Interview with Thomas Foley, outgoing U.S. ambassador to Japan

March 30, 2001
Web posted at: 2:51 p.m. EST (1951 GMT)

Thomas Foley

Thomas Foley is the outgoing U.S. ambassador to Japan. Before his diplomatic service, which began on November 6, 1997, Ambassador Foley was the 49th Speaker of the House of Representatives. He was interviewed by Marina Kamimura, the CNN Tokyo Bureau Chief.

Kamimura: Would you describe this as the toughest time of your tenure here?

Foley: Oh this time, yes certainly, these recent weeks after the accident have been very sad and very troubling for all of us in the United States government. And we are seeking to find out what happened to make accurate information available to all the American people, the Japanese people, and especially the families who still have missing relatives. And the United States is going to do whatever it can to mitigate the effects of this terrible event. It is a very, very sad thing.

Kamimura: There's been a call, within and without of Japan, for Japan to on take a greater role in security affairs. Is this something that the US would welcome?

Foley: Well, the decision as to whether to engage in collective security, which some have talked about in Japan, and elsewhere is totally a matter for Japan to decide. By most interpretations, the constitution poses certain problems in Japan participating in actual collective security arrangements. There are some things I think that the United States would welcome. That is, among others, a more active role for the self-defense forces in peacekeeping operations. And I repeat we would have no objection to Japan taking a broader collective security role, but that's a matter for Japan to decide. And either by a re-interpretation of the constitution or some kind of constitutional amendment, it would be a matter, again, of Japanese judgement. But we have thought that Japan has been enormously generous and supportive in peacekeeping operations by pledging resources, financial resources. But I think it would be very valuable if Japan could participate more actively itself with self-defense forces in those exercises. Presently there are so many rules, five, in fact that have to exist before peacekeeping operations can be conducted by Japan, that there are rare instances in which those conditions actually exist.

Kamimura: Partly because of this accident you have an even more unique position here, of really straddling two administrations for a longer period than really any of us here imagined you would be. Do you sense there have been changes? Much has been made particularly here in Japan about the new administration's knowledge of Japan… about the long ties there over the Clinton administration for instance? Can you sense any change at all?

Foley: Well, I think there's a continuation of a policy that's been part of the US foreign policy for the last half century, which has been to recognize Japan as a principle ally and partner and friend in the Asia-Pacific area, and to recognize that relationship as a key to security in the Asia Pacific area. There's nothing new about that. There was concern in Japan and some criticism of the fact that President Clinton made a "wrong trip" to China, and did not come immediately to Japan after that. But the fact of the matter also is that President Clinton came to Japan twice as many times -- plus one -- as any American president in our history. And if he had not been forced to cancel his visit to the APEC meeting in Osaka it would have been three times as many times, including a trip to Japan that required him to fly 26 hours in Air Force One for the 8 hour funeral period of Prime Minister Obuchi. So I think it's hard to say that the last administration ignored Japan and was not concerned about the relationship. The new administration is re-emphasizing the importance of Japan and I think that's a very positive thing. But again I see it as a continuation, not as an abrupt change.

Kamimura: Throughout your time here, you have been an extremely strong advocate of Japan deregulating its economy. Is that really the answer to all of the problems the Japanese face right now in the economy?

Foley: Well, it's part of the answer. It's not the whole answer, but it's a very significant part of it. Japan, I think, needs to move more aggressively on deregulation. We are very pleased that some of the undertakings of the last three years under the enhanced deregulation policy have borne great fruit. I'll give you the quick example of financial services, which as a result of the Big Bang policy has opened up great activity for not only US firms, but also outside foreign firms and has helped strengthen this sector in Japan immeasurably. There are other areas that could be undertaken in energy and power, in pharmaceuticals, in medical devices, and building and so on.

But another area where there has been a very successful movement is in telecommunications. And we often use the example, which is so dramatic, that in 1995 there were only about 500,000 cellular phones, in the whole of Japan. And then with the de-regulation of the cellular phone industry, Japan has now something like 60 million cellular phones, and is the leader. Japanese companies are the leaders in this wireless technology in the world, the highest development level, one of the highest penetrations in terms of market, and growing every day. So we think de-regulation has proven benefits for Japan. Obviously it also has benefits for foreign firms that would like to have a greater opportunity to participate in the Japanese market. But the fundamental reality is that Japan benefits most.

Secondly, we think that there should be a better climate for foreign direct investment. Japan still has the lowest level of foreign direct investment of any country in the OECD. And that is a fraction, for example, of what it is in the United States or in the UK. About one half of one percent of GDP in Japan, about nine percent in the United States, and twenty percent in the UK. So although it's moving in the right direction and we've appreciated the efforts of the Japanese government to create conditions for foreign direct investment, it still has a long way to go. And we hope that it will still continue to be a part of the Japanese recovery. Restructuring of Japanese debt, and the corporate debt, and the release of real estate that is tied to that, are an important additional steps that need to be taken. Most of all we hope that there will be a growing sense of confidence in Japan and in its own future. One of the big, sorry to say, drags on Japanese recovery has been the doubt that many Japanese have had about the future. And when polls are taken in Japan and people are asked, who do you think will be the second largest economy in the world 50 years from now, it's often not Japan, but China or some other answer. I think it will be Japan. And I think that if the Japanese people get a greater sense of confidence in their own future this will be more than anything the lever of improved growth.

Kamimura: Your 3 years have encompassed this period here that some are calling Japan's third opening, next to the 19th century and world war two. But of course there is this sense of uneasiness here. As the senior statesman as you are, any advice for the Japanese as they move through this difficult transition?

Foley: I think that the only advice I have, it sounds rather strange, but it is a kind of advice of -- trust yourself, trust your own future. This is a tremendous country, and the Japanese are a fantastic people. [One] only has to look at the record of the last 50 years, to watch with the amazement in that record of history of how Japan, devastated at the end of the Pacific War, and there were families separated, and when there was actual starvation, when the infrastructure of the country was laid waste, when industry was non-existent, grew decade by decade and in a few short decades was the fastest growing economy in the world. And in a decade after that was the second largest economy in the world. Japan has no more physical resources now than it had then. But it has the same quality of high education, hard work, and the sense of purpose of the Japanese people which when focused, can accomplish enormous things. And I believe that the Japanese economic future will show that same economic combination of human resources and determination that brought Japan to its present economic heights and will continue to make it an economic power of great consequence in this century.

But on the other hand, just to get back to somewhat of a mundane fact, 60 percent of this economy like all modern economies is in personal consumption, consumer spending. This is a rich country and not a poor country. It has 30 percent of the savings of the world. But many Japanese have looked at recent years and have decided that the future is still a bit cloudy and that their instinct has been to save more, rather than to invest or to spend with confidence of the future. When I first came to Japan, I took distinguished United States Senator Bill Roth, then the chairman of the finance committee, to see then Prime Minister Hashimoto. And Senator Roth said, "Mr. Prime Minister, each one of our countries does certain things very well. Japan saves very well. America spends very well. We must concentrate on teaching each of us the skills of the other. You must teach us in America how to save more and we must teach you how to spend more." But it's not the spending itself, as a reflection of confidence in Japan's future by the Japanese people that I think would be the most important positive change that could occur for the economy, not only for Japan but for the economy of the world.

Kamimura: Great words of advice Mr. Ambassador. Thank you. So what is the message to the Japanese that you want to get out there?

Foley: Well I'm not a Japanese speaker, unfortunately, but if I were I would probably say something such as, gambatte kudasai (good luck).

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