Japan Echo Web

Politicians, Would You Please Stop Betraying Our National Interests?

The “Quintuple Distress” and its impact on the industrial circle

ITOH Motoshige: Since the Great East Japan Earthquake, we have often felt that the government’s actions are slow when it comes to the recovery of the damaged areas and the policy issues that Japan needs to face, and we almost question if they are actually betraying national interests by being too caught up in their own political matters. What are your impressions on the current state of Japanese politics?

HASEGAWA Yasuchika: Exactly like you say. As the loss of ruling party control in both houses is almost a given, unless they resolve the problem of the ruling party not even being able to pass a bill on its own, the earthquake recovery and every other policy issue will grind to a halt. Another unfortunate thing that we see happening is that members of the National Diet, who are supposed to think about national interests, look as if they are only thinking about their own electoral districts. I wonder how many ideas they have on how they could enhance the nation’s presence or interests within greater global society.

Itoh: Talks of cutting corporate tax are likely to be put off, and the nation’s decision to participate in the Trans-Pacific Partnership (TPP), which the government said it would make by the end of June, has been postponed for earthquake reasons. What the industrial circle often refers to as a “Triple Distress” includes (1) Japan’s disadvantage in accessing foreign markets, such as South Korea, because the nation lacks an Economic Partnership Agreement; (2) high corporate tax; and (3) high wage costs. A strong yen makes it quadruple, and with the threat of electrical power shortages now making it a “Quintuple Distress,” we feel that major corporations are concluding that they can now no longer continue what they have been doing in Japan. If this state continues, the Japanese economy—and ultimately society itself—could face seriously tough circumstances.

In the larger picture, it is already clear that we now have to open the nation up to broader fields. But you ask individual citizens, and few would answer how much that would benefit them. A person operating a farm in Hokkaido, for example, would be seriously impacted by milk coming in from Australia. Since these types of effects are concentrated on localized concerns, political interests play out and prevent things from happening.

One exception, under similar circumstances, was postal privatization. Like today, people back then could not quite understand the merits to privatization. But Prime Minister Junichiro Koizumi made it political, demanding, “This is important. Are you for it, or against it?” And he made it happen. This is political entrepreneurship. Yet, we have so many issues today other than the TPP, such as pension reform and raising the consumption tax, and we cannot decide all of them in an election. Resolving them under the current state of a divided Diet may be difficult.

Hasegawa: If the government cannot fix the division in the two houses for some time, the ruling and leading opposition parties had better start cooperating with each other on priority issues that serve the national interest. I just cannot understand how the LDP, which held the ruling position for half a century, could suddenly start objecting to all initiatives just for the sake of objecting once they fell from power. Likewise, if the DPJ found that things had turned out differently once they assumed power, they should have considered serious revisions to their manifesto. In the way that former French President François Mitterrand made a graceful change from leftist to pragmatic thinking, if a ruling party opens the safe and finds nothing there, it should simply consider practical policies that meet the needs of the situation.

When I became chairman of Keizai Doyukai, my utmost priority was to help guide this nation to its path of stable growth during my term. In tackling all the challenges facing the nation, such as the declining population, declining birthrate, and aging society, though I am active in helping to reform regulations and promote innovation, so many restrictions exist that it could take about 10 to 20 years—or 2 to 3 years at the very earliest—for any effects to kick in. So, what should we do at this point in time? Seeing the current state, where over 60% of the world’s GDP growth is achieved by economies other than Japan, the United States, and Europe—in other words, newly emerging nations that account for a mere 25% of the world’s wealth—it is evident that our nation and businesses must collaborate to gain their share of the growth pie. We cannot keep our nation closed and just fight internally to claim our share of the pie. We have to open up to the world, and to understand this necessity first and foremost.