Jon Heese, Peter Schiff, and Japan

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Two days ago, I had the opportunity of finally meeting Jon Heese.

As some of you may remember, Jon is a city councillor in the city of Tsukuba in Ibaraki prefecture. He was also one of the first people I interviewed when I began this blog two years ago, and along with Mike “In Tokyo” Rogers, a mentor from whom I have learned much about not only Japan, but about life in general. Jon had come by Toronto to visit his siblings residing here and thought that it would be a great opportunity to finally meet up.

Although we talked over Japanese food, beer, and two rounds of coffee for close to four and a half hours, it felt closer to one.  Jon had a wealth of experiences to share, and I, like a sponge, internalised what he had to say as much as I could.

One of the main things Jon said that impacted me greatly was his point of finding opportunity where most people found doom and gloom. The point preceding this was my concern of being able to find a job in Japan, as a foreigner, having studied at a foreign university, with intermediate Japanese skills, in a field where most firms are pulling back staff and positions (finance). Certainly a difficult position to be in, but not impossible to succeed in. In other words, akirame ga warui: never give up.

Unfortunately, my initial attitude of scepticism seems to, after twenty years of stagnation, be the dominant attitude in Japan for many individuals. The only way to change the way things areand to change this pessimism is to change the way the system is run. And it seems no one, save the emergence of maverick Toru Hashimoto (who does not have enough popular support), is willing to change the system, preferring short-term comfort at the expense of long-term pain. Nonetheless, one can only take opiates for so long before the underlying disease begins to lay waste to the body and, if left unremedied, may lead to an individual’s death.

Some wonder what changes have to be effected before the body can be cured. The answer is simple: small government. How it works is all described in Peter Schiff’s book “The Real Crash”, which I am currently reading and highly recommend for anyone looking for an alternative solution to problems conventional means simply cannot fix.

Although the book speaks in relation to problems currently faced by the American economy, I find many of his proposals to be particularly applicable to the Japanese economy. It is true that the general consensus view his solutions to be of the “hack and slash” variety, and it certainly doesn’t help that he sometimes fails to articulate his solutions well enough on television. But in full flesh, when he is able to fully explain his proposals, you can see the sense in Schiff’s argument for governments around the world.

Unsurprisingly, the path Schiff and other libertarians support is the path of greatest resistance. Reduction of government will meet opposition from almost every part of society. Opposition parties will hate it because their jobs are at stake. Lobby groups will hate it because of reduction or elimination of funding from certain causes or groups. The general public will oppose it under the perception of reduced government as a reduction of social services.

There is, however, no real alternative. Japan is beginning to recognise that with the growing popularity of Hashimoto (notwithstanding his tie-up with Ishihara) after twenty years of trying everything under the sun. And other governments will begin to realise the same only when all other options have been exhausted.

We can only pray that the changes be implemented sooner rather than later. In the meantime, the challenges continue to grow, and the task at hand becomes more and more daunting.

The Case for Toru Hashimoto

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Every so often in politics, the proverbial pot is stirred. Japan’s last ladle came in the form of Junichiro Koizumi. Fast forward six years, and Osaka Mayor Toru Hashimoto is shaping up to be the next.

Young, charismatic and belligerent, Hashimoto is the antithesis of a typical Japanese politician in both personality and policy. The 43-year old maverick has proposed sweeping change in the municipal public sector, including the implementation of performance-based benchmarks on grade and secondary school faculty; the privatisation of the Osaka Municipal Subway; spending cuts to the fine arts; and a near fifty percent reduction of the municipal government workforce. On the national front, Hashimoto has called for abolition of nuclear power; the elimination of the upper parliamentary house; and strongly supports upping national defence. Substantial views, from a politician with no real political experience on the federal stage.

Substance, however, is what the public seems to want from a national government that – in recent recollection – has had anything but. A survey conducted by American think-tank Pew Research Centre notes that dissatisfaction with the federal government hovers at eighty percent. Movement on Japan’s entry into the Trans-Pacific Partnership free trade agreements has been slow, if not wholly nonexistent. The only result yielded by Japan’s continued spat with China over the Senkaku Islands has been damaged economic relations. It does not come as any surprise to those even vaguely familiar with East Asian politics how poorly the Japanese government currently sits in the view of its people.

It is easy to see the sway Hashimoto holds in light of the above; more than ever, change is needed in a country that, for all its hustle and bustle, seems to be at a standstill. In the eyes of many, his brand of politics is certainly preferential to that of the old guard. Change is needed, and Hashimoto has promised to deliver change.

How effective Hashimoto will be in delivering this change, however, is an entirely different matter. Pointing the metaphoric gun and shooting everything on site may not bode well in a system that has largely been run by mutual backscratching. Farmers and rural dwellers, who hold a disproportionate amount of power in Japanese government, are staunchly opposed to his plan of joining the TPP. While popular in Osaka, recognition of the political firebrand dips as one ventures farther from Kansai region. The internal power struggle between him and ex-Tokyo governor Shintaro Ishihara following the merger of his party with Ishihara’s certainly lends no favour to his cause. Although surmountable, the challenges facing Hashimoto in his quest to the top are not insignificant.

Nonetheless, Hashimoto’s existence in the oft-opaque world of Japanese politics will spark inevitable change. Whether that change is for the better or worse is a matter that can only be told through the passage of time.

[Weekend Countdown]: 8 Reasons Why Japan Should Not Increase its Consumption Tax

Why would you increase the consumption tax to ten percent when…

  1. You can cut the salaries of Diet members from the average ¥21 million to ¥14 million, saving ¥4.3 billion in the process? Freebies like free train tickets, free flights, and free secretaries can go as well.
  2. You can shrink the bureaucracy. The Japanese government hires one million people. Compare this to the 1.7 million hired by the US government, to govern a population thrice as large as Japan’s. I don’t advocate kicking people out of jobs, but there are clearly inefficiencies that must be eliminated.
  3. You can hike taxes on tobacco and alcohol, improving the health of the general population in the process and cut healthcare expenditures.
  4. You can stop with the quantitative easing.
  5. You can stop with the electric car subsidies. Not everyone wants on needs an electric car, and those that have one put a strain on the already strained power grid in Japan.
  6. You put more money into pork-barrel projects to appease the overwhelming overrepresented rural population than in R&D or education.
  7. You bought 179 F-35s when they’ve only built 63 (ever) and cost hundreds of millions of dollars per aircraft. Defence spending to spur the domestic defence industry is good. In this case, however, Japan’s just giving money away to the Americans, which seems redundant given their presence on Okinawa.
  8. You can’t even make up your mind. The LDP wanted a tax hike under Taro Aso. Now that a different party’s in power, it has turned a hundred and eighty degrees and is calling the notion of a tax hike irresponsible. Funny thing, politics.

So why should Japan increase its consumption tax? Given the above, it really shouldn’t.

The Ideal Japan

Lexus' slogan is "The Pursuit of Perfection". Shouldn't Japan's motto be the same?

“If you could become the Prime Minister of Japan, what would you like to see accomplished during your tenure?” Fully aware of my ambitions of eventually joining the Japanese political sphere, a friend of mine posed this question while we travelled home after a long day’s work. Although his inquiry itself was an honest and legitimate one, I quickly realized that I never really (seriously) thought about this question.

If I had the power to reform Japan, what would it look like? Which issues would I focus on in office, and how would I address these issues? How would I put Japan back on track? What would my platform look like?

(Do keep in mind that I am still quite young. There are several things that I have yet to understand, and I would rather not have blog posts I wrote based on a kid’s understanding of the world to be used against me in a gubernatorial race in twenty years’ time. These are my positions at present.)

Economic Policy

Emulate Singapore. In many ways, Singapore is very similar to Japan. Singapore is powered by American-style capitalism run under the guise of democracy, when really everyone knows it’s a technocratic wonderland controlled by Lee Kuan Yew and friends a la Ichiro Ozawa. Yet somehow, it manages to be a mini, more efficient version of Japan. Like Japan, Singapore’s economy is driven by exports. Their workforces are highly educated. Both invest a ton of money into R&D, and geographically both are resource-poor countries with high population densities.

And that’s where the similarities come to an end. For the most part, Singapore remains corruption-free. The Ministry of Finance effects quasi-free market policies. Its corporate tax rate is half Japan’s; consumption tax sits at 3 percent; its business environment remains open and transparent; its infrastructure up to date; and unknown to many, Singapore is one of the top three refineries of crude oil in the world. Unlike Japan, it’s actually growing at a rapid clip and manages its finances very, very well.

Granted, each country has its quirks; certainly, a solution in one case may not necessarily transition well to resolving another problem. In terms of economic policy, however, Singapore serves as a powerful model to which Japan can look up to in restructuring what many consider to be a rather inefficient form of economic governance.

Social Policy

Although mainstream media both inside and outside Japan have remained mum on the issue, pushing forward with the newest initiative to implement a Canada-esque, points based immigration system seems like the right way forward.

Gay marriage and the like will likely not be key issues in the near to immediate future, as individuals in Japan tend to keep that sort of thing to themselves and in the warm embraces of love hotels.

Healthcare is a tricky one. I won’t claim to know enough about the Japanese healthcare system to make any assertions, but last I checked, healthcare and pensions are becoming the biggest public expenses as the population ages. Will it be unpopular to cut it down? Certainly. But when one side of the balance sheet is outpacing the other, at some point something is going to give. Ensuring that the basics are covered while tying the extras of healthcare benefits and pensions to the country’s economic performance may be an unpopular move, but it will be an ideal one in moving towards a more sustainable Japan.

A Nordic-style education, rather than the traditional, rote memorization model used for so many years, may be the way forward in making Japan a more innovative society. You can find more information about this an article I wrote earlier wherein I used the Finnish education system as a model for Japan’s future:

“Though its education system is paradoxical to Japan’s in every conceivable way, Finland beat the East Asian nation in ranking third overall in the OECD’s test of junior high school students. It would be difficult for the average Japanese (or average East Asian, for that matter) to understand why. According to the OECD, the Finnish spend the least amount of time in school and begin their schooling a full two years later than their peers in the rest of the world. Mention cram schools to the average Finn and he will look at you in utter bewilderment. There is only one (yes, one) mandatory exam, taken at the end of one’s secondary schooling. In contrast to many of the equally high ranking countries in East Asia (Japan included), Finland’s education system seems to be too relaxed and too unorthodox to perform well on any standardized test – yet it does.”

A Japan that is less focused on the “guilty until proven innocent” notion would certainly be an ideal one, particularly when you take the country’s 99 percent conviction rate into account.

Environmental Policy

Cut down electricity usage not only to keep Japan’s carbon footprint steady, but to minimize Japan’s dependence on imported energy and mitigate the necessity of restarting its highly unpopular nuclear power plants. The growing popularity of electric cars are likely to put increased strain on the power grid; cutting away at the fat, such as blasting the aircon with the door open to attract customers, will negate the powerful drain of electric cars. Hopefully.

Military Policy

Status quo. Japan is getting a great deal: the best military of its strongest ally protecting the country with a relatively low cost. Development of its own, in-house weaponry could certainly be encouraged. Joint development alongside South Korea would serve both countries’ interests in deterring China and North Korea as well.

Dedicated to Tetsuya (pseudonym)

Breaking the Monotony of Life and the Spectator Mentality

More often than not, people get too caught up with daily life to do anything else. Wake up. Go to school or work. Argue with friends or officemates for a bit, do some work, check Facebook, eat, crack a joke, go home. Eat again. Watch a new Korean or Japanese drama on TV. Drink. Go to bed. And the cycle repeats the next day, and the next, with only minor interruptions like holidays to break the monotony of things.

I am certainly not exempt from this rule; in fact, I’ve been so caught up with university applications over the last two weeks I have relegated blogging to somewhat of a secondary priority. This should not be the case; if you blog regularly like Mike Rogers, writing a long piece comes very, very easily.

Nevertheless, life becomes so self-encased for many. Everyone is so preoccupied with their little world, we oftentimes fail to realize there is a larger existence influencing our daily lives. And though we have become so connected through online media, the emergence of social networking sites and the like have allowed us to take on more of a spectator role than to participate in influencing these events themselves.

Just look at the Japanese political world as it stands. The incumbent Prime Minister, Yoshihiko Noda, has put forth a motion to raise the consumption tax in order to contain Japan’s astronomical level of debt. People will complain, his ratings will probably drop (as they have already) and he’ll probably be put out of power. But have they found a solution to the problem? No! Instead, someone from the old guard will be ushered in to take his place, only to make new, false promises that he won’t be able to live up to and offering the same, tired “solutions” to the same problem to little avail. The Japanese public are more than willing to remain as spectators rather than as participants.

It honestly takes two to tango. You have an apathetic public and a public sector concentrated on its own survival in an increasingly difficult world. The public sector takes care of itself, yet the apathetic public complains but does nothing about it. It’s akin to going to the hospital because of heart disease, chastising and replacing the doctor for not taking care of you, then going to MacDonald’s to get a Double Big Mac combo for lunch.

Granted, much of the blame can be placed on the Japanese government, and I doubt Ron Paul’s libertarian dreams would fly in a country which has, since its inception, been controlled by a large bureaucracy. But a corrupt, big government does not necessarily mean that it is permanent. The Arab Spring. The dissolution of the Soviet Union. Most events that led to major political shifts were led in the interests of the people and by the people. Active political participation, rather than playing the role of a common spectator, will be necessary in changing the Japan of today into a more efficient, better Japan of tomorrow.

We are at the point where we can no longer remain spectators in the grand scheme of things. We can’t just comment on how horrible something is actually without doing something about it. We can’t just keep pulling people down (particularly unwarranted criticisms) when we have nothing to offer ourselves. There is life outside our little bubbles. It will all come crashing down if we personally do nothing to act. To change. To form a better future for ourselves and for our children.

And that change will require a hell of a lot more than a family remarking “最悪だな” while watching TBS News at the dinner table.

Republicans and Japan: The Significance of the 2012 GOP Race to the Land of the Rising Sun

Back in 2008, many had faith in Obama’s promise of change. “Change has come to America!” he openly declared. Americans cheered as the first black president promised to increase American energy independence, decrease lobbyist influence, provide universal healthcare and withdraw troops from Iraq. It seemed like the Harvard Law School graduate could (and would) live up to his word.

It has been three years since the President rose to power. The Keystone Pipeline, a project intended to increase energy independence, has been delayed and faces potential cancellation. The Obama campaign has taken donations from quasi-lobbyists. And though he has kept his promise of withdrawing troops from Iraq, the United States continues to maintain a significant presence in the region with 16 000 diplomatic personnel and over 5000 private security contractors still in the Middle Eastern country. Coupled with high unemployment, low consumer confidence, rising national debt levels, Obama leaves a track record of broken promises and weak leadership going into the federal elections of 2012.

As remote as it may seem, domestic affairs of the United States and the competence of its president are, in fact, crucial to the economic health of Japan. The United States is Japan’s second largest import/export partner, from whom Japan sources much of its supply of wheat and soybeans. Japan is also home to 35 000 American troops, strategically positioned to assert American influence in the Asia-Pacific region. Any indication of socioeconomic instability in the United States may strain its relationship with Japan.

With Obama floundering on both social and economic issues, the United States may well get the socioeconomic instability it has tried so hard to avoid. We are already seeing the effects of his failed fiscal policy: just three days ago, Obama signed a bill that would effectively cut funding from transferring military personnel from Okinawa to Guam in an effort to cut “wasteful spending” notwithstanding an existing agreement to relocate the base (never mind the fact that maintaining an overseas base costs billions of dollars).

Are there any better alternatives than Obama? If they do exist, what would these alternatives mean in the context of US-Japanese relations?

Rick Santorum, the runner up in the Iowa caucus, is not the way to go. Listen to what he says at 4:00 in the following clip when asked about pulling troops out of Okinawa and in bases elsewhere around the world:

“I’m not too sure it’s a wise idea that we should remilitarize Germany and Japan. If there’s something we learned from history it’s that we’re not sure we should go down that road again.”

Right. Now let’s hear from one of Rick Perry’s most ardent supporters, Christian televangelist Charles Peter Wagner:

“Japan, as a nation, is one of the nations of the world which has consciously, openly invited national demonization. The Sun Goddess visits him in person and has sexual intercourse with the Emperor. It’s a very, very powerful thing…that’s an invitation for the Sun Goddess to continue to demonize the whole nation. Since the night that the present emperor slept with the sun goddess, the stock market in Japan has gone down. It’s never gone up since.”

What does that tell you about a person, if his biggest fan believes that the Japanese emperor having sex with a sun goddess is directly correlated to Japan’s economic recession?

Mitt Romney does not have much of a record on Japan, and all we have on Newt Gingrich on Japan-US relations at this point is a minor gaffe made when he compared his failure to make the ballot to Pearl Harbour. Ron Paul has, on many occasions, called for a US withdrawal from Japan; given that 85 percent of all Okinawans oppose the American military presence, that may just be the right thing for the Americans to do.

Economic policy, however, is just as important to the Land of the Rising Sun; if Japan’s second largest trade partner goes down, Japan is going down with it. Having a candidate with sound economic sense, then, is critical to maintaining the economic health of both America and Japan. Nevertheless, deciding the best economic policy platform among the GOP candidates is a difficult choice – all of them have their flaws. Rick Perry wants to introduce the option of a 20 percent flat tax for individuals currently paying more than a 20 percent income tax, a move that favours the wealthy in society. Rick Santorum favours a similar move that lowers taxes only on the rich. Gingrich wants to loosen regulation on the financial industry by repealing Dodd-Frank. Romney’s economic policy is a mixed bag and is oftentimes compared to Obama’s economic record, while Ron Paul wants to do away with the Federal Reserve. At present, their stances on the economy seem kind of sketchy to me.

For the sake of the Japanese economy, better US-Japan relations and global fiscal health as a whole, we can only hope that America picks the right choice in 2012. Ideally, one who doesn’t believe that the emperor has sex with the sun goddess.

The Changing Times: China Taking Economic Precedence, Japan Begins New Immigration Policy

Small, seemingly insignificant events can sometimes precipitate great things. Matsushita Konosuke, the founder of Panasonic, established a multinational consumer electronics giant with nothing more than an improved light socket. The roots of automotive juggernaut Honda can be found at a small auto shop where its founder, Honda Soichiro, perfected his trade. The Convention of Kanagawa in 1854 preceded the Meiji Restoration, which opened Japan up to the world and led Japan to become a major economic tour-de-force. Though it is often said that “the flutter of a butterfly’s wings can cause a hurricane on the other side of the world”, the hurricane – in the case of Japan – usually occurs on the same side.

Today, Japan is facing two tropical depressions that may well transform into full blown typhoons: the inevitability of expanding immigration, and the shift in economic powers from American dominance to equal economic standing between the United States and the People’s Republic of China. In relation to the first, Japan has recently announced its plan to introduce a points-based immigration system that awards visa preference to skilled professionals to combat the decline of its aging population. In response to the second, Japan has agreed to make a shift away from reliance on the US dollar and, for the first time in history, purchase $10 billion worth of  renminbi-denominated bonds.

The shift in immigration and economic policy is hardly uncalled for. Whether found domestically or abroad, Japan will need workers to fill in the gaps left by the shrinking Japanese population. Similar things can be said about placing increasing importance on China as the United States struggles to resolve its ongoing economic issues.

Each shift, however, comes with its own fair share of problems that cannot be left unaddressed. As noted in an earlier interview with Tsukuba city councillor Jon Heese, cultural integration should take top priority: “If Japan decides to loosen immigration rules, my greatest fear is allowing the creation of ghettos. A Chinatown is one thing, but if there is little interaction between the communities, it is a recipe for trouble.” Concerns in balancing US-Japan and Sino-Japanese relations must also be raised. After all, the United States has enjoyed a rather comfortable economic relationship with Japan over the last fifty years; a policy shift that is not in accord with historical ties may spark retaliatory actions that could negatively impact Japan.

By and large, however, it is difficult to make an analysis when full details of both the new immigration policy and the shift in monetary policy have been withheld from the public so far. Both are representative of the changing times, and must thereby be thoughtfully and carefully examined in establishing what’s best for Japan, both domestically and in its relation to the world.

Japan’s Defence Policy: The Irony of Action Compared to Spoken Word

With China taking an increasingly assertive stance in foreign policy and with a precarious North Korea to the west, the task of defending Japan against foreign aggressors has begun to rise in priority. Evidence of such a shift in priorities can be found in Japan’s plans to modernize its air force with the coming purchase of forty F-35s from American defence company Lockheed Martin (despite its inherent unreliability and eyebrow-raising cost per unit).

The Japanese government has since gone a step further: according to Japanese defence minister Yasuo Ichikawa, Japan will loosen a once self-imposed arms export ban to “stimulate the domestic arms industry while reducing the country’s defence spending.” With a slow growing economy and expenditures growing left, right and centre, economic growth and expenditure-cutting in any form would certainly be useful in saving Japan’s quickly-deteriorating fiscal health; particularly when you consider that it has the 6th largest defence budget in the world.

Perhaps there’s a certain irony to the situation, then, that Japan is looking to spend money on American aircraft yet seeks to expand its own domestic arms industry at the same time. What happened to the Mitsubishi ATD-X? What can be more stimulating to a domestic arms industry than building a fighter jet; even if the F-35 were transitory, why did they choose to go with an expensive, unreliable, fifth generation fighter? It’s like buying the most expensive, maggot-infested tomatoes from the supermarket when you could have grown fresh ones in your own garden for much less.

I’m not going to say that I’m a pacifist; there is a need to update aging Japanese military equipment and certainly a potential source of economic growth found in exporting arms. But when you commit to twelve billion dollars of foreign arms while telling the public your objectives of “stimulating the domestic arms industry while reducing the country’s defence spending”, it seems a bit contradictory to me.

The Dubious Cost of Japan’s New Military Acquisition

I’d like to start this post off by thanking Mike Rogers for his support, his openness and as always, for his sagelike words of advice. 本当にありがとうございました。

When I began SavingJapan a little more than a year ago, I had discussed the possibility of Japan “remilitarizing” and updating its ancient fleet of military equipment.

Thinly-veiled rumours heralded by the Japanese media earlier this week indicate that the Japanese government now agrees. According to the Washington Post, “Japan is set to select the Lockheed Martin F-35 Lightning II JSF as its new stealth fighter…upgrading its air defense at a time when China and Russia pose growing threats to its territory.” The 460 billion yen deal is expected to include forty aircraft, military know-how and manufacturing jobs in Japan for producing the aircraft’s various components.

There is no denying the importance of preserving and defending national sovereignty. With its neighbours arming themselves to the tooth with the latest and greatest in military technology, there is reason for Japan to be concerned; as such, the update of Japan’s now-antiquated military hardware can hardly be considered unwarranted.

The purchase, however, could not have come at a worse time. Government officials expect debt issuance to exceed tax revenues in the next fiscal year, while the yen remains at the exporter-unfriendly 78 yen line. This lies on top of the 12.1 trillion yen earthquake reconstruction budget. It is hardly considered appropriate to max out the credit cards with little to no income to pay the debt back.

But was the purchase appropriate to begin with? Not only did they go with the most expensive purchase; they went after the most unreliable one.

Re: F-35 reliabilityFrank Kendall, the Pentagon’s top weapons-buyer, convened the so-called Quick Look Review panel in October. Its report 55 pages of dense technical jargon and intricate charts was leaked this weekend. Kendall and company found a laundry list of flaws with the F-35, including a poorly placed tail hook, lagging sensors, a buggy electrical system and structural cracks.

Some of the problems, the electrical bugs, for instance, were becoming clear before the Quick Look Review; others are brand-new. The panelists describe them all in detail and, for the first time, connect them to the program’s underlying management problems. Most ominously, the report mentions, but does not describe a classified deficiency. Dollars to doughnuts it has something to do with stealth, aviation guru Bill Sweetman wrote. In other words, the F-35 might not be as invisible to radar as prime contractor Lockheed Martin said it would be.”

This, on top of the fact that Japan is home to 90 American military facilities (of which, at least three house F-35s), makes it difficult to justify why Japan needs not one, not ten, but forty of these expensive, unreliable fighters. Though their fleet is in need of replacement, buying F-35s outright from the United States does little to promote much-needed military R&D in Japan and may not be worth the price paid by the Japanese government.

Japan can hardly afford to waste 460 billion yen through the purchase of these fighters. Ironically, that’s exactly what the government plans to do.

Don’t Concentrate Everything in Tokyo

Common sense usually advises us against putting all our eggs in one basket. When it comes to investing, rarely does one invest all his/her money in a single company. Backups of important pictures and documents are usually stored on multiple hard drives to prevent the total loss of data. Being conversant in more than one language opens opportunities to work in a variety of environments around the world, without being limited solely to countries (or the country) in which your native language is spoken. A singular dependence on anything is usually detrimental and at best self-limiting, and it would be wise to allocate one’s resources in multiple places rather than devoting everything to a single task, skill or resource.

Japan, however, seems to be acting against wisdom in its concentration of all functions and industry in the nation’s capital of Tokyo. Home to one out of every four Japanese, job opportunities draw individuals from across the country to the city of 13 million (40 million when the Greater Tokyo Area is considered). Most major corporations are headquartered in Tokyo and the majority of government functions are concentrated in the districts of Nagatacho and Kasumigaseki. Tokyo’s population only continues to grow, and is projected to be the world’s largest megacity at 36 million people by 2025.

Though the country has always been rather urban-centric, the concentration of both people, industry and administration in Japan will present a significant problem to the Japanese in the years ahead. The combination of an aging population and migration to the nation’s capital may place excessive strain on the country’s deeply burdened healthcare system. Tokyo’s transport infrastructure systems would have to be expanded to accommodate the influx of new migrants. Housing in Tokyo, oftentimes described as nothing more than rabbit hutches, would shrink further in an effort to fit more people in the same amount of space. More cars would be on the same roads; more sewage would have to be get rid of, and more resources would have to be dedicated to Tokyo. More money would have to be spent to keep supply and capacity ahead of surging demand.

But would this really be the smart thing to do? Is it really necessary to build new watermains, new subways and new hospitals to accommodate the growing population in a time of economic turmoil? Is it worth paving new roads and building new, grand condominiums? Does the cost of these projects really justify the over-centralization of everything in Tokyo?

Although it makes for a great sight for tourists and is inherently convenient for those who live in it, the centralization of Japan’s population in Tokyo is both unnecessarily expensive and an inherently risky move. A new report by a government panel suggests that another tsunami may be triggered by another major earthquake within the next thirty years. Although memories of the March 11th earthquake are burned deep in the memories of all across Japan and around the world, the potential for an exponentially greater disaster exists with the  existence of a 36-million strong coastal megacity just steps away from the Pacific Ocean. Supplies of food to Tokyo would quickly be exhausted in the event of a future food crisis, whose possibility grows more likely with every passing day. Those in the city would be among the first hit by global economic turmoil, and ministries will find it difficult giving both aid and job opportunities to the swathes of unemployed and homeless that would follow an economic recession. Even if everything were going according to plan, the government would have to spend an unnecessarily exorbitant sum expanding public infrastructure to accommodate the growing population despite the decline in Japan’s overall population. Ironic, isn’t it?

The solution to Japan’s problems, perhaps, is to decentralize everything from Tokyo through providing job opportunities elsewhere. Nobody chooses to live in a rabbit hutch or crowd with hundreds of other people on a packed subway train. The only reason people choose to move  to Tokyo to start with is because of job opportunity available in the nation’s capital unavailable elsewhere. With the Japanese economy in chronic stagnation, it makes sense to want nothing but the best for your career; if Tokyo is the only one that  serves your interest, moving to Tokyo is only natural. By providing new opportunities elsewhere, people will be inclined to chase after those opportunities and settle in new places, and in turn relieve Tokyo of the needs of an increased population.

But how, you ask? How can you convince people to move to Nagasaki instead of Tokyo? “Job opportunities” is a rather vague term to use, isn’t it?

The answer to these questions lies in Special Economic Zones (or SEZs). These have proven to be particularly effective in China, where rural backwaters have been transformed into economic powerhouses through a combination of economic liberalism and state control.

(I won’t delve into this deeply, as I used this as an argument for an essay I wrote for the JFTC competition; I will post it in its entirety later this month when the results are out.)

The long and short of it is this: Japan should not concentrate everything in Tokyo. Doing so will only result in unnecessary expenditures and sets the capital up for the risk of a total disaster greater in scale than March 11th.

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