"JAPAN'S POSITION IN THE FAR EAST"
An Address by
HONOURABLE KOTO MATSUDAIRA Ambassador of Japan to Canada
Thursday, April 14th, 1955
CHAIRMAN: The President, Mr. James H. Joyce.
MR. JOYCE: We are glad to welcome as our speaker today His Excellency the Honourable Dr. Koto Matsudaira, the Ambassador of Japan to Canada, who will speak to us on "Japan's Position in the Far East."
Born in Tokyo 52 years ago, Dr. Matsudaira passed the Diplomatic Service Examinations of Japan in 1926, a year later graduated from the Faculty of French Law of Tokyo University, and then studied in France and took his Doctor of Law degree at the University of Paris, France.
He started his diplomatic career as Attache of the Embassy of Japan, Paris, in 1931, was at two League of Nations' meetings in Geneva and from 1934 to 1941 was with the Ministry of Foreign Affairs in Tokyo.
Dr. Matsudaira was posted to Washington as First Secretary of the Japanese Embassy only a few months before Pearl Harbour. He was interned there until the exchange of diplomats was arranged in June 1942.
After another period of service in Japan he was posted to Moscow in 1944 and when Russia declared war on Japan in 1945, he was interned a second time.
Following a further period of service with the Ministry of Foreign Affairs, Dr. Matsudaira was appointed Ambassador to Canada early last year, arriving just in time to sign a new trade treaty between our two nations. The international situation in the Far East holds the spotlight of world attention today. We are indeed fortunate to have a distinguished Japanese diplomat who can draw on personal experience in the World capitals of Geneva, Paris, Washington, and Moscow, as well as in Tokyo and Ottawa, to tell us of "Japan's Position in the Far East."
DR. MATSUDAIRA: I consider it a great honour indeed to have been given the privilege of addressing the members of this Club today, because I am well aware of the contribution of your organization in furthering the better and fairer understanding of international affairs, in which, I should like to say, Canada is playing an ever more important part.
I should also like to mention what an honour it is for me to represent my country in Canada.
I understand that you would like to know something about the position of Japan in the Far East today. Before entering into a discussion of this problem, I imagine that it would not be out of place to give you a brief historical background of my country.
In July, 1853, Commodore Perry, commanding four United States' ships, steamed into Tokyo Bay with his fleet of "black ships", as they were called by the Japanese of that day, and opened Japan for trade with the West.
A feudal and medieval Japan thus found herself thrown into a world in which world-wide politics were rife and the struggle for colonial possessions was going on. On the Asiatic mainland was a powerful Chinese Empire. Tsarist Russia was a mighty force in the north. Japan was faced with the necessity of building up her political and economic strength without delay, or else submitting to foreign pressure. Her young, patriotic leaders, therefore, were determined to create a modern Japan, a major power which was to become a worthy member of the family of nations.
The speed with which Japan was transformed into a great, industrial power in just three-quarters of a century can still be regarded as an extraordinary achievement. Western culture, science, industrial techniques and thought took firm roots in a virgin soil. Parliamentary government was established. Japan fought two great wars and emerged victorious. In World War I she was a staunch partner of the Allies.
Thus, in the early 1930's, and in the course of some fifty years, Japan built an Empire, became a world power, signed the Treaty of Versailles as one of the principal allied and associated powers, and was an original member of the League of Nations. Her Empire was prosperous and powerful. Her position as the stabilizing force in the Far East was secure. Then came the day of disaster, revealing to the proud how the day of doom, which may lurk in the destiny of nations and men, can be so close to the day of glory.
Now in what position did Japan find herself when the: last Great War ended? She had lost forty-five per cent of her territory and twenty-five per cent of her national wealth. Hundreds of cities were razed and millions of homes were destroyed. Her prosperous colonies and Empire were gone, and her once great merchant fleet no longer existed. And, in the same breath, she lost her traditional markets, as well as her important sources of raw materials.
Now I would like to say a few words about Japan since the war-what her position is in the present state of affairs. I hope that these few words will help you to understand-even in a small and hurried way-the problem of present-day Japan.
Many of you probably noticed the results of the recent general election held in Japan. This election was watched with particular interest by the rest of the world because it gave an indication of the future course of the Japanese people. More than seventy-five percent of those eligible to vote cast their ballots. Out of four hundred and sixty-seven seats in the House of Representatives, the Democrats, who form one of the conservative political parties headed by Prime Minister Hatoyama, won one hundred and eighty-five. The Liberals, another conservative party, won one hundred and twelve. Together they control an absolute majority in the House. The Communists, who at one time after the war had thirty-five seats, put up seventy-two candidates and only two of them were returned. Their defeat is significant. The Socialists won one hundred and fifty-six seats.
In 1946, thirty-nine women were elected to the House of Representatives, but in the recent election this figure dropped to eight.
The Constitution upholds fundamental human rights. The Diet, which corresponds to your Parliament, is the highest organ of the state. No longer is the Emperor a divine ruler. He is a constitutional monarch, a symbol. The Prime Minister is designated by the Diet. Appointments of the Judges of our Supreme Court are reviewed by the people. Our prefectural governors are elected by popular vote. The rate of illiteracy in Japan has dropped to around three per cent, a figure which I would like to emphasize. Economic reforms have also been instituted. The former powerful Zaibatsu combines have been dissolved. Anti-monopoly legislation has been enacted. Sweeping land reforms have been successfully carried out. At the end of the war, fifty-four percent of the land was owner-cultivated and forty-six percent tenant cultivated. At the end of 1950, the percentage of the former had risen to eighty-nine percent and that of the latter had dropped to eleven per cent.
After all I have said, I think I should now define the whole problem. What is wrong with Japan? What is the trouble that besets her? What is the difficulty which her leaders must face and tackle without delay?
Japan's fundamental problem is one of population. In an area a little more than two-fifths the size of the Province of Ontario or one-fourth the size of the Province of Quebec live some eighty-six million Japanese. This is the equivalent of more than six times the population of Canada. In Canada you have a density of population of 3.65 persons per square mile. In Japan it is 620 persons per square mile. But far more important is the figure in terms of arable land, 3,422 persons per square mile, the highest in the world! If you had the same density as Japan, you would have an almost unbelievable population-a figure that I think will shock you-two billion, two hundred and sixty-eight million! This is just about the population of the entire world today.
Now, every day, Japan has three thousand new mouths to feed, every month ninety thousand new babies, every year one million more in population, the size of the population of Toronto! At the present rate, Japan's population will reach one hundred million by 1970. Emigration will not help very much. The present plan of the Japanese Foreign Office is to arrange for the emigration of 50,000 in 1956 to the Latin-American countries; the figure for 1954 was 3,500.
We are faced, therefore, with the necessity of finding some means to support our population, that is to say, to maintain and improve the general standard of living and to find new jobs for the rising labour force. We cannot do so with the resources within our own borders. Every bit of arable land in Japan is so intensely cultivated that the meagre soil will produce, per acre, 1.6 times more than that of the United States. But still we are dependent upon imports for about twenty per cent of our minimum food requirements. That represents $600 million in terms of money, or, in other words, half of our export revenue. The only answer, as I see it, is to develop our foreign trade to the utmost in order to earn foreign exchange with which to purchase the food we need. Our industries must be revived and strengthened. There is no country in the world today for which international trade means life or death to such an acute extent than Japan - not even Great Britain.
Since the end of the war, we have been at grips with this difficult problem. The task is not an easy one. The problem has been made even harder by the high cost of production. Our labour costs are no longer low, as they were reputed to be before the war. The whole result is one of impressive instability in our trade balance. In 1952, the deficit in our trade balance amounted to $750 million, in 1953 to $1100 million and in 1954, $1100 million. The deficit was largely alleviated by off-shore procurement by the United States Army in Japan, but still the net unbalance for 1953 was $314 million. In 1952, we could narrowly manage to make both ends meet, thanks to the said off-shore procurement; but now with the Korean War at an end, we can hardly expect to rely on that indefinitely. You might see how precarious is this situation. Nevertheless, a slight improvement is being made and the Finance Ministry was able to announce during the last few days that the foreign exchange balance for 1954 was $344 million in credit. Japan's foreign exchange reserves were $977 million as of December 31, 1953, and $1,180 million as of March 31, 1955.
Let us look for a moment at the trade between Canada and Japan. You may be aware that Japan now ranks as Canada's third best customer - exceeded only by the United States and the United Kingdom-and as Canada's second best customer as far as wheat is concerned. This year, we are spending more than one hundred million dollars in Canada, the majority for wheat, barley and pulp. In 1953, we sold in this country goods to the value of approximately thirteen million dollars, while our purchases from you totalled close to one hundred and two million dollars.
It is our utmost desire to continue and to expand, as far as possible, our growing trade with Canada, for we are convinced that, in this way, not only can we complement the needs of another, but, also, through fair and honest trade, build up and deepen the good understanding between our two peoples. However, I might venture to say, that it is difficult to see how such a one-sided balance can continue indefinitely.
Perhaps the strongest argument for increased and balanced trade between our two countries is that it would be to our mutual benefit, in the long run. It is only through mutually profitable trade that we can improve our respective standards of living. The woodsman in British Columbia, the farmer in Alberta or in Saskatchewan, the wheat grower in Manitoba, depend on a balanced and long-enduring system of trade between us to maintain and improve their individual, personal well-being. By buying more from Japan, you are ensuring the welfare and happiness of their children and of themselves.
It is time now to examine the position of Japan in East Asia. Before the war, and taking the 1934-36 average figures, Japan depended on China to supply 68% of her coal, 36% of her iron ore and 40% of her industrial salt. Japan's exports to China, Korea, Formosa and other neighbouring countries amounted during the same period to an average of 42 percent of our total annual exports. This has now dropped to 9 per cent, while our exports to Southeast Asia, which amounted to 19 per cent of the total in pre-war years, have now increased to 36 per cent. You will understand how Japan's economy now depends on her trade with Southeast Asia and on the possibilities of its expansion!
If Southeast Asia should go Communist, Japan will not be able to stand alone economically. The fate of Southeast Asia is therefore an object of real and grave concern to us. The political stability and economic development of Southeast Asia, on the other hand, will greatly strengthen Japan politically and economically.
Economics represent a vital element in determining the political future of Southeast Asia. If China under Communist control makes rapid economic progress, leaving the comparatively slow Southeast Asian countries far behind, there will develop a great margin between economic standards in Communist and non-Communist areas of Asia, enabling Communist China to place the whole of Southeast Asia under her influence without resort to arms.
The present per capita national income of Communist China, with a population of 580 million, is estimated to be approximately $50. A similar index for Southeast Asian countries, with a population of 620 million, stands at nearly the same level. (That for Japan was $170 in 1953, still 20 per cent lower than the pre-war level.) Therefore, we may assume that Communist China and Southeast Asia are on an almost equal level at present. The political future of Asia will be acutely influenced by the extent to which either of these two areas surpasses the other in the attainment of a higher national income.
The scale of capital investment is often a decisive factor in determining the rate of economic development. By our calculation, the funds necessary to execute the now contemplated development plans by the Governments of Southeast Asian countries reach a total of $9.28 billion. It is expected that 37 percent of the amount will be furnished by foreign investors. The amount of investment per year will be $1.67 billion - $2.6 per capita in relation to the population. On the other hand, total investments made in Communist China during 1953 were, by our calculation also, $5.92 billion-$10 per capita.
In comparing these figures, it must be taken into consideration that while almost all investments in Communist China are necessarily governmental, there is considerable private investment in Southeast Asia. However, total investment in Southeast Asia, even if we increase the above figures to include private investments, and raise the investment per capita to $5 would still remain at about 50 per cent of that of Communist China.
There is still another important factor to be taken into account - Communist China is mobilizing "voluntary labour" for various construction projects.
Under Communist regimes, it may not be difficult to take drastic measures, through government decrees, to force extremely austere living standards on the people and to mobilize surplus labour for construction projects, thus raising the rate of capital formation. This policy is now being followed by Communist China and the effort has been strengthened, particularly since last year.
Considering all this, it may perhaps be said that the actual amount of investment in Communist China is far greater than our estimate.
On the contrary, in Southeast Asia, efforts are being made on the basis of individual freedom. We will have to admit, although reluctantly, that, unless some help is extended, Southeast Asia will be slow in its economic development.
If the difference in investment level now existing between the two camps in Asia is to continue into the future, the per capita national income of Communist China, in ten years' time, will be higher than that of the Southeast Asian countries by 20 to 30 percent.
It seems to be the prevalent view in, western countries that the responsibility for economic development rests entirely upon each individual country, that it is sufficient for advanced countries to give technical aid to underdeveloped countries, and that economic aid might weaken the spirit of self-reliance. According to this view, it is felt that the supply of necessary capital should be left to the free investment of private enterprisers and that, if under-developed countries wish to invite foreign investments, the most important step for them to take is to eliminate various hindrances to that end. This view is basically sound, I must admit. However, in the light of what has been said before, it is apparent that the supply of capital through government or international banking institutions could be exceedingly helpful and advantageously furnished or enlarged in such basic fields as hygiene, education, transportation, irrigation, power-generation and heavy industries. It would enable those countries to build a foundation on which private enterprises could invest on a commercial basis.
There is one aspect of the problem to which it seems important for me to draw your attention. It is the fact that too hasty overall industrialization of the area is not advisable. We must take into consideration the particular characteristics of the economic structure of this area. I might point out, for example, the following conditions which will result;
1. Industrialization will be unbalanced and "limping" due to the shortage of capital available.
2. Owing to the lack of technicians and to the difficulties in the basic fields I have just mentioned, the products of the newly-developed industries will be, of necessity, high in cost and inferior in quality. They will not be exportable because of these disadvantages: nor will they be consumable in the local market, where the purchasing power is extremely low.
3. A too hasty investment on a large scale will cause inflation in the area.
The right approach, therefore, must be:
(a) To increase the incomes of the persons engaged in agriculture, thus creating purchasing power in the rural districts which cover practically the whole area.
(b) to encourage the cottage and artisan industries; and (c) to advance technical education and social welfare, and to improve the conditions in the basic fields, such as transportation, etc., as was said above.
In the Southeast Asian area, to achieve a level of economic development at least equal to that of Communist China, it is, in our view, estimated that a supply of capital amounting to $4 billion annually will be necessary. However, the recent flow of capital into this area from outside, including FOA, World Bank loans, and the Colombo Plan, has been not more than $400 million annually.
One important factor in the promotion of economic development, which should be considered together with a supply of capital, is the urgent need to increase the availability of technicians and skilled workers. In Communist China, for example, during three years up to 1953, the numbers of technical students in the high schools and universities increased to twice their former number, and adult education covering industrial and agricultural techniques has been extended several fold. In the Southeast Asian countries also, the American Point Four Program, the U.N. Expanded Technical Assistance Program, technical assistance based on the Colombo Plan and various other international projects are under way. However, for the most part, these are aimed at providing a high degree of technical knowledge to a limited number of specialists, and are not designed to train large numbers of skilled workers and other minor technicians.
In the above field, Japan also wants to help as far as her financial position permits. We joined the Colombo Plan last year as a donor nation. We want to begin by expanding the facilities for technical trainees in Japan, and by helping to raise the level of training centres in the Southeast Asian countries themselves.
As for capital investment, Japan wants to help Southeast Asian countries by making payments to them. We agreed to pay to Burma $250,000,000, partly as reparations and partly as a form of economic aid. We also settled Thailand's claim for $41,666,666. We are eager to settle the reparation payments issue with other Southeast Asian countries. The amounts to be paid may not be large when compared with the actual needs of these countries, but we hope they will help them, in some way, in their struggle to better their material way of life.
All of the issues that I have mentioned so far resolve themselves, in one word, into the one main problem of Asia-population.
In Asia, this fundamental problem of population - how to achieve a better standard of living and give jobs to a rising labour force - is attacked by two methods, as I have said. One is communistic, and here looms overwhelmingly the massive and ominous figure of Red China with her boasts of impressive capital investment in her economy, and of tremendous progress in her national life. The other is capitalistic, and here stands Japan as its champion, with her successful record, although disrupted by the destruction of war. The fate of Asia will be decided by whichever one of these methods prevails among the Asian countries. And if Japan fails, all Asia will be lost to the free world.
Japan is situated today at the most strategic and vulnerable point of Free Asia, in what Mr. Stassen calls "The Arc of Free Asia". This extends from Pakistan through India, Burma, Thailand, Malaya, Indonesia, Indochina, The Phillipines and Formosa up to South Korea and Japan. This Arc is formed of fifteen nations. The total population of these fifteen non-communist countries amounts, according to the estimation of Mr. Stassen, to more than 760 million. This is in contrast to what Red China claims to be her population figure in the latest census-approximately 600 million.
You might notice that in this area outside the Communist sphere there are many millions of human beings who could be called upon to build a world of decent living and of economic prosperity millions whom the free world can't afford to lose.
Japan used to be the stabilizing force in the Far East. She was a symbol of stability and economic prosperity. The eyes of the teeming millions of Asia used to focus on the achievements and intellectual leadership of this nation. They welcomed the guidance and example of her people.
And today, Japan aspires eagerly to show by her example that economic prosperity can be achieved in Asia through the ideals of freedom and the dignity of man.
As a very successful industrialized nation, Japan is perhaps the only country in this area profoundly convinced of the advantages and merits of the capitalistic system. She has learned from experience that free institutions and private enterprise will bring her a rising material well-being, open outlook and international friendship. She knows also that she owes, to this system her, by far, superior standard of living among her fellow Asian nations, notwithstanding the fact that she has a population of eighty-six million. You may notice she has solved, to some extent, her population problem!
It may not be out of place, here, to take a quick glimpse at her present industrial strength.
In 1952, the annual steel output of China was two million tons, India, one million six hundred thousand tons. Japan's six million nine hundred thousand tons were three and a half times greater than the boasted output of Red China and 4.4 times greater than that of industrializing India. You might notice that this figure was taken in 1952 when Japan was still staggering under the crushing blows of the worst defeat in her history. We intend, of course, to rebuild our strength in this field to the pre-war level of 20 million tons. The problem facing the leaders of Japan today is, how and when?
Japan's aspiration to organize a comity of Asian nations based on the anti-communistic creed has not been so far very successful.
Unfortunately, in the aftermath of the war, we are still unable to attain unity of purpose among the free nations of Asia. This lack of unity may be attributed to some extent to the war and, in this regard, we will have to accept, with candour and humility, our responsibilities for damage caused by that war. We are striving hard to promote the relations of goodwill among the nations and men of Asia. But still there are so many obstacles which we must surmount. Lack of strong internal government in some Southeast Asian countries is one of the most formidable obstacles in the way.
An agreement was reached on the 9th of April with Thailand under which Japan will make certain money payments and give some contribution in goods and services to balance the account that Thailand has brought because of the Japanese occupation.
This is yet another large step that Japan has been able to take. As I have mentioned before, an agreement has already been signed and ratified with Burma. Another understanding has been reached with Cambodia. Each one of these agreements has removed a further point of contention.
Japan has still two big reparations problems to solve. Indonesia and The Philippines have their claims and we are trying to find a basis of discussion to bring about a satisfactory settlement.
Thus, as you might see, the normal relations between Japan and her neighbours are gradually being resumed, as I have already mentioned. Friendship among them is important to the recovery and to the future of Japan.
Japan's economic relationship with the Republic of Korea is a very thorny problem. At the present, we have reached a deadlock on the issue. But still we hope that reason and goodwill will prevail, notwithstanding the long history of bitterness.
Thus, I might say, Japan is gradually coming back and I hope that all is for the good of the free world.
In ending my speech, I should like to emphasize one point. That is the position of Japan with the western world. From what I have said you may have deduced one fact. That Japan in the real interpreter of the West to the East, and the East to the West, for she knows and comprehends the western world through her long association and background of personal achievement.
With Japan, I should like to resort to the picturesque image, which Field-Marshal Viscount Mongomery of El-Alamein thought fit to invoke in the case of Canada. Japan also is a hinge standing between the old and new worlds, a hinge of Marco Polo's gold. Maybe indeed it would be better to say, a hinge of jade-encrusted there between two worlds-full of subtle lustre and so fragile!
THANKS OF THE MEETING were expressed by Mr. Marvin Gelber.