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 AOYAMA VIEW

"JAPAN: ENDLESS DISCOVERY"
I'm not sure if Japan travel promotion motto is the reason for millions and millions more coming these days to Japan, but it certainly has proved true for me. Even after 30 years here, I'm discovering new aspects of this country and its people every day. Like peeling an onion layer after layer, new views keep emerging on culture, history, society, economy, business and - as you have noticed – politics. Domestic travel still takes me to new places with new thrills and even just rambling around my hometown Tokyo expose me to new sides of the city I have never seen.

This year's travels to Nagasaki and Kagoshima in Kyushu, so different from Tokyo and East Japan, taught me in concrete detail the decisive role these cities played in modernization of Japan 160 years ago, something difficult to truly grab from the history books. Did not know that in Kagoshima the new things from the West were brought in by the powerful Shimadzu-clan daimyo himself. The role of Scottish businessman Henry Glover in Nagasaki is better known. Steel and ships, cannons and gas lights, coffee and beer, shogun's capital Edo, today's Tokyo, was many steps behind these pioneers. Each city's sad role in more recent WW2 history – Nagasaki atomic bomb, Kagoshima No.1 kamikaze base - was well evidenced, too. Most of all, however, both places offered totally modern cultural, especially culinary, experiences beyond what you can find in East Japan.

Even in my familiar Nagano and Niigata, I found this year something new and unknown. One was in middle of farm fields in Uonuma, known for its high-quality rice and plentiful snow in winter: a small buddhist temple that contains most incredible wooden statues, paintings and decorations by an completely unknown artist dubbed "Michelangelo of Niigata". While not as grand as the Sistine Chapel, colorful imagination of the religious characters and high quality of the work well justify his comparison to the Italian master. While millions throng to Vatican every year to see the world-known wonder, the works in middle of Niigata rice fields are practically unknown even in Tokyo. The parking lot was practically empty on the day of my visit and nobody has ever proposed that the sculptures should be at least listed as a national treasure.

For an amazing story and pictures click here.

Unfortunately, there's also negative discoveries. Recently, one constant source has been famous big companies, well known around the world for their their high-quality and integrity, failing in their management skills and morals. After book-rigging scandals at Olympus and Toshiba, data-rigging at Mitsubishi Motors and Suzuki factories, dumb overseas strategies by Toshiba and Japan Post and world's biggest safety recall by Takata, we got last month quality control scandals from two well-known companies.

The Nissan case that leads to recall of 1.2 million cars at home market was actually just Japanese bureaucratics: the last visual check-up of ready-made cars was signed off by staff members who did not have a special creditation for it from the Ministry of Industry. Guess only in Japan such bureaucratic creditation is required and, consequently, there's no concern of actual quality and recall applies only to a new sign-off for domestically sold cars. Yet, once the matter was studied properly, the finding that certified inspectors' signatures were routinely falsified on the documents and this had lasted 40 years unbeknownst to top management, re-confirmed concerns of poor corporate governance here. It showed again how far behind Japan still is in modern management practice due to its traditional culture of trusting responsible individuals. For the same reason we hear every once in while of administrators and accountants in small companies or countryside post offices caught for pocketing money for years from trusting customers or companies, who never double checked their figures.

The Kobe Steel case is more serious step deeper in to the fraud swamp. There company factories had falsified product data to meet the company's famously high quality standards for copper, aluminimium and steel for decades, too. Even factory manuals had been prepared how to do it without being caught. Over 500 customers, well-known names around the world making machines, cars, airplanes and bridges all critical for human safety, had been supplied with sub-standard products – once again alledgely without top management knowing anything about it. Considering Kobe's specially high quality level, the resulting products might still have been good enough, above common standards. Yet, that is not the point: it's the widespread fraud and lack of corporate control in the company. We can expect we have not yet seen the final end of this story, but obviously the company has already lost its fame, plenty business and share value. What everybody is worried, of course, is that Japan's overall reputation has been blemished by these "black sheep".

Few people believe politicians have any qualms about integrity what ever they claim, but but it seems Japan is getting deeper in mud there, too. Latest proof is the unscheduled and unnecessary parliament election organized just to extend Abe-san's rule by another two years and stop parliament debate of his financial favoritism for old friend's business venture. It was not a big win as claimed - the biggest gains were made by Koike's Kibo and Edano's CDP - but LDP managed to pull it home against the fragmented opposition as Koike-san's popularity bubble blew up when she refused to accept the "left wing" of the imploding Democrats into her new party.

"Such arrogance!" was the voters' verdict. "Just like Abe!" It is said LDP won despite Abe's unpopularity, but Koike-san is now even more unpopular. Her Big Moment flew by and she needs a miracle revovery to realize her game plan to become PM in 2021 when Abe's time finally comes to end.

The debate avoidance was further extended post-election by cutting Diet's renewed autumn session that started this week to just 8 days. That gives barely time for new parties get organized, parliamentary working order set up with new committees etc and re-elect the biggest party's president to Prime Minister that forms new government. Hardly time even for that as Abe-san is already focusing to host the US president on his first visit here next week.

Busy schedule has been lined up for Trump: not just talks with Abe and his ministers, but meetings with Emperor, North Korean kidnap returnees, his own countrymen, both military and business, and, of course, the obligatory golf game in return for the one in Florida. This one will be at Kasumigaseki Golf Club that was selected for the play in 2020 Olympics – after it accepted to change rules to admit female members - and Japan's No.1 pro-golfer Hideki Matsuyama will join the two leaders. (Wonder if he was already nervous with the honor last weekend when he played so badly in Shanghai PGA.) The choice of Piko Taro, the dummiest "music" hit wonder ever seen, for dinner entertainment is the guest's own wish, however, I hear. Expect belligerent anti-North statements from both leaders, maybe anti-China, too, even if that it is exactly where the US president is heading next. Trump is not well known for thinking two steps ahead.

In Beijing, freshly further empowered Mr. Xi is waiting for the US president weak under pressure from the Russia enquiry and popularity at record lows. Could not think of two leaders whose careers are going more opposite directions. Xi's "coronation ceremony" was as pompous as expected and his "thoughts" are now enshrined in party rules so nobody can challenge him on policy basis any more. His 3,5 hour lecture about them must have been a testing case for the huge audience but they all managed to look attentive and cheer him wildly at end. Even megarich business moguls from Ali Baba and Tencent beamed in to praise Xi's "wisdom". Only two ex-leaders sitting at podium failed to show interest: one kept looking at his watch, other one was digging his nose.

Let's hope Mr. Kim will not add any fireworks of his own to these regional celebrations, but rather sticks to his poetic verbatim. Last week his spokesmen came up with the following line: "We will bury Japan into bottom of the sea if you act as stooge in the US racket for escalating confrontation and chiming with old lunatic Trump's crazy remarks". Now that's more scary - or "kowai", "egui" and "guroi" if you prefer - than any of the 70,000 Halloween monsters that paraded to scare each other at Shibuya Crossing on Tuesday night.

What a relief that lunacy is over and retail business starts focus on Christmas. Bet you Xmas decorations are already up and Jingle Bells chiming all over the shops. For once prefer that. Two weeks more and we can say same of Trump's Asia Tour. What's the next test?

Timo Varhama  
Tokyo, November 1, 2017   


Previous Columns

21 October 2017
"Power play in Japan and elsewhere - some potentially serious, some not"

10 October 2017
"Abe's useless snap election sparks big changes he did not count on"

26 September 2017
"North Korea boost Abe popularity - opportunity to extend his rule"

7 September 2017
"Kims'allah, Japan is OK and doing well"

28 August 2017
"From North Korea's missiles to Turku Terror and US Navy Mishaps"

17 August 2017
"Raining cats and dogs, missiles and threats, but strong sunshine in economy"

27 July 2017
"Forests, floods, fish and consumer prices - stories too good and data too bad to be true"

21 July 2017
"From Cool Finland to Hot Tokyo: A Round-Up of Recent Happenings"

26 June 2017
"Anniversaries and Memories: Finland, Japan, USA."

19 June 2017
"Rainy Season in Japan, Political Storms in Europe"

8 June 2017
"Trump impact spreads - Japan struggles with workforce issues"

30 May 2017
"Taormina to Tokyo: Heavyweights and fashionable ladies"

"New Missiles, Diet Debates, Yet Big Business in Big Profits - Down on Ground Challenges Remain Basic and Simple"

9 May 2017
"Golden Week, Special Trains, Luxury Spending, Even North Worries Makes for Good Business"

20 April 2017
"North Korea, USA both worry Japan - Koike worry Abe and LDP even more"

5 April 2017
"Spring, Sakura and New Year Start in Japan - Commotion, Tensions Rise Around the World"

27 March 2017
"Questions Unanswered, Unasked – Lifestyle and Surveys Bring Light"

21 March 2017
"Finland in Focus: Friendship, Dictionary, Music, Food - Even Elevators?"

13 March 2017
"Uncertainty Increases Around Japan - At Home Rebuilding Uncompleted in 6 Years - Abe Popularity Takes a Hit."

3 March 2017
"Book Readers, Police Jokes, Nerdy Napoleon and Poison Scare"

24 February 2017
"Populism, Ignorance and Isolationism Leads to Mayhem and Mess"

16 February 2017
"Golf Diplomacy, Chocolate Festa and Hokkaido Deams-Come-True"

9 February 2017
"Tokyo overcoming winter, business changes, political battle and Trump threats "

2 February 2017
"Warm Feelings in Japan, Wild Winds from USA"

20 January 2017
"Ready for Rooster? It will be a wild ride!"



About the Columnist

The columnist is a Japan veteran among Finnish business, our Chamber ex-president and today Member of the Board of Trustees.
After running a major Finnish industry company's Japan business for over 20 years, he is now Senior Associate in a strategic consulting company.

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