Greetings,
"The Japan Forum on International Relations (JFIR) E-Letter" is delivered electronically bimonthly, free of charge, to readers in the world interested in Japanese thinking on Japan's foreign policy and other related international affairs by the Japan Forum on International Relations (JFIR), private, non-profit, independent and non-partisan foreign policy think tank in Japan.
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ITO Kenichi
President, JFIR
"JFIR Commentary"
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"JFIR Commentary" presents views of members of JFIR on Japan's foreign policy and other related international affairs. The view expressed herein is the author's own and should not be attributed to JFIR.
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Budget Deficit Should be Considered Necessary Cost for Japan's International Contribution
By TSUKASAKI Kimiyoshi
Associate Professor of Kurume University
The biggest contribution today's Japan is supposed to make to the international community is to recover its domestic demand as soon as possible and thereby to take the initiative in reviving the world economy. Meanwhile, if Japan, on the contrary, should have to see China's continuing economic growth as a lifeline for its own economy, relying solely on China's expanding domestic demand, Japan would soon end up being look upon as a "baggage," instead of a "contributor," and lose its footing not only in Asia but also in the international community.
Seeing that self-sustained recovery is unlikely, it is therefore imperative that Japan should spur its economy by implementing fiscal and monetary policies. Under the circumstances, as monetary policy has already been relaxed to the maximum, any shortfall should be covered by taking fiscal actions. If fiscal actions are taken, budget deficit will soar. However, the soaring budget deficit at the present phase should be considered as necessary cost for Japan to make contributions to the international community. While some would argue that the current budget deficit is being inflated by the stymied process of "cutting wasteful spending" initiated by the Hatoyama Administration as part of its measures to secure funds in implementing its newly-launched policies, we should nevertheless wait and see.
It is necessary to trim "wasteful spending." However, it is difficult to distinguish wasteful projects and beneficial ones. It is therefore important to take time to determine the benefits of each project in a longer perspective. Besides, we should note that the definition of "wasteful spending" in a time of boom is different from that in a time of recession. John Maynard Keynes says that even "to dig holes in the ground and then fill them up" is a beneficial project in a time of recession.
The Democratic Party of Japan (DPJ) is obliged to fulfill its promise on the budget expenditure pronounced in its election manifesto. It should not resort to easy tax increases merely because it cannot trim wasteful spending. Besides, to curtail beneficial projects without determining its utilities in the longer time perspective would be the last thing it should do. Although wasteful spending must be eliminated when economic recovery is achieved, in order to attain that goal, we need time to determine whether each spending is wasteful or not and so does our economy to recover.
(This is the English translation of an article which originally appeared on the BBS "Hyakka-Seiho" of JFIR on 2 November, 2009, and was posted on "JFIR Commentary" on 25 January, 2010)
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For more views and opinions in the backnumber of "JFIR Commentary," the latest of which are as follows, please refer to:
http://www.jfir.or.jp/e/commentary/backnumber.htm
No.54 "Japan-U.S. Alliance Should Not be Turned Adrift"
by YANO Yoshiaki, retired Senior Officer of Self Defense Forces of Japan
(30 November 2009)
No.53 "Japan's Lonely Battle for the Greenhouse Gas Reduction May Yield Reverse Effects"
by TAMAKI Hiroshi, Professor
(30 September 2009)
No.52 "Three Principles on Arms Exports Need to be Revised"
by TAKAMINE Koushu, Fellow, The Okazaki Institute
(31 July 2009)
No.51 Japan Should Involve NGOs in its ODA Programs
by HIRONAKA Wakako, Member of the House of Councilors (Democratic Party of Japan)
(29 May 2009)
No.50 Before Talking about Energy Deal with Russia
by SASAKI Akira
(11 May 2009)
No.49 What was Wrong with "War on Terror"?
by ITO Kenichi, President of The Japan Forum on International Relations
(7 March 2009)
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"JFIR Updates"
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"JFIR Updates" introduces to you latest events, announcements and/or publications of JFIR.
Events
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The 56th Meeting of "Diplomatic Roundtable" on "The EU after the Lisbon Treaty" Held
JFIR and its two sister organizations, the Global Forum of Japan and the Council on East Asian Community, taking advantage of an occasion of a visit to Japan of a prominent person on international and other affairs, monthly organize a "Diplomatic Roundtable" meeting, which is an informal gathering of members of the three organizations for a frank exchange of views and opinions with the visiting guest. The 56th "Diplomatic Roundtable" was held on 25 January 2010 on the topic of "The EU after the Lisbon Treaty." An outline of the presentation by Ioan Mircea PASCU, Member of the European Parliament (EP), Vice-Chair of the Foreign Affairs Committee of EP, was as follows.
After the Second World War, Europe started the unique political experiment of gradual unification in order to preserve its place in the coming bipolar world under the Cold War regime. The main obstacle of the integration was the Franco-German centuries old conflict. But it was overcome by unifying the two opposing war industrial bases of coal and steel in the two countries. The unification process received substantial material and military support during the Cold War from the United States, through the Marshall Plan and the NATO. The U. S. supported it because they needed the force of entire Western Europe to withstand the Soviets and needed a much larger market to absorb their surplus production. After the end of the Cold War, the international system underwent two structural changes. One was the "U. S. unipolar moment," and the other was the "post-post Cold War era," which was heralded by the 9.11 terrorist attacks. Significantly, after each of these changes, the European integration process was accelerated and deepened. After the dissolution of the Soviet Union, the Maastricht Treaty created the European Union and led to the creation of the Euro. Later on, the negotiations for a treaty establishing a Constitution for the EU started. Nevertheless, as the ratification of the treaty was rejected by referendums respectively in France and in the Netherlands, the idea of establishing a Constitution had to be reconsidered. Thus, a treaty replacing the formally abandoned constitution was called for, which is intended as a reform treaty but still preserves important supranational feature of the abandoned Constitution. This is how the Treaty of Lisbon was concluded, which entered into force on 1 December 2009. The Lisbon Treaty brought about the 10 significant changes in European Union as follows. (1) The Union has single legal personality, (2) Any Member State has the right to withdraw from the Union, (3) The President of the European Council represents the Union internationally at the highest level, (4) The High Representative of the Union for Foreign and Security Policy / Vice-President of the Commission conducts the Union's common foreign and security policy and presents proposals to the development of that policy, and coordinates inside the commission all aspects of the Union's external action, (5) Introduction of European External Action Service, (6) More power for the European Parliament, (7) More involvement of national parliaments, (8) Citizen's right to initiative, (9) The voting arrangements in the Council of Ministers are changed, and (10) The Charter of Fundamental Rights becomes legally binding. The Treaty of Lisbon provides an effective multilateral cooperation framework but has no power to bind down the member country which seeks a sole-behavior in the multi-polarizing world. The Lisbon Treaty is the first document which mentions the possibility of framing a common union defence policy. Thus, European Union's defense policies will have to be so adjusted as to be in harmony with the NATO's framework. In order to access the future prospects of the EU, we have to be attentive not only to the internal evolutions of the Union, but to the reactions of other great powers in the nascent multipolar world.
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