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Challenges to the Ascent

What Dilemma is Hampering Japan’s Rise to a Major World Power

22 March 2024

On January 1, 2024, Japanese Prime Minister Fumio Kishida vowed to propel Japan to the forefront of the international arena amongst nation-states that have a proactive role in key global affairs and issues. In his New Year's address, Kishida affirmed that he will “exert leadership unique to Japan" through summit diplomacy to "overcome challenges," citing issues such as Russia's war on Ukraine and the Israel-Hamas conflict.

The Prime Minister’s comments come on the back of official figures released on February 15, 2024, showing that Japan’s economy has slipped to fourth place after being replaced by Germany as the world’s third largest economy. India is projected to overtake both Japan and Germany and become the world's third-largest economy during the current decade.

Between Japan's aspirations to become a major global player and its evident economic decline, there are lingering questions about the obstacles it faces in transforming into a significant influential force in a world moving towards multipolarism.

Multiple Indicators

Over the past few years, and especially after Fumio Kishida assumed office as Prime Minister of Japan in October 2021, various signs emerged indicating Tokyo's growing status on the international scene across different domains. These signs can be illustrated as follows:

1- Revising Japan's military doctrine

In December 2022, Japan issued a new national security strategy introducing the most significant changes to its defense policy and military doctrine since the end of World War II. The new doctrine allows Japan to participate far more actively in collective self-defense with the United States, and to substantially increase its ability to project force beyond its borders. The new policies identified three key security challenges that Japan must confront through developing its defense capabilities: Chinese military modernization, nuclear and missile threats from North Korea, and the repercussions of the war between Russia and Ukraine. To respond to these challenges, Japan decided to double its annual defense budget to over $80 billion within 5 years, making it the world's third-largest military spender, trailing only the United States and China.

2- Increasing interactions with Asian neighbours

Recently, Japan's presence and influence across Asia has been increasing noticeably. This is evidenced by the growing number of visits by Japanese officials, along with the signing of bilateral cooperation agreements with neighbouring countries to coordinate positions and perspectives regarding the North Korean threat. The more prominent regional role played by the archipelago also presents Asian countries with an alternative to the Chinese model. Japan has successfully strengthened its bilateral relations with the Philippines and India, normalized its relations with South Korea, and resolved historical disputes between the two countries. Additionally, Japan has focused on expanding its presence in the Pacific Island countries and improving bilateral relations with them. Given the escalating tensions in the South China Sea, where China asserts full sovereignty, Japan has prioritized enhancing cooperation with the Association of Southeast Asian Nations (ASEAN), particularly in the area of maritime security.

3- Utilizing aid diplomacy

Japan has been providing aid to developing countries for over five decades, with the aim of deepening partnerships with the involved countries and contributing to achieving international stability through the Japan International Cooperation Agency (JICA).

As part of its efforts, Japan announced in 2022 the allocation of $30 billion for development projects across Africa over the next three years, in addition to providing $130 million for food security projects and $300 million in food aid in collaboration with the African Development Bank. Moreover, Tokyo announced its intention to provide loans worth $5 billion in partnership with the African Development Bank to finance sustainable development and financial reforms on the continent. It also allocated $4 billion for green growth and various pollution control projects, as well as achieving self-sufficiency in food. Furthermore, on February 27, 2024, Japan announced emergency aid amounting to $32 million to improve the humanitarian situation in Gaza during the ongoing Israeli war on the Strip.

4- Enhancing relations with the Global South

In the Japanese Diplomatic Bluebook issued in April 2023, Japan emphasized the importance of cooperation with countries of the Global South to maintain the international order and settle global issues. In that light, Japanese officials made an increasing number of visits to countries in the Southern Hemisphere in 2023, including Mexico, Brazil, Ecuador, Argentina, Solomon Islands, Cook Islands, India, Egypt, Ghana, Kenya, Mozambique, Peru, Chile, Paraguay, Barbados, Trinidad and Tobago. Through these visits, Tokyo sought to present itself as a trustworthy political and economic alternative partner to the Global South countries as Russia and China attempt to reinvigorate relations across the Southern Hemisphere.

In recent years, Japan has been seeking a broader and more proactive role in Africa, in line with the new strategy adopted by its main ally, Washington, towards the continent. Tokyo aims to counter China's increasing influence in Africa, which is why Japanese Prime Minister Fumio Kishida embarked on a tour in April 2023, visiting four African countries: Egypt, Ghana, Kenya, and Mozambique.

5- Increased engagement in settling international crises

Lately, Japan has been one of the major international powers backing Ukraine in its conflict with Russia. Alongside Western countries, Japan has imposed economic sanctions on Moscow and pledged financial assistance to Kyiv. However, due to the restrictions imposed by the Japanese constitution, Japan has refrained from providing military aid, where the constitution explicitly rejects war as a means of resolving international disputes, limiting Japan's involvement to non-military support. In August 2023, Japan proposed an initiative to revive the Joint Comprehensive Plan of Action, commonly known as the Iran nuclear deal, with major powers including the United States.

6- Possessing a strong international diplomatic presence

According to the Global Diplomacy Index, released by the Lowy Institute for International Policy on February 29, 2024, Japan ranked fourth globally in 2023 for having the largest external relations network, with a total of 251 diplomatic posts. This puts Japan behind China (274 posts), the United States (271), and Turkey (252) in that order. It is worth noting that the Global Diplomacy Index 2024 ranks countries based on the number of diplomatic postings they have worldwide, including embassies, consulates, permanent missions, and other posts. This index includes 66 countries or territories in Asia, the Group of 20 (G20), and the Organisation for Economic Co-operation and Development (OECD).

7- Success of Japan's lunar landing

Japan has joined the ranks of the United States, Russia, China, and India as the fifth country to successfully land a spacecraft on the moon. On January 19, 2024, the SLIM probe touched down on the lunar surface, marking a significant milestone in Japan's space exploration efforts. The primary objective of the mission is to conduct research on the moon's origin and its relationship with Earth. Additionally, the probe will investigate the presence of lunar water resources, which is crucial for future plans to establish human bases on Earth's natural satellite. This achievement is particularly noteworthy considering the long-term plans of both the United States and China to establish their own human bases on the moon.

Economic Decline

Despite Japan's rising global geostrategic significance, Tokyo has recently suffered a notable decline in its economic performance, which can be explained as follows:

1- Falling domestic demand

Data published on February 21, 2024, shows a downturn in the Japanese economy during the fourth quarter of 2023. This was primarily due to a decrease in domestic demand, causing Japan to slip to the fourth position globally, behind Germany. Japan's nominal GDP amounted to $4.2 trillion, despite experiencing a growth of 1.9% in 2023. In comparison, Germany's GDP stood at $4.5 trillion. The decline in the value of the Japanese yen against the US dollar played a significant role in this outcome, rather than the strength of the German economy, which contracted by 0.3% in 2023.

2- Declining population

Japan is currently grappling with the issue of a declining population, which has led to a labor shortage. Tokyo, in particular, is experiencing more severe consequences compared to Berlin, including low birth rates. As a result, economists predict that the gap between the Japanese and German economies will continue to widen.

3- Impact on Japan’s international standing

The decline in Japan's global economic ranking, which has been largely due to the depreciation of the Japanese yen against the US dollar, has had significant implications on the country’s international standing and its vision of its role on the global stage. This situation also puts pressure on Prime Minister Fumio Kishida, whose popularity has recently declined. Moreover, the International Monetary Fund's projections that India will surpass Japan in 2026 and Germany in 2027 in nominal GDP further exacerbate the impact of this issue on Japan's international standing.

Japan's Dilemma

For any state to pursue the position of major power in the current international system, it must maximize its comprehensive power capabilities on one hand, and address the domestic and global challenges and constraints it faces in achieving this goal on the other.  In Japan's case, the country’s relentless efforts towards global ascent are facing numerous major challenges and obstacles. These can be encapsulated in four key areas:

1- The challenge of China’s rise

The growing role and status of China in the current international system constitutes one of the major challenges hindering Japan's aspirations for global ascent. Tokyo perceives China as an unprecedented and the greatest strategic challenge, and source of concern for national security. Recognizing the significant challenge posed by China to Japan’s ascent, Tokyo has been competing with Beijing in its spheres of influence in various regions worldwide, including in Asia, Africa, and Latin America.

2- Persistent security threats in Asia

Several security threats to Japan’s national security impede the country’s aspirations because they impose restrictions on its movements in Asia. Among these are the escalating tensions in the South China Sea, the unresolved crisis on the Korean Peninsula, the Taiwan crisis, and the growing security and military cooperation between China and Russia. This is in addition to other challenges related to maritime security in the region.

3- Transition to nuclear power

Some believe that Japan's possession of nuclear capabilities would enhance its ability to address the challenges posed by China, North Korea, and Russia. These nations present a major dilemma for Japan's aspirations to become a major power. China's nuclear capabilities pose an increasing threat to Japan, while North Korea is expanding its arsenal of nuclear weapons and adopting a more confrontational stance towards its neighbours. Additionally, Japan's reliance on the diminishing American "nuclear umbrella" for years of peace and prosperity under Washington's military protection is also a concern.

4- Profound internal challenges

Japan is grappling with several significant internal challenges that are impeding its ambitions to emerge as a leading global power. These include a declining population, growing wealth disparity among its citizens, and a disengaged electorate. Moreover, Japan faces the highest proportion of elderly citizens globally, plummeting birth rates, substantial public debt, escalating natural disasters exacerbated by climate change, as well as stagnant wages and deepening income inequality. All of the aforementioned issues are significant challenges that should serve as a wake-up call to expedite neglected economic reforms, as stated by the Japanese business newspaper Nikkei.

In conclusion, Japan possesses significant potential and the necessary comprehensive power capabilities to establish itself as an influential major power in the current international system. This is particularly evident in the diplomatic vision and plan presented by its current Prime Minister, Fumio Kishida, which positions Japan as an influential global and regional power. However, for Japan to expand its international role and ascend onto the global stage, it must effectively address various external and internal constraints and challenges that may hinder the realization of its aspirations. Topping the list of these challenges include its own economic decline, the rise of China, and security concerns in Asia. Successfully navigating these factors will ultimately determine Japan's future position in today's world.