Week of February 1, 2016
- One of the Japanese novels I like best is not one by a well-known author like Mishima, Tanizaki or Endo: it is Onna Zakari (English title: A mature woman) by Saiichi Maruya. It tells the story of a strong-willed woman journalist working in the male-dominated environment of a major daily newspaper. One of her editorials angers a powerful supporter of the ruling political party; the government puts pressure on her through the newspaper. The woman retaliates, using a network of friends and relatives to defend herself. The result is an accurate picture of contemporary Japan that not only tells us about the role of women, but also about bribery and coercion at the highest levels of society. “Japan is a gift giving society”, is a major theme in this book.*
Why this long introduction? The book came into my mind when reading an article this week in Foreign Policy: "Yen and the Art of Political Scandals”. Abenomics minister Amari stepped down last week after accusations of accepting gifts from a construction company. Was it corruption? Perhaps the tissue of society is too different in each country to put easy labels on.
- "What we should not forgive is an act to manipulate policies or politics by receiving funds”, PM Abe told a House of Representatives Budget Committee session, while adding “I don’t think it is inappropriate for companies or entities to offer donations” to lawmakers (Japan Today).
- God created the world, and the Dutch create their own land … well, both China and Japan are following the Dutch example (the Chinese using Dutch dredging equipment). The Guardian and other publications wrote about it this week. This article in the South China Morning Post has some nice pictures of Chinese and Japanese island creating activities in the South China Sea and the Pacific. Big money is spent to construct islands far away from the main land, obviously for military use as well as to exploit natural resources … (SMCP).
- The world’s biggest pension fund, the Japanese Government Pension Investment Fund / GPIF, assets USD 1.2 trillion (!), can not bypass external asset managers, the government decided this week. No doubt heavy lobbying preceded this decision. GPIF has been a key player in buoying Japanese stocks after the nation’s equity benchmarks entered a bear market. The fund doubled its allocations to Japanese and foreign shares in 2014, boosting returns to a record as stocks rallied into August last year. The share rout that followed left GPIF posting a 7.9 trillion yen loss in the three months through September (Bloomberg).
- China’s capital outflow was a stunning USD 700 bln in 2015, reason for Bank of Japan governor Kuroda, when in Davos, to advise China imposing limits to capital outflow. He should follow his own advise to limit capital outflow from Japan, argues James Saft in Reuters. "Carl Weinberg, economist of High Frequency Economics, points out that the fall in interest rates will cause huge problems for Japanese banks, insurers and pension funds with very long-term liabilities, which will be unable to replace existing bonds as they mature with ones that yield enough to allow them to satisfy their obligations.” Hmm, that sounds like a recipe for trouble for Japan in the coming years, even more when reading the next sentences in this article. "The only way this scheme can force money to stay in Japan and to go to work at negative interest rates is if the government imposes capital controls to throttle investment abroad. That may be next.” To my humble opinion that would put a brake on Japanese companies’ drive to expand overseas now that they cannot grow in their greying home market - so how would corporate Japan respond to capital control? (Reuters).
- DOW, Deutsche Welle, has an interesting article on the pro’s and cons of the Trans-Pacific Partnership agreement that covers 40% of global GDP. This TPP was signed last Wednesday in New Zealand (without ex-minister Amari). Who will be the winners of this free trade agreement? "Relative to their economic size, Vietnam and Japan will benefit the most,” says economist Gary Hufbauer. "Vietnam will benefit in almost every sector thank to the jolt from external competition. Japan will receive a jolt in the agricultural and service sectors (retailing, education, insurance, etc.).” (DOW).
- A long-read in the Financial Times on why Japanese high-tech companies will be overshadowed by companies like IBM and Google in the global Artificial Intelligence / AI race. One reason might be the lack of the art of self-promoting by Japanese companies. Is it is Japanese modesty? Or is it in contrast perhaps the American way to look for shareholder-value by boasting about your own break-throughs (if any)? How this works can be seen when watching the great movie about Steve Jobs that I just saw. There might be other reasons as well: the obvious lack of venture capital in Japan and the risk averseness of Japanese companies. Japan has missed the boat in the ’80s in developing its own software giants like Microsoft, Oracle, Symantec, while it had the hardware capabilities to be part of the global show. Will it now happen again with robotics and AI? (Financial Times).
- PM Shinzo Abe has pledged to raise the birth rate to 1.8 children per women as part of his revamped “three arrows” Abenomics economic stimulus. Now it is apr. 1.42, up from 1.2 in 2005. But, says the Financial Times quoting Japan’s demographers, it is a statistical quirk that does not reflect a fundamental increase in childbearing. Decades of low birth rates mean that Japan’s population will decrease from the current 127 million to 92 million in 40 years. “We need to decide what type of country Japan will be on the basis of a declining population”, says one of Japan’s top demographers (Financial Times).
- In December Japan and South Korea signed a “final and irreversible" agreement to solve the long disputed subject of comfort women. Apologies and some money for the victims. Great, you would think, that topic has been addressed. No way, because the Japanese government informed a U.N. committee last Tuesday that it has found no evidence its WWII government and military forcibly rounded up women to be sex slaves. Sometimes you wish Japan had a better PR coordinator (Japan Today).
- Space in Tokyo is in short supply while many Japanese want to live in a small number of mega-cities. So, huge numbers of new houses are being built on plots barely big enough to park a car and the result is what is known as jutaku, the phenomenon of the detached but often truly tiny house. Many of the jutaku houses may be tiny but they are not designed to blend into the background of the city. This phenomenon is a paradox — a celebration of individuality in a culture that reveres self-effacement, an apparent architectural minimalism founded on the eye-watering waste of demolition and rebuilding each generation. It is a perfect demonstration of what Moriko Kira, a Japanese architect living in Amsterdam and Tokyo, explained a couple of years ago at a DUJAT meeting: cities in The Netherlands are the result of meticulous urban planning; Tokyo is the result of individual expressions, in particular when it comes to houses.
- And for those who are interested in learning more about he traditional Kabuki theatre, here an interview in the Financial Times with one of Japan’s top Kabuki actors Ebizo Ichikawa XI, heir in a long dynasty (10 generations) of famous Kabuki players. Also this 400 year old form of theatre suffers from a greying society and Ebizo Ichikawa is using all kind of social media to increase his audience. On March 1 he will perform in Carnegie Hall, New York.