When discussing the changes in the political and economic systems of the world, it can be said that

Chapter 1. International Environment Surrounding Japan

Section 1. Features of Current International Relations

 Major changes have occurred in succession in the world since the start of the 1970s. These include new developments in U.S.-China and U.S.-Soviet relations, unrest and reform of the international monetary system, the fourth Middle East war and the ensuing oil crisis, intensification of various difficulties in the international economy, and the drastic changes in the situation in Indochina

Nineteen seventy-five was the year in which countries around the world gradually emerged from the unrest caused by this series of changes and moves toward making readjustments in various aspects of international relations were evident. It seems, therefore, worthwhile to review, at this mid-point in the decade, the current state of international relations, centering around the period from the start of the 1970sthrough today, in order to see what the major features are.

1. Diversity and Complexity of World Politics

(1) It is said that the world has entered an era of multipolarization or that international relations have become diversified in recent years. The following can be cited as some of the principal factors contributing to the diversification of today's international structure: the growth in the national power of Japan and the countries of Western Europe, the rise of China's international status, the continued Sino-Soviet conflict, the collapse of the colonial system, the growing nationalism and self-assertion of countries in the South, and the increasing inclination to pursue national or ethnic interests among the countries in the East, the West and the South alike. Moreover, the options available to many countries in foreign policy have increased as a result of the fact that the out break of war between the East and the West has become steadily more difficult, that despite many years of cold war, direct arm-ed conflict between the East and the West has been avoided, and that in recent years the East and the West have adopted the policy of easing tensions. These circumstances have also tended to promote the trend toward diversification.

Furthermore, international relations have become further complicated by an increase in the relative importance of international economic problems and by the fact that economic problems tend to become political issues with the intensification of interdependence among nations.

(2) The weight of the United States and the Soviet Union and their bilateral relations remains predominant in world politics today. However, in a world where interdependence has increased and the interests of various countries are so thoroughly intertwined, even a great power is limited in its ability to handle various problems on its own. It can be said, there fore, that the need for bilateral and multilateral cooperation and dialogue is a logical consequence of the contemporary international community. The following activities by and among the various countries of the world reflect this situation: moves to coordinate views within groups of countries in the West, the East and the South, namely, the various meetings of OECD, the Rambouillet Summit, consultations among the heads of East European countries, the Conference of Heads of States and Chief Ministers of Non-Aligned Nations, ASEAN and OPEC; East-West dialogues which include the Conference on Security and Cooperation in Europe (CSCE) and the Strategic Arms Limitation Talks (SALT) between the United States and the Soviet Union; dialogues between the North and the South which include the Conference on International Economic Cooperation (CIEC) and the U.N. Conference on Trade and Development (UNCTAD); the existence of various collective security agreements; and various U.N.-sponsored conferences addressing themselves to such issues as raw materials, environment, food, population, and the habitat.

The situation involves the danger of giving rise to tension and friction in international relations if any one group should, through collective action, stubbornly pursue its self-interests in disregard of those of others, or demand an immediate and radical change in the existing state of affairs. For this very reason, all countries must, more than ever, promote cooperation in the spirit of fairness and compromise in the international community.

A new and more complicated network of relations in the international community is emerging as a result of the growing tendency for nations to pursue national interests by going beyond the framework of the groups to which they traditionally belong. Under these circumstances, a more flexible attitude and a broader viewpoint than ever before are needed in external relations, as are even greater efforts to maintain international stability.

2. Increasing Importance of Nuclear Control

(1) Advances in the field of nuclear technology have a basic impact on the nature of current international relations.

Progress in the development of nuclear weapons and the means of their delivery has, in particular, brought about fundamental changes to the concept of security. Today, not a single country can assure its own security, in the conventional sense of the word, in the event of a total, nuclear war. Neither the United States nor the Soviet Union can be considered an exception.

The United States and the Soviet Union, however, each have the capability to carry out large-scale retaliation and to destroy the enemy even after suffering a nuclear attack. (This is usually called the "second-strike" capability, and nuclear-powered submarines armed with nuclear missiles constitute one of the effective elements of such capability.) This fact makes it difficult for nuclear war or a conventional war which could lead to nuclear war to break out between the United States and the Soviet Union or between the East and the West, which include allies of the respective superpowers. This effect is referred to as " nuclear deterrence."

(2) It cannot be denied that this nuclear deterrence has been a fundamental factor in preventing the outbreak of direct armed conflict between the East and the West and in maintaining a balance between the two sides. However, nuclear deterrence is neither absolute nor immutable. There is the danger that the unilateral buildup of a nuclear capability will de-stabilize the balance resulting from mutual deterrence; and the possibility of accidental war cannot be eliminated completely.

Furthermore, advances in nuclear technology involve the danger of nuclear proliferation. It is expected that the number of countries possessing nuclear technology will gradually increase due in part to progress in science and technology, the need to secure sources of energy, and also the rise of nationalism in various countries. Should a large number of countries come to possess nuclear weapons, whatever their capacities, international relations will become unstable, thereby posing a serious threat to the peace and stability of the world.

(3) Under these circumstances, the importance of nuclear control in terms of both military and peaceful uses is becoming greater than ever. Thus, how to carry out effective nuclear control, particularly how to promote nuclear disarmament while paying heed to the balance of military power and deterrence among countries, is a problem of major significance to which today's international community must address itself.

(4) In this connection, it should be pointed out that nuclear deterrence is not of itself sufficient to deter the use of armed force, with the result that the importance of conventional forces in terms of both deterrence and defense has come to be recognized once more in recent years.

3. Efforts toward Stabilizing East-West Relations

(1) Since the mid-1960s, the Eastern and Western blocs, centering around U.S.-Soviet relations, have initiated moves to begin improving their mutual relationship. Particularly, after the start of the 1970s, the United States and the Soviet Union have begun negotiations with a view to avoiding military confrontation and the outbreak of nuclear war, and have concluded various agreements with the objective of improving their bilateral relations. In Europe as well, various agreements have been reached between the East and the West, including the treaty between the Federal Republic of Germany and the U.S.S.R. In Asia, the progress made in U.S.-China relations since 1972, together with the improvement in Japan-China relations, has been a factor in the stabilization of the situation in the region. However, international relations in Asia remain complicated by the presence of factors for potential instability in the Korean Peninsula and South east Asia, and of the continued Sino-Soviet conflict.

(2) These moves in East-West relations, centering around the United States, the Soviet Union and European countries, are generally called "detente" or "relaxation of tensions." There is, however, no clear definition of the term, and the differences in underlying motives as well as frictions between the East and the West have surfaced in the process of implementing policies to ease tensions. In particular, there is growing concern in the West over the fact that the Soviet Union continues its military build-up while following a policy of easing tension. The West is also dissatisfied with the attitude of the Soviet Union with respect to its support for national liberation struggles and its implementation of matters agreed upon at the Conference on Security and Cooperation in Europe. Thus, even in the process of relaxing tensions, there remain various conflicts and disputes. Moreover, set-backs in the development of East-West relations can be witnessed as changes occur in the domestic political situations of the countries concerned and the international economy suffers further deterioration.

(3) Differences in ideology and social systems between the East and the West will persist, and efforts to improve relations between the Eastern and Western blocs, which have such basic differences, will meet with many difficulties. East-West relations, however, continue to be of fundamental importance to world politics, and therefore efforts to stabilize the relationship are an indispensable prerequisite for international peace. That is to say, efforts must be patiently continued to reduce those factors giving rise to frictions and to promote dialogue and interchange, while, at the same time, maintaining and strengthening those various frameworks which prevent conflicts from arising between the East and the West.

4. Increasing Importance of North-South Relations

(1) North-South relations carry much weight in current international relations. The basic issue in North-South relations is what kinds of cooperation are possible between the North and the South in order to promote the development of the countries in the South and raise the levels of income in these countries.

The countries in the South have all concentrated their efforts on their respective national development and to this end have sought to obtain aid and expand their trade. Nevertheless, there are innumerable difficulties in achieving development and the economic gap between the North and the South has become greater. Countries in the South have come to feel greatly dissatisfied with this situation and have presented to the North comprehensive demands for drastic changes in the international economic order with a view to redistributing wealth and income in the belief that the existing international economic system has itself caused the gap to increase. These demands are evidence in moves made in recent years in connection with the "New International Economic Order" and the Charter of the Economic Rights and Duties of States. The North, however, finds it extremely difficult to accept such demands in their entirety.

(2) One of the reasons behind the South's assuming such an attitude, in addition to their above-mentioned discontent, is the self-confidence gained by the countries in the South from the fact that the sharp rise in oil prices by OPEC in 1973 and the oil strategy of the oil-producing Arab countries dealt a great blow to countries in the North. Equally significant is the fact that the number of independent states in the South now total more than one hundred, accounting for more than two-thirds of all the members of the United Nations, and that they have come to demonstrate the strength of numerical superiority by acting in concert in international arenas, such as the U.N. General Assembly.

(3) Problems that were treated as purely economic issues in the past have now become political issues, and political questions have been brought into discussions at international conferences on economic issues. Thus, the economic and political aspects of North-South relations have become deeply intertwined.

(4) As the attitudes of the countries in the South became increasingly radical, the atmosphere of North-South relations turned increasingly confrontational. However, through the process of economic turmoil on a global scale caused by the oil crisis and other factors, both the North and the South came to realize that both sides require the smooth growth of the world economy and that realistic cooperation between the North and the South was essential to this end. This led to initiatives for opening a North-South dialogue, while at the same time progress was made in regard to cooperation among the nations in the North through OECD, summit meetings among major countries, etc. With such developments as the background, an atmosphere of realistic compromise between the North and the South was present at the Seventh Special Session of the U.N. General Assemply on development and international economic cooperation in September of 1975, and, since then, dialogue has been pursued between the North and the South in such forums as the Conference on International Economic Cooperation (CIEC) and the U.N. Conference on Trade and Development (UNCTAD). Although not a few difficulties remain in solving concrete problems between the North and the South, the key to the betterment of the situation lies in the promotion of North-South cooperation in a creative manner and from the viewpoint of the common good.

(5) North-South relations contain an aspect of East-West relations as well. Although the countries in the South have strong economic ties with countries of the West, there is a growing trend among them toward taking an independent political stand without belonging politically either to the East or the West. The doctrine of non-alignment is an expression of such a trend adn  members of the Conference of Non-aligned Nations are making it a common basis for political action to pursue a third road which is in principle neither the one pursued by the East nor the West, regardless of what their actual individual positions may be. Such moves are linked with the international economic demands of the countries in the South and are expected to assume relatively greater importance in international politics in the future.

(6) The countries in the South are faced with many political, economic and social difficulties, and the relations among these countries are quite fluid in many aspects.

Differences in the level of economic development among the developing countries have become apparent since the1960s. These differences have increased since the oil crisis, and served to further differentiate the economic levels among the oil-producing, the semi-developed and the developing countries, among which the so-called least developed countries are faced with difficulties of increasing magnitude. Although moves have been made to deepen solidarity among the countries in the South, as mentioned above, relations among the developing countries themselves are gradually becoming even more complex as a result of the greater differentiation in their economic levels and the growing tendency for each country to pursue its own national interests. In some developing areas, there are cases where instability is growing due to the intensification of conflicts and acquisition of sophisticated weapons in an environment which lacks an adequate framework to deter the use of force among the countries within the area. The maintenance of the security of developing areas is indispensable to the peace and stability of the world and therefore, in order to prevent or seek peaceful solutions to conflicts, international efforts appropriate to individual countries and areas concerned are necessary, as well as efforts to promote the development of the countries in the South through North-South cooperation.

5. Transformation of the World Economy

(1) The world economy continued to grow and expand after World War II under the principles of a free and open economy embodied in the IMF-GATT system. This process witnessed an increase in the economic strength of Western Europe and Japan, and the concomitant relative decline of the economic position of the United States, as well as the widening of differences in economic power not only among the developed countries but also between the North and the South. The new economic policy adopted by the United States in August 1971and the oil crisis of 1973 severely jolted the world monetary and trade order and accelerated the transformation of the world economy. The sharp rise in crude oil prices caused the trilemma of serious inflation, recession and imbalances in international payments to affect many countries, and produced a rapid increase in the revenues of oil-producing countries and the consequent imbalance in the distribution of financial resources. At the same time, moves on the part of the developing countries for a change of the existing order intensified markedly, as already discussed above.

(2) In the background of these changes were increased international interdependence and the attendant international synchronization of economic fluctuations, making it necessary to pay due attention to these developments in managing the world economy. The constraints on raw materials and the need for environmental protection have also become matters of great concern with the growth in the size of the economies of various countries and the development of new technologies.

(3) The central issue in the international economy to day is how to overcome simultaneously recession and inflation and to restore the world economy and world trade to the path to ward stable growth. In order to achieve this objective, at a time when the interdependence of national economies has become an indisputable reality, it is necessary for all countries to promote international cooperation by overcoming the differences in their respective positions, stages of economic development, degree of possession of raw materials, and political and economic systems. Such efforts have been made through various activities including a series of summit meetings among the heads of the major countries beginning with the Rambouillet Summit, various cooperative measures taken within the framework of OECD, IMF, GATT, multilateral trade negotiations, UNCTAD, and the Conference for International Economic Cooperation. In order to solve specific problems, however, further patient efforts for making various adjustments and carrying out new constructive measures are called for.

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What is the relationship between political system and economic system?

In practice there is a strong relationship between economics and politics because the performance of the economy is one of the key political battlegrounds. Many economic issues are inherently political because they lend themselves to different opinions.

What risk is associated with a change in the political economy?

Political risk is the risk an investment's returns could suffer as a result of political changes or instability in a country. Instability affecting investment returns could stem from a change in government, legislative bodies, other foreign policymakers or military control.

What is an accurate depiction of the changes in the political systems of nations since the late 1980s?

What is an accurate depiction of the changes in the political systems of nations since the late 1980s? Totalitarian governments failed and were replaced by democratically elected governments usually supportive of free market capitalism.

Which of the following terms refers to an economic system in which the government owns and controls all types of economic activity?

The command economy, also known as a planned economy, requires that a nation's central government own and control the means of production. Private ownership of land and capital is nonexistent or severely limited.