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    Posted by Sean at 11:49, June 29th, 2009

    My hometown newspaper has a blogger who’s writing about dealing with being laid off in the current economy, and she recommends that people who need to scrimp on travel and entertainment go to the Japanese House and Garden at Fairmount Park in Philadelphia. I second that, for those from the Lehigh Valley who haven’t gone. If memory serves, the sightlines are pretty much uninterrupted to the horizon, which actually makes it very unlike modern Japan. (In Tokyo, even when you’re at the Inner Pond at the Meiji Shrine, you can look up and see buildings way off; in the rest of Japan, it’s usually electric-cable pylons hemming you in.) But it’s beautifully kept up. I wanted to take Atsushi there when I brought him home to meet my parents five years ago, but we never had the time. His taste of Japan PA-style was restricted to the “Japanese” steak house in the South Mall, which he fortunately found amusing.

    The Japanese name of the facility, BTW, means something on the order of “pine-wind villa.” The first two characters are read, in other contexts, as matsukaze. It’s the name of one of the most famous Noh classics.

    Refuge of the roads

    Posted by Sean at 11:07, June 29th, 2009

    This Asahi story (Japanese here) announces a major development:

    For the first time in Japan’s corruption-tainted, money-wasting highway construction industry, competition has arisen over contracts for an expressway project.

    Three expressway operators–East Nippon Expressway Co. (E-Nexco), Central Nippon Expressway Co. (C-Nexco) and Metropolitan Expressway Co. (Shutoko)–have applied to the land ministry for contracts to build a new section of the Tokyo Gaikan Expressway.

    The competition is expected to finally make expressway construction and maintenance more cost-efficient.

    Previously, the government had ordered one public expressway operator, including the mammoth Japan Highway Public Corp. (JH), to construct expressways.

    But JH came under heavy fire for bid-rigging scandals and other antitrust allegations.

    After JH and other related public organizations were privatized in 2005, private expressway operators were allowed to seek government contracts for expressway construction projects.

    E-Nexco, C-Nexco and Shutoko all emerged from the privatization process.

    The Japanese story contains this sentence, though:

    The Ministry of Land, Infrastructure, Transport, and Tourism will from here on be choosing the main operator based on its comprehensive assessments of, for each company, the amount of costs it will bear and its technological capabilities; but it has not been decided whether to use competitive bidding or a no-bid contract.

    The English version leaves off the no-bid part, but IIRC it affects how competitive the process actually is because it requires less transparency. The government could still award the contract to the one that’s best at string-pulling and back-scratching, not necessarily the one that seems to offer the best deal for the public. Well, that could happen with open bidding, too, probably, but the competitors would seem to have more maneuvering room.


    Posted by Sean at 13:41, June 26th, 2009

    John Opie links to this op-ed in The Japan Times, which is about America’s new incoherent Asia policy. John summarizes it this way:

    [I]t is nice to see the recognition that US foreign policy under President Bush was understood abroad to have an overarching geopolitical framework…

    Or perhaps, more exactly, a massive focus on China to the exclusion of most other countries there. This is, I think, indeed a problem: India is in so many ways the more “natural” partner for the US, if one ignores the massive Chinese purchases of US treasury bonds.

    Unfortunately, the Obama Administration apparently thinks that China is the only country that matters: this means, in classic liberal wonk fashion, that the other countries will, for the most part be simply ignored or put on the back burner.

    Japan and India are, basically, the losers in the Great Game as it is being played out in Washington. The new Ambassadors to both countries? Political rewards for the faithful. The new Ambassador to India is, to quote, an “obscure former Congressman Timothy Roemer”; the new Ambassador to Japan is “a low-profile Internet and biotechnology lawyer, John Roos”. Neither have any real connections to these countries, and join the long list of US Ambassadors whose claim to fame is the ability to generate campaigning money and organize the party faithful or receive their Ambassadorships as part of some political deal involving others.

    The original op-ed, written by a fellow at what looks like a think tank in India, gives more detail:

    China’s expanding naval role and maritime claims threaten to collide with U.S. interests, including Washington’s traditional emphasis on the freedom of the seas. U.S.-China economic ties also are likely to remain uneasy: America saves too little and borrows too much from China, while Beijing sells too much to the U.S. and buys too little. Yet, such is its indulgence toward Beijing that Washington seeks to hold Moscow to higher standards than Beijing on human rights and other issues, even though it is China that is likely to mount a credible challenge to America’s global pre-eminence.

    The new U.S.-China-Japan trilateral re-emphasizes Washington’s focus on China as the key player to engage on Asian issues. Slated to begin modestly with dialogue on nontraditional security issues before moving on to hard security matters, this latest trilateral is being billed as the centerpiece of Obama’s Asia policy. Such is its wider significance that it is also touted as offering a new framework for deliberations on North Korea to compensate for the stalled six-party talks.

    Despite its China-centric Asia policy, the Obama team, however, has not thought of a U.S.-China-India trilateral, even as it currently explores a U.S.-China-South Korea trilateral. That is because Washington now is looking at India not through the Asian geopolitical framework but the subregional lens — a reality unlikely to be changed by U.S. Secretary of State Hillary Clinton’s forthcoming stop in New Delhi six months after she paid obeisance in Beijing. While re-hyphenating India with Pakistan and outsourcing its North Korea and Burma policies to Beijing, Washington wants China to expand its geopolitical role through greater involvement even in Afghanistan and Pakistan.

    It is shortsighted of the Obama team to lower the profile of India and Japan in America’s Asia policy. Tokyo may be ceding political capital and influence in Asia to Beijing, and India’s power might not equal China’s, but Japan and India together can prove more than a match. The Japan-India strategic congruence with the U.S. is based as much on shared interests as on shared principles.

    It would be wonderful if China made the transition to a stable, peaceable democracy full of contented and prosperous citizens. But that hasn’t happened yet. It would be madness to snub China, but it’s also of questionable sanity to pretend that it’s going to be a reliable partner in the way Japan has been and India has been becoming. Of course, the cold-shouldering of Japan began months ago. At that point, it was difficult to tell whether it was Japan as a strategic partner or just Aso as a damaged-goods politician that was being held at a distance. It’s looking more like the former.


    Posted by Sean at 12:33, June 25th, 2009

    A Mitsubishi UFJ Securities IT manager who sold client information for money to pay down his debts has been arrested in Tokyo:

    According to police, Kubo used the ID of a female temporary staff employee at a subsidiary to illegally access the customer database on Jan. 26.

    The woman had been transferred to a different department in December, but her clearance for the database was not revoked.

    Using her ID, Kubo retrieved data on about 1.48 million customers–Mitsubishi UFJ Securities’ entire clientele–and stored encrypted names, addresses, phone numbers and income amounts in the company’s server, police said.

    On Feb. 4, Kubo instructed a male dispatch worker to copy the information onto a compact disc taken from office supplies, pretending the task was part of official work, they said.

    Kubo took the CD home and used his personal computer to relay information on about 50,000 customers to three mailing list companies. He collected about 328,000 yen, police said.

    That’s about USD3000, which could seem huge if Kubo were indebted to one of Japan’s more usurious consumer lending agencies (still pretty bad after the 2006 lending laws curbed their worst excesses, in my understanding). The Mainichi report adds this obnoxious tidbit:

    Although Mitsubishi UFJ Securities has urged the recipients of the customer information not to use it, the plea has apparently fallen on deaf ears, with the company receiving a massive 15,335 complaints and questions by Tuesday.

    “I receive 10 to 20 calls from salesmen a day,” complained one of the customers, according to the company.

    The company is going to give gift certificates worth JPY10000 each by way of apology, which means it could be out USD 5 million or so.


    Posted by Sean at 14:51, June 24th, 2009

    The Yomiuri reports that an amendment to the FY 2010 defense budget may scotch existing plans to relocate our Futenma base on Okinawa:

    A key U.S. congressional committee has added an amendment to the fiscal 2010 defense budget that would make it hard to realize an agreement reached by the Japanese and U.S. governments over the relocation of the U.S. Marine Corps’ Futenma Air Station in Ginowan, Okinawa Prefecture.

    Japan and the United States have already agreed the facility will be relocated to the shoreline off Camp Schwab in Nago, in the prefecture.

    The amendment says the U.S. defense secretary should not give its approval to the alternative facility as long as it fails to comply with minimum flight safety requirements.

    The office of Rep. Neil Abercrombie, D-Hawaii, who proposed the amendment, told The Yomiuri Shimbun that the alternative facility under the current plan contravenes safety standards on the following points:

    — The runways are too short.

    — A school, Okinawa National College of Technology, is located nearby.

    — There are obstacles, such as utility poles, along the flight path.

    As a result, Abercrombie has stated that Camp Schwab is not an appropriate candidate for the alternative facility and that a new transfer location should be sought.

    A Japanese government source said, “The content of this amendment suggests the transfer to the alternative facility agreed by Japan and the United States won’t be permitted.”

    The relocation of the base has been a sticking point for years.


    There’s been an ongoing story about 7-Eleven Japan and one of the downsides to its now-legendary distribution system for prepared food, and the Mainichi has a pretty comprehensive piece on its English site:

    Seven-Eleven Japan Co. announced Tuesday that the company would help cover the costs of unsold food currently borne entirely by individual convenience stores, but franchises said the move was not enough.

    The industry giant’s headquarters will cover 15 percent of the cost of unsold items such as sandwiches and bento boxed lunches at franchise stores beginning in July. The company is the first major convenience store chain to take on part of such costs.

    “Franchises are worried about wasting food, but also that if they don’t order enough, they will run out of stock, causing trouble for their customers and hurting business,” said Seven-Eleven Japan President Ryuichi Isaka at a news conference Tuesday.

    In the wake of the Seven-Eleven announcement, it appears possible the practice will spread to the entire industry, where shifting losses, and the responsibility for the disposal of large amounts of food, onto franchises is common. Perhaps the era of forcing major expenses onto franchises while the corporate headquarters racks up profits is nearing an end. However, as central support for franchises increases, differences in corporate strength between convenience store companies will likely widen.

    In a standard franchise contract, judgment regarding orders of food items such as boxed lunches is left up to franchise owners and they also bear the total burden of losses from unsold items. However, stores that reduce orders run the risk of regularly selling out and leaving their shelves empty, dealing a blow to the business model convenience stores are based on.

    One way to move unsold stock is to reduce prices, but Seven-Eleven Japan had a policy against discounting. However, the company was ordered to eliminate that policy Monday by the Japan Fair Trade Commission, which could spur Seven-Eleven franchises to begin reducing food item prices to avoid having leftovers and the losses they entail.

    Like a lot of people in Tokyo, I worked within a five-minute walk of a good half-dozen convenience stores, and many of the 7-Eleven prepared-food offerings were, at least at first, markedly better than what you got from its competitors. (The nearby am-pm was horrible when I first started at my old company, though it cleaned up a lot, both literally and figuratively, several years ago.) They weren’t home or restaurant quality, but they were pretty much as good as train-station bento. There was a great deal written about 7-Eleven Japan some years ago during its ascendancy, largely because it was one of the few enterprises wowing Westerners after the fashion of the old Japan, Inc., era. But of course, you can’t predict inventory turnover perfectly, especially for something as whim-dependent as what people feel like eating for lunch once they pull up to the refrigerator case and have to pick something.


    The Nikkei says that China is agreeing in principle to uphold the draft UNSC resolution on North Korea:

    On 24 [June], the Chinese government opened individual meetings in Beijing with both U.S. and Japanese governments, and they were in accord on adopting the direction of upholding the sanction on the United Nations Security Council against North Korea, which had pushed brazenly forward with a second round of nuclear testing. It took the position of non-recognition of North Korea’s possession of nuclear capability and of applying concerted pressure, but it also stressed the importance of dialogue. On pulling together for cargo inspections of vessels entering or leaving North Korea, China is still cooler than Japan, the U.S., and South Korea; and it left unclear how far it would go along the path of “pressure.”


    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).

    School ties

    Posted by Sean at 18:35, June 11th, 2009

    Agenda Bender resurfaced recently, as he is wont to do, with this item about the Brothers Kim:

    WaPo Former classmates at a Swiss boarding school describe a shy student who loved basketball and Jean-Claude Van Damme. Recent reports describe him as overweight and a heavy drinker. Now 26, Kim Jong Un has reportedly been tapped to become the next leader of nuclear-armed North Korea.

    For years, Kim Jong Il’s eldest son Jong Nam, 38, was considered the favorite to succeed his father until he was caught trying to enter Japan on a fake passport in 2001, reportedly to visit the Disney resort.

    Kim considers the middle son, Jong Chol, too effeminate, according to the leader’s former sushi chef.

    Jong Un, however, is the “spitting image” of his father and the leader’s favorite, the chef, who goes by the pen name Kenji Fujimoto, wrote in a 2003 memoir.

    I want some remembrances of Kim Jong Chol by his former Swiss-boarding school classmates.

    Yeah, really. They always leave out the most interesting part of the story.