24-5 Sakuragaoka-cho, Shibuya-ku, 150-0031 Tel: 03-5456-8082 Fax: 03-5456-8388 Mail: [email protected] Newsletter Vol. 10 Winter 2018 http://www.japancivilization.org/

On 21st August, the 10th symposium held by the Japanese Civilization Institute took place at the University of Economics in Shibuya, Tokyo on the theme, “Where should Japan go from here? and reforming strategies beyond that.” The panelists were Shigeru Ishiba—the first Minister of State for the Promotion of Overcoming Population Decline and Vitalizing Local Economy in Japan and former Liberal Democratic Party Secretary—Kazuhiko Toyama who has participated in numerous business revitalization and industry consolidation as CEO of Industrial Growth Platform Inc., and Naoki Inose, author and director of the Japanese Civilization Institute who moderated the panel. Part 1 consisted of a seminar by Mr. Ishiba, while Part 2 included a symposium in which the Japanese economy—its conditions and its future—was discussed. Time was extended as the talk proceeded fervently and harshly. The conditions that Japan is facing today is unpredictable, but there was hope in the strategies that the panelists came up with during the event for Japan to revitalize in the future. Here is an extract from the event. (Part 2 is reprinted from “Shukan Dokushojin,” 2018, 19th January, No. 3223, and WEB “Shukan Dokushojin.”)

opposite direction today in this present era, but still, there’s going to How can we solve the problem of be few young people and many seniors from here onwards. So even the declining population, which if it’s 50 million people, its content is very different. Now, when we has become so acute? face this reality, we have the question; how are we going to sustain Shigeru Ishiba social security, finances and agriculture, forestry and fisheries? (The first Minister of State for the Promotion of Overcoming Population Decline The issue of the declining population that Japan is facing from and Vitalizing Local Economy in Japan, Member of House of Representatives) here onwards is severe. Just thinking about it gives me the head- aches. There are no jobs in the regional areas—where food is made, energy is produced, and the birth rate is high—so they come to Tokyo. But Tokyo—which doesn’t produce food or energy, and is a place with the lowest birth rate—can not exist alone as a country. What’s more, people, money, and commodities are gathering in Tokyo—a place where a major earthquake or the eruption of Mount Fuji can happen any time now. In fact, a social security company in Switzerland lists Tokyo at the top of cities in the world that they think is most dangerous. Are we alright with this kind of situation? People are aging fast even in Tokyo, where most of the Japanese population live. During just 15 years between 1955 and 1970, 5 million people moved to Tokyo and other big cities from regional areas around the country. The year 2015 marked the 90th year of There are one hundred 27 million Japanese people today, but by Showa, so people who came to Tokyo when they were 15-years-old the year 2100, it is said to decline to 52 million. 200 years later it is at the time in 1955 will have turned 75. In 1955, Japan suddenly supposed to decrease to 13 million 91 thousand, and 300 years became filled with young people, but it’s going to the opposite and later, to 4 million 230 thousand. Why is it that the Japanese popu- Tokyo will be filled with old people soon. Not only the regional lation is declining at such speed? areas but also Tokyo is going to head straight to deterioration. I There are roughly three reasons. Firstly, fewer people are getting think our generation has some responsibility in creating such a married. Secondly, people are getting married later in life. Also, country. people living in the top five prefectures that produce the most ba- “Let’s leave the issue of debts to the next generation.” “Who cares bies—Okinawa, Shimane, Miyazaki, Tottori and Kumamoto Pre- about the rest, as long as we enjoy ourselves.” I don’t think we can fectures—are crowding into Tokyo where babies are least born. take pride in these kinds of mindsets. It’s clear that Japan is facing a Synergistic effect of these three factors are working toward creating crisis. Saving the country all depends on how we can revitalize re- a society with decreasing birth rate in Japan, which the rest of the gional areas and accelerate the local economy. So what can the geo- world has never experienced before. graphical regions do for Tokyo? What can Tokyo do for the geo- The Japanese population exceeded 50 million at the end of the graphic regions? We need to think about these issues immediately Meiji Era. It’s true that some people only say that we’re just return- thoroughly. What can Japan do other than eat up the heritage of the ing to those days, but this is a mistake. 50 million Japanese popula- past, not to mention leave burdens to the next generation? Through tion of the Meiji Era mainly consisted of mostly young people. the discussion today, I hope to learn from Mr. Inose and Mr. Toya- There were very few seniors. I wouldn’t say we’re doing the absolute ma regarding these issues.

About the group Address: 24-5 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031 Designed by artisancompany Japanese Civilization Institute Tel :03-5456-8082 Fax:03-5456-8388 Established in August 2015 Website: http://www.japancivilization.org/ A Report on Our 10th Symposium Where should Japan go from here? Abenomics and reforming strategies beyond that.

Modulator Shigeru Kazuhiko Naoki Ishiba vs. Toyama vs. Inose Member of House of Representatives, Liberal CEO of Industrial Growth Platform Inc., director of Japanese Democratic Party, the first Minister of State for an expert member of Council on Civilization Institute the Promotion of Overcoming Population Decline Economic Fiscal Policy (MOF) and Vitalizing Local Economy in Japan and former Liberal Democratic Party Secretary

What was much amount of monetary easing. falling. People in their 20s and 30s When the yen becomes weak, the have only experienced wage cut ever Abenomics? Japanese stock price goes down. It’s since they started working. Mean- the overseas branches that are earn- while, social security is rising, which Inose: In the morning edition of ing money in Japanese global com- means our disposable income is con- Nikkei on 29th November, there was panies like Panasonic and Toyota. It’s tinuing to minimize. In other words, an article that read “Japan’s tax reve- dollar-based transaction, so you de- unless we’re given hope that our wag- nue surpassing 58 trillion next year, serve a profit of 1.5 just by calculat- es and our disposable income is go- likely to hit highest in 27 years— ing with the strong yen which is ing to rise, our consumption will not equivalent to the amount amid the about 80 yen a dollar. In other words, improve. So no matter how much country’s massive asset bubble. The corporate earnings rise regardless of they try and lead inflation—or may- actual amount is approximately 50 the manager’s ability. As a result, they be raise the inflation rate to 2 % in trillion yen, but it’s still a consider- consider it had a significant effect on the future—things aren’t going to able amount. the global economy. And when this change. Meanwhile, this is often heard in effects the stock rate and stock prices Then how should we respond to news, but the household income in of global companies rise, at least the the consumer’s needs? Wages aren’t 1985 before the bubble was 4.18 rich people who earn stock make going to rise unless we can increase million yen. In 1995, it was 5.5 mil- money, and expensive items get sold productivity persistently. In the past lion yen, and in 2015, it was 4.28 at department stores. This is how it 20 to 30 years, Japan’s productivity is million yen. It’s gone back to what it works. But I think nothing more can deteriorating immensely compared was before. It’s said that Abenomics be expected from macroeconomy. to other countries in the world. worked towards improving employ- Then has deflation worked? I Now, which industries are decreas- ment, but has it truly worked? What don’t think peoples’ consumption ing their productivity and which exactly was Abenomics? Could you activities have improved just because have hopes to increase? The richness explain this to us, Mr. Toyama? of this. People say we’re in the phase of global companies such as Toyota of consumer recession, but if we look and Panasonic cannot be raised fur- Toyama: This isn’t my idea (laugh), at it from the consumer’s point of ther. The richness of these groups in but maybe I can explain what came view, the fact that our wages are con- their domestic plants and production forth as a result of it. To begin with, tinuing to fall is affecting us more base are all already highest standards the yen becomes weak if you do that than the fact that monetary value is in the world. But if you think about

2 how much productivity these global When we try and reform a bus corporations occupy in the Japanese company belonging to a regional ar- economy altogether, the number is ea, we almost always succeed. When only 30 %. For employment, it’s just tackled strategically, we can increase 20%. In the end, the problem lies in both profit and wage. The bus com- low wages of the local economy and pany that I manage increased its sal- the declining productivity. ary to nearly 20% during the last ten Today, they say that employment years. I think what we shouldn’t do is improving in Japan, but this is most, is prolong the life of these ex- mainly because of the baby boom isting zombie companies. Just by do- generation who started to retire in ing so, I think we can reduce quite large numbers right at the timing an amount of wage and labor. that the Abe Administration emerged Shigeru Ishiba in 2012. This completely changes Inose: The naming “zombie” is some- the structure of labor supply and de- what harsh, but it’s true that local gional areas and link companies to mand. companies are surviving from loans improve them. Bring talented people From 10 years ago, I have been they acquire from banks, the Credit with skills—who may not necessarily managing a bus company in Fukushi- Guarantee Association and the Shoko be in essential positions in big firms ma Prefecture and Iwate Prefecture, Chukin Bank even though they’re in Tokyo—to regional areas and acti- but bus drivers always lack these past nearly broke. In the past, Shizuka Ka- vate them, thereby creating a mecha- 10 years. Recently, manpower is mei strengthened these remedies, nism of personnel. By circulating short in Tokyo too, but in regional thinking they could save companies them in geographical regions, pro- areas, young people have been mov- that are nearly bankrupt. They ductivity that was lacking before will ing to Tokyo for some time now, so thought if they could support them be produced. I think policies that they’ve lacked in manpower for quite to manage the place in a modern style make these kinds of things effective a long time, resulting in the lagging they could keep them. However, this is meaningful. recession. The declining population resulted in being just a powerful shot is a severe issue for the Japanese fu- in the arm, not something that could Inose: Mr. Ishiba, you travel around ture, but if you view it from the op- change the structure of the companies the regional areas of Japan all posite side, all you need to do to stop altogether. I think this is one reason throughout the year, so I’m sure you the population from declining is to that the Japanese economy is lagging feel a lot of things when you look at increase productivity and raise peo- behind. these sites, but I think it’s sad that ev- ples’ wages. You need to raise peo- er since Abenomics, people don’t refer ples’ incomes, try and avoid people Placement of to “decentralization” at all anymore. flowing to Tokyo and have people During the first Abe Administration, give birth and raise their children in employees—from the Decentralization Committee was regional areas. This must be done Tokyo to regional formed, and I also was a member. fast. When this issue is tackled from The staff of Hello Work are all gov- this angle, you realize there are no areas ernment officials, but they had plans policies that can solve these points. of relocating all of them to regional ar- Inose: Social, economic online eas. But the Administration switched Inose: In other words, Abenomics news, “NewsPicks” had an article to the Democratic Party during the does not correlate revitalizing the mentioning that BizReach—a com- debate and the whole project dimin- economy like how Mr. Toyama just pany that runs a career change web- ished. Then when the second Abe Ad- mentioned. If so, what is the mean- site—is going to start a new business ministration emerged, the term “de- ing of adopting policies? to support business transfer. I think centralization” changed to “regional re- it’s an interesting approach. vitalization.” Toyama: Having been involved in the management of small and medi- Toyama: M&A of small, medi- Ishiba: It was hard enough just try- um-sized companies as well as local um-sized companies is all about the ing to get the licensing authority to economy companies, I feel that the matching of managers and business- relocate the cropland diversions local economy is in a so-called zom- es, so BizReach will probably suc- from the Minister of Agriculture to bie state—a state where the govern- ceed in that area. I think it’s vital the prefectural governors. It’s a ment heavily subsidizes them. that we place circulation in the re- shame that we couldn’t transfer Hel-

3 lo Work, but at least we were able to away. With an engineer’s point of create a link between the Ministry of view, he started reforming old man- Health, Labor and Welfare and Hel- agement ways, which still used pa- lo Work that wasn’t there before. per-based records and lacked effi- I’m sure many people have doubts cient supervision of customers and about Abenomics and the govern- staff. Today, it even sells a cloud app ment, but I feel that there is the called “Jinya Connect” that collec- mood in regional areas that “they tively manages reservations, custom- don’t have to make that much effort.” ers, and operators. But no one be- Many of them feel that their sons ar- longing to the Ryokan Association is en’t returning to their hometown aware of this. anyway, so they think their business Meanwhile, Dry Cleaners Happy is going to end with their generation. Cleaning in Uji-shi, Kyoto is increas- Kazuhiko Toyama This was combined with Shizuka Ka- ing its profit through a multiplying mei’s idea of “Tokuseirei” (a decree game they incorporated. This man- regional areas. How can it we solve for wholesale debt forgiveness issued ager has written his example of man- these problems? Could there be a in the Middle Ages to bail out cash- agement innovation on his website, policy to change these situations? strapped vassals) of Heisei,” and I but this too is not known by people think this whole notion of sticking in this industry. Most people aren’t Ishiba: “Regional Revitalization” with what we already have spread to interested in finding out more. They’re was received with much attention, the public. not thinking of changing the situation but then it changed to “One hun- On the other hand, however, there they are in. dred million total active.” After a are the people who are making an year it was “Work Style Reform” and effort in regional areas, like the bus Inose: Mr. Toyama, you have pub- then it was “Human Resource Devel- companies that Mr. Toyama manages lished the book “Why Japan will re- opment Revolution.” It’s like they’re such as Michinori Bus, Tokachi Bus vive from the Local Economy.” Em- changing their program every single of Obihiro in Hokkaido and Eagle ployment in global companies that year. But I think if the local economy Bus of Kawagoe in Saitama Prefec- are fighting against the world is mere- doesn’t recover, both the regional ar- ture. Up until now, customer’s needs ly 20%. Similarly, they only cover eas and Tokyo will decline. In that were not reflected at all in the way 30% of the GDP. Economic realms sense, I think “One hundred million they run local buses. It’s a service in- exist separately as global and local, total active,” “Work Style Reform,” dustry so they should try and meet but you’re saying the Japanese econo- and “Human Resource Development the needs of their customers, but my will start rising again if the re- Revolution” can be all included in even Michinori Bus didn’t review bus maining 70%—the local economy— “Regional Revitalization.” routes and tackle ways to create a shows signs of recovery, right? A company’s profit changes dras- more convenient way to travel. People who ride the bus in Fukushi- tically when the president changes. It might be rational for humans to ma are the local people who live there. Similarly, the local economy can think that their business is going to In other words, bus companies are change immensely by the city mayor end with their generation, but if ev- making a profit from the local peo- or the town mayor. I think picking eryone starts feeling that way, this ple. Similarly, stores in small towns the leader with management skills is country will go downhill fast. If peo- all belong to the local economy. what democracy is all about. I guess ple don’t start thinking seriously People in the global economy through politics, we need to demon- now, this country will disappear alto- must try extremely hard—as if they strate that justice can be both terrify- gether. were aiming for medals at the Olym- ing and amazing. Also, Jinya, a Japanese-style ryokan pic Games—or else they are going to (hotel) in Tsurumaki Onsen in lose, and the game will be over. Inose: Mr. Ishiba, you started the Kanagawa Prefecture is a place that’s However, people in the local econo- Japanese edition of the City Manag- trying something new. Animation my are aiming for the Prefectural er System. Direct election chooses film director Hayao Miyazaki’s neph- Games, and that’s all. Everything is governors and mayors, but vice town ew—who graduated the Faculty of completed inside themselves. mayors and local creation section Science and Engineering at Keio Uni- I think the Japanese local econo- chiefs are going to be matched from versity, entered Honda Motor and my has yet to modernize their man- young government officials and uni- was developing fuel cell—took after agement structure. Also, there’s the versity scholars, right? You’re saying the ryokan when its director passed issue that public nature is robust in that the nation is going to be involved

4 in supporting human resources for re- the wife can remain in Tokyo, and gional areas, right? Is this working? the husband returns to his home- land, and they can come and forth Ishiba: It’s my feeling, but I think regularly. We can make plans like there is a rise of 60%. We’re taking “super discount” or “early discount” great care in how we match people. and create a structure that can make Of course, we’re not after super gov- it happen. ernment officials who have contacts with the Ministry of Finance. We Inose: We should give that a name hope to find people with motivation Mr. Ishiba, as one of your policies. and aims to revitalize regional areas It’s not spreading with the title, “City and match them with towns that Manager System.” have specific goals like; “we’re trying Naoki Inose to put strength in tourism” or “we’re Ishiba: Please let me know if you trying to build our agriculture.” come up with a better naming (laugh). we want these people to return and raise productivity. That these people Inose: I think we need to publicize “Decentralization” become dedicated taxpayers instead these kinds of measures at a larger of tax eaters—who are dependent on scale. This project involves only a once more tax—is one of the keys to recovery. few hundred people so far. It’s not enough. Inose: Jobs-to-applicants ratio is ris- Inose: The GDP depends immense- ing now, but this is because we re- ly on regional areas. There are many Ishiba: The problem lies in who will gard people who are 64 and below to talented people today who have pay these people after we dispatch be productive. Today, even if people dropped out from the global econo- them. If we dispatch a vice mayor retire when they reach 60, they can’t my. We need to make a connection from City Manager, his salary is ob- receive they’re pension until they’re there. It’ll be great if we could come viously going to be paid by the town 65. Therefore, people aren’t sup- up with a clear plan. he’s dispatched to, but the city re- posed to work are working, which is quires that the central government why employment as a whole seems Toyama: This is not only the case of pays for it. If the government de- to be on the rise. If these people who Japan. It’s about the same rate in cides to spend these peoples’ salaries, are 60 and above work toward sup- Germany, while in the U.S., it’s even probably 2/3 of 1718 towns and vil- porting regional areas, I’m sure the higher. Their local economy occu- lages in Japan will raise their hands Japanese economy will change. pies 90% of the GDP. to join the project. But that won’t do. If that person were to move to a Toyama: The eldest bus driver in Ishiba: When I became Minister of regional town, he should be prepared our company is 75. People say that State for the Promotion of Over- to be paid by the local peoples’ tax. people in their 60s cause accidents, coming Population Decline and Vi- The person dispatched will lack re- but statistically, people in their 60s talizing Local Economy in Japan, I sponsibility if he receives a salary cause the least accidents, while peo- don’t know how many times I asked from the central government. ple in their 20s produce the most. Keidanren (Japan Business Federa- Dispatching personnel is not all The productivity of people in their tion) about management in person- from the government office. People 60s, by no means, fall. nel. There are no banks, trading com- who have retired too can maybe get What’s unfortunate for people in panies or manufacturers that don’t reemployed at a local company in the regional areas is that they let out tal- have regional branches so I asked local area they used to live in. Not ented personnel for 4 to 5 genera- them to send more people out to everybody can become executives at tions ever since the Meiji Era. The these places or perhaps they could re- private banks and trading companies. global economy is deteriorating now, locate specific functions of businesses We can perhaps make a system for so sadly you’ve got to be Hideki Mat- to the suburbs. But they just laughed, these people so that they can smooth- suyama if it were golf, or Kei Nishi- saying, it’s an exciting idea. ly return to their local town. One kori if it were tennis, to play actively A few years ago, Masahiro Sakane, problem is the wife, who might say in the scene. Councilor and Senior Adviser of she doesn’t want to accompany her But even if you drop out of that Komatsu, made a drastic change in husband to his local village. Then we specific field, there are many jobs the company by relocating the whole can come up with a system in which you can pick up in regional areas, so research development function—

5 while leaving just a small number of privatization of the Japan Highway plunged into the Japan Highway people in its head office in Tam- Public Corporation, so I remem- Public Corporation. Putting a stop eike—to Komatsu, Ishikawa Prefec- ber—the national budget was 83 to that and investigating other sec- ture, where it was originally founded. trillion yen. Even though there was a tors, and you find an amount of 1 As a result, it raised productivity im- rise in consumption tax, should we trillion 4 thousand billion yen. May- mensely. Simultaneously, the birth use as much as 100 trillion yen? be you must arrange fiscal discipline rate of women employees increased more appropriately. Then, you can in the company. It’s such a good ex- Ishiba: The budget for the Ministry supply that money to regional areas. ample, but why is it that when I ask of Defense is 7 trillion yen, for Min- them to do similar kinds of reform istry of Agriculture, Forestry and Ishiba: But I think regional areas with other firms in Keidanren, they’re Fisheries it’s 2 trillion 4 thousand must make their own money too. not interested? billion, and for medical expenses, it’s Even if the government grant sub- 42 trillion. It’s a huge number. In- Inose: That’s true. Anyway, why sidies or if they provide them with surance covers half, 10% is covered don’t you start by raising the idea of every possible support, people in the by personal, and the tax covers the decentralization again? private sectors need to feel the need rest. Moreover, 35% of that amount to change, or it won’t work. is a loan, but nobody talks about it. Ishiba: It goes without saying, but decentralization involves authority Inose: However, I do think that pri- Inose: So you must be the one to but also a responsibility. I must point vate sectors can go bankrupt if they speak out, Mr. Ishiba. There’s no out that democracy is exceptionally fail, whereas people working in gov- such thing as a budget of 100 trillion frightening. Districts can become ernment offices don’t have to worry yen. They say they asked the finan- happy or unhappy just by the way about losing their jobs. There’s a big cial world to pay 300 billion yen for you handle it. We must teach stu- difference there. child care support, but can’t that be dents that freedom is substantial. Also, there’s the question of fiscal provided by cutting a little bit out Probably, a lot of people have never discipline. During the Koizumi Ad- from 100 trillion yen? At one time, even thought about national sover- ministration, I was involved in the an amount of 300 billion yen was eignty. It’s not sovereignty unless you

6 vote considering you are a statesman. Court was examined, but did you recognized,” as it is. That means even know one name of the judges? we’re only going to affirm the Self What is local autonomy? The dismissal of the Supreme Court Defense Force, not position it as an Changing the relationship judge is something up to the people, army. Prime Minister Abe thinks the not the diet. But hardly anyone New is going to acknowl- between regional areas and knows the names of the judges let edge this, but there is concern that the central government. alone the judicial decisions they have people may think he’s just arranging made, so it’s become a mere façade. its shape. How do you think it Inose: There is the saying, “Near is Being in such a state, can we say we should be tackled? better,” meaning problems should be have three separate branches of legis- solved nearby. Other words, matters lative, executive, and judicial that’s Ishiba: I’m thinking we add the line, regarding the city, town or village indeed working? “To contribute to Japan’s indepen- should be decided by the people who Also in the Constitution, it says, dence and world peace, the country live there. Moreover, financial re- the Emperor shall “perform only such maintains a Self Defense Force of sources should be collected with the acts in matters of State as stipulated land, sea, and air forces led by the power to levy taxes. by the Constitution.” Therefore, Prime Minister as Command- But when that happens, there is strictly speaking, isn’t the act of the er-in-chief.” Is this peculiar? the issue of the Constitution, for Emperor visiting disaster-stricken ar- Japan, after the war, is a country there is the word “local public entity” eas and battlegrounds—which he in which a Self Defense Officer in written in Act 92 of the Constitu- considers to be extremely import- uniform has never attended the diet tion. Mind here that it’s “entity” not ant—illegal? to respond to questions. Then how “local government.” From about the Amongst these issues, I think “lo- are we to understand the military sit- 1960s, the media started to refer to it cal government” is an important is- uation? It’s a country where people as “local authority.” In fact, after the sue which our Party should solve can become the Defense Minister, war, the GHQ tried to name it the upon changing the relationship be- even though they’ve never experi- “local authority” but the Home Min- tween regional areas and the govern- enced work at the Ministry of De- istry resisted and it became the “local ment. However, the Liberal Demo- fense. As long as they know some public entity.” In other words, self-de- cratic Party is undertaking four prob- other field, it’s okay. How can the termination for regional districts is lems now: Act 9 of the Constitution, administration be in control like this? not written down in the Constitution. emergency response, education for That’s why we need to add something I think there is the necessity to revise free and disparities of one vote. Pres- like “For the operation and mainte- the Constitution regarding self-deter- ently, we’re in fact making the Heisei nance of the Self Defense Force we mination of the local government as 24 Draft that covers all of this, but need the greatest consideration from soon as possible. today I cannot go into this. the judicial, legislative and adminis- trative field.” We must think of better Ishiba: So you’re saying there is Act 9 of the words to express this, however. more than Act 9 of the Constitution One thing that can’t be accepted that needs revising. Like you say, I Constitution and by Japan is the idea of Max Weber think we need to change the relation- civil-military that goes, “the state is a human com- ship between regional areas and the munity that claims the monopoly of central government while rethinking relations the legitimate use of physical force what a “self-government” is, other- (army and police) of violence within wise this country won’t last. We need Inose: I don’t know what will actual- a given territory.” It’s realism if you to shift the peoples’ focus that’s al- ly become of Act 9 of the Constitu- say that this is the essence of a na- ways pointing to Tokyo from region- tion, but Prime Minister Abe sug- tion. An army belongs to the country al areas and try and turn it the oppo- gests that we note the existence of and the police to the government. site way. The structure of the popu- the Self Defense Force in Paragraph Although they’re both organizations lation, society, and industries have 3 of Act 9. But he intends to leave that use force, there is no notion of changed, so the relationship between Paragraph 2 of Act 9 that reads, “To civilian control for police. Under the geographical regions and the central accomplish the aim of the preceding National Government Organization government needs to change too. paragraph, land, sea, and air forces, Law, the police are entirely included During the House of Representa- as well as another war potential, will in the administration. But in Japan, tives general election, the appoint- never be maintained. The right of the Self Defense Force is also in- ment of the judges of the Supreme belligerency of the state will not be volved in the National Government

7 Organization Law. There is no other very different things. These two are ductivity. The problem is the local country like this in the world except the country’s most potent divisions, economy, but as I said earlier, possi- Japan. so shouldn’t we identify them explic- bilities for economic growth is ex- Prime Minister Abe thinks it disre- itly in the Constitution? The reality tremely high. Because presently the spectful that while people believe the won’t disappear even if we try and productivity a Japanese person pro- Self Defense Force is illegal and they look away. duces in Japan is about a half of an teach that in schools, there are people When public officials are appoint- American and 2/3 of a European. who risk their lives for this country. I ed they must submit a document Productivity is the number calculat- don’t deny that, but the “right of bel- that pledges the Oath of Service, but ed by dividing the labor productivity ligerency” is not the right to take part in the case of Self Defense Force of- of added value by hours spent on la- in the war, but rules that you need to ficers it just goes; “I pledge that I will bor. Multiply this by the country’s follow during the war. If you don’t complete my mission heedless of population, and you roughly have acknowledge that, it’s like you’re tak- danger and answer to the interest of the GDP. Exceedingly said, 80 % of ing part in war without rules. To say the nation.” The phrase “heedless of those working in the local economy “the nation’s right of belligerency does danger” is not included in oaths for realm still have room to double the not acknowledge this” is almost the firefighters let alone police officers. size of the economy. In other words, same as not admitting the nation’s It’s disrespectful to make them we can cover the loss we’re receiving right for self-defense. Isn’t that fright- pledge that they’ll complete their from the declining population by ening as a country? mission no matter how dangerous it doubling productivity and extending People who participate in the Self is while stressing that they are against the years we spend on labor. Besides, Defense Force—the country’s most the Constitution. Prime Minister if we can raise productivity, wages influential power unit—are people Abe is right about this. But is it a will rise too. Also, if family income with a strong sense of justice and question of just mentioning it in the increases, the decline in population mission. Do you know the war song Constitution? I don’t think so. will stop. Moreover, if labor produc- “Showa Ishin-no Uta” (Showa Resto- tivity increases, it’s added value, so it’ll ration Song)? It’s a song that was Inose: Regarding military power, mean people won’t be working long popular during the Koki Hirota Ad- America comes first, followed by hours anymore. This will all work to- ministration when the 2.26 incident Russia and China. Japan is in fourth ward raising the birth rate, so I think occurred. It sings; “politics and the place. Japan is, in fact, a country the local economy is the key to a sus- financial world is full of decay, so with quite a scale of military power. tainable strategy for us to grow. what are we waiting for, let’s rise and But it’s bizarre that its laws aren’t Up until now, no economists—in- start a revolution.” There was a time maintained properly. cluding macroeconomists—have dis- like that in Japan just 80 years or so cussed macro economy seriously. back. Nobody has proven it scientifically. I don’t think the Self Defense The paradigm Therefore, people have been going Force will suddenly start a coup, but shift to the local around circles discussing the tradi- we can’t say for sure that there won’t tional macroeconomy, monetary eas- be a time when we reflect and regret economy ing, and financial policies. But these the fact that we didn’t state civil-mil- 20 to 30 years have demonstrated itary relations explicitly in the Con- Inose: Returning to the debate on that the macroeconomy has already stitution. The civil society needs to the economy, the causal relationship come to an end. The global econom- build a framework so that such between policies and their achieve- ic model didn’t work, so in the U.K. things don’t happen. Are we alright ments have yet to be explicitly ana- the Brexit occurred, and in the U.S., with a social context in which every- lyzed regarding Abenomics, so we President Trump emerged. thing is in the hands of the Self De- don’t know what the problem is apart If Mr. Ishiba, you were to become fense Force’s morals and sense of from monetary easing. What do you President, I would like you to launch mission? Isn’t it wrong that we’re es- think is at the heart of the problem? a policy in which Japan leads the caping into a somewhat fictional world in changing the paradigm of world where we refuse to call the Self Toyama: At least Abenomics is economic policies. The U.S. is al- Defense Force an army? working toward the global economy ready facing this problem and China Armed forces exist to protect the to some degree. Having made corpo- will too sooner or later. If Japan can country’s independence, and the po- rate capital investment reform, it’s meet this challenge of local econom- lice to protect the citizens’ life prop- true that ROE (Return on Equity) ics and find a solution before any erty and public order. They are two has increased as well as capital pro- other country, then it will be able to

8 lead the world again in the 21st Cen- enough labor, so we don’t have enough have administrative positions and tury as a role model. room or the necessities for continuing law-related positions but not finan- this. We can no longer help black com- cial positions. In reality, is no person Inose: Why is the productivity of Ja- panies becoming zombie companies. who can analyze the economy of the pan so low? Instead, it’s better that firms with town they’re in, based on the Minis- low productivity disappear so that try of Economy, Trade and Industry’s Toyama: This number is produced firms with high productivity can be annual table or someone who can use by added value according to the time supported. Local economies are the RESAS (Regional Economy and spent on it, so it means the Japanese called, “low-hanging fruit” in En- Society Analyzing System). It’s strange people are spending time where glish, but it’s precisely that. There are that no one can analyze the region’s they’re not receiving money. So I many fruits in tremendously low ar- productivity, employment, and in- think we don’t need “omotenashi” eas, which you can reach if you just come statistically and build a plan (hospitality) anymore. Primarily, we reach out with your hand. But as a from there. To hire someone who has should receive money for the hospi- result, these few 20 or so years, we those abilities can be done with one tality we provide. However, for ex- have been adopting policies that are decision from its leader. If it’s the case ample, almost every ryokan is pro- lowering productivity. The same goes that that kind of standard manage- viding service for free. The more we for the agriculture, forestry and fish- ment logic lacks in local government offer service, the more labor produc- eries industry. So, if we go after these offices, we need to support them in tivity falls. Many managers don’t fruits, I think the Japanese economy areas where we can expect the most question that. can grow. significant growth like Mr. Toyama The reason why this was over- said. looked is that during the past 25 Inose: We need a system that can From as old as the Heian Period, years since the bubble burst until the support such a paradigm shift. Japanese traveled to the city and be- baby boom generation retired in came subordinates of people with large numbers, we had an excess la- Ishiba: So how are we going to build power. It’s not like that in Europe. bor force. In a country where there’s a system, and how are we going to It’s something typically Japanese excess labor force, the employment promote the project? We need pri- based on our culture, and it’s proba- absorption force becomes stronger if vate companies to realize the need to bly going to be challenging to try labor productivity is low. So, in that tackle these issues, or it won’t work. and change that, but if we don’t this sense, the government’s policies not Initially, subsidies for the revitaliza- country won’t last. to mention company managers and tion of regional areas were aimed to People of “kenjinkai” (association people in finance, have been uncon- promote that. of people from the same Prefecture) sciously taking behavior patterns of Usually, there is no zero assess- all say; “let’s fulfill our aspirations in work sharing. Companies had the ment for subsidies, but there were big cities and someday return.” excessive personnel, and those who quite a few during the two years I Shouldn’t we stop thinking like this? dropped out from the global econo- was in charge. We kept the town I think from now on, and we should my were absorbed into bus compa- names confidential, and we triple say, “let’s return to regional areas to nies, distribution companies, and checked, so I’m sure it was done with fulfill our aspiration.” construction companies which pro- fairness. ductivities are low. Therefore, even But by doing so, for the first time, Proposing a though Japan is in a period of a pro- we’re faced with opinions like, “how Ministry for Public longed recession, the unemployment come that town which is in the same rate is about 7% percent at the most, Prefecture as ours receive the full Interest, a Ministry which is extremely low compared to amount, while we get nothing?” So for Startups and other countries. In other words, be- inspection is made, and those who cause we were restraining productiv- are granted have to answer to the re- thereby building a ity, there was employment absorp- sponsibilities, or else there’s no mean- new nation tion force in the local economy. Plus, ing of providing incentives. Talks on there were these monetary easing meth- choosing good managers also rise. Inose: 100 billion was given out for ods, subsidies, and grants that support- This is not a system, but one oth- decentralization. Is the list of scores ed this. Up until now, I think the zom- er thing I’d like to point out is the for assessment open for the public to bie companies played an important role employment of local officials. State see? in keeping the society stable. officials have economic positions But from around 2012, there’s not that they can take, but local officials Ishiba: Yes, it is.

9 well, they’ll start chanting, “abalone.” course, take part in the nation in- Toyama: I was a scoring officer too, The plans that have no material are cluding elections, but while there’s but they’ve graded it with ABCD, marked D. It’s quite clear. one artery where the National Tax and it’s pretty clear. If you look at Agency collects tax and the Ministry the ones that are ranked A, you’ll get Inose: I see. Just one more thing. I of Finance creates a budget out of a good idea of how you should tack- do think we need a National Re- that, we could perhaps form a second le the plan. Most of the ones that modeling Plan. I’m presently a spe- highway where people can donate just filled in the blanks with advice cial advisor for Osaka City in Osaka, money to NPO corporations and from a consultant are graded D. For but what I’m suggesting is Firansoro- thereby be deducted the amount. I example, if the idea on fireworks of pi, like the way Mark Zuckerberg think we need the flexibility of not Oma in Aoyama Prefecture was re- donated 5 trillion yen. Giving grants only casting a vote in elections but ceived well, almost everyone around out not by the government, but by also actively taking part in politics the country would start promoting individuals. through tax. For example, how about their fireworks. Similarly, if they hear We have the responsibility of pay- creating something like a Ministry of that farming abalones are accepted ing tax, and as taxpayers we will, of Public Interest?

Regional revitalization begins by discovering Japanese strengths

Toshio Goto, President

From ancient times, Japan has a history of continuously absorbing the culture, art, and civ- ilization from abroad. It started in the Nara Era, where “kentoshi” (Japanese envoy to Tang Dynasty China) were dispatched and brought “Wakon Kansai” (Japanese spirit imbued with Chinese learning) into the country. Then at the end of the Edo period, around the Meiji Res- toration, there was “Wakon Yosai”(Japanese spirit imbued with Western learning). Now there’s even the notion of “Wakon Eisai” (Japanese spirit imbued with English learning), but all of them have “wakon” (the Japanese spirit) in common. The Japanese spirit known as “Yamato-gokoro” is at the heart of Japanese civilization. The key to the theme today— the revitalization of Japan and regional areas—might lie in Japanese civilization. We often forget the good parts of our country, and it’s quite often that we’re re- minded them by foreigners. Foreigners have discovered many useful parts of our country. If we go back as far as the 3rd Century, the following is stated in the “Gishiwajinden” (an ‘Account of the Wa’ in “The His- tory of the Wei Dynasty”); “the Japanese civilization is of an extremely high standard. There are no crimes, and it is safe. Furthermore, in the “Chosen Tsushin-shi” of the 15th Century, it’s written, “whether you’re a man or a woman, you’re educated the language. The literacy rate is extremely high in this country.” I don’t intend to praise everything about Japan, but it’s true that we often forget our beauties and are reminded them by those who come to Japan from the outside world. And I think the clue to solving regional revitalization lies in rediscovering Japa- nese civilization, which is our strength.

10 ronment to start a business. So may- issue out to the public. Ishiba: We haven’t indeed arranged be we could also build something Ishiba: If there is no one doing it, that yet, but it would be good if we like a Ministry for Startups? then I’ll make the utmost effort to could function something like a try and be that one to do it. Ministry for Public Interest and cre- Inose: Let’s go with those two plans. Inose: Thank you for discussing ate supreme leaders who will provide The relationship between the ruling with us for such an extended period. money but also say what they want. party and the opposition parties are (Reprinted from “Shukan Dokush- Can we perhaps build something like a company and a union. Execu- ojin,” 2018, 19th January, No. 3223, like a Ministry of Public Interest in tives are not exchanging ideas. Com- and WEB “Shukan Dokushojin.”) Osaka City? Also, the rate of starting pany managers have got to get in- up a business is very low in this volved in severe debates in order to country. The age of company presi- improve. As leaders of the country, dents in Japan is probably the high- they need to take part in discussions est amongst the developed countries. actively. I think maybe Mr. Ishiba, Japan is no doubt a challenging envi- you could be the one to bring that

The panelists Shigeru Ishiba Member of the Liberal Democratic Party and the House of Representatives. Born in 1957. He grad- uated from , Faculty of Law and started working in Mitsui Bank (the now Mitsui Sumitomo Bank) before pursuing his career as a member of the Liberal Democratic Party and the House of Representatives (10th). He is the chairman of Suigetsukai (Ishiba group). He served as Minister of Agriculture, Forestry and Fisheries (49th), Minister of Defense (4th), Senior State Sec- retary for Defense (68th and 69th), Policy Research Council Chairman of the Liberal Democratic Party (52nd), Secretary-General of the Liberal Democratic Party (46th), Minister of State for the National Strategic Special Zones and Minister in charge of Promotion of Overcoming Population Decline and Vitalizing Local Economy in Japan.

Kazuhiko Toyama Representative Director/CEO of IGPI (Industrial Growth Platform Inc.). After he graduated the Uni- versity of Tokyo, Faculty of Law, he went on to acquire an MBA at Stanford University. He is the CEO of Boston Consulting Group and Corp Directions Inc. He was appointed to lead Industrial Revital- ization Corporation of Japan, a government-backed restructuring fund, as COO before he founded IGPI. He has been involved in numerous company reform and industrial revitalization. He serves outside director of Panasonic Corporation and Tokyo Electric Power Company Holdings, Inc. and is also the Vice Chairperson of Keizai Doyukai (Japan Association of Corporate Executives). He is al- so an expert member of Council on Economic Fiscal Policy (MOF), member of The Tax Commission (CAO) and member of the Trade and Industry Industrial Structure Council, New Industrial Structure Committee of the Ministry of Economy, etc.

Naoki Inose Author. Born in 1946. In 1986, he received the Souichi Ooya Nonfiction Award for his book “ Mikado no Shozo” (Portrait of the Emperor).” In 1996, he received the Bungeishunju Readers’ Award for his book “ Nipponkoku no Kenkyu” (A Report on Japan).” In June 2002, Prime Minister Junichiro Koi- zumi appointed him to the Promotion Committee for the Privatization of the Four Highway-Related Public Corporations. He served as Tokyo Governor from December 2012 to December 2013. In December 2015, he became Special Advisor to Osaka City. His books include “Show 16-nen no Haisen” (The Defeat in Showa 16), “Persona—Mishima Yukio Den” (Persona: The Story of Mishima Yukio) and “Picaresque—Dazai Osamu Den.” (Picaresque: The Story of Dazai Osamu). Upcoming books include “Kyushutsu” (Rescue), “Senso, Tenno, Kokka” (War, Emperor, State), “Seigi ni tsuite Kangaeyo” (Let’s Think about Justice), “Minkei” (Posse Man), “Tokyo no Teki” (Tokyo’s Enemy) and in collaboration with Lully Miura, “Kokumin Kokka no Riarizumu” (Realism and the Nation-state).

Translation: Ayako Karino

11 Japanese Civilization Institute 2018 11th Symposium

Can Japanese athletes play an active role in the Pyeongchang Olympics? What is going to become of Japanese national sports Sumo? Tradition and science, what exactly is sports? How further are athletes going to evolve? We will invite sports experts, Olympians and sports journalists to talk about the history and the latest science on sports.

▶ Panel discussion: Japanese people and Sports

Dai Tamesue Miyako Tanaka-Oulevey Seijun Ninomiya Naoki Inose Bronze medalist in men’s 400 meters IOC marketing committee member Sports journalist Author, Director of Japanese hurdle, at the World Championships Seoul Olympic bronze medalist in Rakuten Eagles Management Civilization Institute Organizer of DEPORTARE PARTNERS synchronized swimming, duet Board of Trustees

Date: 6th February, 2018, 7 p.m.-9 p.m. (doors scheduled to Admission: 2,000 yen (please pay at the door on the day) open at 6:30 p.m.) How to attend: apply through the site below: Venue: Japan University of Economics, Tokyo Shibuya http://www.japancivilization.org/ Campus Hall (the hall seats approximately 100 people) Contact: Japanese Civilization Institute Address:  25-17, Sakuragaoka-cho, Shibuya-ku, Tokyo, 151-0031 03-5456-8082

Traditional Crafts Worldwide：https://shops.japancivilization.org Online Site Japanese：http://japancivil.shop9.makeshop.jp

Messages from Director Japanese Civilization Institute has been introducing and selling traditional crafts of Japan. Although it is said that there is approximately 1,200 types of traditional crafts in Japan, its production is declining. As part of our activities, we hope to discover valuable traditional crafts spread across the nation, enjoy Japanese craftsmanship and its beauty inherited over the centuries, and develop it with you.

Tsumami Kanzashi Folding Screen Folding Screen KYO-YAKI Japanese Bamboo Odoshi - (Crepe) (half size) (full size) Earthenware Basket Tokyotrad Samurai Armor

Contact：Japanese Civilization Institute 24-5 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031 Phone : 03-5456-8082 Mail : [email protected]