Japan operated for decades with a social covenant similar to those of many other Asian countries – accepting wealth in exchange for tolerating political iniquities. As a result, Japan, one of the world’s most honest societies, had one of the most corrupt political systems.
That social contract became frayed when Japan’s economic “bubble” came under pressure in 1989 and eventually collapsed, leading to a long slowdown from which Japan has yet to emerge. Japanese voters retaliated in 1993 by evicting the Liberal Democratic Party from power for the first time in 38 years.
The opposition ruled briefly and ineffectually, and last year the Liberal Democrats were effectively voted back to power, not so much in a moral victory as by default. Voters, stymied by the lack of attractive alternatives, are retreating from the electoral system in disgust, sending voting participation rates to their lowest levels ever, and politicians are even more hobbled than before.
“The system has become more fragmented, and no one is ready to take charge of Japan,” said Takeshi Sasaki, a political scientist at Tokyo University. Another huge question mark concerns Indonesia, which like Thailand and South Korea has already turned to the International Monetary Fund for a bailout.
Indonesia has a population of 200-million and no clear successor to President Suharto (76). Although Suharto is still widely expected to win a seventh five-year presidential term next year, the economic crisis may weaken his authority and limit his ability to install whoever he wants as his successor.
Then there is the giant of the region, a domino that, while it is not wobbling now and perhaps never will, could produce a crash whose political, social and economic consequences would shake the world.
“The real question is China,” said Professor Michel Oksenberg, an Asia expert at Stanford University. “If China suffers a downturn, at what point will the substantial number of urban migrants feel pressure, and how will they react?”
China in some ways is vulnerable because the communist party has switched the basis of its legitimacy from the Maoist revolution of 1949 to the remarkable economic successes of the last 15 years.
The challenge for the party is that this economic triumph has also nurtured dangerously high economic expectations and the emergence of a class of tens of millions of migrant labourers who increasingly resemble something akin to the volatile proletariat that Marx warned might rise up against the owners of capital.
Oksenberg noted that there have been a growing number of reports of sporadic worker protests in recent years and added, “I do not think of the Chinese working class as quiescent, and I think that’s what makes the regime nervous.”