Hatoyama Poised for Global Struggle

Yukio Hatoyama, Japan's new Prime Minister, may yet transform northeast Asian security. And he may become Kevin Rudd's new best friend.

He has had his first phone call from US President Barack Obama, and another from the Prime Minister, who both congratulated him warmly.

The three men may recreate the strange but powerful partnership that grew up under their predecessors - George W.Bush, Junichiro Koizumi and John Howard.

They were all three radical conservatives, ideological soulmates with a muscular approach to foreign policy, an identical view of the global war on terror, a commitment to troops in Iraq, and a penchant for low-tax, market-friendly economics.

One official who observed the three leaders together recalls: "They were an oddly mixed group - Bush with his Texan shtick, Howard a little boring, Koizumi kinda goofy. It was fascinating to see Howard's estimation of Koizumi grow over time."

Hatoyama, Obama and Rudd are very different, but they do share a world view. All have criticised what they label free market excesses. And they all have a support base in the union movement.

Each is committed to ambitious targets on climate change - Hatoyama's Democratic Party of Japan wants to cut national carbon emissions by a whopping 25 per cent from their 1990 levels by 2025.

There is not the slightest chance this target will be met, but it shows Hatoyama's political direction is the same as Obama's and Rudd's. All three share commitments to the UN, and to multilateralism.

But it's going to be much more brutal, hard old-fashioned issues that confront the three leaders. And security in the Asia-Pacific depends on their successful partnership.

The most important task facing Hatoyama is to find a new source of energy and growth for the Japanese economy and society more generally. Next year, China could overtake Japan as the world's second-largest economy. The stakes are huge.

Kurt Campbell, now the US Assistant Secretary of State for East Asia and the Pacific, co-authored a study on the US's Asia policy last year. He wrote: "Asia is not a theatre at peace. It is a cauldron of religious and ethnic tension; a source of terror and extremism; an accelerating driver of the insatiable global appetite for energy; the place where the most people will suffer the adverse effects of global climate change; the primary source of nuclear proliferation and the most likely theatre on earth for a major conventional confrontation and even a nuclear conflict."

This is not just rhetoric. For the first time, there are more warships in the US Pacific fleet than in its Atlantic fleet. And a rarely acknowledged truth is that Japan is Washington's most important ally anywhere on the globe.

Who else would be a candidate? Britain sends more troops to Iraq and Afghanistan, but they are not decisive and the US has a full suite of European allies. Australia is important, but we are a nation of only 22 million people.

Japan and the US military bases it hosts are central to the US position in Asia. Japan, a nation of 125 million people, is still the world's second-largest economy, far bigger than any of the Europeans. The Obama administration seems to get this.

But there is no way of telling how Hatoyama will govern Japan. His reform path is unclear. Some of his proposed policies, such as taming the bureaucracy, favouring the consumer over the producer and encouraging the Japanese to have children, are necessary. Others, such as re-regulating the labour market, are retrograde and could exacerbate Japan's economic woes.

On the US alliance, Hatoyama and the DPJ made some generally negative statements about no longer using Japanese vessels to refuel US warships involved in the war in Afghanistan, and further reducing the footprint of the US bases in Japan.

But Washington has made it clear it considers the issue of the bases closed after the negotiations it concluded with the Aso government earlier this year, and which were the culmination of a substantial reduction of the US military presence in Japan, especially in Okinawa.

Make no mistake. This is a critical issue for the Asia Pacific. The US has nearly 50,000 troops in Japan. They are the heart of the US rapid reaction capability. If the US bases in Japan fall below a certain indefinable but critical level, it will badly erode the US's operational capabilities in Asia, and more importantly the credibility of its security guarantees.

Since Hatoyama's election win, he has said he wants to keep the US-Japan alliance at the centre of Japanese foreign policy. He has deliberately hosed down expectations of a serious foreign policy change.

Meanwhile, the traditional geo-strategic challenges are mounting in northeast Asia.

Mike Green, the former Asia head of the US National Security Council under Bush, predicts a crisis in North Korea within a couple of years. South Korean intelligence believes that North Korea's dictator, Kim Jong-il, survived a stroke but now has pancreatic cancer, which would certainly accord with his haggard look in recent public appearances.

The best estimate is that he will die within two years. He has planned a succession for his third son, Kim Jong-un. But in a newly published analysis, Green argues that the favoured son, still in his 20s, is in a much weaker position to assume power than was his father, who inherited the mantle of leadership after a lifetime's grooming.

Green forecasts a three-stage crisis of intense danger. First, North Korea, armed with nuclear weapons, brandishes its arsenal not to gain aid but to alter the security structure of northeast Asia. Second, the regime begins to collapse. And finally there is the prospect of settling terms for a unified Korea.

Green reveals a meeting in 2004 at which the North Koreans told the US they would demonstrate their nuclear deterrent, expand that deterrent and transfer it. Given North Korea's recent nuclear tests, the nuclear reactor it helped to build for Syria (which the Israelis bombed) and the troubling reports of at least incipient nuclear trade between North Korea and Burma, Pyongyang has fulfilled all three promises.

Fears of North Korea have driven much Japanese security policy, and will continue to do so.

Tensions for now are reduced across the Taiwan straits. Beijing has made a decision to get along with the Taiwanese government of President Ma Ying-jeou, but at the same time it continues to massively build up its missile capacity against Taipei. The Pentagon's report on Chinese military power this year shows a fundamental change in the balance of power in the Taiwan straits. Taiwan used to be able to dominate this airspace. According to the Pentagon, this is no longer true.

The Pentagon outlines China's continuing massive military build-up, vastly outstripping its economic growth. Much of the Chinese military spending is hidden, but the Pentagon estimates it could reach up to $US160billion ($190bn) a year.

This may seem small compared with the US's military budget in excess of $US500bn, but the US has vast global security responsibilities in Iraq, Afghanistan and all over the world, which China does not. And as the Pentagon report shows, much of China's furious military effort, apart from its gigantic expansion plans for its nuclear weapons arsenal, is directed squarely against the US, and designed to make it extremely costly for the US navy to continue to operate in the waters near China's east coast.

Here again, Japan is central. Although Japan's modest military build-up has been incremental, it is very hi -tech and is aimed precisely at building a new level of inter-operability with US forces in the context of a revived and newly reciprocal US alliance.

This is a minor revolution in Asia-Pacific security, and is one way the US alliance system has maintained the regional balance of military power.

At the same time, China and India cannot resolve their long-running border disputes, and the military of each nation eyes the other with barely disguised suspicion.

Australia and the US have both conducted modest naval exercises with China as a sensible form of confidence-building. But these exercises reflect another reality.

China's navy is going to be much more active in the Asia-Pacific, and its navy, along with the navies of the US, Japan and in due course even Australia, will start bumping into each other, so to speak. There is a real need for security capabilities to manage these encounters.

Hatoyama would like to project himself as a leader on the new issues, as would Obama and Rudd.

But it is the old issues - of economic growth and military balance - that will test him the most.