A crisis presents a good opportunity to do all those many things that you should have done a long time ago.  Indeed, following Japan's triple crisis of 11 March 2011, Japanese government and society could have seized the moment to get the country out of its two decade-long funk.

One year down the track, what is the scorecard?  Despite some promising signs, a panel of experts at the Lowy Institute remains very cautious about the future of the land of the rising sun.

The whole world was positively amazed by the initial reaction of the Japan people who remained stoic, disciplined, perserverant and calm.  Being there at the time, I personally witnessed Japanese citizens lining up calmly for hours for taxis, as the metro had stopped functioning.

Among the many anecdotes is that of a total of $80 million being found in safes and elsewhere, and being handed over to authorities, without ever being looted.  In countries like the US, China or Australia, there would have been chaos, as people would have trampled over each other trying to save themselves.  

The social disaster caused by the triple crisis is however continuing, and the ever patient Japanese people may one day lose their patience.  

Corporate Japan also responded with amazing flexibility, belying its stodgy and rigid reputation.  In response to damaged production facilities, disrupted supply chains, and power shortages, production was shifted elsewhere in Japan and Asia, factories were operating on weekends, and there was ultimately little negative effect on output.

It is estimated that the economy may even grow by 1 1/2 per cent this coming year, despite economic woes in Europe and Japan.

The government of Japan, already in serious disrepute, damaged its reputation even more through its lack of transparency, bumbling reactions, and infighting.  Revelations of the close cosy ties between nuclear regulators and industry confirmed the worst impressions of Japan's iron triangle.

While the government may have reacted sluggishly, the traditionally repressed NGOs and youth responded quickly.  As Daniel Aldrich has argued in a recent article, Japanese civil society is now "rising". 

In particular, the disaster at the Fukushima Daiichi Nuclear Power Station has energized segments of Japanese civil society to be more proactive and vocal about everything from personal safety to nuclear power.  These changes in civil society can be seen in four main areas: mass protests, local and national referenda and petitions, renaissance of citizen science, and public uproar instead of rituals of assent.  Through mass protests, petitions, citizen science, and direct confrontation with the state, Japanese citizens are pushing for a new, more vocal role in policy making.

Looking ahead, Japan still has many well documented problems which have not gone away.

In contrast to the highly competitive, export-oriented manufacturing sector, Japan's service and agricultural sectors suffer from low productivity.  And as manufacturing Japan continues to offshore production to elsewhere in Asia in response to the high yen, a competitive services sector (75 per cent of the economy) is necessary in areas from finance to retail to take the lead in the economy.  But there is regrettably no sign of a government appetite to launch the necessary regulatory reforms, especially to open up barriers to entry.

Political paralysis and infighting continue at the national level, and the annual revolving door of prime ministers seems to set to continue.  At the regional level, grassroots democratic activism is on the rise, especially in Osaka and Nagoya where independent politicians are in power.  The best hope for political modernization is through regional movements.  But whether this translates into real change in Tokyo, which has always been run by bureaucrats, is another question.

Regarding nuclear energy, the normally passive and submissive Japanese are standing up to their government in opposition to nuclear power.  At this stage, 52 of the nation's 54 nuclear power stations (which together supply one-third of the nation's electricity) are shut down, and there is massive public pressure to stop nuclear power all together.  This would a costly and time-consuming switch, and the summer of 2012 looks like being a sticky one, with power shortages.

Japan's population, which is already sitting on public debt of 200 per cent of GDP, is right now in the middle of the costly ageing process which drives up health and pension costs.  The decades long option of raising the nation's consumption tax now has a head of steam (and may cost the head of the prime minister), but many rightly question if the timing is right, with the economy still wobbling forward.

Interesting proposals for developing renewable energy have been put forward by Mr Son, CEO of Softbank, who is of Korean origin.  But he is an outsider.  He is evidence that a more diverse society, with more migration, could offer great opportunities for Japan to reinvent itself. But a more open migration policy just won't happen in a nation which is lacking self confidence, and becoming more inward-looking -- and which is convinced that the experience of Europe is proof that migration is a bad policy.

All things considered Japan will likely continue to muddle through as the strength of its manufacturing export sector and its hard-working and talented work force battle against the headwinds of weak governance at the national level.  Japanese citizens know that the country must change, and can even be seen debating the merits of the Trans Pacific Partnership in the metro.  But can the government break the vested interests holding back reform?

As the Chinese economy pulls further ahead, Japan will become more and more an economic dependency of China which needs its technology and high quality products.  China's elite is also very appreciative of Japan's product security and street safety, and can be already be seen emptying its pockets of yen in large numbers in the streets of Tokyo, on the ski slopes of Hokkaido and also buying real estate.

Japan should aim with confidence to become the Switzerland of Asia.  And through its lessons from dealing with an ageing population, and natural and nuclear disasters, it has much to teach the rest of the world.  But hierarchy and seniority, the fundamental basis of Japanese society, are not compatible with societal renaissance -- although if civil society keeps on pushing, things may indeed change.

One very interesting point concerns how the triple crisis has affected the happiness of Japan's much-maligned young people.  Professor Yukiko Uchida of Kyoto University has explored this question by conducting surveys (both before and after the earthquake) of Japanese in their 20s and 30s from all non-crisis-afflicted prefectures. 

The results suggest that about half of the Japanese youth have changed their life values after the earthquake even though they were not in the afflicted area, especially in terms of valuing social connectedness and ordinary life. In addition, people who were thinking about the earthquake when they completed the second survey were happier after the earthquake, showing that reflecting on the earthquake had prompted them to reevaluate their definition of global happiness. They also experienced temporary negative emotional reactions more frequently after the earthquake.

Could the triple crisis have been a much needed wake-up call for Japanese youth?  Only time will tell ...

Reference:

After Fukushima: The Outlook for Japan.  Lowy Lecture Series Panel Discussion.  Manuel Panagiotopoulos, Professor Jenny Corbett, Greg Earl, Michael Fullilove.  7 March 2012.

http://www.lowyinstitute.org/Upcoming-Events.asp

Aldrich, Daniel P., "Civil Society Rising".  Bulletin of the Atomic Scientists.  9 March 2012

http://www.thebulletin.org/web-edition/features/civil-society-rising

Yukiko Uchida, Professor, Kyoto University, Kokoro Research Center.  Happiness in Japan before and after the Great East
Japan Earthquake

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