Kawari: How Japan's Economic and Cultural Transformation Will Alter the Balance of Power Among Nations

""Kawari"" is a Japanese word for change. Ezrati, a veteran Japan observer who is chief investment officer of Nomura Asset Management, analyzes the forces for change in Japanese society and predicts that Japan will not only recover from its present economic doldrums but will also transform itself from a timid actor on the world stage to a major diplomatic and military power. Drawing on his knowledge of Japanese history, Ezrati concludes that Japan will have no choice but to shed its former reliance on manufacturing for export and transform itself into a ""headquarters nation,"" providing service functions such as research, finance and management, and directing a workforce scattered throughout Asia. Balancing his presentation, Ezrati identifies and assesses the risks to Japan and its neighbors arising from these fundamental changes. The primary risk, and Asia's historical nightmare, is that Japan might (again) respond irrationally to pressures and perceived threats to its survival. Ezrati believes, however, that Japan will prove resilient enough to overcome the risks and emerge as a new kind of Asian powerhouse. Ezrati's occasionally awkward writing doesn't detract from the evidence he marshals or from the clarity of his analysis. While short-term thinking about Japan currently focuses on whether or not it will accede to U.S. ideas about trade liberalization and financial reform, Ezrati's book provides readers with a gracefully long view. (June)