Penny-Wise, Pound-Foolish

February 22, 2000

 

The Japanese government is reportedly planning to negotiate a cut in so-called “omoiyari yosan” (sympathy budget), or special host-nation support, for the U.S. forces stationed in Japan. The word “omoiyari” is left out these days, however, on the ground that it can create misunderstandings. The budget dates to 1978 when, in an attempt to show the Japanese government’s sympathy for the financial impact that the yen’s rise was having on the U.S. military budget, Tokyo signed a special agreement to pay the wages of Japanese workers at the U.S. bases as well as the military’s utility bills.

This contribution has been praised on many occasions during the past two decades, and has played a very large role in maintaining our bilateral alliance. In the past year alone, U.S. defense and security reports, as well as U.S. defense officials, have praised Japan’s special host-nation support. -U.S. Defense Secretary William Cohen, in a meeting with Defense Agency Director General Tsutomu Kawara Jan. 5, said that in his congressional testimony he makes a point of citing Japan’s outstanding contribution as a model for host-nation support to U.S. forces stationed overseas.

Deputy Defense Secretary John J. Hamre told Foreign Minister Yohei Kono Nov. 26 laast year that Japanese goverment support to the U.S. forces in Japan underpins the close ties between the two Pacific allies and that the U.S. Congress appreciated that support as solid proof of the alliance.

The Report on Allied Contributions to the Common Defense (March 1999) said “Cost sharing in support of stationed U.S. forces remains Japan’s most significant responsibility-sharing contribution.”

A National Security Strategy for a New Century (White House, December 1999) noted that “Japan’s generous host-nation support for the U.S. overseas presence also serves as a critical strategic contribution to the alliance and to regional security.”

The Japan-U.S. relationship is now on a stable course thanks to the meeting in 1996 between then Prime Minister Ryutaro Hashimoto and U.S. President Bill Clinton and the enactment in 1999 of the legislation for the new defense cooperation guidelines.

It is also true, however, that the alliance found itself in crisis during the decade following the end of the Cold War.

Immediately after the collapse of the Soviet Union, there was serious talk among informed Americans that the United States now faced a new threat the economic threat from Japan. There was also talk, not only in the U.S. but here in Japan as well, of the need to forge trilateral cooperation among the U.S., Japan and China or quadrilateral cooperation that included Russia, to replace the bilateral U.S.-Japan alliance. China still calls for this wider security framework, saying the Cold-War alliance is obsolete.

In that kind of charged atmosphere, Japan-U.S. economic negotiations held earlier in the decade took the worst turn since the end of World War II. The U.S. position was that it was no use to make general trade agreements with Japan because the Ministry of International Trade and Industry would pull strings behind the scenes to prevent private industry from buying U.S. products. So the U.S. government tried to impose numerical targets designed to secure specific market shares for U.S. goods so that the Japanese government would exercise its influence to achieve the target. Of course, that ran counter not only to free-enterprise principles, but also to the realities of Japan’s administrative and economic systems. U.S.-Japan relations declined rapidly. In the end, the yen appreciated sharply against the dollar, and the pace accelerated every time a U.S. trade negotiator spoke unsympathetically of the Japanese plight. The strong yen, of course, dealt a heavy blow to Japan’s export industries.

The Pentagon saved Japan from the crisis. The so-called Nye Report stated that “We must not allow trade friction to undermine our security alliance.” U.S. trade negotiators reportedly deplored that statement on the grounds that the U.S. would lose its most potent leverage to influence Japan. In a similar vein, the Economist magazine said that Japan, feeling assured about the alliance, would not back off in trade negotiations with the U.S.

Thus Japan was saved through mutual trust between the two nations’ security authorities, a relationship built in the last days of the Cold War the “hidden success story” as Jim Auer put it, particularly buttressed by Japan’s special HNS budget as a visible symbol of cooperation.

U.S. public opinion and the Congress reigned supreme in the world during the 20th century. Indeed, dealing with the U.S. Congress was, and still is, a matter of life and death to nations around the world. Granted, Japan has less talent to deal with the U.S. Congress than English-speaking nations, such as Britain and Canada. It is no exaggeration to say, however, that this special budget is the only and the biggest “brand name” Japan holds at present. Japan should not stint on this spending, in much the same sense that private-sector companies should not cut back on expenses essential to maintain their brand names.

The “omoiyari” budget was conceived in the realization that Japan, being unable to cooperate with the U.S. through the use of force, should cooperate financially as much as possible. I do not think that this money-centered approach can be continued indefinitely because the alliance could be endangered if Japan watched from the sidelines when U.S. soldiers shed their blood in a military crisis in a surrounding area. In the present circumstances, however, money is the only thing Japan can provide in place of a direct military contribution. We should realize the grave implications of stinting even on such financial support.

The point is that the stationing of U.S. forces in Japan is essential not only to the security of this nation and to peace in Asia, but also to the global strategy of the free and democratic nations. Therefore, Japan should maintain a firm political stance that leaves no doubt about the government’s policy of providing unstinting support to help maintain the U.S. military presence. Exactly the same way of thinking should apply to the bases problem in Okinawa, for instance.

A Japanese business leader well acquainted with the U.S., reacting to the talk of a possible cut in the sympathy budget, labeled the move “stingy.” It is a sensible reaction from a business manager who knows how to put money where it is needed.

True, electricity, gas and water may be used in a wasteful manner if they are free, so a spending cap on these services may make sense. But asking the U.S. to pay more because its economy is booming whereas Japan is stuck in a slump is another matter; it raises questions about Japan’s perception of the very significance of the alliance. If this special cost-sharing agreement is to be continued for the foreseeable future, as it should be, then the Japanese government should negotiate in ways that do not hurt the value and benefits of this key brand name with the U.S. Congress.