In order for Japan to ensure its national interests in the political, security, and economic domain, and to continue to maintain and develop an international order desirable for Japan based on fundamental values such as freedom, democracy, human rights, the rule of law, and respect for international law, it is essential to conduct strategic diplomacy, while rationally grasping changes in the international situation and responding to those changes.

Below is a broad overview of the international situation surrounding Japan and Japan's diplomacy in 2018.

1 Overview of the International Situation

The security environment surrounding Japan continues to face very severe conditions. In addition, factors such as the unprecedented change in the balance of power in the international community and rapid progress in technological innovation have had substantial and complex impacts on the global and regional security environment. Furthermore, as a backlash to the advance of globalization, protectionism and an inward-looking tendency are becoming conspicuous even in countries that have been enjoying the benefits of free trade, such as the United States and Europe.

The international order based on fundamental values such as freedom, democracy, human rights, the rule of law, and respect for international law, which have underpinned the stability and prosperity of the world, including that of Japan, is being challenged by attempts to unilaterally change the status quo by force or coercion, and the spread of terrorism and violent extremism. Moreover, Europe, which has supported the maintenance and promotion of the international order, is in unstable situation due to the weakening of the administration in France and Germany, as well as the UK's withdrawal from the EU (Brexit).

(1) Changes in the International Situation in the Mid to Long-term

A Change in the Balance of Power

Since the beginning of the twenty-first century, the balance of power in the international community has been changing on an unprecedented scale and this has substantially influenced the dynamics of international politics.

In the international community, interdependency among countries further expands and deepens. On the other hand, thanks to further growth of national power of such countries as China, changes in the balance of power are accelerating and becoming more complex, thereby increasing uncertainty over the existing order.

Against such a backdrop, prominently emerging are inter-state competitions across the political, economic and military realms, in which states seek to shape global and regional order to their advantage as well as to increase their influence.

B Diversification and Complexification of Threats

The security environment has become complicated with concerns regarding the increase of “gray-zone” situations that are neither pure peacetime nor contingencies over territorial sovereignty and interests, especially in the Asian region.

In addition, cases involving employment of methods to alter the status quo, such as “hybrid warfare,” that intentionally blur the boundaries between the military and non-military realms and ones including intervention in democracy from foreign countries through the manipulation of information and other methods are also being pointed out.

Issues related to the transfer, proliferation and improvement of weapons of mass destruction and ballistic missiles, including the possibility of acquisition and use of such weapons by terrorist organizations, etc., constitute a major threat to the entire international community, including Japan.

Regarding terrorism, although the decline of Islamic State in Iraq and the Levant (ISIL) is being witnessed, it is still necessary to be careful of the influence of the non-state actors including international terrorist organizations in the international community. In addition, there is a growing concern of terrorism targeting so-called soft-targets in recent years. Advances in communication tools, including social networking services (SNSs), are also being used in the diffusion of violent extremism, one of the primary causes of terrorism, and the expansion of the range of activities by terrorist organizations.

Recent advances in science and technology are invigorating activities in new spheres such as cyberspace and outer space. While this presents big opportunities, it also brings about new risks and threats, with the establishment of applicable norms under development.

Furthermore, technology transformation which can bring about the essential change to the nature of the society and people's lives, such as IoT, robot, AI, quantum technology is advancing, and not only the international competition to gain superiority in technologies is becoming severer, but also the movement to make use of these technologies for security purposes is becoming more active.

C Global Economic Trends (the Emergence of Protectionism and Inward-Looking Trends)

In the world economy, interdependence has been strengthened more than ever through the development of the global supply chain and financial systems, in line with the progress of globalization and innovation such as digital technology. While these create further opportunities for growth, they also make it easier for an economic shock in one region or fluctuations in commodity prices and other factors to simultaneously impact other regions and the entire world economy. Moreover, innovative progress in information and communication technologies by the Fourth Industrial Revolution, represented by AI, robotics, and Big Data, will press the international economic order to transform further by dramatically changing all aspects of people's lives. Furthermore, to enable smoother crossborder economic activities, there is an increased need for the maintenance and formulation of an economic order based on rules.

On the other hand, mounting protectionism and inward-looking trends in the U.S. and major countries in Europe run counter to globalization, and these tendencies remain pronounced. The backgrounds of those tendencies may vary, from the increasing domestic income inequality, job losses, the increase in imports, and a rise in migrants, to the global environmental problems. In Europe, the influx of migrants and refugees is slowing, but at the same time the economic disparity between the south and the north remains unsolved. In the U.S., President Trump continued to emphasize “America First,” and the issue of trade friction between the U.S. and China rose to the surface.

D Growing Concern over Global Issues

The international community has been engaged in various efforts to globally eradicate extreme poverty and hunger through initiatives based on the Millennium Development Goals (MDGs) adopted in 2000. Poverty threatens the survival, daily life, and dignity of each person and becomes a source of social injustice, political instability and violent extremism, and its eradication is vital also from the perspective of “human security.”

Furthermore, the number of refugees, internally displaced persons (IDPs), and asylum-seekers has continued to increase due to such factors as frequent occurrences of new crises and protracted conflicts and persecutions, and as of the end of 2018, it reached approximately 70 million people¹, the largest number since the end of World War II. The issue of refugees and other displaced persons is a serious humanitarian problem and has brought about friction in the international community over responses to the issue, and there is a concern that it will be further prolonged and aggravated.

In addition, as a result of the impacts of climate change, 2018 saw a succession of large-scale disasters around the world caused by major typhoons and torrential rain. It is forecast that natural disasters such as typhoons and torrential rain will continue to become severer with the effects of climate change, and there is a concern that this will have a serious impact especially on people in vulnerable environments. The number of people crossing borders has also increased dramatically due to globalization, posing an increasingly serious threat of the outbreak and transmission of infectious diseases. It has also been pointed out that the increase in global population, industrialization, and urbanization in the future may aggravate issues over water, food, and health.

In order to resolve these global issues, it will be important to steadily implement the “Sustainable Development Goals (SDGs),” which are development goals of the entire international community, and address social, economic, and environmental issues in an integrated manner. It is said that promoting the SDGs will generate a value of 12 trillion US dollars and create 380 million jobs worldwide, and achieving the SDGs provides an opportunity to generate significant growth and profits. In particular, 2019 is an important year for achieving the SDGs, with Japan hosting the G20 and the Seventh Tokyo International Conference on African Development (TICAD 7), and the first SDG Summit being held in New York, U.S. In the lead-up to these opportunities, the international community is expected to advance concrete efforts while pooling the wisdom of a range of stakeholders.

• 1 Office of United Nations High Commissioner for Refugees (UNHCR) website

E The Situation in the Middle East Faced with Destabilizing Factors / The Escalation of Terrorism and Violent Extremism

The Middle East lies in a geopolitically important location and is an essential region that supplies energy resources to the world, including Japan. Its stability is crucial for the peace and stability of the international community, including Japan. On the other hand, the Middle East is facing several challenges that are destabilizing the region, including the existence of violent extremism such as ISIL, mass flows of refugees and their influx into neighboring regions, the prolongation of the Syrian crisis, the Middle East peace process, the tension between countries in the region and the domestic situations in Afghanistan, Yemen, and Libya.

While the territory controlled by ISIL in Iraq and Syria has shrunk as a result of the operations against ISIL, the return or relocation of foreign terrorist fighters (FTF) who had been under its influence to their home countries or to third countries has spread the threat of terrorism and violent extremism around the world, including Asia.

(2) The Very Severe Security Environment in East Asia

A Nuclear and Missile Development by North Korea

North Korea has not carried out the dismantlement of all weapons of mass destruction and ballistic missiles of all ranges in a complete, verifiable and irreversible manner, in accordance with a series of relevant United Nations Security Council resolutions, and there has been no essential change in North Korea's nuclear and missile capabilities.

B China's Strengthening of Military Power which Lacks Transparency and Unilateral Attempts to Change the Status Quo

The peaceful development of China should be welcomed by Japan and the entire international community. However, China continues to expand its defense budgets and strengthen its military power extensively and rapidly without transparency. It also gives priority to securing superiority in new domains, such as outer space, cyberspace, and the electromagnetic spectrum. China continues unilateral actions and attempts to change the status quo by force or coercion at sea and in the airspace in areas such as the East and South China Seas based on its own assertions which are incompatible with the existing order of international law of the sea.

In the East China Sea, amid the continuation of intrusions by Chinese Government-owned vessels into Japan's territorial waters around the Senkaku Islands in 2018, Chinese naval vessels and aircraft have been conducting intense activities. In addition, China has been continuing unilateral development of resources in the maritime areas pending delimitation of the Exclusive Economic Zone and continental shelves. Furthermore, in recent years China has been carrying out numerous surveys in the waters around Japan, including the East China Sea, without Japan's consent, or surveys that differ in the details of those agreed upon.

In the South China Sea, China has conducted large-scale and rapid land reclamation and built outposts on the disputed features, and utilized them for military purposes. From 2016 to 2017, there were developments seen such as test flights to the Spratly Islands carried out by private Chinese aircraft, the deployment of surface-to-air missiles on Woody Island of the Paracel Islands, patrols in the airspace above Scarborough Shoal carried out by bombers and other aircraft and the sailing of an aircraft carrier of the Chinese Navy to the South China Sea. In 2018, China stepped up its activities, including the deployment of missile systems and jamming equipments on the Spratly Islands and takeoff and landing training by bombers on the Paracel Islands. According to an announcement by a U.S. think tank, the total area covered by permanent facilities that China completed or commenced construction as of 2017 has reached around 290,000 square meters.

With regard to the dispute between the Philippines and China over the South China Sea, China continues to make its own unique assertions concerning its territorial rights in the South China Sea, including rejecting the legally binding force of the final award rendered by the Arbitral Tribunal, which confirmed the unlawfulness of China's land reclamations and other actions in July 2016.