Rethinking Japan’s Postwar Settlement with East and Southeast Asia

Abstract

This paper estimates the 1960 real present discounted values of postwar Japan’s total real resource transfers to the East and Southeast Asian victims of its colonial and imperial aggression by summing up the values of the assets left behind, formal reparations, what is called quasi-reparations (economic assistance provided in the spirt of reparations), and the grant portion of the official development assistance provided through 2000. Applying the social discount rate of 5 percent and the grant element of 25 percent uniformly, converting local currency values into U.S. dollars by market exchange rates, and using the U.S. consumer price index to deflate nominal dollar values, the paper finds that Japan’s real resource transfers, measured in 1960 U.S. dollars, amounted to 151-334 percent of Japan’s 1960 U.S. dollar GNP. Moreover, 95-98 percent of the transfers took place through the confiscation of the assets Japanese nationals had left behind. The large share of the confiscated assets reflects not only their sheer volume (reflecting years of investment by Japan) but also the fact that the confiscation took place immediately after the conclusion of the war (hence their 1960 present “discounted” value roughly doubled) whereas the reparation and other payments, made over many future years, were heavily discounted at 5 percent.