Ian Bremmer

Almost a year on from a devastating earthquake and tsunami that left the Fukushima nuclear catastrophe in its wake, it’s fair to say Japan has experienced a crisis unlike any other since the 1945 bombings of Hiroshima and Nagasaki that ended World War Two.

Over 13,000 people died from the quake, many from drowning. The final death toll, which will include those who were unable to receive proper medical care during the disaster, will be even higher. An estimated 100,000 children were uprooted from their homes after the quake, along with some 400,000 adults. And in the areas affected by fallout from the Fukushima nuclear disaster, cleanup work is really just beginning. With all of this coming in the teeth of the global economic crisis and Japan’s national industrial slowdown, the densely populated main island of Japan has not seen anything like this in decades.

Now Japan has to contend with the fact that its primary power supply, nuclear energy, is effectively verboten in the country. How will it rebuild its power infrastructure when the very idea of a new nuclear power plant is dismissed nearly out of hand? How will it rebuild when its costs for construction have skyrocketed thanks to the setbacks its industries have faced this year? How will it continue taking care of the thousands who have yet to return home, many of whom are living in fallout zones and may never even have the option to do so? The challenges facing the country are serious.

Yet Japan’s response to tragedy has been nothing but remarkable. The Japanese are diligently rebuilding their infrastructure. That deserves our admiration. So does the government of Prime Minister Yoshihiko Noda, who reflected in public that he wasn’t meant to be a “shiny goldfish,” but rather a mudfish or catfish — a leader who gets down in the muck but gets the job done. To that end, Noda has mobilized the country’s military and his civilian bureaucracy in service of rebuilding, and is, based on conversations I have had, winning plaudits from Japan’s business community for his work.

In fact, Japan’s business leaders are more upbeat than I have seen them in years. That says several things about their state of mind in a world that has become accustomed to global shocks (whether oil spikes, natural disasters or unforeseen geopolitical events). Because we’re going to see much more instability in the years ahead, Japan knows it’s in a good position — it’s a country that prepares for the worst. Its economy focuses on quality and attention to detail, and Japanese society takes care of its young and old and has incredible longevity, even for a developed nation. Having just gone through a huge test, there is a sense of security among Japan’s leaders as its ability to withstand shocks has been proven.

Some inside and outside the country argue that Japan, thanks to its declining population, should be open to immigration. But I believe a less homogeneous society probably wouldn’t have responded to the earthquake in the same way. This is a country whose “Occupy Tokyo” movement consisted of, when I saw it, three protesters in Roppongi Hills. It’s not a country predisposed to rioting or looting, and perhaps that’s because of its makeup.

If there’s one area where Japan must improve, it’s in the development of more ideologically coherent and stable political parties. The Liberal Democratic Party served as the dominant ruling party for nearly the entire postwar period. But its fall from power has destabilized the entire political system and led to a seemingly endless process of party splits, births and mergers. Leadership in the ruling Democratic Party of Japan (DPJ) is now fighting to remain in control of its own members and the government, and there is significant potential for political turmoil this year that could cause the party system to fragment even more.

The other big area that Japan has to work on is utilizing the full power of its potential workforce, and by that I mean its female population. When I addressed the U.S.-Japan Business Council meeting at the World Economic Forum this year, the Japanese executives in the room were uniformly male. Even though Japan is an advanced society in many ways, it has lagged behind the rest of the developed world in providing opportunities and training for women to work in its businesses and industries. Women of working age in Japan who don’t want to bow to custom or tradition have few choices for their careers. Many either work for the Japanese offices of multinational companies or leave Japan altogether. Neither of these outcomes helps Japan. The concerns about Japan’s aging population in the media may be overstated, but its failure to advance women in society is probably understated.

What’s amazing is that though the list of problems facing Japan is long, it’s not much longer than those every developed country faces these days. There is confidence inside and outside the country that it will meet these challenges and get the job done. That’s not to say that any of this is easy, that the country already has all the answers or won’t face the typical problems of corruption, waste, and tough choices in the decontamination and rebuilding process. But more important, Japan is primed to meet these challenges on a structural level. That says a lot about why so much of its postwar history has been, by all measures, a success, and why Japan has the opportunity to achieve more of the same in the 21st century.

This essay is based on a transcribed interview with Bremmer.

PHOTO: Local government officials inspect the bottom of the No. 4 reactor inside the containment vessel at the Fukushima Daini nuclear power plant in Fukushima Prefecture February 8, 2012. The Daini plant, located south of Tokyo Electric Power Co.’s tsunami-crippled Fukushima Daiichi nuclear power plant, was opened to the local media for the first time since the March 11, 2011 earthquake and tsunami. REUTERS/Kyodo

By Ian Bremmer
The opinions expressed are his own.

Though I’ve already written about the recent Munk debate in Toronto elsewhere, it’s worth taking some space to expand on my position, and why the U.S. truly is not going to experience a Japan-style lost decade of economic stagnation.

(The debate was on this resolution: Be it resolved North America faces a Japan-style era of economic stagnation. I joined Larry Summers in arguing the Con side against Paul Krugman and David Rosenberg.)

Let’s start with the political realities: Japan experienced 50 years of single-party rule. In the last 22 years, the country has had 17 prime ministers. Recently, the Democratic party there defeated the long-time incumbents, the Liberal Democrats, only to find that they had no idea how to govern the nation. They had no idea how the ministries worked, no relationships with industrialists or financial institutions, no grasp on the levers of power in society, and no strong policy apparatus. If the U.S.’s political situation looks bleak, consider that alternative.

In fact, the political situation in the U.S. may not be pretty or easy to watch, but it’s functioning. The President and Republicans continue to hammer out centrist deals on issues like tax hikes and the debt ceiling, albeit at the last possible minute after much gnashing of teeth. Ignore naysayers who say that budget supercommittee doom is coming; a deal will likely get done. And after the presidential election, things will get even better. That’s because Republicans are almost certain to retain the House and take the Senate. Whether Obama or the likely GOP candidate Romney wins the election, their dealings with a unified legislative branch will become far easier than the current divided government.

Our stable government is why foreign investors continue to flood into the dollar. Paul Krugman may have argued at the Munk debate that a strong dollar is what’s harming the U.S. economy, by making the country less internationally competitive, but I believe the confidence that foreign and sovereign investors continue to show in US debt outweighs that negative. Ask yourself what the better scenario is: a strong dollar that puts us at a slight relative disadvantage, or a pullout of investment dollars in the U.S. altogether? Investors continue to make bets in dollars, and that’s good for us. Yes, gold has risen dramatically in recent years, but “gold” is not a country. When investors need security and stability in currency, only the U.S. can still claim to provide it.

Krugman is also frustrated that the U.S. can’t move on a dime to enact policies needed to slam the country out of its current GDP growth lethargy. Looking around the world, there are only a couple countries of size that I can point to with that ability. One is Russia. Vladimir Putin has positively gutted that Moscow’s fledgling institutions to let his will be done. Their growth rate has been phenomenal, but at what cost? No one can say what will happen to Russia when Putin exits the stage, and that’s not a situation the U.S. will ever be in. Our institutions endure.

Finally, let’s look at the U.S.’s secret weapon when it comes to avoiding a lost decade: its demographics. With healthy immigration and a fertility rate that hovers around replacement levels, our outlook for population and labor force growth beats that of Japan, the EU, and even China. We’re going to have workers that are educated and capable of entrepreneurship in a way that other regions of the world will not. They will continue to follow our lead, but the innovations will come from the U.S. and North America.

Ultimately that’s the most important point of all. Nearly twenty years ago, the rise of the Internet, which was a long-gestating government and university networking project, began to reshape the world. Today, we don’t know what the next Internet-like innovation is going to be. It could be 3-D printing, or laser fusion, or nanotechnology, or something none of us has ever heard of. But we do know that it’s almost certainly going to come from the United States. If that was not the case, 50 percent of Chinese millionaires wouldn’t want to actually live in the U.S. rather than China.

Our biggest economic competitor over the coming decades will be China. But in China, 1.3 billion people are in the process of industrializing. We’ve seen the industrial revolution in England and in the U.S. It’s necessary, but not pretty or simple. Check the air quality in Beijing for proof of that. The decision among the world’s elites as to where they want to locate themselves will always be a relative question. And relative to the rest of the world, the United States continues to stand alone.

This essay is based on a transcribed interview with Bremmer.

Photo: Japan’s Prime Minister Yoshihiko Noda (L) talks with China’s President Hu Jintao (2nd R) at the start of their meeting on the sidelines of the APEC summit in Honolulu November 12, 2011. REUTERS/Kyodo