

tory. Bureaucrats will remain neutral in the government, providing

technocratic assistance to the politicians. This is already the case in
prefectural governments.
The second advantage of this arrangement is that Diet members
who belong to policy "tribes" need no longer be the target of criti-
cism. "Policy- tribe parliamentarians" need not be a term of dispar-
agement if it refers to politicians who are familiar with special
policy areas. In fact it is highly desirable that politicians be special-
ists in various areas and exert their influence over policy formation.
The problem today is that their influence and involvement take
place "outside the government" and without formal authority and
responsibility.

Cabinet meetings, as well, need responsible politics if they are to

have any meaning at all. We will therefore have to abolish the dubi-
ous practice of delivering cabinet statements in advance of the
meetings themselves. If ministry and agency views have already
been completely coordinated before the cabinet meeting takes
place, what is the purpose of the meeting? The cabinet meeting
should be the site of such coordination.
Frequent discussion among various groupings of ministers
 Political Reform 61

should also be established to address special issues. Smaller groups

will sometimes be able to have more efficient and substantive dis-

cussions than a full cabinet meeting. The cabinet meeting can thus
become the cabinet's supreme decision-making institution, both in
name and substance, and serve as the central institution of the rul-
ing party. This will enable the prime minister to exercise the real
leadership we need. It is for these reasons that the integration of the

ruling party and cabinet is of particular importance.

 C H A P T E

The Advantages of Creating

Small Electoral Districts

A Set of Four Reforms

Postwar Japanese politics has been, fundamentally, quite cozy and
undemanding. While Japan concentrated on its own economic
development and the distribution of its newly generated wealth, it

left the maintenance of international order to the United States.

The government had two relatively painless tasks: to hear the views
of the opposition and to allocate budget funds as fairly as possible.

"Consultation on allotments" accurately sums up the whole of our

politics. There is no serious discussion or debate on Japan's future
course.
We might draw a picture of the LDP and the opposition, each
lounging in a separate bath. The temperature varies a bit from bath
to bath, but the water in each feels just right. The parties enjoy

casual talk with each other across the room; they bargain, make
deals. The atmosphere is easy, the talk lighthearted. Somewhere
along the way, though, the bathers forgot the fundamental democ-
ratic principle that they must at least occasionally change places.
Both the LDP and the opposition prefer to stay in their comfort-
able tubs rather than get out of the water to change baths and risk

catching a cold.
We were only allowed to enjoy this luxury because America
bore the burden of world peace and stability. The end of the Cold
War means the end of Japan's consensual, deal-making politics.

62
 Political Reform 63

Remarkably, many politicians want to linger in the comfort of that

bath for as long as they can.
This snug postwar structure, in which everyone makes deals
with each other and no one bears responsibility for them, will have
to be eradicated. Politics will have to be transformed by its very
roots if Japan is to respond to the world's changes and build a new
foundation for peace and prosperity. The more thorough the
destruction of the old structure, the better.
The question is not whether, but how we should demolish the
old order and achieve a transformation of postwar politics. I am
convinced that the only effective way to do this is through funda-
mental reform in three areas: the electoral system, the political con-
tributions system, and the political corruption prevention system.
Once electoral reform has been achieved, a fourth reform — elec-

tion campaign reform — will likely follow as a matter of course.

Electoral system reform must be at the core of any reform that
takes place. The present medium-sized constituency is the institu-
tion most responsible for sustaining and encouraging the comfort-
able, mutual dependence between the ruling and opposition
parties. Moreover, the multi-seat electoral district system forms the
basis of the present laws and regulations on political contributions

and election campaigns; it is also at the root of our "money-poli-

tics" problems. Any change of rules on contributions or campaigns
that is unaccompanied by electoral reform will be nothing more
than a diversion designed to placate a public weary of political
money scandals. Any reform that does not transform the electoral
system itself will not have the backbone needed to change the
nature of politics. I emphasize here that electoral reform is not
itself the aim; it is merely the means to a broader political reform.

We must distinguish between our aims and our means.

It is no exaggeration to say that the Lower House's multi-seat
district electoral system has been a means of maintaining what has
been a cozy, undemanding structure. The ruling LDP would have
no reason to want to change the status quo. What is surprising is

that the opposition parties, out of power for over four decades, find
64 Blueprint for a New Japan
the status quo comfortable enough to have lost all ambition of
reform.
In the present electoral system, each district throughout the
country elects from three to five representatives. Invariably, at least
one opposition candidate wins a seat, even if lie never appears in
public. The reason? There is always some 20 percent of the elec-
torate that is critical of the establishment and votes in opposition
to the ruling party, no matter who the candidate. The opposition
parties can sit out the election twiddling their thumbs and still

count on something approaching 130 seats in the Diet.

Extraordinarily, it is the opposition parties that enjoy the great-

est security in this setup. The largest, the Socialist Party, seems con-
vinced that there is no need to go through the struggle of actually
campaigning to win an election. The Socialists will never rule, left

What is more, they seem content

as they are. with that. It makes
one wonder why they are a party at all.
It is the multi-seat district system that has so indulged the oppo-
sition parties, particularly the Socialists. As a consequence of their
weakness, the LDP has been assured of its semi-permanent rule so
that it, too, has become immobilized. If we are to break down our
sheltered, comfortable politics and build opposition parties that

truly seek to rule Japan, we must begin by abolishing the multi-seat

district electoral system.

Not only has power remained in the same hands under this

system, but every aspect of politics has become entrenched and

limited. Governmental politics is increasingly akin to simple
administration. It is next to impossible to find what we seek in
politics: the dynamic coordination, the emergency responses, and
the ability to stay ahead of the curve. Nowhere can we find the

vision and imagination we need to cope with the complexities of

the post-Cold War world.

Creating a Dynamic Politics

The aim of reform, as I have stressed, is the revitalization of poli-
tics. If we can therefore pinpoint the obstacles to dynamism, the
66 Blueprint for a New Japan
type of reform needed will naturally present itself. What I am
suggesting here is not especially novel. Dozens of proposals have
already been made. We need only select from among them.
The main hindrance to political dynamism today is the over-
emphasis on proportional representation. This~principle is designed
to ensure the voice of minority groups in the political system; it

seeks policy decisions that have minority agreement. Respect for

minority views is fundamental to any democracy. In Japan, however,
this has gone to such an extreme that the result is a system of unan-
imous accord. In the current system, nothing can be decided with-
out unanimous agreement. It accordingly takes too long to reach
decisions, and it is all but impossible to take any advance action on
issues; the pressure to maintain the status quo is overwhelming.
The first step in restoring dynamism and leadership is the
reestablishment of the principle of majority rule. I believe that a
single-seat district electoral system is the most efficient and direct

way of recovering majority rule. In this system, each district elects

just one person; the candidate with the most votes wins, even if

only by a single vote. No other electoral system so clearly reflects

the principle of majority rule. An added advantage is that elections
are fought between candidates who represent their parties, since

each party can only field one candidate per district. Competition,
in other words, revolves around policy: parties are forced to pre-

sent their approaches to the problems of the day. This is an election

as it was meant to be.
Given Japan's relatively homogeneous electorate, whose ideo-
logical outlooks tend not to diverge too widely, elections are likely
to become battles between two large teams. The demands of com-
petition will mean the emergence of two dominant parties that
share similar fundamental goals for Japan's future. Additionally, a
single-seat system will make transfers of power easier. In this sys-

tem, even minimal gaps in the number of votes can mean major
gaps in the number of seats gained: a party with only 40 percent of
the vote might win a majority of the seats. The composition of the
Diet is thus highly sensitive to shifts in the levels of support.
In sum, the major problems of Japanese politics can be resolved
 Political Reform 67

with the introduction of the single-seat district electoral system. I

am not arguing that the multi-seat district electoral system has no

advantages to offer. Nor am I saying that the single-seat system is

ideal; it has weaknesses of its own.

The biggest weakness is that many of the votes that go to minor-
ity parties are effectively "dead votes." In Britain, for example, the
Liberal Party might be in second place according to opinion polls,

but it wins very few seats in elections and therefore has no chance
of governing.
A second drawback is the polarizing effect that single-seat sys-
tems tend to have. In districts where one party enjoys overwhelm-
ing strength, opposing parties have virtually no chance of gaining
sufficient seats. Eventually, the support bases of the various parties
become entrenched, and the standoff between parties polarizes
neighboring communities. There is also no guarantee that the
single-seat system will result in a two-party system. The world-
wide decline of socialism, for example, has rendered the Labour
Party's chances in Britain increasingly remote.

We must remember that our aim is not electoral reform in

itself. The aim is to fill in the gaps where Japanese politics is lack-
ing. Overall, our best choice is the replacement of the current
multi-seat district electoral system with a very different system of
smaller districts. Any system built by mortals will have its imper-
fections. Our effort must be to build systems suitable to their times
and to rebuild them when their weaknesses become too serious to
ignore. It is an abdication of political responsibility to think in

terms of systems that will survive in perpetuity.

We can probably avoid radical changes and ameliorate some of
the weaknesses of single-seat systems by including elements of pro-
portional representation. But a simple single-seat district electoral
system will be the most effective route if what we are seeking is

bold and large-scale political reform. We must keep our focus on

the fundamental aims of reform. There will be plenty of room for
the specific compromises that will be required for widespread
support for the changes.
However, I do not necessarily support a "combined" propor-
68 Blueprint for a New Japan
tional representation and single-seat district electoral system. The
"combination" proposal is essentially a version of proportional

representation: it will simply drag the principles that underlie the

current multi-seat system into the new system. True, proportional
representation does in theory promise that the relative power of
parties mirrors the status quo in society. But it does not encourage
parties to take the initiative in reorganizing society.

Party organization tends to swell in a proportional representa-

tion system; individuals find it difficult to engage aggressively in
political activities. We must instead enact reforms that make
parties compete on policies, reforms that allow the principle of
majority rule to govern politics.

Political Contributions: 120 Million Observers

The system of political funding is also in need of reform. The

two basic components of reform should be complete disclosure of
political funds and expansion of public support for political
activities.

The major problem surrounding political funds is their mys-

tery. Even though the amounts in question are immense, their

sources and destinations are unclear. People suspect politicians of

lining their own pockets and distorting what should be public pol-
icy decisions. Public distrust of politics has so intensified with the

recent succession of scandals that it is rocking the very basis of par-

liamentary democracy, as the unusually low voter turnout rates
suggest. Politicians, meanwhile, have no method of proving their

own innocence under the current system. Politicians' attempts to

vindicate themselves are ineffective in the face of such deep public
suspicion.
The best way to increase public trust is to make the flow of
money completely transparent. All political fund receipts and
expenditures, right down to the last yen, must be reported. With
total disclosure, politicians will lose all latitude for cheating, and

the people will not have a pretext for distrust. Each politician
should be limited to a single funding group, through which all

monies for political activities (receipts and expenditures) must

 Political Reform 69

pass. These groups will make full annual disclosures of all accounts.
This will prevent sloppy mingling of political and private funds, as
well as monetary transactions that accompany the policy-making
process. For politicians, full disclosure will become a way to prove

their innocence.

Some politicians and opinion leaders have suggested that

ombudsmen or other supervisory organizations should be estab-
lished and regulations governing political contributions be
strengthened. However, these moves would only expand bureau-
cratic power —expansion that would run counter to our aims of
reform. In any case, we could not have very high expectations of
such supervision. Full disclosure, on the other hand, would mean
that 120 million people would have their eyes on the flow of politi-
cal money. This is by far the most democratic and effective method
of supervision.
Companies and other groups must not be allowed to give
money to individual politicians. They should instead be limited to

contributing only to political parties. This may sound strange, but

ifwe are to recover the trust of the people we have to remove all
room for doubt about the relationship between individual politi-
cians and companies, unions, or any other group.
On the other hand, if politicians are only allowed to receive

funds from individuals, they will not be able to accumulate the

money they need. Public funds will therefore have to cover some of
the cost of political activities. Whatever the amounts —say ten or
twenty million yen a month —they must be enough to pay for
political activities. Public money will naturally be deposited with
the politician's single funding body and be subject to the same dis-

closure as any other money. Public funds should also be distrib-

uted to the various parties in proportion to the number of seats

they hold. The inevitable postal, communications, and transporta-

tion costs of political activities can simply be made free of charge.
Public funding is likely to reach up to ¥100 billion annually. If
such a system helps restore a healthy democratic politics, however,
it will be inexpensive compared to the cost of today's repeated
political scandals, political stalemates, and public distrust.
 —
70 Blueprint for a New Japan
Concurrently with these funding reforms, we should also
strengthen the penalties on violators and reinforce the political
corruption prevention system. Concretely, this would mean the
suspension of the violator's right to vote or run for office. It would
also mean bolstering the system to penalize accomplices to prevent
violators from conspiring to evade responsibility.
These punishments are of course too harsh if weighed against
those for other crimes. But if politicians are serious about responsi-
ble governing, they should undertake to govern and regulate them-
selves with these measures. The politicians themselves should set

the example of responsibility and ethical behavior in this system

as in the full- disclosure system —by imposing on themselves the
strictest standards.

Policy-Centered, Party-Directed Election Campaigns

How should party candidates be chosen in the small- district system
proposed here? If our aim is elections that are fought among par-
ties rather than individuals, the parties themselves should choose
the candidates, thereby concentrating power in party headquarters

and bolstering party order. But this is risky: power that becomes
excessively concentrated in the party executive easily slips into oli-
garchic control. The party bureaucracy would inevitably become
more dominant as well, which might hamper the ability of the
parties to attract a wide range of able people.
Given these concerns, the parties' local branches —and not the
headquarters —should decide which candidates to field. An alter-

native to this approach is party primaries, but I am against this

method because of a number of possible abuses. One such problem
is that party primaries would not be subject to the Laws Governing

Elections to Public Office, so that financially strong candidates

could spend money without legal limitations. This would minimize
the significance of electoral reforms. And, if the law is amended to

prevent such abuses, the danger arises that government branches

would intervene in party affairs.

A qualifying exam system for candidates, similar to that used by

 Political Reform 71

the British Conservative Party, would be most valuable for attract-

ing a diverse and capable group of candidates. Bureaucrats, busi-

ness people, farmers, merchants, and anyone else who desires to

enter politics can take the exam. Those who do not pass the test

may not stand for election no matter what their status.

The exam would not limit candidacies to those who score well
on written exams. It would instead seek to determine whether a
person can effectively conduct election campaigns or handle the
responsibilities of a member of parliament. Pertinent characteris-
tics — the abilities to demonstrate good judgment, to argue a point

logically and consistently, to speak persuasively before large num-

bers of people, to exhibit self-assurance in debate —would be ascer-

tained through interviews and mock debates. Those who pass the
test would then be registered on the party headquarters roster,

from which local party branches could select candidates appro-

priate to them. Aspiring politicians would accordingly strive to

acquire the abilities necessary for policy debates and other political
activities. An examination system would also reduce the chances of
ill-equipped candidates running for office.
How would local branches be assembled?
In the case of the LDP, the most realistic approach would be to
reorganize the personal support groups {koenkai) of individual
candidates, which have already been developed in each district.
Such a reorganization would run into serious resistance. The exist-

ing support groups, however, are not motivated by impassioned

support of particular politicians. They are simply groups trying to
send their chosen representative to the Diet. The presence of so
many second-generation Diet members testifies to the priorities of
the support groups. The most rational course would be to reorga-
nize such groups into local party branches so that they secure an
established place in the system.
If, as I have suggested, local branches are to run the elections
and politics is to be centered on the parties, we are going to need
new laws that clarify the status of parties. In order to qualify for
public funds, groups will have to meet fixed eligibility require-
72 Blueprint for a New Japan
ments. These requirements will, of course, be ideologically blind:
any group that fields candidates in an election would be equally
eligible for funding.

Two other issues remain: election campaigns and public assis-

tance to those campaigns. Campaign- related political broadcasts
should be permitted, within the limits of the constitution, only to
parties. Likewise, public assistance should be accorded only to
parties and not to individual candidates.
The object of the single-seat district electoral system is to turn
elections over entirely to the parties, which should be exclusively
responsible for election campaigns. Since outright prohibition of
individual campaigning violates the constitution, a minimum
amount of individual action will have to be recognized. That
means that campaign sound trucks and space on official billboards
for campaign posters will be permitted not only to parties but
to individual candidates as well, with the caveat that parties be
allowed at least as much publicity as individual candidates. More-
over, political broadcasts and campaign materials and mailings
should be permitted only to party candidates. Public assistance
should likewise be accorded only to parties and not to individual
candidates.
The result of this approach is that individuals will have to shoul-
der all campaign costs themselves and will thus be able to cam-
paign only in limited spheres. Effective, sustained campaigns will
be possible only in the hands of the parties. Measures such as these

are intended to neutralize the campaign advantage of parties and

candidates with large private funds and to reduce the number of
unaffiliated candidates.

Because only official parties will be able to run effective cam-

paigns, parties will compete with each other based on policies

rather than on financial advantage. With elections managed by the

parties, the kinds of factional abuses we have seen in the LDP are

likely to be corrected in the process.

The Upper House election system must also be thoroughly
reformed. It should not mirror the party format of the Lower
 Political Reform 73

House elections if the Upper House is to have an independent

function. Upper House elections can represent something other
than party allegiances. We need to address what role the Upper
House should fulfill.

Unlike the Lower House, the Upper House should represent

concerns beyond the local. Under the current constitution, how-
ever, it has the same direct election system as the Lower House and
roughly similar powers. It appears to have important power in its
own right, but in reality it is rarely able to play an independent role.

We must keep in mind the distinction between the two Houses as

we try to develop an election system appropriate for the Upper

House. While the Upper House should undertake reforms of its

own accord, the public must also take a more serious and active

interest in the possible role of the Upper House.

Diet Members Belong in the Diet

The ills of the Diet itself also need to be diagnosed. I have already
discussed how unanimous consensus-building hinders govern-
ment leadership, but there are a number of other weapons in

the Diet process that the opposition parties use to obstruct the
government.
Odd as it may seem, the first is the brevity of Diet sessions. The
Diet not only has shorter sessions than the legislatures of other
major nations, but we also have multiple sessions within a year.
They operate on a principle known as "discontinuity," meaning
that any bills still under discussion at the end of one session must
be reintroduced at the start of the next session. The arguments for
the bill are then explained from scratch. It is hard to imagine a
system less conducive to the passage of legislation.
To further bottleneck the proceedings, other committees are
not permitted to conduct substantive deliberations when the
Lower House Budget Committee is in session. Since committees
can meet only two days per week, this leaves only ten days or so in a
regular Diet session for other standing committees of the Lower
House to meet and deliberate. Again, the system seems designed to
74 Blueprint for a New Japan
ensure that as little discussion as possible takes place.
As practiced today, politics is characterized by government or
ruling party attempts to pass legislation and opposition party
attempts to prevent passage of the same. The system itself becomes
a weapon of resistance in the hands of the opposition. The advan-
tage of this system is that it acts as a brake on the ruling party. This
is especially important since Japan has not seen a transfer of power

in half a century and because the ruling party, as a permanent

majority, is almost always able to pass its bills. However, gover-
nance becomes immobilized when such obstructions are carried
too far. We must reform the Diet processes in conjunction with

reforms of the electoral system.

Since concrete proposals for Diet reform have been extensively
discussed elsewhere, I will here simply clarify what should be the
goals of reform. Greater efficiency is called for in the Diet session.

Foreign relations often demand that we quickly and flexibly review

various domestic practices. We cannot continue to take months or
even years to handle even the most trivial reforms. We will see
more progress if the Diet remains in session throughout the year.
Diet members belong in the Diet. They must increase the number
of days spent in substantive deliberations, and focus on debates
over policy. That is, after all, the very nature of the job they were
elected to perform.
Second, we must do away with the various irrational customs
that have evolved in the Diet. The ban, for example, on the meet-
ings of other standing committees while the Budget Committee is

in session is ridiculous. Committees can and should meet concur-

rently. It is neither reasonable nor practical to require cabinet
ministers to attend all Budget Committee meetings. In Chapter 5,

I argued that it is politicians such as parliamentary vice-ministers,

not bureaucrats, who must respond to Diet questioning, but it is

also desirable that ruling and opposition party politicians debate

with each other even when cabinet ministers are not in attendance.
The Diet, in other words, should become a forum for real debate,

not simply the site of formulaic question-and-answer sessions.

 Political Reform 75

Up to now, the opposition parties have unilaterally cross-

examined the government, which, in turn, has adhered to a strictly

defensive strategy. But the ruling party should also be questioning

the opposition. If the ruling party is brought into the cabinet, as I

have suggested, real discussion can take place between the ruling
and opposition parties. Two-way discussion would deepen the
debate and allow valuable views and policies to emerge.
Third, the Diet must become a source of information and edu-
cation to the people as well as a bully pulpit for the nation's leaders.
The Diet is the supreme organ of national authority. Statements
made there thus have the greatest formal significance. It is the
appropriate place for responsible politicians to make their intents

known to the world, to inform the people of party positions on

issues, and to raise public consciousness on issues.

Diet deliberations will only become more comprehensible to

the average citizen if Diet members themselves fully understand
the true objective of the Diet and actively voice their opinions.
Parties will communicate their positions more clearly to the peo-
ple, and the people will communicate theirs in elections. If bills

continue to live and die based on deals made in the Diet Affairs

Committee, the policy process will remain opaque and the people
will become even more cynical and dissatisfied. Our current
methods are an invitation to political apathy and have emptied
Japan's democracy of its substance.
Government belongs to the people. That is the essential cri-
terion of democracy. If democracy is truly to take root in Japanese
society, Diet members must return to the Diet. They must use
deliberations on national policy as opportunities for bold appeal to
the people, and they must submit themselves to the judgment of
the people they serve. These are the underlying reasons for the need
for electoral and Diet reform.
 CHAPTER SEVEN
Dividing the Nation
into 300 "Municipalities"

Enacting a "Law on the Fundamental Principles of Local

Government"
Japan's successful development has taken place under highly cen-
tralized control and under the banner of "catching up with and
surpassing Europe and America." But now that we have become an
economic superpower, we face the need to create new values and a
new way of life for ourselves.
Any such effort must begin by encouraging the latent potential
and creativity of the people. The most effective means of accom-
plishing this is by restraining the power of the central government.
In the preceding chapters, we have considered how best to
strengthen political leadership. But we cannot undertake such lead-
ership if the government continues to cast its net over any and all

issues. So intrusive a government cannot help but suffocate people

in their daily lives. It not only prevents creativity from surfacing,
but it suppresses people's potential and produces quiescent citizens
overly dependent on authority.
Reform of the way the nation is governed must begin by elimi-
nating central government regulation of everyday life. The central

government would carry a much lighter load and therefore be free

to apply its energies and resources where they really belong: crisis

management and fundamental national policy. The increasingly

international world we live in already demands that we do this.

76
 Political Reform 77

Continued failure to do so will put the nation in serious jeopardy.

I am not disavowing the positive aspects of the current adminis-
trative system. The system has served us well up until now. I simply
want to emphasize that its disadvantages become more pro-
nounced by the day. Times have changed. Whatever brakes there
may have been on Tokyo's explosive growth are no longer work-
ing. In fact, the entire country has come to look like Tokyo; this in

itself ought to be taken as a grave warning. The time has come for

what I'll call the "new decentralization."

The new decentralization must reverse the accustomed relation-
ship between central and local governments. Local governments
must henceforth take the lead while the central government pro-
vides the backup. The center must cease issuing directives for the
local governments to obey. It is through competition among local

governments that we will see the flowering of diversity in towns,

lifestyles, and cultures.

The nation's center has hitherto relied on its own judgment and
directed local governments through the dispensation of subsidy
monies. Local districts obediently followed along, devised plans
that met the requirements of the center, and obtained the money to
carry them out. The plans permitted no variance, which meant that
local governments had no way to contribute or implement their

own original ideas. As a result, every park in the country has the
same plaza, the same swings, seesaws, and jungle gyms. Town plan-
ning was like cutting cookies: they all came from the same mold.
The question now is how to reverse this situation —how to
create a system in which the local governments take the lead and
the center provides the support. We can start by enacting a "Law
on the Fundamental Principles of Local Government."
The framework thus established would be built on the principle
that local areas have the authority and bear the responsibility for all

domestic affairs except those that require a unified national policy.

Why should we go to the trouble of enacting a law that seems
simply common sense? Because, in the absence of such a law, the
center at present enjoys unlimited interference in local affairs.
78 Blueprint for a New Japan
The constitution, the Local Autonomy Law, and the Local
Finance Law together form the framework of the current local
government system. However, there is no commonly accepted
principle governing the division of labor between the national cen-
ter and the local governments. Every ministry and agency makes its

own separate laws regarding public facilities and other matters to

regulate that division of labor. Since there are no limits on the leg-

islative authority of the center, the ministries and agencies draft

laws on anything that occurs to them. The result is an excessive
regulation of local affairs.

Moreover, most of these laws treat prefectural governors and

town mayors as the appointed representatives of the national gov-
ernment. The nation controls these local officials by delegating
authority to them. The significance of these "delegated functions"

is their de facto role: they are, in essence, pipelines to the center. It

is through these pipelines —and thus through governors, mayors,

and other elected officials — government
that the central is able to
manage the details of its citizens' lives.

We should also note that central control does not rely exclu-
sively on laws. Subsidy monies, official notices, "guidance," and
supervision are all freely used to the same end. The most effective

way to change this is through the creation of a law that clearly

delineates the roles and responsibilities of the national and local

governments — in other words, a "Law on the Fundamental Princi-

ples of Local Government." The essential points covered by the law
would include:

• The fundamental principles governing the relationship

between the national and local governments;
• Work to be managed by the national government;
• The national government's relationship, including
legal and advisory aspects, to work handled at the local

level;

• A framework in which local governments can commu-

nicate with the central government on amendments to
 Political Reform 79

the local government system and on the national

response to local needs;
• The financial demarcations and relationship between
the central and local governments under the new
decentralization.

The law aims to reduce the domestic tasks handled by the cen-
tral government and limit central interference in local affairs. The
"delegated functions" would in principle be abolished.

Let Local Governments Handle Local Affairs

The national government needs to lessen its grip on local areas.

The most sensible way to accomplish this is with a large shift

of staff and funds to local control. All work handled by the
local branch offices of the national government should be trans-
ferred to local administrations. The national government will of
course retain direct responsibility for such national-scale endeav-
ors as public investment in bullet trains, expressways, and airports
as well as in police, pensions, public health, and standardized
education.
Such reforms will generate a surplus of both personnel and
funds in the central government. Local governing units will be able
to use their people more efficiently as well, even with their
increased workloads. At present, local governments have to assign
people to respond to directives and supervision from the national
government, but as central involvement is curtailed the liaison
work will become superfluous. Local governments will finally be
able to use their people in planning for the revitalization of their
communities.
Regional governments will need sufficient strength and re-
sources to take on the work previously done by the central govern-
ment. At this point I would like to propose replacing the current
city-town-village system with an approach that divides the nation
into roughly three hundred self-governing units. For purposes of
discussion I will call these new units "municipalities."
80 Blueprint for a New Japan
Local government should be a single-tier system based on the
municipalities. It may in the future prove useful to group a number
of municipalities into something resembling a "province," but a
single-tier system is simpler to administer and more accessible to
the public.
The creation of three hundred units would mean an enlarge-
ment of today's cities, towns, and villages, which are not equipped
to handle the new responsibilities they would inherit from the cen-
tral government. Two guiding aims will help us determine the size
and function of the new self-governing municipalities. First, the
municipality must have a balance of urban and rural, agricultural
and industrial, production and consumption, work and recrea-
tional, and workplace and residential areas. The aim is for the
municipalities to achieve comprehensive and high-quality coordi-
nation among all these zones. The municipality must not, however,
be so big that it is unable to integrate these various parts into a uni-
fied whole. Second, the municipality must be an area that already
forms a community or that has the potential to become a commu-
nity, both geographically and in the minds of its residents.

Specifically, the municipality will be slightly larger than the 360

"Larger Areas for Municipal Cooperation" we have today (with
roughly nine city-town-village units and average populations of
250,000), and much larger than the current city, town, and village

units themselves. Needless to say, the mayors and representatives

will be elected by municipality residents.
These general guidelines, when actually applied, will not pro-
duce municipalities all of the same mold. Tokyo and Osaka, for
example, would be utterly unable to cover both urban and rural
districts. Administrative issues are likely to vary regionally as
well. The framework we establish must be able, in other words, to
respond to a variety of needs.
We would therefore do well to establish categories such as
"regions comprising core cities and their environs," say, of those

containing populations between 100,000 and 500,000. The scale

and area of any region would depend upon two factors: the density
 Political Reform 81

and relative importance to the area of its core city, and a balance of
geographical and regional conditions.
This would be the model for the basic self-governing unit,
thereby setting the standard for the powers and resources to be
accorded to the units in general. Much of today's national and pre-
fectural authority would be transferred to the municipalities,
including authority over city planning, land use, transportation,
social welfare, and the environment.
Another category could be "large cities or metropolises," refer-
ring to cities that are already listed as "designated cities," or
roughly one million in population. Their borders, however, do not
need to be redrawn. They will form self-governing units within
their current boundaries because they are already sufficient in
terms of both scale and diversity.

A Transfer of Both Political Power and Financial Resources

A third category, "satellite cities around metropolises," poses a
greater challenge. The so-called satellite-city clusters surrounding
major cities contain populations of 50,000 to 300,000; they tend to
be "bedroom communities" for the metropolises or to have a high
concentration of small and medium-sized companies. They cur-
rently suffer from overcrowding because of their rapid increases in
population. None of the cities in the cluster has enough draw to
constitute a "core city." Residents therefore have only a weak sense
of community, and the conflicts of interest between new and old
residents have a tendency to escalate.
The basic self-governing unit comprising such areas will need to
develop special frameworks to handle the diverse interests of the
central city and its environs; the frameworks cannot be developed
centrally. Special measures will also be necessary to enable these
areas to spend the considerable funds required for them to keep
pace with their precipitous growth and urbanization.
Municipalities, due to their size, may not be able to manage the
details that are now left to the city-town-village units. Building
neighborhood parks, registering residents, or any of the other
82 Blueprint for a New Japan
relatively small affairs intimately linked to the daily lives of resi-

dents will require careful planning. It would therefore be best to

establish "administrative districts" along the lines of the current

"designated cities."

Since the new decentralized system will give special weight to

regional ideas, activism on the part of regional residents will be
especially important. If the regions are to generate a steady stream

of their own ideas for development, the residents will need a

greater sense of autonomy and the confidence that they can build
their own communities through their own efforts. We must
encourage such community activities as care for senior citizens.

Local regions will also need to expand their information-gather-

ing and communications functions if diversity and competition are
to flourish in the new decentralized system. Information gathering
and encouragement of local knowledge and culture will be among
the major responsibilities of the municipalities. For this, they must
be able to draw on large numbers of capable people. Every region
will need its own growth industries and research centers, abundant
publishing and broadcasting facilities, and opportunities for indus-

try, government, and universities. National universities, too, will

have to be moved out of the major cities. Financing for this massive
transfer of responsibilities will have to come from tax revenues
handed over to the local regions.

I earlier stressed that Japan is no longer able to afford the luxury

of weak leadership: the times demand strong leadership. Strong
leadership does not mean dictatorial or oppressive government.
Politics will be charged with building an environment in which the
citizens can enjoy maximum freedom, comfort, and creativity. We
will only see, for the first time, truly effective leadership when we
strengthen the role of the Prime Minister's Official Residence,
firmly establish the new decentralization, and transfer substantial

national authority and finances to the local governments.

 CHAPTER EIGHT
Wasting the Minds of
Our Bureaucrats

Building a Crisis Management System

Even if we thoroughly decentralize government operations, the
national government will have its hands full with work of vital

importance to the nation as a whole. True decentralization would

demand that the central bureaucracy broaden its horizons to
handle national-scale policy, instead of deciding policy on detailed
local issues. We particularly need to strengthen those parts of
the national administration that have been ignored in the ever-
narrower range of postwar politics.

Japan's bureaucrats have a world-class reputation for their

abilities. It is well deserved; they are a true source of pride for the
country. But even though the content of the work expected of them
has changed with the new political realities, the overall framework
in which they work has not. Their situation is the stuff of tragicom-
edy. No matter how hard they try, they cannot win the apprecia-
tion of the people. This is unfortunate for the bureaucrats, but
equally unfortunate for Japan's citizens. A paramount issue facing

us is the need to introduce reforms both to the work of the national

government and to the bureaucratic framework so that we can
build an administrative system appropriate to the needs of the
twenty-first century.
Crisis management is the most important job of the national
government. It is the kind of work the national government should

83
84 Blueprint for a New Japan
be doing in this era of internationalization and decentralization.
-

Who bears responsibility, for example, in the event that the cabinet
is unable to function, through accident or for any other reason?
Currently, no provisions are in place. Neither the constitution nor
the various administrative laws have formulated a crisis manage-
ment policy. Our first task, then, is to create the necessary laws and
systems for a crisis management framework. The bureaucracy, too,
needs to be organized to respond to crises.

The defining nature of "crises" is the impossibility of predicting

when or how they will arise. It follows that the best way to develop
crisis management is to imagine all kinds of scenarios and begin
preparing for them.
The problem of Japan's oil reserves illustrates this principle.

We have only ninety days' worth of oil reserves. What will be our
course of action if another oil crisis arises? How will we respond to
an energy crisis? How will we, a nation that relies on imports for

the majority of our food, deal with a crisis in which those food
imports are cut off?

During the Gulf War, we tried to charter commercial aircraft to

transport refugees and emergency supplies but were unable to do

so. We must have systematic means by which the government may
call upon commercial transport in an emergency. We need substi-

tute transportation networks immediately available in case roads

and railroads are destroyed in natural disasters like earthquakes or
floods. How do we expect to protect citizens' lives and economic
activity in a major earthquake? Is it wise to have our industrial base
so heavily concentrated in a few areas, given our vulnerability to
earthquakes? It is vital that we continually strive for better policies.
In 1988, when I was deputy chief cabinet secretary, the military

submarine Nadashio collided with a fishing vessel and a number of

people were killed. At the time, the prime minister and chief
cabinet secretary happened to be in the mountains and were un-
reachable for almost an hour. Likewise, we have no ability to

communicate with the prime minister when he is flying overseas to

summits and other affairs. We need a system of security, transport,

 Political Reform 85

and communications that ensures the accessibility of the prime

minister regardless of his physical whereabouts.
Containment of turmoil in the financial system is another pri-
ority. How does the government protect depositors from financial

instability or the collapse of financial institutions?

Plutonium — particularly its transport —has become a delicate

issue because of its use in the manufacture of nuclear weapons.

How do we prevent terrorists from stealing the plutonium cur-
rently stored in nuclear laboratories?

We must consider other emergencies as well, such as a massive

toxic spill into the water supply. How would we communicate with
the residents during such a crisis? What is the appropriate response
when a dam breaks? Law enforcement and public security include
the protection of citizens in such events.
There is no end to the crises we can imagine. Responsibility for
responding to them is currently spread across any number of gov-
ernment ministries and agencies. Those agencies concerned should
be in constant anticipation of possible emergencies and be contin-
ually developing policies to respond to them. We need laws and
systems in place that will enable immediate reaction by the prime
minister during national emergencies. Today's crisis manage-
ment ex post facto reaction by individual ministries — is wholly
inadequate.
An effective crisis management system needs to address several
concerns. First, the locus of responsibility and authority must be
clear. If ultimate responsibility lies with the prime minister, we
must also clearly designate who is to replace him if he is not avail-
able. We must, at the same time, protect against abuses of power.
After outlining possible emergencies, we should establish a system
that implements emergency measures based on the judgment of
the prime minister or his alternates, and that subsequently requests
the approval of the cabinet or the Diet. Emergency measures need
strict limitations built in to protect against abuse.
Second, training is management staff must con-
essential. Crisis

stantly consider possible emergencies and models of resolution in

86 Blueprint for a New Japan
order to train itself sufficiently for the real event. Other staff would
also do well to learn the basics of crisis management.
Third, we must build institutions that can keep abreast of, and
respond to, situations of potential importance. Again, the kantei
has to be fully informed at all times of developments in the min-
istries and agencies in order to communicate effectively with them.
A fourth feature of crisis management is procedure. Emergen-
cies may require implementation of both direct orders and admin-
istrative measures that are somewhat different from those of
non-crisis times. What is important here is to determine in
advance the procedures and the range of emergency measures that
can by taken. It is by doing so that we will be able to maintain both
social order and human rights.

These areas can be treated under special laws on crisis manage-

ment. Some people denounce such laws as violations of human
rights, but it is more dangerous to be without laws altogether.
far

Abuses are more likely when emergency powers are not clearly
delineated. We should of course ensure that those hurt by emer-
gency measures would later be eligible for compensation.
Without the trust and cooperation of the people, the institu-

tions handling crisis management cannot possibly be effective. This

is the foundation of crisis management. It will not succeed if the
people do not share a sense of urgency and agree to follow their
government's judgment.

Fundamental National Policy

In addition to crisis management, the national government must
consider the fundamentals of national policy a top priority.
While local initiative should be given the maximum possible

leeway on specific policy issues, the central government will be

occupied with larger-scale concerns. It is the national government
that must clarify the fundamental direction to be taken by the
nation as a whole. Politicians are the ones responsible for carrying
out this debate, but the central bureaucracy, too, will have to draft
basic proposals as part of the discussion.
 Political Reform 87

In the current political and administrative framework, the cen-

tral bureaucracies shoulder all responsibilities down to the most
detailed tasks. They can barely keep up with the volume of work
this approach generates, let alone devote their time to longer-term
visions. We need to make better use of their talents: we must call

on them to conceive broad policy plans and encourage competi-

tion in ideas, thereby enlivening the debate among politicians. It is

often said that Japanese do not voice their views. We need to lay
the foundations that will help us become more vocal in interna-

tional affairs.

Equally important are our responsibilities in foreign affairs.

International exchanges on the local level are bound to increase,

but the central coordination of Japan's responses will only become
more important. If we are to respond in a timely manner and from
the point of view of the national interest, we need institutions that

burden of the interminable details now weighing

are free of the
down the bureaucracy. Without this burden, communication
among ministries and agencies will improve, facilitating policy-
making on a national scale.
Security, in all its aspects, is a third major responsibility of
national government. We cannot ignore military preparedness as
an area of security, but other aspects of security include energy,
food, and disaster-relief policies. Today it is difficult to build any
kind of comprehensive policy in these areas.
Issues of national scope also include the adoption of uniform
weights, measures, and other standards throughout the country. It

would be menacing, to say the least, if some regions drove on the

left side of the road while others drove on the right. Communica-
tions and broadcasting require technical standards. But because
even the most picayune matters are so highly regulated, individu-
als, firms, and local governments are unable to exercise their own
autonomy. The question, then, is how much the national govern-
ment should regulate. Our overriding goal is to maintain order and
avoid confusion without constraining freedom of action.
The easiest solution to this problem would probably be to have
88 Blueprint for a New Japan
the national government decide everything down to the smallest
details. But I am proposing here a more general, overarching legis-

lation that will require still greater administrative skills. We will

also need considerable negotiating skills if uniform standards are

sought on an international scale. The coming era will demand even
greater abilities of our bureaucrats.

The Revitalization of Central and Local Government

The central government should naturally have jurisdiction over all

areas that can be better managed on a national scale. Japan would

experience large income gaps, for example, if regions were left to
rely solely on local tax revenues for funding. We need a financial
coordination system that ensures the assistance of more affluent
regions to their less prosperous neighbors. The system should also

coordinate the needs of the various regions without infringing on

their autonomy.
A pension system is also needed. Early in the next century, just

two working people will provide the support for each senior
citizen. Social security systems enjoy greater financial stability

when handled in larger units.

Large-scale land development projects and public works that

require vast sums of money are also national-scale concerns.

Highway construction, bullet-train networks, international hub
airports, flood control, food-supply systems, energy management,
and telecommunications networks all fall into this category.
Working hours and basic education appropriately come under
the control of the central government. Cutting-edge research and
development in science and technology ought to be supported by
the nation as well. Other areas also could be defined as national
priorities.

The nation must also shoulder fundamental responsibilities

related to law and order. Central control of police forces is a source

of concern for some people. But like many areas of government,

police activities are becoming increasingly global, especially with

the increase of drug and criminal syndicates. The creation of an
 Political Reform 89

organization like a Japanese FBI to address problems like these

would not be especially effective or even suited to our needs, but
the police must be a national organization because the nation is

responsible for protecting the lives of its citizens.

There is the danger, however, that a strong police organization
can become too muscular and uncontrollable. To keep the brakes
on any such development, we need something similar to our pre-
sent National Public Safety commission. There should be corre-
sponding committees at the regional level so that police activities

are always subject to the strictest scrutiny.

Information is another key area that will only become more
important. The central bureaucracies have a duty to gather policy
information and make it available to the various regions. There is

some level of information exchange between the center and regions

at present, but the hierarchical quality of the exchange prevents
much of the information from being put to good use. We make
heavy use of statistics, but we have to be able to gather and analyze
more complex information as well.
Information is bound to proliferate under the decentralized sys-
tem because the various regions will be pursuing their own new
initiatives. The central government will likely select the best exam-

ples from among them for recommendation to others and advo-

cate new policies based on analysis of newly available information.

This process will add tremendous value to their advice.

Up to now, local governments have had one chief concern: that
they faithfully carry out central directives. Under a decentralized
system in which policies are formulated regionally, unforeseen
problems will naturally arise. It is the central government that will

work out the adjustments. And since issues will no longer be swept
away unilaterally by directive but resolved through persuasion
and compromise, we will need that much greater ability in our
bureaucrats.
Decentralization and reorganization of the central bureaucra-
cies are part of a single set of changes, the two sides of administra-
tive reform. These reforms are not intended to harass the central
90 Blueprint for a New Japan
bureaucracies. They are intended to make better use of the abilities
of the bureaucrats and to set a higher standard for government
administration. By transferring the detail work to local areas, we
will reduce the workload of the central bureaucracies and give
them the margin and incentive to think of-larger-scale policy
matters. As long as we keep the bureaucrats as busy as they are
today, we will never be able to take full advantage of the ability we
bring into government. If the bureaucrats have time to study and
to think, the nation gains the untold benefits of fresh concepts in
government.
With newly defined missions, bureaucrats will also have
renewed motivation to work and gain the respect of the people.
Regional management of administrative matters and an active
national government together will at last present the possibility of a
dynamic politics and administration. We will need both for the
coming challenges.
 BOOK

BECOMING
A "NORMAL NATION"
 CHAPTER ONE
Japan's Role and
Responsibility

What Is a "Normal Nation"?

A nation, by its very nature, is a selfish entity. It puts its own
welfare and interests above all other considerations. It cannot be
otherwise, no matter how "borderless" economies become. The
reality of the international world is that roughly two hundred
nations are struggling day and night for the survival, development,
and prosperity of their citizenry.

Nations striving for survival and prosperity do not, however,

pursue their interests in disregard of other nations. National secu-
rity is a precondition of any nation's affluence and stability, and it

in turn rests on a peaceful and stable international environment.

Since no nation can preserve its economic, military, or political

security alone, the world's nations have no choice but to seek

security through cooperation.
The Japanese people could in theory choose to return to the
days of isolation and to the tradition of finding "beauty in purity
and poverty," but realistically speaking, the mission of politics
today is we maintain and enhance the affluence and
to ensure that

stability that we now enjoy. The conditions necessary to accom-

plish this are peace and stability in the international environment
and the free trade that flourishes as a result. Without these, Japan

will be unable to survive in the new post-Cold War world.

It is widely acknowledged that resource-poor Japan built its

93
 94 Blueprint for a New Japan
economic might on wealth accumulated in the world free trade
system. If Japan loses the ability to trade, it will lose the very source
of its prosperity. Free trade itself is doomed without international
political and economic Japan must do all it can to main-
stability.

tain global stability, peace, and freedom. More than any other
nation, Japan must quickly and actively assume its international
responsibilities and help create a new, post-Cold War global struc-
ture. Japan, in other words, has no choice but to become a "global
state" in the true sense of the term.
•yl The term "international contribution" has been in vogue since
the end of the Gulf War. It is a mistake, however, to interpret this
term to mean that Japan makes contributions only to serve others,
or that Japan is somehow being forced to cooperate with the inter-
national community. That presumptuous interpretation can only
mean that people have forgotten the true nature of Japan's situa-
tion. Contributions may serve international society in useful ways,
but they are vital to Japan itself. "International contributions" are
essential to Japan's survival.

These observations do not apply only to international security

and the maintenance and development of the free trade system.

When economic aid from Japan helps other nations become pros-
perous, Japan's own peace and welfare thrive from the regional
stability and economic expansion that result. Japanese assistance
in environmental protection not only helps halt environmental
destruction in developing countries and contributes to their long-
term growth, our assistance also improves Japan's own living

environment: the environment knows no borders.

What, then, must Japan do to become a true "global state"?
The answer is not especially complicated. Japan must become a
^ "normal nation."
What is a "normal nation"? First, it is a nation that willingly
shoulders those responsibilities regarded as natural in the interna-
tional community. It does not refuse such burdens on account of
domestic political difficulties. Nor does it take action unwillingly as
a result of "international pressure."
 Becoming a "Normal Nation" 95

This is especially relevant where national security is concerned.

We don't need to return to the Gulf War or PKO bill debates to see
how suddenly eloquent we become in self-righteous arguments
about the constitution and other laws whenever security issues
arise. We look for ways, however fallacious, to avoid a responsible
role. The contradiction is clear: how can Japan, which so depends
on world peace and stability, seek to exclude a security role from
its international contributions? For many people, the thought of
Japan playing any sort of role in the security arena conjures up
images of a rearmed, militarist Japan. But this is, quite simply, not
an issue of militarization or aspirations to military superpower
status. It is a question of Japan's responsible behavior in the
international community. We need to think rationally about
this and develop a system in which Japan can assume appropriate
responsibility.

A second requirement of a "normal nation" is that it cooperate

fully with other nations in their efforts to build prosperous and sta-
ble lives for their people. It must do so on issues that affect all

nations, such as environmental preservation. While Japan has

made significant progress in this area, we still have a great deal to
offer and can lead a worldwide effort toward making our planet
more sustainable.

Japan must satisfy these two conditions if it is to go beyond sim-

ply creating and distributing domestic wealth and become what the
world community recognizes as a "normal nation."

The Costs of Peace and Freedom

Japan is frequently described as a "merchant nation." But when we
consider the cost burden that individual nations must bear in
international society, it is questionable whether Japan has func-
tioned fully enough be called a "nation" at all. A view from this

angle will provide a clear example of what I mean by normality.

One of the best-known merchant nations in world history was
the northern Italian city-state of Venice. Even earlier, Phoenician
Carthage was also renowned for its mercantile prowess. How did
96 Blueprint for a New Japan
these places fare in history? Venice maintained its prosperity for a
full millennium. Even Carthage, which was ultimately destroyed by
Rome, endured six hundred years. If Japan, with a little over forty
years of relative prosperity as a merchant state, follows these exam-
ples, it is conceivable that it has a long future to look forward to.

But postwar Japan differs in fundamental ways from Venice and

Carthage.
Venice did not survive a thousand years simply because of
superior business practices. It was a fully functioning republic:
Venetians engaged in politics and security efforts. The Venetian
government used skillful diplomacy and occasionally overt naval
power to preserve the Mediterranean peace and stability necessary

for its trade. The entire populace united to keep the Mediterranean

region under Venetian control and was willing to bear the costs
of peace and free trade. This is why Venice was able to remain
prosperous for so long.
Carthage, on the other hand, offers a rich illustration on how to
perish. Like Venice, it too bore the costs of peace and freedom, but
it chose a different way: it paid mercenaries to defend it. Carthage
was far wealthier than Rome, but it offered no match for Rome's
peasant armies. Its belief that wealth alone could sustain a nation

ultimately caused its demise.

How much of the cost of maintaining peace and freedom has
postwar Japan borne? Hardly any. Yet Japan has reaped the harvest
of peace and free world markets more than any other nation.
Under ordinary circumstances, nations cannot participate in world
trade without pulling their weight. The diligence of the Japanese
people, it must be said, contributed enormously to today's pros-
perity. But the primary foundation of our affluence is a historical
circumstance: Japan was not faced with the need to pay the costs
of peace and freedom during the Cold War. The world never
seriously demanded that we do so.

The threat of communism was what gave rise to these special

conditions. For almost half a century the United States regarded

Japan as a bulwark against communist might and was content and
 Becoming a "Normal Nation" 97

able to take on Japan's share of the costs of peace and freedom.

Had Japan borne these costs, it would not have been able to achieve

today's prosperity. We should not forget this.

But with the end of the Cold War and the collapse of the former
Soviet Union, America no longer has reason to bear Japan's share
of the costs. In this sense, the very foundations of postwar Japan's
economic prosperity are beginning to tremble. If Japan evades the

costs associated with free trade and stability, world peace and free-

dom, we run the serious risk of denying ourselves our own peace
and prosperity. Despite the gravity of this situation, Japan's politi-

cal world —which is supposed to recognize harsh realities and steer

the country in the right direction — is at present unable to make

any effective decisions at all. It does not even fully recognize that

we must assume the costs that normal nations share.

This inability to make political decisions means that domestic

and foreign politics remain as segregated as ever. It also means that

Japan is unable to respond to new and evolving situations. Domes-

tic and foreign affairs naturally differ in both their goals and their
methods, and must therefore be handled by separate institutions at

the working level. However, they should not exist in total isolation
\j
from each other. Our political system must be able to produce final
decisions that integrate the two.
Both foreign and domestic affairs must accordingly be based on
consistent national principles and doctrines. Foreign policy cannot
displace domestic policy altogether, but neither should foreign
policy be stalled because of uncomfortable domestic realities.
Coordination between the two must be founded on a consistent
set of principles.
Now that Japan is a world power, its actions affect not only our
neighbors but the entire world. It is often said of Japan that it does
not clarify its thinking or the strategic aims of its diplomacy, that it

is "faceless" and "opaque." This criticism, heard from both outside

and inside Japan, is the result of the poverty of our politics. Contact
between people from different nationalities is an utterly common
occurrence in today's world, and the world media broadcasts
98 Blueprint for a New Japan
international developments instantaneously. Jf we continue to act
without clarifying the basis of our policies, we risk the serious dan-
ger of our real intentions being misunderstood or even deliberately
distorted. The failure to explain clearly the fundamentals of our
foreign policy —both to the citizens of Japan and to the world — all

but invites unilateral attack from those who are ignorant or

irresponsible or who have differing agendas. It is not only undemo-
cratic, it is dangerous.
Japan no longer has the luxury the Cold War provided. The
poverty of our politics must be remedied and the framework for a
"normal nation" put in place. This is the primary objective of the
political reforms outlined in Book I.

The "Yoshida Doctrine," Misunderstood

The fundamental philosophy underlying postwar Japan's conserva-
tive politics — the so-called Yoshida Doctrine —has been consis-
tently misrepresented. The common interpretation says that Prime
Minister Shigeru Yoshida, architect of the postwar Japanese state,

achieved success with a political strategy that gave highest priority

to economic development. We therefore should not, the argument
goes, stray from that path. I find this bewildering.
The decision to pursue a political philosophy that gave priority
to the economy, as I explained in Book I, was a strategic choice
made by Prime Minister Yoshida when Japan's economy still lay in
ruins. "Economy first" was not a product of Yoshida's political phi-

losophy and it certainly was not an immutable principle. Yoshida

made this point clear in Sekai to Nihon (The World and Japan),
published in 1963:

It was not economically, socially, or intellectually possi-

ble for Japan to set about rearming itself . . . during my
administration. As I think about all that followed, I have
come to have many misgivings about the current state of
Japanese defense. My view at the time was that we should
leave our defense mainly to our American ally, and that
 Becoming a "Normal Nation" 99

we should put all our effort into recovering our prewar

strength and improving the harsh lives of our people.
However, both the domestic and international environ-
ments have since changed significantly. Economically,
we have overcome the need to rely on foreign aid and are

even able to assist the world's developing nations. Does it

not seem that we are already past the stage when we

should be depending on another nation's might in the
realm of defense? I have come to think so.

In my frequent travels overseas, and particularly

during my recent trips to Europe and America, I have
had the opportunity to look at the nations of the free

world and to have discussions with their leaders. These

countries have already overcome the wounds of war, and
I was impressed by the fact that all of them are trying to
assume responsibility for contributing to the peace and
prosperity of the world as a whole. I have come to the
conclusion that Japan too must assume that responsi-
bility and resolve to contribute to the free world.
...Even a Japan that stands in the world's top ranks
economically, technically, and scholastically will remain
something of a crippled nation if it remains dependent
on others for its own defense. It is a position that cannot
be respected in international diplomatic circles.

Yoshida wrote these words thirty years ago, and yet they reso-
nate as if they were written today. He offers a clear view of the
peculiarity of Cold War-era Japanese politics. But the Cold War
has ended. We must overcome our misunderstanding of the
4 Yoshida Doctrine and set forth a new strategy without delay.

Becoming a "normal nation" is not simply a matter of the polit-

ical world's undertaking its own reform. The Japanese people must
acknowledge Japan's position in international society and begin
to reform their own consciousness. We must break out of our
ingrained ways and become a "normal citizenry" ourselves.
100 Blueprint for a New Japan
Individual citizens may, for example, conduct grass-roots-level
exchanges with people of other nationalities, or perhaps volunteer
with non-governmental organizations on behalf of less-privileged
people around the world. It is especially important that we, as
citizens, grapple with such issues as the global- environment, the
education of youth, and aging societies.

Japan is fortunate to have the deeply rooted wisdom of a long

tradition. We have also come to enjoy vast economic and techno-
logical strength. We have to be strict with ourselves—by launching
bold changes at home and aspiring continually to new and higher
goals — if we hope to be understood and respected in international

society. We need to take advantage of our strengths and embark,

without fear, on building a new Japan.
 CHAPTER TWO
Toward a Peace-Building
Strategy

Noblesse Oblige

The post-Cold War era marks a change in the kind of dangers the
world faces. While the likelihood of world war and global nuclear
war has become remote, other threats have arisen: regional dis-

putes, civil wars, terrorism, nuclear proliferation. Confrontations

between differing national interests have intensified.
Regional and civil disputes have multiplied since the end of the
U.S.-Soviet Cold War. Ethnic conflicts are occurring in places all

but forgotten during the Cold War. The civil war in the former
Yugoslav Federation is the most prominent example, but in other

areas like the independent republics of the post-Soviet CIS, ethnic

nationalist feeling has sparked wars of independence waged by
minority peoples. Ethnic nationalist sentiment of this sort did not
surface during the Cold War; it gave way to the ideological disputes
that dominated the period. The Cold War suppressed ethnic
nationalism.
. Perestroika changed all that. It relaxed the ideological binds and
^ allowed expression of ethnic feelings that had long been stifled in
the Soviet Union. The sense of shared ethnicity was the primary
force that brought down the Berlin wall and ultimately gave birth
to a newly integrated nation. The ideologically communist govern-
ments of Eastern Europe were toppled one after another and
replaced by administrations with strong nationalist inclinations.

101
 —
102 Blueprint for a New Japan
The same nationalism is now fueling the civil wars of the former
Yugoslavia and the CIS republics. Ethnic nationalism is the single
most important force shaping the international environment
today. Sovereign nations are coming apart at the seams: the num-
ber of nations in the world has reached nearly 170 and is climbing.
The world map is drastically changing.

The "peace dividend" that many were hoping would materialize

is clearly not on the horizon, although it remains a long-term pos-
sibility. Of course the U.S. and Soviet stockpiles of nuclear arms
enough to destroy the human race many times over, and which,
together, sustained a "balance of terror" — will be greatly reduced.
The leaders of both nations have agreed to reduce current stock-
piles of some ten thousand nuclear warheads each to one-third that
level. The United States, Russia, and NATO are at the same time
substantially reducing their military expenditures.
Meanwhile, however, the more than one hundred nations of the
so-called Third World, such as China and India, are expanding
their defense budgets. Not only is there no "peace dividend," but the
international situation is, if anything, growing more precarious.
We need to think seriously about how to reverse this trend and
encourage a more stable environment if we seek to maintain world
peace. A peaceful and stable international environment is indis-

pensable if we are to experience the real blessings of a peace divi-

dend. But the grand design envisioned by America and other
countries is at this time still a blank page. The world is likely to

continue to witness the turmoil of ethnic nationalism. Conflicting

armed confrontations. Only those
national interests will result in
who go beyond empty words to commit their own blood and sweat

to the quest for world peace will have earned a claim on future
"peace dividends." Surely this is self-evident.

Many Europeans and Americans subscribe to the concept of

noblesse oblige, meaning that those with wealth and power have a

moral obligation to society. Japan was able to attain economic

superpower status because the world was stable and at peace and
because Japan was permitted to accumulate wealth though trade.
 B e c o m i n g a "Normal Nation" 103

The time has come for Japan to contribute actively to the mainte-

nance of peace. Even non-nuclear, non-arms-exporting Japan can

work for world peace.

Peace Maintenance and Japan-U.S. Cooperation

Our choice of concrete methods of peace maintenance will depend

on global developments and, more particularly, on Japan's neigh-
boring environment.
It is often said that the stability of China^and the Korean penin-
sula is the key to the stability and prosperity of theAsia- Pacific
region; put another way, we could say that these two regions are
the greatest sources of instability in the area. But China and the
Korean peninsula impose restraints on Japan in various ways. Even
as China seeks Japanese economic cooperation, for example, it

insistently warns against any expansion of Japan's political or mili-

tary role in the Asia- Pacific area and maintains a steady campaign
of criticism against Japan in the effort to A typical exam- restrict it.

ple of this came during Japan's consideration of PKO involvement.

China immediately censured the development as a "design for

resurgent Japanese militarism."

The bitterness of both North and South Korea over Japan's past
colonial domination is still strong, and it continues to prevent the
development of normal relations between Japan and the two
Koreas. I expect that only efforts over a long period of time will
bring resolution to the burdens and legacies of the past.
While Southeast Asia fears domination by China or by China
and Japan jointly, its attitude toward Japan alone is different from
that of China and the Koreas. Southeast Asia and Oceania sup-
ported Japan's deployment of mine sweepers after the Gulf War,
and helped dampen Chinese and Korean criticism. That said, we
must not forget that these regions suffered severely during the
Pacific War and that every country in the region has painful associ-
ations with Japan. Japan must be wary in taking unilateral action.
Though its relative economic power has declined in recent
years, America remains the world's only military superpower.
 —
104 Blueprint for a New Japan
The Clinton administration is not altering America's fundamental
security policy. The president has said that America will retain the
world's greatest military force and military power to fully carry out
its mission in the post-Cold War world. President Clinton intends
to maintain superior troops and morale; to continue to develop the
newest and most advanced offensive and defensive military tech-
nology; and to improve the ability of the military to react in emer-
gencies. He also appears to be considering the establishment of a
U.N. emergency force that would respond to regional disputes.
It seems likely that America, as it attempts to reduce defense
expenditures, will scale down its role as international policeman
and lay the groundwork for historic change in the form of a United
Nations-centered strategy for peace. Such a strategy would more
nearly reflect the reality of post-Cold War international society.
Specifically, the United States will probably try to provide a
brigade-scale standing reserve army and present proposals to the

United Nations for the establishment of a large-scale general

headquarters to support U.N. military activities.

This type of emergency force is the kind of institution urged by

U.N. Secretary-General Boutros-Ghali in his June 1992 declara-
tion, An Agenda for Peace. Emergency deployments would not only
respond to urgent regional disputes, but would entail a fundamen-
tal structural reform of the United Nations. It would also form part
of the American military's long-term strategy. The United States
will no doubt reaffirm its resolve to be involved in the management
of regional disputes. It will also continue to develop ideas on how
to strengthen the collective security role of the United Nations. It

will, in other words, be laying the groundwork for the construction

of a new United Nations-centered world order.
Given the two above conditions — that Japan's neighbors are
still alarmed by any independent action taken by Japan, and that
America will be working actively for the maintenance of peace
Japan's path becomes self-evident. The most rational and effective

way for Japan to contribute to world peace is by cooperating with

America.
 B e c o m i n g a "Normal Nation" 105

The first clause in Japan's Fundamental Plan for Defense calls for

a U.N.-<:entered defense policy. In reality, Japan has defended its

independence and peace under the framework of the Japan-U.S.

Security Treaty. Both countries are committed to the values of lib-

erty and human rights. For this reason as well, our contributions to
world peace should be carried out in intimate cooperation with the
United States.

The view that the Japan-U.S. Security Treaty has become obso-
lete with the end of the Cold War is shortsighted and grievously
mistaken. The Japan-U.S. Security Treaty is not simply a defense
treaty like that of NATO. The history between the two nations is

complex. Not long ago we were fighting each other to the death.

Our two histories, racial makeups, languages, and cultures could

not have been more different. When the fighting ended, however,
we bound ourselves together as securely as we could with the rope
of the security treaty.
The Japan-U.S. Security Treaty is analogous to a three-story
structure. The bottom floor consists of the Japan-U.S. Friendship

and Cooperation Treaty, one in a long line of friendship treaties

going back to the Japan-U.S. Treaty of Friendship, signed with

Commodore Perry in 1854. The full name of the current treaty
Treaty of Mutual Cooperation and Security between Japan and the
United States — is an expression of this history.

The second story is the Non-Aggression Treaty. This treaty is, in

effect, a vow taken by both nations not to repeat the insanity of the
Pacific War. The third story is in some ways comparable to NATO.
It includes promises regarding defense, and is the part of the struc-
ture that attracts most notice. Those who argue that the Japan-U.S.
Security Treaty has become superfluous have only this part in

mind.
The three stories were deemed necessary because of the differ-

ences of our two cultures and peoples, and because of the bitterness
of our war half a century ago. America and Europe share roughly
the same racial, cultural, religious, and linguistic characteristics.

They need neither friendship treaties nor non-aggression treaties.

106 Blueprint for a New Japan
Given our history, the Japan-U.S. Security Treaty will not become
superfluous anytime soon. The best choice for Japan in the coming
years is to make international contributions based on the firm
foundation of the Japan-U.S. Security Treaty.

Reorganizing the Self-Defense Forces

We must next consider whether Japan's current security system is

adequate for Japan to cooperate with America and to participate

actively in building a new international order. During the Cold
War, Japan's security policy was in principle centered on the
United Nations. Meanwhile, its defense strategy, dubbed "exclusive
defense strategy," rested on the Japan-U.S. Security Treaty and
focused on preventing or reacting to any direct or indirect invasion
of Japan. "Exclusive defense" was actually a policy of passive
defense. It was developed within a constitutional interpretation

that allowed Japan to maintain its right to independent self-

defense, but not the right to collective defense.

Japan's Self-Defense Forces have not functioned as a "military"
that independently guarantees the sovereign existence of the state.
Only with America's active cooperation under the Japan-U.S.
security system did the military have any hope of being effective.

This is cold, hard fact. Japan's peace and security are not assured
on the independent strength of the SDF.
As I emphasized earlier, however, we must maintain the
Japan-U.S. security system and continue our present course in the
realm of defense. The character of the SDF, too, should remain
unchanged. Nonetheless, as the Cold War era fades, Japan must
participate actively in the construction of a new world order. The
SDF will be a vital means to achieve that.

As long as Japan maintains the policy of "exclusive defense," the

SDF will be seriously limited as a means to the construction of a
new order. If the SDF is to play such a role, Japanese strategy and
the organizational structure of the SDF will have to be reformed.
American policy is currently leaning toward an expanded
United Nations role in the maintenance of peace and stability,
 Becoming a "Normal Nation" 107

particularly in collective security efforts. The key to the reorgan-

ization of the SDF lies here. Japan must emphasize the Japan-U.S.
relationship and develop an SDF centered on the United Nations.
The SDF must become the means by which Japan actively works to
create the strategic environment desirable for its peace and stabil-
ity. We must make the leap from our passive "exclusive defense
strategy" to a dynamic "peace-building strategy."

Japan does not have the capability to assume the defense of the
nation independently. Our prosperity and even survival will be at
risk if the Asia- Pacific region and the world as a whole are not
peaceful and stable. We must replace the strategy of "exclusive

defense" with one of "peace-building" not only for world peace but
for our own national security. The reorganization of the SDF
should be based on this principle.

The quality of our defense should no longer be defined simply

as "the ability to repel, with our own force, a limited, small-scale

invasion." Defense capability will have to embrace a variety of

strengths, including those in non-military areas. The SDF must be
able not only to respond to purely military threats, but also to
take on other activities as well. It must become a knowledge- and
technology-intensive organization. We must immediately review
whether the arms and equipment currently allowed by our limited
defense budget are an efficient choice. We will have to consider
what constitutes necessary and cost-effective equipment, and what
the future role of the SDF should be, given the responsibility we
will assume for fortifying the United Nations' collective security

role.

U.N. Secretary- General Boutros-Ghali has urged an expansion

of the future role of the United Nations to include not only peace-
keeping activities after the outbreak of disputes but also peace-
building and the prevention of disputes. His concrete proposals
include 1 ) stationing of U.N. personnel prior to the occurrence of
disputes, 2) consideration of the establishment of a U.N. reserve
composed of personnel from member nations, based on Article 42
of the U.N. Charter, and 3) creation of emergency deployment
108 Blueprint for a New Japan
units that would intervene in disputes in "peace-maintenance"
activities such as the supervision of cease-fires. The emergency
deployment units would be authorized by the Security Council,
and would be under the command of the secretary-general. They
would be sent into regions in the event of cease-fire violations or
other breakdowns in the peaceful settlement of disputes.
The SDF must be restructured to meet these new needs. The
reorganization of existing SDF personnel alone, however, will not
be adequate for making the shift in strategy from "exclusive
defense" to "peace-building." In its new form, the SDF will take on
responsibilities previously not required of it and will therefore

require diversity in expertise, including non-military skills, to fulfill

its duties. Linguistic expertise, for example, will be necessary as

Japan participates in peace-keeping activities throughout the
world. We have ample experience in the building of roads, bridges,
and communications facilities, but the future SDF will require a

wide range of knowledge in fields like industry, distribution, and

other civilian needs. We will have to maintain a level of knowledge
and technological ability that fulfills the spirit of the expression
"a nation's military capability depends on its human resources."
For these and other reasons, we need to begin a comprehensive
review of the National Defense Program Outline, upon which our
policy of exclusive defense is based. The review must be under-
taken from the purely military viewpoint of uniformed SDF mem-
bers who are specialists in military affairs. They will have to give the

matter sufficient study to persuade the government to back their

plans. This would be true civilian control in action.
It has become customary over the years to define "civilian con-
trol" as Defense Agency bureaucratic control over uniformed per-
sonnel. SDF personnel themselves seem to have grown accustomed
to this definition. The distortion evolved perhaps because Diet
debates on defense have so long been removed from reality, treat-

ing the SDF as something of an outcast. Politicians bear the blame

for having invited the misinterpretation of so important a concept.
The purpose of government is to defend the lives and property
 B e c o m i n g a "Normal Nation" 109

of the people. The politicians chosen by the people bear the

responsibility for that defense. National security is thus one aspect
of politics, and politicians obviously bear responsibility for it. That
is what is meant by civilian control. We must therefore use this

change in national security strategy as an opportunity to achieve

civilian control in its truest sense.

Politics must accordingly take the lead in military issues. The

system must ensure that our foremost military specialists —our top
uniformed personnel —commit their full assistance and knowledge
to politicians, not just to agency bureaucrats. With this system
in place, the reorganized SDF will be able to contribute to the
building and maintenance of world peace in a meaningful way.

Peace Activities and the Japanese Constitution

It is my view that even under the current constitution, Japan is able

to offer the SDF to the United Nations as a reserve force for opera-
tions overseas. That is because all such activities would be based on
United Nations policy and take place under United Nations com-
mand. They would not constitute action taken "as a sovereign right
of the nation." Japan's constitution sets forth three main princi-
ples: the sovereignty of the people, respect for basic human rights,

and pacifism. The preamble further declares that in order to defend

world peace and "preserve our security and existence," Japan will

cooperate with the nations of the world, and that Japan desires to
"occupy an honored place" in international society through its

participation in international efforts.

Paragraph 1 of Article 9 states that Japan "aspir[es] sincerely to
an international peace based on justice and order." This means that
Japan must actively fulfill its responsibilities by cooperating with
other nations in the effort to defend justice, order, and peace in
international society. What specific means should be taken? The
United Nations, as the world's only global institution for peace, is

the only possible instrument for this purpose. If Japan offers the
SDF to the United Nations for participation in a U.N. reserve force
for peace-keeping activities, it will not only be acting within the
110 Blueprint for a New Japan
limits of the preamble and Article 9, it will be giving true life to the
ideals expressed therein.

Japanese participation in United Nations peace-keeping activi-

ties unmistakably differs in form and substance from the sovereign
acts that are forbidden under Article 9. Japanese~participation does
not involve the use of force overseas based on decisions by the
Japanese government and under government commands. This
strict distinction between action as a sovereign nation and action
under United Nations command is important.
The current constitution does not, however, give us clear guide-
lines governing Japan's response to international developments.
This is why we find ourselves forever mired in arguments about
constitutional interpretation. I have two proposals for resolving
this debate. The first is that we add a third clause to Article 9 of the
constitution.
Article 9 is currently written as follows:

1. Aspiring sincerely to an international peace based on

justice and order, the Japanese people forever renounce
war as a sovereign right of the nation and the threat or

use of force as a means of settling international disputes.

2. In order to accomplish the aim of the preceding

paragraph, land, sea, and air forces, as well as other
war potential, will never be maintained. The right of

belligerency of the state will not be recognized.

A third clause should be something like the following:

3. Paragraph 2 should not be interpreted as prohibiting
the maintenance of a Self-Defense Force for peace-build-
ing activities; the maintenance of a United Nations
reserve force for action under United Nations command
when requested; and action by the United Nations
reserve force under United Nations command.
 Becoming a "Normal Nation" 111

Clarification of the character and role of the SDF in this way

would help alleviate the worry of those who fear a gradual interpre-

tive erosion of the constitution.

Article 9 clearly prohibits the use of military force abroad by the
Japanese government based on its own decision. Those who worry
about a gradual erosion of constitutional prohibitions suspect that
the establishment of a force for deployment abroad in the name of
United Nations participation will one day pave the way for Japan's

use of the military under its own command. That would clearly

be a violation of the constitution. We need a third paragraph in

Article 9 to address such fears.

The constitution was not meant to be left untouched, sacred in

its original form, through the ages. It sets forth the fundamental
rules that enable us to live in happiness and prosperity. The cir-

cumstances surrounding Japan change, as do our own needs and

desires. It is natural and appropriate that the constitution, too,
should change with the times.
My other proposal is simply to leave the constitution as it is and
enact a law called the Fundamental Law for Peace and Security.

This law would stipulate that Japan, like all sovereign nations of the
world, has the right to self-defense; that it will maintain the mini-
mum military self-defense force necessary to this end; that it will

actively cooperate in peace-keeping activities as a member of the

United Nations; and that it will maintain a United Nations reserve
army for this purpose. The Fundamental Law should further
include among its aims disarmament and elimination of nuclear
weapons, as well as the principle of political control of military
force.

Again, cooperation in United Nations peace-keeping activities

is not only possible under the present constitution, it is necessary.
The constitution does not, however, make specific provisions for
such activities as PKO deployments because peace-keeping opera-
tions did not exist when it was promulgated. I am suggesting that
we fill those gaps with a Fundamental Law such as I have described.
By doing so we can correct the misconception that Japan is
112 Blueprint for a New Japan
emasculating constitutional prohibitions in order to become a mili-
tary superpower. We also have the opportunity to demonstrate the
potential for the pacifism of a new age.
People often speak of "wars of aggression" or "just wars." What
constitutes "aggression" or "justice"? As the expression "victor's

justice" suggests, these terms are extremely ambiguous, abstract,

and subjective. It is obviously a mistake to evaluate the actions that
people take during wartime in terms of these categories. We must
not, in other words, allow a war to be called "just," even if 99
percent of a given population believes it to be.
The only overseas uses of force that we can permit our nation
are peace-keeping activities that take place under the flag of the
United Nations, whose authority has the sanction of the majority
of the nations of the world. That is the principle set forth in the
Japanese constitution, and it is the principle on which the survival

of our nation depends.

CHAPTER TH

U.N.-Centrism

Founders of a New Age

No nation today can hope to defend the security and prosperity of
its people entirely on its own strength. No nation can hope to
remove itself entirely from the chaos of the outside world. Nor, as

the Gulf War revealed, can any one nation alone resolve the
turmoil afflicting international society. International security and
prosperity, then, are dependent on the cooperation of the world's
nations. No single nation can attain its own security and prosperity
without a stable and flourishing international environment.
The end of the Cold War has destabilized the world in many
ways. We face conditions of crisis. If we fail to overcome the crises
immediately before us, not only will we have to forego any "peace
dividend," but yesterday's burdens will seem manageable in
comparison to the challenges that lie ahead.
We must consider the central role the United Nations can play
in reinforcing world efforts to build a new order. The United
Nations during the Cold War served as a stage for the power strug-
gle between the United States and the Soviet Union. The veto
power wielded by one or the other of the superpowers crippled any
peace maintenance policy undertaken by the United Nations. The
United Nations thus never succeeded in overcoming the standoff
between the two great camps, East and West.
The situation changed abruptly with the collapse of the Soviet

113
114 Blueprint for a New Japan
Union. The end of the ideological battle that dominated the Cold
War era has woken the United Nations out of its long winter hiber-
nation. The veto power employed so readily by the two countries is

no longer used. Russia, which succeeded the USSR in the Security

is still in chaos at home. China, while still maintaining its
Council,
communist underpinnings, is generally choosing the path of coop-
eration with the West. We are no longer subject to the confronta-
tion of the two great ideologies. The United Nations therefore is

called upon to determine the security policies necessary for today's

world.
For the first time since the founding of the United Nations in
1945, it has become possible to lay the groundwork for a security

edifice in international politics. It is incumbent upon Japan, more

than any other nation, to pursue that possibility. That effort itself is

a necessary condition for Japan to live in the world of the future.

The international agreement for Cambodian peace is a good
illustration of the United Nations' new role. The agreement, signed
on October 23, 1991, by the eighteen nations of the U.N. Security
Council, including its five permanent members, and by Cambodi-
a's four disputing parties, was possible because of the aggressive
efforts of the United Nations and the countries of the Association
of Southeast Asian Nations (ASEAN).
The agreement stipulates that UNTAC (United Nations Transi-
tional Authority in Cambodia) directly oversee Cambodia's ad-
ministration in foreign affairs, defense, finance, internal security,
and information. This marks the first time the United Nations has
led or directed the internal administrative organs of an individual
country, even as part of a peace-keeping mission. This represents a
major turning point in the history of the United Nations.
A Japanese national was selected to lead UNTAC. His appoint-
ment is an example of the contributions Japan will henceforth be
able to make to United Nations activities, and thereby to interna-

tional society. It is also an indication of the direction Japan must

strive to go in the coming years.
Meanwhile, Japan passed the Peace-Keeping Operations
 Becoming a "Normal Nation" 115

Cooperation bill on June 15, 1992, and became able, for the first time,

to deploy SDF personnel for United Nations cooperation purposes.

If Japan sustains its principle of U.N.-centrism, continues its inter-

national contributions of personnel, and accumulates experience

in this area, I am confident that the day will come when Japan
earns the appreciation of the other nations of the world.
We must concentrate hereafter on strengthening the United
Nations. Two main strategies will help enhance its powers.
The first is United Nations reform. The United Nations was
organized by the victors of World War II to assist in the creation of

a postwar world order. It was naturally constructed in ways that

suited the interest of the victor nations, as is symbolized most
powerfully in their veto rights and permanent-seat status in the
Security Council. Ironically, it was these very privileges that para-

lyzed the United Nations. As the world's nations design a new

order for the future, they must review the composition of the cur-
rent United Nations. Japan should participate actively in this effort.
Second, America, as sole remaining superpower, must actively
use the U.N. stage. It must also act in accord with the United
Nations. This means that we have to be especially careful that the
United States not be driven into an isolationist stance. If America
tires of bearing its burden in international society, acts only with its

own interests in mind, and thereby weakens the United Nations,

Japan's present foreign policy will no longer be applicable and will

have to be revamped. Japan, second only to America in economic

power, is, of all nations, the one best equipped and most obligated
to cooperate with the United States.

America is currently taking a new look at the United Nations.

Ideally, America would work with the United Nations on all mat-
ters of international importance, and Japan would be able to main-
tain its two pillars of cooperation with America and U.N.-centrism
without risk of contradiction. U.S.-U.N. cooperation would also
be the ideal combination for world peace and prosperity.
If we succeed in reforming the United Nations and in encourag-
ing the United States to work actively with it, Japan will help build
116 Blueprint for a New Japan
the basis for the new world order. We would stand among the
founders of a new age.

U.N. Management of Nuclear Weapons

As we build a new order, we must also implement a concrete peace
policy. Japan is in a unique position to lead the world toward large-
scale nuclear disarmament: it is the only nation in the world to
have suffered an atomic bombing. Fortunately, our national policy
of promoting nuclear disarmament has a much higher chance of
success now that the Cold War has ended.
Policy making regarding nuclear weapons has two stages: reduc-
tion of their numbers, and United Nations control of nuclear
stockpiles.

Today, America and the former Soviet republics (especially

Russia) hold roughly ten thousand strategic nuclear warheads each.
Even if the January 1993 START II treaty's reduction of nuclear
weapons is fully implemented, some three thousand to thirty-five

hundred warheads will remain in the United States and Russia at

the beginning of the twenty-first century, enough to annihilate the

people of both nations many times over. Each superpower will

continue to hold excess nuclear weapons, despite their reductions.
The stockpiles are so large because American and Soviet strate-

gies have called for the capability to destroy each other's missile
silos and command centers. These targets are tiny: an ICBM silo is

only a few meters in diameter. To increase the odds of hitting so

small a target, each side must drop a large number of warheads.
The typical example of this strategy is the Russian SSI 8 ICBM, with
its ten warheads per missile. America has repeatedly called for the

destruction of the SSI 8.

The quantity of nuclear warheads held by each nation is a func-
tion of nuclear strategy. IfAmerica and Russia returned to the
1950s strategy of attacking each other's cities, the number of
nuclear warheads of both could be reduced to fewer than one thou-
sand. Given the progress made by the two nations in achieving
amicable relations, a strategy that holds cities hostage may seem
 Becoming a "Normal Nation" 117

anachronistic. It may be unavoidable, however, as a transitional

stage in which nuclear-weapon stockpiles could be reduced before
they are ultimately eliminated altogether.
Even if the world declared an end to nuclear weapons, the costs
of their destruction would be enormous. The livelihood of the
people working on them would have to be considered, as would
the conversion of related industries to peacetime industries. The
destruction of nuclear weapons will not be a quick and easy
process. Japan can offer assistance and cooperation to encourage
large-scale nuclear disarmament, and should be aggressive in
doing so.

The second stage in nuclear disarmament is to put nuclear arms

under U.N. control. This idea is not as unrealistic as it may appear:
the heavy burden of maintaining these expensive weapons could
certainly outweigh the benefit of having them. If nuclear disarma-
ment between America and Russia makes significant progress and
they return to the strategy of holding each other's cities hostage,
it will be obvious that their approach is completely out of sync
with actual relations between the two countries. There would be
almost no remaining value in keeping nuclear weapons. The United
Nations would at last have an opportunity to gain control of
nuclear weapons.
"Control" or "management" does not imply that the United
Nations would collect all nuclear weapons in some special place

under one key. The weapons themselves would remain where they
are, but all their command and control facilities would be removed
from sovereign national governments and defense establishments
and put under U.N. control. Some number of troops from nations
with nuclear capability would likewise be shifted from their
national militaries to forces under U.N. command and be sup-
ported financially and technically by the United Nations.
This would enable the United Nations to extend the nuclear
umbrella over all its member nations and, at the same time, to
check any single nation's effort to develop nuclear weapons
covertly. U.N. control is the best system for the prevention of
118 Blueprint for a New Japan
nuclear proliferation. Today's system — the de facto recognition
that certain nations but not others "legitimately" hold nuclear
weapons — is patently unjust. There is ample reason to fear that this
system actually invites an increase in the number of nuclear
nations.
Another policy vital to maintaining peace is the imposition of
restrictions on the arms business. In 1992 the United Nations orga-
nized a registration system for the export and import of conven-
tional weapons, but it has not yet functioned effectively.
Japan needs to take the lead in making the international arms
trade more transparent. We should issue warnings on arms trans-
actions —which are notoriously opaque and hard to track — that
are likely to fuel international disputes. We should also join other
nations in increasing the pressure on nations that export or import
arms. Before Iraq suddenly invaded Kuwait, it was importing arms
of a quality and volume well beyond the requirements of its own
self-defense. This is not an argument for prohibiting all trade in
arms: developing nations without a domestic arms industry will
likely require some degree of arms imports for their internal and
border security.
International pressure is sometimes required against arms-
exporting nations as well. When nations sell arms in a way that

suddenly and significantly alters the military balance in a given

region, or when the export of massive amounts of arms to powers
that oppose another government takes place, prohibitive measures
may be necessary. International pressure may take the form of lim-
iting Official Development Assistance (ODA) or restricting trade.
Fortunately, Japan's hands are not sullied by the arms business.

Japan is thus especially suited to spearheading such restrictive

measures.
In May 1991 the five permanent members of the Security Coun-
cil developed guidelines for the export of weapons of mass destruc-
tion and related technologies. There has been no agreement on
implementation of the plan as yet. Japan should therefore work
actively with other nations to establish a system whereby nations
 Becoming a "Normal Nation" 119

will report such sales to the United Nations. It must also help

establish an international supervisory system to govern the sale of

high technology by nations such as Japan and Germany.
We must, in other words, promote policies that will make it dif-

ficult to embark on regional disputes and wars, that will prevent

specific disputes where possible, and that will resolve them where
they have arisen. The PKO Cooperation Law that passed Japan's
Lower House in June 1992 opened the way for Japan to actively
fulfill its role in building peace.

Establishing a U.N. Reserve Army

The PKO Cooperation Law was the first step toward Japan's partici-
pation in U.N. peace-keeping activities. The next step should be the

creation of a standing U.N. reserve army.

There is only one reason for Japan to participate in military
activities overseas: to cooperate in U.N. peace- maintenance activi-
ties. As long as Japan acts within those limits, it will not violate
Article 9 of the constitution. To the contrary, active Japanese par-
ticipation in U.N. activities will fulfill the spirit of the constitution.
As I have already explained, the SDF's operations as a U.N. reserve
army for deployment in response to U.N. requests and under U.N.
command would in no way violate the Japanese constitution: the

SDF would not be commanded by Japan but by the United

Nations.
History remains an obstacle. The Japanese people continue to
have an aversion to SDF participation in overseas military activi-
ties. We cannot disregard this "allergy," regardless of whether such
action violates the constitution. Asian nations, too, still have an
emotional resistance to the idea of Japanese participation in U.N.
military activities, even if the intensity of the feeling has subsided
considerably in many countries.
We risk, in other words, inviting doubts and misunderstandings
both at home and abroad. If we arouse these concerns it will mean
that our efforts have only had adverse effects, the opposite of their
intended results. It will also mean that the contributions of our
120 Blueprint for a New Japan
young people, whose sense of mission inspired them to serve in
international society, were in vain. We must make no such errors
in our planning of overseas cooperation missions. We need to
show beyond the shadow of. a doubt, not with words but with
actions, that Japan is acting only out of a wish for world peace. For
these reasons it would probably be best —and most realistic for the
foreseeable future — to organize a U.N. reserve army separate from
the SDF.
We must not deploy troops, as we are doing today, on any basis
other than internationally recognized principles. The current PKO
law, for example, seeks to assure that the SDF will not be drawn
into military confrontations by stipulating that if the cease-fire
agreement breaks down, Japanese units will be able unilaterally to
suspend their activities and withdraw from the site. The law clearly

seeks special treatment for Japan. U.N. regulations stipulate that

the right of command over the troops deployed under UNTAC
belongs to the U.N. secretary- general. But in the text of the PKO
law, the English word "command" is translated into two parts:

the secretary- general has the right only to give orders, while the
Japanese government retains the right of "command." The prime
minister used this distinction in explaining the government's
interpretation of the law to the Diet. Thus if the Japanese govern-
ment judges that Japanese troops are about to get drawn into com-
bat, it can withdraw the troops on its own authority, without the
approval of the secretary- general.
This interpretation not only complicates the situation but
brings up other serious problems as well. First, troops in the field
face greater difficulty because of the confusion in the chain of
command. Second, this interpretation is almost certain to violate
Article 9. To claim, as the Miyazawa government does, that the

Japanese government has the right of command over the troops it

has deployed overseas is to say that the government of Japan has

responsibility for the actions of its troops overseas. This is the same
as saying that Japan deployed its troops abroad as a right of a sover-
eign nation. It is precisely the sovereign use of force by Japan that
 B e c o m i n g a "Normal Nation" 121

Article 9 prohibits. If the troops we deploy get enveloped in fight-

ing, they will find themselves taking the kind of action that is

explicitly prohibited by the constitution. The way we deploy troops

today leaves potential for constitutional violations.
This would not be the case if the troops came entirely under the
command of the United Nations. They must not be the responsi-
bility of the Japanese government. In this way, even if Japanese
troops do get caught in fighting, they will respond not at the direc-
tion of the government of Japan but clearly as participants in the

peace-keeping functions of the United Nations.

It is time that Japan recognizes that it is an important partici-

pant in this new age in international society. We have to face the

demands of the new age head on and plan the best course of action.
We must not assume that we can evade the responsibility for any
mistakes we make, or that we can disguise them in any way.
Maintenance of a U.N. reserve force distinct from the SDF does
have budgetary and management disadvantages. However, we
should regard these burdens as the cost of publicizing to the entire
world that Japan engages in military acts overseas only in coopera-
tion with U.N. peace-keeping activities.
 CHAPTER FOUF
Steering the World Away
from the Trap of Protectionism

Aggressively Opening Our Own Markets

The postwar Pax Americana global free trade system is today seri-

ously at risk. "Managed trade" is increasingly common, although it

continues to be labeled "free trade" in its many guises. "Voluntary"
export restraints in textiles, steel, and automobiles, for example,
may violate GATT principles. Ironically, the end of the Cold War
has aggravated this risk, as nations focus increasingly on their eco-

nomic Had the Cold War continued, the Uruguay Round

interests.

would probably have come to a successful conclusion much

sooner, as the common fear of the Soviet Union helped bind the
Western bloc.

We must realize that it is Japan that will be most blamed for

destroying the free trade system. Americans seem more and more
inclined to believe that, although they emerged as "victors" of the
Cold War, they face a new threat from Japan. Even U.S. govern-
ment publications like Defense Report and National Security
Strategy list Japan as the most significant non-military threat to
American national interests.

It is already being said that the major failure of the GATT was
its inability to open Japan's markets. According to the OECD,
Japan's 1992 current account surplus stood at $120 billion, while
the deficits of America and Germany were $56 billion and $26 bil-

lion, respectively. Excluding France (which showed a surplus of $1

122
 B e c o m i n g a "Normal Nation" 123

billion), the total deficit of the other five members of the G-7 came
to $150 billion, leaving the impression that Japan is "the only
victor" in world trade.
This image, along with Japan's burgeoning surplus, shows no
signs of changing anytime soon. This is why others claim that

\( Japan is a free rider in the GATT, making little or no effort to dis-

mantle its non-tariff and other invisible barriers to trade. Although
Japan has reduced its import tariffs and quotas, its proportion of
imports of manufactured goods remains unimproved.
How will it be in the future? The "Super 301" clause of the 1988
Omnibus Trade Act suggested that America's attacks on Japan will
become more pronounced. Super 301 was a unilateral, confronta-
tional measure stipulating that if America determined that Japan
unfairly discriminated against certain imports, America would
push open those markets. The law also stated that the
it to
American government, acting unilaterally, would take retaliatory
measures if Japan failed to respond.
A look back at our experience thus far shows that Japan
changed a number of its policies as a result of negotiations with

America. Voluntary export restraints are one example. Through

the Japan-U.S. Yen-Dollar Committee, America pushed Japan to
open and liberalize its financial markets; foreign banks were thus
enabled to enter Japan's trust business. Japanese policies in many
sectors, including telecommunications, airlines, transport, and
health, were altered as a result of the Market-Oriented, Sector-
Specific (MOSS) talks held from 1985 on. During the Structural
Impediments Initiative (SII) talks, America pointed out the closed
nature of the Japanese distribution system, and the result was an
amendment of the Large-Scale Retail Law. Many of America's
demands for market opening were advantageous for Japanese con-
sumer interests. With the help of American pressure, Japan was
willing to reform its domestic systems.
Deregulation of this kind, based as it is on trade friction, is

dangerous. America has gained the impression that Japan makes

concessions only if enormous pressure is applied. Japan is also
124 Blueprint for a New Japan
frustrated at the thought that increased gaiaisu (external pressure)
will result in only more concessions. This has spurred an emotional
confrontation that threatens to aggravate U.S.-Japan trade friction.
Japan needs a new economic diplomacy. It has to take the initia-

tive in opening its domestic market and fully realize the principle

of non-discrimination at home and abroad.

It is not only foreign producers and representatives of other
governments who claim that Japanese markets are closed. The
Japanese consumer, too, faces interests that became entrenched
during our rapid-growth era and that are often opposed to con-
sumer welfare. As part of economic reform toward opening our
markets, we must undertake a thoroughgoing review of every sec-
tor from the perspective of the consumer. However, where we can
prove that American demands of Japan are not rational, we should
immediately appeal to the GATT. By limiting our appeal to the
product in question, Japan can clearly communicate its intentions
to America and the world. An international approach to trade dis-
putes benefits not only long-term cooperative relations between
the two nations but the wider world order itself.

Transparency and openness are also being demanded of Japan's

keiretsu, or corporate groupings. Keiretsu have many strengths,

including the long-term relations of trust they encourage among

related companies. The keiretsu s role in improving quality and
developing new products has been widely praised even in America
and Europe. But the keiretsu system requires modification if com-
panies are to end their discriminatory practices. It might be possi-
ble, for example, to replace the principle of non- admission of new
participants in keiretsu with a provisional "10 percent system" that
would recognize the unconditional new entry of foreign firms into

10 percent of keiretsu transactions annually.

Along with managed trade, regional trade systems pose a threat
to free trade today. The market integration of the European
Community in the mid-1980s marked the beginning of the spread
of regional trade systems. The European economic sphere is
already expanding: Hungary, Poland, and the Czech Republic are
 B e c o m i n g a "Normal Nation" 125

attempting to conclude "association agreements" with the EC.

America, Canada, and Mexico have meanwhile officially concluded
the North American Free Trade Agreement (NAFTA). Brazil,

Argentina, Uruguay, and Paraguay have agreed to create a South

American Common Market (MERCOSUR).
Regionalism in this form is not equivalent to the pre-World
War II economic blocs, but it is reminiscent because it is a means
of deepening the interdependence among economies within a
region and achieving economies of scale. The common threat
binding the West during the Cold War no longer exists, and
nations are beginning to act in terms of their own national
interests.

Creating a "World Trade Organization"

Just after World War II, America called for the creation of an
"International Trade Organization" (ITO) in the United Nations
and gathered the signatures of fifty- three member nations in sup-
port of the proposal. The idea arose because of the recognition that
protectionism and bloc economies had been a major cause of the
war. The ITO was essentially a trade version of the role played by
the International Monetary Fund (IMF) in international currency

stabilization.

Unlike the IMF, the ITO never came into being. The American
Congress rejected it because it would hinder industrial protection.
Thus the GATT —which was originally intended to be a subsidiary
organization under the ITO —has endured almost half a century
without adequate supervisory power to enforce international trad-
ing rules. Free trade nevertheless survived, albeit with some distor-
tions, in large part because of the memory of the war and because
of the Cold War that demanded strong allegiance among Western
allies.

Today, however, the relative decline in America's economic sta-

tus, Europe's failure to make structural adjustments to global eco-
nomic change, and extreme trade imbalances have given rise to

unilateral restrictive trade measures, bilateralism, and regionalism.

126 Blueprint for a New Japan
It is conceivable that the GATT will increasingly be circumvented
or shorn of its limited powers. The greatest threat is the tendency
of various countries to determine for themselves the fairness or
propriety of the trade practices of other nations. America and the
EC unilaterally impose sanctions based on their own standards.
It has accordingly become difficult to predict the future of
trade rules, and that uncertainty threatens the world's economic
dynamism. If nations continue to evaluate market structures with-
out international standards, they will increasingly fall back on mea-
surable import and export "results" as the basis for evaluation.
They will rely, that is, on managed trade and protectionism, which
will in turn exacerbate the economic confrontations among the
major economies of the world.
Today's global economy needs exactly the kind of international
trade organization that America proposed nearly fifty years ago.
For purposes of this discussion I'll call this organization the World
Trade Organization (WTO). Japan, as the greatest beneficiary of
the GATT, should work hard to promote the establishment of the
WTO and cast off epithet of "GATT free rider."
its

The WTO should have at least three characteristics. First, it

should expand the rules governing international trade sectors not

currently regulated under the GATT. This would, for example,
entail strengthening the Multilateral Trade Organization (MTO),
currently under discussion in the Uruguay Round, which seeks to
establish international definitions of dumping, standards for mea-
suring local content, and rules governing intellectual property. Sec-
ond, the WTO must be organized in such a way that the structural
characteristics of various economies that give rise to international

trade friction are eventually abolished. Measures that are unwit-

tingly discriminatory remain in all nations, the legacies of their
various histories and traditions. Non-transparent systems, such as
Japan's dango (collusive practices), must be reformed. The WTO
would also make the necessary adjustments among such structures

and build frameworks to guarantee free competition.

Third, the WTO has to take North-South issues into account.

 B e c o m i n g a "Normal Nation" 127

Developed countries have long made the claim that "trade is better

than aid," but developing countries continue to struggle with

poverty and stagnation. If they are to embrace international trade
rules as developed nations do, they must be enabled to develop
import-substitution industries and to export their products. Japan
and other successful nations in Asia provide many examples of the
importance of this process.
Japan has enjoyed the many benefits of free world trade; it must
now take the initiative and actively promote the creation of a world
trade organization. Japan will only be in a weaker position if we
wait until the world has committed itself to regionalism. It will be
too late.

These are not simple issues. They are enmeshed with domestic
interests regarding industrial protection and are therefore politi-

cally difficult. But that is precisely the value of creating a world

trade organization with high ideals. As the world's greatest benefi-

ciary of free trade, Japan has a duty to take this stand on behalf of
free trade.

Today's market economies can be divided into two types: the

free market economies characteristic of Europe and America, and
the development-oriented market economies typical in Asia. The
latter boast the highest growth rates. Japan stands somewhere in
between. It began as a developmental market economy, but now
increasingly resembles the American-European type. Japan is in a

unique position to close the gap between the two.

Japan must begin to fulfill that role by opening its domestic
market to the outside world and significantly reducing government
interference in business. By working toward a classically liberal
market economy, we can slow the move by Europe and America
toward regionalism and prevent Asia from moving in the same
direction. Japan would gain a greater voice in world trade as a
result and be in a stronger position to promote the creation of a
WTO. Japan's response to trade friction has hitherto been passive.
We need to become aware that we can and should play a more
active role.
 CHAPTER FIVE
An Asia-Pacific
Ministerial Conference

An Accurate Recognition of History

Japan is also expected to play a political role in the creation of
a stable order in East Asia. As Chinese Communist Party Secretary
Jiang Zemin stated on a recent visit to Japan: "The nations of Asia
and the world would welcome political, technological, and cultural

as well as economic contributions to regional development and

world peace by Japan, in its capacity as Asia's most advanced
nation."
However, our Asian neighbors continue to feel distrust and
alarm about Japan, as a result of World War II. We need to develop
the trust of our neighbors if we are to place greater emphasis on
our political ties in the region. "History" is not an issue we can
avoid.
How are we to approach the history issue? We must reflect

soberly on our history, examine it in good faith, and apply its les-

son to our principles and behavior, our present actions, and our
future plans. We cannot deny the part aggression has played in our
history in Asia. The issue we have never discussed the
is not that
question of our wartime responsibility, but that we did so only at
home: we did not face the Asia-Pacific nations we had invaded.
We have to admit that our government has not made much effort
to settle the past. Nor was public feeling sufficiently harsh to pre-
vent the reemergence of politicians associated with Japan's past

128
 B e c o m i n g a "Normal Nation" 129

aggression. We must be strict with ourselves as we look back on

our history, even if we start doing so only today.
We should also be aware that "aggressor" is not the only histori-
cal role Japan has played in the region. We also have a history of

solidarity with the region, as was evident in Fukuzawa Yukichi's

support for reform in Korea, and the support of Inukai Bokudo
(Tsuyoshi) and Miyazaki Toten for Sun Yat-sen's revolutionary
movement in China and for Emilio Aguinaldo's campaign for the

independence of the Philippines. We must learn about both aspects

of our history as we reconsider the nature of our regional diplo-
macy in order to dissolve the distrust and alarm felt toward Japan
in Asia.

Our first step should be to find ways to settle the issues re-

maining from our past aggression. Second, our diplomacy should

strive to achieve the ideals of mutual help that we embraced at one
time in our prewar history and again in our postwar economic
relations with the region. Finally, we must seek to define Japan's
role and responsibility for building a stable regional order through
discussions with the various nations of the region. It is precisely
this kind of affirmative effort that will earn Japan the trust of the
region.
As we seek to fulfill our international responsibilities, the
importance of partnerships should be foremost in our minds.
Nothing can be realized by our acting entirely on our own. As I

have repeatedly stressed, Japan's major diplomatic partner is

America, in the Asia- Pacific region as elsewhere in the world. We

must also form close cooperative partnerships with the nations of
ASEAN and Oceania.
China, the Korean peninsula, and the other nations of East Asia
are all important for Japan's stability and prosperity. China, how-
ever, retains a different political ideology and, despite one of the
highest growth rates in the world, remains a developing nation
economically. North Korea is even more unfamiliar, and the
Korean peninsula as a whole is likely to be unstable for some time
to come as it makes the transition from division to integration.
130 Blueprint for a New Japan
"Flying-Geese Formation" Development

The end of the Cold War is bringing the era of ideological con-
frontation to a close. In the present international power structure,
military —including nuclear—might is no longer decisive. Nonethe-
less, new types of security problems are arising.
The dissolution of the Soviet Union will not necessarily bring
peace and disarmament to the Asia-Pacific region. Security here
has hitherto been maintained by the American military stationed
in the region to resist the Soviet threat. It now seems likely that

America will significantly reduce its forces in the region, and

many countries fear that such a withdrawal will result in a power
vacuum.
The fear is justified. India is expanding its navy, North Korea
and China are building up their military stockpiles, and some
Southeast Asian countries too are strengthening and expanding
their military capabilities.

Ethnicity, religion, and territorial disputes also threaten

regional security. These issues were largely suppressed during the
Cold War, but may pose a serious threat to regional stability in the

years to come. Cold War-era problems such as those between

China and Taiwan and between North and South Korea, and the
instability of Cambodia are to some extent Asia-specific problems.
Ethnic problems are a source of chaos in China, Central Asia,
Far-Eastern Russia, Indonesia, Myanmar, and other places. Terri-

torial disputes remain between Japan and Russia over the Kurile
Island chain, and between China, Vietnam, and ASEAN countries
over the Spratly Islands. The rise of fundamentalist Islam in
Malaysia and Indonesia is a source of concern. The confrontational
relationship between India and Pakistan is largely due to ethnic

and religious clashes. Domestic confusion in China and North

Korea is new source of unease.
sure to be a
It become commonplace to hear that the world is shifting its
has
focus from military to economic might. The striking economic
development of the Asian Newly Industrializing Economies (NIES)
 B k c: o m i n g a "Normal Nation" 131

and ASEAN has led a number of commentators to predict the

coming "Asia-Pacific century." Assuming that current projections

do not change, 6 percent growth is expected in the 1990s in this

region, which does not include China, North Korea, Myanmar,
and other politically unstable regions. It is said that the economy
thirty years hence will be seven or eight times today's size.

The engine driving this development is Japan. Along with

America, it supplies the capital and technology that enabled the

Asian NIEs and now ASEAN to develop as Japan has, in a process

that has been called development in "flying-geese formation."

Today, the socialist nations of China, North Korea, and Vietnam
are seeking to join the flock. The threats to peace and prosperity in

the Asia-Pacific region will be significantly reduced if they do, and

Japan must redouble its efforts to maintain and spread this devel-

opment. Of special importance will be cooperative relations with

ASEAN, the center of development today. Improved relations with

Oceania, the most advanced area in the wider region, will also be
crucial.

At the same time we must be wary of ideas, such as the East

Asian Economic Caucus (EAEC), that encourage a drift toward
bloc economies. "Flying-geese formation" development has been
possible because the South China economic area and the Malaysia-
Singapore-Indonesia triangle set their sights beyond national
boundaries and on the global market. The EAEC and other bloc
ideas will only obstruct development.

International relations within the Asia-Pacific region are more

complex than in Europe because the communist element combines
with the priority of economic development in China, Vietnam, and
North Korea. It is a source of considerable instability.
The demand for political democratization is growing in China,
following a decade of reforms. The movement was crushed in the
Tiananmen Square incident of June 1989, but it is likely to boil

over again if current reform policies continue. But if the democra-

tization movement develops sufficiently to generate domestic
chaos — or even disintegration —China's internal confusion will
132 Blueprint for a New Japan
threaten the stability and prosperity of the entire Asia-Pacific
region.
North Korea appears stable with its Kim II Sung personality
cult. But it has intensified regional instability by withdrawing from
the Nuclear Non- Proliferation Treaty (NPT) and further isolating
itself from the world. Vietnamese policies of doi moi (economic
reform) have steadily gained ground since their inception in 1986.
But it is questionable whether the socialist, one-party dictatorship
will be able to confine development to the economy when it is

closely cooperating with such liberal nations as ASEAN, the NIEs,

Japan, and the United States. Democratic movements are likely

soon to emerge in the political sphere as well.

Five Guidelines for Japanese Foreign Policy

Given the above conditions, I believe the following five guidelines

will best direct our Asia- Pacific diplomacy.

The national interest. Japan must recognize that the fundamental

aim of Japanese foreign policy is to maintain our security and pros-
perity and our role as a major member of the community of
advanced democratic nations. Democracy, human rights, and mar-
ket economics are the principal values Japan shares with other
democratic nations. It is by the pursuit of these principles that we
ensure our country's stability and prosperity.

Global participation. As one of the world's advanced democratic

nations, Japan has a responsibility to cooperate with the U.S. and
Europe in building a new and stable order to replace the Cold War
structure. Japan has already been asked to cooperate in this effort.

Both the Japanese government and the citizens of Japan need to

become aware of the nation not only as an economic power but as
a political power as well. Political power does not mean imposing
our will upon others. To the contrary, it requires that we seriously
consider the individual characteristics and special needs of other
countries when formulating policy.
 B e c o m i n g a "Normal Nation" 133

Diplomatic objectives. The stronger Japan becomes, the more neces-

sary it is to have a clear, unambiguous foreign policy. The world

will be rightly wary of an increasingly powerful Japan that does not

spell out its policy aims. Those aims should include the realization

of the values we share with other advanced democratic nations,

such as the belief in the need for political democratization and free-

market economies, and a desire to contribute to the resolution of

global problems like AIDS, environmental pollution, and drug
abuse. After our diplomatic aims are established, we must demon-
strate to ourselves and to the world that we are developing strate-

gies designed to achieve them.

A strengthened U.S -Japan alliance. We must reaffirm that the

U.S.-Japan alliance will remain the cornerstone of our foreign pol-

icy, and help the relationship adapt to changes in the international
environment. Up until now, Japan has enjoyed the benefits of secu-
rity and prosperity under the U.S.-Japan security alliance. This sys-

tem will continue not only to guarantee Japan's own security and
prosperity, but also to prevent disputes in the Asia-Pacific region.

The importance of the Asia-Pacific. Japan must continue to give pri-

ority to its Asia-Pacific diplomacy. The twin pillars of Japanese

diplomacy have been our membership of the Asia-Pacific commu-
nity and of the community of the advanced democratic nations of
the West. The end of the Cold War, however, has stripped the latter
approach of its significance, while the remarkable rise of the Asian
economies suggests that Japan's ties to the Asia-Pacific region can
only strengthen. The political democratization currently taking
place will further solidify the relationship. It is natural that Japan
maintain policy coordination relationships in the U.S.-Japan
alliance and the G-7. Now it must construct special relationships of
policy coordination with the nations of the Asia- Pacific region.
Japan must do everything possible to foster China's stability and
development. At the same time, we need to be prepared to respond
to domestic confusion inside China. The Chinese economy has
134 Blueprint for a New Japan
shifted quickly toward an open system and has already been incor-
porated in the international economic network. China's depen-
dence on the outside world is greater than Japan's, and the Chinese
economy cannot return to isolation. However, even as we continue
to offer our cooperation, we must take into account the harsh
international reaction to the Chinese government's stance on
democratization. This issue will require serious and continuing
scrutiny. we continue to be sensitive to China's position on
Even as

Taiwan, we may at some point have to establish some kind of

official relationship with Taiwan as well.
Japan has an important role to play in resolving disputes in the
Asia- Pacific region. We have already taken the initiative to help
resolve the Cambodian dispute. We must also, in cooperation with
the nations of ASEAN and Oceania, take steps toward active assis-
tance in the postwar reconstruction of Vietnam and Indochina.
On the Korean peninsula, we must maintain our close relations
with South Korea. We must also advance normalization of rela-

tions with North Korea and help create an environment that will

encourage the peaceful reunification of the two Koreas.

If Japan is to represent the interests of the Asia-Pacific region in
the international arena and act as mediator in disputes, it must first

earn the trust of the people of the region. Our government's han-
dling of World War II issues has been a hindrance. We must not
only apologize in words but take action that will demonstrate our
sincerity. There are any number of issues we should settle, though
postwar reparations issues have already been resolved in interna-
tional agreements. The government must take carefully considered
measures to respond to those who were victims of the war and
those who were left out of the prosperity that Japan enjoyed
thereafter. The government will be responsible for these sorts of
responses, but Japanese citizens, too, should undertake similar
efforts in the private sector.

Resolution of the problems of the past is not enough to build

confidence between nations. We need to develop bold policies

intended to build trustful relations over the long term. Increasing

 Becoming a "Normal Nation" 135

the number of Asian students in Japan and our support for them
would be one example. We should also continue to offer the
nations of this region well-planned economic cooperation
designed to meet their needs. Japan's economic influence here is

overwhelming.
The nature of our cooperation in the years to come should
emphasize the following three areas. First, we must increase the
scope of our economic cooperation. Second, we must base our
national and sectoral allotments on fundamental polices, and
clarify what those issues are. For example, I believe we should begin
to emphasize aid to such areas as Mongolia and Central Asia,
which are moving toward democratization and market economies.
We should also pay more attention to Vietnam. Third, Japanese
cooperation should have a "Japanese flavor" distinct from Ameri-
can or European cooperation and should be based on our own
recent experiences as a developing nation. The education and
development of Official Development Assistance professionals
should reflect this.

The Dawn of Multilateral Diplomacy

The post-Cold War security environment in Asia is fragile.

We need to develop a new security framework that can respond to

the power vacuum that would be left by an American withdrawal.
To build mutual trust we need a fixed place where the many
nations of this complex region —including Japan and the United
States —can discuss security issues. A good starting point would be
a permanent Asia-Pacific Ministerial Conference.
In July 1991 Foreign Minister Taro Nakayama proposed that
the Expanded ASEAN Foreign Ministers Meeting be the site for

political discussions. His idea was that the Expanded ASEAN,

including Japan and America, should become the basis for a regu-
lar Asia-Pacific Summit that would eventually embrace China,
the Korean peninsula, Russia, and Central and South American
nations. The organization could be called the Asia-Pacific Ministe-
rial Conference.
136 Blueprint for a New Japan
The conference should discuss a number of regional issues. The
list might include the prevention of regional disputes, mediation
between disputing nations, peace-keeping operations following the
resolution of disputes, military facilities, democratic development,
and human rights in member nations. The conference could also
serve as mediator between the United Nations and various bilateral

relationships. Japan can expect the most cooperation from Amer-

ica at such a conference, followed by ASEAN and Oceania.
Japan is in a position to take a leadership role in such an
arrangement. Our experience of atomic warfare puts us in a unique
position to take the initiative in nuclear disarmament and in the
creation of registration systems for the export of arms. Japan is an
example of a nation that has developed economically without a
major military force. We can work well with the nations of ASEAN
and Oceania. These countries understand Japan's potential respon-
sibility and role in the region; they did not oppose the Japanese
deployment of mine sweepers to the Middle East or of PKO
personnel elsewhere.
Malaysian Prime Minister Mohamad Mahathir remarked that
"our old fear of Japan [becoming militarist again] has been
reduced a great deal." Philippine President Fidel Ramos said that
"Japan's personnel contribution to Cambodia is important, and we
support it," and Indonesian President Sueharto has maintained
that "it is natural that Japan would make efforts for peace." Newly
elected Prime Minister Goh Chok Tong of Singapore also stated

that he "represents a new generation and is too young to recall the

Second World War." Such statements by ASEAN leaders have con-
siderably deflated Chinese and Korean criticism that Japan's per-

sonnel contributions are signs of a renewed militarism. As a result,

both China and Korea have begun to exhibit an "understanding"

of Japanese personnel contributions that include the SDF.
Japanese diplomacy has hitherto been based on the U.S.-Japan
alliance. In the Asia-Pacific region, too, bilateral relationships have
been dominant. We have virtually no experience in multilateral
diplomacy; it is the area in which we are least equipped. It is by
 B e c o m i n g a "Normal Nation" 137

embarking on multilateral diplomacy, however, that we can best

fulfill our responsibilities in the regionand grow into a fully func-
tioning member of the international community in name and in
substance.
 CHAPTER SIX

Constructive Uses of
Foreign Aid

An Aid Superpower
I argued in Book I that if Japan remains a dinosaur with only a
small brain, it will be unable to adapt to the dramatic changes of
our times. We cannot remain a "faceless" nation "without clear
policies or goals." Yet we have not undertaken a serious discussion,
at the political level, of the kind of countrywe want to be, or of
how we want to be seen in the world. This lack of clarity is the
biggest problem in our Official Development Assistance.
In 1991 Japanese ODA totaled more than $10 billion, making
Japan the world's biggest donor. Japan's 0.32 percent proportion of
aid to GNP was higher than that of both the United States and
Britain, though still lower than the 0.7 percent goal of the United
Nations and slightly less than the 0.35 percent average of the
twenty member-nations of the Development Assistance Commit-
tee (DAC), a subsidiary organization of the OECD. It is almost
three times larger than it was ten years ago, and is growing at a rate

far beyond the average of DAC member nations. Again, whereas in

the 1970s only six developing countries listed Japan as their biggest
aid donor, by 1989, that figure had risen to thirty. Fifteen of these

countries were in Asia, and in fourteen of them, Japan provided

over half their total aid.
Japan intends to increase its ODA and to play a responsible role
as an economic power. However, if we do so only defensively to

138
 B e c: o m i n g a "Normal Nation" 139

avoid the criticism that we have pursued trade surpluses at the

expense of others, our ODA will be stripped of all its positive

significance. ODA is a valuable tool in peace-building efforts. We

must treat it as such. ODA can assist in building not only industrial
but social and cultural infrastructures. We can help nations to

enlarge their educational and medical systems and to preserve their

cultural inheritance. The assistance that enhances stability and eco-

nomic development in developing nations will contribute to inter-
national peace and thereby to Japan's peace and prosperity. Our
contributions will build trust for Japan in developing nations and a
deeper understanding of our character as a nation. Instead of being
"faceless," Japan will be understood to be contributing to world
peace.
Our efforts will not gain recognition, however, if we simply
pour in more money without clarifying our principles and intents.

We must, at the political level, design an overarching vision for

ODA, and we must make sure it is clear to all. Japan's ODA is

based on the aid philosophy that says "help developing nations

help themselves"; we select our aid programs based on requests
from recipient nations. It is therefore all the more important that
we not open ourselves to the criticism that our aid serves the busi-
ness interests of Japanese companies.
Our decision-making process in ODA has been criticized. For-
mally, the cabinet makes the decisions, which are followed by
exchanges of notes with the recipient nations and then by several
stages of surveys. In reality, however, the finance, foreign affairs,

and international trade and industry ministries and the Economic

Planning Agency have already selected their aid projects. This is

one reason for the criticism that our decision-making process is

not sufficiently transparent. There is no room in such a process for

a larger ODA strategy. The process should not be criticized merely
because bureaucrats take the lead in it, but it does require a
thorough review.
We should meanwhile be aware that some of the criticism of
our ODA is misdirected. The Japanese government's lack of public
140 Blueprint for a New Japan
relations on ODA is at least partly responsible for the misconcep-
tions. Reports on a small number of failures are heavily empha-
sized in the press and contribute to a mistaken impression of ODA
as a whole.

We also suffer a chronic scarcity of experienced people in every-

thing from policy planning on aid to its implementation and sub-
sequent evaluation. We need to develop people with expertise in
these areas.
The Foreign Ministry's Report Evaluating Economic Cooperation
also refers to frank criticisms of Japanese ODA by third parties:

"There is no ex post facto examination of specific aid cases," and

"ODA efforts are vast and sweeping. They lack careful, detailed

consideration." Numbers alone will not earn Japan the apprecia-

tion it deserves for its ODA—we need experts who can improve the
quality, not just the quantity, of the programs.
Japanese aid programs need some adjustments. They need to
take into account the changes that have come with the end of the
Cold War and the emergence of environmental issues. The swelling
number of countries receiving aid poses problems. Not only is the
number of developing nations in general on the rise, the recent
democratization of Eastern Europe and the dissolution of the
Soviet Union have produced a rapid increase in the total number
of nations eligible for aid. In 1991 and 1992 alone, roughly twenty
nations in Eastern Europe, the Baltics, and the former Soviet
republics have joined the roster of aid recipients, and the nations of
Indochina will soon join them.
The concept of aid has also broadened. There are new aims and
needs, including those of environmental preservation projects. The
participating nations of the 1992 Earth Summit agreed on the prin-
ciple that ODA should be applied to environmental projects.
Moreover, as the need for aid increases, we should be wary of "aid
fatigue." The ratio of aid to GNP in America, for example, has

fallen significantly in recent years. In this context, Japan is regarded

as the most promising donor.
 B e c o m i n g a "Normal Nation" 141

ODA as Part of Diplomatic Strategy

Given the changed aid environment, I believe that we must make
ODA a consistent part of our diplomatic strategy for enhancing
world peace and stability. We should provide ODA based on the
following principles:

One: We must delineate the beliefs and principles guid-

ing our aid plans and strategies. In our effort to "help

developing nations help themselves," we have thus far

formulated policies by reviewing and selecting from
among the requests received from various nations. This
particular path was chosen because of Japan's own expe-
rience and its experience of providing aid to Asian
nations. This method has been both effective and useful.

However, as the world's largest aid donor, Japan has a

responsibility to demonstrate clearly the principles and
aims governing our economic aid. We must spell out the
kind of post-Cold War international society we seek as
well as the particular role we anticipate our aid will play.
The "Four Kaifu Principles" of democratization,
human rights, peace, and sustained development were
articulated by the Kaifu administration in April 1991

with the view that aid should be used to realize the com-
mon aims of humanity in the wake of the Cold War. A
little over a year later these four principles were further
clarified in the Japan's Official Development Assistance
Charter: 1) establish economic development and envi-
ronmental preservation as the twin pillars of ODA; 2)
prevent the use of ODA for military purposes; 3) guard
against the use of ODA for military spending, develop-
ment of missiles and other weapons of mass destruction,
and the export and import of armaments; and 4) weigh
efforts to promote democratization, the introduction of
market economies, and the guarantee of human rights

and liberty.
142 Blueprint for a New Japan
We must go beyond establishing principles and do
our utmost to realize the principles in specific ODA poli-
cies and projects. The issues raised in The Four Kaifu
Principles are intimately related to the security and
internal problems of recipient nations. We have to give
careful consideration to the actual conditions in each

country.
The Development Assistance Committee of the
OECD has already proposed requiring transparent
accounting of military spending as a condition of aid to
developing nations. If such concrete measures as reviews
or suspensions of aid are to have any effect, however,
donor nations have to be prepared to stand together to

enforce them. Earlier I indicated the need for stricter

supervision of the arms business; we must also consider

suspending aid to nations that are exporting arms that

threaten stability or peace, or that are producing or
importing unnecessarily large volumes of armaments.
Japan should take the lead in this area.

Two: The increasing need for aid requires that Japan set
priorities among recipient nations and sectors. We
should build cooperative relations between government
and private non-ODA capital, suppliers, international

organizations, former recipient nations such as the Asian

NIEs, and non-governmental organizations. Information
on Japan's aid must be made public and readily available.

The creation of a third-party organization that objec-

tively evaluates the impact of our ODA would also be
valuable.
Aid resources are limited. Japan should concentrate
its aid in the sectors where contributions are particularly

valuable. It should also be noted that Japanese ODA,

concentrated mainly in industrial infrastructure such as
electricity, transport, and telecommunications, has con-
 Becoming a "Normal Nation" 143

tributed a great deal to the economic development of

many Asian nations. Aid in medicine and food will con-
tinue to be important in the future, but it is also essential

that we assist recipient nations in becoming self-reliant.

This is the most effective form of aid in the long term.

Three: We must provide aid with regional security as our

aim. For example, Japan can contribute to multilateral
efforts to develop the Mekong River so that the five
countries along the river —China, Laos, Thailand, Cam-
bodia, and Vietnam —can use the river effectively. Efforts
like this, which involve more than one country and an
unstable political environment, require special commit-
ment and determination. But if they are successful, they
enhance regional stability. Such efforts by Japan will

demonstrate to the people of the region our true position

on peace and stability.

The recent agreement to impose a worldwide ban on

the production of chemical weapons may create some
hardship for developing nations that produce these
weapons, and they may try to continue production in
secret. Such concerns could be alleviated if, for example,

Japan assisted in converting these factories to fertilizer

production.

100,000 Foreign Students per Year

Another major component of our international efforts should be

the area of human development. Before the war, Japan made active

efforts to welcome foreign students. In the postwar period, those in

leadership positions in countries that followed Japan in their devel-
opment have mostly studied in Europe and America. We need to
take steps immediately to increase the number of students coming
to Japan.

We have established job-training centers in and sent technical

instructors to various developing countries. Such technical assis-
144 Blueprint for a New Japan
tance has borne fruit in this area of human development. We must
now extend this assistance to provide education and vocational
training in Japan to students and workers from developing nations.
Japan has had a myriad of opportunities to learn from foreign
countries by sending people abroad, beginning centuries ago with
trips to Sui and Tang China, and continuing today in the form of
government-funded travel to Europe and America. As many as

120,000 young people a year are sent by their families and busi-
nesses to study abroad.
In contrast, there are only about 40,000 foreign students study-
ing at Japanese high schools and universities, though that number
is now rising. Far more students go elsewhere, to nations that more
readily accept them. America currently has some 360,000 foreign
students. France receives about 140,000, and Germany takes in

90,000. Just as our students received education and the opportu-

nity for intellectual development abroad, young people from other
nations must be given the same opportunities by Japan. We have to
throw our doors wide open to enable foreign students to achieve an
excellent education and to learn about our traditions and culture.
I would like to see Japan take a minimum of 100,000 students
annually by the year 2000. A good starting point for this goal is the
expansion of a nationally funded system for foreign students.
America currently receives 86,000 foreign students on federal

monies. France accommodates 10,000. Japan only takes in 5,000.

We should greatly expand that number. Second, national and local
governments should offer subsidies or tax incentives to the private

voluntary groups, companies, and schools that offer scholarships

to foreign students.
A third important task is to develop a preparatory program for

foreign students to ensure the scholastic background and informa-

tion necessary to study here. We will have to send Japanese-
language teachers abroad and develop an elective system for
those who want to study in Japan. Systems should be in place in
foreign countries to assist students who may want to enter

Japanese high schools or universities.

 B e c o m i n g a "Normal Nation" 145

Additionally, we need a system for receiving foreign students.

Of particular importance is the development of a support structure

to help cover medical costs incurred by foreign students. We must
build more dormitories, but I strongly oppose the recent trend of
building dormitories for the exclusive use of foreign students.
Foreign students should not be segregated from Japanese students
but should be offered the opportunity to live and study together
with them.
The homestay and host-family system should be strengthened.
Foreign students should have the chance to enter a Japanese family
and live as Japanese children do. We must quickly arrange public
support for host families and homestay go-between groups. In
addition, it will be important to assist the students in their daily
life. We should seriously consider establishing a public subsidy
system for remedial Japanese lessons and other measures.

A Technical Training System for Foreign Workers

In recent years the number of foreigners coming to work in Japan

has steadily increased. Thousands of young men and women come

from abroad, hoping to earn a good income in prosperous Japan,

to polish their skills, and to help their families back home. As with
students, we should welcome their efforts by opening our doors
further.

At the same time, taking in an unlimited number of foreign

workers is unrealistic —something no country is willing to do. All
countries have limits, great or small, on the entry of foreigners,
based on economic, labor, and social conditions. Japan is no excep-
tion. The number of illegal foreign workers has also steadily risen.
Many enter on tourist visas and work on construction sites, in

factories, or as hostesses. The number of illegal workers is estimated

at around 300,000 today, almost one-third the number of the
1,070,000 foreigners legally residing in Japan.
Regulation of such large numbers of people is virtually impossi-

ble, and their illegal status means they have to live in hiding. It

also keeps them from going to the hospital or from requesting

146 Blueprint for a New Japan
compensation for work-related injuries. Because they are here
illegally, they often find themselves in the hands of cruel people
who pay exploitative wages and demand long working hours.
More often than not, illegal foreign workers leave Japan with
bitter memories of their stay. The negative feelings they have
toward Japan are then communicated in some form to those at

home. It would be very unfortunate if experiences like these were

to mar relations between Japan and their home countries in the
future. It is desirable for both Japan and for other countries that
foreigners come work for their living, develop their tech-
here to
nical skills, and use them to build their countries when they

return home. One possible solution to this complex issue could be

to create a comprehensive technical training system for foreign
laborers.

This system should not serve simply as stopgap measure for

Japan's labor shortages, but rather should enable foreign workers
to use what they have learned in Japan to contribute to the eco-
nomic development of their home countries. We already have one
such program and plan to establish a new system in fiscal year
1993. Under the new system, the first three months of a foreign
worker's stay in Japan will be spent learning Japanese and other
skills. Living expenses for the period will be paid by the companies
planning to employ them. After the three-month period, the
workers sign employment contracts and embark on two years of
technical training.
However, there are obvious flaws in this system. Now that the

economic "bubble" has burst, we are closer to experiencing a labor

surplus than a labor shortage. It is questionable to what extent
companies will be willing to cooperate in a foreign-worker training
program. The program must therefore have solid support from the
national government. The government should, for example, pay
the living expenses for the student's language-study period. After
the employment contract is signed, the government can assist
the company through tax and capital incentives. Companies will
accordingly want to bring in foreigners. Of course, the mechanics
 B e c o m i n g a "Normal Nation" 147

of the program will also have to assure that it does not put pressure
on Japanese workers.
We could also require the companies to present training plans
for the two years and to report on training conditions. These
requirements would help ensure that workers are assigned to
appropriate companies and that they complete the program. Above
all, their work in Japan must not begin and end with simple
unskilled labor. We must be sure that they receive at least some
advanced training. In construction, for example, this might include
such skills as filling concrete molds, building steel frames, or oper-
ating construction equipment. Our aim is to avoid using foreigners

as a cheap source of labor and instead assist them in developing

their home countries.

Currently, the ministries of justice, foreign affairs, and labor all

address foreign-labor issues separately. The resulting procedural

requirements are often contradictory. Visas are not necessarily in
accord with periods of stay under certain programs, for example.
Foreign-worker training is ODA in the broadest sense of the term.
It is an important part of foreign relations, and the ministries
should unite in their handling of foreign labor.

Leadership in Environmental Preservation

It is common knowledge that the earth's natural environment is

rapidly being destroyed. One of the major issues facing humanity

at the end of the twentieth century is the protection of the earth
from destruction and the recovery of a healthy and rich natural
environment.
The 1972 declaration issued by the U.N. human environment
conference in Stockholm put it this way:

Of all things in the world, people are the most precious.

It is the people . . . that through their hard work, continu-
ously transform the human environment. Along with
social progress and the advance of production, science
148 Blueprint for a New Japan
and technology, the capability of man to improve the
environment increases with each passing day.

However, environmental conditions have steadily worsened since

this declaration. People somehow believe that they control the nat-
ural environment, that they have the right and the ability to use
nature as they will. But the ubiquity of environmental destruction
tells us that this conception of man's dominance of nature is pro-
foundly mistaken. The day of reckoning is at hand, and we have no
choice but to change our way of life.
The Western values that have driven the world are based on the
idea that man dominates nature. The means by which man sought
to control nature was scientific and technological development. It

has resulted in today's mass-production, mass-consumption soci-

ety. But we will shortly have no choice but to pay our accumulated
debt to nature.
Clearly, we cannot regress to the pre-development age. Our
aspiration should be to live a healthy and civilized life in a clean

environment. A balance between environmental protection and

economic development must be the resolution to this issue.

Japan is fortunate to have had the experience of battling and

conquering pollution in the period of our rapid economic growth.
We have had notable success in balancing environmental protec-
tion with economic growth through the united efforts of our
government and our citizens to protect the environment and con-
serve energy. Japan is therefore particularly suited to leading the
way in global environmental recovery. We must take the initiative

in this area.

Our efforts cannot be confined to giving aid to developing

nations for environmental protection. Whatever national borders
exist in politics or economics, they are not shared by nature. We
must protect the environment of the entire world if we are to live
comfortably ourselves. This issue —along with personnel contribu-
tions in the security arena and economic — one of most
aid is the
important political issues facing Japan today.
 B e c o m i n g a "Normal Nation" 149

The first thing Japan needs to do is survey the kinds of technical

know-how it has and determine which skills are applicable to vari-

ous types of problems. We need, in other words, an inventory of

intellectual expertise that is applicable to environmental problems.
The implementation stage will call for the participation and coop-
eration of experts and a wide variety of other people.
Today number of Japanese organizations support environ-
a

mental activity. MITI (Ministry of International Trade and

Industry) and the Environment Agency have been promoting
atmospheric and water pollution cleanup efforts as part of bilateral
technical cooperation programs. The Japan International Coopera-
tion Agency has been sending survey teams and private environ-
mental experts to various places in Asia. Such programs are quite
large in scale, even in comparison with those of other advanced
nations. Organizations such as these should take the lead as we
begin to implement new programs.
The call for widespread public participation is not intended
simply to borrow the time and labor of people but to deepen public
consciousness of environmental issues. Environmental protection
begins with ordinary people cleaning up their immediate sur-
roundings. If we care about the environment, we will conserve
goods and energy and will resist the temptation to carelessly dis-
pose of goods; we will actively engage in recycling. With heightened
awareness, people will stop tossing cans by the roadside and ciga-
rette butts into the street. These simple actions alone will improve
our immediate environment and reduce waste.
Intellectual contributions to the environmental discussion are
necessary as well. Japan's experience of environmental destruction
during the period of rapid growth and of environmental recovery
thereafter will be instructive regarding the environmental-destruc-
tion issues that have now assumed global proportions. It would
thus be extremely useful to organize systematically the information
available in each sector of the economy so that it can be made
available to those who require it.

In addition to organizing a comprehensive research facility that

150 Blueprint for a New Japan
could undertake that task, we must form a network among existing
research organizations, including universities. Such a think tank
would help people here and abroad make effective use of Japan's
experience in their own environmental-protection and recovery
efforts.

Environmental destruction is especially concentrated in the

industrializing Asian nations. The entire region faces the same kind
of pollution problem Japan had in the recent past, and could learn
from Japan's experience. Solutions to environmental concerns in

the Asia-Pacific region are very much in Japan's interest. An "Asian

Environmental Cooperation Center" could form a valuable part of
Japan's intellectual and technical aid and become the core of efforts
to join Asian nations in environmental management.
The people, money, and knowledge available for environmental

issues are limited. The effective use of these resources demands that
environmental administration not be entirely scattered among the
various countries; cooperation among nations will mean a higher
level of environmental protection. Capital contributions to global
issues like overseas aid and environmental protection will require

careful planning. As with aid, the government should in principle

make available sufficient financial resources for priority expendi-

tures. There has been discussion of an environmental tax that

could serve as a financial resource for international contributions;
environmental taxes such as the petroleum tax designed to reduce
consumption, however, should remain separate. I will discuss tax

issues in detail in Book III, but let me simply say here that funds for

foreign aid and environmental policies should first be based on a

careful review of priorities and resource management and then
supplemented from general funds based on income or consump-
tion taxes.
 BOOK

THE FIVE FREEDOMS

 CHAPTER ON

The Japanese Dream

"We Wouldn't Want to Be Like the Japanese"

I once heard a well-known American intellectual say, "We
wouldn't want to be like the Japanese." At first it sounded to me
like an affront. But the more I thought about it, the less surprising
the comment became. He was implicitly criticizing the huge gap
between what appears to be our high income and what is in reality

a poor standard of living. He was thinking of our inferior housing,

impoverished social capital, high prices, long working hours, severe

exam competition, and many other things. The European journal-
ist who said "the Japanese live in rabbit hutches and spend all their

time working" probably had the same things in mind.

Japan's rapid economic growth has often been referred to as a

miracle. In less than fifty years, Japan raised itself from the ashes of
war to become an economic superpower boasting one of the
world's highest incomes. Nonetheless, the people living in this
supposed economic giant do not feel as though they are leading
rich lives.

In the Tokyo dream of home ownership grows increas-

area, the

ingly improbable, even with a lifetime of hard work toward that

goal. There is something wrong with a society where people cannot
buy proper homes no matter how hard they try. One of the pri-
mary aims of working people is to build a fine home of their own.
Yet many young people have simply abandoned any hope of

153
154 Blueprint for a New Japan
buying a home. This is a terrible state of affairs.
It is our political leadership that must take responsibility. Are
we really a people whose standard of living ranks among the
world's highest? Do citizens see this standard reflected in their own
lives? Japanese enjoy a higher per capita income than either Ameri-
cans or Europeans but, according to some surveys, when income is

calculated relative to working hours or to prices, Japanese income

is only about 70 percent that of America or Germany. Japanese
may have a high income, but they work long hours for it and then
see it eaten away in no time by the high price of goods.
Europeans and Americans have other things in mind as well

when they say they don't want to be like the Japanese. One of our
prime ministers was once ridiculed in Europe as just a "transistor

salesman." Other familiar terms reflect the same impression: "eco-

nomic animal" has become all but synonymous with Japan. Japan
is regarded as a country whose only concern is economics, and as a
nation whose competitiveness is extreme and destructive when car-
ried out internationally. In the past, Japan was accused of "social

dumping" or destroying Europe's domestic industries by launch-

ing export drives of cheap goods produced in Japan's exploitative
labor market. Sixty years later, our image has barely changed.
Japan is already the world's largest donor of economic aid. But
it is accused of relying solely on "checkbook diplomacy." Foreign
laborers come to Japan to earn enough money to afford them a
more affluent life in their own countries. They sometimes stay in

Japan for years, but to them Japan is simply a place to earn money.
They do not want to settle down here permanently.
Such images are of course often exaggerated and unrealistic. But
they are not altogether false. The way foreigners evaluate us is an
important barometer of the maturity of Japanese society. We will

not be able to exercise leadership in international society as long as

foreigners are unable to say that Japan is a laudable country, that

they would like to live here or to build their countries on a Japanese

model. We must therefore create our own "Japanese dream."
When America entered its golden age at the turn of the century,
 The Five Freedoms 155

American society with its "American dream" was the object of envy
and longing to many people living overseas. America was a society
driven by tremendous economic power, and the "dream" meant
that anyone with ability and the willingness to work hard could
have a chance to do well. America actively embraced immigrants
and foreign students and spread its social, cultural, and economic
influence throughout the world. Those who experienced American
life wanted to bring its wonders home to their own countries. Our
ancestors were among the many who thought they would like to
make their countries like America.
In the realm of economic statistics, Japan is today running even
with or even surpassing America. But one never hears anyone
speak of a "Japanese dream."

Japanese Society Is Showing Signs of Strain

For all its faults, contemporary Japanese society does have much to
be proud of. Its safety and stability are unmatched anywhere.
People everywhere in the world yearn to live in a peaceful society
largely free of violent crime. Japan has been able to provide such an
environment for its citizens.

Japan should also be proud of its income distribution. The gap

between rich and poor is exceptionally small. While recent specula-
tion in land values has caused the gap to widen somewhat between
those who own land and those who do not, Japan is one of the
world's few societies to realize near equality in earned salaries,
which undoubtedly contributes significantly to our social stability.

Anyone who works in the conventional way can live without

undue anxiety about his own life or his society. While this seems
altogether obvious to Japanese, it is very important and worthy of
note: few countries enjoy this degree of stability.

Japan is, in both good and bad ways, an extremely comfortable

society. Japanese consumers are treated like royalty, and citizens

are especially protected from the risks and shocks inherent in

social life. In this sense, government regulations and interven-
tion, though overly protective on the whole, have contributed
156 Blueprint for a New Japan
significantly to social stability. We only realize the true value of a
stable society when we look at the tragedy of nations that have lost
social stability entirely.

The counterpart to these blessings is the poverty of the lives of

citizens. Our economy and society are beginning to show signs of
strain. The economy continues to grow, while the people the very —
—
essence of the economy are robbed of their freedom. Why is this?
It is because Japan, in its pursuit of stability and efficiency, has
become a society dedicated solely to its corporations. The people
have become mere cogs in the Japanese corporate wheel.
Japanese people work long hours and are almost completely
subject to the will of their companies. Companies retain most of
the fruits of economic growth; the portion left to individuals is

small by comparison. We may have nominally attained the world's

highest income, but we continue to struggle with small residences,

lengthy commutes, and extreme urban concentration. Various

administrative programs and regulations are in place, ostensibly
for the protection of the citizens, but to what extent do they truly

serve the citizen? Even if they in fact once did, their utility today is

in serious doubt.

Seen from overseas, permanent employment and the seniority

system look like tools that have been used to bind people to their
companies. An economic and social framework that emphasizes

cooperative, long-term relationships seems nothing more than a

closed society, one that bars foreign companies or any other out-
siders from entering. This system —once regarded as an outstand-
ing model — is increasingly showing signs of strain.

Becoming a Society that Values the Individual

The constraints on individual lives have become needlessly bind-

ing. The elimination of excessive restraints will allow the liberation
of the individual, which is the most important task facing Japan's
political leadership today.

I would like to see Japan strive toward the goal of "five

freedoms."
 The Five Freedoms 157

• Freedom from Tokyo requires reversing the extreme concentra-

tion of population and resources in Tokyo and making the transi-

tion from urban overcrowding and rural depopulation to a more

balanced development policy.

• Freedom from companies means placing the individual rather

than the company at the center of the social and economic frame-
work, so that each citizen can approach his or her work more freely
and place greater value on his or her own individual life.

• Freedom from overwork requires steps that will aggressively

reduce work hours so that people may work with greater ease and
plan their own futures. We must also alter the excessively competi-
tive examination system.

• Freedom from ageism and sexism means enabling the growing

number of senior more fully in society, and
citizens to participate

building a society in which women can play more active and varied
roles.

• Freedom from regulation entails abolishing anachronistic and

meaningless rules. It also means allowing individuals and compa-
nies more freedom.

If we can achieve these five freedoms, we will release our citizens

from their social and political shackles and begin to build a society
that truly values the individual. Japan must become a society in
which individuals can act freely, based on their own judgment.
Respect for the individual does not refer only to oneself, but to a
society that enables mutual self-respect and coexistence among
individuals. Individual freedom will mean a society that offers
many choices, a society that not only permits but encourages
diversity.

Unnecessary regulations must be recognized as such and elimi-

nated as quickly as possible. Companies and individuals must act
158 Blueprint for a New Japan
more autonomously. The power that has been concentrated in the
capital must be decentralized; local areas must make their own

decisions and turn Japan into a society that embraces diversity. We

must put all our effort into rectifying our extreme Tokyo-centrism,
whose distorted form of efficiency has hampered improvements in
ordinary life. Senior citizens and women, who are today bound by
too many social restrictions to participate to their full potential in

society, must be accorded greater freedom. We must also contain

the excesses of corporate behavior that today so distort individual

lives.

The release of people from what is effectively a protective but

confining social incubator is long overdue. This will, of course,
require that people take responsibility for themselves, but this
should not be considered undesirable. There should be no freedom
of choice without a sense of responsibility for self. We must make
available whatever information will allow individuals to make their

own choices and take responsibility for their own lives. That is the
meaning of a free society.

What kind of society will Japan be if we liberate people from

their tethers and proclaim these five freedoms? It will depend on
the choices each individual citizen makes. When diversity flour-

ishes, the content of a gratifying and prosperous life will differ

according to the individual.

Government should have little to say about individual choice.
What is required of government is not that it offer citizens a ready-
made "affluent life." It should instead eliminate the barriers to
individual action and provide an environment in which people can
use their own power as they see fit to construct the kind of lives

they want. This is the intent of the five freedoms I am calling for. If

we can attain these freedoms, the appropriate course toward rich

and meaningful lives will open before us of its own accord. The
question is how to do it.
 CHAPTER TWO
Freedom from Tokyo

30,000 Hours of "Commuter Hell"

The average one-way commuting time for office workers in Tokyo

is now approximately ninety minutes. Assuming that an average
office worker has two days off per week, works fifty weeks a year,

and stays at his job for forty years, he will have spent 30,000 hours
(1,250 twenty-four-hour days, or three and a half years) commut-
ing. This huge loss of time essentially means that Tokyo residents
have become "commuter slaves." The overcrowding problem
brought about by the extreme population concentration in the
Tokyo area has reached its limits.

While the congestion grows worse in the big cities, the country-

side suffers severe depopulation. "Depopulation" does not refer

only to the decrease in the rural population. It also means that the
generational balance in the countryside is collapsing. As more and
more young people move to the cities, the rural population ages
rapidly. The eventual outcome of this pattern will be the destruc-

tion of regional society and the loss of its financial, industrial, and
cultural foundations. It will mean the end of many potentially
thriving industries. We already see such consequences in the
forestry industry, which, although prosperous today, is threatened
by the steady outflow of workers.
Until recently, the various regions of Japan had their own
unique features and autonomous communities. This social and

159
160 Blueprint for a New Japan
cultural diversity was Japan's heritage. Depopulation destroys that
heritage and suffocates the very roots of these regions. It is no exag-
geration to say that the postwar Japanese economy was built on the
strength of these areas. Throngs of people —many of whom would
eventually lead Japan — left the countryside for Tokyo. They were
the source of Japan's high productivity and quality products. Now,
all the strength of these regions — all the nutrients —has been
drained by Tokyo. Our non-urban regions are dying.
We should take the issues of urban concentration and rural
depopulation very seriously. Japan is a small nation: 120 million of
us live cheek-by-jowl in what is already a small area. Why must
we all congregate in the still narrower confines of the capital?
A healthy future for Japanese society demands that we create a sen-
sitive balance between urban and rural. This balance has already
broken down, and we need to recover it.

Tokyo has become something of a monster. The people of Japan

have to be liberated from its grip. To this end, we must undertake
tax reform, invest in social overhead capital, and commence the
decentralization that I discussed in Book I. Without freedom from
Tokyo, Japan will not be able to build an affluent society for the
twenty- first century.

The Limits of Unipolar Concentration

The extreme concentration in the big cities — particularly in

Tokyo — is not simply a matter of overcrowding. "Unipolar con-

centration" refers to the fact that virtually all functions of society,
including economic, political, and cultural, are intertwined and
concentrated in a single place. The difficulty of disentangling these
functions from each other prevents us from correcting the excesses
of Tokyo-centrism.
Scores of companies, for example, have brought their headquar-
ters to Tokyo or expanded their Tokyo operations. As our indus-
trial base shifts to the tertiary sector, industries such as finance and
communications — necessarily based in Tokyo —assume increasing
importance, exacerbating Tokyo's omnipresence. Most of the
 The Five Freedoms 161

nation's products also flow into Tokyo, the main consumption

center of Japan.
Government is perhaps even more concentrated in Tokyo.
Following the war, the administration of Japan was located in
Kasumigaseki, in central Tokyo. The administrative system was
divided vertically: Kasumigaseki was the base from which all

administrative organizations stretched their tentacles out to con-

trol every last nook and cranny of the country. This is true of edu-
cation, transportation, construction, agriculture, finance, trade,

and almost everything else of administrative concern. Tokyo-cen-

tric concentration is pressing forward in the cultural realm as well.
The worlds of music, literature, and other arts are all concentrated
in Tokyo.
Political, economic, and cultural concentration in Tokyo rein-
force each other. Their interaction accelerates the convergence.
Companies shift their headquarters to Tokyo, for example, to be
near the administrative institutions located there. As economic
activities in the capital expand —bringing more people to Tokyo in

the process — cultural activities there also proliferate. The universi-

ties concentrated in Tokyo draw young people from other areas;
graduates choose to stay and seek work in the capital. Even if they
wanted to, they would not find work in their hometowns; the con-
centration of economic activity in Tokyo is simply too pervasive.
The unipolar concentration of business and culture adds to

Kasumigaseki's efficiency, and thereby to political concentration.

This unipolar concentration actually helped sustain the eco-
nomic growth of postwar Japan. The administrative system
launched Japan on a course of rapid economic development that
required tremendous social capital, and centralized administration
was therefore an extremely efficient formula for achieving this goal.

The convergence of corporate activities in Tokyo was convenient

for the exchange of information and personnel among companies,
and promoted widespread industrial dynamism. Tokyo's univer-
sities, meanwhile, provided a steady stream of talented people to
support such corporate activities.
162 Blueprint for a New Japan
Housing for the Cities, Employment for the Provinces
It is easy to criticize unipolar concentration. But it is difficult to

correct, precisely because it is so economically efficient. The draw

of Tokyo for anyone seeking information of any kind, for example,
is beyond measure. The "information age" is already upon us;

urban concentration, especially in the capital, will only increase

unless we act now.

Japan could take one of two routes. First, we could assume that
unipolar concentration is a natural process and stop fighting it.

We could henceforth focus all social investment in, say, a three-

hundred-kilometer area around the capital, a proposition strongly
advocated by some economists. With extensive enough investment
in roads, residences, public works, sewage, etc., the Tokyo metro-
politan area could probably become a pleasant enough environ-
ment. Public investment could be carried out more efficiently,

given its concentration in a single area. There is a great deal of

waste in the way land is used in and near Tokyo. If we modified our
land-use policies and made the necessary investments in social
overhead capital, the living environment would improve signifi-

cantly. We must recognize, however, that this would not solve the

problem of depopulation and disintegration of other parts of the

country.
The second choice is to suppress further concentration of popu-
lation in Tokyo and to focus our efforts on balanced decentraliza-

tion. Specifically, we must create multiple centers of industrial

activity so as to expand employment opportunities outside Tokyo.
With a reduction of industrial activities in Tokyo, those workers
who remained in the capital would be better able to afford homes.
Our aim would be to shift economic power to other areas, some-
thing that would not be possible without a fundamental and thor-
oughgoing shift in policy. The government has already made some
attempts to halt the flow into Tokyo and to promote decentralization,
but the unipolar concentration shows no signs of abating. Busi-
nesses rely too heavily on the efficiency that concentration offers.
 The Five Freedoms 163

Which road should we take? The answer, I think, is obvious. No

matter how difficult decentralization will be, it is our only choice.
The other option, that of an ever-larger capital region, is simply
an extension of the Japanese economic structure that generated
rapid growth. It would mean that politics, economics, and culture
would converge ever more insistently, producing an even more
uniform society. An urban nation of this kind may boast high effi-

ciency in production, but this is no longer the priority it once was.

It has been superseded by the search for a higher quality of life.
Further urban concentration presents a host of other problems.
We can hardly expect, for example, to be able to respond to such
problems of high-density living as housing, commuting, garbage,
and sewage when unipolar concentration becomes even more
intensified. Certainly we must question the wisdom of crowding all

our economic and other activities into a single place, given Japan's
vulnerability to major earthquakes.
The future of Tokyo-centered concentration once again calls to
mind the history of the dinosaurs. The dinosaur began as a simple
creature, but gradually developed its functions and grew larger and
larger. When its environment could no longer support it, however,
it was doomed. The same is true of companies and organizations
that become outsized through a kind of self-expansion mechanism:
they too self-destruct. The same process applies equally to urban
growth. A healthy system should have a balance between concen-
tration and dispersion. Animals, organizations, and cities all have
to try to maintain this balance. But they also undergo diffusion.
There is no question that unipolar concentration in Tokyo has
gone too far.

We need to develop long-term land policies that will achieve a

more balanced development throughout the country. Policies can

no longer be confined simply to questions of how to allocate social
capital investment. They must cover a wide range of issues includ-
ing changes in the industrial landscape, a review of Japan's cultural
and educational foundations, and the alteration of the nature of
administrative organizations.
164 Blueprint for a New Japan
In the short term, it will be extremely expensive to disperse the
many functions of society to other areas. Regionally disparate eco-
nomic development, however, promises innumerable advantages,
as is evident in the healthy regional communities that exist today.
Where there are special regional and cultural qualities, they can be
passed on to future generations. Where land is used more effec-

tively, people enjoy a closer relationship with nature and a better

residential environment. Japanese society can pursue this diversity

in regional development and reap the benefits of the choices that

will result. A pluralistic and richly varied society is infinitely prefer-
able to drawing all of society into one giant economic machine.
Decentralized living also allows people to develop deeper
human relationships with each other. Currently, grandparents liv-
ing in the country cannot see their urban grandchildren more than
once a year. No matter how much energy we put into developing
inexpensive rail and air routes, people cannot maintain close ties

across very great distances.

The government has already made a number of attempts to

contain the excessive concentration in Tokyo. It has emphasized

investment in other regions. It has carried out projects like the
"New Industrial Cities" in every region as incentives for regionally
based companies and industries to stay where they are. In spite of
these efforts, the government has been unable to halt the unipolar

concentration in Tokyo. What should we do about this?

As I explained earlier, I believe we need a fundamental concep-

tual transformation regarding our administrative framework and,

especially, regional self-rule. We will not stop unipolar concentra-
tion simply by building up social overhead capital outside Tokyo.
We need a transformation in our very ideas. We must not only
shift our investment allocations, we must reform Kasumigaseki's
vertically divided administrative system so that the various regions
can rely on their own wisdom to carry out regional administration.
This is the only way we can hope to see diversification and the
social decentralization of Japan. If we fail to make this shift, we will

be unable to liberate ourselves from the meshes of Tokyo's unipo-

lar concentration.
 The Five Freedoms 165

Generous Investment in Our Residential Environment

National policy will be of critical importance in the few years
remaining of this century. We will have to carry out bold programs
of public works investment — especially to lay the foundations of

residential life — to serve what will be the most aged society in the
world by the early twenty-first century. Programs such as these will

form part of our planning for regional decentralization and for the

stabilization of our industry and population. This is necessary in

order to apply the brakes to Tokyo's urban concentration and also
to ensure that we provide the necessary social capital for residential
life throughout the country. If we fail to do so, we will see the seri-

ous destabilization of our population just when we are confronted

with challenges posed by a rapidly aging society. If we delay
reforms any longer, Japan's standard of living will continue to suf-
fer in comparison with those of other advanced nations, and we
will be risking a decline in the very strength of our nation.
The roots of today's recession are structural. The economy will

not recover through tinkering. A bold public investment program

is what is needed to prevent a further downturn in the business

cycle. If we stimulate demand through our public investment, we

will alleviate the rise in our trade surplus and thus ease the trade
friction we experience with other nations. The primary compo-
nents of public investment should include the following.

• Expanded shinkansen networks. The main project in public

investment should be the construction of a national network of
bullet trains {shinkansen) , running from Hokkaido to Kyushu and
along the Japan Sea, based on those plans already under considera-
tion. Once built, they will make virtually any point in the Japanese
archipelago quickly accessible. The shinkansen stops will become
the core cities that bring development to their regions.

• Better airports. We should expand the airport facilities of the

major cities throughout the country. The airline network has
focused far too much on Narita (Tokyo), which has by now
166 Blueprint for a New Japan
reached its limits. Odd as it may sound, it is more convenient for
people in the country to go to America and Europe via Seoul than
through Tokyo's airports. In addition to the Kansai airport cur-
rently under construction, we need to have international airports
in Tohoku, Hokuriku, Hokkaido, Kanto, "Chubu, Chugoku,
Shikoku, and Kyushu.

• More expressways. We must construct a network of expressways

that will link all parts of the nation by early in the next century.
This network will help improve contact between different regions
and bind various parts of the country together. Today's expressway
network converges on Tokyo, but we urgently need roads connect-
ing other cities with each other.

• Optical fiber grids. We must prepare the facilities necessary for

the optical fiber networks that will be a key part of the infrastruc-
ture of the twenty-first century. A single fiber just one-tenth of a

millimeter in diameter can carry virtually unlimited amounts of

information. Optical fiber will change human life in countless ways
with high-density telephone and facsimile services, rapid computer
transmissions, and high-density televisions with hundreds of chan-
nels. For maximum utilization of such networks we must immedi-
ately begin to develop the technical and intellectual skills to make
the switch to these networks and create the software to run them.
The aggressive development of our national information networks
is essential to solidifying our standing as a world economic leader
and to eliminating the great information gaps between the country
and cities.

• Improved facilities in non-metropolitan areas. We have to lay a

solid foundation for residential life in small cities and the country-
side. The main reason that young urban men and women use to

explain their dislike of the country is the lack of flush toilets. If we

want to bring our young people back to their native regions, we
must begin by building proper sewage facilities. By the year 2000 at
 Future Bullet Train Networks
and International Airports

International Airports
4000 - 5000 m runways)
(with

Current bullet train routes

New bullet train routes,

first stage

New bullet train routes,

second stage

Fukuoka
 —

168 Blueprint for a New Japan

least 70 percent of our population should have sewage facilities,

and not long afterward the total should exceed 90 percent. We

should also bring drainage facilities to our farm communities. If
development proceeds according to plan, Japan's sewage facilities

will meet American and Canadian standards by the early twenty-

first century, and reach British and German standards not long
after that.

Our fundamental problem is that the young urban dweller cannot

hope to own a house, even after a lifetime of hard work. Urban
concentration, chiefly in Tokyo, is the main cause. The big cities
are overused, while remote villages suffer disuse.
The government must plan for housing for urban dwellers and
employment for those outside the major cities. Such a plan would
restore a decent living environment to urban dwellers and bring
rich opportunities to ambitious young people in the countryside.

This will help eliminate many of the problems facing farm villages
today. The only route to this end is public investment.
The investments discussed here will cost a huge amount of
money. Road work is likely to cost around ¥52 trillion, the
shinkansen between ¥7 trillion and ¥12 trillion, international

airports ¥6 trillion, public sewage facilities ¥100 trillion, farm

drainage ¥23 trillion, and optical fiber networks about ¥30 trillion,

for a total of approximately ¥200 trillion. I will discuss the question

of funding these projects in the next chapter.

Constructing a New Capital

The need for social diversification into areas outside the capital
is not an argument for abandoning Tokyo. Decentralization is, in

my opinion, our only hope for saving Tokyo. The alternative

an emphasis on improving the environment of Tokyo only
would likely include tax incentives and deregulation for more
effective land use. There is still plenty of land even within a hun-
dred kilometers of Tokyo, so we could ameliorate the housing
 The Five Freedoms 169

problem if we laid more commuter lines to Tokyo.

Such prescriptions for Tokyo's ills are meaningless. The bigger
Tokyo grows, the faster concentration will progress, until the
vicious circle brings us back to where we started. Tokyo's density
can only be moderated by developing appealing provincial cities,

containing Tokyo's growth, and promoting the outflow of popula-

tion to other areas. Tokyo will always remain the nation's financial
and information center, but we have to get over the notion that it's

necessary to bring anything and everything into the capital.

The creation of interesting and diverse cities is desirable for

Tokyo residents as well as for non-Tokyo residents. Many people

today cannot leave Tokyo even if they want to. They are dissatisfied

with Tokyo life because of everything from inadequate housing to

long commutes, but they cannot realistically hope to find employ-
ment opportunities at salary levels comparable to those for Tokyo's
mid-career workers. This problem is especially acute for those rais-

ing children in Tokyo. When workers are transferred out of Tokyo

by their companies, they frequently have no choice but to leave
their wives and children behind in Tokyo because education else-

where is considered inferior. The result is divided families, an

extremely Japanese (and unnatural) way of life.
Conversely, a multipolar society, dispersed throughout the
country, will widen the range of possibilities available to individu-
als and weaken the grip Tokyo has on Japanese citizens. People
may choose small university towns for their college years and then
work in the big city after graduation. When they marry and begin
to raise children, they may favor areas with plenty of space and a
rich natural environment. As they age, they may wish to retire

where the climate is milder. In America, life planning of this

sort is regarded as a given. It is simply how people live. But it is

not possible in Japan today. Naturally, there will always be plenty

of people who prefer to live their entire lives only in Tokyo or only
in some other place. The point is that people should have the
opportunity to choose.
This discussion of balanced development necessarily leads us to
170 Blueprint for a New Japan
the question of moving the capital. I am certainly in favor of such a
move. There are not many reasons to leave administrative and
political functions in Tokyo. Political and economic centers are
separate in many countries, including Germany, America, Canada,
and Australia. Tokyo's extreme overpopulation suggests that the
capital should be moved.
Such a move will constitute for Japan one of the great undertak-
ings of the twenty-first century. It should therefore be on an appro-
priate scale. If we build a new capital, let it be something worthy of
being passed on to posterity. Our own historic capitals at Heijo-

kyo, Heian-kyo, Kamakura, and Edo remained as legacies to later

generations; a twenty-first century capital, too, should live on. We

may be the generation fortunate enough to carry out this task. It

would be magnificent work to be a part of.

We must not, however, delude ourselves into thinking that

moving the capital will be enough to resolve the problem of unipo-
lar concentration in Tokyo. Our aim should not be the creation of
a second Tokyo but rather a fundamental systemic reform in which
administration is moved out of Tokyo and development is spread
throughout the country. The move must be just one part of a
larger, more thorough reform.
CHAPTER THRE
Freedom from Companies

Company Freedom, Individual Confinement

As corporations in Japan become more and more prosperous, their

individual employees become less and less free. This is commonly
believed to be true. Most people think that all good things —good
land, good food, good recreation facilities — are swept up by corpo-
rations. That is why it is impossible for individuals to buy proper
homes in the capital region, and why young people abandon the
idea of buying their own homes and opt instead to enter compa-
nies that offer company housing. The proper order of things is
reversed if workers are owned like pets by their companies and
housing is offered as the equivalent of dog food.
Japan today must transfer corporate wealth to individuals. The
first issue to address is the housing situation. Land prices in the
best parts of the city are extremely inflated because of company
demand for office space. When prices skyrocketed, people who
once lived in such areas had no choice but to leave. They accord-
ingly moved to the suburbs, and soon land prices in the Tokyo
suburb of Setagaya and other areas began to climb. Moreover,
companies also buy up suburban land for worker residences and
recreational facilities. Housing available to ordinary individuals
thus moves farther and farther away from the center of town. Land
prices are unbelievably high even in suburbs ninety minutes from
Tokyo by train. Those fortunate enough to purchase a house look

171
172 Blueprint for a New Japan
forward to a lifelong struggle with loans and a total of thirty
thousand hours of commuting time.
Company money also controls the free time that should, in
theory, make our lives more comfortable. Exclusive clubs and the
best restaurants costing ¥30,000-¥50,000 per person are available
only to those on corporate expense accounts. Golf might be a
pleasant recreation for older people, but only corporations can
afford the membership fees charged at golf clubs near the capital.
One after another, first-rate resorts also seem to end up as com-
pany facilities. Similarly, a majority of the luxury cars sold during

the bubble period were bought on company funds as displays of

corporate wealth and power.

While companies grow stronger and stronger, many of the
people working in them find their lives entirely dictated by the
demands of the company. It is unacceptable that people are unable
to acquire decent housing in the Tokyo area unless they work at
companies that offercompany housing. People who eat unimagin-
ably costly dinners on expense accounts cannot hope to enjoy such
meals with those who are truly important, namely their families.

It is natural in a free- market economy that money confers

power. But the argument that individuals who want the privileges
that come with corporate money should join the strong, rich com-
panies is naively simple. Individuals involved with corporations are
eventually absorbed by them. Their own values do not receive
adequate respect; individual needs are often sacrificed. Workers
receive notices of transfers to distant places in a single memo; fami-
lies are divided because of the transfers; promises of shorter work-
ing hours never materialize; overtime is demanded free of charge;

people even die from overwork. All these problems have the same
root cause.
came through the period of rapid eco-
Japanese corporations
nomic growth stronger than ever. The high earnings of strong
companies should have gone toward improving the lives of the
workers who bear the burden of corporate activities. Personal
incomes have risen a great deal since the rapid growth period, but
 The Five Freedoms 173

people do not feel as if they live in affluence.

Corporations are ostensibly the means by which people partici-
pate in economic society. Yet corporate organization has taken on
a life of its own. Company imperatives have come to take priority
over the values of working people. It may seem inevitable in capi-

talism that society should give priority to company values, but do

people in Europe and America work overtime without compensa-
tion? Are their expense accounts as pervasive as Japan's? Are people
there unable to have homes other than rented company housing?
Is it a foregone conclusion that fathers will live far away from their

children? The fact that individual lives are so bound to corporate

needs is clearly due to serious flaws in the system.

Individuals have to be liberated from their companies. It is only

when each individual becomes able to act autonomously that we
will see the birth of a richly diverse and dynamic society.

Going Beyond the Rapid Growth Era

What I have just described is in no way a traditional Japanese con-
struct. It is something that developed during the period of rapid
growth.
The Japanese-style company system, with its cooperative indus-
trial relations, long-term technical training, and stable employ-
ment, made Japan's rapid economic growth possible. Its permanent
employment system, seniority wage structures, in-house technical
training, and other features were also in some ways quite comfort-
able for the workers within this framework.
When Japan was trying to industrialize and "catch up" with the
West, its first priority was to strengthen the corporate body. It was
assumed that the lives of workers would naturally improve as com-
panies prospered. This framework served economic development
extremely well. Without this structure, the "miracle" of Japanese
development would not have been possible.

Japan is no longer catching up. We now rank alongside the

United States as an economic power. The social framework tied to
rapid growth is no longer appropriate.
174 Blueprint for a New Japan
No one is entirely satisfied with the status quo. There are many
calls for change from throughout society. One example is the
movement by both companies and workers to shorten working
hours. I will cover this subject in more detail later, but let me point
out here that this is not simply a matter of establishing a shorter
work day. It is an enormously complicated problem involving the
very nature of Japanese society.
The increasing fluidity of the labor market is another sign that
postwar ways are changing. Many people no longer orient their
lives entirely around their companies; they focus instead on them-
selves and their families. They are beginning to recognize that their
companies should be revolving around them. Many are changing
jobs, a step virtually unheard of just a few years ago. Others are
eagerly improving their skills or are participating in activities out-
side work such as social services. These are signs of forthcoming
change.
External factors have changed as well. The social advancement
of women is making progress; the male labor force is aging. More
and more foreigners come to work in Japan. These kinds of devel-
opments are accelerating the transformation of the rapid
growth-era company system. The internationalization of the
Japanese economy is itself becoming an engine of change in Japan-

ese employment. One of the issues of the Japanese company system

is the difficulty experienced by new entrants, such as foreign com-
panies, into the market. One reason is that companies setting up
operations in Japan have trouble finding capable, experienced
workers. If Japan's economy is really internationalizing, we may
expect major transformations in our industrial society.
These kinds of changes will almost certainly affect the Japanese
labor market. We should not sit passively by, letting events unfold
as they will. We should actively take part in correcting the distor-
tions of today's corporate society. Let there be no misunderstand-
ing: the direction of change I am describing does not constitute a
denial of corporate importance. Obviously, company activities will

continue to be vitally important for the healthy development of the

 The Five Freedoms 175

Japanese economy. However, if we wish to maintain today's high

productivity levels, we must rethink the relationship between com-

pany and individual. It is by giving individuals sufficient freedom
and building healthy relationships between them and their compa-
nies that Japanese companies will be able to retain their dynamism
over the long term.

The Severity of Individual Taxes

Japan's tax system is one of the major contributors to the social

structure that subjugates individual to company needs. The ratio

between direct and indirect taxes is too high here; direct taxes such
as income taxes are a higher proportion of total taxes in Japan than
in Europe. The tax system also clearly discriminates between indi-
viduals and corporations in favor of the latter. It does so by limit-
ing the portion of company profits allotted either to workers or to
stockholders, while permitting company holdings and expense
account spending to climb.
One example of the discriminatory features of the tax system is
in housing. An individual purchasing a home does so with after-tax
income. Companies, in contrast, offer housing to employees as
part of a benefits package and can thus regard interest on purchas-
ing capital as an operating cost.
The bequests of real estate from individuals to their children are

subject to inheritance taxes. So much so, in fact, that it is said any

family assets will have been eaten up by the inheritance tax by the
third generation. Company housing and buildings are not subject
to similar taxes. Given this kind of discrimination, the best land
will all eventually wind up as corporate assets.

Tax discrimination between individuals and corporations does

not apply only to the acquisition of real estate. Automobile pur-
chases are treated completely differently by the tax system depend-
ing on whether they are individual or company purchases. The
same is true of stock investments. Corporations can write off large
losses in the stock market, but individuals are not permitted to take
these deductions.
176 Blueprint for a New Japan
The predominance of direct taxes also contributes to corporate
power. With a system of high individual income tax rates, a sizable
portion of what the company pays out in the form of wages is eaten
up by taxes. It is thus cheaper for companies to pay their people in
housing, company cars, and expense accounts than in actual wages.

In short, the tax framework encourages companies to spend money

on things other than increases in worker wages.
Today's steeply progressive individual income tax was devised
in the postwar period when Japan was just rising out of poverty. It

was designed to tax the wealthy heavily and to distribute that

—
money widely certainly a laudable aim. Now, however, as we seek
new levels of affluence, the priorities and methods embedded in the
tax system are no longer rational. Because income tax rates rise so

steeply, people enjoy less than half of any additional income they
earn. We should not assume that only the very few—the exception-
ally rich — are in the higher tax brackets. A considerable number of
people already fall into this range at today's income levels, and
more and more young "salarymen" are likely to join their ranks as
the seniority system disintegrates.
We urgently need a large-scale cut in income taxes. Our society

is aging more rapidly than that of any other industrialized nation.

The proportion of the population over age 65 was 9.1 percent in
1980, the lowest rate among industrialized nations, but by the year
2000 it will have passed those of the United States, Britain, and
France at 16.9 percent. By 2020, it is expected to reach 25.2 percent.
At present, the ratio of working people aged 20-64 to senior citi-

zens is 5.5 to one. It is expected that, by the year 2020, only 2.1
working people will support each senior citizen. Medical, pension,
and other social spending will increase as our society ages, but the
proportion of working people who will be called on to pay for such
costs will decrease rapidly. At today's tax rates, the income tax bur-
den on working people will only grow heavier. Those currently
working have to be uneasy about the prospects for Japan's welfare

system in the early twenty- first century.

It should be noted here that, even today, the average elderly
 The Five Freedoms 177

person enjoys greater material comfort than do most working

people. Elderly households have lower annual incomes, but their
income per household member is higher. The tax system offers

senior's deductions, deductions for public pensions, and exemp-

tions of ¥2 million more than those offered income-earning house-
holds. Furthermore, since housing loans and educational expenses
for senior citizens are low, the proportion of income they spend on
self-improvement and entertainment is high. Elderly people thus

enjoy greater comfort and consume more. I raise these points to

show that we cannot lay the tax burden entirely on the working
generation but must achieve a better balance through the use of
indirect taxes.

In sum, we must reform today's tax system, which too heavily

favors corporations; we must greatly reduce income taxes and
expand the range of choices available to individuals.

Cutting Income and Residence Taxes in Half

First, income and residence taxes should be cut in half. Because of

the progressive income tax scale, the individual tax burden rises

steadily with income even if individual income and residence tax

rates remain at their current level. Working families, already strug-

gling with mortgage payments and educational expenses, are par-

ticularly hit with this burden. We certainly cannot afford to
undermine the will to work through increased tax burdens, given
that our working population will begin to contract. High individ-
ual taxes can only aggravate the imbalance between salaried work-
ers and others, threatening the very stability of our society. Cutting

income and residence taxes in half will put a much larger chunk of
disposable income into the hands of individuals, who would freely
choose how to spend their own money.
Second, we must reduce the corporate tax to the lowest levels in
the world. At the same we must strictly enforce corporate tax
time,
laws. Tax loopholes involving company recreational facilities, com-
pany residences, autos, expense accounts, and the various benefits
added to the income of workers should not be permitted. The tax
178 Blueprint for a New Japan
system should not allow owner- managers to Use company facilities

for private purposes.

Some people have suggested that corporate taxes be increased.

But as the economy becomes more international, our tax system
will have to take into account external as well as domestic condi-
tions. If Japan stands out as especially costly in terms of corporate
and asset taxes, companies and capital will flow to other nations.

We cannot set corporate and asset taxes in isolation from the tax
systems of other industrialized nations. We must, at the very least,

be neutral in active international economic transactions. Lower

rates would be better still.

The government obviously cannot cut income taxes in half

without another means of generating income. Japan's tax system is

peculiar among those of the twenty-four advanced industrialized

nations of the OECD. Our income taxes make up a larger share of
the total tax burden than in any other OECD country, and our
consumption taxes the smallest share. We will not be able to avoid
dealing with this issue in the coming years. We will somehow have
to rectify this balance, and the most rational approach will be to
increase the consumption tax rate.

While cutting income and residence taxes by half, we should

raise the current 3 percent consumption tax rate to the 10 percent

level (VAT or sales tax) established by our European and American

counterparts. By raising consumption taxes and lowering income
taxes, we will not only improve the balance between direct and
indirect taxes but will also galvanize the will to work and expand
individual choice in the use of disposable income. We will also thus
be assured of funds for the investment in residential facilities that I

discussed in Chapter 2. In other words, this tax reform is fully con-

sistent with the aims of "freedom from companies" and "freedom
from Tokyo."
If the economy continues in its current state, we might want to

defer the consumption tax hike for two or three years after income
taxes have been cut. We can make up the tax shortfall during this

period by issuing deficit bonds. Specifically, tax revenue increases

 The Five Freedoms 179

accruing to every 1 percent of consumption tax come to ¥1.8 tril-

lion (calculations are based on the budget of fiscal year 1993). With
special revenues of approximately half a trillion yen, the total
increase comes to ¥2.3 trillion. Revenue increases should reach ¥3.2
trillion by fiscal year 2000. What will happen to average revenues

between now and then?

Since consumption rates depend on the consumption tax rate, it

is impossible to make accurate projections, but a very crude calcu-

lation suggests that if consumption taxes were raised from 7 per-
cent to 10 percent, revenue increases could be expected to reach
¥20 trillion.

How much will we need to make up for the shortfall from other
income and operating taxes based on
taxes? Calculations of only

show revenues of about ¥16 trillion. If

the fiscal year 1993 budget
we reduce income and operating taxes by half, we will need to raise
¥8 trillion. Individual residence taxes today total ¥8 trillion, so a
50-percent cut will mean a ¥4-trillion shortfall. Again, if corporate

taxes are reduced from today's 37.5 percent to 33 percent, we lose

¥2 trillion, for a total shortfall of ¥14 trillion.

These are rough calculations that may not correspond exactly

with the actual figures. Currently, the proportion of total tax rev-
enue that comes from direct taxes tops 70 percent. The changes I

have proposed should reduce the proportion to 60 percent. Even

with the cuts in income, residence, and corporate taxes, these cal-
culations suggest that a 10-percent consumption tax will generate

¥6 trillion in additional revenues. ¥5 trillion of this should be spent

on public works investment for the next century.

The remaining ¥1 trillion may be used to defray the costs of ful-

filling our global responsibilities. These include contributions
other than ODA, such as projects furthering Japan-U.S. or Japan-
European relations or the education and training of foreign
students and laborers. We could also apply this money to other
needs related to foreign relations, such as compensation to those
hurt by market-opening measures and funds for small business
and agriculture.
 CHAPTER FOUR
Freedom from Overwork

Planning Our Own Futures

"Children study too hard, adults work too hard, and senior citizens
have nothing to do," goes the common complaint. The "three
excesses" accurately describe the problems facing Japanese society
today. Children spend all their energy on the passive acquisition of
data and math skills for the looming entrance-exam wars. After
graduation, they devote themselves to their companies. Years later,

retirement often brings little but boredom and an excess of free

time.
This system has served Japanese industry well. The seemingly
efficient use of people was a critical element in Japan's rapid devel-
opment. Today, however, Japan is criticized by other countries as a

nation that insists always on winning, as an "economic animal"

that knows nothing outside the realm of hard work. This is why
informed people from overseas say they "would not want to be like

the Japanese."
More importantly, Japanese people themselves are beginning to
express grave doubts about spending their entire lives as part of a
production machine. Everyone wants an end to the "three
excesses." Educational, labor, and social reform are all necessary
solutions to these problems.
The Japanese labor market today faces a number of pressing
problems. In the short term, we must reduce working hours;
medium-term efforts should focus on laying the groundwork for

180
 T H E F I V E F R E E D O M S 181

the employment of senior citizens and women; and, over the long
term, we must turn our company-centered society into one cen-
tered on the individual.

At first glance, these issues appear to be unrelated, but they are

connected. If we do not reduce working hours,
in reality intimately

we cannot promote the employment of senior citizens

for example,

and women. If we want to create a working environment that

welcomes senior citizens and women, we must reform Japan's
corporate-centered society.
Contradictory as it may sound, the only way to maintain the
dynamism of Japanese industry in a high-technology age is to liber-

ate ourselves from overwork. We must enable people to spend

more time on their own activities and choices instead of merely
binding themselves to their work.

Three Reasons for Shorter Working Hours

There are at least three compelling reasons why we need to develop

concrete policies aimed at reducing work hours. Above all, we need
to bridge the gap between what is nominally the world's highest
income level and our own sense that we do not lead affluent lives.

In other words, while Japan enjoys almost an overabundance of

material goods, the choices available to the people are still too few.
We have the ability and the money to do as we like, but we do not

have the freedom to pursue our own interests. The main source of
today's frustration is in fact the lack of freedom.
Second, we must help people to develop the necessary skills and
talents to meet the changing labor standards of the next century,
when labor productivity will be paramount. As high productivity
becomes increasingly valuable, Japanese men and women will be
eager and able to have long working lives. We will need to make the
best of their abilities. The emphasis will not be on people working
themselves to the bone, reducing themselves body and soul to
labor, but rather on investing their energies in their own health and
development. People will therefore need the time and scope to
pursue self-development.
182 Blueprint for a New Japan
Third, reduction of working hours is part of a broader-based
international effort to coordinate work practices. Japan's working
habits must meet international standards, particularly those of
other advanced industrial nations. We must, therefore, reduce
working hours to common-sense levels.

Let me qualify this by saying that I do not personally think that

the Japanese work too hard. Europeans and Americans work with a
high degree of concentration during working hours. They then
leave when working hours are over and spend their free time with
their families or pursuing their own interests. In Japan, though,
work during working hours is often of a very low intensity (with
the exception of assembly-line work). People work overtime
instead. One might even say with some hyperbole that though the
total amount of work accomplished is roughly the same, in one
work culture, people finish the job within working hours, while in

work long hours of overtime.

the other, they
Sharing international standards of work styles is not simply a
matter of reducing hours. It entails changing the way we work: we
need greater intensity and concentration during working hours.
The movement to shorten working days must embrace this
broader change in work culture.
Naturally, income should not be reduced along with hours. As
work will be done more we have to change our notion
efficiently,

of how income is calculated. Moreover, if we cut income and resi-

dence taxes in half, people should have plenty of money to live

comfortable lives even without working overtime.
By calling for reduced working hours I by no means intend to

send the message that Japanese should not work. Japan cannot pos-
sibly support itself without the continued will of the people to
work, since we cannot rely on natural resources for our sustenance.
The purpose of shortening working hours is to enable people to
work intensively and eagerly during work hours and to spend their
free time as they please.
The impact of reduced work hours will be enormous. First, the
relationship between companies and labor will change fundamen-
 The Five Freedoms 183

tally. Today, workers often feel that they live under a huge com-
pany umbrella. With the various benefits it provides, the company
has seemed to many to be all there was in life. Ifwe succeed in
reducing working hours, people will be able to achieve some dis-
tance from the company, to find some space that will permit them
to plan their own lives, select their own work, and develop their
own abilities. The reduction of working hours has to be the first

step in achieving "freedom from companies."

People will use their free time in countless ways. Some may
want to take a holiday and rest from the fatigue of the working
year. Other would undoubtedly spend the time to study and
develop new skills. We complain that our children "study too
hard," but it is the adults who really need to study. If people can
take the time to upgrade their own abilities and broaden their

understanding of the world around them rather than give them-

selves entirely to their companies, they will not "lack things to do"
after retirement.

People in Europe and America often take vacations up to four

weeks long. Many use this time to rest with their families in the
countryside while also devoting some hours each day to language
or other specialized study. Even in their regular working lives,

many people pursue M.B.A.s and other degrees at night school.

Unfortunately, Japanese today do not have that flexibility. Some
may have the opportunity for such education as part of their com-
pany training programs. What is important is that people have the
freedom to pursue the education they themselves feel they need.
Reduction of working hours will permit individuals to develop
skills that will be valuable in their careers as well. During the catch-
up when we knew with certainty what we needed to make
years,

and how make it, people acquired the necessary techniques and
to
knowledge from their predecessors on the shop floor. The longer
they stayed in the company, the more skilled they became. But fac-
tory-based knowledge is no longer adequate for today's high-tech-
nology market needs. The decisive factors in success hereafter will

be a keen sense for consumption trends, the theoretical grounding

184 Blueprint for a New Japan
to analyze product ideas, and the creativity to* design new products
and markets.
Our best workers, then, will make time outside of work to edu-
cate themselves. People will have to study from the earliest stages of
their careers if they wish to enjoy long working lives.

The increased free hours can also be used for activities that con-
tribute to society. It is often said that international and social ser-

vice activities are not highly developed in Japan. The reason for this
is not that Japanese are less inclined than others to such activities,

but that we simply do not have room in our lives for anything out-
side the company. A one- or two-year leave from the company to
work in economic aid activities abroad, for example, would be
invaluable for everyone concerned. Such overseas experiences
enrich not only the lives of those who actually go abroad, but their
companies and all of society as well.
Weekend service activities are also important. If people had the
time and means, they could volunteer for environmental activities

or for community and social service. These services cannot be sus-

tained solely on the efforts of government; when welfare activities
are reduced simply to collecting taxes and building old age homes
or welfare facilities, they have no soul. Similarly, money alone is
never enough. The growing demands on the system would simply
increase the tax burden on everyone.
A dynamic welfare state requires the participation of the people.
We cannot build a high-quality welfare society without contact and
exchange among our citizens. Those who participate actively in

social service efforts are especially aware of the enrichment that

comes with these activities.

An 1800-Hour Work Year

My basic aims fall roughly into four categories: full use of paid
vacations, time-and-a-half pay for overtime work, two-day week-
ends, and forty-hour workweeks. I call these goals "basic" for two
reasons. First, these four conditions have already been met by
advanced nations such as America and Britain, which have work
 The Five Freedoms 185

years of roughly 1900 hours even though they have been relatively
slow to accept shorter work hours. If Japan could reduce its work
year to 1800 hours, we will have reached and even surpassed the
standard they have set. Thus, the four aims I cited are minimum
and basic.

The second reason is that these will be considered the basic con-
ditions for future market competition. At some point, we will not
be allowed to compete with other nations by foregoing two-day
weekends and paid vacations. Rules are already being drawn up
that will prohibit nations from competing on the basis of labor

conditions that do not meet the standards shared by advanced

nations.
The proportion of Japanese workers taking paid vacations
finally exceeded 50 percent in the 1980s, but we still have a long
way to go. The average vacation time even for those who do take it

is usually a maximum of eight days, an especially low number next

to America's twenty days and Germany's thirty days. Opinion polls

show that the two main reasons why people do not take their paid

vacations are 1) they fear "causing trouble for our colleagues if we

take the day off," and 2) they want to "save up days in case we get

sick."

Planned vacations, company rules for organizing them, and

temporary labor services can go a long way toward eliminating the
first concern. And it is truly unfortunate if people need to "save
vacation days for sickness. " Most advanced countries have sick-

leave systems in place. Japan, too, should make such provisions so

that people do not have to use their holidays other than for the
pleasure for which they were intended.
One effective way of encouraging people to take their holidays is
to increase the number of national holidays. We might stretch the
New Year's holiday to the seventh of January; designate all of the
annual spring "Golden Week" a national holiday, including May 1;

and declare another "Golden Week" in the fall. Every season could
thus have an extended vacation period. This effectively means that
the national government would be forcing holidays on the people
186 Blueprint for a New Japan
by a kind of decree, but it may be the most promising approach in
a nation where people are reluctant to plan their own holidays.
To alleviate the traffic problems that arise when the entire nation
takes its holiday on the same day, each prefecture or city could
freely select its own public holidays.
However, it is the companies themselves that should take the
initiative and increase the number of holidays they offer; they
should also take steps to ensure that workers actually take these
holidays, and preferably leave it up to workers to decide when they
will take their time off. Government policy, meanwhile, should
focus on spreading such efforts throughout society. We can
arrange to publicize which companies give the most holidays, or
reward companies that actively arrange days off for their workers.
Overtime pay will also prove extremely important for maintain-
ing competitiveness. Labor hours should be adjusted to the
strengths of the economy at any given time. Some industries may
require longer hours, and some shorter. Working hours, in other

words, should be set not uniformly but by the particular needs of

each industry and each company. The best way to encourage com-
panies to shorten working hours is to make overtime labor more
costly. The government should not seek to interfere with the com-
petitive advantages of individual companies; companies that want
their workers to work long hours and are willing to pay time-and-
a-half wages may do so.

In the coming labor shortage, small and medium-sized firms

that cannot afford two-day weekends or shorter working hours will

find it increasingly difficult to hire people. If forty-hour workweeks

and two -day weekends are required by law, however, then all firms
will have to adhere to the rules. All companies, large and small, will

compete under the same conditions. This can only be to the benefit

of small firms.
 CHAPTER FIVE
Freedom from Ageism
and Sexism

The Contributions of Senior Citizens

Japanese society is now aging at a pace unprecedented anywhere in

the world.
The first concerns that come to mind when we think of senior
citizens have to do with medical, pension, and social welfare facili-

ties. These are extremely important, but I would like to consider

the issue of the aging society in a different light.
The most crucial need of senior citizens is not the small pension
they receive, but the zest for life that comes with contributing — as

they have throughout their lives — to self, to family, and to society.

In other words, it is most important to senior citizens that they not
lose their freedom on account of their age; they, like everyone, need
to continue to live a social existence. People need the freedom to
work and the freedom to participate in society. Unfortunately,
Japan's senior citizens today do not enjoy either of these.

No one escapes aging. Very soon, Japanese society will have the
largest proportion of senior citizens in the world. We have no time
to lose in putting our minds to the issues raised by an aging society.

"Senior citizen" is a catch-all term that includes a vast range of

people. Many senior citizens are ailing and do require social pro-

tection, but the majority are relatively healthy people with plenty of

energy. As we live longer, the number of healthy senior citizens will

grow. Our first priority must be the creation of an environment in

187
188 Blueprint for a New Japan
which these senior citizens can actively participate in society.
If we are serious about eliminating the "three excesses" (chil-
dren's excess study, excess work of adults, and excess free time for
senior citizens), we must undertake a thoroughgoing social reform
to rebuild our company-centered society, beginning with a reduc-
tion of working hours. We don't need to wait for a social revolu-
tion before we expand the opportunities for senior citizens to
participate in society. There are plenty of policies available right

now. The lifetime of experience that senior citizens have accumu-

lated can be put to social use in many ways, and can thereby con-
tribute to their own lives. For most people, active participation in
society would mean being able to work in their own specialized
areas. This is an important problem that I will address again later,

so I will here discuss other areas in which senior citizens might

be active.

• Education. Currently, only professional teachers are permitted to

teach at the elementary, junior-high, and high-school levels. Their

task is to impress upon the children whatever knowledge is called

for in the Ministry of Education's "Outline of Educational Guide-

lines." However, in the effort to expand the choices available to

adults, we must begin by diversifying the content of childhood

education. Senior citizen participation in classrooms is one of the

unique learning experiences we will have to offer children. The
knowledge and experience senior citizens have to impart are unde-
niably a valuable part of education.

• Technical training; aid programs. Personnel contributions will

only become more important in the international contributions

Japan will make in the future. Since working people can only rarely

take one-year leaves from their jobs to work on outside projects,

the government should actively support the use of what is an excel-
lent resource for international contributions — the abilities and
experience of our senior citizens. Even now, many senior citizens
offer technical and other assistance to communities overseas.
 The Five Freedoms 189

Recently, for example, retired specialists from a synthetic textiles

factory in Hokuriku traveled to several Asian countries to offer

technical instruction. If there were more opportunities to offer

help on a paid basis as part of government programs, there is no

question that many more people would offer their services.

• Welfare. As I mentioned above, most senior citizens in their six-

ties and seventies are very healthy. They are uneasy about their

future health and understand better than anyone the importance of

social services for senior citizens; they give serious consideration to

the problems senior citizens face. It would be useful to arrange for

"young" senior citizens to participate actively in welfare efforts.

They might do so on a volunteer basis, but as long as they are

offering their time, they should be able to earn some money. The
government should give strong support to their work.

These three activities are just a few of the areas in which senior
citizens can make valuable contributions. But such activities will

have a hard time taking hold without policies to direct them. This
is where the government comes in. It is far preferable to spend
money on developing such programs and thereby to enable senior
citizens to contribute to society and enjoy greater quality of life,

than simply to pour money exclusively into welfare systems. Even

more important, our senior citizens will discover renewed pride
and meaning in their lives.

Senior Citizens in the Workplace

Japan's young labor force will begin to contract in 1995. By the year
2000, the overall work force will begin to shrink. It is becoming
increasingly urgent that we begin preparing for the employment of
senior citizens.
Japan's labor market has hitherto been molded by an employ-
ment system premised on permanent employment and seniority
wage structures. This system, as I stressed earlier, lent tremendous
power to Japan's rapid economic growth. Senior citizens, however,
were left standing on the sidelines in this labor market.
190 Blueprint for a New Japan
The permanent employment system is already collapsing. Its

expand the range of choices available

collapse will not only to
senior citizens but will be of great significance for Japanese indus-
try itself as it develops employment opportunities for senior citi-

zens. We are already beginning to see signs of such transformations

of the permanent employment system, as more and more people
change jobs and careers. Employment opportunities for senior citi-

zens are increasing little by little, but the pace of change is very
slow. If we work themselves out naturally, nothing
leave things to
will change fast enough to accommodate the pace of the aging of
society or the coming labor shortage. A major responsibility for
government, then, is to remove the obstacles senior citizens face in
the workplace and actively promote their employment.
From the point of view of the senior citizen, the obstacles to
work are low wages and poor working conditions. From the com-
pany's view, it is hard to use senior citizens effectively. Hiring and
working methods lack flexibility on both sides of the labor-
management relationship.
We must begin by promoting the practice of paying people
according to their abilities and contributions. Senior citizens and
young people with the same abilities should be paid the same
hourly wage. Small businesses and craftsmen already give the same
compensation for the same skills. Age is not a factor. Such a prac-
tice could act as an incentive to white-collar workers as well and
offer them life-giving energy in their older years.
Skills present a different problem. Salaried workers today are
usually shifted to managerial jobs as they grow older and are grad-

ually removed from day-to-day operations. The skills they develop

are personal, such as the ability to move the organization in the
desired direction. Accordingly, when they transfer to other compa-
nies, or even to non-managerial jobs in the same firm, these skills

are not transferable. Specialized skills offer the most promise of

transferability. Workers must therefore maintain and upgrade
these skills from the early stages of their careers.

However, to retrain older workers, we need policies with more

 The Five Freedoms 191

immediate effect. Today's senior citizens worked very hard in their

youth; there is no question that, with some additional skills, they
can contribute significantly to day-to-day business operations.
Companies hire so many young people that they have not had to
learn how to use the considerable skills of their older workers; they

let training and education for older workers fall behind.

A policy proposal that may apply here and be very effective
would be to give substantial public assistance to companies that
seek to educate, train, and employ senior workers. The policy could
also apply to individuals who try to pursue their own training out-
side the company framework. The government can help by reduc-
ing the costs of such training through tax deductions and subsidies.

We might also establish public education and training programs.

We must also make employment practices more flexible. As
people age, it is natural that they should be reluctant to work long
hours. Part- or half-time workers often suffer inferior working
conditions, while companies find it hard to use their skills effec-

tively. Many senior citizens would like very much to work if they
could do so on a part-time or consulting basis where their skills are
needed and put to good use. Special skills offered on a consultancy
or part-time basis will become increasingly important to compa-
nies that need access to a wide range of professional expertise. It is

rational for companies to rely on outside people for high-level

skills that they only need from time to time.
Our biggest obstacle is our way of thinking. We will have to
acknowledge that the distinctions we draw between part-time and
full-time workers or between salaried workers and outside consul-
tants are unrelated to quality issues. We should legislate a nondis-
crimination principle to eliminate the discriminatory distinctions
between part-time and full-time employees. I have in mind here
the Part-time Law proposed by four of the opposition parties.*
However, to establish part-timers as skilled and valuable employ-
ees, they must be made eligible for the same social insurance bene-
fits and be subject to the same income taxes as full-time workers.
This law will also be crucial for promoting the participation of
192 Blueprint for a New Japan
women in the workplace, as I will discuss below.
If the conditions described above are met, senior citizens will be
able to participate actively in society. It will, inevitably, take time to
achieve these fundamental changes. Companies today assume they
need not hire senior citizens. They neglect theirtraining and rarely

consider more flexible hiring practices. Under such circumstances,

the hiring of senior citizens is not likely to make serious progress.
Nor will governmental measures to ensure their employment make
much headway.
We need to break this cycle. For the foreseeable future, we must
require companies to retain people up to the age of sixty- five. This

is essential in part because we will eventually have to raise the age at

which people will begin receiving their pensions to sixty-five. Peo-

ple should not be required to work full-time beyond age sixty,

however; contracts may be written for part-time or consultancy

work in which workers maintain their hourly wages. Again, those

who retire early or whose skills simply are not applicable to

company needs should receive company pensions equivalent to
part-time wages.
National and prefectural governments and public organizations
should of course take the lead in implementing such plans in pub-
lic workplaces, and do so as quickly as possible. Bureaucrats must
lay the groundwork to ensure that the abilities of senior citizens are
not wasted.

Increasing Choices for Women

Many of the employment problems of senior citizens apply equally
towomen. In a labor market premised on permanent employment,
women, like senior citizens, are automatically relegated to the side-
lines. This requires immediate attention, not only because of the
economic challenge posed by the coming labor shortage, but also

because we must offer greater scope and more diverse choices for
women to fashion their own lives.

Childbearing and child-rearing have heretofore constituted

major obstacles to women's participation in the workplace. It is
 The Five Freedoms 193

impossible to exaggerate the importance of the work women have

done in the home, but it is women who should choose whether
they wish to be confined to the home. A wider range of roles and
opportunities must be offered to women. At the same time, men,
senior citizens, and children will have to help out more with the
household work.
Japan's labor market is still shaped by the uniform assumption
that men go work while women maintain the home. The
outside to
permanent employment system hinders women, as it hinders
senior citizens, from entering the work force. As with senior citi-
zens, conditions are changing bit by bit, but the pace is much too
slow. Without reforms imposed from the outside — through gov-
ernment policy —we will not see significant changes anytime soon.
There are a number of concrete policy options available to us.

Let me touch on the major points that need to be addressed. We

must first build the social support systems that will permit women
to pursue both careers and homemaking. Policies should stress the

strengthening of company maternity-leave plans. We must also

expand systems to allow for childcare and assistance in homemak-

ing. The costs need not all be borne publicly, but we must, at a
minimum, establish effective and reliable institutions to perform
these functions. This does not mean, of course, that we should
attach less value to the burden of homemaking and child- rearing.
The work done in the home, including child-rearing first and fore-
most, will only become more important in the future. The respon-
sibility should therefore not be placed entirely on women: men,

too, should have support structures that will enable them to play

active roles in the domestic arena.

Second, as our society ages, the care of elderly people will also
become an increasingly serious problem. Like child- rearing, this
has become almost exclusively the responsibility of women.
Women in their forties and fifties who have worked hard to
develop and sustain long-term careers frequently find themselves
resigning from their jobs to care for elderly parents, either their

own or their husband's.

194 Blueprint for a New Japan
Leaving work in mid-career does even more damage to wom-
en's careers than taking time for child-rearing at a younger age.
Women who take some years early in adult life to raise children can
eventually reenter the workplace. As the children grow, women
gain some free time, often enough to enable them to return to
work. Ultimately, of course, childcare ends altogether. In contrast,
the burden of caring for the elderly only becomes heavier with
time. It is impossible to know if or when a woman will be free to do
other work. It is a serious loss from both an economic and a social

point of view to have experienced and responsible career women in

their peak working years be forced to leave their jobs.

The government must therefore give public assistance for the

care of the elderly and for the care of children. Caregivers could
assist the elderly in their homes rather than consign them to hospi-
tals. The national government could hire home caregivers and
assist elderly people in bearing the costs of the special facilities they
will need in their homes. The education and development of man-
power to handle home care is itself becoming an urgent policy
issue. We must build a society in which women can both fulfill
their filial obligations and work outside the home in satisfying
positions if they so desire.

Providing Pensions to Housewives

Women who leave their companies to raise families fall behind

their male colleagues in skill and experience. This is true even
where companies invest in women's education and training. Lack-

ing the background for higher-level work, they are given only sim-
ple tasks to do when they come back to the workplace after several

years. The problem may best be addressed first by requiring com-

panies to give men and women the same education and training,

and second by easing the cost burden on companies through tax

and other incentives. The maintenance and upgrading of women's
skills are essential for the participation of women in the workplace.
Just as with senior citizens, it is vital that Japan adopt more
diverse work and hiring styles if women are going to be able to
 The Five Freedoms 195

enter the workplace. We need not insist that husbands work full-

time while wives work part-time and do the housework. We need

an environment where husbands can perform high-level work on a
part-time basis and also work at home if we want to enable women
to work outside the home more readily. We need policies, in other

words, that will expand the choices available in work and hiring
practices.

Reform of the permanent employment system is another policy

area that is crucial for women's participation in society. Most pub-
lic workplaces like teacher organizations, city offices, insurance
offices, and hospitals guarantee permanent employment as a mat-
ter of principle. This means that it is, in principle, impossible to

become an elementary school teacher in mid-career. It is obviously

important that teachers have experience, but there is no reason that

every teacher must have acquired that experience in his or her

twenties. There is no reason why well-educated women cannot
begin teaching in schools in their forties, after they have raised
their own families. Fresh blood of this kind could improve the level

of education, not undermine it.

Permanent employment has become a meaningless principle in

many cases of public hiring. It is discriminatory to hire only young
people. I believe we can induce momentous changes throughout
Japan's labor market by implementing our reforms in public
offices, hospitals, and insurance offices.

The difficulties faced by women resemble those of senior citi-

zens in other ways. Because companies have not hired women as

regular workers, none of the groundwork has been laid for doing
so. Again, we probably need temporary measures requiring that
women be hired.
We must begin by implementing these measures in all public-
sector jobs. The civil service — originally intended to reflect the
composition of the citizenry — is composed overwhelmingly of
males. Neither the bureaucracy nor the Diet reflect the population
they serve. A certain proportion of women in the public workplace
should be required by law. This is not an ideal solution, but it may
196 Blueprint for a New Japan
be a useful provisional measure until the hiring of women becomes
established practice.
I want to emphasize here that the work women do in the house-
hold is extremely important. The unfortunate truth of the Japanese
system is that we maintain obstacles against women who want to
work outside the home, and at the same time deprecate the work
women do at home. It is surely as important to bear and raise the

next generation of Japanese, to do the housework, and sustain fam-

ily life, as it is to work outside the house for wages.
Widows' pensions reflect this contradiction. Women who have
worked outside the home receive their own full pensions even
when their husbands die. This is as it should be, but widowed
housewives receive only half the pension. The difference is unwar-
ranted. Under our current pension system, the pensions that senior
citizens receive do not come out of monies they have paid in over

the years, but out of taxes paid by today's young working people.
Yet the housewives who raised these young people receive only half
the pension of working women, who may or may not have raised
children. This contradicts the basic principle governing our pen-
sion system. Housewives and their husbands clearly constitute a
single unit. The housewife bearing the responsibility for housework
and child- rearing is contributing to society, just as her working
husband is. When her husband dies, the wife should naturally have
full rights to his pension.

"Opposition parties" refers to those under the LDP government.

 C H A P T E

Freedom from Regulations

Anachronistic Regulations

I recently had occasion to hear a discussion of land prices in a cer-

tain regional city. The city has an urban district at its center, a

"controlled urbanization district" outside of that, and an "agricul-

ture promotion district" on the periphery. Land in the residential

areas most recently developed in the urban district costs roughly

¥600,000 per tsubo (36 sq. feet), while land in the "controlled" dis-
trict costs about ¥200,000 per tsubo. The "agriculture promotion"
land at the very outskirts, which might be expected to be least
expensive of all, runs at roughly ¥400,000 per tsubo.
Why do such peculiarities arise? The controlled urbanization
district neighboring the city center became the object of strict regu-
lations because it was feared that it would face intense development
pressures. The regulations sought to protect farmlands in the con-
trolled area by restricting almost all development except that by
younger sons of farmers. Meanwhile, the agriculture promotion
district that was also intended to protect farmland is subject to
almost no regulation, because no one expected residential develop-
ment to press that far into the hinterland. But residential develop-
ment has leapfrogged the controlled district into the agriculture
promotion districts, with the result that prices climbed to the
¥400,000 level.

Ironically, the agricultural district that was supposed to preserve

197
198 Blueprint for a New Japan
the best land for farming is the one being developed most inten-
sively; land prices there have risen steadily despite its location. The
farmland in the controlled district is meanwhile the area's most
protected land. Clearly, urban planning of this kind is badly
managed. It has not even succeeded in preserving the best farmland.
No one —urban planners or anyone —foresaw else the spread of
automobiles. No one imagined that people would be able to drive
from the country into the city within thirty minutes. Urban plan-
ning chugged along without recognizing that motorization was the
definitive development of our times.
If policy making cannot predict these kinds of changes, it must
at least be able to make rapid shifts in policy so as to assure, in this

case, for example, both urban development and protection of good

farmland. This is only possible if regulations undergo periodic
review. But the unfortunate regulations in this regional city simply
stayed on the books, and planning went nowhere. Aggressive
efforts should be made to change regulations as times change. This
cannot be done in Japan today.
I am not saying that regulations are altogether superfluous.
Currently, however, new regulations are simply tacked onto out-
dated regulations that are preserved in their original form until
every aspect of citizens' lives is bound by regulations. A liberal

society should be founded on laissez-faire principles. Only the

minimum necessary regulations should be maintained.
The excessivenumber of anachronistic regulations constrains
the lives of people on every front. Urban planning and other prob-
lems are not unique to the area I described; they are ubiquitous.
Meaningless regulations up our lives in issues related to trans-
tie

port, finance, distribution, and land use. They distort our lives. To

build a truly liberal society, and to make our lives more pleasant,
we must immediately commence deregulation.

Toward a Rule-Based Administration

Problems like those faced in urban planning can be found in
many areas. Public works, for example, are allocated according to
 The Five Freedoms 199

detailed standards determined by the central government and car-

ried out uniformly nationwide. The result is that the entire country

has the same community centers and public halls, but it is doubtful
whether any given region actually receives the specific kind of
public investment it needs.
Again, central planning for the encouragement of industry is

channeled through prefectural governments and carried out in tan-

dem as directed. Kasumigaseki stands at the center of industrial

policy making, while the raison d'etre of the prefectures is to loyally

carry out its directives. Industry, however, differs from place to

place; industrial policy should be specific to the region in question.

A factory analogy would place the role of Kasumigaseki in post-
war Japan to that of foreman. MITI (Ministry of International
Trade and Industry), the Ministry of Finance, and other agencies
decided how to allocate industrial capital and circulated funds to
the areas they chose. The bureaucracy responsible for transporta-

tion similarly determined how much should be allocated to which

district, and set prices. It managed everything from the assignment
of taxi districts to the allocation of airline flight routes to the certi-

fication of truck transport businesses. Similarly, the Ministry of

Education set educational guidelines (aimed especially at the ele-

mentary level) and decided where to establish district schools and
how to divide the children and teachers among them. As foreman,
Kasumigaseki managed the large factory called Japan.
I acknowledge that this factory- management approach was a
crucial engine for rapid economic growth, and that it had obvious
value as such. There is no question that the concentrated — if too
uniform — power of the administrative system was able to absorb
foreign technology in a short span of time and thereby succeeded
in raising the Japanese economy to world-leading levels. But man-
agement of this kind became untenable as the "factory" that is the
Japanese economy grew too big. The economy is a fluid
actual
entity and not something that can be managed by a handful of
administrative organizations. People's needs change radically, as
does technology. Most importantly, if the life of the citizenry is to
200 Blueprint for a New Japan
be subjugated to a single image of the ideal society, what becomes
of freedom?
The failings of management- style administration are clearly
revealed in the travails of our financial administration, which
recently attracted attention with the collapse of the bubble econ-
omy. Every aspect of the finance industry, from the building of new
bank branches to the establishment of deposit interest rates, was
carried out under the strict regulation and supervision of the Min-
istry of Finance. For regulatory purposes, finance was not only
divided by sector — into banks, securities, and insurance —but was
subdivided further so that the banking sector alone included long-
and short-term finance, the savings banks, and other narrow regu-
latory divisions. The ministry also gave detailed guidance in every

action taken by individual financial organs. Again, we return to the

image of the foreman managing his factory.

The consequences of this approach are becoming clear. The

premise underlying close administration of this kind was that the
money market would remain a manageable size and that there

would be no great change in existing conditions. In reality, the cap-

ital market became increasingly global, complex, and diverse. The
changes were significant and constant, and the ministry "over-
lords" simply could not manage the details across so wide a terri-
tory. The financial industry survived under MOF administrative
protection, but since the "overlords" could not supervise every-
thing under their jurisdiction, financial institutions and non-banks
came to suffer extensive bad debts. Serious crimes took place in the
banking industry.
The administration of the financial industry must be changed
from the bottom up. It should not become an entirely unregulated
industry. My argument is that we must replace management-
through- regulation with rule-based policies. In other words, we
should stop using regulations to check company activities before
they take place, and instead have policies designed to contain any
undesirable results of the action taken by companies.
 The Five Freedoms 201

CompanieSy Individuals, and Responsibility

We must manage company behavior through the power of the

market, not the power of the bureaucrat. We can ensure greater
opportunities for consumers if we insist on strict corporate
disclosure.

We must determine, for example, precisely what rules the finan-

cial industry should follow and subject the industry to strict

scrutiny. Rules might include maintaining a certain capital-to-

assets ratio; limiting excessive real estate financing; or requiring

healthy risk-management standards. We must make the industry

as transparent as possible through public disclosure of conditions
in financial organizations.

With conditions like these firmly in place, consumers will have

to take responsibility for their own choices. People will be able to
use their own judgment to strike a balance between risk and return,
select the appropriate financial institutions or products, and take
responsibility for whatever results ensue. In essence, this will mean
that financial institutions are guided by the actions of their cus-

tomers. Bureaucratic administration will naturally be responsible

for determining whether or not financial institutions are strictly

observing the rules, and violators should be subject to harsh

penalties.

This shift from management-type regulation to rule-based poli-

cies should not be limited to the financial sector; it can be equally
applied to the monopolistic practices of companies. Japan's Anti-
Monopoly Law, for example, includes many exceptions to the
rules, as America has recently charged. Between the legally recog-

nized exceptions to this law and the cases that are considered not to
be subject to the law, numerous sectors of our economy avoid
application of the law.
Specific industries each come under the jurisdiction of a partic-
ular bureaucracy. This makes it difficult to broadly apply general
rules like the Anti-Monopoly Law. Finance is administered by the
Ministry of Finance, steel and autos by MITI, transportation by the
202 Blueprint for a New Japan
Transport Ministry, broadcasting by the Ministry of Posts and
Telecommunications, and pharmaceuticals by the Health Ministry.
Vertical administration of this kind is unavoidable to a degree, but
it has become so restrictive that it obstructs free competition.
Instead of directly controlling company activities, we should
enforce rules like the Anti-Monopoly Law to restrain them.
We of course need rules governing product safety (especially in
medicine), public ownership of broadcast or financial networks,
and many other areas. We must ensure the transparency of such
rules and keep management-type administration to a minimum.
Privatization must also continue if we are to utilize the knowl-
edge and ideas of the private sector. Japan Railways (JR), Nippon
Telephone and Telegraph (NTT), and Japan Tobacco (JT) privati-

zation efforts still have some way to go, but they do constitute
progress in the privatization of public corporations. By privatizing,
we will upgrade the efficiency and quality of services and reduce
the financial burden on national and local governments, and thus
free public funding for projects that truly require it. The govern-
ment must scrap and build just as private companies do. Areas that
the government no longer needs to manage should be delegated to

the private sector, and government activity should shift its focus to
those areas where it is truly appropriate. A thorough study of sec-
tors to be privatized should be carried out as quickly as possible.
 CHAPTER SEVEN
Establishing Real Freedom

Democracy and Citizen Autonomy

I cannot help but feel that the biggest source of our lack of freedom
lies with the people. In other nations, democracy began with the
revolt of citizens who demanded rights from their king or overlord.

Democracy is the self-rule of citizens and is premised on the idea

that citizens can stand on their own feet and take responsibility for
themselves. As long as citizens are unable or unwilling to take
responsibility for themselves, we will have only a quasi-democracy,
no matter how much politicians and bureaucrats strive to institute

democratic practices.
Postwar Japan ostensibly adopted American-style democracy,
but the people have been robbed of their freedom. This may be due
in part to the survival of the prewar bureaucratic system, but more
fundamentally it is because the conditions for democracy were not
met by the citizens.

The prewar Imperial military forces were one of the best-

trained, best-disciplined, and strongest in the world. However,
although the soldiers were excellent as parts in a large organization,
they were not autonomous individuals. They did not have their

own values and could not act on theirown judgment. Japan's

defeat revealed this, but in historical terms, it was only a momen-
tary event. It could not possibly bring fundamental changes to the
Japanese character.

203
204 Blueprint for a New Japan
With the prerequisites for democracy missing, American-style
"postwar democracy" could not take root. It has not taken root,
even to this day. This is the fundamental reason why Japanese
society lacks freedom today. Postwar education, which set out
to lay the groundwork for democracy, in fact worked in diamet-
ric opposition to its supposed mission. Today, we see the signs of
this failing in the spread of violence in the school and home, of
drugs, AIDS, and the destructive behavior of our youth. No one
can seriously argue that education is not implicated in these
problems.
To see true liberty in Japanese society, we must embark upon
bold education reforms. There are many weaknesses in education,
but we must first confront the problems at the elementary and sec-
ondary levels. Japanese education at this level is given high marks
abroad, and indeed, according to the International Association for
the Evaluation of Educational Achievement (IEA), Japanese stu-
dents rank in the highest levels. America, conversely, ranks close to
the bottom. The contrast between the two is a constant subject of
discussion. This does not mean, however, that our elementary and
secondary education cannot be improved.
In fact, the seeds of autonomy and subjectivity in Japanese chil-

dren are discouraged from developing under the current education

system. An American cultural anthropologist who once surveyed
Japanese high school students described them as follows. The stu-
dents, as he saw them, have their feet bound by the examination
system. The path before them lies straight and very narrow. They
are completely restricted by their families and schools. Those who
do not follow this path are penalized.
He found that they are encouraged not to attempt new things
but to adapt themselves to the reality around them. They are taught
to favor external appearance over their internal selves. They believe
that they must deny their own selves and adhere strictly to the sur-

face order of things. They do not learn to express their thoughts.

They are not encouraged to talk or to write. They are not trained to
think or to debate. They do not even learn that there is more than
 The Five Freedoms 205

one way to interpret a single issue. Memorization takes priority

over analysis, and the official curriculum places little or no empha-

sis on the students' artistic natures, their personalities, or their
humanity.
I agree with the anthropologist's conclusions. Today's high
school students are urged only to cram themselves with informa-
tion. The same is true of elementary and junior high school educa-
tion. I understand that teachers in America and Britain begin
discussion by agreeing with children's statements, then probe their
reasoning and assumptions and begin to argue other points of
view. Teachers encourage them, and at the same time foster the

children's ability to think for themselves. By contrast, teachers in

Japanese classrooms always have the right answers, which are duly
absorbed by the children. The teacher calls on one child after
another until he hears the right answer to his question, at which
point he moves on to the next question. The class is taught as if by
computers, though conducted by flesh-and-blood teachers.
From elementary school to high school, children busily cram
themselves with the correct answers. They go all the way to college

without polishing their skills or developing the habit of thinking

for themselves. This cannot possibly produce autonomous citizens.

Clearly, our educational practices are not entirely mistaken, nor are
those of America or Europe necessarily correct. However, the ques-
tion we are addressing is why democracy has not taken root in
Japan. Surely the differences between Japanese and Western educa-
tion account for part of the answer.

Education that Encourages Independent Thinking

We must begin tackling elementary and junior high school educa-

tion by reforming the standardized guidance of education from the
center. We should replace our uniform national education curricu-
lum with one divided between basic academic skills and applied
studies. The former should be directed by the central government;

the latter should come under the jurisdiction of education com-

mittees established by local governments.
206 Blueprint for a New Japan
Basic academic skills here refer to the 3R's. The central govern-
ment must establish standards for the basic skills that students
must acquire by certain ages. It is responsible for assuring that the
entire population meets those standards. However, it should dele-
gate to regional governments responsibility for the precise curric-
ula by which such standards are to be met, as well as the content of
social studies and science curricula. This would enable each area
to root its education in its own culture; it would help develop
a diverse population. If the various districts are allowed some
autonomy in education, Japan's teachers will no longer be forced
to teach only one way of understanding things.

Such a modification would render the system of standardized

national examinations untenable. The nature of entrance exams
will accordingly have to change, which will in turn help remove the
emphasis on cramming in the junior high years.

I am not suggesting that any central government guidance of

education is a mistake. It is clear from IEA test results that this

form of education is efficient. It unquestionably served postwar

Japan's rapid economic growth. But we also lost a great deal in the

process.
Not only did democracy not take root, regional autonomy
declined. The center maintained a monopoly on information. Peo-
ple became apathetic about the financing of education. Problems
were left to fester because those in charge locally lacked the skills to
address them. Parents, schools, and local school districts lost
authority over education until finally they were no longer equipped
to assume responsibility for it. If the schools themselves have no
sense of themselves as the actors in education, they have no way of
teaching students to perceive themselves that way.
We also need to consider the fact that children are maturing
earlier than they used to. We will probably want to lower the age at
which students enter school. The majority of students continue
their education until high school; we might want to consider mak-
ing attendance compulsory all the way to that level. If we integrate

junior high and high schools, entrance exams prior to high school
 The Five Freedoms 207

should not be necessary. Elimination of junior high exams would

alleviate at least some of the exam competition.
Higher education, too, needs reform. Japanese university edu-
cation is not highly regarded either at home or abroad. One of the
biggest reasons for this is the lack of appetite for study among
college students. Since exam competition ends with entrance into
university, people regard admittance as an almost automatic
passport into society.
Students also find the classes dull because the character of the
university itself is ambiguous. Historically, Japan's national univer-
sities were divided between those that offered high-level academic
educations, like the Imperial universities, and professional/voca-
tional schools that trained people in specific occupations. Private

universities provided liberal educations, primarily for future white-

collar workers. With time, however, this division broke down. In

the postwar period, Japan recklessly eliminated any distinctions
and turned them all into the same kind of university. The purposes
of university education have become too vague.
The universities must clarify their particular aims and charac-
teristics, including general liberal education, professional educa-
tion, and academic research. We need an education system that can
better respond to the needs of the times.

On Teaching

Finally, I would like to touch on the question of teachers' status in

society. Teachers are the most important influence, after parents,
on the growth of children. Just as parents do not regard the educa-
tion of their children as a nine-to-five job, neither should teachers.
Education is qualitatively different from office work or the produc-
tion of goods.
Teachers therefore should not have the right to strike or the
right to union negotiations that belong to other laborers. Teachers
do have unions in advanced democratic nations, but teacher
unions in Britain, for example, aim toward the development of the
professional abilities of teachers. The aim in Japan, by contrast, is
208 Blueprint for a New Japan
simply to defend teachers' rights as laborers.
This "labor consciousness" of teachers needs to be erased so that
teachers can more honestly undertake their jobs as educators of

our children. The "three rights of labor" should not apply for
teachers. Instead, teachers must be given the social status of
"special civil servants."

Education cannot be considered in isolation from its relationship

with society. Society gives rise to today's education, and vice-versa.
Each is both the cause and effect of the other. It is therefore diffi-
cult to know where to begin to solve problems. We must start

where we can, and a ripple effect will follow.

Our lives are changing dramatically in these last years of the
twentieth century. Individual Japanese desire a more affluent life.

Japan's political leadership thus bears a great responsibility. The

very roots of Japan's structures and lifestyles — hitherto taken for
granted —must now be reviewed and, where necessary, revised.
This is true even where the difficulties of doing so are daunting.
The reform of Japan does not belong only to Japan. Japan will
only be able to fulfill its responsibilities in international society

when people overseas can look at us and say, "We do want to be

like the Japanese."

We must reform not only those policies immediately at hand,

but those at the very root of today's social constructs. All our citi-

zens must seriously consider for themselves what road they think
we must become a truly affluent society.
travel to

Pain will naturally accompany these reforms; no change is pos-

sible without some distress. Yet people undergo surgery in the

knowledge that some pain is worth the promise of a fuller, better

life. We endure difficulties today because we wish to bequeath an

affluent society to our children and grandchildren.

JQ Ozawa, Ichiro
1631
.09313 Blueprint for a new
Japan

55 Ozl

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1631
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982-2541 or 982-0430
312 Sutter St., Suite 200

San Francisco, CA 94108

0EMC0
ICHIRO OZAWA was Secretary-General of the
ruling Liberal Democratic Party before co-found-
ing the Japan Renewal Party in 1993. He was
the architect of the coalition government that
took power in 1993, ending nearly fifty years of
continuous, one-party rule in Japan.

H426 B«ti£
5£fffi2,900R(;2M*2,8
 in unprecedented manifesto that goes to the heart of Japan's problems with itself

and the world."

Karel van Wolferen, author of The Enigma of Japanese Power

"An important book by one of Japan's most important political leaders. Ozawa has
cast a wide analytical net; his arguments are compelling and his recommendations
wise. He shows conclusively that for Japan to thrive in the twenty-first century, it

must work to reform and open both its political and economic systems."

James A. Baker, former Secretary of State

"A remarkable, frank, and insightful discussion by a powerful Japanese politician of

Japan's problems, as well as a persuasive recipe for resolving them. This book is a
must for international political leaders and thinkers."

Clyde V. PrestOWitZ, author of Trading Places

"Some may argue with the details laid out in his Blueprint for a New Japan....

Nonetheless, I suggest that its ultimate aim— nothing short of a peaceful democra-
tic revolution— is one that every reader should pay serious attention to."

Senator Jay Rockefeller

"A thoughtful, candid, and highly readable prescription for political, economic, and
social reform in Japan by a distinguished former Minister and key party official.

Ozawa's comprehensive vision for a 'New Japan' will shape public opinion and pub-
lic policy on both sides of the Pacific."

Carla Hills, former U.S. Trade Representative

"A road map for where Japan is headed. Anyone interested in the future of Japan
and its relations with the West should read this book."

Bill Powell, Tokyo Bureau Chief, Newsweek

9 '784770 n 018717

ISBN M-77DD-lfl71-l
ISBN4-7700-1871-1 C0031 P2900E