Japan, To-day and Tomorrow

DR. CRANFIELD:

Today, Your Excellency, is as you know, April 1st. It has, for more than 300 years been a day to be on one's guard. It is a day on which up until noon one has to be watchful that a friend does not play one a trick or send one on a Fool's Errand. For a source, I take you back to 1670 and the writer William Congreve. He was responsible for such well known expressions as, "She lays it on with a trowel," "Music has charms to soothe a savage breast," "Courtship to marriage (is) a very witty prologue to a very dull play." In one of his stories called "The Old Bachelor" he referred to a man in love as "One of love's April Fools", thus setting us right that after a bad winter the onset of spring is too much for a man's mind and he foolishly falls in love. Out of this 300-year-old reference April 1st is called April Fool, though I assure his excellency he is in no danger of any trickery from me, since by tradition no tricks are played after 12 noon.

Since we are speaking of 300-year-old customs I will tell the audience of one in Japan; for 1971 is the 300th anniversary of the practice of dehorning the domestic stags that roam the 1,250-acre park at the Japanese city of Nara. It is a ritual that turns out to have some characteristics of the rodeo (as at the Calgary Stampede). The difference is that after the deer is captured a Shinto priest from the Kasuga Shrine removes the horns painlessly with a hack saw. The deer hunters, called Seko, have the equivalent lassoing skills of our cowboys and the Argentinian gauchos. The horns are removed each autumn to prevent the deer injuring themselves or their human admirers.

Having exchanged these courtesies of Japan-Canada customs of 300 years' standing let me move on to a proper presentation of a very distinguished guest.

In 1934 while His Excellency was receiving his degree from the Faculty of Economics in Tokyo University one of his countrymen, Dr. Tosiho Kajiyama was graduating with me from the Faculty of Medicine at the University of Toronto. He was an intellectual ornament for he led the class throughout his undergraduate days. Our speaker has been too modest to reveal his own academic brilliance but it was sufficient that he joined the diplomatic service the following year and served in Washington, New York and Shanghai in the years prior to World War II. His background is in the Political Affairs and Research Bureau of the Ministry of Foreign Affairs. By 1951 he had become the Secretary General of the Foreign Service Training Institute of the Ministry.

For the three years from 1954 to 1957 he was appointed Counsellor of the Embassy of Japan in Ottawa and was then made Director General of the Bureau of Public Information and Cultural Affairs of the Ministry of Foreign Affairs. One of his functions in this office was that for four years he acquainted His Majesty, the Emperor of Japan, each week on international problems. This grave responsibility would only be carried out by a well-informed and articulate scholar of world events. Ten years ago his appointment was Ambassador Extraordinary and Plenipotentiary of Japan to Denmark. Imagine if you will the adjustment one would need to make to go as he did from Denmark to its antipode, New Zealand with the same responsibility two years later. I have always been delighted with the literal meaning of Antipodes--since it signifies "having the feet opposite"--or if you like, to be upside down. Our guest accomplished this manoeuvre with his usual eclat and was further promoted to Deputy Vice Minister of the Ministry of Foreign Affairs Japan in 1967 and continued in this position until June of 1969.

At this point Canada was once more to be favoured, and he and Mrs. Kondo came to Ottawa where he is Ambassador Extraordinary and Plenipotentiary of Japan to Canada. There are deep roots in Canada for his whole family, since his two daughters, now both married to Foreign Service Officers, attended Notre Dame Convent from 1954 to 1957 while they were in Ottawa. (I know he would not want me to fail to tell you that he and Mrs. Kondo have the blessing of three grandchildren!)

Your Excellency, last week our speaker was the Earl of Bessborough. He reported amongst other things that the three leading world powers in respect to balance of payments in International Trade were Japan, the United Kingdom and Canada. Canada is pleased indeed to find itself in such illustrious company. So, for two meetings in a row, we are to hear a success story from an authority.

It is clear that our speaker from the vantage point of such a background, can ably portray the picture of Japan's economic growth, its projected future and the important role and international responsibility that this economic power creates. This and Canada-Japan relationships are to be his subject under the title "Japan, today and Tomorrow."

His Excellency Shinichi Kondo, Ambassador of Japan to Canada.

His Excellency prefaced his remarks with a reference to the introduction by the chairman and having indicated his appreciation of its warmth spoke as follows. "Had I been alert to the significance of the day, April 1st, I might have prepared an April Fool address. It would have been in Japanese and delivered in Japanese, a language which is much easier for me to use." This comment was received with great good humour by his audience.

HIS EXCELLENCY:

Mr. Chairman; I am most grateful for your kind invitation to speak to such a distinguished organization as the Empire Club of Canada. I am particularly glad to have this opportunity in the city of Toronto in the heartland of Canada. Thanks to your courtesy in allowing me to select my own topic, I have chosen "Japan--Today and Tomorrow." I have done so because I feel Canada and Japan are becoming increasingly more important to each other and I would like to do whatever I can to increase the understanding of my country by Canadians.

Most Canadians are aware that trade between our two countries has been increasing year by year. Commerce has drawn us together, but there are other factors, factors of common interest, that form natural bonds between Canada and Japan. We are both Pacific nations, neighbours divided only by an ocean whose dimensions are rapidly shrinking as transportation and communications technology advances. We are both trading nations and countries who depend for their continued growth--and, indeed, continued existence upon peace, international stability and ever-increasing exchanges between nations, including progressively freer world trade.

There is another unique parallel between us. This is our almost simultaneous birth as modern states. Canada, and certainly Japan, have a history and tradition that precedes 1867-1868. But it was with Confederation in 1867 that the new nation of Canada was born and it was the Meiji Restoration of 1868 that marked the beginning of Japan's national efforts to create a modern industrial nation from the feudal framework of old Japan.

In the comparatively brief span since 1954 when the Canada-Japan Trade Agreement first came into force, the trade relationship between our two countries has grown steadily. In 1954, Canada's exports to Japan amounted to some $96 million and her imports from Japan were valued at $19 million. By last year, this trade reached a combined total of $1.3 billion, with Canada's exports to Japan amounting to some $795 million and her imports from Japan amounting to $581 million. According to the projections of the Canada-Japan Trade Council in Ottawa, the volume of this two-way trade will reach $21/a billion by 1973 and $33/4 billion by 1975. This expansion of trade will no doubt further develop closer relations between Canada and Japan to our mutual benefit. But now, with this firm economic base established, I would like to see more efforts made to provide in our relationship a new dimension, a dimension beyond that of economics. It is my sincere hope that this promising foundation may be extended and built upon by exchanges between us in the academic, cultural and political fields. There is still a great deal to be done in the area of information to ensure that we both know as much about each other as possible. I believe it is from such information that true understanding will come--and true understanding, one of the other, is in my estimation, the soundest basis for an international relationship that will be truly progressive and mutually beneficial.

Japan today, in a very real sense, is at a crossroad. She has achieved, since 1945, what some refer to as "a miracle". But, after the single-minded pursuit of economic growth that brought her such remarkable success, where is Japan heading?

The consensus among economists, political leaders and among foreign observers appears to be that Japan will continue her steady economic growth but in a radically altered context. Speaking to the National Press Club last April, Prime Minister Sato said--"If the 1960s was a decade in which problems were solved through a quantitative expansion of the economy, I think the 1970s will be a decade of competition, a competition to create better living conditions, more suitable to human life and more agreeable to human nature, by improving the quality of the economy while continuing its quantitative expansion." In a major policy speech before the Diet two months ago, the Prime Minister said further--"It is possible for us, on the premise of this enormous energy, to aim during the next ten years for greater efficiency in the utilization of land resources of the nation and to bring about a new harmony between man and nature and between man and his environment."

Writing in the American magazine Fortune in February, Nobutane Kiuchi gave it as his view "the Japanese today are becoming aware that happiness for man requires more than just material abundance." A distinguished economist and former chairman of the Foreign Exchange Control Board of the Ministry of Finance, Mr. Kiuchi is now executive director of the Institute of World Economy in Tokyo. In the Fortune article, he notes that there are times in the long story of any nation when it starts out upon a completely new and different path. "Today, after twenty-five years of post-war development, I see Japan as being on the eve of just such a period of historic change," he said.

Mr. Kiuchi in his article echoed views already advanced by many other observers in relation to the future course of Japanese social, political and economic development. Indeed, the points he makes have already been suggested in the Japanese Government's programme--"Economic and Social Development Plan to 1975"--adopted last June. The essence of this plan is the deliberate slowing of economic growth in order to bring about the internationalization of the national economy and to improve the quality of life for the Japanese people.

Japan has come very fast and very far in economic development in less than one generation. She is today the world's third economic power behind the United States and the Soviet Union. Despite some talk of slow-down and even recession, her GNP continues to expand at an annual rate at least twice as fast as that of the largest industrial nations and three to four times that of others. Some observers predict the pace will continue unabated in the foreseeable future. But the very magnitude of her growth, the incredible pace of growth, the single-minded dedication of the whole Japanese nation in ensuring this growth, have all combined now to cause Japan to pause and consider her future in the light of the past and present.

The Japanese people from the Prime Minister down are rightfully proud of what they have achieved together. But they also clearly see that in their headlong rush to economic expansion, much that is desirable has been by-passed or neglected. Investment has been concentrated too much in private industries to the neglect of social needs. Social welfare has not kept pace with growth or the aspiration and needs of the people. Inflation is draining off some of the benefits of prosperity. Some sectors of the population have been excluded from the growing affluence of the nation. Pollution of air, water and land have become an exceedingly grave national challenge. The myriad problems bred of uncontrolled urbanization have not been, as yet, adequately approached. These are national problems that are the inevitable companions of swift, dramatic, economic success. They are now known. They have been clearly identified. They will have to be tackled. The chief question facing the Japanese people today is, can they be tackled and solved without unduly retarding the national development in the economic sphere? I believe they can. Many Japanese economists believe they can. The Japanese government is reasonably confident. It has already advanced policy solutions to meet the challenges of the decade ahead. The first immediate steps are those designed to check and then reduce inflation and bring consumer prices from a rate of increase of 5 % annually to one of below 4%.

Next, under the "New National Land Development Plan", as referred to by the Prime Minister in his policy speech before the regular session of the National Diet in January, the emphasis on investment for industrial expansion will be switched to social investment--capital investment in a new national network of highways, of railways, communications, air transportation, ports and, perhaps most important, in urban rationalization. This will mean a deliberate and purposeful diffusion of Japan's urban population. This problem of uncontrolled or poorly controlled urbanization is a little-noticed but vital component of environmental pollution.

Together with this extension of the nation's physical social plant will come an expanded social welfare programme that will include renovation of the educational system, extension of medical facilities, and the promotion of a richer cultural life. One of the most important single areas of social investment will be in the area of housing. The government's plan calls for providing 9.5 million units over a five-year period.

Two factors that have led some economists to doubt whether Japan can maintain her current economic growth rate for much longer are her shortage of labour and the mushrooming pollution created by expansion of industry. During the years 1960-65, the annual increase in the productive population was approximately 11/z million. From 1965 to 1970 this figure declined to 900,000. It is expected to drop to 600,000 between 1970 and 1975. In the face of these figures and the fact that the bulk of the work force will be growing progressively older, some economists have felt Japan must slow down.

Others, however, like Herman Kahn for instance, the Director of the Hudson Institute who published a book recently entitled The Emerging Japanese Super-State, believe that this is not the case. He points out that the great increases in production in Japan come not from the size of the labour force but rather from the increased productivity of the existing force. In 1970, he notes, the labour force grew by only one percent, but production increased 18%. Mr. Kahn believes the economic drive will be sustained by a fuller utilization of the labour force and an upgrading of its skills as a whole.

This, of course, presumes advances in techniques and in new kinds of production equipment. It also means the creation of a steady flow of increasingly sophisticated items for manufacture. This is where science and technology assume such a vital role. Indeed, they might be said to underlie the hope of Japan to sustain her economic growth in the years ahead. Not only that but they are the surest hope of success in Japan's determination to master environmental pollution. Already the fight against pollution has opened up a whole new technological area and, in a world that is becoming increasingly pollution conscious, Japan hopes to make a significant international contribution by development and export of new anti-pollution techniques and devices. In the last month of 1970, the Diet met in special session to consider a number of important anti-pollution acts and regulations. The fight against pollution has been given top priority by the Government. A newly established environmental agency will help to centralize and give impetus to a national anti-pollution effort.

There was a danger that, in her headlong pursuit of economic growth, Japan and the Japanese might acquire what might be called the "economic animal" mentality. Mr. Kiuchi has written of Japan being "obsessed with a single national goal of economic growth at whatever cost". A foreign observer said, "They (Japanese) watch growth rates the way Americans watch baseball standings or Canadians watch football scores." But this danger now appears to be ebbing. There is increasing perception by the Japanese people generally that "living" means more than the mere acquisition of material things, more than mere economic growth. Man and his surroundings must be in harmony and man's soul in harmony with the body. This national re-assessment of goals and priorities has emphasized this realization and, I believe, pointed Japan along a new path.

In our post-war period, an era in which economic theory and expertise has become increasingly sophisticated and in which the economist has been accorded great status, there has grown up, in all countries, the cult of the GNP--what has amounted almost to worship of the Gross National Product. This may have been carried to extremes in Japan but the Japanese have by no means been alone in their blind faith in an ever-growing GNP as the answer to everything.

This adherence to what is essentially an economic guide post is today being called in question throughout the industrialized world. As is the case when other gods are doubted, skepticism knows no half-way point. From unquestioning belief we go to complete disillusionment. Now that the GNP cult is being discredited, there are many who tend to write it off completely. This "to hell with the GNP" attitude is negative and damaging. To claim that the GNP is responsible for all the social evils of modern society is silly. The GNP is an economic measure. It never was a measure of social or moral values. There are many today who advocate cutting back production as an answer to many of the social afflictions they trace to exaggerated belief in an expanding GNP. I believe this is the wrong approach. We must seek instead to harmonize the economic with the social and cultural elements in the national context. It becomes a matter of priorities within all the elements that make up the Gross National Product--greater emphasis on the public rather than upon the private sector. In Japan, this is what government policy is now seeking to do. Writing in the New York Times recently, Mr. Harold C. Passer, Assistant Secretary of the U.S. Department of Commerce, noted that "we should not feel guilty about having a huge GNP as long as we set proper priorities. With reduced production, we would have far fewer choices to make--and the opportunity to make choices is perhaps the most precious element in the quality of our life."

I have said that Japan is at the crossroads and appears to be setting off upon a new path in relation to her domestic national life. I must now speak briefly of Japan's new path in relation to the world beyond her national boundaries. Part of her deliberate choice of a new path forward involves the internationalization of her economy, partly as a matter of international responsibility and partly to ensure a stable position with the other nations upon which she is heavily dependent for continued national progress. This is why Japan has been exerting the utmost effort to accelerate trade and capital liberalization. Details of this effort are complex. For those of you who may be interested in detailed information about recent developments I might recommend a pamphlet, The Japanese Economy: Increasing Liberalization, recently published by the Canada-Japan Trade Council in Ottawa. Suffice to say here that by the end of this September the remaining items under import restriction in Japan will be only 28 agricultural items and 12 manufactured items--a level equivalent to West Germany and below that of France, Denmark, Norway and Austria.

Japan feels that the positive efforts toward freer world trade and the opening of her domestic economy to foreign trade and investment is her responsibility as a member of the world community. It is also a fact that her economic development depends upon liberal world trade. Japan today exports only about 10% of her production thanks to a huge domestic market. But foreign trade remains, nevertheless, indispensable to continued growth. Exports are her only means of paying for the imports of resource products and foodstuffs upon which Japanese industry and the Japanese people are so heavily dependent.

Again, Japan feels it to be her international responsibility and the path of good sense to make a greater contribution in the international development aid field, particularly in Asia. As the only industrially advanced nation in Asia, Japan has a responsibility to help her neighbours. She also has a sound reason for helping to eradicate poverty and create viable economies in the nations surrounding her as the best assurance of peace and stability in Asia. Japan today ranks fourth among the donor nations. The Governments plan to increase foreign assistance to 1 % of the GNP by 1975. Since the GNP of Japan is estimated to reach $400 billion in 1975, the total amount of Japan's foreign aid will be about $4 billion. This will probably place her in a position as a donor country second only to the United States.

There remains now one other very important and, I may say, touchy aspect of Japan's international role. The question that many people outside Japan are asking today is will Japan attempt to re-assert herself as a military power commensurate with the economic power she has already achieved? Herman Kahn asks, "Can Japan be a technological and economic giant while remaining a military pygmy?" The apparent imbalance between Japan's economic power and her military capabilities may have led to such an apprehension that Japan might someday expand her military power and eventually intervene militarily in the international scene. There are genuine-but in my opinion excessive--fears still lingering in the minds of Asians who suffered much from Japanese military aggression in the past. It is also true that such fears are being fostered and cultivated by certain communist countries for the ulterior purpose of disrupting friendly relations between Japan and other Asian countries. They even go so far as to call Japan an "accomplice with American Imperialism" and to denounce the "revival of Japanese militarism." They intentionally ignore the post-war change of the political and social system which rules out any possibility of a resurgence of militarism in Japan and the strong feeling of pacifism imbedded in the minds of the Japanese people since the end of the war. (Incidentally, Japan's defence expenditure for the fiscal year 1970-71 was $1.5 billion which represents only 0.78% of her GNP, while Canada's defence expenditure is $1.7 billion representing 2.3% of her GNP.)

Let me say quite bluntly that Japan is prepared to defend her independence and ensure her own national security. Japan will not, however, assume any military commitments abroad. She will not take over the peace-keeping tasks of the United States in Asia. Japan's Constitution forbids her to acquire an offensive military force and also prohibits her from deploying her defence forces outside of Japan. We believe that Japan's continued existence as a politically stable and economically viable entity and her positive contribution to development assistance to other Asian countries are the soundest guarantees she can offer to peace and security in the Asian-Pacific region.

Japan's economic power will not be directed toward military adventures but will be utilized for the betterment of her own peoples' lives and for the benefit of developing countries in the efforts toward economic and social development. This, I believe, is what the Japanese people aspire to and what the rest of the world expects of Japan.

In closing, Mr. Chairman, may I say that one of the most hopeful signs of closer ties between our two countries is the expressed intention of the Canadian government to make Canada truly a nation of the Pacific. It is my sincere hope that, as close partners in a world at peace, Japan and Canada may go forward together to the mutual benefit of both our peoples and in the common cause expressed in the motto of Expo '70--"Progress and Harmony for Mankind."

The gratitude of the Club was expressed by Mr. William Kam.