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No. 8, July 2000
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The Japanese tradition of reforms
A collective publication by German researchers In German: Bestellen bei Amazon.de.
Book your hotel in Japan online.


In 1999, the collective work
Japans Kultur der Reformen was published, uniting the papers of the 6th gathering of specialists on Japan of the German Society for Nature Study and Ethnology (OAG) in Tokyo (March 1998). It is a testimony of an existing culture of reforms in Japan, although the current LDP leadership seems to do everything to prove the contrary.
 
Established in 1873, the OAG was founded not only by scholars and diplomats, but also by merchants. Today, still an important part of its members come from the economy. The present volume not only deals with the current financial and economic problems of Japan, but also with the political system, think tanks, security policy, yakuza, the educational and university system, the evolution of the father-image as well as reforms on the artistic and esthetic level. Already the first motto of government in Japan in 645, in which the still used year-counting after the Chinese model was introduced, was taika ("big change"). However, the book by the OAG does not go behind Meiji-reform-era.
 
Peter Baron deals with the reforms of the financial system in the last decades. For him, deregulation as such is no recipe for the solution of the Japanese problems since an efficient economy needs on the contrary a certain degree of regulation; otherwise, economic chaos would be the result. A "wrong"-handed deregulation could have negative effects on the market. Baron stresses the fact that the social responsibility of society and enterprises is higher in Japan than in the USA. Therefore, the density of regulation in the banking sector is higher.
 
In no other developed economy are the financial institutions in a comparable position of power and influence, according to Baron. Japan early realized the necessity of a fundamental reform of its financial system, but no measures and of course no real reform were undertaken until the mid-1990s.
 
At the end of 1989, the Nikkei reached its climax with 39,000 points. The end of the bubble economy was for Baron not an event of destiny, but a wanted measure introduced by the Japanese Central Bank which initiated a monetary policy of slowly becoming more expensive money. As a result, the prices for overpriced stocks and property sunk rapidly. A movement which only towards the 1990s seemed to come to an end.
 
First, there was a sort of tacit understanding between banks, supervising authority, employers' association, politics, etc. They all seemed to agree to wait and hold out. Japanese were convinced to have found the best way to handle the crisis. The banks sat on a huge pile of unsecured credits but did nothing to bring them to light and made no risk provisions. Only towards the mid-1990s, under the unchained pressure by foreign press and banks, the supervising authority started reacting and catching up with the problem. The Japanese people and public opinion only became sensitive when the unsecured credits of the whole financial sector were estimated at over $300 billion. As a consequence, the confidence in the banks and the banking system faded.
 
In November 1996, a structural reform of the financial market was introduced, which aimed to revive the Japanese stock market by 2001. According to Baron, the successful implementation of the program began in 1997/98. Therefore, he concluded that (in 1998 when he presented his paper) there had never before been such good conditions for foreign financial companies to become active in Japan in the sectors of private banking, consumer finance, asset management, ABS and real estate financing. Especially the American side, where the harshest critics came from, started acquisitions of Japanese companies. Baron's reservations to his optimistic outlook where that the success of the reform program depended on the political will to implement it rigorously. Today, he probably would agree that the crisis is not resolved yet.
 
A few remarks on two other articles of the book: Richard A. Werner examines the economic reforms of the 1990s which were the deepest since the great depression of the 1930 and became necessary because of the Japanese recession starting in 1992 and during six years (his paper was written in 1998/1999). Patrick Reinmöller has a look at the Japanese think tanks. In contrast to the mostly non-profit-orientated institutes in the USA which are strongly engaged in middle- and long-term research, the Japanese think tanks are profit-oriented and specialized in short- and middle-term (commissioned economic) research. Over 80% of researchers are concentrated in the Tokyo area where of course also most of the money goes to.
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Referate des 6. Japanologentages der OAG in Tokyo, Werner Schaumann, Hg., iudicium verlag, 1999, 276 S. Get it from Amazon.de.
 
Another book in German, by Makiko Hamaguchi-Klenner: Politischer Realismus in Japan, Verlag Peter Lang, Frankfurt a.M., 2000, 376 S. Her analysis focuses on the development of new international concepts in Japan. She examines the role of the government, LDP, the bureaucracy and other actors and their impact on foreign and security policy, development aid and other international policies.
 
Book your hotel in Japan online.

www.cosmopolis.ch
No. 8, July 2000
current edition & archives
Art  Film  Music  History  Politics  Archives
Links  For Advertisers  Feedback  German edition  Travel

Copyright 2000  www.cosmopolis.ch  Louis Gerber  All rights reserved.