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    Posted by Sean at 12:59, June 23rd, 2009

    The lead editorial in the Nikkei today carries the headline “Use stringent criteria for public assistance to [private] corporations”:

    Public-sector assistance for powerhouse corporations is getting mobilized. The government has determined that it will attach government insurance to the loans provided by the Development Bank of Japan to Japan Airlines. It is forecasted that within the month syndicated loans on a scale of JPY 100 billion will also be executed. Public assistance for Elpida Memory and Pioneer, among others, is also being looked into among relevant parties.

    The grounds for legitimizing Tokyo’s embarking on assistance for corporations are that it’s a response to a crisis. In the economically sluggish environment that surrounds them, if the operations of powerhouse corporations are impeded, many and great effects on the Japanese economy and on the daily lives of citizens will manifest themselves. The thinking goes that government intervention, taken as an emergency measure to forestall those effects, is justified.

    Casting an eye abroad, we see that the U.S. government has infused General Motors with approximately JPY 5 trillion of public funding to assist its reconstruction. In Europe and the Americas as well, Opel in Germany and other enterprises have taken public loans. Since the financial crisis of last fall, the nature of the relationship between private and public has changed, and now corporate relief from the government is not all that rare.

    However, the premise of the operations of private enterprise is responsibility for itself, and the brakes need to be applied hard to government assistance. If it gets to the point that “any old corporation can get a government bail-out,” then inevitably we’ll be asking for slackness in business operations. The metabolic process—restructuring, attrition [of moribund organizations], and appearance of new entrants—will not go forward, and it will produce a decline in industrial activity.

    An industrial policy of protecting the weak is not something that is desirable. In industries such as electronics, in which it has been indicated that the number of players is too high, moving forward with restructuring and attrition, not with bailing out individual enterprises, will lead to the robustness of the industry as a whole. Even if a powerhouse enterprise topples, if new entrants come to life, the markets will take on their own vigor, and employment will also emerge.

    Compared to some time ago, the financial markets are in the process of recovering their stability. We should pile prudence on prudence when it comes to setting in motion government assistance, which cannot be guaranteed not to cause distortions in competition.

    The word I’ve (loosely) translated “attrition” above is the selection part in the Japanese equivalent of natural selection (自然淘汰). Of course, the relationship between government and private industry (especially “powerhouse corporations”) has been much closer in Japan than it’s conventionally been in the States. And the Japanese have now had nearly two decades of experience with zombie corporations and painful economic dislocations.

    Added later: ReasonTV has turned Anthony Randazzo et al’s recent study into an episode.

    Added on 24 June: You’d think I’d be able to distinguish between JAL (my airline!) and ANA, but I mistyped above; it’s corrected now.

    Behind door A…

    Posted by Sean at 12:58, June 18th, 2009

    The Yomiuri says that Japan and the United States are looking into the likeliest scenarios for the DPRK’s next rocket launch. Very comforting:

    At the Tongchang-ri facility, either a Taepodong-2 missile or an upgraded Taepodong-2 was believed to have been brought from a missile manufacturing facility near Pyongyang on May 30, according to the sources.

    Based on the assumption that this latest missile is a two- or three-stage type and has capability equal or superior to the long-range ballistic missile North Korea launched in April, the Defense Ministry predicted the possibility of a launch toward Hawaii, with a launch toward Okinawa Prefecture and Guam also seen a possibility.

    If it took the Okinawan path, when the first-stage booster detaches it could fall in the vicinity of a Chinese coastal area and might anger China.

    In the case of the Guam path, the missile must overfly South Korea and Japan’s Chugoku and Shikoku regions, which means the booster would be dumped onto a land area. Therefore, the ministry sees both possibilities as quite low, according to the sources.

    In case of the Hawaii route, the booster could be dumped into the Sea of Japan. If such a long-range test launch was successful, North Korea would be able to pose a great military threat to the United States, which until now has not regarded North Korean missiles as a threat to North America or Hawaii. Therefore, the ministry concluded the Hawaii route is most probable of the three scenarios, the sources said.

    However, while the distance from North Korea to the main islands of Hawaii is about 7,000 kilometers, an upgraded Taepodong-2 only has a range of 4,000 to 6,500 kilometers.

    The ministry believes even if the missile took the most direct route over Aomori Prefecture, it would not reach the main Hawaiian Islands, the sources said.

    Though U.S. intelligence satellite images showed a missile launch pad had already been set up at the Tongchang-ri base, it takes more than 10 days to assemble and fuel a missile before launch, according to the sources.

    The ministry said it believes North Korea is likely to launch a missile sometime between July 4 and 8, because the 1996 launch of the Taepodong-2 missile took place on the July 4 U.S. Independence Day (July 5 Japan time) and July 8 falls on the anniversary of the 1994 death of former North Korean leader Kim Il Sung.

    It came to light Wednesday that North Korea may have transported a missile to a launch site in Musudan-ri.

    So now we watch and wait and show “grave concern,” if that’s the phrase of the month on this particular issue.

    BTW, in more benign circumstances, Japan is apparently readying to provide nuclear power expertise to a roster of developing countries. I can’t for the life of me locate the article in which I read that–it was just within a week ago–but it sounds like good news given the push to move away from fossil fuels. Some may wonder whether Japan, given its history of nail-biting incidents at nuclear facilities, is really in a good position to be doing so; but the problems at, say, Mihama were not due to lack of knowledge of what safety regulations were needed. They were due to a failure to follow procedures that were supposed to be in place. Japan has plenty of good technical expertise to transmit.


    Posted by Sean at 21:33, June 16th, 2009

    The Asahi reports that a broker/fixer type who connects Japanese enterprises with investment opportunities in North Korea is being investigated by the Tax Bureau:

    Tax authorities plan to order an executive of a nongovernmental organization that offers humanitarian assistance to North Korea to pay back taxes on “fees” he collected from his side businesses, he said.

    Hiroyuki Kosaka, 56, head of the secretariat for Tokyo-based Rainbow Bridge, told The Asahi Shimbun that the Tokyo Regional Taxation Bureau suspects he concealed about 240 million yen in income over several years until 2007.

    But Kosaka said the money collected from Japanese companies as “advanced investments” for future business with North Korea was offered to the secluded country or used as tax-exempt expenditures.

    “I cannot agree (with the tax authorities). I will fight them thoroughly (in court),” he said.

    The authorities informed Kosaka’s accountant that he could face orders to pay between 100 million yen and 200 million yen in back taxes and penalties.

    “I offered the commissions to North Korea or used them as (part of tax-exempt) expenditures. So I have not obtained any income from them,” Kosaka said.

    Although North Korea’s latest missile launches and nuclear test have heightened tensions with other countries, including Japan, many Japanese companies see future business opportunities with Pyongyang, particularly in the fields of rare metals, gravel, infrastructure construction and matsutake mushrooms. Such deals require middlemen like Kosaka.

    Kosaka’s group is not the same as Chongryun, the most well known advocacy group for North Koreans in Japan, which has long been suspected of working semi-covertly for the DPRK regime. Also of long standing is the hope that North Korea will liberalize its economy even a little bit, which could enable established Japanese companies to have access to its untapped markets and resources. Of course, Pyongyang has a record of taking invested money and equipment and, essentially, nationalizing it, so such maneuvers would not be without risks.

    I’m very amused by the phrase “particularly in the fields of rare metals, gravel, infrastructure construction and matsutake mushrooms.” That’s a pretty eclectic list.

    The ROK newspaper Chosun Ilbun is reporting that U.S. reconnaissance satellite images indicate the DPRK may be moving a long-range missile to the Musudan-ri launch site in its northeast, says the Nikkei. So maybe another ballistic missile test soon.


    Posted by Sean at 19:34, June 11th, 2009

    The Nikkei has another editorial up today about North Korea’s nuclear program.

    Japan and the U.S. should continue to team up with South Korea and make the UNSC’s sanctions into something that gets results, and there’s a need for steps to be taken immediately. The U.S. is looking into sanctions of its own, such as toughening its financial sanctions and redesignating [the DPRK] a terrorism-sponsoring state. The Japanese government also ought to expedite its investigation of possible concrete steps and legal arrangements for implementation of sanctions. Especially for inspections of vessels on the open seas, it’s assumed that revision of the Ship Inspection Operations Law and the enactment of new laws will be necessary.

    It’s probably inevitable that the adoption of the UNSC resolution will bring with it a furious reaction from North Korea. One view of its recent radical behavior ties it to Kim Jong-Il’s succession issues; nevertheless, its intention to move forward with its nuclear development is obvious. It is anticipated that North Korea could, from here on, move into such adversarial steps as withdrawing from the U.N., but shattering North Korea’s “nuke” ambitions is the duty of the global community.

    Well, most of the “global community” isn’t an enemy of North Korea that sits within Taepodong range, so it rather lacks Tokyo’s sense of urgency. That’s not to say the Nikkei is wrong to point out that the DPRK’s nuclear program, with its known leaks to unsavory clients, is a global problem—only that Japan, the U.S., and South Korea seem to be the only countries that are actually keen on doing anything about it. And even the U.S. has been pretty consistently wifty.

    Also, North Korea leaving the U.N.? That sounds highly unlikely to me. I can see its making a big show of threatening to do so, but what would the DPRK possibly gain by withdrawing from the major international organization that lends it legitimacy? Claudia Rosett, on her blog at PJM, has been keeping an eye on DPRK-related developments, BTW.

    Added on 12 June: To wit, Rosett’s post today on “The Lighter Side of North Korean Nuclear Tests.” She’s not talking about the glow after detonation, either.

     The United Nations Security Council unanimously adopted Resolution #1874 on Friday condemning “in the strongest terms” North Korea’s May 25th nuclear test. Devotees of such stuff will note that this sure-as-shootin’ sounds stronger than UN Security Council Resolution #1718, adopted in 2006 in response to the previous North Korean nuclear test. In that case, the Security Council, instead of condemning “in the strongest terms,” contented itself merely with “Expressing the gravest concern.”

     This latest UN resolution, #1874, demands that North Korea “not conduct any further nuclear test or any launch using ballistic missile technology.” Or rather, this new resolution makes the demand again, since the previous resolution, three years ago, made the same demand. (Well, with one small difference — the previous resolution demanded no more nukes or ballistic missiles. The new resolution demands no more nukes and no more launches using ballistic missile “technology” — a fine distinction perhaps meant to address the problem that two months ago North Korea tested a ballistic missile, but described it as a satellite launch).

    Anyway, the UN’s new resolution #1874 doesn’t stop there. It contains 34 articles demanding, deploring, deciding, calling, requiring and requesting, plus a coda in which the Council decides to “remain actively seized of the matter” (which may sound like what happens to an engine block without oil,  but at the UN, it means they plan to keep fussing about it).

    Some of these articles spell out plans that could be interesting, especially the calls for UN member states to inspect ships and seize cargoes if they have information that gives “reasonable grounds” to think that items pertaining to Kim Jong Il’s missile and nuclear bomb projects are aboard. More broadly, there is a list of actions the UN Security Council has (again) decided North Korea should take – which boil down to abandoning its nuclear and long-range missile programs, allowing complete and verifiable inspections and not trashing the world’s non-proliferation deals. (Seems like the Security Council, while on this roll, might just as well have tossed in a few demands for Kim Jong Il to disband his military, open his gulag and move to Hawaii — but maybe Russia and China wouldn’t have gone along with that).

    As I think I’ve said here before, my problem with these things is not that they’re only symbolic. Legislative bodies (if you want to think of the UNSC as one) make symbolic commendations and condemnations all the time to demonstrate principle. My problem with them is that people pretend they are actual actions taken to slow the spread of evil in the world, which they manifestly are not (the manifestation being the DPRK’s still-existent nuclear program).


    Posted by Sean at 12:44, June 10th, 2009

    Well, I can stop worrying about all my dear friends in Japan—the UNSC has drafted another resolution telling the DPRK that it’s naughty-naughty to be playing with plutonium (Japanese version at the Nikkei here):

    The latest U.N. action is expected to spark a reaction from North Korea as in the case of a presidential statement issued by the Security Council on April 13 condemning North Korea’s April 5 rocket launch.

    A draft outlined last week by the United States contained a requirement for all U.N. members to inspect North Korean cargo if it was suspected of carrying nuclear or missile-related items.

    But China had rejected the proposal, urging the six other countries to weaken the wording on cargo inspections and maintaining that mandatory inspections of North Korean cargo would lead to military conflict, the sources said.

    Effectively implementing the inspection of North Korean cargo was one of the measures the Security Council contemplated as a way to enforce Resolution 1718 in response to Pyongyang’s latest nuclear test.

    The resolution, adopted in October 2006 after North Korea’s first nuclear test, states all U.N. members are ”called upon” to take ”cooperative action including thorough inspection of cargo to and from” North Korea.

    Following Pyongyang’s second nuclear test, Japan and the United States had insisted that a new resolution include a phrase making cargo inspections by U.N. members mandatory rather than ”calling upon” them to cooperate.

    Okay, little man, that’s it! It’s a time-out for you.

    Japan notes

    Posted by Sean at 14:40, June 9th, 2009

    This Yomiuri story on Toshikazu Sugaya, who was convicted of the 1990 murder of a child but released last week after new DNA tests pointed to his innocence, exemplifies one of the common complaints about the sky-high rate of convictions among cases that go to court in Japan:

    While saying investigators used heavy-handed interrogation techniques only on the day of his arrest, Sugaya spoke of how he went on to conjure up a story of his “crime.”

    This further shadow over the investigation begs the question as to why Sugaya felt compelled to make a false confession.

    At the station, the investigators and Sugaya became involved in a verbal duel of accusation and denial that continued until the evening.

    He did not immediately admit the crime when investigators showed him evidence such as the results of a test that matched his DNA with that of body fluid found on an item of the girl’s clothing.

    “It was night, I was desolate and began to feel that if I didn’t do anything I wouldn’t be able to go home,” he said.

    After about 13 hours of interrogation, Sugaya finally broke down at about 9 p.m., saying he “gripped both of the detective’s hands tightly and broke down into tears.”

    “The detective seemed to think I’d done it because I cried,” he said. “But in fact, I cried because I was upset that he wouldn’t listen no matter how many times I told him I didn’t do it. I’d gotten desperate.”

    Sugaya later confessed. He also said he imagined the story based on details the media had covered of the case.

    “Since I was young, I’d clam up when people said things to me,” Sugaya said of his personality. “I hate offending people.”

    His lawyer, Hiroshi Sato, said of Sugaya, “He has a tendency to be accommodating and felt he wanted to convince investigators [of what he did].”

    Sato pointed out similarities between Sugaya’s case and that of a man in Himi, Toyama Prefecture, who had been arrested and imprisoned for rape and attempted rape. This man was found innocent in 2007.

    If the Japanese police pick you up and decide they want a confession out of you, they have a well-stocked arsenal to help them ensure they get it (that link via Debito). Notice this sentence: “Yasuda claimed they told him it is cowardly to invoke the right to remain silent and said he should take responsibility as a lawyer.” The Yomiuri article mentions personality, and it’s probable that Sugaya is unusually self-effacing; nevertheless, the tendency in Japan when there’s a disturbance is for everyone at hand to make reflexive apologies. Interrogators, say those who’ve studied detention practices in Japan, play on that. If you don’t apologize and then sign a confession, you’re holding up justice, you’re wasting the police’s time, and you’re disrupting the smooth flow of things. Even if you weren’t the exact person who caused the disturbance, as long as you’re involved in it, it’s considered proper to step up and say you’re sorry. Those concerns are especially powerful to Japanese people. Of course, there are wrongful convictions in the U.S., too, often over the protests of suspects who maintain their innocence all along. At the same time, our system is set up to presume innocence and to maximize the options of the defense. There’s a great deal of self-policing in Japanese society, and often for lesser crimes charges aren’t pressed even if a suspect is picked up. But we were told, practically the moment we arrived in Yokohama for our language program thirteen years ago, that once you sign a confession, that’s it.

    Another story from a few days ago illustrates a complementary problem: when things are not expedited but rather gridlocked because too many entities are engaged in turf wars. This is from a Nikkei editorial published Friday about ITS (intelligent transport systems), in which it is hoped Japan can take the technology and implementation lead:

    ITS comprise things such as vehicle-vechicle communication that avoids collisions between vehicles, road-vehicle communication that transmits road information, and navigation using high-speed roads. Auto navigation or or fee-collection systems (ETC) also fall within them. The metropolitan government and police department of Tokyo are moving forward with route guidance through traffic-signal controls and electronic signage, aimed at easing traffic jams.

    The challenge is the form cooperation between the public sector and manufacturers takes. For ITS, it has a vertically divided structure, with the Ministry of Land, Infrastrucure, Transport and Tourism, the Ministry of Economy, Trade, and Industry, the Ministry of Internal Affairs and Communications, and the National Police Agency having, all four of them, jurisdiction; and there’s a powerful tendency for manufacturers also to be dead-set on their own unique technologies.

    ITS Japan conducted a joint experiment of large-scale ITS in the Odaiba area, for which the Tokyo Olympic Center is planned. The technologies that each federal entity is moving forward with were unveiled, but to look at it from the perspective of people who drive, there was no uniformity to the systems and it was impossible to deny the impression of disjointedness.

    The system that results is almost certain to be a snazzy one. When it comes to electronics, Japan does not fool around. But it’s also likely that consumers will pay, because each ministry, agency, and powerful corporation will find a way to get a piece of the governing power and the licensing and fee structure.


    Posted by Sean at 12:21, May 24th, 2009

    Not only are the two Japan Post subsidiaries related to the mails less profitable than the bank and the insurance company, but they also, according to the Yomiuri, owe back-taxes for Japanese fiscal year 2008, halfway through which the system was privatized:

    Following investigations by the Tokyo Regional Taxation Bureau into the two companies, the bureau notified the firms of their unreported earnings for the business year ending March 2008, according to sources.

    The companies are expected to be levied about 9.2 billion yen in back taxes, including penalty, corporate and local taxes, the sources said.

    The total undeclared income reportedly is more than 20 billion yen.

    It also said Japan Post Service and Japan Post Network logged 3.53 billion yen and 5.69 billion yen, respectively, to pay for taxes, on the assumption that the two companies would likely have to pay back taxes.

    Although Japan Post Group said it had a “difference in understanding” with the bureau, the group said it would abide by the notification.

    Well, you know, in Japan, these things are all about perspective.

    Japan Post update

    Posted by Sean at 14:50, May 23rd, 2009

    The Japan Post family of companies released its first financial statements for a full fiscal year since privatization–well, more like partial governmental divestiture, but in today’s climate, anything that even resembles a shift in the direction of less federal control of a major industry feels like a refreshing change–and the numbers are mixed:

    In the consolidated financial statements for J-FY 2008 Q4 that Japan Post released on 22 May, current income (corresponding to sales revenues) was JPY 19.9617 trillion, current profits were JPY 830.5 billion, and net profits (for the quarter) were JPY 422.7 billion. Since privatization in October 2007, this round is the first release of financial statements for a full fiscal year, and while all four companies operating under the Japan Post umbrella ultimately secured balances in the black, the three remaining companies when Japan Post Insurance is excluded fell short of standing projections. CEO Yoshifumi Nishikawa indicated in an interview that he intends to stay on the pitcher’s mound until the two financial subsidiaries [the insurance companies and the savings bank] are in a condition to list their stock, which is planned for as early as J-FY 2010.

    It’s the two finance-related arms that are making most of the profits; the holding company wants to jack up the contribution from the remaining two companies, one of which runs the post offices and the other of which runs the shipping and courier logistics of the old postal system. The Mainichi has an English version here, which scrambles the order of the original Japanese article but doesn’t omit much of the information.


    Posted by Sean at 17:47, March 29th, 2009

    I love this report in the Yomiuri:

    South Korea’s Yonhap News Agency announced on 29 March that there is a possibility that the launch of North Korea’s long-range ballistic missile under the guise of an “artificial satellite” will take place after 6 April due to weather conditions.

    North Korea has announced to international organizations that the launch will take place between 4 and 8 April, but according to the Yonhap wire service, The [Republic of] Korea Meteorological Agency has forecast that, at the launch base in Musudanri, North Hambyong Province, weather conditions will be “overcast beginning 3 April, with rain or snow falling on the afternoon of 4 April, and heavy cloud cover on 5 April also.”

    However, ROK forecasts have a bad reputation with citizens as “often inaccurate.”

    Oh. All right, then.

    Another Yomiuri article, this time posted to the English site, says that intercepting the missile could be difficult for Japan because, of course, no one knows exactly where it will go. This handy diagram is appended:


    If you’re having a hard time reading that, the red lines represent paths in which the rocket falls on land in Japan–the solid line if it’s the first booster rocket to separate, the dotted line if there’s just not enough thrust off the launchpad and the whole thing flops.


    Posted by Sean at 20:26, March 27th, 2009

    The lead editorial in the Nikkei today carries the headline “Make due preparation for North Korea missile tests.”

    In response to the North Korean ballistic missile test, nominally [for] an “artificial satellite,” the government has convened a security meeting and confirmed a plan to intercept the missile if it falls over Japan’s territory or territorial waters; Minister of Defense Yasukazu Hamada has for the first time issued an order, predicated on the Self-Defense Force Law, to destroy it.

    Prime Minister Taro Aso instructed [attendees] at the security meeting to “be vigilant and adopt a firm and resolute stance.” If there is disarray in Japan, the result will only be that we’ve played into North Korea’s hands. In order to avoid that, at the stage when the launch date is imminent, and even more after the launch, the appropriate providing of information by the government will be indispensable. That point must especially be emphasized from the get-go.

    The Japanese and United States governments have declared that, even if it were an “artificial satellite,” the launch would violate UNSC Resolution 1695, which was adopted after North Korea launched a series of missiles in July 2006, and UNSC Resolution 1718, from after the nuclear tests of October that year. Improvements in the performance of North Korean missiles are a direct threat to the U.S. and Japan.

    Accordingly, U.S. Secretary of State Clinton warned that “this will affect the six-party talks revolving around nuclear issues, and [North Korea] will end up paying high compensation.” If North Korea ignores the warning and forges ahead with the launch, a debate will be raised at the UNSC [over measures that] include sanctions.

    On the other hand, the Spokesperson for the DPRK Minister of Foreign Affairs [stated] that, if the Security Council makes an issue of the “launch of an artificial satellite,” then “denuclearization will be set back, and we will adopt the necessary strong measures,” implying a resumption of nuclear testing. This development reminds one of 2006, with its series of missile launches and nuclear testing. That’s possibly due to expecations that the scenario in which the U.S. government did a 180 [and pursue] a path of conciliation after the nuclear testing.

    That switch to a path of conciliation is linked to the refusal [to allow] inspection during denuclearization, and to the new missile tests. If we consider these facts, it is necessary for not only Japan, the U.S., and South Korea, but also [all other] participants in the six-party talks, including China and Russia, to be sure of their resolve not to repeat the mistake.

    The Japanese phrase used at the end there is 過ちを繰り替えさない, which echoes–I can’t imagine this is a coincidence, given that it’s part of the last sentence of an op-ed about nuclear weapons–the inscription on the Hiroshima memorial: 安らかに眠って下さい/過ちは繰り返しませぬから (“Rest in peace, for we will not repeat the mistake”).