During the mid-1980s, when Japan's economic might was reaching its zenith, a French diplomat reportedly declared, "All I wish is that somehow Japan and the Soviet Union would disappear from the earth." On both counts, his dream has almost come true. Japan now confronts the toughest challenges in its foreign relations since World War II. The way it faces up to them will determine whether Japan's meteoric rise to world-power status in the last half-century is transient or sustainable.
Japan is in a deep funk. Its economic debilitation, political gridlock, and rapidly aging population all contribute to a pervasive pessimism and imperil its cherished identity as a nonnuclear, non-weapon-exporting, economically dynamic, democratic, generous, civilian power. And while the Japanese are famed for downplaying future prospects to prepare for a rainy day, this time is different. People genuinely fear the future. Political leaders have consistently failed to lead and the economy has deteriorated for seven years. Increasingly, however, the pessimism is the problem, with far-reaching regional and global implications. Unless the psychological slump reverses, Japan's deflationary cycle will cripple Asian hopes for recovery and destabilize the global economy.
While the world has been collectively keening over the Japanese economy, another death has been in progress -- Japan's diplomacy. Economic and financial failure have exacerbated Japanese insecurity at a time when it must confront a complex of foreign policy concerns -- Asia's economic meltdown, India and Pakistan's nuclear tests, China's emergence as a major power, and most critically, uncertainty over the U.S.-Japan alliance. Japan, historically disposed to a sense of strategic exposure, is again feeling vulnerable about its place in the world.
Since World War II, Japan has based its diplomacy on economic, not ideological, foundations. But the erosion of those foundations has jolted the belief that economic might would translate into diplomatic influence. Japanese hopes for peace through economic development and integration have been compromised.
Worse, Japan is currently amassing a dismal record as the
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