Chapter 1 International Situation and Japanfs Diplomacy in 2015 In order for Japan to ensure its security and economic national interests, and to continue to maintain and develop an international order desirable for Japan based on universal values such as freedom, democracy, rule of law, and human rights, it is essential to conduct strategic diplomacy, while rationally grasping changes in the international situation and responding to them. Below is a broad overview of the international situation surrounding Japan and Japanfs diplomacy in 2015 which takes a panoramic perspective of the world map under the policy of gProactive Contribution to Peace,h based on the principles of international cooperation, as well as issues to be addressed. 1.Overview of the International Situation (1) Change in the International Situation in the Medium-term yChange in the balance of powerz Since the turn of the 21st century, the presence of so-called emerging countries, in particular China and India, has been increasing. While the influence of China in the global economy increases, its military strengthening with lack of transparency is also pointed out. Meanwhile, as globalization progresses, non-state actors, such as non-governmental organizations (NGOs) showing a strong presence internationally and multinational corporations producing revenue equivalent to state budgets, have been playing a more important role in the international community, while concerning issues, such as areal spread of various kinds of terrorism, are also taking place. The United States (U.S.) still occupies a leading position in the world in terms of overall national power, including not only military force and economic power, but also soft power such as values and culture. On the other hand, the rise of emerging countries causes changes in the balance of power, and various moves are being observed, such as the decline of strong leadership and increased multipolarity in the international order, the increasing complexity of international issues, and attempts to change the status quo by force and destabilizations of the order. yDiversification and complexification of threatsz Issues related to the transfer, proliferation and improvement of weapons of mass destruction and ballistic missiles constitute a major threat to the entire international community, including Japan. Spread and diversification of international terrorism as well as the increase in the possibility of acquisition and use of weapons of mass destruction by international terrorist organizations are negative aspects of globalization, and remain a matter of serious concern to the international community. From this point of view, non-proliferation of weapons of mass destruction, especially enhancement of nuclear security to prevent nuclear terrorism from becoming a reality, has become important. Advances in communication tools, including social networking services (SNSs) are also used in the diffusion of ideologies and expansion of the range of activities by international terrorist organizations. Furthermore, thanks to recent advances in science and technology, new activity areas, such as cyber space and outer space, have been created for the human race. On the other hand, it has brought about new risks and threats along with great opportunities, while applicable rules have not been established. yGrowing concern over global issuesz While some developing countries have been achieving high economic growth benefitting from the progress of globalization and expansion of international economic activity, there are also the poorest countries unable to escape from severe poverty. Some data indicates that the poorest living on less than 1.9 US dollars a day still accounts for about 10% of the worldfs population1. Poverty limits freedom and abundant potential of individual human beings, and concurrently becomes a source of social injustice, political instability and violent extremism. There is a concern that global warming will have a serious impact on the global environment, including an increase in natural disasters and damages caused by such disasters. In addition, since it is socially vulnerable people who suffer from natural disasters, efforts for disaster risk reduction are absolutely necessary to eradicate poverty and realize sustainable development. Furthermore, the number of people crossing borders has now increased dramatically due to globalization, posing an increasingly serious threat of the outbreak and spread of infectious diseases. Thus the strengthening of international crisis management system has become an issue. 1@World Bank website yGlobalizing world economyz In the world economy, the global supply chain and financial systems are developing in line with the progress of globalization, strengthening interdependence more than ever before. While this creates an opportunity for further growth, an economic shock or oil-price decline in one region is apt to have an impact on other regions or the entire world economy simultaneously, as was seen with the collapse of Lehman Brothers and the European debt crisis. Also, in order to further facilitate cross-border economic activities, there is a growing need to maintain and build an economic order based on rules. (2) The increasingly severe security environment in East Asia yChinafs extensive and rapid strengthening of military force which lacks transparency and unilateral attempts to change the status quoz Peaceful development of China should be welcomed for Japan as well as for the entire international community. However, a series of military developments in China, as seen prominently in recent years, raises concern in the region and the entire international community. For instance, China strengthens military power with lack of transparency, including continued expansions of its defense budget. Chinafs defense expenditure has continued to show an approximately double digit increase rate from the previous year in a row since 1989. In addition, the organizational structure and equipment of the marine law enforcement agencies as exemplified by the China Coast Guard have been reinforced, while such agencies are not under the command and order of the Peoplefs Liberation Army (PLA). Furthermore, China has been accelerating actions and unilateral attempts to change the status quo in waters and airspace, including the East China Sea and the South China Sea based on its own assertions which are incompatible with existing order of international law of the sea. For instance, in the East China Sea, Chinese government-owned vessels have continued to intrude into Japanf territorial waters around the Senkaku Islands at the same frequency in 2015 as in the past. Furthermore, Chinese Coast Guard vessels apparently equipped with cannons have repeatedly intruded into Japanfs territorial waters since the end of December 2015. In addition, China has been continuing unilateral resource development in Japanfs Exclusive Economic Zone and on continental shelves in areas pending delimitation. In November 2015, there also occurred an incident where intelligence-gathering vessels had repeatedly navigated outside the southern part of the contiguous zone around the Senkaku Islands. In the South China Sea, China has been further conducting unilateral actions that change the status quo and increase tensions such as large-scale and rapid land reclamation, building of outposts, their use for military purposes, and attempts to create faits accomplis. Many countries including Japan have expressed concern over such Chinafs actions. With regards to the dispute over the South China Sea between the Philippines and China, the Philippines started arbitral proceedings in accordance with the United Nations Convention on the Law of the Sea (UNCLOS). The Arbitral Tribunal decided on the issue of jurisdiction, ruling that it has jurisdiction over a part of the submissions by the Philippines. In November, the hearing on the merits was held. However, China continues its non-participation in the arbitral proceedings. Japan has a high interest regarding the issues over the South China Sea as it relies on marine transportation for most of resources and energy, and attaches importance to freedom of navigation and overflight in South China sea, as well as the security of sea lanes. The international community is called upon to cooperate in order to protect open, free and peaceful sea. (see 2-1-2 (1), 2-1-6 and 3-1-3 (4)). yNorth Koreafs unclear directionz North Korea has adopted a gbyungjin policyh which simultaneously pursues the build-up of nuclear armed forces and economic construction. North Korea conducted its 4th nuclear test in January 2016, and in February, it launched ballistic missile, ignoring calls for restraint from the international community. North Koreafs continued nuclear and missile development, which clearly violates the relevant UN Security Council resolutions, poses a direct and serious threat to Japanfs security, and significantly undermines the peace and security of Northeast Asia and the international community. (3) Growing concern over violent extremism and international terrorism International terrorist organizations based in politically unstable regions with vulnerable governance, such as the Middle East and North Africa, are intensifying their activities. In particular, gIslamic State in Iraq and the Levant (ISIL)h, a militant group of Islamic extremists, carried out terrorist attacks outside their stronghold such as ones in Paris in January and November 2015, which caused a large number of civilian casualties. ISIL was also involved in the killing of foreign hostages including Japanese nationals in early 2015. ISIL poses a serious threat to the international order. They abuse religious ideology to deny the existing borders and nation states and recruit combatants from other regions by using online propaganda. The activities of ISIL have caused serious humanitarian crises including mass displacement of refugees and internally displaced persons (IDPs). (4) Global issues requiring urgent response yRefugeesz The number of refugees and IDPs who fled from their home due to conflict or persecution is said to total about 60 million worldwide currently2. It has been increasing significantly in recent years. Politically unstable regions in the Middle East and Africa have become major sources of refugees and IDPs. The refugee influx, in particular into Europe since the summer of 2015, has become an urgent issue for the international community. 2@United Nations High Commissioner for Refugees (UNHCR) website ySpread of infectious diseasesz As for the Ebola outbreak, which had spread in West Africa since 2014, the end of the public health emergency of the international concern (PHEIC) was declared, including Guinea, Liberia and Sierra Leone, the three most affected countries. However, the outbreak highlighted the need to improve health systems in developing countries, crisis management in the international community including Japan and a system to handle a situation where Japanese nationals are infected abroad. Cases of infection caused by the Middle East Respiratory Syndrome (MERS) corona virus, prevalent mainly in the Middle East region, were confirmed in the neighboring Republic of Korea (ROK) in 2015 (the ROK government declared the end of its outbreak in late 2015). Also, since May of the same year, Zika virus infection, a mosquito-borne infection, has been prevalent mainly in Brazil and other Latin American countries. Regarding Zika virus, the relation between the infection of pregnant women with the virus and microcephaly of the fetus is pointed out. yGrowing concern over the issue of climate changez In 2015, the phenomenon of El Nino occurred on a large scale, causing the sea surface temperature to rise over a wide range of the Peruvian coast in South America, while there occurred droughts and floods in East Africa, and forest fires in Southeast Asia. The seriousness of climate change issues and necessity of the international communityfs action was once again recognized. (5) Risks and opportunities of the international economy surrounding Japan ySlowing down of the Chinese economy and the emerging economiesz In 2015, the Chinese economy, which is closely connected with the Japanese economy, was seen to be slowing down, and the decline of stock prices in the Chinese market since June upset global stock markets, including those of Japan. Emerging economies dependent on resource exports were also seen to turn sluggish, due to the decline in resource prices. yGrowth in Asia-Pacific regionz The Asia-Pacific region surrounding Japan is an area where relatively high economic growth is expected from mid-and long-term perspectives, due to population growth and strong infrastructure demand. Japan is expected to tap into the growth in the region.