Wednesday, August 22, 2012

USD 57 Billion Supplementary Tranche Will Be Extended…If South Korea Wants

The following grows out of my end of a conversation that I had with Mark Manyin after his Hitachi-CFR Fellow talk today. (It was a useful talk, and the gist of it should show up on the CFR website and elsewhere.) A bit of advocacy crept in, but I like to think that it’s mostly analytical, descriptive and even predictive, not prescriptive.

There’s some media chatter around the possibility of Japan refusing to extend the one-year expansion of the Japan-South Korea swap arrangement from USD 13 billion to USD 70 billion in retaliation for President Lee Myung-bak making landfall at Takeshima and his subsequent statement about the Japanese Emperor having to go visit graves and apologize from the heart if he wants to visit South Korea.

Don’t even think about it. It’s bigger than Japan and South Korea. The Ching Mai Initiative was essentially about China and Japan bringing their foreign currency reserves to the service of the rest of the East Asian states.* Try to imagine what kind of message the Japanese Government would be sending to the rest of the world, the Southeast Asian members of the Chiang Mai initiative in particular, if it decided to use it for unrelated political purposes. Try to imagine how Beijing could use that for propaganda purposes against Japan, or, worse, dabble in the dark arts themselves.

Not that it’s sure to happen. The South Korean Government might decide to discontinue for political show. I can see the logic; its political leaders might not want to be seen by their domestic constituency in a supplicating position when the bilateral political relationship is at a historical low. I hope they do; the global community needs the message that Japan and South Korea can put the interests of the global financial system above the political demands of a dispute over the Liancourt Rocks. Japan and South Korea also benefit by establishing a baseline where administrative needs will be met even as political exigencies evoke verbal fuselage. If the trilateral FTA talks can go on, so can the USD 57 extension. And everyone will be enriched, at no immediate cost to any of the players.
* South Korea also has a meaningful role as a supplier, but its potential is inherently limited. It has only one-third as many residents as Japan does and has an eerily similar demographics (its surfeit of males excepted) and has one fairly recent currency meltdown in its records.
ADD: Whoa! I don’t think that they’re going to ask for an extension IYKWIM.

8 comments:

Jan Moren said...

Lots of big words over a few small islands. Here's an idea for Takeshima and Senkaku both:

Keep the matter creatively unsettled by donating them, or giving over administration of them to a disinterested third party. Somebody that is absolutely no threat and has no interests in the area. Sweden, say, just to pick a name.

They'd pledge not to exploit the resources, to keep the islands clean and pristine and in general act like the very image of an inoffensive absentee owner. To cement the claim, expat Swedes from both strifing nations would take turns living on the rocks; perhaps doing running documentation of the wildlife and so on but really just being there as claimants to avoid any more boat excursions from frisky young males in the respective countries.

This suggestion has of course nothing to do with the fact that three months or six months as a lighthouse keeper or similar is a romantic notion with intense appeal on my part. None whatsoever.

Jun Okumura said...

Jan:

You suggestion belongs to what I call the pigs-will-fly, my-aunt-the-tea-cart solution. Remember, countries have gone to war over a soccer game.

Mark said...

As I cannot claim to have a decent understanding of the currency swap issue, I cannot take a definite position (I AM NOT AN ECONOMIST!!! Hey, wait a minute, neither are you, as you often say. So how come you're coming out strongly on this issue?). But I will say that I am leaning in favor of the currency swap. And I am leaning in favor of China and Japan using their own currencies for trade.

Mark said...

And in reference to what you put on the SSJ Forum, for me, I do not speak in code. When I say that everyone must immediately uphold my three yeses, that means that I really believe that every single person on the face of this planet must adhere to the universal principles of transparency, accountability, and human rights.

Mark said...

I get the feeling that I'm suppose to be writing things about the comfort women issue. I have no problem with this. Except finding the truth about the issue has been a chore. I would prefer some help. Actually, I would prefer to get a lot of help. The only thing I got today is...

http://www.sdh-fact.com/CL02_1/80_S4.pdf

If you look at the bottom of page 16, you will see that Chinese prostitutes believed that they could transfer the venereal disease to others, meaning that if they contracted a venereal disease, and they gave it to someone else, they would no longer have the disease. And so some of these prostitutes tried to rupture the condoms used by their customers. Of course, this is a preposterous claim. But someone must have told them that. Presumably, either the Nationalists, Communists, or the West told those prostitutes this so they could have them infect Japanese soldiers. Perhaps the Japanese government realized what was going on and that is why they set up comfort stations to begin with. They often said that they set up the stations to prevent the spread of venereal disease. Interestingly, at the top of page 16, it says that according to a March 11, 1938 report, all the public comfort stations were closed. Only the private ones continued to operate. How can we explain this? I turn to you, Okumura.

Mark said...
This comment has been removed by the author.
Mark said...

Uh, let me try to post that again, this time without the grammatical errors...

Holy crap! That was fast. I just did a search for the March 11, 1938 report and...I didn't find the report. But I may have found some thing else:

http://koreanhistorytranslations.blogspot.com/2011/09/1938-mar-4-notice-concerning-comfort.html

Apparently, the people who ran comfort stations claimed they were working under the authority of the Japanese government and these people did kidnap women and force them to become prostitutes. They apparently did this to ruin the reputation of Japan. So the question is, who were these individuals who tried to ruin the reputation of Japan? Given how strenuously America has tried to cover up this issue, given how Abe used this issue against America to force America to accept the free trade agreement with Thailand, I'm guessing that this whole thing was an American plot to ruin the reputation of Japan. Is there anything else I am missing? Once again, I turn to you, Okumura.

Mark said...

P.S. some information identifying the people who kidnapped those women would be helpful. Names! I need names!