FROM THE EDITOR (SHIRAISHI Takashi)

CHRONOLOGY (November – December 2007)

THE BUMPY ROAD TO GLOBALIZATION (NARIAI Osamu)

The Twilight of the Dollar’s Reign (SAKAKIBARA Eisuke)

The roots of the subprime mortgage crisis run deep. Because of the expansion of transactions among different types of financial instruments, the risks in the economic system have grown much greater. The world is awash in excess liquidity, and it is not clear how long it will be possible to head off dire trouble. Meanwhile, the American age is drawing to a close, and the Asian age is commencing. (Chûô Kôron, December 2007)

Polarization in the Japanese Economy (MIZUNO Kazuo)

Reflections of a Financial Regulator (GOMI Hirofumi, interviewed by ODA Makoto)

Japanese finance has changed greatly over the past decade. Banks have cleaned up their balance sheets and are offering sophisticated projects. And the Financial Instruments and Exchange Law has created a new regulatory paradigm. But defects in the financial marketplace, such as insider trading, have growth steadily worse. In this new environment regulators must consider each situation without relying too heavily on past precedents. (Ronza, November 2007)

FOREIGN POLICY STALEMATE (WATANABE Hirotaka)

The Political Tug of War and National Security Policy (KITAOKA Shin’ichi)

The opposition Democratic Party of Japan now dominates the upper house and is locked in a struggle for power with the Liberal Democratic Party. There is a danger that the debate between the DPJ and LDP over such issues as Japan’s maritime refueling operations in the Indian Ocean will lead toward a further narrowing of the scope of national security policy. The two parties should work together to formulate a set of general principles in the form of a basic law on national security. (Chûô Kôron, December 2007)

Fuel Supply Operations Need No UN Resolution (KOTERA Akira)

The question of whether to continue the fuel supply operations by the Maritime Self-Defense Force in the Indian Ocean has become a major political issue, with the head of the top opposition party saying that the mission is illegitimate because it has not been approved by the United Nations. But cooperating in maritime policing activities is allowed under international law; the decision on whether to do so is one for each state to reach at its own discretion. (Nihon Keizai Shimbun, October 9, 2007)

Dealing with North Korea: Time for Japan to Reengage (IZUMI Hajime)

Since North Korea’s October 2006 nuclear test, international diplomacy focusing on the Korean Peninsula has undergone a major shift. The tensions raised by the test have eased greatly, the six-party talks have moved ahead, and Washington has been talking directly to Pyongyang. But Japan has taken a rigid stance, insisting on progress in resolving the issue of past abductions of Japanese by North Korea. The result has been a clear decline in its influence on Northeast Asian affairs. Tokyo should shift course, as Washington has done, and resume a policy of engagement. (Chûô Kôron, November 2007)

DOMESTIC CHALLENGES FOR THE FUKUDA CABINET (TAKENAKA Harukata)

A Study of Fukuda Yasuo (KABASHIMA Ikuo, ÔKAWA Chihiro)

Over the years when the ruling LDP has experienced major threats to its hold on power, it has responded with a swing of the pendulum, picking a new leader with a different sort of policy stance. The selection of Fukuda Yasuo to replace Abe Shinzô represented a swing to the left. This brings the administration closer to the position of the LDP’s coalition partner, the New Kômeitô, and to that of the DPJ, the top opposition party. But Fukuda’s lack of a dynamic image may make it hard for him to attract voters’ support in the next general election. (Sekai, December 2007)

Trust in the State Hits Rock Bottom (MASUZOE Yôichi)

Last year it was revealed that the Social Insurance Agency was unable to identify the beneficiaries of more than 50 million payments into the public pension system. Combined with other scandals, including the embezzlement of payments by government employees, this has deeply shaken public trust in the Japanese state. Ethical standards in the public sector have clearly declined. We must design a pension system on the assumption that those managing it are weak. And we need to put the social security system on a strong footing to promote consumer confidence. (Chûô Kôron, December 2007)

CONSUMERS ON THE WARPATH (KONDÔ Motohiro)

Japan’s Dangerous Witch-Hunt Mentality (GÔHARA Nobuo)

Japan is being swept up in a rising tide of complaints flooding manufacturers, retailers, schools, and hospitals. This phenomenon has its roots in the increased emphasis on “legal compliance” that has accompanied the shift toward free competition within the broader Americanization of the economy. The complaints have some basis in fact, but they are being carried to excess. If this pattern continues, Japanese society as a whole will suffer irreparable damage. (Chûô Kôron, December 2007)

Abandoning the Benefits of Community (UCHIDA Tatsuru)

It is proper for citizens to demand that public organs operate fairly and sensibly. But people must recognize that if such demands are carried too far, they can hinder the functioning of public systems. When too few people have a sense of ownership as members of and participants in society, and too many dedicate their efforts to getting what they can out of public systems for themselves, civil society itself is in danger of collapsing. (Chûô Kôron, December 2007)