By Paul Nadeau
Source: diueine’s flickr photostream, used under a creative commons license.
When Japan released its national security strategy (NSS) in January 2014, it was rightly viewed as a welcome attempt to coordinate the various portfolios relevant to Japan’s security policy, streamline decisionmaking, and introduce a level of long-term planning to Japanese strategy. But as drafted, Japan’s plan to operationalize its national security strategy is incongruent with what it identifies as risks to international stability. While it emphasized the role of economic policy in Japan’s national security, stating “achieving the prosperity of Japan and its nationals through economic development” as one of Japan’s national interests, there was no economic minister included in the cabinet-level national security council (NSC). Despite references to Japan’s role as a major player in world economics and identifying protectionism and the spread of economic contagion as risks to global stability, the only explicit reference to economic planning is to “maintain and strengthen the free trade system” and mentioning Japan’s various economic arrangements.
As the Trans-Pacific Partnership (TPP) comes to a close and with it a platform for 21st century commerce and economic governance in Asia, Japan will have greater strategic clarity if it can consider these issues in the broader strategic context of its relationships with the United States, China, and more. While Japan has generally adopted an “it’s just business” approach to its economic dealings, they will increasingly find this will limit their potential to act in both their economic and security policies.
Given that the Japanese NSC system is based on that of the United States, the role of economic policy in Japan’s NSS may reflect the role of economics in the U.S. NSC system, where international economic decisionmaking, once the almost exclusive purview of the State Department and Treasury Department, has become divided among several departments and agencies, with the NSC taking a central role. The Japanese NSC is too new to make predictions, but Tokyo could either consolidate international economic decisionmaking at the NSC level with diminishing input from the ministries, or it could continue to leave international economics to the ministries, running the risk that economic statecraft would become increasingly bifurcated from national security strategy with limited coordination.
An easy step to ensure better coordination would be to add an economic team to the National Security Secretariat’s (Japan’s equivalent of the U.S. NSC staff) issue area teams staffed with personnel seconded from the relevant ministries. A second step would be to expand the NSC’s core “four ministers group” to include ministerial-level representation for international economics, possibly from the Ministry for Economy, Trade, and Industry (METI), the Ministry of Finance (both are currently included in the broader “nine ministers group”), or a new cabinet position with an international economics focus similar to that created for current Minister of State for Economic Revitalization, Akira Amari.
This is relevant for three reasons. First, economic growth was almost exclusively the source of Japan’s national power following World War II and remains one of the few areas where the Japanese government can exercise influence with national strategy given the sensitivities surrounding its armed forces. Second, Japan’s economic policy will be crucial in responding to China’s rise through its continued integration with the rules-based economic order. This will provide a constructive opportunity for engagement in the midst of territorial disputes and ambiguities about China’s intentions as a great power. Essentially, economics will determine the future order of Asia as much as security, if not more so. Finally, Prime Minister Shinzo Abe’s economic strategy of “Abenomics” is explicitly aimed at recovering Japan’s status as a global power. The national security strategy appears to confirm this with its references to bolstering its economic strength to ensure national security. In this context, economic policy is conspicuous by its absence.
There are several specific cases where economics needs to be considered in the context of national strategy and vice versa. One would be Japan’s relationship with the China-led Asian Infrastructure Investment Bank (AIIB) which Japan has expressed conditional interest in membership but which the United States has (awkwardly) discouraged allies from joining. Another would be the increasing role of sanctions as a tool of coercive diplomacy, and there will likely be cases where Japan may be pulled between securing energy imports and its “tier-one nation” role of maintaining global stability.
Economic strategy, and therefore national strategy writ large, works best when it’s harmonized with market forces and Japan currently has no mechanism to do this. Though Japan is not alone in divorcing economics from its broader security strategy, the recent creation of the Japanese NSC is a missed opportunity for Japan to leverage one of its strongest strategic assets. Given its potential to both strengthen Japan’s coordination of its economic and security interests and shape rules and behavior in the international economic order, Japan’s NSS is incomplete until incorporates economic statecraft.
Mr. Paul Nadeau is a program manager and research associate with the Scholl Chair in International Business at CSIS.
