Wine Tasting and Discussion About Japan Vol.160

A Wine Tasting and Discussion about Japan Meeting was held as always on August 31, 2016. The guests included Mr. Kais Darragi, Ambassador Extraordinary and Plenipotentiary of the Republic of Tunisia – the country that won the Nobel Peace Prize in 2015 for taking the path toward democratization after the political upheaval from the Arab Spring; Mr. Yasutoshi Nishimura, a Member of the House of Representatives and hope of the youth who serves important posts in the Liberal Democratic Party such as the Special Advisor to the President and Chief Deputy Secretary-General; Ms. Satsuki Katayama, a Member of the House of Councilors who has become known as an authority on policy by taking advantage of her 23-year career in the finance bureaucracy; Mr. Yasuaki Ono, the Chairman of the Japan Tunisia Friendship Association and someone who has served as the Ambassador Extraordinary and Plenipotentiary to Tunisia; and Mrs. Kazuko Ono, his wife. They engaged in debate on a wide range of topics – from analysis of world affairs to economic issues.

Democratic Party: Bureaucratic Leadership / Abe Administration: Strong Political Leadership

 Japanese athletes did extremely well at the Rio de Janeiro Olympics. In particular, it was very impressive to see the men’s 400m relay team take the silver medal in the athletics. This team received a lot of attention for the skillful way in which they passed their baton, but they also ran very fast. This will surely cause Japanese people to have increased expectations toward the Tokyo Olympics. The method to scientifically strengthen muscles has been established through research. It is said that Japanese people are especially weak in athletics and swimming because they do not have as much physical strength compared to Europeans and Americans. However, this scientific muscle training has even made it possible for Japanese athletes to aim for medals in short distance races in athletics. Japan’s goal at the 2020 Tokyo Olympics is to take third place in the gold medal table. Japan took sixth place at this Olympics with 12 gold medals while China took third place with 26 gold medals. Taking this into consideration, this is an extremely ambitious goal. However, Japan does have advantages. The first is that the Olympics will be held here. In addition, baseball, softball and karate will be added to the list of events. These are sports at which Japan excels. It would be great to see Japan achieving this goal by making full use of a typical Japanese scientific approach to food and training.
 The raising of the national flag and playing of the national anthem at the awards ceremonies for the events in which Japanese athletes won medals were frequently cut part way through in the live broadcasts by commercial stations. It is clear that commercial stations are biased and do not comply with the Broadcasting Act. Looking at this, it is only possible to describe the response of Ms. Sanae Takaichi, Minister of Internal Affairs and Communications, in regards to the Broadcasting Act as extremely reasonable. It should be expected that broadcasting stations follow the Broadcasting Act and do not put out biased broadcasts because they have been assigned limited radio waves.
 Major banks were once dealt with by the Ministry of Finance (MOF). However, this ministry was completely eliminated after it was discovered in the 1990s that there was excessive wining and dining between both sides in order to maintain close cooperation. Bureaucrats were once able to perform enjoyable work in that they could achieve what they wanted when they were managers and assistant managers. However, political leadership is now in complete ascendency. This means that bureaucrats have lost their status and are now simply note-takers. The Democratic Party administration said that they were taking political leadership; in fact, they were at the mercy of the bureaucrats. That was because they had absolutely no idea about what they should be doing. However, the Abe administration has seized power to the extent that they have the right to determine the personnel makeup of the bureaucracy. The administration is now taking wonderful political leadership. It is interesting to think about what would have become of Japan if the Democratic Party had remained in power. It is very fortunate for Japan that Prime Minister Abe appeared on the scene when he did.

Mr. Nikai, Secretary-General of the LDP, Is Truly a Skillful Person: Toward the Extension of the Term of Office of the President of the LDP with a Change to the Rules

 The appointment of Mr. Toshihiro Nikai as Secretary-General of the Liberal Democratic Party in August was a wonderfully clever move to sustain the Abe administration. The efforts of Mr. Nikai, a man who it was previously thought had different ideas to Prime Minister Abe, have been incorporated into measures against New Komeito and China. Furthermore, he also continues to maintain a relationship with Ms. Yuriko Koike who won the Tokyo gubernatorial election in July. Mr. Nikai has earnestly declared himself to be a part of the faction that supports the Abe administration. Prime Minster Abe has not appointed people based on his likes and dislikes since his second administration. It was also thought that Prime Minister Abe and Mr. Yoshihide Suga would not get on, but they have maintained the administration with skillful cooperation. Prime Minister Abe has thoroughly taken on board the lessons learned with the failure of his first administration. He openly stated that he would free Japan from the postwar regime at that time, but that was a great risk for the United States. He was told by President Bush that things would be considerably difficult for him in Sydney in 2007 as a result of that. His sickness deteriorated shortly after this and he had to resign as prime minister. He is now heading toward achieving his goals one by one while considering how to maintain his administration over a long time even if he has to compromise somewhat. Nevertheless, the term of office of the President of the Liberal Democratic Party – six years over two terms – is too short. The representative has previously talked about this in Apple Town and Mr. Nikai has now finally mentioned the same. The rules of the Liberal Democratic Party should be changed to make the term of office of the presidency nine years over three terms to continue maintaining the Abe administration for a long time. Prime Minister Abe should then work to change public opinion and achieve constitutional reform during this extended term of office. It would be impossible to change everything all at once. Therefore, Prime Minister Abe should start by changing the preamble which appears more and more ridiculous every time it is read. He should then work on changing the major items after this. It is also necessary to think about amending the part of the constitution that relates to the electoral system. The courts have made rulings that the current disparity between the value of the vote in different constituencies is unconstitutional or an unconstitutional situation. However, should electoral districts and the number of legislators really be decided only by the population? Surely there should be a system in which there is at least one legislator per prefecture. The debate should start from there.
 The appointment of Mr. Nikai as Secretary-General of the Liberal Democratic Party came about because Mr. Sadakazu Tanigaki had a bicycle accident and suffered a major cervical spinal cord injury. There was no-one – not even within the Liberal Democratic Party – who foresaw a sportsman like Mr. Tanigaki having such an accident. Mr. Kerry, the Secretary of State in the United States, was also involved in a commotion when he was hospitalized due to a fracture from a bicycle accident near the French-Swiss border in May last year. Important people like this need to take extra care when riding a bicycle for fun. Bicycles normally ridden in cities are still dangerous when taken on pathways. Roads must be maintained, but there should be thorough implementation of rules to ensure that bicycles are ridden on roadways.

Major Infrastructure Investment Needed Now When There Are Negative Interest Rates

 There is a pressing need to place telephone poles in Tokyo underground to prevent traffic accidents and improve the landscape. If we do not invest in infrastructure when we have negative interest rates, when will we? There are still many politicians with no idea about economics who argue vehemently for austerity measures without any meaning. Nevertheless, politicians should be insisting upon legitimate economic policy theory and exercising political leadership to increase investment in infrastructure. In the case of the Linear Chuo Shinkansen, 1.5 trillion yen has been lent to JR Tokai two times as part of the Fiscal Investment and Loan Program. This is a total of 3 trillion yen. Not a single yen of this money needs to be repaid for 30 years. The company will develop this infrastructure and raise revenue from fares during this time. They will then use this revenue to make repayments from 30 years in the future. Methods like this in which little burden is placed on business operators (e.g. issuing ultra-long-term government bonds) should be employed in other major infrastructure investment projects. Private companies should also be investing now when interest rates are low even if it means taking on debt. However, some listed companies are increasing their internal reserves while neither raising their wages nor making investments. There is no merit to increasing internal reserves and carrying out self-financing now when there are negative interest rates. The reason companies are only acting passively is because the presidents of these firms are simply company persons who do not take risks. This is a fallacy of composition and will lead to the overall economic strength of Japan being weaker. On the other hand, there is also reluctance on the part of financial institutions to lend due to deterioration in their financial health from the negative interest rates. You will always yield a profit by borrowing money and investing it. Therefore, it may be necessary to take a stance in which you will be profitable if you apply to borrow money and your application is approved.
 Tunisia underwent political upheaval during the Arab Spring. Nevertheless, the people there are wise and so they did not destroy any part of the World Heritage Carthage ruins even during the state of confusion. On the other hand, towns with many World Heritage level historical buildings (e.g. Aleppo and Palmyra) have been almost completely destroyed by street fighting and bombing raids in Syria. This is something that cannot be undone. Artifacts excavated from the ruins of Palmyra were once exhibited at the Metropolitan Museum of Art in New York, but this is no longer true. It seems likely that this exhibition was stopped because there is a possibility these artifacts may be a target of terrorism.

Result of Talking while Standing Diplomacy at G20: Politicians Should Learn Languages

 The problem with the press in Japan is that discussions gradually enter a foxhole with people holding the same views exchanging opinions. There are fewer and fewer opportunities for debate by people with various ideas active in diverse fields. It would be great if the APA Japan Revival Foundation, which has become a public utility foundation, takes the lead in such debate. The APA Japan Revival Foundation was turned into a public utility foundation from a general incorporated foundation last year. The document approving this change approves active foundations as public utility foundations with the proviso that this does not mean the content of these activities are approved. Was this proviso put in in order to provide an escape route in that the opinions of the government and foundations are not necessarily the same?
 If lawmakers in the Liberal Democratic Party with experience of studying abroad talk in English or French at social gatherings with foreign dignitaries, there are many other members of the Diet who dislike this and say that they should speak Japanese. Of course, interpreters are present, but there is no doubt that those speaking directly find it easier to communicate. Prime Minister Abe spoke directly in English with many leaders (e.g. President Obama) while standing at the G20 just before. He was able to settle various matters by doing this. Language skills are essential for politicians. All members of the Diet should strive to learn languages.
 APA Hotel has acquired a company that operates 39 hotels through an M&A. This has increased the number of APA hotels in North America to 40 all at once. Now, when interest rates are low and the yen is on the high side, it is a great opportunity to invest overseas. Immigrants are continuing to descend on Europe and causing disorder there while China, which has previously been leading the world economy, has seen the collapse of its bubble. On the other hand, it is the United States and Japan that are doing well in such circumstances.
 The Act on Securitization of Assets (Specific Purpose Company Act (SPC)) was created with unbelievable trouble by Ms. Satsuki Katayama when she was in the finance bureaucracy. The first development-type SPC hotel project in Japan was the APA Hotel YOKOHAMA-KANNAI that was opened in 2005. The representative learned about the concept of SPCs and the income approach from Jewish friends in the United States in the 1980s. In the wake of Black Monday, when stocks crashed in 1987, the representative looked again at the bubble situation heating up Japan with the income approach and saw that the real estate boom in Japan would not last. Accordingly, the representative began to sell off assets from 1988. As a result, the APA Group was not affected by the collapse of the bubble economy. The massive profits obtained from the selloff of these assets were put off with the leveraged leases of aircraft and the extraordinary income returned from these six years later was used to invest in hotels. This led to APA Hotel now being the number one hotel chain in Japan.