Watch Japan reassert itself on the world stage

JAPAN may have retreated a little in the 90’s to deal with its own set of economic woes but it appears ready to return as a formidable player on the world stage.

Its tenacity and resilience are well known, and its ability to ride out of adversity is legendary, but its long silence may have led people into thinking whether the sun has already set in the land of the rising sun.

There is now compelling evidence that suggests its upward trajectory remains unabated considering its newfound economic strength, its demographics and the ‘quadrilateral’ coalition with India, Japan, US Australia will bring Japan back again into center stage.

Following tax reforms by the Abe government and with the nation’s high savings rate, Japanese companies are set to mobilise its funds in Asia-Pacific countries.

It is estimated that total savings in Japan for the past four years by the corporate sector has reached US$1 trillion (RM4.08) due to record profits posted by the non-utilisation of the funds.

The estimated idle funds in the Japanese private sector are as large as the amount China has promised to invest in Asia, Middle East and Europe for its Belt and Road projects that could alter the global trade routes.

Its newfound strength in the economy should have fueled domestic investments, unfortunately, its aging and shrinking population have deterred large corporations from investing locally.

This alone is the single motivating factor for Japanese corporations to have spent more than US$100 billion on foreign takeovers in 2016.

It was believed that they are set to conquer the world through unity that comes within, and act as super conglomerates that westerners call Japan Incorporated.

In addition, its cultural value systems deeply infused in the corporate sector are expected to help bolster productivity and profits of its overseas investments.

There is already evidence that its investments, which have allowed it to espouse its values to the workforce in key south-east Asian countries, had led to better performance.

The Japanese practice of looking at the welfare of its employees holistically, and impressing upon them that their welfare and destiny is intertwined with the company, is likely to have a positive effect overall.

Aside from this, the external opportunities that are presented to Japan in the form of a ‘quadrilateral’ coalition with India, US and Australia will bring Japan back into center-stage again.

The coalition is likely to keep the Indo-Pacific region “free and open” and is seen as a move to counter China’s assertiveness in the area.

At the recently held Asean meeting in Manila, the coalition also deliberated on enhancing cooperation in dealing with challenges of terrorism and talked about tackling proliferation threats, including North Korea’s nuclear and missile programme.

Officials at the meeting agreed to work to address threats to international peace and security posed by the proliferation of weapons of mass destruction, including North Korea’s nuclear and missile programmes.

While the security issues around the region that had bogged Japan previously out of the way, its course into the world-stage looks unabated.

Sathish was previously the Senior Analyst at the Institute of strategic and International Studies and most recently as the Assistant Business Editor in a local newspaper.