Dentsu in the News, Part 2: The Bad News

The Japan Communist Party flexes its awesome research muscle:

Dentsu Takes 40% of Government Public Relations Contracts
Representative Yoshii Presses Officials on Connection with Golden Parachute Scheme

At the May 11 Lower House Committee on the Cabinet, it was revealed that Dentsu is substantively monopolizing contracts for “government public relations” that the Cabinet Public Relations Office prints in newspapers, with the company garnering nearly 40% of the total value of contracts. The situation was brought to light via a survey conducted by JCP Representative Hidekatsu Yoshii.

According to the survey, of the 13.2 billion yen in contracts government PR placed in newspapers from FY2001-2005, Dentsu was the top recipient with 4.9 billion yen, or 38% of the total. Hakuhodo, the second largest recipient, received 2.4 billion yen (19%), while other companies all received less than 10% apiece.

In response to a request from Yoshii for disclosure of the expected bidding prices, Director Yasuyuki Takai of the Government Public Relations Office refused the request, stating that the office “uses regular competitive bidding.”

Yoshii pointed out that there are too many advertisement placement companies that participate in bidding but later withdraw. For example, from FY2001-2005, Nihon Keizai Co. (printers of Nikkei Shimbun etc) withdrew the most times, 101. The fewer times a company won bidding, the more times the company placed a bid but later withdrew. Yoshii concluded: “This is just too unnatural. I suspect this is a case of ad industry-related bid-rigging intended to maintain Dentsu’s unipolar control.” Takai repeated that “Withdrawal from bidding is the bidding company’s decision.”

A survey by the House of Representatives Research Bureau shows that as of April 2006, 12 [retired officials from the Govt PR Office] were in post-retirement jobs at Dentsu, while 5 were at Hakuhodo. Yoshii pointed out that this practice of “Amakudari” was likely behind the rigged bidding, and emphasized, “If [the current govt] says it will reform the public servant system, it should first thoroughly reveal the true state of amakudari.”

In other news:

Dentsu “Pale” in Apology for Retooling Reds Stadium Seats
May 10, 2007

The Japan Football Association revealed on May 10 that it had granted advertising company Dentsu permission for a Kirin Beer commercial that made unauthorized modifications to a photo of Saitama Stadium filled with supporters of the Urawa Reds without noticing the changes.

The Association claimed it had not received an explanation of the changes from Dentsu, who was in charge of the production. The modifications violate the J-League’s rules for commercial use of photos. JFA Executive Director Kozo Tajima commented, “This is very regrettable and unpleasant. I cannot express how sorry we are to the supporters of the Japan National football team.” The morning of the same day, a representative of Dentsu visited the JFA to apologize. The advertiser, Kirin, reportedly was also not made aware of the changes.

The advertisement that caused the controversy was part of a rally campaign for the Japan National team. The seats in Saitama Stadium were changed from the Urawa’s red to the Japan National team’s blue, and the ads were seen in newspapers nationwide from April 27.


Also, former Dentsu executive and noted novelist Iori Fujiwara (known for the Naoki award-winning Terrorist’s Parallel, a story of the men and women who gave their lives in the 1960s student communist movement) has died of esophagal cancer at age 59.

Another Casualty of JASRAC’s Fun Police

I recently came across this sad story in my referrals:

Live music spots are disappearing one by one in Japan!
2006-11
I am a live Jazz fan, and often go to Jazz clubs in my home town. Recently I visited one of my favorite clubs and was informed that live jazz was to be canceled at the end of the month.

I couldn’t believe it, and asked why this was going to happen. The owner replied “JASRAC (Japanese Society for Rights of Authors, Composers and Publishers, equivalent to ASCAP) ordered retrospective fee payments for the last 10 years of the club’s operation. There’s no way I can afford to pay, so I’ve decided to stop live music”. The JASRAC representative then presented a scrap of newspaper with a story reporting a recent lawsuit and subsequent closure of another Jazz club that had fought, and lost, a similar situation. In the end, however, the owner decided to submit to JASRAC’s demands and pay the fees.

JASRAC also refused to negotiate future licensing costs, and stated that a fixed fee must be charged regardless of how many live performances are held. The club could have one live show each week, or a show every day of the year, and the cost would be the same. JASRAC also refuses to reveal how they calculate fees for each club.

In Japan, NHK(National publicly funded television) fees must be paid by all people that own TVs. However some people manage to avoid paying fees, are unaware of fees, or simply slip though NHK’s administrative cracks. When these people are discovered, NHK usually just asks these people to begin payments from the next month onwards. JASRAC, however, demands payments for the past 10 years.

Does JASRAC truly protect the rights of musicians? I often by CDs from musicians playing at live Jazz clubs. I believe live Jazz promotes CD sales and helps artists succeed.

It’s just appalling that JASRAC can nitpick and police even the most minor activities. The hyper-aggressive protection of intellectual property is not just limited to JASRAC, mind you: Johnny’s Talent Agency (the promoters of SMAP etc) fiercely guard their superstars, a practice that leads to odd rivalries and ridiculous news like Takuya Kimura refusing a major movie award for no apparent reason. Disney is also particularly heavy-handed. I read (on 2ch mind you) that Disney once forced a school to remove an image of Mickey Mouse from their pool that was to be used in an event. How can a culture of openness, ambition and imagination flourish when there’s an environment that often punishes even modest forms of creativity?

Dentsu in the News, Part 1: The Good News

Lots of Dentsu-related stories in the pipeline these days. But first, the good news:

* Dentsu reports revenue exceeding 2 trillion yen, but sees slower growth ahead

From Asahi:

On May 11, Dentsu reported 2.939 trillion yen, or a 6.7% boost, in consolidated revenue for the 2006 fiscal year, the first time the company’s total has ever topped 2 trillion. Revenue in the major media (TV, newspapers, magazines, radio) all slightly dropped, but ticket sales for the 2006 World Cup in Germany, which was undertaken by a Dentsu subsidiary, pushed up the total.

Operating profit (which is mentioned last in the Asahi report) grew at a similar pace of 6.9% (30.6 billion yen or approx $1.7 billion). To compare, OmnicomGroup, the largest Madison Avenue ad company, posted $11.3 billion in revenue and $1.5 billion in operating profit.

Revenue in the 4 mass media, which make up 65% of the company’s non-consolidated profits (or 48% of consolidated revenue, which would mean that the Dentsu parent company’s total of 2.169 trillion make up 73% of total Dentsu group revenue), dipped 0.7% to 1.410 trillion yen.

A surprising note in this profit announcement is that Internet ads are not Dentsu’s biggest growth area, as earlier reports from Dentsu might have seemed to indicate. Internet ad growth of 14.8% (21.5 billion yen) lost out to outdoor ads, such as train ads, grew 19.2% (43 billion yen) with the rise of ads coordinated with web content (infrared bar codes, search keywords). Note, however, that these two areas remain small compared to Dentsu’s traditional businesses. However, Dentsu is predicting huge growth in the Internet sector in general, and sees its share in the Net ad market going from a present 15% to 20% by the end of FY 2009.

But the overall outlook for Dentsu is for slower growth, for reasons which an AP’s report goes into more detail about (unsurprising for an article aimed at investors):

Dentsu, the world’s fifth-biggest advertising company behind Omnicom Group , WPP Group , Interpublic Group and Publicis, said growth might also be held back by a wave of mergers among its client base.

The company, whose rivals in Japan include Hakuhodo DY Holdings Inc. and Asatsu-DK Inc., forecast group operating profit to rise 1.6 percent to 63.8 billion yen ($532.2 million) in the current business year to March 2008 on sales of 2.107 trillion yen, up 0.6 percent.

The profit estimate is in line with the consensus of 64.2 billion yen from a poll of 13 analysts by Reuters Estimates, but the forecast for sales growth is decidedly below the expected growth rate of about 2 percent for the Japanese economy.

The seemingly conservative forecast also comes with Japanese corporate profits at a record high.

“We are always told that our forecasts are conservative, but one factor probably at play here is the fading correlation between corporate profits and the economy on one side and growth in advertising spending,” Dentsu Managing Director Setsuo Kamai told a news conference.

Kamai said the trend could be explained by a handful of factors including booming industry consolidation in Japan, which leads to fewer advertisers, and a move by an increasing number of companies to lower costs by combining their brands.

For 2007/08, Dentsu expects its revenues to get a boost from the IAAF World Championships in Athletics Osaka 2007, elections in Japan and the Tokyo Motor Show, but no event on schedule is likely to match last year’s soccer World Cup in Germany.

Dentsu logged strong revenue gains to the information and technology, food and retail sectors, which offset declines to makers of cosmetics and toiletries, producers of home appliances and electronics, and consumer finance firms.

Speaking of profits, Hakuhodo just posted its first loss (due to lower than expected real estate revenue and dips in auto ads and government PR work) since converting to holding company status in 2003. It posted a 2% loss in revenue (1.884 trillion yen) and a 1% loss in operating profits (24.4 billion yen). Bad news for Hakuhodo, good news for Dentsu.

A new president will be leading Dentsu:

Dentsu to name Takashima president
Kyodo News

Dentsu Inc. is set to appoint Executive Vice President Tatsuyoshi Takashima as president of Japan’s biggest advertising agency, while the current president, Tateo Mataki, will become chairman, company sources said Saturday.

He is expected to accelerate a shift in Dentsu’s business base from newspapers and television to relatively new media such as the Internet by continuing the efforts of Mataki, who aggressively concluded capital and operational tieups with startup companies specializing in Net advertising.

Meanwhile, Dentsu is consolidating some of its various Net ad subsidiaries (in the affiliate advertising section [similar to the Amazon Associates program]) to form a more unified strategy:

Dentsu to Merge, Amalgamate Action Clip
May 10, 2007

Dentsu and Cyber Communications (CCI, a member of the Dentsu Group) announced that they intend to merge Dentsu subsidiary Action Clip and CCI subsidiary Criteria Communications.

CCI will continue to exist but will amalgamate the two companies in a cash tender offer. The ban on cash tender offers to shareholders in the case of an amalgamation merger that absorbs the target company was lifted as of May 1.

Action Clip’s affiliate operations will be united with Criteria’s advertisement distribution network with the goal of consolidating the Dentsu Group’s affiliate business.

Tokyo Shimbun on the Faltering Council for Economic and Fiscal Policy

Even though today is a lamer-than-lame newspaper holiday, I thought I’d take some time out of my busier-than-usual schedule to introduce a sharper-than-you’d-think editorial from the unexpectedly-lucid-and-candid Tokyo Shimbun:

[Editorial]
A Thought to Begin the Week: The CEFP Has Forgotten How to Fight
May 6, 2007

The Council for Economic and Fiscal Policy, which is supposed to be an “engine for reform,” has started to lose steam. Most papers emanating from the Council look like they were written by the bureaucrats, and we do not see an attitude of striking at the vested interests.

The CEFP debates the Basic Policy (an outline of the Kantei’s budget proposal) and critical issues of economic and fiscal policy an advisory body to the prime minister. The meetings are attended by the PM, who serves as chairman, the Minister of State for Economic and Fiscal Policy, who runs the meetings, along with 4 private-sector members, the Chief Cabinet Secretary, the Minister of Finance, the Minister of Economy, Trade, and Industry, the Minister of Internal Affairs and Communications, and the Governor of the Bank of Japan.

Legally, the Council is no more than a forum for “investigative deliberations,” but during the Junichiro Koizumi administration it had become a de facto “policy-making institution.” How did it get that way? It had a lot to do with their dynamic style of infighting.

Strategies Formed at Behind-the-Scenes Meetings

Former MIC Minister Heizo Takenaka, who was a key actor in the Koizumi-era reforms, wrote in a recent book that there were 3 interrelated keys to managing the Council: “strategizing at behind-the-scenes meetings,” “unified statements from private-sector members,” and “authoritative statements from the prime minister.”

You may think: “What? There were secret meetings?!” But in fact that’s what happened. Prior to Council meetings, Takenaka held detailed discussions with his small group of trusted staff made up of secretaries and reformist bureaucrats, finalized policies, and submitted them to the Council as private-sector member papers. In other words, he finished deliberations behind the scenes before his policies were brought out in the open for debate.

And that’s not all. He made backdoor preparations for critical policies and objectives that were close to being finalized, and even the occasional conclusion to debate on policy details, by meeting with the prime minister beforehand. He would then allow the opposing forces to speak for as long as they like at the actual meetings, then have the prime minister make a definitive statement when he saw that the debate had played itself out.

And statements from the prime minister carry considerable weight. The last word would then become the conclusion, finalizing the direction of reform. It may not have gone exactly according to plan all the time, but this sort of scrupulous planning was absolutely critical to promoting reform. It feels like this is a secret that needs to be told now.

Make Proposals that Kasumigaseki Won’t Like

In the same book, Takenaka points out that “passion of the minister of state” and “conflict with the opposing forces” are golden rules for reform. In order to garner public interest and get public opinion on the reformists’ side, dramatic battles with the opposing forces within Nagata-cho (Tokyo’s political district) and Kasumigaseki (location of most bureaucratic offices) are essential. Takenaka pragmatically states that “Battles are actually welcome.”

Compared to the previous Council meetings, at present we are forced to conclude that they have lost the power to reform. That is made obvious by the conspicuous absence of scuffles with the opposing forces.

At the start of 2007, Kasumigaseki went after proposed reforms to the civil service with vigor. The placing of retiring bureaucrats in private-sector jobs using the government’s authority and budget to pressure companies will be banned completely. But even after this bill is submitted to the Diet, the opposing forces in Kasumigaseki are poised to continue their fight against the new proposal from behind the scenes.

Yet except for civil service reform, we can’t fight the impression that the Council is lamely debating topics with little element of conflict with the bureaucracy, such as economic growth, globalization, and productivity issues. One bureaucrat gave us the inside story:

“That’s because Minister Ota has avoided battles with Kasumigaseki and started meeting with bureaucrats at the paper-writing stages. If the bureacrats get their hands on something beforehand, it’s already clear who will win. There is just no chance for fierce conflict at the meetings.”

The last word from PM Shinzo Abe have also tended to fall short at “Please continue to consider this thorougly.” The number of reporters attending post-meeting press conferences has also shrunk.

Policies such as using IT to boost productivity are certainly important policies. Compared to before, the economy is steadily recovering, and we can understand that there is a diminished sense of crisis. Still, there will be no reform if all the Council talks about are general topics that receive unanimous approval.

Looking at the policy challenges listed early this year, they include issues such as fundamental reworking of government functions/organization (including reform of Independent Administrative Corporations), creation of a progress schedule for fiscal spending reform, and regional autonomy, but they have yet to be debated. These are just the sort of issues that Kasumigaseki hates, and therefore the ones that should be prioritized.

There are those who say “There is little benefit in making a show of bureaucrat-bashing.” However, isn’t breaking the current enmeshed system of vested interests, as seen in bureaucrat-led bid-rigging, what reform is about? If the Council aims to be the engine of reform, it cannot avoid a fight.

Economic and Fiscal Policy Minister Hiroko Ota, who worked as Deputy General Director for the Minister and Director General for Economic and Fiscal Management under Takenaka, should understand this. Before she became minister, she even published a book titled “The Battles of the Council for Economic and Fiscal Policy,” from which we quote the following:

“Even if the Winds are Strong”

“Both the fight with vested interests and tension with the government ministries and agencies will likely continue. We should be much more concerned if the tense relationship evaporates easily… We must keep on fighting even if the winds are strong, and I think that if the pressure dies down under the current conditions, that means that the Council’s allure and raison d’etre have disappeared.”

We’d like her not to forget that original feeling.

Comment: I wouldn’t count on it. Abe’s pet causes, like constitutional reform and education, along with the possibly disruptive results of the upcoming Upper House Election, leave little room on the agenda for the relatively less sexy issues of economic reform. Abe will be happy to leave economic issues relatively out of the public light as long as the economy remains stable. And if an easy victory on civil service proves elusive, watch for that to fall to the wayside as well (which is sort of already has).

But with the Abe administration, the practice of setting up kantei-led committees to take the lead on policymaking (essentially to take the lead away from the traditional committees that operate under the auspices of various ministries) has caught on in the areas he really cares about, and while none of them have escaped derision in some corners of the press, they have continued to produce results in one form or another, such as the attempt to create a US-style National Security Council. While Koizumi was never able to get the LDP consensus he needed for his pet issues, Abe has the allies on national security etc (and the Diet numbers) to go the more traditional route.

In the news

Although I did end up doing a post yesterday on the Kokaryo case, I’m sure you’ve all noticed that I have been on a vacation from the blog for about a month. To catch up a little bit, here are a few headlines of interest to my themes on this blog that have been kicking around my desktop for the past couple of days. I normally don’t like to do the “here’s a bunch of links” format, but putting them here is as much for my own future reference as for everyone else’s enjoyment.

  • The Japan Times has a FAQ about the new National Assessment of Academic Ability exam, given to all sixth year elementary and third year junior high school students in Japan. Of special relevance to some recent discussions on this blog over Japan’s adaptation to foreigners is this sentence. “Foreign students who take classes with Japanese nationals at Japanese schools are also required to take the test, but are allowed to receive support from interpreters.
  • In September of 2005 I posted about Osaka’s Kongo Gumi (金剛組) construction firm, which was then probably the world’s oldest continually operated company, having remained a family firm ever since its founding in A.D. 578, over 1410 years ago. Sadly, Kongo Gumi is now no more. Read the tale of how a decline in construction by their traditional Buddhist temple clients and excessive borrowing during the bubble period in an ill-advised attempt to expand into other areas of construction led to the bankruptcy of the world’s oldest company. They technically still operate as a subsidiary of Takamatsu Construction, but it’s just not the same without the 40th head of the Kongo family as CEO. According to Wikipedia’s list of the world’s oldest companies, this now leaves formerly second place Hoshi Ryokan, formerly just the world’s oldest hotel, as the world’s oldest independently operated company. Founded in 717, they are nearly 140 years younger than the former Kongo Gumi.
  • Historian and journalist David Halberstam has died in a car crash, at the age of 73. I mention it because several months ago I read his excellent book The Reckoning, on the history of the American and Japanese automobile industries from the very beginning to the mid 1980s when it was published, focusing largely on the stories of individual personalities in Ford and Nissan-the number two car companies of respectively the US and Japan, as well as some key bureaucrats in the case of Japan. This is recommended reading for people who are interested in learning generally how Japanese industry developed, thrived on technology transferred from abroad, to specifically why Japanese car companies and Toyota in particular are now leading the market. I strongly believe it should be on the short list for people interested in these topics, along with such better known books as Charlmers Johnson’s MITI and the Japanese Miracle, particularly for the chapters in which Halberstam explains precisely how Nissan management created a company union, crushed the independent labor movement within their company, and created the harmonious management/union structure we see throughout Japan, which the misinformed believe to be a symptom of Japan’se traditionally harmonious culture.

Kokaryo update

Back on February 1st I wrote a post on the battle over the “Kokaryo” (光華寮) Chinese students dormitory in Kyoto, between the Republic of China and the People’s Republic of China. Those who don’t remember the details of the case or need a refresher should read my initial post on the subject and/or some of the linked news articles.

Since my initial report the case, which 40 years after filing was apparently the longest running lawsuit in Japan, has ended-at least in its current form. While the outcome of the case was exactly what the PRC wanted for diplomatic reasons, it was still not technically a complete success in terms of the primary substance of the lawsuit.

Note that Yomiuri Shimbun’s March 28 headline, “Top court rules China, not Taiwan, owns dorm” is factually incorrect. In fact, the court ruled that because the lawsuit was originally filed by “China” and that recognition of “China” has shifted from the Republic of China (Taiwan) government to the People’s Republic of China (Mainland China), not Taiwan but the PRC is now the plaintiff. The original lawsuit was filed by “China” as represented by the ROC (Taiwanese) authorities against the Chinese (mainlander) dorm residents, whom the ROC wanted to evict due to their support of the PRC. While the defendant was technically the individual students, they were supported by the PRC government, and the case essentially became ROC vs. PRC vying for control of the dorm, even though the original motion that started the trial was calling for an eviction order of the mainland Chinese students from the dorm. Because the original lawsuit was filed by “China,” the court’s judgment that “China” was now represented by the PRC and not the ROC meant that in essence the People’s Republic of China was now playing both sides of the field, and as the plaintiff they had the right to decide not to continue prosecuting the case. In fact, it seems that the court never ruled on the primary issue of property rights one way or the other, and technically their decision allowed the plaintiff to continue to pursue the case by having it returned to the Kyoto district court, which they naturally did not do.

As PRC Foreign Ministry Spokeswoman Jiang Yu said in a January 26 news article, “The Guanghualiao [note: “Guanghualiao” is the Chinese pronunciation of “Kokaryo”] case is not merely a property case, but a political case concerning China’s legitimate rights.” While China has always insisted that this is a political case and has publicly demanded satisfaction from the Japanese government, Japan has always pleaded separation of powers, and insisted that it was both illegal and impossible to intervene in the court system for diplomatic and political reasons. However, some observers find both the timing and verdict of the case suspicious. Coming on the heels of Chinese Premier Wen Jiabao’s highly publicized and politically significant official visit to Japan, cynics might suspect that the Japanese government did in fact “encourage” the court to resume the long-stalled case, and adjudicate it in China’s favor as a subtle diplomatic gift to counterbalance moves by the Japanese administration over the last few years to strengthen diplomatic and military ties with Japan.

Despite the high court’s decision that the PRC was in fact the plaintiff in this case, which has effectively nullified all of the previous judgment’s in Taiwan’s favor, there is still a chance for Taiwan to prevail in their property rights claim. The April 4 Taipei Times reported that Taiwanese authorities were looking into how to continue the case, despite having lost the standing to pursue the lawsuit as originally filed on behalf of the Republic of China. “We will continue our fight, considering the possibility of a fresh civil lawsuit or other legal means,” said their attorney Noriyasu Kaneko. According to an April 21 Kyoto Shimbun article (apparently not available online), Taiwan is in fact planning to file a new motion in the Kyoto court asserting their property rights as a “body” and attempting to sidestep the entire hornet’s nest of “one China” and diplomatic recognition. While this case has been a victory for China and a potential danger for Taiwan’s property rights abroad, it is also worth noting that the original premise of the case, that the ROC is the proper representative of “China” is a decades old doctrine that is effectively disavowed by the current Taiwanese administration anyway. Although I doubt that there has been anyone in Taiwan celebrating this verdict, it can also be looked at as the collapse of yet another piece of the “One China” diplomatic fiction. Now that Taiwan no longer has to pursue this Chiang Kai-shek era lawsuit based on the obsolete premise that they are the “One China,” there is at least some sliver of hope that they can turn around and use the new lawsuit to reassert their rights as a body separate from China.

Japan’s continuing influx of foreigners and what it means for YOU

Quiz time! What percentage of Tokyo is non-Japanese?

Answer: 2.93% – that’s the percentage of registered foreigners in Tokyo as of January 1, 2007 (an increase of 1.8% over last year), says Shukan Toyo Keizai. That means that 3 out of every 100 people you see in Tokyo are foreign (one of whom could be a white dude staring at the Daily Yomiuri [picture courtesy STK]). There are 371,000 registered foreigners among Tokyo’s overall population of 12.69 million. The information comes from a “population movement survey” conducted by the Tokyo Metropolitan Government.

white-dude-47_1.jpgTop nationalities:
Chinese – 126,000
Korean – 109,000
Filipino – 31,000

Most foreign districts:
Shinjuku-ku (where Tokyo’s Koreatown is located): 30,000
Adachi-ku: 21,000
Edogawa-ku (home to Indiatown in Nishikasai): 21,000

Tokyo’s foreign population has surged 2.5-fold over the past 20 years, going from a mere 150,000 in 1987 to the present 371,000 (18.5% of the estimated 2 million registered foreigners, or about 1.5% of the total population).

These numbers may just be the tip of the iceberg. The ‘registered’ foreigners are merely the people in the country legally for purposes other than tourism, some of whom are temporary visitors who have no intention of making a life here. But many do plan to (there were 349,804 permanent residents that are not zainichi Koreans/Chinese as of 2005). According to Immigration Bureau statistics, there were approximately 190,000 people illegally residing in Japan (presumably concentrated mainly around Tokyo) as of 2006. Though the number of illegal immigrants has decreased as controls have gotten stricter over the years, Japanese manufacturers have no intention of turning back from their use of cheap, often illegal, foreign labor to stay competitive as the numbers of Japanese workers decrease and fewer people are willing to take such jobs. On top of that, other industries, including the medical, restaurant, and agricultural industry are eager to expand their use of foreign labor.

While many of the legal immigrants were educated at least partly in Japan (and in the cases of Chinese and Koreans, their families may have been in the country for 3 generations or more) and lead normal, middle class lives, the conditions for illegal workers in Japan can be downright dreary. A recent government-produced documentary depicting the daily activities of immigration officials features a scene in which the “Immigration G-Men” break up a textile operation in a small Tokyo apartment that was making handbags for local consumption. The workers are Korean, speak poor Japanese, and look like they rarely leave their work stations. Even among legal residents of Japan, many are “trainees” at manufacturing companies whose “training” consists of full time work on an assembly line for low pay.

The regular publication of statistics like these, and the regular, adversarial reporting of developments in this issue, should remind the public as well as the authorities that real “internationalization” based on economic interests, rather than the abstract concept of peace, cooperation, and English study that is usually associated with that term, has already arrived in parts of Japan, making it necessary to adjust and respond. Recently publicized cases of some issues facing foreign laborers, such as abuse in the “trainee” system the difficulty that children of foreign residents face in getting an education, have resulted in increased attention by the authorties, and even some incremental reform. Justice Minister Nagase is heading efforts at the ministry to provide a legal framework to tap unskilled workers, a move that would give legal credibility to the current practice but at the same time would give the foreign workers rights and proper status. The Ministry of Education has begun requiring children of permanent residents to attend school.

These are necessary steps forward, but I feel like the current developments facing foreign residents in Japan have yet to receive the top spot on the agenda that they deserve. Back in 1990, Japan began a program to accept Brazilians of Japanese descent as temporary guest workers. I wasn’t around at the time, but it’s clear that the issue received very wide coverage that I think helped prepare people mentally for the small-scale but significant change in policy. Today, with the foreign population exploding (by Japanese standards), where are the public opinion polls, dramas featuring foreign laborers, rants by unqualified political commentators, etc etc?

Corporate-led Social Revolution

Generally, Japan’s immigration policies are much more liberal than the US – in the rare case that you speak Japanese fluently and have connections within the country. For the rest of the world, Japan’s immigration policies focus on attracting skilled foreign workers in areas such as computer programming where Japanese skills aren’t enough to meet demand. Some industries, meanwhile, are calling for an addition to that policy of allowing more low-skilled workers in to either fill shortages or drive wages down. The most recent victories for advocates of such policies were the “free trade agreements” signed with the Philippines and Thailand, which will allow foreign nurses and chefs, respectively, to work in Japan. However, the Japanese side insisted on language requirements that guarantee virtually no significant numbers will be let in.

This is a radical change for Japan, which has traditionally coddled its low-skilled workers with decent wages and living standards and kept out large numbers of non-Japanese foreigners. Like the US, Japan has a valuable currency and lots of industry, making it an attractive destination for low-skilled workers. Bringing in lots of foreign unskilled labor would make Japan’s immigration structure more like the US, which imports millions of unskilled laborers with poorly enforced immigration laws while making highly skilled jobs very difficult through unofficial barriers such as difficult licensing requirements and tight visa quotas. From the perspective of an average citizen who wants to see the best people in the right jobs, I would advocate opening up the books for all levels of jobs. The US situation is a nightmare for both the illegal immigrants from Mexico who have no prospects back home but must leave their families and live as an outlaw to support their families in the US, and the Americans who have seen low-skilled jobs with decent pay evaporate as a result of the immigration and outsourced manufacturing.

Japan, meanwhile, has relied almost exclusively on what the Japanese government coyly calls “international division of labor” and less on importing labor. Large Japanese corporations are major investors around the world, particularly in China and SE Asia, and employ hundreds of thousands if not millions throughout the region. This decision by the Japanese companies no doubt increases the supply of labor for the companies and allows them to save on wages. But Japan managed to avoid the US situation by maintaining stable employment in domestic industries such as service and construction, sometimes at the expense of efficiency or economic rationality.

But the business community has changed its tone over the years, and now the two top business lobbies, the Keidanren (made up of manufacturers) and Keizai Doyukai (a more brazenly neo-liberal group of top executives), are calling for massive importation of labor to avoid a drop in GDP due to the shrinking native work force that will accompany Japan’s population drop to 100 million by 2050.

No more – Economic analysts have been pointing out for years that Japanese consumer consumption is low relative to other developed countries, and that poor consumption is holding back Japan’s GDP growth. The low consumption is blamed on two factors – deflation that makes people delay large purchases, and stagnant wage growth – the latter of which Morgan Stanley economist Stephen Roach argues stems from the “powerful global labor arbitrage that continues to put unrelenting pressure on the labor-income generating capacity of high-wage industrial economies.” In other words, Japanese labor is in competition from foreigners, a prospect that means money for the global corporations but hardship for the domestic workers.

Japan’s media has been sensitive to this issue, if a bit reluctant to blame it on globalization. Economic disparity between the rich and poor (known succinctly as “kakusa” in Japanese) has been a persistent buzzword over the past 2 years. A host of phenomena – growing income disparity, the collapse of stable employment and the rise of fluid ‘temporary’ employment, a jump in the welfare rolls, the rise in prominence of a new wealthy class, the bankrupt finances of local governments, the near-collapge of the social insurance system, low economic growth for more than a decade, a shrinking/aging population, and on and on – have given average Japanese people the sense that the future looks rather dim.

Now the manufacturing interests, among others, are calling for more foreign labor to come to Japan, and as we’ve seen above it is on its way, putting perhaps more pressure on the average worker. But in my opinion this is only a problem if only labor is allowed to be fluid while corporations with stable management and shareholders reap the profits. Highly skilled laborers such as lawyers, doctors, professors, journalists, and especially corporate managers/investors should be allowed into Japan. Allowing a full spectrum of business opportunities into Japan, which with a highly educated population, peaceful society, and hyper-developed infrastructure, would allow for a wealth of more business and labor opportunities.

But of course that’s a silly proposition. The stewards of Japanese society will continue to hoard the top positions and continue making hypocritical appeals to racial harmony out of one side of their mouths when it comes to reform of corporate boardrooms while pushing for internationalization of cheap labor from the other side. Like it or not, the choice average citizens have is how to deal with the situation that’s been thrust upon us.

Where East and West meet

It’s easy to see a disconnect between, say, the interests of English teachers, IT workers, and businessmen that make up the bulk of Japan’s semi-permanent Western population, and those of the “low-skilled” world of immigrants from Asia.

But that would be wrong. Apart from entry requirements and visa stipulations, Japanese law treats all foreigners basically the same. And while perceptions of foreigners is different based on skin color and culture, the rights of foreigners and the level of their acceptance in Japan will depend on the experiences of other populations. There are already many examples of this connection. The question of whether zainichi Koreans will be accepted as a distinct “Japanese-Korean” identity or whether they will end up mostly assimilated and forgotten will decide how future populations will be dealt with. And if human rights activist Arudo Debito is successful in his campaign to get a national law passed banning racial discrimination, that legal framework will be enforceable for the entire foreign population.

At the same time, the bad deeds of a small group of people can ruin things for everyone else, fairly or not. Crimes committed by foreign nationals are often highly publicized thanks to a xenophobic police force that I suspect is in search of a scapegoat to help market security equipment and grab bigger budgets. Whatever the case, the anti-foreign crime campaign has resulted in bothersome ID checks and humiliating signs warning citizens to watch out for suspicious foreigners. And as limited as its impact was (thanks mainly to successful protests that cut its shelf life to mere months), the “Foreign Crime File” book, a despicable, short-lived multimedia diatribe against the foreign population in Japan, did not distinguish between Asians, Africans, or Westerners in its cheap attempts to cast foreigners in a negative light.

My biggest worry is that without proactive efforts to make this immigration smooth and easy, Japan will start to experience something like the US illegal immigration problem, with all the poverty, crime, and mistrust that goes with it. Occasional statements from high-level politicians, like Education Minister Bunmei Ibuki’s statement that Japan is a “homogeneous nation,” should remind people that race consciousness and nativism are not dead and work as appeals to a conservative voter base. The time to lay the groundwork is now to prevent a backlash against foreigners that would prove a major headache for the entire foreign population, and a loss of the culture of tranquil co-existence with neighbors that has defined Japanese society.

Another post-upper house scenario: A “liberal coalition”?

The unified local elections began their official campaign periods today, with the Tokyo Gubernatorial election emerging as the most interesting to watch, as incumbent Ishihara under fire for a number of scandals and main challenger Shiro Asano looking like a real contender (though an underdog) in early polls.

Still, I can’t say I’m that interested because the elections probably won’t have much direct effect on national politics. I mean, I guess I’m keen to see if localities continue to elect fewer ex-national bureaucrats and “elect representatives who will end the traditional dependence on subsidies and reshape their communities into strong entities through wisdom and innovative ideas” as the Asahi suggests.

But unless the LDP-backed candidates somehow fare absolutely miserably, I can’t really see them having a huge effect on, say, whether Abe will stay in office. So let’s focus on the latest juicy political speculation from Shukan Bunshun:

Signs of “Certain Political Reorganization” after the Upper House Election – Both LDP and DPJ may break up if ruling coalition loses majority
March 20

Political maneuvering with an eye toward what happens after the July upper house elections have begun within the LDP. The scenario is “If the ruling coalition loses its majority, the LDP and DPJ will break up and cause a major political reorganization.” Nagata-cho is squirming this Spring.

On the evening of March 12, 4 influential Diet members gathered at a Tokyo restaurant. They are former LDP Vice President Taku Yamasaki, Koichi Kato, Makoto Koga (the last two both former LDP Secretaries General), and present LDP Policy Council Chief Toshihiro Nikai. Except for Nikai, a member of the LDP senior leadership, the men have all kept their distance from Prime Minister Abe. Their are called the “New YKK,” a name taken from their initials, and also held a top-secret meeting on February 19. This meeting, on the surface, reported concluded with “unanimous support for the Abe cabinet leading up to the Upper House election,” but the content of the meeting had to be different considering who was in attendance.

When the conversation got to the point, Kato brought up the upper house election:

“This won’t be an ordinary election (since unaffiliated votes are moving away from the LDP). It’s going to be a tough election.”

After Kato offered his analysis, Koga and Yamasaki nodded, and revealed their opinions:

“If we lose the majority, then both the Diet and the administration will be very tough to manage.” However, Nikai, his position in the party being what it is, listened intently.

This summer’s upper house election (voting will be held July 22) has been billed as “a battle for supremacy,” but people have started making political maneuvers behind the scenes aimed at after the election. This New YKK meeting is just one example. The key words in meetings like these are “the ruling coalition losing the majority in the upper house” and “political reorganization.” These words were actually used in the above-mentioned meeting. Koga: “If, for instance, the ruling coalition loses its majority in the upper house, there is no need to dissolve the lower house. In that case, we should keep a political reorganization within our field of vision.” (to a group of reporters in Saga Prefecture, March 11)

Yamasaki joined in, saying “If, heaven forbid, the LDP loses in the upper house election, it will be very difficult to manage the political landscape in the 3 years until the next upper house election. In that case, there are people who would call for dissolution of the lower house and a general election, but that would be meaningless since it’s the upper house that would be paralyzed… In order to restore governing ability, there would be no choice but reorganization. (March 9, in an interview with Asahi Shimbun)

An LDP official close to Kato reveals more detail, but prefaced his explanation by saying “This is only if the LDP loses its majority in the upper house.” He went on:

“This is probably an idea thought up by the New YKK, led by Kato. They are aiming to rope in some DPJ members and form a ‘non-Abe, non-Aso’ liberal administration. They have no other options if the LDP loses the upper house election.”

In November, Kato met with Yohei Kono, speaker of the lower house, possibly to test the waters. Kono is well known, along with Kato, as representatives of the LDP’s doves, but the two had a “bad breakup” when the former Miyazawa faction split up. After patching things up, they reportedly agreed at the meeting to “stop the right-leaning rampage and cooperate from here on out.”

Of course, there is a potential partner for this “political reorganization.” The target is the DPJ, Japan’s top opposition party. Party president Ichiro Ozawa, who leads the party, is infamous for shaking things up. Even recently, Ozawa has sounded positive about a shakeup: “The opposition should take a majority (in the upper house election) and if possible realize a political reorganization and a healthy 2-party system… The LDP cannot exist in its present form if the opposition takes a majority in the upper house election. They will split into groups along ideological lines.” (in Tottori city on Feb 10) He has expressed a desire for political reorganization that takes in the LDP as well.

Atsuo Ito, a political analyst with experience working for both the LDP and the DPJ, had this to say:

“In Ozawa’s book, the only shortcut to taking control of the government is political reorganization. Ozawa’s political stance has shifted from right to left and back again, but he has been consistent in seeking reorganization and a 2-party system. The now-defunct Shinshinto and Liberal Party were nothing but tool to achieve that reorganization.”

And the rumors in Nagata-cho speculate: “If the opposition takes a majority in the upper house, Ozawa will most certainly try to split the LDP.”

In fact, in the “June Transformation” in 1994 over who would succeed Tsutomu Hata as PM, Ozawa (then president/sec gen of the Shinseito) got former Prime Minister Toshiki Kaifu to leave the LDP and make a run at the premiership. He also made overtures toward former PM Yasuhiro Nakasone and former Foreign Minister Michio Watanabe (now deceased) and set up a split in the LDP. People are wondering if he’ll try the same trick again.

Still, Kato, Yamasaki and the rest are reportedly unlikely to team up with Ozawa. The above-mentioned LDP official remarks: “[Teaming with Ozawa] might be an option, but that would bring with it a lot of halation. They are probably actually prioritizing the “non-Ozawa” conservative elements of the DPJ.”

The Kato-Yamasaki group is probably eyeing the mid-career and younger conservative DPJ Diet members, such as the Maehara Group. There is some dissatisfaction among the conservative DPJ Diet members with Ozawa, who gives consideration to former Socialist Party factions including Takahiro Yokomichi. Also, one mid-career member from the DPJ explains, “They are tired of being in the opposition and are more and more seeking to join the ruling parties.” If both the LDP and DPJ have potential to split up, there’s a good possibility that the two groups could come together.

Kamei Shizuka of Kokumin Shinto may also prove to be a key player. And since the epicenter of any potential reorganization will be “the ruling coalition losing their majority in the upper house” one mustn’t ignore the actions of Mikio Aoki, chairman of the LDP’s upper house caucus, and Toranosuke Katayama, Secretary General of the upper house LDP caucus. Both men are high-ranking members of the LDP’s Tsushima faction, which is brimming with dissatisfaction with the Abe administration. A political reorganization won’t have much traction only with this New YKK, and it goes without saying that the actions of the Tsushima faction, which is not a leading faction and boasts strong numbers in the upper house.

Lonely Girl wasn’t viral marketing, it *aspired* to be viral marketing

I’d state the obvious and say that Lonely Girl is the lamest bunch of crap that ever existed, but then I might hurt my own chances of a sweet product placement deal with Pocky.

Lonelygirl15 Breaks Ice With Hershey’s

MARCH 20, 2007 –

Lonelygirl15, the pseudo-video diary that became a YouTube phenomenon last year, has signed its first major product placement deal with Hershey’s for its Icebreakers Sours Gum brand.

In a video posted on March 20 on the official Lonelygirl site, Lg15.com, the show’s main character Bree is seen offering her friends a piece of Icebreaker’s gum, and a closeup of the product is shown. The sponsored episode of scripted teen drama is slated to eventually be featured on YouTube and other video-sharing sites in the near future, said officials.

This level of product integration marks one of the more sophisticated examples of branded entertainment to emerge from the rapidly-evolving world of amateur-created online video. The deal was initiated by the Dallas, Texas-based agency TracyLocke. Ad sales were handled directly by the agents from Creative Artists Agency who represent the Lonelygirl creators. “It’s empowering for us to have major international brand like Hershey’s treat us like they would any other major entertainment property,” says Greg Goodfried, Lonelygirl15co-creator. “Deals like this are good for the community – they help us pay our operating expenses, which has been an ongoing struggle.”

(from MediaWeek)