Japan’s Global Standing Rests on More than GDP

By Akihiko Tanaka / Special to The Yomiuri Shimbun

20:58 JST, March 1, 2024

Japan has slipped below Germany and is now the world’s fourth-largest economy in dollar terms, according to 2023 nominal gross domestic product statistics released by the Cabinet Office. Japan’s GDP in fact hit an all-time high in yen terms last year, but when measured in dollars, GDP has fallen behind Germany due to the further weakening of the yen and high inflation in Europe’s largest economy. Since Germany posted negative growth in real terms in 2023, even if the countries have swapped places in the global ranking, Germany is not necessarily better off than Japan.

However, some may regard the reversal as a sign that Japan’s national strength is declining. The country’s GDP was the second largest after the United States for many years until it was overtaken by China in 2010. Now it has fallen behind Germany and is likely to fall behind India as well in 2025 or 2026. Japan’s global standing appears to be steadily diminishing.

Some people believe that nothing is left of the country that was once Asia’s sole economic powerhouse, that once inspired a book by a U.S. sociologist titled “Japan as Number One.” Others see a Japan that could grow humble, as befits its actual strength.

In my view, however, such pronouncements of Japan’s decline do not reflect the reality of today’s world and international relations.

First, even when its economy was the world’s second largest, Japan did not wield much international influence. It is true that Japan’s post-World War II economic growth amazed the rest of the world. Its economic rise sometimes sparked fear in the United States and other countries about how much the Japanese economy would eventually grow.

Nonetheless, in a series of trade disputes with the United States, Tokyo had no choice but to make concession after concession to Washington. After the Group of Seven came into being, Japan was less active than its peers in making proposals in the group, even though it was a founding member. In those days, countries in East and Southeast Asia were strongly suspicious and wary of Japan.

When the Gulf crisis broke out in August 1990, the year Japan’s economic bubble was at its height, the country contributed a whopping $13 billion to the international coalition of nations fighting Iraq. And yet, there was no mention of Japan in Kuwait’s “thank you” advertisements published in major U.S. newspapers soon after the Gulf War ended in February 1991.

Second, the source of influence in international relations has continued to change.

In the 19th century and the first half of the 20th century, it was common to rank countries on the basis of their potential war-making capabilities. For example, it was said that Japan emerged as a great power thanks to its victory in the Russo-Japanese War. However, the international community’s perception of war fundamentally changed in the wake of the world wars. The use of force as means of settling international disputes now constitutes a grave breach of international law.

Today, even if a country boasts advanced war-making capabilities, it is not necessarily in a position to exert major influence in the international community.

There are still wars with clear winners and clear losers. But in many cases, present-day wars are major disasters that bring catastrophe to all those involved. The United States achieved victory in the Iraq War in military terms, but since then it has seen no rise in influence in the Middle East. Russia, which has disregarded international law by continuing its aggression against Ukraine, would not be able to increase its international prestige even if it were to somehow pull out a victory.

Needless to say, military force has not lost its meaning. Today’s world is not free from accidental military clashes, and there are certain leaders who fail to understand the meaning of modern warfare and instead cling to a classic, outdated view of war. Against this backdrop, it remains crucial to maintain the capacity for both self-defense and collective defense with allies. It is also important to be able to participate in international peacekeeping operations.

But this only shows that states need to be able to defend themselves. Just because a state possesses defense capabilities, though, does not mean that it is able to be a leader for the international community.

The same holds true for economic strength, which on its own does not equate to international influence. Japan’s experience of the Gulf War is evidence of this. At the time, Japan extended significant financial support to the international coalition fighting for Kuwait, but it was not yet prepared to join the international community’s coordinated peace-building efforts.

Likewise, today’s China has yet to translate its economic strength into international influence. The biggest drawback of Chinese diplomacy is its strong tendency to see international relations as unidimensional, short-term transactions and to take punitive actions frequently. For example, China often bans imports from countries critical of its policies vis-a-vis Taiwan or its human rights abuses. Such sanctions might drive other countries to yield to the pressure, but in the long run these nations will only grow more distrustful of China.

Taking on global challenges

How then should we view the current state of Japanese influence in the international community? Compared with the pre-economic bubble era, in my view, Japan’s international presence has markedly increased.

After the United States withdrew from the Trans-Pacific Partnership agreement, Japan engaged in dialogue with all the other signatories to the TPP in a down-to-earth way, leading to the successful conclusion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japan became the first country to focus on and call attention to the importance of the Indo-Pacific. As a result, both the United States and member states of the European Union are now stepping up their involvement in the region.

When the Group of 20 major countries held its 2019 summit in Osaka, Japan successfully proposed that the G20 leaders agree to promote “data free flow with trust.” The concept has since become a world norm for global data governance.

In 2000, when Japan hosted a summit in Okinawa Prefecture for the then Group of Eight countries, which included Russia, it announced a global initiative to help developing countries fight infectious diseases. This Japanese endeavor led to the creation of the Global Fund to Fight Malaria, AIDS and Tuberculosis shortly afterward. Since its inception, health programs supported by the fund have saved 59 million lives.

Those achievements have rarely been reported in Japan. But the number of countries that appreciate Tokyo’s leadership has been steadily increasing thanks to the high degree of trust the world has in Japan.

In the international theater, Japan does not try to twist anyone’s arm. It has a reputation for honesty and sticking to its word. Of course, I often hear complaints that it takes too long here to make decisions. But many countries tend to have close relations with Japan rather than with some country that, though known for quick decision-making, tends to change its attitude out of the blue.

It is noteworthy that recent prime ministers — from Shinzo Abe during his first term as head of government to Fumio Kishida — and their cabinet ministers have flown from country to country to build relationships with their counterparts, including heads of state and government. This sort of active diplomacy was a rarity for the Japanese government until the 1980s.

Of course, the purpose of this article is not to praise Japan. It is to show that Japan’s influence abroad is larger than is thought at home. The foundation of this influence is the trust that Japan has earned from other countries through many years of collective efforts — namely, the government’s diplomatic efforts and official development assistance, and the activities of corporations, nongovernmental organizations and the Japan Overseas Cooperation Volunteers Program, among others.

For Japan to boost its international influence further, it should continuously put forward proposals for tackling global challenges, while making efforts to maintain and increase the trust it has already gained.

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Akihiko Tanaka

Tanaka is president of the Japan International Cooperation Agency (JICA), a post he took up in April 2022 for the second time after his first stint in 2012-15. He served as president of the Tokyo-based National Graduate Institute for Policy Studies (GRIPS) from 2017 to March 2022. Previously, he was vice president of the University of Tokyo from 2009 to 2012.

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The original article in Japanese appeared in the Feb. 26 issue of The Yomiuri Shimbun.