Japan in the Past, Present, and Future

March 18, 2025

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To understand Asia, or any significant part of it, history is particularly important. Asia is where rich histories and cultures meet to produce layers of meaning, making institutional memories more enduring and the sub-texts of narratives less overt. That in turn impacts relations between nations in the world's largest and most diverse continent. When Asia also happens to include some of the world's oldest civilizations, now undergoing rapid change of historic proportions, it becomes a compelling subject of study requiring better understanding.

 

East Asia is of special interest because it remains the world's most economically dynamic region, with all the attendant geo-strategic implications. Despite multiple challenges, this region still leads global growth for the foreseeable future since the second half of the 20^th century. East Asia is understood here as comprising North-East Asia and South-East Asia, in terms of physical geography, economic integration, and the spread of economies covered in the 1993 World Bank report, The East Asian Miracle: Economic Growth and Public Policy.

 

East Asia's modern growth era began with post-war Japan's rapid economic ascendancy, spreading regionwide within a few decades. This rapid growth develops from circumstances common throughout East Asia, which differ broadly from the Western development experience. These circumstances relate to aspects of governance and are as much political as they are economic. Although Japan's growth has dimmed for a generation, it remains an important case study as a major global economy and an integral part of East Asia's geopolitical dynamic.

 

Japan's regional status and trajectory shape, and are shaped by, East Asian perceptions of it. With history as baggage, this tends to be negative, first because of Japan's national pride with its self-image as unique and thereby superior, and from some perceptions of Japan as smaller, marginal, and of lesser significance compared to China. Imperial Japan's military aggression worsened perceptions immeasurably, as violent Japanese fascism devastated China, Korea, and elsewhere in East Asia.

 

Some Japanese pretentiously regard their country as "Western." Its governing institutions, industrial development, geographical latitude, and being a nation of islands off a continental mainland superficially resemble Britain. In the first half of the 20^th century, this resulted in military adventures to colonize foreign lands in limited efforts to emulate Western imperialism. Japanese polity aspires to the ways of the successful, and Western powers were then regarded as inspiring role models.

 

The imperialist-militarist argument that the Japanese occupation did the colonized peoples a favor by expelling European colonizers has no credibility. The Japanese occupation was generally more brutal toward local populations and imparted little or no benefit. Despite fading memories of Japanese imperialism, the region's horrific experience still weighs on the Japan's prospect of reaching out. An unqualified and contrite apology for war atrocities is still unlikely, and senior Japanese officials continue to honor their war dead including convicted war criminals.

 

For geo-strategic interests, Western partisans seek to persuade Japan to align itself with them rather than with Asia. This divides East Asia, preventing a more unified and peaceful region from developing that may compete better economically with the West - and which may render Western intervention in the region as a benign patron redundant. East Asian efforts to persuade Japan otherwise have been patchy and inadequate.

 

Post-war Japan is essentially a creation of the US in the immediate aftermath of World War II, alongside an exhausted Europe and an impoverished Britain. The Soviet Union was among the victors, but heavy war casualties made it no match for the US. The US-Soviet Cold War that followed offered a semblance of parity, but the bipolarity was heavily tilted toward the US politically, diplomatically, economically, and militarily.

 

Although Japan was mortally weakened by mid-1945, the US nonetheless proceeded to unleash two nuclear bombs on its civilian population. This "shock and awe" strategy softened up Japan to accept the three measures Gen. Douglas MacArthur enforced in acting effectively as an autocrat: retribution and remolding Japanese politics, rebuilding the economy along US lines, and containing Japan in a US alliance treaty.

 

The Korean War deepened Japan's alliance with the US and shifted US threat anxieties from Asian imperialism to communism. A weak economy was interpreted as a vulnerability to communist influence, mostly from within. MacArthur was more successful politically than economically: Japan stayed within the US orbit in terms of defense and foreign policy, but expanded economically until the 1970s, when it was deemed a threat rivaling US industries. The 1985 Plaza Accord then devalued the dollar, severely emasculating Japan's industrial strength.

 

In the final quarter of the 20^th century, Japan's stellar economic performance was admired and emulated in East Asia. Regional leaders were impressed by how an Asian economy devastated by war could rise from its ashes to become an industrial juggernaut and a global technology leader. Malaysian and Singaporean leaders "looked East" to follow the example of Japan and South Korea, another rising regional economy. The sub-text of looking East was looking less to the West to reduce dependence on former colonial powers.

 

For East Asia, Japan's lesson was that development needed planning - confirming a priority since independence. This implies a prominent government role, industrialization, strong work ethic, and - in US terms - industrial policy "on steroids." Japan's rapid growth from the mid-1950s to the 1970s led to industrial relocation in South-East Asia, providing employment opportunities and technology transfers.

 

Japanese influence was expressed in shared regional attributes conducive to rapid growth, regardless of politics: national priorities on education and training, state incentives for industry particularly manufacturing, a hospitable environment for foreign investment, a disciplined workforce, and a stable, productive public-private sector partnership effectively under a centralized one-party state.

 

Post-war Japan had been defanged with Imperial Japan replaced by manic manufacturing. Japan provided affordable consumer goods and employment opportunities, making South-East Asia regard it as a valued partner. Japan offered study scholarships and other ad hoc endowments to the countries it conquered in place of war reparations and a heartfelt apology. However, despite such regional assistance embodied in the Fukuda Doctrine, Japan's influence remained limited.

 

Even at its peak, that influence was almost exclusively economic or "one-dimensional." Japan aspires to be a "normal country" with greater autonomy, including defense and security matters. Article 9 of the Japanese peace constitution forbids recourse to war and permits only minimal military capacity for its own defense, with the US obligated to provide everything else. Yet, must this sub-normal status persist indefinitely? Can it even do so?

 

Japan is deeply divided on these questions, in part because its political imagination is limited by very few hard choices. At one end is the status quo, defined and constrained by subordination to the US, whose own interests dominate Japan's scope and regional space. On the other is a strident Japanese nationalism that underscores self-reliance free from US tutelage, but buttressed by shades of a militarist past. Nothing between or beyond these fixed positions is considered conceivable or politically acceptable.

 

These self-imposed limitations stunt Japan's development prospects, including its capacity for deeper regional integration and East Asia's growth as a region. They also mean missed opportunities, stagnation, and regression. Reluctance even to endorse regional reform advanced elsewhere in East Asia has disabled Japan's diplomatic capacity by failing to utilize available regional platforms.

 

The Uruguay Round appeared listless in the 1980s, and East Asia felt restless. Europe had the EU, North America had NAFTA, but a most economically dynamic East Asia had no equivalent economic framework or identity. In 1990, Malaysian Prime Minister Mahathir Mohamad proposed an East Asia Economic Grouping (EAEG) comprising ASEAN countries, China, Japan, and South Korea to Chinese Premier Li Peng as an ASEAN initiative. China accepted it, but inadequate preparation left some ASEAN members indifferent.

 

The US pressured Japan to reject this option. The EAEG was accused of regional isolationism, but Malaysia countered that the "loose, consultative grouping" promoted open regionalism. Implicitly, the EAEG would also bring the region together on agreeable economic terms to transcend past suspicions and animosities.

 

This was an opportune and critical moment with a rising China, when Japan was Asia's leading economy - the only time in history when these Asian nations would be paramount simultaneously. Instead of the risk of rising tensions and conflict, the EAEG would instead build upon regional commonalities. ASEAN as a universally trusted and non-threatening party would be offering its good offices in building regional peace and stability through economic complementarity.

 

However, Japan's insouciance meant a lack of consensus. Singapore then proposed an East Asia Economic Caucus (EAEC) as a component of the US-led Asia-Pacific Economic Cooperation (APEC) as a compromise. Yet, since this would heighten US preponderance instead of balancing it, the EAEC did not materialize. In the absence of an East Asian consultative framework to provide better regional coordination, the Asian financial crisis in 1997 devastated multiple economies, particularly South Korea's.

 

After this crisis, South Korean President Kim Dae-jung pressed for an ASEAN Plus Three (APT), a regional framework of EAEG countries. The APT then developed the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) comprising APT countries and Australia, New Zealand, and India. This ASEAN Plus Six (APS) framework is what the EAEG would have grown into had it been established three decades earlier as originally intended, given the logic and direction of economic integration. Japan and other APS countries have now formed the world's largest trading bloc, with only India yet to ready itself for the RCEP's economic obligations.

 

Throughout the convoluted process of establishing an East Asian economic regime, Japan has been torn between serving national and regional interests by partnering with neighbors, and servicing US interests even when the latter militates against the former. Japan has been conditioned to prefer the latter, but its policymaking elite is not monolithic. Japanese diplomats can be amenable to regionwide efforts toward greater regional autonomy, even as they prioritize other options. Japanese corporate leaders are also more open to shared regional imperatives.

 

The EAEG suffered from weak advocacy from the outset, but some Japanese officials could still appreciate its merits. China's proposal of the Asian Infrastructure Investment Bank found Japan reluctant to be involved, but corporations like Mitsubishi were keen for Japan to join. After President Xi Jinping introduced the Belt and Road Initiative (BRI) in 2013, Prime Minister Shinzo Abe declared in 2017 that Japan was ready to join it. On January 1, 2022, Japan joined the ASEAN-led, East Asia-centered RCEP the day it took effect.

 

Japan may remain in US-led institutions, but their utility remains in question. Shinzo Abe proposed the Indo-Pacific construct in 2007, then the US led discourses on it - while Japan retained its own nuanced interpretation. As India indicates, interpretations of the Quadrilateral Security Dialogue (Quad) differ, limiting its effect. The Indo-Pacific Strategy consists of no identifiable strategy, only universal norms and goals, plus the Quad, with the Quad bereft of specific ends and means shared by all members.

 

The US-led Indo-Pacific Economic Framework for Prosperity (IPEF) and the EU-led Global Gateway are often cited as rivals to the ASEAN-led RCEP and the China-led BRI respectively. However, these are complementary in their declared goals with no zero-sum equation or rivalry. Japan, like many of its neighbors, has joined several frameworks without contradiction. What matters is how many, if any, could work, as success depends on available investment, political commitment, and policy consistency.

 

Japan must contend with regional realities as they develop: the primacy of economics governed by consensus, a distanced Europe, a still rising China, declining US superpower capacity, growing economic integration, and ASEAN centrality. Major Western powers may persist in ambitious statements as a substitute for capabilities or action. This is a region Japan is an inseparable part of, and which it can contribute to, and grow with, or lose valuable opportunities from.

 

Japan remains defined by 20^th-century security concerns in an East Asia increasingly defined by 21^st-century economic priorities it helped engender. How Japan chooses to navigate between its perceived choices will determine its future prospects. This will also shape regional perspectives of Japan, and in turn its capacity to develop as a "normal country."

 

 

This article is from the February issue of TI Observer (TIO), which explores Asia in micro and macro scale during this unprecedented period of uncertainty in decades, highlighting the shifting economic ambitions, security concerns, and diplomatic strategies of Asian countries in the process of redefining their positions within an increasingly multipolar world. If you are interested in knowing more about the February issue, please click here:

http://en.taiheinstitute.org/UpLoadFile/files/2025/2/27/162841654bb4b4485-6.pdf

 

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