NO. 14 -- April 11, 1997


Feature Article


A year ago President Clinton and Prime Minister Ryutaro Hashimoto issued what was hailed as a groundbreaking statement reaffirming the importance of the U.S.-Japan Mutual Security Treaty. They also pledged greater bilateral collaboration on various regional and global security initiatives. American defense officials had particularly high hopes that a slated joint review of Tokyo's 1978 defense operational guidelines would open the door to expanded Japanese cooperation with the United States in dealing with regional crises.

Defense insiders maintain that working-level discussions on the guidelines review are moving forward. They also note Tokyo's progress in implementing an acquisition and cross-servicing agreement, its greater engagement in regional diplomacy as well as Japan's probable agreement in principle that the country needs some variation of a missile defense system.

However, the still-roiling controversy over the U.S. military base presence on Okinawa has overshadowed these gains. Especially disconcerting to Washington, the refusal of Okinawan landowners to renew soon-expiring leases on property used by the U.S. military has diverted the energies and the attention of top Japanese officials from matters requiring difficult political decisions, such as aspects of the guidelines review that press on Tokyo's policy banning collective defense activities.

Political experts attribute the quagmire that has developed over the Okinawan bases not just to local residents' longtime anger at the central government for foisting on them the lion's share of hosting U.S. forces. Contributing factors include the political weakness of the Hashimoto government as well as a cumbersome legal process for public use of private land that has politicized further the renewal of the base leases.

Tokyo's handling of the Okinawan base issue as well as its determination of the roles that Japan can play in supporting the United States in a regional emergency will be influenced by a still-fluid political situation. At the same time either or both issues could reshape the national political landscape. No matter how Japan's political parties realign, the United States expects more from its most important Asian ally in the area of security.

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Weekly Review

Tokyo Seeks Cure For Financial-Sector Ills by Jon Choy

Despite strenuous efforts to repair their balance sheets, Japanese financial institutions have been unable to dispel the concerns of analysts and investors that nonperforming loans threaten not only individual companies but Japan's entire financial sector. Efforts by banking authorities in Tokyo to restore domestic and foreign confidence in the nation's financial institutions and financial regulation have met with limited success.


Tankan Registers Improvement In Economic Conditions by Douglas Ostrom

Japan's recession officially ended more than three years ago, implying that the current recovery already may be tied for third place among the longest stretches of postwar economic growth. Instead of celebrating this feat, however, Japanese analysts -- like their counterparts abroad -- remain somewhat skeptical that the nation's economic expansion is for real. The Bank of Japan's latest short-term economic survey (tankan), released April 2, feeds those doubts, even though the headline statistic moved into positive territory for the first time since December 1991.


APEC Meeting Draws Rubin To Asia by Christopher B. Johnstone

The Asia Pacific Economic Cooperation forum has made its mark primarily as a body aimed at promoting regional trade and investment liberalization. Often overlooked are the other components of APEC's agenda, including an annual meeting of the region's finance ministers. This lack of attention hardly is surprising. APEC's macroeconomic work program has been even murkier than the often-nebulous discussions that have slowed progress toward the forum's explicit trade and investment goals.


Agreement On Lease Renewal Bill May Spark Political Changes by Barbara Wanner

In a move that stunned some Japanese politicians, Prime Minister Ryutaro Hashimoto and Ichiro Ozawa, the leader of Shinshinto, the largest opposition party, agreed April 3 to cooperate in passing legislation that would allow the continued use by the U.S. military of land on Okinawa on which leases expire May 14. With the added support of Taiyoto and the New Sakigake Party ruling party officials are confident that the prime minister will realize this goal of enacting revisions to the Special Measures Law for Military Land Use before he meets President Clinton April 25 in Washington.



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