The Superpower That Isn't There

Where's Japan? As the world's corporate giants scramble for contracts to raise a new Kuwait, representatives of the mightiest trading nation on earth have been sitting out the action. Major Japanese companies have not even participated in the bidding for reconstruction work in the devastated gulf country. Government leaders have warned Japanese firms against joining the rush for jobs lest they be seen as kajiba dorobo, or thieves who steal from a fire. "We won't take any initiative," says an official of a Japanese engineering company. "If Kuwait approaches us, we'll go. But for now we want to just wait and see."

Japan's sudden reluctance to seek profits abroad reflects the conflicting demands that have swept the country since the gulf crisis began. Japanese leaders have been torn between a constitutional ban against military action and allied insistence that the economic superpower contribute massive financial support, if not troops, to the war effort. Under these pressures, | Prime Minister Toshiki Kaifu has pledged a total of $13 billion to the U.S.-led allied campaign.

Now Japanese firms are resigned to losing business to countries that participated in the fighting. Some companies doubt that Kuwait will give them a chance to fix equipment they built and installed themselves. "Repairs would be most efficiently done by the original supplier," says Yujia Wakayama, a spokesman for Toshiba, whose generators provided about half of Kuwait's electricity before the Iraqi occupation. "We are ready to cooperate if Kuwait requests it." But industry insiders concede that Kuwait may give the repair contracts to U.S. firms in recognition of America's leading role in liberating the country.

Some Japanese argue that the same constraints that kept them from sending soldiers to war may now bar them from certain peacetime jobs. They point out that Japan's laws ban the export of military weapons and equipment to manufacture arms. The terms are broadly defined. Under these rules, Japanese firms cannot even export equipment to remove mines (although in the past some companies, feeling less constrained, haven't minded selling high-tech equipment with potential military applications to the Soviet Union). "Japan was bashed for only providing money for the war and not participating directly," says Masao Takemoto, a spokesman for electronics giant Mitsubishi. "But in the reconstruction period we will also be under restrictions."

Japan is not the only trading power that has been reluctant to press for contracts to rebuild Kuwait. Firms in Germany expect to miss out on much of the reconstruction because Bonn did not supply troops to the war effort and German companies illegally helped build chemical weapons for Iraq. But neither country intends to walk away from the region and leave a vast market to foreign firms. Kuwait will have to borrow to finance early projects, and flush Japanese lenders could be an important source of funds. While vowing not to attach strings to such money, Japan could well encourage Kuwait to spend it on the world-class services of Japanese contractors.