Sir David Warren
Sir David Warren in Edinburgh
There is of course only one way to try to truly understand Japan – go and live there.
But perhaps the next best thing is to spend time in the company of Sir David Warren, former UK ambassador to the Land of the Rising Sun.
Sir David is an impressive speaker. Thoughtful, measured and refreshingly frank, the man clearly knows his subject in great depth.
Speaking without notes to Asia Scotland Institute members in Edinburgh, he covered it all: Japan’s extraordinary history and remarkable economy; Japan’s corrupt and faction-ridden politics and its tense relations with China and the Koreas, South and North; Japan’s close ties with the UK and United States and its concern that Britain could one day leave the EU; Japan’s unusually high degree of “linguistic isolation” which Sir David sees as a “a serious problem”, particularly for its politicians.
“My fundamental theme,” the former ambassador said, speaking at the Royal Society of Edinburgh, “is that even though we are rightly now mesmerised by the rapid growth of China and the future of China, as it changes as a society as well as grows as an economy… let’s remember that Japan remains a giant in economic terms and will remain a giant.
“And remember, too, that it remains a friend of Britain, and a country with whom our friendship has borne serious fruit over the past 30 years.”
As with any other country, to understand Japan’s place in the world today it is useful to look at its past. And that is where Sir David began his talk, briefly describing to his audience “a highly developed society which sealed itself off from the world for nearly 250 years until the United States and the other Treaty powers, of which the UK was one, forcibly opened it to foreign trade and to foreign influence in the mid-19th century.”
The Restoration of Emperor Meiji followed, and Japan became “in short order a powerful industrial force in the world” and “a role model for other Asian countries”.
By the 20th century that optimism had turned sour. The “physical and moral catastrophe of the Second World War” effectively destroyed Japan as a functioning society. And yet, as we all know, it recovered from that cataclysm with breathtaking speed to quickly become the second most powerful economy in the world.
By the 1980s Japan was confidently expected to overtake the US as the largest economy in the world. Then the bubble burst. And, in Sir David’s words, “Japan began its long period of effective stagnation, through which it is in a sense still living”.
So what of today’s Japan, a country that Sir David has lived in for a total of 13 years and where he has served not only as ambassador but also in the British Embassy’s economic department?
“One of the striking things about Japan,” he said, apologising for making a generalisation, “is the way it remains an extraordinarily self-conscious country. It is a country which is fascinated and intrigued by the way in which it is perceived in the world…
“At the same time there is… a deep sense of unhappiness that in a way Japan is no longer taken as seriously as other Asian countries that are growing much faster; that it is being overtaken, obviously by China, and increasingly by other East Asian industrial tigers. And after a period in which Japan was thought to be rising, it is now a country which is being surpassed by others and it is, in a sense, missing from the international fraternity.”
Sir David said he spoke to many Japanese at ambassadorial functions and the conversation “was often extraordinarily depressing, miserable, self-critical. Why are we so useless? Why are we failing as a society? Why are our young people so lacking in get-up-and-go? Why are our politicians so pathetic and unable to lead? Why is the rest of the world kicking sand in our face?”
Iron in the soul
“There was this terrible sense of depression and despair,” he went on, “and it was often left to me and a lot of the British observers to say, ‘But Japan is still seen as a role model by so many countries in terms of the success of its society in many ways, in terms of its continuing economic growth… because although it has been economically stagnant for 20 years or so, it has continued to grow, albeit it at slightly insipid rates during that period.’
Prime Minister Shinzo Abe “In many ways, Japan remains an extraordinarily attractive society in which to live; a comfortable and – in terms of social cohesiveness – a successful society. But the iron is in the soul for many Japanese and this sense of failure was all pervasive.”
Sir David’s frank observations will be familiar to anyone who has lived in Japan or spent a significant amount of time there. So to his description of Japanese politics as complex, corrupt and beset by maladministration and scandals.
For decades Japan was run by three institutions that formed an “Iron Triangle” – big business, the bureaucracy, and the ruling Liberal Democratic Party. But in the 1990s that Iron Triangle began to break down and what Sir David described as “a period of revolving door prime ministers” led to the current leadership of Shinzo Abe.
Mr Abe has attempted to lift Japan from its slump by combining increased government spending with monetary easing, while at the same time deregulating the economy – a three-pronged approach known as Abenomics.
While Mr Abe’s popularity rating is “quite high for a Japanese prime minister”, Sir David said, “the jury is still out” on Abenomics: “It is beginning to bear fruit very slowly, and the shine is beginning to come off this policy, so people have become a little disillusioned, a little sceptical about whether it will really succeed in lifting the growth rate and the inflation rate… to the 1.5 or two percent that Abe and the governor of the Bank of Japan have committed themselves too.”
“There are friends of Japan and informed commentators in Britain who say it is unrealistic to expect Japan’s economy to grow to this degree,” Sir David added. “Japan is a highly developed and sophisticated economy. It has a demographic which is quite scary because the population is over the long term shrinking.
“By the middle of this century, 40 percent of a reduced population – it’s about 125 million at the moment, it’ll be about 95 million by 2050 – 40 percent of those will be over the age of 65.
“It’s very hard to expect an economy with that demographic profile to grow at the level that Abe has committed himself to, and certainly it’s completely unrealistic to expect Japan to match the growth rates happening in East Asia.”
That said, Sir David conceded that Mr Abe’s policies have “injected a higher degree of confidence” into Japan and given the Japanese “a little bit more vim and umph”.
It’s not a Greece
And he reminded his audience that – despite its many challenges – “Japan is still a mighty economic force”: 13 percent of the Fortune 500 top companies are Japanese; much of the world’s cutting edge research and development is done in Japan; it remains a massive economy in terms of its financial reserves.
Japan also continues to have a positive effect on Scotland and the UK, Sir David said: “It contributes 130,000 jobs directly to the British economy, hundreds of thousands more in the supply chains, and who knows how much money in terms of prosperity for Britain.”
“One of the things which I think frustrates commentators about Japan,” he concluded, “is its refusal apparently to obey the laws of economic gravity.
“I notice among some of the Western commentators on Japan a profound frustration that Japan didn’t collapse like they said it was going to collapse. It seems to stay afloat. It does stay afloat.
“And that’s because it’s a highly innovative society with strong centres of excellence in certain manufacturing industries… a strong and socially cohesive community; it doesn’t simply crumple.
“With no disrespect to what people were saying about Greece, it’s not a Greece. People who say something terrible is going to happen are often wrong.”
You can watch Sir David’s full presentation at the Royal Society of Edinburgh via the Youtube link below. Or click here to see a short video of Sir David in conversation with our Chairman Roddy Gow.