2009/08/31 Monday 13:51:54 IRDT
Ｈａｔｏｙａｍａ’ｓ Fantasy Island（Ｆｏｒｂｅｓ）
Hatoyama's Fantasy Island
Tim Kelly, 08.30.09, 06:00 PM EDT
Japan's leader-in-waiting has a delusional vision for his country and its relationship with the rest of Asia.
Yukio Hatoyama dreams of an Asian union, a utopia free of rapacious American capitalism, a region bound together by fraternity and a common currency. Were Hatoyama a soapbox orator his fantasizing could be dismissed as twaddle, but he isn't. He's about to become the next prime minister of the world's No. 2 economy, following his party's victory Sunday in a general election.
In an op-ed piece, "A New Path for Japan," that ran in The New York Times recently, the leader-in-waiting revealed his vision of Asia's future, one that has Japan hand-in-hand with China at its center as American economic and military power wanes. He describes his country as being "buffeted by the winds of market fundamentalism," a nation "damaged" by an unfettered global economy. There is, Hatoyama boldly states, "danger inherent in freedom," although he doesn't specify what variety of liberty he finds most hazardous.
There's no suggestion he would want to go as far as rounding up Japan's beleaguered free marketeers and locking them up and throwing away the key, but his public musings suggest Japan is in for a heavy bout of re-regulation that will swaddle the unviable and stymie the fit. Hatoyama is right when he notes the relative decline of America vis-à-vis China, but chooses to overlook the more precipitous decline in Japan's power and influence. As the rest of the world economy grew over the past decade and a half, Japan's stood still, its corporations hobbled by the kind of regulation and bureaucracy seemingly advocated by Hatoyama's brand of economic nationalism.
He also ignores an uncomfortable truth: As an export junky unable to kick-start its domestic economy, Japan relies on other nations keeping their markets free to ensure corporate profits at Toyota, Sony, Panasonic and the rest of Japan Inc. With America and Europe in recession, Japan must increasingly look to China to sell its products.
The Chinese may be happy to buy Japanese TVs, cameras, game consoles and washing machines, but Hatoyama is probably deluded if he believes they will buy into his idea of a common Asian currency. Even 64 years after the end of World War II, bitterness about the conflict that claimed millions of lives lingers. Japan's empire building under the guise of a co-prosperity sphere back then was its last stab at creating a pan-Asian common market.
Apart from the practical obstacles of tying China, Japan, Korea and Taiwan together under one currency--an emerging economy, China's gross domestic product per capita is a mere one-tenth that of Japan's and is a totalitarian state to boot--there's little incentive for Beijing's leaders to even consider the idea. All China need do is wait for its yuan to become Asia's currency of choice as its economy comes to dominate the region. It will overtake Japan this year or next. Why tie your fortunes to that of a fading island nation on the edge of Asia?
Japan's 100 million voters have given Hatoyama and his party four years to prove they can transform Japan. However, it wasn't so much an election that the DPJ won with persuasive policies, but rather a poll that the LDP lost. Sunday's result was a massive protest vote against a worn-out, clique-ridden party that after ruling Japan for nearly all of the past half century had simply been in power too long. Hatoyama is about to step into the job he sought, but it doesn't mean his fellow Japanese want to live on his fantasy island.
Tim Kelly is Tokyo bureau chief for Forbes. You can follow him on twitter here http://twitter.com/kellyJapan.