The Downing Street Years (86 page)

My next visit to Tokyo was for the G7 economic summit in May 1986. The main issues at the summit were not economic at all but rather political. In the wake of the US-Libyan raid, international terrorism was the principal item on the agenda. The appalling consequences of the nuclear disaster at Chernobyl were also still being assessed and discussed. On terrorism I was determined to support the Americans with a strong statement in the communiqué. I was glad to learn from President Reagan when I saw him in Tokyo on the afternoon of Sunday 4 May, on the eve of the summit, that he could go along with what I proposed.

Both President Reagan and I were keen that the summit should be a success for the Japanese. The President was a strong supporter of Prime Minister Nakasone and was rather more inclined to be optimistic about the changes which had been promised in Japan’s economic practices than I was. But I had to agree with him that Mr Nakasone had the right instincts in international affairs and it was important not to endanger his position.

In fact, there was not much practically to show for the vigorous efforts we had made to have the Japanese open up their markets. There was, for example, still heavy discriminatory tax on imported liquor. Whisky was the fourth largest single UK export to Japan. This being my own favourite nightcap, I felt a truly proselytizing zeal to encourage the taste for it. The former Governor of the Bank of Japan, Mr Maekawa, had also produced a report on ways to reform the Japanese financial and commercial system so as to allow the reduction of Japan’s huge trade surplus. But it was better on generalities than specifics.

Japan’s trade surplus was sharply up again in 1986. But the Japanese had allowed the yen to rise in value, something which was far from popular among Japanese industrialists, and this would probably be the most important factor towards achieving a better balance of international trade relations in the future. The other good news from our point of view was that by now forty Japanese manufacturing companies were operating in the UK, creating over 10,000 jobs; and the
Nissan plant was expected to start full-scale production that summer with total employment of around 3,000 people. On the cultural level, contacts between our two countries were good. The Japanese had begun a policy of endowing teaching posts at British universities. The eldest son of the Crown Prince of Japan had recently completed two years at Oxford University. Our own Prince and Princess of Wales were due, in turn, to visit Japan.

I talked to Mr Nakasone shortly after the end of the summit. After congratulating him on the organization — which was far better than the previous Tokyo summit I had attended — and discussing the inevitable subject of Scotch whisky, I said that I wanted to try to ensure that in future relations between Britain and Japan were not dominated by the trade imbalance. That was still not possible at the moment. Some sizeable purchases by the Japanese of aircraft would help. But I was clear in my own mind that we must get beyond these issues to those of wider international importance if Japan was to play her proper role in world affairs.

Japanese politics are
sui generis.
Leaders ‘emerge’ from negotiations between factions. Decisions are taken through gradually developed consensus rather than debate. And in spite of his achievements in establishing Japan as a major player on the international stage, Mr Nakasone was unable to buck the convention by which the nominees of other factions in the governing Japanese Liberal Democratic Party (LDP) must have their turn in office.

It was his successor, Mr Takeshita, as head of the largest faction in the LDP, who took the most important decisions to make structural changes in the Japanese economy. Of most importance from our point of view, it was he who removed the discrimination against Scotch whisky and opened up the Japanese Stock Exchange to two of the best-known British stockbrokers who had been excluded. I said to Mr Takeshita when he came to London to see me that he was the fourth Prime Minister with whom I had raised the issue of the Stock Exchange. He promised action but asked for time. And he proved as good as his word. I did not have to raise it with a fifth. Partly as a result, however, of public resentment at the introduction of a new, though modest consumption tax and partly as a result of political scandal, Mr Takeshita resigned in May 1989. His successor, Mr Uno, after just a few months in office, soon resigned too. So it was the comparatively young and relatively unknown Prime Minister Toshiki Kaifu who was in office when I made what turned out to be my last visit to Japan as Prime Minister in September 1989.

Mr Kaifu was to host a meeting of the International Democratic
Union (IDU) — the international organization of Conservative Parties which Ronald Reagan and I had founded. Inevitably, the IDU comprised a variety of right-of-centre parties: but it had the advantage over its junior partner, the European Democratic Union (EDU), that it was not dominated by the Christian Democrats and included the American Republican Party. (The star of that year’s conference was undoubtedly the Swedish Conservative leader — since Prime Minister — who delivered a speech of such startling Thatcherite soundness that in applauding I felt as if I was giving myself a standing ovation.)

Mr Kaifu had his own domestic reasons for wanting the occasion to be a success. He had no strong power base of his own within the LDP and needed to cut something of an international figure in order to win back alienated LDP voters before the forthcoming general election. For my part I wanted to help him as much as I could. He was strongly pro-western, a man of integrity, and not at all in the somewhat reticent, introverted mould of some Japanese politicians that I met. I had not really got to know Mr Kaifu before I came to Japan — though he had been to see me at No. 10 as part of a group on previous occasions. I was told that his favourite sayings were: ‘politics begins with sincerity’ and ‘perseverance leads to success.’ It seemed an uncontroversial philosophy.

I had a long talk with Prime Minister Kaifu on the afternoon of Wednesday 20 September. Some of the worst causes of disagreement between Japan and the West, including Britain, were by now being overcome. Japan’s external surplus had begun to fall somewhat — though the fact that the yen had depreciated against the dollar threatened problems with the Americans in the future. Japanese investment in Britain was now greater than ever: in fact we were attracting more Japanese manufacturing investment than anywhere else in the European Community. Japan had become one of Britain’s fastest growing major markets. My discussions with the Prime Minister covered that perennial topic, Scotch whisky — where the ever ingenious Japanese had devised whisky ‘lookalikes’ to circumvent the tax changes which had been introduced.

But we were also able to range much more widely over international and indeed Japanese domestic affairs. Mr Kaifu had twice been Education minister and so we had something special in common. He spoke eloquently about social issues, in particular the decline of the family and the need to come to terms with the demographic factor of a rapidly ageing population. These were matters which were also increasingly preoccupying me. But I felt that Japan’s highly developed sense of community and ability to combine material progress with an attachment
to traditional values in some ways equipped them better to face these challenges than did our western culture. I have always connected this with the fact that Japan has the lowest level of violent crime in the developed world.

At the end of our talk I gave a television interview jointly with Mr Kaifu about global environmental issues, an area in which the Japanese were beginning to play a large role. I hoped that it would boost his standing, and was told that it had done so. But after the customary two years, Mr Kaifu was soon in his turn to join the ranks of former Japanese prime ministers whose international achievements were an insufficient antidote for factional weakness.

By the time I left office, the West and Japan were beginning seriously to come to terms with the question of where Japan’s future lay. Only with the end of the Cold War has the full importance of this become apparent. Japan can have a huge role in bringing Russia to prosperity and stability by providing the capital and technology for the development of Siberia. At the same time, Japan has very close links with China. Japan’s attitude to East Asia, where newly industrialized countries’ economies are racing ahead, is also of great importance in determining whether the dominant approach will be one of free trade or protection. Above all, relations between the United States and Japan are vital to the security of the region, and indeed on a global scale too, where Japan has the resources and America the technology — and enjoys the trust — to support any kind of ‘new world order’.

British policy ‘East of Suez’ still matters. Indeed, there is a strong argument that it will matter more and more. East Asia contains some of the fastest growing economies in the world. The newly industrialized countries of the Asian Pacific region, like South Korea, Taiwan, Indonesia and Singapore — which, together with Hong Kong, make up the five ‘little tigers’ — have to be fully integrated into a global free-trading economy if our industries are to compete effectively. They will increasingly provide us not just with competition but markets. They would all welcome more European — particularly British — contact as a counterweight to the other dominant influences in the region — the United States, China and Japan. In the longer term it is still unclear if and when countries like (an eventually reunited) Korea and Indonesia (with the world’s fourth largest population — and the largest Muslim country) will develop wider political ambitions.

Britain has a traditional presence in the region. Australia should
also now be considered at least as much a power in its own right as a partner in the Anglo-Saxon world. Individually and through the Commonwealth, Britain and Australia have an interest in nudging political development in the direction of democracy. So for all these reasons I was keen to visit the region so as to exert influence and drum up business for British companies.

I had had to postpone my visit to South-East Asia because of the miners’ strike. This put out some of the initial arrangements. So when I eventually departed on the morning of Thursday 4 April 1985 it was with a schedule originally devised for a fortnight but telescoped into ten days.

The first leg of the tour was Malaysia. We ought to have had better relations with Malaysia than we actually did. This was in part because the Prime Minister of Malaysia, Dr Mahathir, felt that in the past we had not treated his country with sufficient respect as an independent nation. It may not have been just chance that Britain always seemed to be at the bottom of the list when bids for contracts in Malaysia were considered. In fact, I got on rather well with Dr Mahathir and developed an increasing respect for him. He was tough, shrewd and practical. He had a refreshingly matter-of-fact outlook on everything that related to his country. Several years later, when, almost overnight, environmental issues had become all the rage in international gatherings, he put down some of the more extreme conservationists by saying that he was not prepared to keep tribesmen in his country living under conditions which promised a life expectancy of about forty-five simply in order to allow them to be studied by academics.

When I left Malaysia I felt that Dr Mahathir and I had established a good understanding, and so indeed it proved. When I first arrived he had been highly critical of the Commonwealth, seeing it as a kind of post-colonial institution. But I persuaded him to come to the next CHOGM. I had made a convert. Indeed in 1989, he himself hosted the CHOGM in Kuala Lumpur. It turned out to be the best organized I ever attended. Slightly less diplomatically beneficial were my talks with the very cultured, sophisticated earlier Prime Minister of Malaysia, Tunku Abdul Rahman. We found ourselves, as so often seemed the case in Commonwealth countries, discussing South Africa. I remarked that it would have been better if we had kept South Africa inside the Commonwealth, where we could have influenced her more effectively. Tunku Abdul Rahman looked surprisingly displeased. I soon learnt why. He told me that he had been principally responsible for throwing South Africa out in the first place. Clang.

From Malaysia I went, via Singapore and Brunei, to Indonesia. Everything about Indonesia is remarkable. A state created out of some 17,000 islands, a mix of races and religions, based on an artificially created philosophy — the five principles of ‘Pancasila’ — it is a marvel that Indonesia has been kept together at all. Yet it has an economy which is growing fast, more or less sound public finances, and though there have been serious human rights abuses, particularly in East Timor, this is a society which by most criteria ‘works’. At the top, President Soeharto is an immensely hard-working and effective ruler. I was struck by the detailed interest he took in agriculture — something which is all too rare in oil-rich countries like Indonesia. He spent hours on his own farm where experiments in cross-breeding livestock to maximize nutrition were the order of the day. The architect of the technological and industrial base of Indonesia was Dr Habibie, a German-trained scientist of immense energy and imagination.

It was on the final day of my stay in Indonesia that I first realized that I had become an internationally known figure — and not just in Europe, the scene of so many bitter arguments, or in the United States, where I always received a warm reception, but in parts of the world entirely foreign to me. I flew up to Bandung to inspect Dr Habibie’s excellent Institute of Technology. As I got off the aeroplane I was met by girls throwing rose petals on the ground in front of me and then all the way from the airport by crowds five to six deep along the roadside crying ‘Tacher, Tacher’.

Later that day I arrived in Colombo, Sri Lanka. President Jayewardene I already knew and had liked at once. He was an elderly, distinguished lawyer of great integrity and someone who peppered his speech, as I am inclined to do, with talk of ‘the rule of law’, not a bad refrain for any politician. At this time he was beginning to be faced by Tamil terrorism, which ultimately Sri Lanka alone was not able to suppress. He explained to me in the car the various concessions he had made for regional autonomy — Sri Lanka is a relatively modern construct and real unification of Ceylon came only in the 1830s. I judged that if anyone could restore peace and order without large-scale violence it was such a man as this.