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What does globalization mean to us? -2-

Address by Sadaaki Numata, Executive Director,
Japan Foundation Center for Global Partnership
Abe Fellowship Program – Fellows’ Retreat
Cocoa Beach, Florida
January 18, 2008 

6. The Lexus and the Olive Tree

In his column entitled “Japan’s Nutcracker Suite” in the New York Times of April 30, 1999, Tom Friedman wrote about what a Japanese friend had told him:

''My son informed us the other day that he wants to be a fund manager, but he doesn't want to work for a Japanese bank. He wants to be with an international bank. The Japanese institutions that young people of my generation would automatically like to join, like the major banks, are crumbling. That is new. My wife couldn't understand my son. So he said to her, ''If you want to understand what I want to do, watch this film.'' He gave her a video of the movie ''Other People's Money,'' about a New York financier who takes over a dying company in New England. . . . My wife is still worried.''
Well, it was not just the mother but also the father who was worried.
I know that for a fact, because I am the father in question.

In that interview, which took place in Tokyo in March 1999, I happened to mention the word “globalization”. Tom Friedman’s eyes lit up, and he started quoting from his lap- top portions of the book that was soon to be published, with the title “The Lexus and the Olive Tree”. He talked about globalization as the international system, characterized by “integration” and symbolized by the World Wide Web, that has replaced the cold-war system characterized by “division” and symbolized by a wall. If the cold war had been a sport, it would have been sumo wrestling, whereas globalization would have been the 100-yard dash, over and over again. The yardstick for influence in the system of globalization is speed, as opposed to weight in the cold war system. As I listened to all this, I felt the proverbial scales falling off my eyes, because it cut through, in one sweep, the many questions that had made me uneasy, for example, why there had been repeated accusations that Japan’s actions were “too little, too late”.

7. Japan: Coming out of the long dark tunnel

In this age of new paradigms, Japan was being tested in more ways than one.


As Toyoo Gyoten points out (Institute for International Monetary Affairs Newsletter No.8, 2001), one such area was governance both at the level of national government and corporate management. It used to be the case that the information pertaining to the operation of the government or the company was controlled and monopolized by the leadership. The monopoly provided the basis of authority and influence. In contrast, technological advances in internet, e-mail, cellular phone, broadband, etc. have made it possible for millions of taxpayers, shareholders, voters, employees, and consumers to share the same information instantaneously. As a result, transparency and accountability became the name of the game, as the public came to subject central and local governments and corporations to rigorous scrutiny.

(2) Another major challenge was corporate restructuring including layoffs. This was a major topic in the interview that I arranged for Nayan Chanda, then Editor of the Far Eastern Economic Review, with Prime Minister Keizo Obuchi, which appeared in the December 2, 1999 edition of the magazine. Prime Minister Obuchi was quoted as saying, “Basically I do support restructuring, but not the kind of drastic restructuring common in the U.S. and Europe, or so-called chopping off live people’s heads.” It was not easy for Japanese businesses to bite the bullet.
(3) From 2001 to 2006, Prime Minister Junchiro Koizumi pursued audacious reform based on the principles of market economy, including painful structural reform to cope with the fierce competition in the age of globalization. By the time the governing coalition of LDP and Komeito won a landslide victory in the Lower House election of September 2005, it was felt that Japan had finally come out of the long dark tunnel, as the triple negative legacies of the collapse of the bubble (bad loans in the banking sector, excess capacity and excess labor) had been cleared away. But that was not the end of the story.

8. Lights and shadows of globalization

Free market capitalism and democracy are generally considered to be the two distinguishing features of the current wave of globalization. The debate on the positive and negative aspects, or the “lights” and “shadows”, of globalization has revolved on the relative receptivity of the country or region in question to these principles as well as on the actual consequences arising from the application of these principles.


There is little denying of the positive fruits of globalization: such as improved governance in corporation and government, commitment to the rule of law, the principle of free trade and  the heightened sense of global community. East Asia is a region where such fruits of globalization have been clearly seen. It is also true that the Asian financial crisis of 1997-98 put to the test of the market some of the factors that had been lurking behind the East Asian economic miracle, such as the lack of transparency and accountability, lax supervision and corruption. Having survived that test, the dynamism of the East Asian economy continues unabated. The recent focus on the emerging economies of BRICs indicates that what has happened in Europe, America, Japan, and East Asia has important messages for all other regions.

(2) At the same time, there has been the backlash to globalization. In recent years, anti-globalization demonstration have become a fixed feature of the gatherings of leaders of developed countries, be it the G8 Summit, G-7, IMF, World Bank, WTO, ADB or the World Economic Forum in Davos. They denounce free trade, free investment, poverty, environmental degradation, American hegemony, neo-colonialism or neo-imperialism. Would all this mean that the market economy has to be rejected as a guiding principle? I think not. As Amartya Sen argues (for example, in How to judge globalism, The American Prospect , Jan 1, 2002), what is at issue is not globalization itself, nor is it the use of the market as an institution, but the inequity in the overall balance of economic, social, and political institutional arrangements, which produce very unequal sharing of the benefits of globalization. A crucial question concerns the sharing of the potential gains from globalization --- between rich and poor countries and among different groups within a country.
(3) I had the opportunity to take part in the First Japan-Arab  Conference which took place at Bibliotheca Alexandrina, Egypt last November, with the participation of 250 representatives from political, government, business, academic, cultural and civic circles from Japan and 16 Arab countries. In the sessions on globalization and its effects on culture and society, the Arab representatives were vociferous in expressing their sense of frustration or powerlessness in the face of the onslaught of globalization. For my part, I made the following points on the possible nexus between globalization, human security and the role of culture in peace building.

As the image of the affluence and abundance of those reaping the benefits of globalization in the developed world is relentlessly disseminated, the poverty-stricken people in developing countries feel increasingly humiliated. When they are economically deprived, they feel politically and culturally deprived as well. This spawns the “poverty of dignity” in the developing world, as Tom Friedman argues in “The World Is Flat”.

(b) Against this background, there has developed the focus on a people-centered dimension of security, with the realization that the traditional military-centered approach to security alone may not suffice to cope with the diverse threats to security, such as terrorism, weapons proliferation, environmental degradation, infectious diseases and natural disasters, facing the world today. The UN Outcome Document of the World Summit in September 2005 contained the following reference to human security, acknowledging the need to protect vulnerable people from three kinds of freedom, namely, freedom from want, freedom from fear and freedom to live in dignity.
We stress the right of people to live in freedom and dignity, free from poverty and despair. We recognize that all individuals, in particular vulnerable people, are entitled to freedom from fear and freedom from want with an equal opportunity to enjoy all their rights and fully develop their human potential. To this end, we commit ourselves to discussing and defining the notion of human security in the General Assembly.
(c) The negative effects of globalization, such as the marginalization of individuals and groups, destruction of traditional communities and cultures, and disrespect of human dignity, manifest themselves most acutely in situations of conflict. Therein may lie the potential role of cultural initiatives, in building tolerance for other cultures, healing traumatized minds, restoring human pride and dignity, and so forth. The Japan Foundation, for its part, has been exploring ways in which we may translate this idea into action, or to put it another way, to operationalize the concept of “human security”, through cultural means, for example, by focusing on children.
(4) As Japan’s ambassador to Pakistan from late March, 2000 to October, 2002, I experienced the trauma of 9.11 close to the battleground of Afghanistan. I also saw at first hand Pakistan’s struggle for national unity and survival. 9.11 brought out in stark relief the transnational nature of terrorist networks such as al Qaeda. One of the downsides of globalization is that the jihadist credo of violence is spreading beyond the Middle East or South and Southeast Asia to Europe and North America. What is particularly frightening is the prospect of nuclear and other weapons of mass destruction falling into the hands of these extremists. Further, as I watch with serious concern the tragic drama now unfolding in Pakistan, I ask myself to what extent it is possible to transplant the Western vision of democracy on a soil which is fraught with feudal and tribal legacies. The dilemma is that globalization can result in the fragmentation of traditional communities, which in turn may weaken the centripetal power of the national authority. 

9.  Conclusion: Japan’s global engagement

Globalization has benefited, and will continue to benefit Japan. At the same time, it poses to us a multitude of political, economic and strategic challenges. We are sometimes pulled in two directions by outward-looking and inward-looking demands.


Ed Lincoln’s theme in his new book “Winners without Losers: Why Americans Should Care More about Global Economic Policy” has come to resonate in Japan as well. The Upper House election last July demonstrated that Japan was not immune to the backlash of globalization. The pains of drastic reform and restructuring continue to be felt in many quarters and loom over the political landscape. Ichiro Ozawa, Leader of the DPJ, zoomed in on issues such as the frustration of those missing out on decent jobs and the growing urban-rural disparities. Ozawa’s strategy was based on the recognition that Japan is effectively divided today into two groups, that is, winners in the structural reform and globalization drives and losers feeling left out and discarded by such changes. The election resulted in an anomalous “distorted parliament” where the opposition parties led by the DPJ control the Upper House and the Lower House remains under the control of the LDP/Komeito coalition. Legislative action on controversial issues has been stalled as the tug-of-war between the governing LDP/Komeito coalition and the opposition parties continues. Only last week the bill that would allow the redeployment of JMSDF refueling vessels to the Indian Ocean finally became law after the Lower House overrode its rejection by the Upper House.

(2) External policies cannot be divorced from internal politics. In Japan, given the stalemate in the legislative process, we have come to an inward-looking, reflective interlude where the extent of our external engagements is debated. The developments in the fast-moving world will not permit us to remain in this interlude for too long. The gradual but steady steps that we have taken over the years towards more proactive global engagement should not come to a standstill, but should continue, albeit at a somewhat measured pace than was once thought possible.
(3) As we look to the future and contemplate the ways in which we can play our part in tackling the host of global issues facing us, our partnership with the United States continues to be vital. It is with this in mind that we, at the Japan Foundation Center for Global Partnership, have been seriously reexamining our mission and agenda. The most notable change in the circumstances surrounding us since the CGP was established in 1991 has been the rapid and extensive progress of globalization as outlined above. As a result, a new configuration of powers, possibly a new multipolarity, may be emerging with the ascendancy of BRICs. This raises the question of how Japan may conceive of its own role in Asia and in the world. On the international scene, there are a multiplicity of actors including not just sovereign governments but also non-state actors including business, academia, NPOs and other segments of civil society. Bearing this in mind, we would like actively to explore ways of enhancing collaboration with the United States, with the participation of third countries especially in Asia as appropriate, in the areas of (a) Traditional and non-traditional approaches to security and diplomacy, (b) Global and regional economic issues, and (c) Role of civil society.
(4) The Abe Fellowship Program, which has consistently been CGP’s flagship program, will continue to play a crucial part in all this. We are counting on the Abe Fellows to give us ideas and suggestions that will help Japan and the United States work effectively together in tackling the host of global challenges before us.


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