Diversity of Development and International Cooperation in the Era of Globalization

Sachihiko KATAOKA
Representative, GN21
Japan

While placed under U.S. occupation since the end of WWII, Japan adopted the so-called “light-armed state theory” (relying on the U.S. for foreign relations and defense and pouring all nation’s efforts into economic development) and achieved a rapid economic development following the postwar reconstruction.  In the 1970s and 80s, Japan’s economic growth attained a level comparable to that of the most advanced countries in the world.  It can be said that Japan was successful in realizing an outstanding industrial development, especially in heavy, chemical and IT-related industries, by using its advanced technological potential and investing massive capital, building highway and high speed railway networks throughout the length and breadth of the small insular country.  It was also in that time that the people spoke of “Japan as Number One”.  However, today, twenty years later, what is the reality of our country?   Since the 1990s, named “the Lost Decade”, the entire Japanese society has been paying the cost of the rapid development and accelerated economic growth of the past.

First, Japan took a bite in the forbidden fruit by issuing the first deficit-covering government bonds in 1965? As a result of the massive issuance of deficit-covering government bonds that has continued for more than 40 years now, Japan’s debts are said to amount to 800 trillions yen (8 trillions US dollars), or 1300 trillions yen if including the debts of the municipal governments and government-guaranteed bonds.  This accounts for 10 million yen (100,000 US dollars) of debt for every Japanese citizen.

Second, the country’s birthrate is declining and so is the working population.  The average number of children a woman gives birth to in her lifetime has dropped to less than 1.3.  In 2000, “London Times” reported that Japan’s population would be zero in 2100 if the birthrate were applied to geometrical regression and the news went around the world.  The actual situation is not as serious as London Times predicted, but Japan is obviously falling far behind other industrialized countries in the effort to redress the birthrate.  If nothing is done now, the population aging will accelerate and the number of young people will continue to drop, which fact will have serious impact on the whole society, especially on the national pension and health insurance systems.  With the falling birthrate, the relations within families and the education environment for children have changed significantly, making it more and more difficult for a child to grow up to be an adult capable of standing on his own feet.  This in turn has led to the decline in workforce.  Let me give an example I know well.  A large listed company for which my nephew works as one of top executives hired 150 young college graduates in April and in March next year, all of them were gone.  This is a true story, not a joke.  Last year, one of my students from Vietnam was hired by Panasonic.  The Japanese company recruited 15 Vietnamese in total.  This was not imaginable 5 years ago.  Hiring of foreign workers is not a trend only seen among big enterprises like Panasonic, but everywhere on the Japanese labor market.  In fact, what is declining is not only the number of Japanese workers but also their quality as workforce.  Michio Morishima, internationally famous Japanese economist, published in 1982 a book entitled “Why Has Japan Succeeded?”  17 years later, in 1999, he was asked by foreign press the same question as the title of his book, and he responded to it by writing another book “Why Is Japan Falling?”  He indicated in the second book that the cause of Japan’s fall was the “degradation of human power of Japanese people”.

Third, Japan is able to produce only 39% of its own food.  This problem has suddenly attracted public attention in the recent “scandal of imported gyoza (Chinese dumplings)” from China.  The figure testifies to an alarming situation that threatens to undermine the very foundation of human security in Japan.  This is the result of the major strategic turn Japan initiated during the 1960s and has pursued till today, taking advantage of internationalization and globalization, a turn characterized by the priority given to development, economic growth and economic efficiency.  One must admit that Japanese people were on a spree, believing that they had all become middle-class, but those who have led the country’s social and economic policies are the ones to be first held responsible for these disastrous results.  In addition, Japan has many other negative legacies from the past, including the growing social gap and environmental problems.  This is the reality of today’s Japan, a country considered as an advanced country in term of official development aid (ODA).

I have allowed myself here to look back the course of Japan’s economic progress since WWII and describe its realities today, because I wanted you to know first that “development” is not something that is always positive for a society.  If driven in a wrong way, development could seriously distort a society as a whole.  In addition, when you look at the world, the rapid globalization of economy it has gone through since the 1980s provoked failures of foreign policies of big powers and serious stumbling of transnational enterprises and investment funds of banks, causing a chain of economic turmoil in the markets around the world.  Industrial development on a global scale that was brought about by liberalization of capital, technologies and labor, has affected the environment of our planet much more seriously than the forecast.  On the other hand, as Marshall McLuhan (“The Global Village”) pointed out, in the context of vulgarization of television and Internet, unilateral diffusion of information from western advanced countries is pressing historic traditions and cultures specific to each local community to transform and beginning to shake the values of the people living in these communities.

Therefore, when a country or a region of the world envisage its own social or economic development, keeping also in sight international cooperation, it must, as I said earlier, develop strategies that are based on the realities that it is facing, the harsh realities we are all facing though in different degrees.  So, I would like now to present you in a concise manner my own understanding of what is development, focusing on political and social-economic areas and, on this basis, and make some concrete proposals of action at the end.

The governments of Western countries that came to power in the 1970s or 1980s held up a policy for “smaller government”, an objective that seemed rational in appearance then.  However, this policy has led to a sharp increase in twin deficit and the “working poor” in these countries while allowing gigantic private capitals to?extend its dominance over financial markets.  A handful of transnational enterprises are also strengthening their control over the world economy using as leverage the method of merger and acquisition.  At the same time, the so-called “vulture” funds are making colossal profits by acquiring and reselling over and over various kinds of companies not only in their own countries but also in the rest of the world under the globalized capitalist system.  These investment funds are neither banks nor enterprises, and therefore their names are almost unknown to us.  Nevertheless they have grown so huge that even national governments are almost unable to regulate their activities.  As you may know very well, they are investing enormous amounts of money, 170 trillions yen according to some, and are influencing foreign exchange markets, stock markets and commodity markets around the world.  In recent years, not only private funds, but also sovereign investment funds from Middle East, Russia and China whose activities have been known to us due to the problem of sub-prime loans, are drawing attention for the immensity of their operating expenses that are said to amount to 300 trillions yen.  There are around 30 of these investment funds in the world and they are selling about 100 to 150 different financial products, whose total cost is said to attain 900 trillions yen.

On the other hand, as many of us know also, the rulers of some Western powers that hold a strong influence on the world’s politics and economy, backed by military industries and big businesses, are busy enriching themselves and their families.  Meanwhile, gigantic investment funds are monopolizing the management of enterprises with the aim of leading world economy as they want.  The spirit or ethics of capitalism once preached by Max Weber seem to be totally forgotten even by Japanese multinational enterprises.  In fact, in a number of countries including Japan, the structure of corrupt connection among bureaucrats, politicians and businessmen is still in place and there is nobody who is determined to put his heart and soul into the creation of public added value or the solution of social issues.  The problem that is in the media a lot now in Japan offers a good example of this.  The Japanese parliament is examining the bills that will enable the government to allocate 59 trillions yens exclusively to road construction for over the coming 10 years.  These bills, together with the recently exposed problem of 10 billions yen of the national pension fund wasted because of negligence of the administration, are exposed to a severe criticism of the population.  Although small local communities are falling apart and the birthrate is declining and the population quickly aging, in addition to degradation of the educational environment for children, for the last 30 years, much of the nation’s efforts have been oriented to the construction of highways that now cover our small territory, very much to the detriment of people’s living conditions and security.  Take into account that globalization will continue well into the future, I fear that this type of problem of society is not specific to Japan but will spread to in other places around the world.  Backed by the power of colossal capital and monopolizing world’s scientific and technological achievements, the market-based economy is expanding and its perverted expansion may be devastating for local communities and human cultures that history has nurtured in their diversity.  It is therefore an important task for the countries and regions of Asia and Africa, rich in natural resources and traditional cultures, to take the initiative and cooperate in redressing the current course of development of market economy.

According to a dictionary widely diffused in Japan, democracy “made a sudden rise in modern times in the Western nations where civilian revolutions occurred.  Human rights, freedom rights and equality rights, majority rule and rule of law are its major attributes and whose realization is called for”.  It is defined as originally, “a position of the people who both possess and exercise the supreme power”.  Historically speaking, it is said that modern democracy originates from Thomas Hobbs’ work published in 1651 entitled “Leviathan”, in which the author explained that peace and security for all should be established under a state power by a mutual contract with the people.  However, it was in reality a (monster-like) state power that emerged out of a competition for the establishment of sovereignty of nation state between the military power of the king and feudal lords on one hand and the parliamentary power on the other.  In Western countries, even after the civil revolutions that occurred from 18th century to 19th century, there is no case in which citizens or people directly held and exercised the power, except for frontier areas far from the state power.  In most of these countries, parliamentarians elected by citizens or people forming a majority made up the Cabinet and imposed an administration in a top-down manner on the people under the name of sovereignty of the state.  Few people believe today that the socialist governments of the ex-Soviet Union and other Eastern countries that adopted the one-party rule system and planned economy succeeded in implementing a politics based on people’s sovereignty.  By the way, there are a few countries in the world that, like China, have adopted people’s democracy system under single-party rule.  On the other hand, even in the countries with pluralist political system, when a majority government lasts for long time, it is spoiled from inside by graft and corruption and freedoms and equality of the people or citizens are often neglected.   We actually witness this in our own countries.   In Japan, it was rather during the Age of Civil Wars (1493-1573) or the Edo Era (1603-1867), before the Western countries began modernizing themselves that we find some cases of provincial feudal lords who used to govern wisely their domains not to make the people and farmers suffer.  There are also some cases of headman of village who saved the lives of farmers from a merciless land tax system at the cost of their own lives.  These examples show, and we should not disregard that fact, that democracy does not only depend on the system itself, but also and largely on the abilities of those who hold power, on how much they think of his people as well as the abilities of the people to govern themselves.   In any case, modern Western societies can be considered as advancing or regressing in terms of democracy.  They can best described as having been repeating trial and error until today.  However, there have been recently some significant changes that deserve our attention.

One of them is the U.S. unilateralism seen since the 1990s.  It consists of the process of building of an “international order” by the U.S. governments, a process that started in the Gulf War and has led the war in Iraq, and the attempt of enforcing “American type democracy”.  This attempt has not been totally successful.  Rather, it has provoked the regression of the confidence of the international community in the U.S. politics and economy.  This is manifest in the books published in recent years in Europe and in the U.S. itself: “Après l’Empire” (Emmanuel Todd, 2002); “The End of the America Era” (Charles Kupchan, 2002); “The Last Days of American Republic” (Charlie Johnson, 2006).

The second noteworthy change is the rise of resource nationalism.  Disregarding the Western powers that are turned to the Middle East for oil, resource-rich nations such as China, Russia, Australia, Latin American countries and South Africa are advocating resource nationalism and reciprocating among them active “resource diplomacy” to deepen their relations.  Meanwhile, Japan is unable to take the lead in achieving a cooperative strategy within the East Asia community and is lagging behind other countries in securing itself essential resources including foodstuffs, oil and rare metals that are indispensable for high-tech industries it excels in.  In the area of environment protection, since the COP 3 on climate change it hosted in Kyoto, Japan has taken a contradictory attitude by showing some sympathy to the U.S. position, besides its own problems for reducing emissions.  It remains to be seen whether Japan is able to propose a more ambitious objective for international cooperation in tackling this global issue at the G8 Summit Meeting in coming June.

Given this international political and economic context, we should leave aside differences in political and economic systems of our respective countries or regions, abandoning ideas that are centered on Western political or economic models and excluding attitudes of advanced countries to help and cooperate with developing countries from above.  For the sake of peace and security in the world and for security and betterment of living conditions of local communities, we should adopt an alternative vision of international cooperation in which we mutually respect independence and autonomy of the others, not rely on military force or power of money, but share resources, technologies and human potential.

As we have seen briefly, international relations have changed significantly since the 1980s, especially since the 1990s after the end of Cold War.  These changes can be summarized in two major phenomenon: rapid extension of U.S. unipolar rule over world politics and strengthening of domination of world markets by a handful investment funds and multinationals.  As a result of these changes, gap between the group of winners and the group of losers has grown and been reproduced at national and regional levels, as well as at citizens level.   As the gap widens, conflicts and revolts spread between emerging nations and old powers, as well as between small citizens and big citizens, initiating a shift to mono-polar to multi-polar world that leads to the so-called “Socio-Cultural Paradox” (“Global Paradox” (John Naisbitt, 1994), localized diversification of cultures and civilizations that cannot be contained in the framework of 190 nation-states in the world.  I believe that it is our shared common understanding that, on the basis of the realities of today’s world I have just described, while trying to solve the problems facing us as citizens of the global village or as a nation in our respective countries, we must work also to build an international cooperation that transcends national or regional borders and allows a stable development of our respective societies.  From this perspective, I would like to make five concrete proposals of action.

First, as we in GN21 have advocated through the “Human Renaissance Series”, we should radically reconsider our traditional vision, vision of life or vision of history that blindly values and worships “progress”, “development” and “growth”.  We must remember that the modernization of the West was based on the establishment of a vision of the world according to which man is the protagonist of the earth and he is able to replace the God in ruling and controlling the nature.  Since then, the world has known three industrial revolutions and today, national governments are called on to cooperate so as to regulate tightly the moves of free capitals, liberated from the “God’s Hands”, and prevent them from monopolizing surplus value.  And for this, national governments have to constantly watch and correct disordered behavior of investment funds, private or government-controlled, that continue to dominate world economy today.

Second, the traditional socio-economic systems that have been oriented towards urbanization and market economy must be transformed into more balanced and harmonious ones, making a drastic shift from centralization to decentralization, from standardization to diversification, from globalization to regionalization or localization.  The countries in East Asian region, for example, are attempting to form a regional association after the model of European Union, but they are facing more problems to solve and need to implement a concrete scenario for resolving these problems if they want to succeed in realizing their project.

Third, there are various contradictions and problems that are emerging as the development aid policies are implemented on the initiative of Western countries.  Japanese government has recently decided a new ODA policy that relies on public- private partnership.  An example of this policy is to concentrate official development aid on building of roads and port facilities that are necessary for transportation of goods produced by Japanese plants located in developed countries.  The underlying idea is that this will encourage Japanese private enterprises to invest more in developing countries.  But does such an aid policy really meet the needs of recipient countries?  It is essential to put an end to a development policy conducted by Western countries that is aimed at enhancing the market principle in developing countries.  We must establish instead the principle of Multitude that will introduce a new vision of relationship between developed and developing countries that is not of interdependence and that also includes the questions of resources, food and environment.

Fourth, the new revised capitalism, preached by Lester Brown, founder of the U.S. Worldwatch Institute that consists of incorporating the environmental cost and social cost into market price” is praised since a few years by the media and certain research institutes and enterprises.  What is important for us to note however is not his vision of market economy, but what he wrote in the opening paragraph of the first “State of the World” report he himself launched in 1984: “The situation we are facing has been created by ourselves and can be controlled by ourselves.  Without any further technical progress, all the problems can be solves and all human basic needs can be met.  That is to say that the problem is neither techniques or resources, but  awareness and political will”?translation by the author from the Japanese edition?.  How can we restore declining agriculture, fishery and forestry typically seen in present day Japan and establish a self-sustainable food and feed supply system?  We need to redress the policy of allocating an important part of nation’s budget to building infrastructures and drastically change the balance between manufacturing and service industries (including distribution) on one hand and agriculture, fishery and forestry on the other in favor of sustainable natural environment and local community life.

Fifth, we must dare to put a brake on the scientific and technological development that has enabled us humans to control and use the nature for our self-centered interests. This will in turn allow humans to do what they need to do the most that is to live in symbiosis with other animals and plants and preserve natural environment.  If we fail to realize and understand that each one of us is placed before this crucial alternative, the modest perspective of the “blue global village” many people have been longing for will be torn apart by the hands of those greedy “civilized” people who are behaving as if they owned the whole world.  Military buildup and development of new weapons including nuclear by those countries that call themselves big powers pose a constant threat to the work and living of the peoples around the world.  In order to break the chain of “violence against violence” and achieve peace for the sake of people of the global village, we must strictly outlaw state violence perpetrated by the use of weapons.  And for this, we must try to build an international consensus on putting a total ban on the development and production of weapons, because there are people who claim that the progress of civilization is found in “sharp rise in the value and cost of the technique to kill a human being”.  Today when we witness almost every day discord, rivalry or conflict among states, ethnic groups or among citizens, we must reactivate the declining capacity of cultures to communicate to swiftly develop proposals of action for building an international and global consensus on a project of “global civilization” that will replace the current Western-style world order and provide security and protection to all global citizens.

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