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How Middle Powers Can Manage Resource Weakness: Japan and Energy

Published online by Cambridge University Press:  13 June 2011

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The post-World War II world has seen the transformation of the international system from a configuration with several rival great powers into one with two superpowers and a set of lesser but still substantial powers—second-tier states with democratic politics and mixed economies. One of the recurrent concerns of the latter has been to secure supplies of natural resources. We argue that postwar conditions point to eight elements of prudent resource policy for middle-level powers. Such states should: (i) avoid military means; (2) choose trade partners whose political interests overlap with their own and who enjoy political stability; (3) seek to create in supplier and transit countries a structure of economic interests that will make supply agreements self-enforcing; (4) diversify with respect to commodity dependence, supplier share, and transit bottlenecks; (5) tailor stockpiles to the urgency of demand; (6) exploit technology to reduce dependence and enhance bargaining advantages; (7) encourage the private sector and public enterprises to become intermediaries in the international resource trade; and (8) pursue strategic interdependence among consumer nations by creating multilateral stakes in the maintenance of normal commerce in resources.

Type
Research Article
Copyright
Copyright © Trustees of Princeton University 1987

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References

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21 The careful reader of the text and the formula presented in Table 2 will note that the index in column A is the ratio of county Vs export of commodity X to Japan's total imports of commodity X: the trade terms between the two countries in the ratio cancel out. If we presented the information in columns B and C as the ratio of C to B, we would have the same type of outcome with the ratio of X's total exports to Japan's total imports. We leave columns B and C to be examined separately because their absolute (as opposed to relative) magnitude in the trade of the two countries would be lost in a ratio (as it is in A). There is no ideal measure of asymmetry or the importance of trade in a commodity to either country. (We could, for example, devise other measures related to the total outputs of the two countries.)

22 AIXDT: Trade Database of the Institute of Developing Economies, Tokyo.

23 Ministry of International Trade and Industry [MITI], Toward the Establishment of Economic Security (Tokyo, 1982, in Japanese), 148–49. Ministry of Transportation [MOT], Transportation Policy: Considerations of Comprehensive Security (Tokyo, 1983, in Japanese), 118–19.

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31 Ibid., 296.

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