Political Changes in East Asia (Agenda)
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Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, Stratfor cannot guarantee their complete accuracy.
Video Transcript:
Colin Chapman: There have been changes of leaders in Japan and South Korea this week, which means that all four major countries in North Asia have different people in charge from a year ago. And the families of each of them have a history of struggle and conflict. So what can we expect in 2013? Welcome to Agenda. I'm Colin Chapman. And with me is Senior North Asia Analyst Rodger Baker. Rodger, let's start with Japan. Shinzo Abe now has the so-called supermajority, which allows him to override any upper house vetoes of his legislation. What legislation can we expect?
Rodger Baker: I think we're going to see, despite the fact that he's got this advantage right now, in some ways he's going to be a little bit cautious. I think his first focus is going to be on economic stimulus. He may try to use this time to work a little bit toward constitutional change on the military or toward being able to work out a better deal with the Russians in regards to the Northern Territories. But he does have in the summer upper house elections, so he can't push this too far yet. He has to give himself some space to win those elections as well.
Colin: It's suggested that he'll replace the governor of the Bank of Japan with someone less conservative, more malleable. But then the bank did what Abe actually wanted them to do this week and ease monetary policy.
Rodger: Yeah, whether he replaces the bank head or whether he just works with the bank head, I think that either way we're going to see the Japanese work to adjust their currency to really try to boost their exports. They've been having some problems with the Chinese. The Chinese have been reducing imports from Japan. So they need to be more competitive with the Koreans. This is also something we're seeing that the Koreans are very worried about is the potential for Japan to start narrowing the gap in the cost of goods right now.
Colin: Now in terms of defense strategy, he did promise to redraft the constitution to bolster the role of the military.
Rodger: I think that Abe is definitely going to try to push forward with the formal normalization of Japan, the constitutional change to adjust the legal structure that underpins the Japanese defense forces, or the Japanese military. The United States supports this, but at a slower pace. Many of the countries in the region may be a little bit nervous about that, but in many ways the Japanese have been making that change anyway. And the Japanese military has advanced weapons systems, it's got advanced training, it's got better interoperability, and so in many ways it's really just removing that last little fiction rather than a fundamental alteration of the Japanese military capability.
Colin: Right. Now, when in power before, the Liberal Democrats had a record of being bloated and corrupt. Will Abe be able to prevent a return to those bad old ways?
Rodger: There's certainly a difficulty with the LDP in simply going back to tried and true methods. Those methods weren't always effective for them anyway. They did end up losing power to the DPJ. The bureaucracy remains fairly strong. We're already seeing them thinking about using construction and infrastructure developments, which puts them back in that same cycle again. At the same time, the rise of this third poll is really starting to push against that bureaucratic structure. It goes back also to Koizumi. When he was prime minister he was trying to chip away at the edges of the bureaucratic structure, and I think that in some ways Abe is caught between the need to utilize that and a need to start to break down that element of Japanese politics.
Colin: The powerful Japanese business group Keidanren is pushing Abe to lead the country into the Trans-Pacific Partnership that's also back by the United States. Do you think the TPP has legs?
Rodger: The TPP is going to be hard for Abe to push through with his coalition partners to be able to make that pass. It may not be a heavy priority for him. It will depend in some sense also on what progress he or the Japanese manage to make in discussions in regards to a trilateral free trade area with South Korea and with China. Abe and Tokyo are going to want to balance both of those, the TPP and this trilateral arrangement and let them play off each other. So TPP may not be a very high priority for him. It may be public, but because of the pushback against it and the questions of the value of TPP overall, and the difficulty in many ways of finalizing the agreement with the United States, he may use it more for talk in his relationship with the United States than in making progress on it.
Colin: Now this week's also seen an election in South Korea, where there's now a woman president for the first time. What initiatives do you expect to come from Seoul?
Rodger: Well I think that Park Geun Hye's very first effort is going to have to try to find a way to unify the political elements in South Korea. If you look at this vote, yes, she's the first elected president to have greater than 50 percent of the vote. At the same time, it was a very close race. We that regionalism is still strong in South Korea. So in the southwest, it was something like, only 10 percent voted for her, whereas in the southeast 80 percent voted for her. So those regionalism elements are there. There's an age gap that the liberal candidate gained most of the young voters, and she gained most of the older voters. So that's going to be the first thing she has to do. Then there's the balancing of the economics. The South Korea economy has been slowing down from where it was. There is a need to adjust the growth of the chaebol. They've been taking over small- and medium-sized businesses, taking over the mom and pop shops, so she's going to have to find a way to put a few chains on the chaebol, but not in a way that undermines South Korea's overall economic competitiveness. And yet give some money, give some opportunities to some of these small businesses.
Colin: Rodger, finally looking at North Asia as a whole, it's possible to be uneasy about the year ahead. South Korea's new president is the daughter of a dictator. Mr. Xi in China is the son of a Communist Party revolutionary hero, and Mr. Abe is the grandson of a World War II minister, who helped to run Japanese-occupied Manchuria. The history isn't good, and actually the optics havn't been good either. These people are far from being bosom pals.
Rodger: I think what we're seeing in northeast Asia is very interesting in that you see an almost nationalistic drive in all these countries, whether it's through election, through the rejection of the existing parties, or just through the way in which the parties are shaping and organizing themselves. There is a long history with all these candidates with their family lineages that goes back into regional politics, and at a time when most people have been focusing for the past few decades on this concept of globalization and the breaking down of barriers, I think one of the things we're seeing in northeast Asia is the reflection that geopolitics matters, that history matters, that the national interest is very strong in each of these countries, and they're seeing a shift in the way in which they can balance with each other. Watching as you see a more conservative candidate in Japan, a more conservative candidate in South Korea emerge, even in China. In North Korea, perhaps the slightly-less-conservative-than-his-father, but he's there. I think the other thing we are going to see is, as you see Japan re-emerge as a normal (in the sense of having the military as a potential tool of politics) state, we see the Chinese continue to be more assertive in their territorial claims. This may actually provide impetus for the two Koreas, who will feel stuck between, to actually start to lean toward each other and over the next three or four years find ways to strengthen cooperation with each other in the face of this rising change in the regional balance of power.
Colin: Rodger, we'll leave it there for now. But this is obviously something Stratfor will watch closely next year. And that's Agenda. A Happy Christmas to you all. See you again next week.
