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 AOYAMA VIEW

  New Year News Review

Happy New Year and welcome to Heisei 31! Still can recall that cold, grey morning 30 years ago when the old Showa emperor passed away and his son was declared successor in the 2000 year old family line. In 4 months' time the "new" old Emperor will retire and it's turn for his eldest son to take over the Chrysanthemum throne. Happily, the father is still with us this time and can start a well-deserved and hopefully long retired life.

Government has promised to tell us the name of the new Imperial period on April 1 when the new financial year starts. Calendar publishers are anxiously waiting for the rare opportunity to print and sell big part of the 2019 calendars all over again. There's always business involved in everything.

Foreign business here is preparing for the EU-Japan EPA deal taking effect on February 1 followed by the 11 Pacific countries' TPP deal soon after. The EU deal is the biggest global trade deal in history and will bring big changes especially to food business here. Importers have already announced price cuts to their European wines and we can expect many other products to follow. Thanks to Trump's rash move to take US out of the TPP that his country itself initiated, Australia and Canada are now eager to cut into US beef import domination with help from tariff cuts.

Pressed by concerned US farmers and cattle growers, both Trump's core supporters, Washington is now trying to catch up with pressuring Japan into talks for a bilateral deal. This is the form favored by Trump – and China! – as it allows the bigger country to better use its muscle to force smaller nations into submission. To maintain president's public support US officials are in hurry and target early outcome even if the publicity focus is firmly geared on the ongoing US-China talks to stop Trump tariffs leading to US business loss and further decline in Dow index.

FINLAND IN JAPAN NEWS

Finnish business has been increasingly active in promoting its products here over the past few years and the new EPA will hopefully bring even more Finnish companies to the market place. The centenary of diplomatic relations with Japan will add publicity for Finland with lots of culture events this year. First exhibition of Finnish modern art already opened at Aoyama's Spiral and there will be plenty more to come together with classic concerts. It's not just Tokyo, but Nagoya, Gifu, Ehime, Nagano etc. To keep up with it all, you better check Embassy's home page.

First classic music event is Finnish Culture Society's annual Gala Dinner Concert at Meiji Kinenkan on January 29. As I'm deeply involved in the arranging organization it might sound partial but I do warmly recommend the glorious black tie event to all readers.

In business side, we just got good news that Finnair finally received the necessary overflight permission from Russia and decided to start flights from Sapporo to Helsinki. This was expected for long time, so congrats to Nagahara-san and his Japan team! Finland will be also featured in the Sapporo Snow Festival for the first time with Helsinki Cathedral as one of the big snow sculptures they build in the central park. As well, hearing that Metsa part of the Moomin Park that opened in Hanno last year keeps attracting big crowds and Finnish food and design products on display there are often sold out of stock. The opening of the actual Moomin Valley part is neither far away any more in mid-March.

The first big Finnish business event will be a seminar arranged together by JETRO and Business Finland in February to coincide with visit of Economy Minister Lintila and his business delegation. To have a Japanese government organization involved in arrangements for Finland promotion once again shows how special position our country has achieved here. Same happened last year with the Circular Economy Forum that was co-arranged by Sitra and Environment Ministry of Japan.

As well, hear that the annual Slush Japan later in February will also see bigger than before Finnish participation. The top arranging official there, too, is now Japanese – and a young female to top it off.

JAPAN IN FINLAND NEWS

While the great tumult around the world worry Japan – there seem to be serious problems where ever you look – many foreigners and Japanese alike worry that recent news from here also raise unnecessary concerns about Japan. First it was shock arrest of Carlos Ghosn, something unexpected for a big business mogul anywhere, and then extension of his detention time and again in time-honored manner how prosecutors work here. Same for the spartan jail conditions. Japan's old-fashioned judicial system has been indeed highlighted in international media and deservedly so. Hope this attention will help to bring about long sought-for changes. Certainly agree that transporting suspects into court hand cuffed is way too much today, but to have Ghosn family apply for human rights because he has to eat rice every day is going pretty far off, too. Unexpectedly Human Rights Watch leader already op-ed in line with Aoyama View: system should be changed, but not just for one man who ever he is.

For Christmas present we got criticism for Japan's decision to "start commercial whaling" and for New Year greetings US media reminded us that the traditional auction of the year's first big tuna is an afront on another endangered species. Until now the news of this annual happening had focused just on the crazy prize that one fish can fetch in Japan. Here, the news this time focused on that the event was held first time in the new Toyosu facility instead of old Tsukiji.

Finally last week we got a French court, who's running a study into widespread corruption in IOC, come up again with its old suspicion that Japan paid five years ago bribes to a Senegal IOC member so he would organize African votes for Tokyo 2020. With the timing for warming up this old affair, many Japanese took it as French revenge for Ghosn arrest.

The Japanese case for Ghosn and the French case for IOC are ongoing and will come to their own conclusion in due time, so let's leave them here. Instead, it's useful to look behind headlines of the whale affair.

JAPAN WHALE BUSINESS

Japan decision to resign from IWC was headlined in Western news so that many understood Japan would now engage on unlimited expansion in killing the big, defenseless marine creatures. In some comments, the entire Japanese nation was condemned as cruel barbarians. Yet, closer reading actually says Japan will give up its annual cull of 300-700 whales in international waters close to Antartica for "scientific research" and limit the nation's whalers to hunt only within country's own waters, something they have done through the years to the tune of 150-250 whales per year. So, in fact, it looks like the decision will be actually a big reduction in volume and retreat from disputed waters, something positive. As well, now Japan will be on same level in "barbarity" with other whaling nations like Norway and Iceland and its doubtful pretension for science has been terminated. These are steps forward in discussing the divisive subject, I think.

It is highly unlikely that the domestic hunt volume will much increase as 1) the local stock is more limited and 2) there is little demand for whale meat in today's Japan anyway. National data tells us that whale meat consumption has decreased from 200,000 tons per year 40 years ago to just 5000 tons today. In public polls, 99% of consumers say they have not eaten whale or have any plan to do so, not because of environmental concerns but simply because it just does not attract them. Whale meat is mainly eaten in the few traditional whaling prefectures - 4 out of 47 - and even there by old people for nostalgic reasons. Hence, in popularity, regionality and volume it is about the same as eating horse meat in Japan, something much more common around the world. As importantly, horse meat business is purely commercial small local industry, but whale hunting has been government subsidized activity for long time. How long can that continue?

HARMFUL WEAKNESS OF THE POLITICAL SYSTEM

What we should be concerned with is the systematic weakness of Japan's domestic politics that are susceptible to regional and demographic minorities. In this case, a few whaling communities were given preference over country's international image because several LDP big wigs starting with Prime Minister and Party Secretary happen to have their constituencies in such place. As long as rural regions, despite their population decline, command votes that count for more than urban population centers and old hereditary MP's from countryside continue to lead the ruling party, Japan will suffer of this ballast against positive policy making on national basis.

Any blemish on Japan image to kotow to a few coastal communities is a minor distraction; much bigger economical values impacting all citizens' lives are being sacrificed through this abuse of democratic system to protect farmers. Their number, too, has drastically declined and many of them are beyond normal retirement age, yet they have been supported to continue their ineffective production protected from import competition by highest tariffs in the world, even outright import quotas given to only certain countries as political favor.

As result, we pay highest prices in the world for many basic products and higher portion of our incomes go to food than in other developed countries. That leaves proportionately less to spend on other ends and keeps the private consumption feeble impacting, in turn, the prospect for GDP growth. We've seen it time and again: every time weather is too hot or too rainy vegetable prices shoot 30-50% up and spending on other consumer products like clothes or computers and services like travel or restaurants goes down.

FARMING SYSTEM MUST BE REFORMED

The JA agricultural co-op system that was created to help farmers in their hard work and sell their product to consumers has become a huge monster that controls the business from seeds, tractors and fuel to finance and final sales, tells members what to produce and has powerful impact on national politics. It is said JA has more bureaucratic staff than farming members and when you travel in countryside it is easy to spot its huge warehouses and office buildings: they stick out tallest in every village.

It is high time for Japan to modernize its farming system. National food production is important for all countries, but most others have changed already long time ago from protective tariffs that punish consumers to financial support to farmers where necessary. Change would be beneficial for consumers and total economy as well as smooth out international relations further. The two new trade deals are both steps into right direction, but the government is unlikely to speed up steps much as the ruling party fear the overpowering farm vote, its own creation and cradle of power.

I am more certain that the court system will be developed in due course, the recent international exposure will help those who have demanded it for a long time already. As for whaling, it will continue to wither and decline into a eskimo-like heritage rarity like what it supporters claim it to be in the first place.

Timo Varhama  
Tokyo, January 16, 2019  


Previous Columns

19 December 2018
"JAPAN: THE ONLY SAFE PLACE FROM GLOBAL TURMOIL?"

6 December 2018
"Political Theater at World Stage, Media Play in Nissan Case"

21 November 2018
"Different inroads into Japan: Finnish forest knowhow vs French corporate genius"

7 November 2018
"Moomin, Muji, Movies and Mobile Phone Fees"

29 October 2018
"Towards better world? Circular economy, collaboration with China"

15 October 2018
"Circular economy, fish market and construction boom"

2 October 2018
"Abe's "third reich": challenges abound"

17 September 2018
"From Osaka typhoon to Osaka fever - dark side and bright side of Japan"

6 September 2018
"Emperor: love, peace and reverence"

23 August 2018
"Summer heat, new scandals and export worries - but Tokyo is best"

8 August 2018
"Petty politicians, bungling bureaucrats and profitable business"

30 July 2018
"While we were on holiday"

17 June 2018
"From Singapore to soccer - wrapp up for summer"

11 June 2018
"Showdown in Singapore, commotion in Canada and cover-ups in Tokyo"

28 May 2018
"Morals and responsibility, blind loyalty and power harassment"

17 May 2018
"Big Business in record results again, but consumer are not convinced - North Korea spectacle continues under Kim direction"

26 April 2018
"Political spectacle approaches grand finale
- people's trust sinking ever lower"


17 April 2018
"Cruise missiles and cronyism, business boom, old people and sumo"

6 April 2018
"Mystery train and other unpredictable moves in geopolitics around Japan"

26 March 2018
"Trump Unchained and Abelympics – Can PM Make the Party?"

16 March 2018
"Anniversaries, updates, fallacies and deception"

5 March 2018
"WHILE WE WERE WATCHING OLYMPICS..."

26 February 2018
"Korean Olympics: sports shine, politics stink"

14 February 2018
"Korea: Murky Politics and Big Business Behind the Sport Spectacle"

4 February 2018
"It's "smile time" in politics, Olympics, economics and business"

23 January 2018
"Moomin crisis, panda frenzy and Olympics turned into political farce"

12 January 2018
"Heisei 30 looks good: share prices soar, PM rides high "



About the Columnist

The columnist is a Japan veteran among Finnish business, our Chamber ex-president and today Member of the Board of Trustees.
After running a major Finnish industry company's Japan business for over 20 years, he is now Senior Associate in a strategic consulting company.

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