The impact of the American occupation years on
Japan was momentous. The victor was admired
and America’s national sport, baseball, and
clothes and manners were widely copied, especially
by the young. The occupiers found it hard
to believe that this was the enemy that only
recently had fought so fiercely and cruelly. To all
outward appearances Japan was adapting quickly
to a new image of ‘Made in America’. A brand
new constitution in 1947 introduced ‘democracy’
and was based on the finest ideals of the West, a
mixture of Jefferson and Montesquieu. It provided
for a parliament with an upper and a lower
house elected by universal suffrage, political
parties, a prime minister and Cabinet dependent
on a majority in the lower house, and an independent
judiciary. The emperor became a mortal,
a national symbol rather than a divinity. The
changes were for real, but this Western model of
democratic institutions had a very traditional
Japanese orientation. Western and Japanese attitudes
fused to create something different from
the constitutional governments of the West but
also from the autocratic military-dominated
regime of pre-war Nippon.
The traditions survived of a hierarchical society
that placed great emphasis on personal relations
between the leader and the led, each knowing his
place. Japanese society tends to be organised in
groups, each with its own charismatic leader – the
‘parent’ groups begetting ‘child’ groups, thus
building up powerful ‘families’. Policies are
decided by the manoeuvres of the leading groups.
Group thought prevails. Democracy, with its
emphasis on the individual, does not sit very easily
with such an ethos. Another weakness of Japanese
democracy was that one party dominated Japanese
politics for nearly half a century after the
Second World War; patronage and corruption
became so widespread, they were practically institutionalised.
An important feature of Japanese government
is the role of the bureaucracy, of the leading personalities
who guide the ministries and work in
close association with business. They are not civil
servants in the Western sense, simply carrying out
the instructions of politicians, their elected
masters; rather, Japanese mandarins built up an
independent network, providing constant guidance
and exchange of information with the business
elites. This role is not laid down in the
constitution, but conforms to Japanese traditions.
The prime minister and ministers rely on the
bureaucracy not only for carrying out policies but
frequently for initiating them. So the bureaucrats
are in practice legislators themselves, and the proceedings
of the Diet, or Assembly, no more than
a formality. In relations with the citizen they also
provide gyosei shido, or ‘administrative guidance’,
which does not have the character of legislation,
and they enjoy a close relationship with members
of the ruling Liberal Democratic Party. It takes
prime ministers of exceptional strength and ability
to impose their wills on the bureaucracy, and of
these there have been relatively few. The careers
of bureaucrat and politician were not mutually
exclusive, and it helps to understand their close
relationship when the careers of ministers between
1955 and 1980 are examined. Former
bureaucrats held the office of prime minister for
no less than twenty out of these twenty-five years.
In dealings with business elites and with financial
policy the bureaucrats of a number of
financial institutions have played a leading role,
pre-eminent among them the Japan Development
Bank and the Export–Import Bank, working with
the Ministry of Finance and the Ministry of International
Trade and Industry (MITI). Numerous
other agencies play a part, including the Science
and Technology Agency. Rivalry between these
institutions is endemic, which makes coordination
difficult. Japanese government is not therefore,
as it is frequently believed to be, an efficient, welloiled
machine. Errors are made – for example, the
neglect until recently of the environmental consequences
of industrial growth – and it can take
a long time before decisions are reached. Despite
these drawbacks, the Japanese political, bureaucratic
and business elites for four decades since
the war contained enough men of outstanding
vision and ability to propel Japan’s phenomenal
economic growth.
During these early years Japan’s unique business
organisation served Japan well. The Federation
of Economic Organisations (Keidanren) was
founded in 1946 at the nadir of Japan’s industrial
fortunes and rapidly developed wide national and
international interests, maintaining close contacts
with bureaucrats and the ruling party. The Japan
Federation of Employers deals with employer–
employee relations, when necessary taking a
leading role in fighting labour demands. Another
influential body, which is independent but works
closely with the bureaucracy, is the Japan Chamber
of Commerce and Industry. All these trade organisations
publicise their views on national policy and
exert great influence on the political process. This
is not unconnected with the huge financial contributions
that they make to the Liberal Democratic
Party, to groups and even to individuals within the
party. The other smaller, non-communist parties
have benefited to a lesser degree from business
contributions. Nor are bureaucrats immune from
more subtle forms of business ‘patronage’. What
businessmen want from government is to be able
to conduct their operations as profitably as possible
at home and abroad with the minimum of interference
– in other words, capitalist enterprise with
government providing incentives, information, tax
breaks and so on, restricting imports and leaving
the door open for exports. Government, in other
words, is required to create an environment in
which businesses may flourish.
During the first decade after the war, a number
of parties competed for power, most of them conservative,
though there were also socialist and
communist parties. The socialists, in coalition
with conservatives, actually held power for a few
months in 1947 and 1948. The threat that, with
a more united left, the Japanese Socialist Party
might return to power overcame the differences
among the various conservative parties and drove
them to form in November 1955 the Liberal
Democratic Party (LDP). But the left split again,
and from 1955 to 1990 was unable to mount an
effective challenge or to offer a credible alternative
administration to the LDP. This enabled the
LDP to form the government on its own or with
minor allies following the twelve elections held
between 1958 and 1990. Only twice, in 1976 and
1979, did the LDP fail to win an absolute majority
in the House of Representatives and then only
just; the opposition was far too split to form an
alternative coalition government. The Japanese
Socialist Party, at its strongest in the decade 1958
to 1967, could never muster enough votes to gain
more than 166 out of 467 seats (1958) and continued
to grow weaker in the 1980s despite a
temporary upsurge in 1989. For more than three
decades the LDP was the ‘eternal’ ruling party.
Nonetheless, there was plenty of political
infighting within the umbrella Liberal Democratic
Party. The various groups within the party all
follow their own leader, whose views they then
unanimously back. Membership of a group is a
matter not of political attitude but of personal
attachment and loyalty. The ‘boss’ determines the
power of the group or faction, which rises or falls
or splits according to its success in influencing the
overall leadership. Thus strongmen dominate the
party, and bargains and alliances are struck
between the six or seven most powerful groups.
Cabinet posts, ministerial portfolios and party
executive positions comprise the patronage that
the president of the party is able to bestow once
he has obtained the support of enough factions
to take over the leadership. The ‘leadership factions’,
having backed the right horse, enjoy
enhanced power; the ‘non-leadership factions’
now work for change so that they can be on the
winning side next time. So ‘democracy’ works
after a fashion, not between parties but within the
Liberal Democratic Party. The emphasis is less on
policies than on the power struggles among the
factions. The president of the party automatically
becomes the prime minister of the country. That
was how all the prime ministers of Japan were
chosen from the 1950s on.
The Japanese in-groups in politics, business
and the bureaucracy know the rules and know
how to play by them so as to make their influence
felt. As individuals they have to conform to
the wishes of the leadership of their particular
interest group. From the interplay between these
groups, consensus policies eventually emerge. But
what about the sizeable minority who are not part
of the in-group – the politicians of the left, the
more militant trade unionists, citizens who do not
share the views of the Liberal Democratic Party?
What about the generation gap, those young
people who rebel against the elders’ practice of
trying to determine every facet of their later life?
And what about the small band of traditionalists
or nationalists who reject imported American
culture and Western-style politics? There is no
safety valve for their views. They are condemned
to be permanent outsiders, and their lack of influence
through the established channels leads to
pent-up frustrations which periodically explode
into violence – as happened at the massive
demonstrations against the ratification of the
US–Japanese Mutual Security Treaty in April and
May 1960.
Just as it did in the West, student protest
boiled over in 1968 and 1969 in Tokyo, over the
need for university reform. In 1968 large-scale
demonstrations demanded the return of Okinawa,
the US-occupied island in the Pacific, and clamoured
for the removal of American bases. There
were also street battles between police and students
over the government’s decision to build
another international airport outside Tokyo on
farmland. The clashes continued into the 1970s.
This was ‘direct democracy’, given that other constitutional
means of voicing dissent were blocked.
But protest was never strong enough seriously to
imperil the Japanese way of government or of
conducting business. Economic progress and the
promise of material benefit encouraged the
majority of the people to compete for the best
opportunities and to conform.
The dominant political leader during the occupation
years and immediately after was Shigeru
Yoshida, who was out of sympathy with General
MacArthur’s liberal and democratic views. He
welcomed the ‘reverse course’ which was adopted
as soon as Washington became primarily concerned
with the containment of communism.
Yoshida headed the government five times from
May 1946 to May 1947 and then from October
1948 to December 1954. A former career diplomat,
he became prime minister only because
Ichiro Hatoyama, who was president of the
Liberal Party, had chosen him as his successor.
Hatoyama had had to leave politics for a time
because he was unacceptable to the Americans:
like many early leaders, including Yoshida, he had
shared the ideology of Japan’s ‘co-prosperity
sphere’ in Asia before 1945. Yoshida rehabilitated
himself in the eyes of the Americans by courageously
pressing for peace when the war was all
but lost; moreover, he blamed the military for
their adventurist readiness to go to war with the
West in 1941. In 1946 he recognised that Japan’s
recovery depended on being trusted again by the
US. This meant winning over MacArthur and
accepting the directives of his headquarters,
SCAP, when they could not safely be circumvented.
He thus played a similar role to Adenauer
in West Germany. The escalation of the Cold War
in Asia, Washington’s loss of China as an ally and
the outbreak of the Korean War in 1950 hastened
Japan’s rehabilitation.
Yoshida exploited with great skill the
American–Communist confrontation. MacArthur
had long been persuaded that his prescriptions
had turned Japan into a democracy. In June 1950
Secretary of State John Foster Dulles came to
Japan, to win the Japanese as allies in Asia. He
wanted the famous Article 9 of MacArthur’s constitution
to be set aside so that Japan could rearm.
Yoshida rejected rearmament, stressing all the
negative results it would have on the Japanese and
on Japan’s neighbours. Dulles was ‘flabbergasted’,
but MacArthur sided with Yoshida. Japan
should build up its industrial potential and in that
way help the free world. Soon after the outbreak
of the war in Korea, American orders for arms
came pouring in and gave the Japanese economy
a much needed boost.
Eventually the Japanese, under American pressure,
did create a Self-Defence Force, initially of
only 75,000 men. It expanded to 165,000 by
1954 and 250,000 by 1980. The army, navy and
air force came to be equipped with the most
modern weapons, but in relation to Japan’s size
and wealth it was a small force. The Japanese
expended no more than 1.3 per cent of their
GNP on the military. The ‘saving’ as against the
expenditures of the Cold War countries was enormous
and was available for investment in industry.
But the Japanese elite was less niggardly in
building up a powerful paramilitary police force
of 250,000 to guarantee internal order.
The negotiations leading to the peace treaty
and the end of the American occupation were
long and arduous. Yoshida made as few concessions
as possible. Japan would not rearm heavily;
it would not itself participate in international disputes;
it would rely on the US and its nuclear
umbrella for security. Japan would be the reliable
but passive ally of the US, which it would provide
with bases, and it undertook to grant no bases to
other countries without American consent. The
Americans retained Okinawa for military use only,
and the Japanese had to give up all the conquests
they had made since 1895. Yoshida also had to
concede that, if requested by the Japanese government,
the US would provide assistance ‘to put
down large-scale internal riots and disturbances in
Japan’. American rights inside Japan certainly
reminded the Japanese of the special rights that
foreigners had enjoyed in Japan until their abolition
at the close of the nineteenth century. It was
humiliating. Nevertheless these terms, embodied
in the US–Japanese Security Treaty, were signed
in San Francisco on the same day, 8 September
1951, as the Treaty of Peace with the Allied
powers. Australia and New Zealand were reluctant
signatories, since they feared a Japanese military
revival, but they were reassured by a
defensive treaty, ANZUS, with the US; the
US–Pacific alliance structure was completed by
US treaties with the Philippines (1951), with
South Korea (1952) and with Taiwan (1954),
and by SEATO (1954). Thus Japan was tied to
the anti-communist containment policy of the US
and thereby limited in its ability to adopt an independent
foreign policy.
Japan had to follow the US lead in recognising
Chiang Kai-shek on Taiwan as representing
China, and it was thus prevented from normalising
its relationship with the People’s Republic.
Not surprisingly the Soviet Union refused to sign
any peace treaty with Japan, and a Japanese–
Soviet agreement formally ending hostilities was
not reached until 1986 and territorial disputes
still stood in the way of a definitive peace treaty.
The US–Japanese Mutual Security Treaty of
1951 became a burning issue in Japanese politics.
The possibility that there might be nuclear
weapons on US warships became a particular
problem; the left identified this treaty as a form
of US hegemony, which also keeps the conservatives
in power. Public hostility to the treaty
proved so strong, with widespread demonstrations
against it, that Washington agreed to revise
it in 1960. The changes were cosmetic, though
they allowed Japan a more equal voice; the
Japanese stressed their country’s residual sovereignty
in the islands still militarily occupied by the
US. The revised treaty then came up for ratification
by the Diet. In April and May 1960 there
were unprecedented demonstrations and street
battles between the police and students and other
demonstrators. After unseemly scenes in the Diet
itself, the Liberal Democratic Party forced ratification
through. President Eisenhower was so
incensed by these strong anti-American feelings
that he called off an intended visit to Japan.
In 1970 the treaty was renewed again indefinitely,
subject to either country giving a year’s
notice to terminate it. The following year a
problem was solved that closely touched Japanese
pride. The Ryukyu Islands, including Okinawa,
were returned to the Japanese in the spring of
1972, though US bases were allowed to remain
by agreement. But the territorial claim to four
islands of the southernmost part of the Kuril
island chain, occupied by the Russians, continued
to prevent good relations with the Russian
republic. Thus after 1951 the American alliance,
despite all the difficulties it caused in internal
Japanese politics, remained the sheet anchor of
Japan’s international position and defence.
It was Yoshida who had set Japan on that
course. The close relationship with the US has
enabled Japan to eschew extensive military pretensions,
which could be seen as a threat to its Asian
neighbours and endanger political stability at
home; but the relationship is also based on a
recognition that the US is indispensable to
Japanese prosperity, mainly by providing the enormous
single market on which that prosperity is
based. The Japanese have on a few occasions followed
a more independent line from Washington
when their interests seemed to demand it. The
most notable instance has been in Japanese dealings
with the Arab oil states in the Middle East.
After suffering from the effects of the Arab oil
embargo in 1973, Japan made it clear to the Arab
states that it did not share Washington’s views on
Arab–Israeli issues and, indeed, supported the
Arab cause. In this way it bought the goodwill of
the Arab states, who continued the oil supply vital
to Japanese industry. During the Iran–Iraq war in
the 1980s the Japanese attempted to stay on good
terms with both sides, despite America’s estrangement
from Iran, especially following the seizure of
the American Embassy hostages. In 1990–1 during
the Gulf crisis, Japan again displayed no
enthusiasm for the US position. The Americans
have at times shown little sensitivity for Japanese
feelings; Nixon’s sudden opening to China and
the dropping of the Nationalists in Taiwan in the
1970s were undertaken without consulting Japan,
which had faithfully followed the Washington line
in refusing to recognise communist China. But
despite strains, especially in matters of Japanese–
US trade, the alliance has held and what later
became known as the ‘Yoshida Doctrine’ continued
to chart the course of Japanese policy, with
only minor modifications.
What then was the essence of that doctrine?
Yoshida believed he would satisfy America’s
demands on Japan as an ally by offering facilities
and bases and by restricting Japan’s own military
build-up. The Japanese forces were to be purely
defensive, forbidden to act except in defence of
the home islands, and Japan should forswear
development of nuclear weapons. In international
disputes its profile should be low. Japan had
finally turned its back on achieving greatness
through military conquest; all its energies were to
be concentrated on economic rehabilitation and
growth. For its own security, Japan had no choice
but to rely on its American ‘ally’, which was also
Japan’s most important trading partner. The
Yoshida strategy for Japan’s recovery was
accepted by the Liberal Democratic Party consensus
as the basis for Japan’s national policy and
long outlived Yoshida’s relinquishment of the
premiership in 1954. The doctrine was elaborated
and put into practice by Yoshida’s disciples and
protégés, for example Hayato Ikeda, who became
prime minister 1960–4, and Eisaku Sato, prime
minister 1964–72, and on into the 1970s and
1980s. Yoshida’s vision helped to make Japan
into an industrial and financial superpower,
second only to the US, during the second half of
the twentieth century.
The inner workings of a society are often
obscured by outward appearances. This is certainly
true of Japan. Its early industrial successes
and its recovery from the low of war’s end might
at first sight be ascribed to purposeful governments
setting planned targets and, with the help
of the bureaucrats in the relevant ministries, especially
the Ministry of Finance, the Ministry of
International Trade and Industry (the famous
MITI) and the Economic Planning Agency,
achieving them unfailingly. From the mid-1950s
onwards, plan after plan, some ten of them in
thirty years, were produced, often interrupted,
amended or discarded before they could run
their five- or ten-year terms. There is no doubt
that in the early post-war years the influence of
governmental–bureaucratic measures was considerable.
At first, priority was given to coal and
steel, to provide the basic energy and material for
manufacture; then other sectors were successfully
developed – chemical fertilisers, shipbuilding,
cars, machine tools, transistor radios, cameras,
television sets, video-recorders and microchips.
MITI encouraged the formation of the keiretsu,
the pre-war zaibatsus. Mitsubishi and Mitsui were
back in business and huge new conglomerates
came into being, such as the electronic innovator
Sony and car manufacturers Toyota and Nissan.
Government–bureaucracy assisted during the
early years in various ways, most importantly by
managing the nation’s finances and investments
through controlling revenue and banks and by
making cheap loans to targeted industries
through the Reconstruction Finance Bank, the
Export–Import Bank and the Japan Development
Bank. Industry expanded fast, fed by enormous
investments. Governmental–bureaucratic rules
and legislation in the 1960s and 1970s meanwhile
protected the emerging home industries, employing
many devices to prevent foreign imports from
being competitive – where they could not be kept
out altogether. This was to lead to tension with
the US and Western Europe, which were threatened
with a flood of Japanese exports. Japanese
trade unions became steadily more cooperative
after the more turbulent 1950s; continual conservative
government and rising prosperity undermined
union militancy and membership.
Undeniably, then, the government–bureaucracy
has played an important role in Japan’s rapid economic
growth. But the notion that it has developed
anything like a command economy is very
misleading. Since 1945, command economies
have failed all over the world. It would be strange
if Japan were the one exception. In fact, Japanese
government planning had far more in common
with the approach of Jean Monnet in France, that
is indicative planning, than with Stalinist forms of
control over production, investment, distribution
and pricing. Japan’s economy was and remains
thoroughly capitalist, with a profit-oriented outlook,
fiercely competitive at home and abroad.
The role of MITI declined after the early 1960s; it
remains a source of supplementary assistance to
industry but it has long since ceased to be decisive.
Business leadership, however, was certainly decisive.
But neither government–bureaucracy nor
business could have generated the colossal investment
in technology necessary for the economies
of scale achieved as huge industrial conglomerates
were built up but for the availability of
funds. These came not from abroad but from the
Japanese man in the street, who lived frugally
and saved a fifth of his income year after year.
The rewards of this frugality were not large in
the short term. The return from interest and the
growth of pensions was kept very low so that
companies could borrow money cheaply. In the
longer term, however, the Japanese did benefit
from industry’s prosperity. Meanwhile, government
expenditure for non-industrial purposes was
also held down – welfare payments, housing, the
infrastructure were all neglected. The contrast
between an automated industry employing the
largest number of robots in the world, on the one
hand, and the inadequate sewerage system in
many large cities, the over-crowded roads and
extensive pollution, on the other, was the price
paid for the single-minded pursuit of industrial
growth. The close links between savings, the
banks, their loans to industries good and bad
would lead to trouble later.
At the start of the 1960s, the new prime minister,
Ikeda Hayato, promised to double everyone’s
income in ten years. Business met this target with
extraordinary rapidity, more than quadrupling
exports of ships, textiles, cars and electronic goods
during the 1960s. The effects of this expansion
percolated far beyond the Japanese islands – to
Australia, where the ore was mined to provide
Japan with steel, to the Middle East, which supplied
much of its oil, to south-east Asia, especially
Indonesia and Malaya from which it imported oil
and raw materials. The rest of the world took note
and tried to gain access to Japan’s market for
industrial goods. The Japanese government lifted
restrictions and made genuine efforts in the 1980s
to open the home market more freely, to head off
international hostility, especially from America.
But the bureaucracy and business have used
administrative obstacles to make it as difficult as
possible for foreign goods to penetrate the
Japanese market. Japanese business had the advantage
of the protected home market as a base from
which to expand, protection in the end makes
home industry less efficient.
Toyota and Nissan began making cars before
the war, copying British and American designs. In
1950 Japanese motor manufacturers produced
less than 2,000 cars. To take on the American
giants, Ford and Chrysler, or the British Austin
and Morris seemed a futile ambition. Initially they
made agreements with Western car manufacturers
to use their designs and technology, and they
studied American factories. In 1970 Japan produced
5 million cars, providing Western customers
with what they wanted at a lower price
than similar Western cars. By the 1990s, to overcome
foreign resentment and pre-empt the exclusion
of Japanese exports, the Japanese electronic
firm Sony and the Japanese car giants had set up
factories in the US and Europe. In industry after
industry, the Japanese improved technically on
the Western product, whether cameras or
machine tools. Then, exploiting heavy investment,
the hard work of a skilled labour force, the
economies that come from large-scale production,
a more or less closed home market and a
worldwide export market, they raised productivity
sharply so that better goods could be produced
more cheaply. There is a constant battle for
improvement, for keeping ahead in research,
design and methods of production. The new generation
of computers in the coming information
age is the latest industry to be targeted by Japan
to become a world-beater. There will be few
industries of the twenty-first century in which the
Japanese will not excel; one of these, in the 1990s
still dominated by the US, is the aircraft industry.
After a phenomenal growth rate in the GNP of
10 per cent a year in the 1960s, annual growth
in Japan slowed in the 1970s and 1980s to an
average nearer 6 per cent, but that had the effect
of nearly doubling output in a decade. The highly
praised Japanese model ran out of steam and
weaknesses of the financial protected industries
became apparent. The stagnation of the economy
during the last decade of the twentieth century is
in stark contrast to earlier spectacular growth.
Japan is governed by career politicians, by
leaders of factions and local ‘favourite sons’
returned to the Diet. Allegiance is less to mass
parties, more to individuals. Politicians play a considerable
role in the communities that elect them,
attending hundreds of events, including weddings,
funerals and festive occasions, at which
they are expected to distribute largesse. Their
resulting need for money breeds corruption. They
do favours for their supporters, using their influence
as members of the Diet with ministries. In
return they receive cash donations. For example,
the country farmers enjoying farm subsidies
support the LDP. The opposition support comes
from the newer urban areas, which are discriminated
against in that each of their electoral districts
contains a much larger number of voters
than those in the countryside. This suits the LDP.
When getting to Tokyo, young LDP politicians
have to join one of the factions; thereafter they
will gradually rise in the hierarchy of national
politics, increasingly able to bestow favours.
The Yoshida faction and followers dominated
Japanese politics from 1946 through to the
1980s. A rival was Hatoyama, who had earlier
stepped down and passed the presidency to
Yoshida, whom he expected to make way for
him later. From 1956 to 1960 two protégés of
Hatoyama became successively president of the
party and prime minister. But the second of these,
Nobusuke Kishi, fell from power in 1960. Kishi’s
anti-unionist and anti-socialist stance earned him
the hatred of a wide grouping among the opposition.
The renewal of the US–Japanese Security
Treaty in 1960 became the catalyst that brought
the opposition on to the streets in April and May
1960. The polarisation, the violence of demonstrators
and police, and the intemperate scenes in
the Diet itself presented the ugly face of Japanese
politics. These spectacles and the manoeuvring of
the factions within the LDP forced Kishi to step
down. Hayato Ikeda took his place, representing
the Yoshida line, as did his own successor Eisaku
Sato (1964–72). Eisaku Sato’s selection was probably
effected by a deal between Ikeda and Kishi;
he had the advantage of being Kishi’s brother,
and he proved himself a very adept politician.
Sato’s eight years in office were notable for the
estrangement between Japan and the US arising
out of the Nixon administration’s demands that
Japanese textile exports to the US should be
restricted. Nonetheless, the renewal of the
US–Japanese Security Treaty in June 1970
prompted Nixon, after much Japanese agitation,
to promise to return Okinawa, and an agreement
to that effect was concluded in June 1971. A
month later relations were soured again by
Nixon’s announcement that he would visit China;
his failure to inform Japan of this reversal of US
policy towards Nationalist China on Taiwan,
which the Japanese had hitherto supported,
greatly angered the Japanese, who did not relish
being treated as very much a junior partner in
Asia. The second ‘Nixon shock’, in August 1971,
was a devaluation of the dollar – in effect making
Japanese exports more expensive – and the imposition
of a temporary import surcharge. The
Japanese interpreted America’s defensive economic
moves as unfriendly to themselves. These
foreign-policy difficulties and internal LDP
manoeuvres ended Sato’s premiership. In July
1972, after bitter internal feuding between Sato’s
two principal lieutenants, the younger, more
ambitious Kakuei Tanaka defeated Takeo Fukuda
to win the presidency and become prime minister.
Tanaka was unusually active in foreign affairs.
He visited Beijing, following in Nixon’s footsteps,
and toured south-east Asia, where memories of
the Japanese occupation were still too recent to
ensure a good reception. In Indonesia, the
Philippines and Thailand, demonstrators carried
placards demanding ‘Tanaka Go Home’. His premiership
was anyway a stormy one. In 1973 the
Arab–Israeli War produced the shock of the quadrupling
in the price of oil. This hit Japan particularly
badly, as it depended overwhelmingly for
oil on the Middle East, and there was widespread
panic. Tanaka now called in his arch-rival Takeo
Fukuda, a financial expert, to take charge of the
Ministry of Finance. Fukuda imposed drastic
measures to squeeze the economy. It worked. By
1975 the Japanese economy was expanding once
more by a healthy 6 per cent, which it continued
to do for the rest of the decade. Tanaka’s ambitious
plans to develop the Japanese regions had
been put into cold storage and were only gradually
revived after 1975. More significantly, Japan
took effective steps to reduce its reliance for power
on Middle Eastern oil by securing alternative
sources and developing nuclear power stations.
Even among Japanese political leaders, Tanaka
was exceptional in the power and money he commanded.
Institutionalised corruption had reached
new heights. In the end publicity about his financial
misdeeds in Japan and in the foreign press
undermined his standing. The LDP factions
agreed to replace him with a minor figure, Takeo
Miki, to restore an image of propriety. But Miki
proved rather too energetic in trying to reform
the LDP, especially when he had Tanaka arrested
in 1976 for accepting bribes in the Lockheed
aircraft-purchase scandal. Lockheed had handed
over $12 million in bribes to Japanese bureaucrats
and politicians, including Tanaka, to ensure that
the aircraft order went to them. Tanaka spent
only a short time in jail and was then let out on
bail, still a power-broker behind the scenes
among the LDP factions. The close of the 1970s
was a turbulent time in internal LDP politics, and
from 1978 to 1982 further tame successors were
found.
In November 1982 the LDP factions of
Tanaka and Suzuki chose Yasuhiro Nakasone for
the presidency and premiership. He turned out to
be much more decisive and more of his own man
than Tanaka or Suzuki liked. His success in
winning the general election of 1986 enabled him
to stay a further year in office, although LDP rules
would normally have required him to hand over
the presidency that year.
Nakasone wanted to break away from Japan’s
outdated traditions, to remove the heavy hand of
centralised control with its myriad regulations,
and so prepare the way for a new phase of economic
growth. He asserted Japan’s claim to
respect from the world’s powers, a claim that
entailed losing its pygmy international status and
its dependency on the US. In 1986 he hosted the
annual summit of leading industrial nations in
Tokyo and that same year visited Beijing. War
guilt was now part of history. He would lead
Japan, backed by popular approval, in the
American presidential style.
Nakasone’s self-confidence and his promise of
a more active Japanese foreign policy were welcomed
by Western leaders. Visiting Washington
in 1983, Nakasone promised President Reagan
Japan’s active assistance in the containment of the
Soviet Union. He toured south-east Asia and
indicated that he was ready to expand Japan’s military
capacity. But his attempt to revise the constitution
for this purpose so alarmed the Japanese
that he promised not to go ahead during his first
term of office. Nakasone engaged in high diplomacy
with a relish, but government efforts to
open the domestic market to foreign goods, as
the rest of the world was demanding, were constantly
frustrated by bureaucracy and business.
Every year Japan amassed huge balance-ofpayments
surpluses, while the US had to cope
with the largest debt in the world. The deficit was
in part managed by Japan recycling its surplus
into the purchase of US treasury bonds. But the
Japanese also bought many physical assets abroad
– real estate in California, the Rockefeller Center
in New York, factories in America and Europe.
Japan’s financial and manufacturing power globally
seemed to be on an ever continuing upward
trajectory. When Nakasone finally left office in
November 1987, his reputation internationally
and at home was at its peak. He had achieved a
great deal during his five years in office, aligning
Japan more closely with the West and freeing it
from its shackles of tradition. But Japanese
politics were about to take a surprising turn.
Nakasone’s successor, after much factional
struggle, was Noboru Takeshita, who enjoyed
Nakasone’s support. Takeshita continued Nakasone’s
foreign travels, exhibiting thereby a more
independent Japanese foreign policy, though the
American alliance remained the bedrock, despite
growing trade tensions. Progress towards closer
relations with China, however, was temporarily
upset by the Chinese leadership’s brutality in the
massacre of Tiananmen Square. Takeshita’s
efforts at home were concentrated on reducing
direct taxation and increasing indirect taxation
through a sales tax, which was especially unpopular
with the poorer Japanese families. But the
most sensational event of the Takeshita premiership
was the uncovering of yet more corruption
in what became known as the ‘Recruit scandal’.
The Recruit group operated in publishing, real
estate and other areas, and it needed favourable
decisions from the government and bureaucrats if
it was to expand and start making large profits.
To gain favours, the group not only lavished legal
donations on the political parties but also made
illegal payments to politicians and officials. As
usual, money had been needed in the leadership
race between the factions in 1986, and huge
profits were made by Nakasone’s ministers in
illicit share-dealings. The scandal broke in 1988
and its investigation continued into the following
year. Even Prime Minister Takeshita had received
political donations and was forced to resign.
Many suspected Nakasone too, but he was not
formally charged. Nonetheless, the standing of
LDP politicians reached a low point in public
esteem, and for the first time it looked as if the
party might lose power. Sousuke Uno, the new
president and prime minister, did not last long
when a sex scandal arose to titillate the public.
Next, Toshiki Kaifu became prime minister and
leader of the LDP; he pulled the party together
and promised to rid it of corrupt politicians.
It was enough. In 1990 the LDP was securely
back in absolute power after a landslide victory.
The dream that a charismatic female politician,
Takako Doi, who led the Japan Socialist Party,
might effect a decisive change in Japanese politics
on two counts – forcing the LDP into opposition
and advancing the cause of what was very much
the second sex in Japan – quickly faded again. The
majority preferred to stick with the party that had
presided over Japan’s growing prosperity.
But the Japanese miracle began to fade in
1990. Financial scandals continued to undermine
the standing of ministers and leading members of
the LDP. Some of the most renowned names
among securities companies had manipulated
stock-market prices by agreeing to compensate
some favoured clients against losses. Production
plummeted, loans based on inflated house and
land prices turned into bad debts, the Stock
Exchange registered huge losses and the whole
financial fabric appeared threatened.
Kaifu was regarded as a weak prime minister
by the barons of the LDP factions, a good
stopgap while scandals still hung in the air.
During his two years in office Kaifu nevertheless
was very popular among the Japanese people as a
clean politician. This mattered little to the LDP
and in October 1991 Shin Kanemaru, the most
powerful of the barons and chairman of the
Takeshita faction, forged the necessary alliances in
the corridors of power so that the premiership
should fall to Kiichi Miyazawa. Miyazawa had
been minister of finance at the time of the Recruit
financial scandal and had resigned in December
1988. His return to politics was intended to mark
the end of any recriminations. Cabinet posts were
distributed among the factions. Miyazawa faced
new challenges. The trade surplus with the US
was the cause of considerable tension while
America remained bogged down in recession, and
President Bush’s visit to Tokyo in January 1992
did little to repair the image of the US, unable to
compete with Japan in manufactures such as automobiles
where it was once the world leader.
Miyazawa, who abandoned most of Kaifu’s
reform programme, was saddled in 1992 with a
new investigation of a financial scandal that
promised to be bigger even than the Recruit
affair. Known as Sagawa, it concerned the handouts
made to some hundred politicians, mainly
LDP, including two Cabinet ministers. Sagawa
Kyubin was a parcel-delivery firm that went into
bankruptcy with huge debts. It was one scandal
too many. The political power-broker Shin
Kanemaru was forced to resign in October 1992.
A breakaway faction of the LDP formed the
Renewal party. Elections in July 1993 resulted in
a political upheaval. The LDP fell from power.
Morihiro Hosokawa headed a new seven-party
coalition government committed to reform until
his fall in April 1994.
The contrast between Japanese politics –
faction-ridden, endemically prone to scandal – and
Japan’s success as an economic superpower subverts
the claim that in all regions of the world
democracy is essential for prosperity. Indeed,
prosperity has undermined the growth of a
healthy democracy in Japan and in the more prosperous
nations of Asia – Taiwan, Singapore and
Thailand, not to mention Hong Kong. There is
a parallel here with China, where Deng too
believed that the great majority of the people
would accept the communist political system as
long as it delivered rising standards of living; conversely,
democracy would be in danger where
standards fell. Will Japan break this cycle and
combine democracy and prosperity?
Unlike the inhabitants of many countries in
the world, the Japanese enjoy civil liberties, and
their government is neither dictatorial nor
authoritarian. If it were, the politicians would not
have to distribute so much largesse and favours
to ensure their reselection. They have to keep on
the right side of the people. Politics is marginal
to the ordinary Japanese, except for necessary
favours, his own job prospects, education and the
outlook for his children. Material progress and
security are what matter. Fo those who won
places in the right schools, universities and companies,
there were jobs for life. The company took
care of you, and you owed it absolute loyalty. It
was good for those who were ‘in’ – once they survived
the fearsome competition. There is a place,
too, for those who are ‘out’, but there is also
much frustration and crime. In the early 1990s
growth stalled, industrial and banking profits
plunged. The last decade of the twentieth century
brought changes and challenged old customs.
Future peace in Asia depends on the relations
between the US, Japan and China. Japan has had
to adjust to the fact that in the 1990s its economy
was faced with economic difficulties and debtridden
banks. Once all that mattered was the
peaceful pursuit of global economic power, which
had replaced Japan’s military aspirations. Concern
for the quality of life and for the environment
took second place and the Japanese accepted that
a benevolent bureaucracy would manage much of
their lives. Education provided post-war generations
with equality of opportunity. But it was the
bureaucrats rather than the politicians who
wielded economic and legislative power. Dealings
between companies, bureaucrats and the politicians
of the Liberal Democratic Party (LDP),
which continued to govern Japan, had become
corrupt. Bribery scandals surrounding the politicians
became high-profile news, but the bureaucrats
involved largely escaped detection. The LDP
fall from power in 1994 did not mark a dramatic
change in Japanese politics. By the October 1996
general election the LDP was again the leading
party in the coalition government; fundamental
change would prove elusive. The LDP prime minister,
Ryutaro Hasimoto, promised ‘administrative’
reforms of the bureaucracy but little was
achieved. Changes in the conduct of politicians
will take even longer; the old party bosses of the
LDP still pull the strings from behind the scenes.
The stagnation, in the 1990s, of Asia’s biggest
economy and the second largest in the world,
still did not look like ending in the early twentyfirst
century. The boom of the 1980s turned to
bust, property prices fell to lows not imagined,
the Stock Exchange slumped by three-quarters,
unemployment rose to heights that made the
Japanese fearful. Although, at under 5 per cent,
it was good by European standards, still it meant
that a culture of a job for life in one of Japan’s
large corporations was changing, many businesses
went bankrupt. All at once the greatly admired
‘Japan model’ that had served the country well
since the Second World War was blamed for stifling
change and bureaucratic sclerosis. An indicator
of Japan’s loss of self confidence in its
managerial skills was the take-over by French
Renault of ailing Nissan especially when
European management turned it around. What
had gone so drastically wrong in Japan?
Politics were dominated by the LDP which
was slow to react to new conditions at home and
in the world. The overexuberance of Japanese and
foreign investors sent shares to unsustainable
multiples of earnings. Investors from abroad
poured in funds. Banks in cosy relationships with
Japanese conglomerates, the keiretsu lent money
recklessly, small businesses were showered with
easy finance, all leading to a huge build-up debt.
But no sector was as unrealistic as property prices
– by the close of the 1980s Tokyo’s real estate
was valued as the equivalent of the whole of the
US. When the property prices slumped to a fraction
of their former value the banks that had
financed the boom were in trouble, saddled with
bad loans. The Asian economic crisis of 1997 and
1998 did the rest, debts of businesses threatened
to bankrupt them. The government stepped in,
guaranteeing the savings of the people who otherwise
would have panicked and caused an economic
meltdown. Japan began to suffer from
deflation, next year’s prices would be lower than
this year’s, the frightened public more uncertain
of the future, saved more and consumption in
Japan dropped adding further to Japan’s woes,
the currency lost value to the dollar, but exports
of world-leading companies alone were not sufficient
to counteract consumer loss of confidence
at home. Japan was caught in a spiral of low
growth. With near zero interest rates even inefficient
companies could ‘service’ their loans and
stay afloat. Then during the early years of the new
millennium, the US was struck by its own ‘economic
bubble’, world growth slowed, Japan’s
export markets became more difficult. After more
than ten years of such a depressing trend, possibly
the main obstacle to any dramatic improvement
is the low expectations of the Japanese
people who see no hope in political change.
The Japanese absence of a ‘feel good’ factor
was reinforced by the poor performance of suc-
cessive LDP governments and the uninspiring
choice of leaders by a cabal of powerful elders
behind the scenes. Hasimoto admitted failure in
1998 and was succeeded by Keizo Obuchu, avuncular
and unpretentious he did rather better,
introducing some cautious reforms; in April 2000
Obuchu was felled by a stroke and died before he
achieved very much, however. The elders of the
Liberal Democrat Party then gathered in secret in
Tokyo’s Akasaka Prince Hotel and from their
deliberations Yoshiro Mori emerged as caretaker
prime minister. He performed so badly that he
was pushed aside and ‘resigned’. His successor,
Junichiro Koizumi, broke the mould of elderly,
staid politicians. He looked different for a start,
more with it, like a rock star with a trademark
shock of hair. For once the LDP power-brokers
had clearly chosen someone who was popularly
acclaimed by the voters placing their hopes on the
exterior of his appearance. Koizumi may well have
been genuine when promising radical reform. He
called an election in 2001 campaigning for the
LDP. They won in the Diet and dictated the pace
of change. The power-brokers of the LDP had
not lost control. Koizumi was unfortunate to
come to office during the economic world downturn.
Deep reforms would cause massive pain.
The LDP did not change its ways, continued the
palliative of printing money, increased Japan’s
high debt to finance a wasteful public works programme
to prevent rising unemployment, and did
not clean up the failing banking sector, the root
of the problem. Some moderate reform opened
Japan cautiously to fairer competition at home.
Some keiretsus have improved their efficiency by
laying off workers and manufacturing abroad and
supporting factories in mainland China. But the
banks, burdened with bad loans, remained an
obstacle to financial health. The big monopolies
have not been broken up, the stimulus of cutting
interest rates has been applied to the point where
it can go no further as interest rates are set close
to zero, the huge public works budget was only
slightly reduced. Eventually, the economy will
emerge from the doldrums and perhaps sooner
than was expected, in 2003.
Despite the stagnation of more than a decade
and the destruction of individual wealth, the
annual Gross Domestic Product at around
$38,000 per head is still the highest in Asia.
Abroad, Japan has followed a cautious policy of
improving relations with its neighbours. Koizumi
even normalised relations with North Korea by
paying the Dear Leader a visit. But security is
founded on the military shield of its US ally. There
was debate about modifying its ‘peace constitution’
in which the Japanese people forever
renounced war as a sovereign right of the nation
and the threat or use of force as means of settling
international disputes; Japan further undertook
that land, sea, and air forces would never be maintained
(Article 9 of the Constitution of 1946). The
reality is that Japan does have armed forces, modest
army, navy and air units for self-defence which
may support US forces, but cannot fight offensively
abroad though Japan has supported a peace
mission in Afghanistan under UN auspices. Public
opinion remains strongly averse to any enhanced
military role. But Japan lies at the crossroads of
a volatile tense region of China, Taiwan, North
and South Korea. Of greatest concern has been
the development of missiles by the North Korean
regime. Their capacity was demonstrated when
in 1998 a first-generation missile passed over
Japan into the Pacific; it was probably not
intended as a threat, but was most likely a space
shot whose third stage had failed. Still there is no
complacency about North Korea’s missile capability.
North Korea’s nuclear ambitions, once assisted
by Pakistan, and probable possession of a small
number of nuclear bombs, heightened the tension
in the new millennium. In the face of the threat
Japan has not sought to shelter in neutrality in
place of reliance on the US alliance but is anxious
to play a role in cooling tensions in the region.
The ‘other’ China, the Republic of China on
Taiwan, was founded when the remnants of
Chiang Kai-shek’s army withdrew to the island
in 1949. Some 20,000 Taiwanese who resisted
Kuomintang rule were killed that year and martial
law was imposed. Under American protection and
with American forces stationed in Taiwan, Chiang
Kai-shek and the ageing Kuomintang party and
military leaders were able to rebuild a formidable
military force of half a million men, ruling over
the native Taiwanese with only the façade of a
constitutional process. Security police ensured
that no opposition could make itself felt for long.
Despite American influence, civil liberties and
democracy were given no real opportunity to take
root. Politically, Taiwan was an ally, and as such
the Kuomintang acted internally as it thought
best. Taiwan was poor, but even under the
Kuomintang economic progress was achieved in
the production of textiles and simple electronic
goods such as transistor radios. Chiang Kai-shek
died in 1975, and after an interval was succeeded
by his eldest son, Chiang Ching-kuo, in 1978.
The rapprochement of the US and the
People’s Republic of China gradually led to the
withdrawal of US troops (in 1979) and of US
diplomatic recognition. Chiang Ching-kuo had to
readjust Taiwan’s international stance. He cautiously
improved relations with the People’s
Republic, and trade and other links expanded.
The leaders in Beijing, meanwhile, had no intention
any longer of attempting to unify China by
force. At home Chiang Ching-kuo likewise gradually
followed a reforming policy, having to carry
with him the gerontocracy of Chiang Kai-shek’s
former political and military companions. He
finally lifted martial law in 1987 and permitted a
multi-party system to evolve. On his death, Vice-
President Lee Teng-hui, the first Taiwanese to
head the Kuomintang, became president and continued
the reforms of the fragile democratic
process. Taiwan’s human rights record had previously
been lamentable; in contrast, its economic
growth was another of the so-called economic
miracles, giving it an income per head twenty
times greater than mainland China’s.
Lee Teng-hui won the elections of 1988, and
continued to move away from the old authoritarian
style. The most important foreign issue was to
regularise relations with mainland China and
democratise politics at home. He encouraged
family visits with the mainland and economic
links. When in the spring of 1996 he campaigned
against the ‘one China’ formula, he brought the
wrath of Beijing on his head. Missiles were fired
into the Taiwanese Straits as a warning that China
would invade if independence was declared and
the US countered by moving two aircraft carriers
within striking distance. The crisis passed to be
repeated during the presidential election campaign
of 1999. After the elections both sides
cooled their rhetoric once again.
The changes in Taiwanese politics had begun
in 1987 when martial law, in existence for more
than three decades, was lifted. Reforms to create
a multi-party state were introduced. On 1 May
1991 Taiwan declared the forty-two-year ‘communist
rebellion’ at an end, code for recognising
the regime in Beijing. Reform at home made
possible a historic change in July 2000 when
the opposition candidate of the Democratic
Progressive Party Chen Shui-bian won the presidential
election. Talk of declaring independence
receded. Taiwan, too, had to adjust to the economic
crisis in Asia of 1997 and meet the challenges
of the new millennium.
Another Chinese ‘miracle’ is Hong Kong, which
has no resources except the ingenuity of its
merchants and the enterprise of its Chinese
population. Capitalist Hong Kong adjoins the
communist mainland of China, on which it is
dependent for water and food imports. Its geographical
position makes it, in practical terms,
indefensible. Hong Kong island was seized by
Britain in 1841, and more territory was forcibly
secured in 1860. Then in 1898 the Chinese were
made to lease the so-called New Territories for
ninety-nine years, in what then looked like
becoming a ‘scramble for China’. The lease
expired in 1997, and the prosperous colony of
Hong Kong rejoined the rest of China.
Margaret Thatcher’s Conservative government
tried to make the best of this predicament by
negotiating conditions for the return of the
Crown colony, at a time (the mid-1980s) when
the presence in office of a reform-minded Chinese
leadership seemed to promise a liberal future. In
the Sino-British Joint Declaration negotiated in
1984, China pronounced that the government of
Hong Kong would be composed of local people
and that what would be known as the Hong
Kong Special Administrative Region would enjoy
a high degree of autonomy. Britain, afraid to
offend Beijing, declined to pre-empt the choice
of a system of representation by creating a wholly
elected legislature before the Chinese takeover.
The Declaration promised that the:
current social and economic systems in Hong
Kong will remain unchanged, and so will the
life-style. Rights and freedoms, including those
of the person, of speech, of the press, of assembly
. . . of travel . . . [as well as] private property
[and] . . . foreign investment will be
protected by law.
But Beijing’s Basic Law for Hong Kong, published
in April 1988, raised fears that Hong
Kong’s freedoms and autonomy would not be
respected after 1 July 1997 and would make
meaningless Beijing’s doctrine of ‘one country,
two systems’. In June 1989 the Tiananmen
Square massacre of the student demonstrators not
only aroused passionate sympathy in Hong Kong,
but further undermined confidence in a Chinese
takeover.
For the first time in its history elections were
held in Hong Kong in September 1991. But the
Legislative Council was still dominated by nominees,
just over two-thirds chosen by the governor
and just over one-third by professional bodies,
leaving only eighteen of sixty seats to be contested.
China’s shadow loomed over Hong Kong’s development.
The attempts belatedly to broaden representative
government before the take-over as
proposed in 1993 by the British governor was
sharply condemned in Beijing. Democracy is
anathema to Beijing. Only 50,000 favoured Hong
Kong British passport holders were allowed to
come to Britain. The future of the more than 3.5
million people of prosperous Hong Kong lies with
China. The people of Hong Kong have been
watchful and defiant in the new millennium, massively
demonstrating against any Beijing attempts
to circumscribe their freedom and the bases of
their prosperity.
The Chinese of Singapore are much more fortunate
in having their own independent island state
to which no one else lays claim. Singapore, which
has been independent since it seceded from the
Federation of Malaysia in 1965, is a well-ordered
state with a democratic constitution, although
one party, the People’s Action Party, has ruled
since 1959. Prime Minister Lee Kuan Yew, who
headed the government for thirty-one years until
he stepped down in 1990, was notable for his
authoritarian tendency, his incorruptibility and his
almost puritanical zeal for law and order, which
extended to requiring long-haired youths to cut
their hair short. In common with Thailand and
some other Asian countries, Singapore combated
the drug menace with draconian laws, including
the death penalty. It was, at best, half a democracy.
Opposition politicians and parties were
allowed, but the Internal Security Act passed in
1963 permitted the authorities to detain suspects
without trial, and the power of the courts to
review administrative decisions was severely
restricted. Repressive politically, Singapore was
economically free – enterprise was encouraged
and since the island, like Hong Kong, was
without resources except fish, manufacture and
trade flourished.
Lee kept a watchful eye on his chosen successor,
Goh Chok Tong, remaining in the government
as ‘senior minister’ and staying as general
secretary of the Action Party. Democratic progress
of sorts was made in Singapore in the general election
held in August 1991, when the opposition
quadrupled its representation, from one to four
members, albeit swamped by the ruling Action
Party’s seventy-seven. Singapore remained an economic
powerhouse in Asia in the 1990s, robustly
tied to the West – the government welcoming the
US fleet, which was offered facilities in Singapore
after the Americans lost their Philippine bases.
In 1990, unlike other south-east Asian leaders,
Lee Kuan Yew did not leave under a cloud but
was deeply respected and was given the title of
senior minister. His influence behind the scenes
remained considerable, his legacy of a wellordered
state, derided by some as a ‘nanny state’,
endured. Singapore is the cleanest city in the
world, there is no grafitti or chewing gum, hooligans
receive strokes of the cane. Society is orderly
and well behaved, the atmosphere restrictive,
but the 4 million people enjoy the highest living
standards in Asia. The democracy established here
was, in effect, one-party rule through repression
but by the consent of the majority. The opposition
in the legislature has become more lively but
is powerless and small.
The economic crisis of 1997 did not pass
Singapore by, but Singapore soon recovered. As
a developed nation, Singapore faces new challenges
in trade and its economy, surrounded by
countries that can manufacture the goods that
made Singapore rich, more cheaply. There are
now, in the new millennium, no development
models to follow any longer. The high degree of
education and business skills of Singapore’s
people, the absence of crime and conflict provides
a good base for the future.
After the terrible devastation of war, Korea was
still a partitioned country in the early 1990s.
Sporadic talk of bringing the two Koreas
together, of uniting families again, had made little
progress. No personality cult anywhere equalled
the excesses of worship bestowed on Comrade
Kim Il Sung, the longest-ruling communist dictator
in the world. He had presided over the
‘democratic’ Korean Republic since 1948 and was
already a veteran communist then. There was no
freedom in North Korea, with its showpiece
capital Pyongyang, its huge and costly military
establishment and all the trappings of an oppressive
one-party state. Living standards were
appallingly low in consequence and did not
compare with those in the South.
The history of South Korea can be told in two
quite different ways. When the world came to
Seoul in 1988 and the XXIV Olympic Games
were televised, a fine modern city came into view
with well-dressed people in the streets. The economic
recovery and industrial growth of South
Korea, which accelerated after the 1970s, now
place it in Asia’s club of rich nations. The other
side of South Korea’s history, however, has to
recount the violence and brutality of its politics.
For most of the years since the early 1950s the
military ruled Korea oppressively, violent student
and popular protests were put down with force
and bloodshed. Aligned with the West, especially
with the US, South Korea had to make some
show of a democratic process with a national
assembly and elections. But the military made
sure that they held on to power, ruling under
martial law, imprisoning opposition leaders and
resorting to torture and bloodshed to suppress
demonstrators who, in their frustration, frequently
turned to violence. The ruling cliques
were identified by those who opposed them with
the US, so anti-American and anti-military agitation
often merged. For the Americans such
authoritarian regimes were an embarrassment, but
pressure to democratise took second place before
1990 to the global aim of containing communism.
South Korea was a frontline state of the free
world, and the credentials of the South Korean
rulers as implacable opponents of communism
were never in doubt.
South Korea’s first president, Syngman Rhee,
lasted until 1960. By then the old autocrat had
lost his grip and was forced to bow out after
student-led riots in April of that year, protesting
against corruption and election fraud. There was
a brief hope that the politicians might create at
least the semblance of civilian, democratic government.
After some months of turmoil, in May
1961 the military stepped in and a junta led by
Major-General Park Chung Hee took control.
His repressive military-police regime allowed just
enough leeway in the 1970s for political activity
to function sporadically. But, whenever such
activities threatened to become too assertive or
violent, Park reimposed rigid control by emergency
decree, arresting opposition politicians and
suspending civil rights. Suppression would be followed
by a measure of liberalisation, as long as it
did not threaten military power. Korea’s chief of
intelligence assassinated him in October 1979. A
civilian president was tolerated for nine months
but the military remained the real power in the
land.
In 1980 a new general took over, General
Chun Doo-Hwan, who was no less determined to
keep the opposition under firm control than Park.
The 1980s, like the 1970s, were plagued by periodic
demonstrations and riots answered by police
truncheons, firearms and torture. The killings in
the riotous town of Kwangju in May 1980, when
hundreds lost their lives, were just the worst of
these. But Korea’s rapid industrial development
made it desirable to create a better image in the
West. The opposition was again allowed a degree
of activity, political prisoners were released, and
the most prominent opposition leaders, Kim Dae-
Jung and Kim Young, were from time to time
freed from house arrest and allowed to campaign.
In 1987, on the eve of the Olympics, a relatively
free presidential election was held. The general’s
nominee, Roh Tae-Woo, won, but the opposition
would have succeeded instead had they been able
to close ranks behind a single candidate. Without
full democracy it is difficult, if not impossible, for
political parties and institutions to develop, which
are necessary for democracy to function. So South
Korean politics were caught in a vicious circle.
Roh Tae-Woo was prepared to allow a wider
margin of political freedom than his predecessors.
In May 1990 the opposition was strengthened
and gained a majority in the National Assembly
when two opposition parties combined. The wellknown
dissident Kim Young Sam, leader of the
Liberal Democratic Party, was elected president
in December 1992. He took office in February
1993, the first civilian president in 32 years.
The dichotomy between political backwardness
and economic modernisation had been
a characteristic since 1962. For the ordinary
Korean, politics took second place to material
welfare, which so rapidly increased for the majority
of the people. Opposition politics and violent
demonstrations were for the young and for the
minority of political activists, not for the majority.
For those who did not actively oppose, there
was not only far greater prosperity but also
greater freedom in the South. The influence of
the generals receded, and the president tackled
corruption; democratisation made some headway.
In the North, nothing much was to change until
Kim Il Sung died in 1992 and was succeeded by
his son the ‘dear leader’.
By the 1990s the reunification of Korea had
for long been one of the demands of the radical
opposition. All politicians in the South were in
favour of it; it was the official policy, and visits of
government delegations from the North and the
South were exchanged in 1990 and in 1991. In
December 1991 the communist North and the
capitalist South at their fifth meeting signed a
non-aggression pact. The meetings continued in
1992. North Korea was working towards the
manufacture of nuclear weapons. The Americans
withdrew their army from the South, so President
Roh’s prime interest was to stop the North from
making its own bomb. The whole of Korea,
according to the wishes of the South, of Japan
and of the US, should be free of nuclear weapons.
South Korean enthusiasm for merger with the
North was at its height when Germany reunified
in 1989, but it waned in the light of German
experience. The population of the North with its
low standard of living is far greater proportionately
to the South’s than East Germany’s was to
its well-off Western cousins. The Korean statistics
bring out this contrast very sharply.
By 1994 North Korea’s nuclear programme
had raised fears and tensions between North and
South and the South’s ally, the US, to new
heights. Japan also felt threatened by the situation’s
volatility. Reductions in the large armies
and numerous weapons, a tremendous burden
especially to the North, a lessening of tension and
more intercourse between North and South
nevertheless brought their own tangible benefits
to a people who had suffered so much in the
twentieth century.
North Korea remains one of the last unreconstructed
communist dictatorships. Its ‘Dear
Leader’ lives in luxury while the people starve.
Famine in 1997 caused the deaths of possibly as
many as 2 million. The population survives at
subsistence level at best, the gap in its grain made
up mainly by China and also the West. This does
not deter Kim Jong Il from diverting scarce
resources to a million-strong army, a missile and
a nuclear programme at the Yongbyon nuclear
complex. The 1993/4 crisis, when North Korea
threatened to produce bomb-usable plutonium
by reprocessing fuel rods, was resolved by Clinton
concluding a ‘Framework Agreement’. The US
would build two Light Water reactors less capable
of plutonium production and supply oil
until they were built, and in return North Korea
undertook to freeze plutonium production.
North Korea also signed the Nuclear Non-
Proliferation Treaty. In October 2002 a new crisis
erupted. North Korea threatened to reactivate
the plutonium reactor at Yongbyon and process
fuel rods enabling it to make nuclear weapons. In
December the international supervisory inspectors
were thrown out and Kim threatened to discard
the Nuclear Non-Proliferation Treaty.
The timing was well chosen as Bush was
preparing for war against Iraq. The response from
Washington in partnership with South Korea and
Japan was to stop the supply of fuel oil essential
to North Korea as the construction of the two
reactors promised in 1994 had hardly begun. As
a member of Bush’s ‘axis of evil’, a regime that
could not be allowed to acquire weapons of mass
destruction, North Korea’s challenge could not
have been more direct. The US went to war with
Iraq to destroy Saddam’s weapons of mass
destruction which he had not been proven to
possess, but resorted to diplomacy with North
Korea which almost certainly had nuclear bombs
already. The apparent inconsistency is not difficult
to understand. South Korea is exposed to a North
Korean army of overwhelming strength. The
37,000 US troops can act as no more than a trip
wire in the event of an invasion. The US would
have to risk a nuclear war in defence of the South.
By sacrificing the welfare of the people to build
his military arsenal Kim believes himself safe from
attack. He demonstrated his defiance in 2003 by
firing a cruise missile into the sea of Japan and
sending fighters to force down a US spy plane.
His regime may one day implode, but this is
something China is anxious to avoid as it would
upset the strategic balance. The reactivation in
2003 of the nuclear bomb programme was
causing the greatest worry. The disarmament and
neutralisation of the Korean peninsula is a distant
hope.
In the South the political leaders and the bosses
of the big conglomerates, the chaebols, are being
called to account for misrule and corruption.
President Kim Young Sam was elected on an anticorruption
platform. His two predecessors were
brought before the courts. General Chun Doo
Hwan was accused of instigating the 1979 military
coup and the 1980 massacre in the city of
Kwangju and ex-president Roh Tae-Woo of
taking $361 million in bribes from business
leaders while in office. Kim Dae-Jung, former dissident,
was elected president as the decade drew
to a close in December 1997.
South Korea was one of the most successful of
the ‘Asian Tigers’, its economy boosted by global
exports. In this South Korea was following the
first of the ‘Tigers’, Japan. But lax government
management, foreign debts, as well as competition
from Asian countries with lower labour costs
have created problems. Corruption in business
and politics has been endemic. Twenty-three
bosses of the big industrial conglomerates, the
chaebols, were convicted of bribing the two disgraced
ex-presidents General Chun and Roh Tae-
Woo, but escaped prison terms. A country can
manage without ex-presidents but not without its
business leaders.
By the autumn of 1997 the ‘Asian Tigers’ had
lost their bounce – not only Japan and South
Korea but also the younger more virile Tigers.
Stability and investor confidence, with money
from abroad readily available, had brought rapid,
seemingly unstoppable, growth. The abundance
of cheap credit led to mismanagement and excess:
building – especially of office block skyscrapers –
boomed. And then the giddy ride shuddered to
a halt and investor panic even engulfed the
sounder economies of Hong Kong and Singapore.
North Korea’s military threat hangs as a shadow
over South Korea. Kim Dae-Jung adopted a policy
of reconciliation with the North. Kim and his
regime, he believed, should be engaged not condemned
to containment and isolation which
would, he believed, only increase the paranoia of
the leadership. His ‘sunshine policy’ reached its
climax when he met with Kim Jong Il in 2000,
both exuding smiles and friendship. The South
Korean president promised financial assistance and
development help in return for closer links
between the two countries, open road and rail
links and for families torn apart by the Korean
war to be able to visit. Rather prematurely Kim
Dae-Jung was rewarded for his efforts with the
Nobel Peace Prize. In 2003 it emerged that the
wheels had been oiled by a bribe of a large sum
paid by a company in the Hyundai chaebol to the
‘Dear Leader’, it is alleged with Kim Dae-Jung’s
knowledge. In South Korea politics were
enlivened by the corruption scandal investigation.
Kim Jong Il was able to play on the resentment
of a new generation of South Korean anti-
Americanism which had its roots in ethnic resentment
and, justifiably, in protest at the American
support for past corrupt military regimes. Kim
Dae-Jung’s dissident politics in Korea remained
far from clean. Corporate ‘donations’ and vote
buying distorted the democratic process. In relations
with the North, Kim saw no alternative to
the policy of engagement he was following
though it has yielded little positive results after
the first media-hyped family reunions.
While Kim Dae-Jung’s five-year record as a
political reformer does not shine, his government
engineered a spectacular turn around of the
economy from its depths in 1997. Once Japan
was the model, now Korea can serve Japan as an
example. The medicine was drastic. The IMF provided
a loan to save the country from bankruptcy.
The chaebols, Korea’s largest conglomerates, overladen
with debt, were forced to restructure, those
that were unable to survive financially were not
bailed out but went to the wall or were taken over
by foreign companies such as Daewoo managed
by US General Motors. The culture of business
secrecy and corruption was tackled. The banking
system was overloaded with bad debts. Banks
unable to deal with them were taken over by the
state. Western management skills were introduced,
the country opened to competition and
deregulation. The pain was great, unemployment
soared. The people, however, responded to the
crisis with dogged determination to build their
industries anew on a sounder basis. Inefficient
businesses were forced into bankruptcy. Within
two years, South Korea was back on a healthy
growth rate, once more attracting foreign investment
but this time into a sound economy.
Employment is back to pre-crisis levels. Yet the
one thing the people wished for remained unfulfilled,
the lifting of the threat of the armistice
frontier and the unification of the country.
The December 2002 presidential elections
were won by the more progressive Roh Moo-hyn
who beat a conservative candidate. The issue of
how to deal with the North was a central issue.
Roh Moo-hyn campaigned on the promise to
continue the ‘sunshine policy’ and end corruption
and was inaugurated in February 2003. Despite
rising resentment of the US, which had supported
past military regimes, the bedrock of security
remained the US alliance.
World History
