Counterinsurgency Lessons From Sri Lanka

Can insurgencies be crushed by purely military means? Many counterinsurgency -theorists doubt it, arguing that guerrilla wars are won and lost primarily on the political front. It will be interesting, then, to see what conclusions they draw from the dramatic end of Sri Lanka's brutal civil war against the Tamil Tigers.Last week the Tigers admitted defeat in their two-and-a-half-decade insurgency after the death of their leader, Velupillai Prabhakaran, at the hands of the military. Sri Lanka's strategy relied on a few key tactics. First, the government created heavily armed village militias to protect civilians—mostly civilians who belonged to the majority ethnic Sinhalese population. Second, whenever it cleared an area of rebels, it quickly moved in enough professional soldiers to hold the ground. Third, Colombo used highly trained commandos to snoop out guerrilla bases deep in the jungle, where they used GPS to call in airstrikes. Many of these tactics are replicable elsewhere—in...

Bernanke's Fight Against Deflation

Comparisons between the United States today and Japan in the early 1990s just keep growing. The Japanese call that period the "Lost Decade," as it was marked by anemic growth, plummeting prices and the lingering death of insolvent banks. There was, however, one product everyone wanted: a safe. If you couldn't trust banks to hold your savings intact, why not do it yourself?No one remembers this history better than Federal Reserve chairman Ben Bernanke, which is why the Fed's Dec. 16 decision to slash a key interest rate to 0.25 percent caused a flicker of fear among those in the know. That measure means that the United States' central bank is gearing up for a full-fledged pre-emptive strike against deflation, the sort of prolonged drop in prices that bedeviled the Japanese until just a few years ago and crippled the global economy back in the 1930s. Some optimists say it's too early to worry. Deflation, they insist, has to be chronic before it can be considered a serious problem; a...

Yen, Dollar and Franc Turn Into Safe Havens

Japanese stock markets have tanked this year. America is in the midst of its greatest financial crisis since the Great Depression. And Switzerland? Wait, isn't that the country whose GDP is outweighed by a single one of its now beleaguered banks?Currency markets don't seem to be thinking quite that way. In recent weeks, investors have sent the value of the U.S. dollar, the Japanese yen and the Swiss franc soaring, but the boost is all relative. Swiss banks, however troubled, are considered safer than debt-ridden European ones, which gives the franc a leg up over the euro. The yen is benefiting from both Japanese insularity from the financial crisis and the unwinding of the carry trade, an arbitrage in which investors borrow in yen to buy in other currencies. As for the dollar, it's still just the most liquid currency, which lends an aura of safety in a storm.

U.S.-Japan Ties Strained by North Korea Delisting

Most nations are applauding George W. Bush's late-term embrace of talking to U.S. enemies, with the notable exception of Japan. Even Europe, once the epicenter of Bush bashing, will grudgingly praise his latest concessions on climate change. And the Middle East can take some comfort in Bush's new willingness to send envoys to talk to Iran. But Japan, never a loud critic of 43, is infuriated at his decision to remove North Korea from the U.S. list of nations that support terrorism.So why does Tokyo oppose the deal, when North Korea has agreed to continue to dismantle its main nuclear facility in Yongbyon and let international inspectors back onto the site—an apparent step back from the brink that was greeted warmly by North Korea's other big neighbors, China and South Korea? Because Japan ties progress in denuclearization talks to its demand that Pyongyang account for some 12 Japanese citizens who were kidnapped by North Korean spies back in the 1970s. A member of Prime Minister Taro...

Kim Jong Il's History of Disappearing

Amid the frenzy of speculation on the whereabouts of Kim Jong Il—is he dead, sick, paralyzed?—it's worth remembering that the North Korean leader has a history of disappearing for weeks or months at a time. Some analysts think the vanishing act is a ploy to draw international attention to the North, as happened when Kim went missing around the time of Pyongyang's missile tests in 1998 and 2006, the U.S. invasion of Iraq in 2003 (Kim may have thought he was next) or North Korea's first nuclear test, last October.Most intelligence analysts think Kim really is sick, apparently the victim of a mild stroke last month. Typically, 60th birthdays are a big deal in North Korea, and Kim missed the celebration of the 60th anniversary of North Korea's founding on Sept. 9. So did the Chinese, who failed to send a high-level delegation, suggesting they may have learned of Kim's illness in advance.Still, don't put it past Kim to manipulate his return to the public stage. In 2003 he disappeared for...

The Other Global Warming

Global warming tops the agenda of the July G8 summit of leading industrial nations in Hokkaido, but warming of a more beneficial sort is coming to Japan, too. Asia's two great powerhouses, China and Japan, are trying to calm their long and bitter rivalry, in ways that could transform the region.The animosity dates to Japan's imperial aggression during World War II, and has been fueled by modern politicians. Former Japanese Prime Minister Junichiro Koizumi, whose term ended in 2006, persisted in visiting a Tokyo shrine to war dead, including men the Chinese consider war criminals. This unleashed violent protests in China. Now current Prime Minister Yasuko Fukuda is sending conciliatory signals by avoiding shrine visits in favor of uplifting talk about what unites China and Japan. He's also accepted an invitation to the opening ceremonies of Beijing's Olympics and has pointedly declined to criticize Chinese human-rights violations.These efforts appear to be paying off. In late June,...

Goodbye, Shanghai

Evidence of an investor exodus from China is mounting. Some 200 Taiwanese firms have left the city of Dongguan, says a Taiwan trade group. The Federation of Hong Kong Industries predicts 6,000 to 7,000 of its factories in the Pearl River Delta will shut down this year. The Korea Chamber of Commerce and Industry says 5 percent of Korean firms in China are preparing to leave; an additional 25 percent are considering it. A recent Seoul headline read: FROM CHINA DREAM TO CHINA NIGHTMARE.Why? New labor rules requiring firms to hire staff long term, the rising yuan, tougher environmental laws and higher taxes are raising business costs. Half the Korean firms in China say they're in the red. Japanese investment in China has declined 44 percent since 2005, while increasing by 150 percent in Vietnam. Others are shifting to India, even North Korea, or just going home.

Not Made In Japan

Once upon a time, the country was a leader in technology. Now it's struggling to find its place in the digital age. Can an entrenched corporate culture change?

The New Food Capital Of The World

Toru Okuda was in trouble. He'd slaved away for years to realize his dream of opening a gourmet restaurant in Tokyo, and by 2003 he had finally pulled it off. He'd even managed to land an address for his place, dubbed Koju, in the high-rent district of Ginza—quite an achievement for a thirtysomething from provincial Shizuoka. But just a few months after opening, Okuda realized that one critical ingredient was still missing: customers. "On some days we only had two or three," he recalls. "My cooks and I had to eat all the food. I should have enjoyed it, but it was sticking in my throat." Bankruptcy threatened.But Okuda persevered, serving impeccably prepared delicacies like charcoal-grilled blowfish and fresh snow crab topped with roe. And this past November he received his reward. Paris-based Michelin, publisher of the world's most authoritative restaurant guides, announced it was awarding him and seven other Tokyo restaurateurs its highest distinction, three stars, rocketing them...

Japan's Mob Modernizes

Like smart businesses everywhere, Japan's infamous underworld gangs are reinventing themselves to cope with increasingly global competition.

Nuclear Relations: Loveboat Diplomacy

Few things have been as dependable as animosity between the United States and North Korea—until now. This month, U.S. sailors helped a North Korean ship repel a pirate attack near Somalia, winning a courteous public "thank you" from Pyongyang. Earlier this fall, U.S. evangelist Franklin Graham chartered the first direct flight between the countries since the Korean War, bringing in a planeload of aid. Now there's talk of the New York Philharmonic visiting Pyongyang. North Korean U.N. diplomats have even been allowed to go sightseeing in Washington.The thaw shows just how determined the Bush administration is to ensure nothing derails its efforts to coax the North out of it nukes; a U.S.-led team recently began disabling the North's facilities. Never mind recent revelations linking a suspected Syrian nuclear site to Pyongyang. Washington has downplayed the tie. Seems George W. Bush, in his last days, is determined to strip the Axis of Evil of another charter member.