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Nikkei, Japan

America Must Support Global Stability

Translated By Sylvie Martlew

8 November 2012

Edited by Natalie Clager

Japan - Nikkei - Original Article (Japanese)

U.S. President Obama has been re-elected. His second term is beginning on Jan. 1, 2013. He is aware of the gigantic responsibility that he holds as the leader of a global super power, and must do his best to ensure the political and economical stability of the world.

This year, Russia and France also held presidential elections. China and North Korea have seen the rise of new leaders. But one country is not experiencing a time of change. Japan wants to join hands with America and serve the world together with it.

Avoiding the fiscal cliff

Republican Party candidate Mitt Romney increased the pressure during the final stages of the presidential election, standing in fierce competition with Democrat Obama. “Big government” or “small government”? The political climate of the U.S. is yet again one of distinct bipolarity.

The French elections were also marked by the preservation and spread of liberalism. During his victory speech in Chicago, Obama reached out to the people, stating that “we are an American family”, but it is not an easy task to manage the heavily divided public.

The governing Democratic Party has won a majority in the Senate, while the Republicans control the House of Representatives. This situation has not changed. It is hard to imagine a carefree future for Obama, carrier of numerous heavy burdens.

The major priority for the government is, of course, the revitalization of the American economy. Even four years after the Lehman Shock, economic recovery is still sluggish. With the present state of the parliament, the government cannot implement valid countermeasures, but neither can it rely on the FRB’s monetary easing.

The budget deficit in the fiscal year 2012 (October 2011 – September 2012) has exceeded one trillion dollars for the third year in a row. As a result, the situation is already intolerable. There is no hope for true recovery unless economic growth can be reconciled with fiscal reform.

First of all, the “fiscal cliff” needs to be avoided. As the end of large-scale tax cuts overlaps with budget cuts, it is likely that financial conditions will tighten sharply. This is not just a problem for the U.S., but poses a threat to the entire world economy.

A growth strategy is urgently needed. Obama has promised to create a million new jobs in the manufacturing industry, and announced plans to cut the federal government corporation tax rate from 35 percent to 25-28 percent.

The development and manufacture of new types of natural gas (referred to as the “Shell Gas Revolution”) and similar efforts are positive. It remains to be seen whether they can continue to vitalize the American industry and ensure employment and incomes. This is the main hope of the middle classes, who have enabled Obama’s re-election.

In the U.S., the wealthiest one percent earn 20 percent of the income of the entire nation. On the other hand, there are close to 50 million citizens who do not have medical insurance. The acceleration of growth is unlikely to be the only topic: it will also be necessary to fix the income divide and reform health insurance policies.

Of course, we cannot help but point out the route of mid-term financial reform. Obama has announced plans to cut the deficit by 4 trillion dollars, but the clash of opinion between the two parties will stand in the way of this. They need to cooperate and devise a plan to strike a balance between tax increases and annual budget cuts.

The increasing feeling that the world economy is slowing down even further will provide a good basis for protectionism, currency devaluation and similar moves. America and Japan must resist the pressure to face inward, and instead begin to cooperate in order to reap the benefits of globalization and the market economy.

The alliance between America and Japan must be strengthened

The economy is not the sole concern for Japan. Chinese maritime advances and the establishment of the Kim Jong-un government, which introduces further uncertainty to the situation in North Korea, constitute a great risk for the security of Japan. It goes without saying that we need the protective shield of Japanese-American cooperation to deal with these issues.

It is expected that Obama will maintain his new diplomatic policies and continue to place great importance on Asia in his second term. But economic difficulties will certainly force him to drastically cut the defense budget. Japan had better stop relying exclusively on the deterrent capacities of U.S. forces stationed here.

The U.S. Army and Japanese Self-Defense Forces (JSDF) must be in mutual support of each other, rather than showing signs of a breach. It is essential to put aside the misunderstandings between America and Japan that resulted from the relocation of Futenma Air Base in Okinawa. A lot of work is necessary to return to a stable relationship.

What can America and Japan do to promote global unity? A common goal would also contribute to a stronger alliance. There is a lot that Japan can do: from furthering peace-keeping operations of the JSDF in regions of conflict to joining the global effort for the prevention of cyber attacks from unknown origins.

Considering the tendencies China has been displaying, a redefinition of the U.S.-Japan security treaty will probably become part of the political agenda. Japanese participation in the Trans-Pacific Strategic Economic Partnership (TPP) would, besides economic advantages, also have the additional security benefit of demonstrating America’s presence in Asia.



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