The Man Who Would Be Warlord

Meet Japan's most controversial, most notorious politician.

TOKYO — These days, the name Shintaro Ishihara tends to provoke laughter in Japan. As Tokyo's controversial but popular governor from 1999 to 2012, he enraged the Chinese by attempting to purchase the Senkaku Islands, a small group of windswept rocks in the East China Sea, that Beijing claims and calls the Diaoyu. He is now the co-head of the small and marginalized Restoration Party, an 80-year-old who will never again have a shot at becoming Prime Minister. An influential Japanese journalist smiled when I mentioned Ishihara, and said that last year's affair "was sad."

And yet, the mess he made continues to roil the region. Last September, the Japanese government, under Prime Minister Yoshihiko Noda, overruled Ishihara's attempt to purchase the Senkakus and instead nationalized them. China erupted in massive protests, and since then, tensions, have remained worryingly high, as both sides engage in behavior the other finds provocative. China flies military aircraft over Japanese territory, and Japan responds by scrambling fighter jets: in late October, this pattern repeated itself for three consecutive days. Current Prime Minister Shinzo Abe told the Wall Street Journal in an interview published Oct. 26 that if China "changes the status quo by force," then "it won't be able to emerge peacefully."

And on Oct. 31, China's Defense ministry accused the Japanese army of disrupting a Chinese live ammunition military drill. The high level of mistrust, sowed in part by Ishihara, means that a mistake could lead to a skirmish, or even a war.

In a half-dozen off-the-record meetings with senior Japanese government officials and policymakers in early September, the general view towards Ishihara was embarrassment expressed by an awkward laugh, followed by a small intake of breath, a shifting of the hands, an averting of the eyes. Ishihara has brought democratic, committedly pacifist Japan closer to war than at any point since 1945. "Ishihara has no power anymore," snorted one government official affiliated with Japan's ruling Liberal Democratic Party, to which Ishihara formerly belonged, following up his comment with a wistful and self-conscious chuckle.

There is never anything awkward however, about the way Ishihara laughs -- a natural and comforting extension of his soft smile. Tall, imposing, and well-spoken, 23 years ago, an interviewer from Playboy called him "strikingly handsome," and noted that he was partial to Savile Row suits and Armani ties. Now 80 and a member of the lower house of Japan's Diet, or parliament, Ishihara is still attractive, in a way unique to certain men who have never admitted they're wrong.

It is hard to square his charismatic, nearly regal bearing with his outrageous views. "They will not stop at a few islands. After China hijacks the Senkakus, I am afraid of the eventuality where Japan becomes the second Tibet," he says, comparing the sparsely populated, impoverished region that fell to China in 1959 with the world's third-largest economy.

It is Sept. 4, and I am interviewing Ishihara with three other American journalists, in a conversation arranged by the non-profit Sasakawa Peace Foundation, which brought us to Japan. One of the journalists asks if he thinks that China will invade. "Yes, I think there is that possibility. First it would be Okinawa," he says. I refrain from mentioning that this island group in Southern Japan is where the United States maintains the bulk of the 38,000 military personnel it has stationed in the country. "I wonder how much risk China is willing to take to invade Japan," says Ishihara. "I am quite fearful of this."

If you're looking for an American parallel to Ishihara, think of him as an extreme version of Pat Buchanan, the Nixon speechwriter and right-wing pundit who has labeled white Americans "an endangered species." And like evangelical preacher Pat Robertson, who blamed Hurricane Katrina on U.S. abortion policy, Ishihara said the March 2011 Japanese tsunami that washed away thousands of people was "divine punishment" for Japanese selfishness. Indeed, Ishihara has a knack for incendiary statements: No U.S. politician could have weathered the political storm that would have rained down after making such comments as people who are going to commit suicide should just "get it over with" and "it is a waste and a sin that women who have lost their reproductive capabilities are alive." Atsushi Kobayashi, a 34-year-old business owner and Tokyo resident, says Ishihara "gets things done, and sometime he has good results, but he says a lot of problematic statements. I don't have a good image of Ishihara as a person."

And yet Ishihara had a long and fruitful political career. He ruled Japan's most important city -- its political and economic capital -- for longer than Michael Bloomberg's soon to be ending 12-year tenure. Tobias Harris, a Japanese political researcher, thinks Ishihara survived for so long because of his competence -- he is an effective fundraiser and good judge of character, but also because of the prominence he attained for being in the public eye for nearly six decades. "There's a certain artfulness in how he acts," he said. Noriko Hama, a professor of economics at Kyoto's Doshisha University, told the Hong Kong newspaper South China Morning Post that Ishihara "appeals to the kind of people who don't want to worry about their lives, who like to be told what they should be thinking and why." He's popular, she said, because he has the ability to "hypnotize people into intellectual laziness."

This is bizarre because Ishihara, like his successor Naoki Inose, is a popular and well-regarded author. Born in 1932 to the manager of a shipping company, at the age of 24, Ishihara won the Akutagawa Prize, one of Japan's most prestigious literary awards, for his novel Season of the Sun. That same year, three of his books were turned into films. Ishihara, who covered the Vietnam War for a Japanese newspaper in 1967, a year before entering politics, kept writing fiction and non-fiction throughout his career. His best-known book is probably The Japan That Can Say No, co-written with the then chairman of Sony Corporation Akio Morita, which argues that Japan should be more assertive in its relationship with the United States. Ishihara's brother Yujiro became a famous actor, while Ishihara himself made a few films, then stopped. "If I had remained a movie director, I can assure you that I would have at least become a better one than Akira Kurosawa," he told Playboy. Instead, he became a politician, winning a series of parliamentary elections, before being elected governor of Tokyo in 1999.

Ishihara, who denigrated the French language, claimed to "hate" Mickey Mouse, and stated that Tokyo's World War II campaigns saved Asia from colonization by white people, reserves a special brand of opprobrium for the Chinese. He has denied the Rape of Nanking, and sometimes refers to the Chinese with a derogatory name used during World War II. He said he visited Beijing for the 2008 Olympics, but didn't meet with any Chinese there, because "I didn't think there was anything I could learn." He said he doesn't want to go back to China because he feared "he'd get poisoned."

Ishihara understands his Japanese audience, but simply refuses to, or "cannot fathom," how non-Japanese will receive his statements, says a Western diplomat familiar with the matter, who asked to speak anonymously because of the sensitivity of the issue. Atsushi put it more politely. "Most Japanese politicians and governors say things without causing a commotion, but Ishihara is very direct," he said.

No one in the diplomatic community even bothered "to try to justify" Ishihara's behavior in trying to purchase the Senkakus, said the Western diplomat. "It was so obvious to everyone" that what he did showed a blatant disregard for international norms.

Everything felt very normal, however, in Ishihara's quiet meeting room in his office in the Diet. Two of my last questions to Ishihara were, in retrospect, softballs. Does he regret any of his controversial statements? Would he like to set the record straight, looking back on the end of a long career? "No," he said, baring his world-eating smile. "So I am the most notorious Japanese politician in the United States. You know that book I published -- Japan Can Say No? I want to continue saying no."

Angela Kubo contributed reporting from Tokyo.


Fiesta Del Few

Spain’s economy might technically be growing again, but most people are still feeling the squeeze.

MADRID — They say the party is back on in Spain. Money "is pouring in from everywhere," according to Banco Santander Chairman Emilio Botín, and the country's benchmark stock index, the Ibex 35, is up around 20 percent since January. Last week, the Bank of Spain confirmed that the economy is finally growing again after a nine-quarter recession. Even Bill Gates has gotten in on the action, taking a 6 percent stake in Fomento de Construcciones y Contratas, one of Spain's biggest construction companies. But if the party is back, it's a decidedly elite gathering.

Only big business and those who enjoy access to international finance appear to be on the guest list. As for the vast majority of Spaniards? Well, their best hope is to find work popping champagne corks for those who made the cut. 

The collapse of Spain's banking system -- and the sheer quantity of previously unwanted real estate and low-priced office space -- means the bargain hunters are moving in; according to El País newspaper, international investors have bought stock and property worth nearly 14 billion euros so far this year after a desperate 2012 that saw virtually no sales.

And now, after the longest recession in living memory, the economy is growing again -- just barely -- with the Bank of Spain reporting 0.1 percent quarterly rise in gross domestic product (GDP) for the July-September period. This year will still see Spanish output shrink by over 1 percent, while the government's forecast for next year stands at an anemic 0.7 percent growth. That's hardly likely to make a dent in the country's crippling unemployment figures of 26 percent, or just under six million.

After a half-decade of crisis in the form of a double-dip recession, Spain's recovery period is set to be painfully gradual. What's worse for those who are out of work -- and for the growing proportion of Spaniards whose labor conditions are precarious -- is that the ongoing human crisis may actually form the basis of the Popular Party (PP) government's recovery plan: a low-wage, low-tax, and ultra-flexible discount sale where investors can place their bets.

Not that it appears to be making a dramatic impact. Apart from the headline figure of the first quarter-on-quarter rate of growth for two-and-a-half years, the Bank of Spain's report on the economy in the third quarter made for somber reading. In addition to the fact that the economy had shrunk by 1.2 percent over the previous year, the figures showed that Spain's domestic market is still contracting, making a negative contribution to a meager output of 0.3 percentage points on a quarterly basis. The head-above-water overall growth rate is thanks to net trade -- exports minus imports -- which boosted GDP by 0.4 points. But even this is bad news. Imports are down because so many Spanish households are in scrimp-and-save mode, while exporters are becoming more competitive thanks to lower wages, which are falling in real terms.

"No one is laying out on anything, unless they really have to," said one unemployed mother in Madrid in late October. Third-quarter unemployment figures showed a slight drop, but the number of indefinite contracts fell nationwide by 146,300, offset by a slightly more dramatic rise in temporary jobs.

"There has been a major adjustment, a big internal devaluation with negative consequences for the people," says Miguel Jiménez, the financial editor at El País. Of course, this has been a selling point for the right-of center administration. According to Finance Minister Cristóbal Montoro, it has managed an internal devaluation of the magnitude of 30 percent: "What's more, it is a devaluation without inflation. It is extraordinary. This allows Spain to recover credibility," the minister crowed in a recent El País interview.

News this week, however, brings the specter of deflation into view, with a National Statistics Institute flash estimate of -0.1 percent on price variations for the year up to October.

So how were the seeds of this internal devaluation sown? When Prime Minister Mariano Rajoy's government introduced its 2012 labor reform, the biggest howls were directed at its plan to make it easier for companies to terminate employees. Now, it is indeed easier and cheaper to downsize, but what is turning out to be even more significant is that employers can now unilaterally cut salaries citing "objective causes." Falling sales, it turns out, are reason enough.

"In part, this was the plan: to bring costs down," says Jiménez, pointing out that the effects of such a sly economic strategy are naturally limited. "With the unemployment levels we have, internal demand is in the doldrums. There is not going to be real growth for a good while."

And yet, optimism prevails -- at least in the world of high finance. "We are optimistic on the euro periphery as a whole and Spain in particular," Berenberg Bank economist Robert Wood recently told Bloomberg Businessweek. "The country has made big structural changes," he added. "It's been engaged in a lot of deficit reduction, business sentiment is improving and unemployment is probably close to a peak." Berenberg Bank forecasts that Spanish growth could be as high as 1.4 percent in 2014.

The Popular Party government in Madrid is somewhat less sanguine, predicting 0.7 percent growth next year, while the International Monetary Fund is still insisting on a nearly flat 0.2 percent.

So whose portrait of the Spanish recovery bears a closer resemblance to reality? In a way, both capture elements of the truth: Investment is pouring into the country, but it's not making a lot of difference for the vast majority of Spanish citizens.

According to financial analyst Juan Ignacio Crespo, the continued inflow of foreign capital into a more competitive Spanish labor market represents the way forward. Crespo acknowledges that there's been a dramatic transformation since Spain was forced to accept an EU-sponsored bailout for its troubled banking sector in June 2012 (for starters, the risk premium -- the added profit investors demand for holding Spanish sovereign debt over the rate on the German bund -- is now stable at around 230 basis points compared to the unsustainable levels of 600-plus in the summer of 2012.) But he argues that more investment is needed to prevent Spain from becoming choked by its ballooning public debt, which will probably reach 100 percent of GDP next year. Here another factor enters into play: whether or not the EU will cut Spain some slack in the coming years on its timetable for bringing its budget deficit back under the European limit of 3 percent of GDP.

"The fact that Brussels softened up on the 2013 target [6.5 percent of GDP] gave the Spanish economy some breathing room this year. The same will happen in 2014, with a target of 5.8 percent which is not all that strict. From then on, the Spanish government and the European Commission will face another difficult dilemma: If deficit targets are relaxed for two additional years, the debt-to-GDP ratio will soar to 112 percent. If they are not relaxed, the economy will relapse into a recession," said Crespo, the author of Las Dos Próximas Recesiones (The Next Two Recessions).

The only way out of this dilemma, according to Crespo, is an "influx of foreign investment, especially if it comes in the shape of businesses settling down here or expanding their Spanish operations." Pointing out that Spain has a qualified workforce which is cheaper than that of its rivals -- he cites average labor costs per hour of 21 euros in Spain, compared to 30 euros in Germany -- Crespo concludes that "the key to growth does not just rest on the public sector adjusting its spending, or on exports doing as well as they have so far."

On strong exports and buoyant tourism, Spain's balance of payments registered its first surplus in the first half of the year since 1997. At the same time, services -- including those of engineers, architects or consultants -- are increasingly driving the export boom, reaching one third of the total in 2012. Even with falling labor costs, Spain cannot hope to compete with China or other emerging nations on the factory floor. But a well-trained Spanish engineer with low salary expectations is increasingly being seen as an unbeatable deal. The fact that more young people are now in the education system -- many returning to the classroom after being tempted away by easy-to-find work in the boom years -- will enlarge Spain's skills pool further: in 2011, 62.4 percent of those between the ages of 15 and 24 were studying, above the European average.

But many young people are still abandoning Spain for greener pastures. Clearly, the length of the unemployment lines provides ample motivation to move away, with some 400,000 more Spanish adults living abroad now than in 2008, a rise of 33 percent. But the ultra-phlegmatic attitude of the prime minister has surely added a touch of nightmarish urgency for many. Elected in late 2011 with a rare absolute majority, Rajoy has watched as unemployment passed the 5 million barrier -- and then the 6 million barrier at the start of 2013 -- before improving slightly in the past six months. Cue a frenetic tour of employment offices or the unveiling of a national plan to get the youth into work? Not Rajoy.

Joblessness records, a judicial investigation into widespread corruption within his Popular Party, and now revelations of U.S. espionage against Spain are among the many burning issues met with stony silence or guarded observations by the conservative leader. Even on the day Spain was bailed out by the European Union, Rajoy chose not to pronounce in public, instead attending a soccer match.

Rajoy has seemingly made the calculation that his majority-guaranteed four-year tenure will be long and arduous, and any attempt to burn brightly amid so much gloom will be futile. In recent days, he has pushed out junior officials and ministers one by one to make delicate inquiries into the NSA's massive espionage activities in the hopes of remaining relatively anonymous amid the harmony of European outrage; the plan is still to stage-manage Rajoy's first visit to the White House after two years in office. And the prime minister will need a boost ahead of his third year in office, when the PP's performance in European elections will determine whether or not he is still the party's horse in 2015.

The hope that 2015 will mark the culmination of a genuine recovery is being cherished through what are still very lean times, with Economy Minister Luis de Guindos predicting growth of over 1 percent for that year. Nonetheless, Rajoy signaled this week that the economy had been shored up, and the government's task now was to extend the benefits of this work to the majority of Spaniards. The danger is that amid the noise of so much back-slapping in the ministries and those champagne corks over at the stock exchange, the sound of a new storm brewing may be missed.

Since taking over in 2011, the PP has mocked Rajoy's predecessor, Socialist José Luis Rodríguez Zapatero, for being unprepared for the 2008 global financial crisis -- and now claims to have come up with a better economic model. Foreign investors, it seems, must now be the judge of that.