About FCCJ  


  Our Services  


  Why Join?  


  Organization  


  Our Members  


  Feedback  








     Events    |    Bulletins    |     Newsletter    |     Reports   |    Business News    |    Trade Statistics    |    Member List    |      JOBS  


 AOYAMA VIEW

BETTER LATE THAN NEVER - JAPAN INC MOVES SLOW
It is often said Japan Inc never moves fast. Now we know this applies even to modern game industry. It's 1,5 years since Softbank and its game company Gungho paid USD 1,5 billion to bring Finland's Supercell under its umbrella and launch the globally successful Clash of Clans game in Japan, the world's biggest "appli" market, yet only last week we had the company name and "the No.1 game in 140 countries" splashed all over Tokyo from Shibuya crossing billboards to "nakatsuri" and videos in Yamanote line trains. When even Visit Finland joined in Shibuya with big video screens promoting travel to Finland, it all made for bigger than ever visibility for our little country here.

Supercell, Angry Birds and other "new generation" companies are also featured in an event called Slush Asia that will be held April 24 in Tokyo. It targets to encourage young entrepreneurs in Japan and around Asia to live up to their ambitions. With only a few new Finnish companies interested to join in the market here these days, it is nice to see new blood and new business ideas. Hope they will manage to encourage young Japanese follow example and that they will themselves do well here.

As for old slow Japan, nothing compares in scale with the rebuilding the Tohoku coast damaged in the "Japan 3-11" triple catastrophe. With the passing of fourth anniversary last week, plenty television coverage of the gigantic construction sites made it all look like pyramid building in ancient Egypt and the figures laid out relayed the poor conditions still prevailing for the victims there. Over 80,000 people, many of them old beyond 65, continue to live in temporary barracks, hastily built to last 2-3 years and now already growing mold and leaking. Obviously this is testing their patience, physical and mental health and more than 3000 have already died from boredom, sickness and suicide. Of the 30,000 promised public replacement homes, less than 20% have been built as it took the first three years to just clean up the mess of 25 million tons debris and since then the work has focused on building infrastructure for the new communities before housing can be added.

There's an old saying about Mohammed and mountain - which one should move? - as well as another one of Japanese always choosing the more expensive way, if two alternatives are given. Yet even an old hand like me cannot help but shake head seeing that the newly built JPY 12 billion "Bridge of Hope" over a river in Rikuzentakata, one of the worst damaged towns, is not for people, but for a construction company to transport sand from mountain side to the seaside, where the ground is being elevated by 10 meters before starting build the town back at its original place. To further minimize the risk of repeated tsunami destruction in this risky position, the town is also building a new 2 km long, 12 meter high sea wall to protect the new dwellings the 2011 tsunami was 14 meters high there. "Seeing the progress with their own eyes is highly encouraging for the people", says the town mayor. Many others see huge waste of tax payer money. It's not only Rikuzentakata, but many other communities, who decided to rebuild themselves at their old dangerous place next to the sea. In Japan, Mohammed does not want to move, it's the mountains that are made to move instead.

As pointed out before, it is not for lack of money that the reconstruction is progressing so slowly. From the outset, the central government pledged JPY 26 trillion (USD 220 billion) funds for FY2012-16 and as that is coming to end one year from now, PM Abe last week already promised another JPY 6 trillion for next five years, now called "the latter term of 10 year recovery period". In a UN Global Risk Prevention conference in Sendai over the weekend, he threw in another USD 4 billion to help other countries prevent their disasters, a big wad of cash for most of us, but actually peanuts in comparison to spending in Tohoku. In fact, the sum is about same that Tokyo City - and not central government - budgeted to pay for the 2020 Olympics, so those who say Tohoku rebuilding suffers from Japan's choice to host the Olympics clearly don't know what they are talking about. A better comparison for Olympic cost, energy experts point out, is that keeping nuclear plants closed costs Japanese electricity users one Olympic game every month. Yet, anti-nuclear NGO's are already preparing to get court injunctions to stop starting up the plants that have now received the new safety agency's green light and pass through the local democratic process.

Apart from the magnitude of the task, what has delayed things in Tohoku is lack of labor and rapidly risen material costs. Repeatedly, public biddings to build a road or a bridge have failed to receive any offers from construction companies already busy elsewhere or the bids have overshot the price norms set by the bureaucrats. It is said that building costs, materials and labor, are now double from 2012 and every year up to 20 percent of the budgeted money has gone unused. Yet, no doubt, the construction companies, big nationals as well as small local operators, have done great business and will continue to do so.

Naturally the rapid cost rise in Tohoku has spread nationwide and doubled Tokyo City's Olympic cost estimate, too, so it is no wonder Governor Masuzoe and the arranging committee rushed to re-negotiate with IOC their original promise that all events will be held within 7 km from the new Olympic Village. Some events will be now changed to old, existing facilities a bit more far away. For instance, basketball will be played in Saitama Super Arena, often used for this sport and located 20 minute train ride from Tokyo station. The new IOC leadership has accepted the proposed exceptions as it has noted that, after all, Olympics are for sports and not for megalomaniac building projects like Beijing and Sochi that only centrally-governed countries like China and Russia are willing to do. With Oslo and other European cities declining to host 2022 Winter Olympics, IOC is left to choose between China and Kazakhstan to follow Korea 2018, all three unknown places in Asia with no history for winter sports except Alma Ata, where speed skating records were often made during Soviet time with Soviet clocks. FIFA is not any better off with its next World Cups set in Russia 2018 and Qatar 2022.

Instead of money, the debate in Tokyo has focused on design of the new stadium that will be constructed in place of the old National Stadium, which was originally built for 1940 Olympics, but got to be used only in 1964. The winner design by award-winning British-Iraqi architect Zaha Hadid was criticized by a number of Japanese architects and some powerful decision makers as "overtly attention-seeking, aesthetically disharmonic and degrading for the visual environment" and the winner was forced to make changes to her plans, which, in turn, were not good for some others. With the architectural feud finally over now, the deconstruction work of the old place finally started two weeks ago, full 10 months after our Chamber arranged the "last opportunity" visit for members to see the old site with so much history. Apart from clearly run down facilities, we saw three historical Finnish gold medal winners' names engraved in gold on the honorary marble wall, two from the 1964 Olympics and one from 1998 Athletic World Championships. Now they are gone, but happily the marble wall will be preserved for the new Stadium together with the original cauldron for the Olympic fire. Once again, action comes late after much deliberation, but happily still in time to get the stadium ready in schedule.

The feuding in parliament about money in politics ended, too, after it was found that not only all ministers including PM himself, but high number of other MP's including the opposition leader himself, had received donations from companies that had received government aid for their projects, something forbidden in the political financing law. As result, the FY'15 budget finally passed through the Lower House on Friday, almost unchanged from the government proposal, which was detailed in this column in January. As opposition does not have numbers to change it much even in Upper House, it just might pass through in time before start of new financial year April 1. Anyway, senators cannot delay it more than 30 days, so even in the worst case it will take effect on April 13, just two weeks late. For any delay days, the government just have to create a stop gap budget to keep the public services going.

Amidst two months of feuding, not many new laws could be passed. The one that received most media attention was a new law substituting the ordinance from 1946 that forbid dancing in public restaurants and bars after 10 pm. As all of us who have been clubbing in Roppongi until morning hours know, the law was enforced rather selectively, if ever at all, but now you can dance perfectly legally - though with a twist. The original law makers in post-war poor Japan were concerned that dancing late was conducive to prostitution and even today's law makers - bless their high average age - remain so concerned about nation's morals that they added demand for bright lighting to be kept up in the clubs. The required lighting level was spelled out in clear scientific terms, but it's easier to say it is about same as you would have in other public places like railway stations. Hardly conducive for romantic encounters that could lead to young people boosting the birth rate as the same old MP's cry for. As none of the clubs are likely to follow this additional rule any more than they followed the ban earlier, it is again left to police discretion how they wish to enforce it.

Interestingly, the same MP's, who are so concerned about what adult people do when they are dancing after 10 pm, all agreed on joint new law proposal to bring the voting age down to 18 from 20 as required for normal adulthood in Japan. There was no discussion of changing the adulthood in general, ie. whether young people here at 18 to could drink beer and smoke cigarettes or sign their name to buy a bike or be otherwise legally responsible for their actions as they can in most other countries, only that they were now suddenly mature enough to vote how their country and community should be run. There was impressive unity over party lines on this, no feuding at all. The rest of us outside Nagatacho wonder what's the rush? The calculations show that the change will theoretically bring 2,4 million new voters to ballot boxes, but if less than one in three of 20-30 year olds bother to vote, then how can you expect 18-19 year olds to be any more interested? Not to talk about informed enough.

The new law will probably not yet reach validity by the nationwide local elections next month, the next milestone in political calendar that parties are now focusing on, but certainly by Upper House election in 2016. As that is seen now an important step to Prime Minister's plans to initiate process to change the Constitution, one can only wonder the logic to invite into that debate people, who cannot even buy cigarettes from Seven-Eleven.

While the politics continue in their own pace and direction, the economy rolls on its own. Most of the headline figures continue to say things are going well. Nikkei index hit last week already over 19,000 points, highest level in 15 years, in expectation of excellent corporate results and big dividends at March 31 closing. Some say the billions that the Government Pension Fund is spewing into share market today following its policy change from government bonds, has something to do with the rise, too. Yet, it is true that the latest business outlook survey shows the sentiment remains high among major corporations, especially in car manufacturing, construction and real estate and the latest estimates say car makers' profits for the ending financial year will be average 40% up and those of electronics over 50%. So it is not surprising if Toyota, Toshiba and other big multinationals really are going to pay biggest pay rises in 10 years. Yet, the same calculations show that most of their big profits came from their overseas operations, not from the domestic factories, so you can ask whether it is right that Japanese workers will be rewarded for the productivity of their counterparts in Thailand, Mexico and Mississippi? Be as it may, more money in the pocket for Japanese consumers is what matters for the government's growth model.

The GDP growth for October-December quarter was recalculated to have been 1,5% on annual basis instead of the original estimate 2,2%, still pretty good in international comparison today. The worry is that half of it came from overseas and prospects there are today not any better than in Japan. The US growth, that powers ahead of other developed economies today and leads Japan's overseas business, was recalculated to have been Japan's original 2,2%. Europe remains a global worry and anything above zero there is these days considered good with Germany and UK as the only exceptions. Meanwhile you don't hear much about the BRIC's leading the world growth any more.

What worries analysts most is China, always first to give out its own estimate and always so precisely that it never needs recalculation like others. This time its official growth figure fell to lowest level in 20 years and the Prime Minister called it "the new normal". As the same guy famously said some years ago that the official statistics in China are only figurative and for real growth you should look at other indicators like electric consumption and rail cargo movements, some analysts have calculated that based on such "Li Index" China's growth rate end last year was just 5%. This is hardly enough to support the huge social change that the country is going through and raises questions how the leaders are going to keep the big masses happy.

With first name Atom, the ex-Niigata football player Tanaka was expected to be a mid-field dynamo in his new Finnish club and sure enough his precision passes clinched two winning goals for Helsinki in his first match. Helping to finish them off was his new colleague Mike Havenaar, the 195 cm lanky forward, who despite his Dutch name carries Japanese passport having grown up here from small child. It seems the pair could do well in their new club once the proper league season starts in the North.

In Japan, the soccer season started one week ago and it took only 9 minutes from Hiroshima's veteran forward Hisato Sato to score the season's first league goal. The 36 year old has already played 20 years in J-League, all of them in Hiroshima, and could this year pass the legendary "Gon" Nakayama's record for all-time league goals. The title for the oldest player in the league, maybe in the whole world's premium football, however, goes to another legend "Kazu" Miura, who started his umpteenth season in the second tier Yokohama FC at the ripe age of 48 years. More like a fashion model outside the field, Miura can still move around the pitch with surprising agility, but scoring goals is another matter.

It's all admirable for Japan's league clubs to have these veterans still doing OK here, but many say that the recent problems for the national team come from having too many old star players with too high salary and comfortable life in their foreign clubs to be really interested to fly back home and give their best for the national team. We will soon see if the new national manager Vahid Halilhodzic will bring a change into that. The Bosnian, who coached Algeria into Top 16 in Rio World Cup last year, will follow Italian Alberto Zaccheroni, who failed to do same for Japan, and Mexican Javier Aguirre, whose contract was cut short for suspected bribe crime during his previous stint in a Spanish league club. Halilhodzic comes with recommendation from Ivan Oscim, another Bosnian, whose promising start as Japan national manager 10 years ago was cut short by heart attack. We will soon see what he can do to re-energize the Blue Samurais, who will have two international friendlies end this month before starting their qualification campaign for the next World Cup in early April.

Timo Varhama  
Tokyo March 16, 2015   


Previous Columns

2 March 2015
Three struck out, three more in doubt - Abe's ministers under attack again

19 February 2015
Spring, Sibelius, Chocolate, Budget and Big, Bad Putin

5 February 2015
Reform Work Starts - Energy, Farming and Food on Wish List

26 January 2015
Terror strikes, plenty work, sad memories wait

15 January 2015
Watching AKB, Eating Mochi, Spending JPY 96 Trillion - Japan Off to Better 2015 After So-So 2014



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.

©1999-2014 Finnish Chamber of Commerce in Japan. All rights reserved.
Mail to Webmaster