What can we learn from Japan’s efforts to achieve economic security?

Economic security has become a key priority for European and Nordic countries. This leads to a range of security issues tied to economic investments, supply chains, and dependencies in key goods and services. A recent controversy regarding Chinese investment in the Kirkenes port illustrates how the Norwegian government at times struggles to act coherently on these issues.

“The Kirkenes example illustrates how different ministries can have different interpretations of what economic security looks like. This can lead to confusion and highlights the need for a shared understanding of when national security trumps economic benefits” says Junior Research Fellow Charlotte Børing (NUPI).

A trade-off

In the recently published report “Implementing Economic Security in Norway: Lessons from Japan”, Børing and NUPI colleagues Lars Gjesvik and Wrenn Yennie Lindgren explore what Norway can learn from Japan in this regard. The Norwegian government should consider adopting a more unified and comprehensive approach to economic security, other countries, such as Japan, have already started this process.

“The idea of economic security is a bit challenging in practice. It is a trade-off between national security risks and economic costs, and this trade-off involves both the government and private actors. Japan has tried to solve this by creating a new minister post and a top-down approach, but every country has to find its own solution,” Gjesvik explains.

Japan: A first mover

Economic ties and trade are becoming increasingly intertwined with national security. The world's leading economies are implementing measures to protect critical sectors, including investment screening and export controls, to mitigate the risks of economic coercion.

Japan is highlighted as a first mover in the field of economic security, having a longer history of dealing with these issues due to their close ties to the US and a contentious relationship with China.

“Japan got a head start on these issues, both due to natural disasters and deteriorating relations to China. As US-China relations worsened, this process accelerated, and Japan has made efforts to put the issue high on the agenda both domestically and globally. Key to this approach has been to create a shared understanding and frequent coordination both within government and with the private sector," says Børing.

Challenges and opportunities

The report identifies several valuable lessons from Japan's experience:

• The need for a clear definition of economic security to ensure all stakeholders are working towards the same goals.
• Careful consideration of the scope and targets of economic security policies.
• Prioritizing a coherent and holistic approach to economic security, with coordination across government ministries and engagement with the private sector.
• Active engagement with global partners to build consensus and coordinate policies.

The report acknowledges that Norway faces unique challenges in adapting to this new economic security landscape, particularly its position outside of the EU. However, Norway also has certain advantages such as its close relationship with key security allies and trading partners, diversified trade dependencies, and critical role as an energy exporter to Europe.

The report suggests that Norway can learn from Japan's experience and improve its economic security policy by:

• Developing a clear national economic security strategy.
• Promoting coordination across government ministries to avoid conflicting policies and departmental fragmentation.
• Fostering proactive engagement with the private sector.
• Aligning its approach with like-minded states, and the EU in particular.

The report concludes that a well-defined economic security approach is crucial for Norway's future prosperity and security, as the rest of Europe strengthens its own policies in this area.