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 AOYAMA VIEW

 Missiles, footballers and fishermen from North
    - Big spending on child care to get more mothers working
Finland 100 Year Independence was celebrated spectacularily in Finland and all over the world. The list of landmark structures showered in blue-white lights was impressive - Rome's Colosseum was No.1 for me! No such lightshows here, but Japanese people's heartfelt feelings toward Finland came clear in various events I attended. Sibelius music, Marimekko, Iittala, Artek, Finnish food and drinks, all national symbols well known here, were also featured time and again.

Going forward here, it's just waiting for Christmas. The "real" Santa Claus from Lapland arrived already weeks ago by courtesy of Finnair, as always. He's pushing through his heavy schedule of appearances around the country – lucky we could catch him for a moment at Nordic Chambers' Xmas Ball. The coming holiday season must be welcome for the poor fellow as well.

Two weeks ago North Korea "delighted" us with a missile again. Just when Western media was speculating that Young Leader might be softening up with no launches for 2 months, not even during Trump's Asian tour. Just when Abe-san was being grilled again for his favoritism scandals in the reconvened Diet. Just when I had managed to write one column without any reference to politics, Kim, Trump, Xi, Abe or any one of them. Cannot avoid them this time.

Firstly, of course, Diet debates changed from Abe's alleged wrongdoings to North Korean threat in a flash – just like they did with the earlier missiles in summer. If we didn't know there's no direct dial from Tokyo to Pyongyang, we might doubt it was Prime Minister himself who called to Mr. Kim and asked for this one. "Sumimasen Kim-san, would you mind sending one along again. My opposition is attacking me again even if I beat them well in the election thanks to your help then." It's all my imagination, of course. And happily PM is not dissolving Parliament for another election again. The short post-election session ended last week already.

There was no J-Alert alarm across the country either this time as SDF radars and computers "had it under full control" that it won't hit Japan. Pyongyang declared, too, that all went as it planned. This one was new type, bigger than before, that will now surely reach US mainland, they claimed and arranged big national celebrations for the achievement. Some took it as hint that the tests might be over now and Kim regime is ready to talk terms with USA. In fact, North asked UN special envoy to visit and hear its case for eventual mediation. UN's new General Secretary himself is supposed to visit Japan this week, then make full report to General Assembly.

It just looks like American side is now even less keen for talks than before. The White House air is filling up with talk of "increasing likelihood for war". It sounds ominouly same as when Bush and Cheney were building their case to attack Iraq – still remember Al Queida and all those WMD's that Hussein was said to hide there back then? Well, this time Mr. Kim really has WDM's and plenty of them, so there's all the reason to be more careful. Yet, US President is running out of excuses not to execute his list of threats now that it has finally come clear to all that his ace card China is not performing. In fact, President Xi's special envoy's trip to Pyongyang turned an embarrassing fiasco: he was taken to see a basketball game and visit a kindergarten instead of ever meeting The Leader! UN Security Council, too, has been this time slow to get together for another damning statement even if Trump said that would happen instantly. (Instead, the council met urgently to discuss Trump's Jerusalem move last week.)

It's unclear what "war" means to US leaders. Maybe a limited pinpoint strike to some North Korean missile base - big enough to boost Trump credentials but small enough not to lead to retaliation from the other side? That's my taking of White House No.1 strategist McMaster's statement that US action would not necessarily mean risk for all-out nuclear war. Yet, I'm not convinced the storied "soldier philosopher" is right in his calculations. It's also rumored that Foreign Secretary Tillerson, a rare independent character in Trump line-up is his own clumsy way, will be changed soon to the current CIA director, a war-hawk and devoted Trump yes-man. To complete the picture, USAF bombers were practising bombing runs in South Korea on simulated North targets and congressmen are pushing for US military families to be evacuated from there.

No such need for the Japanese civilians "at this time", says Suga-san. Instead, we have plenty North Koreans visiting here. Their national soccer teams, men and women, flew in on special visa for East Asia tournament while fishermen, mostly dead ones and without visa, have been washing on shore. Ten of those, who made it live to a remote island, robbed an empty house there of everything they could carry from televisions and rice cookers to kitchen sinks and door knobs.The national hunger in North is not limited only to food. Let's see what comes out of all this – hope no unexpected fire works this New Year.

There's plenty good news on the economic front. Recalculations showed July-September GDP growth was after all 2,5% annual speed, almost double the original estimate 1,4%. Stronger private capital expenditure, particularily in financial and service sector, pushed up the revised data. Yet, private consumption that makes 60% of the GDP was 0,5% down – as much as it went up in April-June. For a bigger jump, better salaries are needed and that's now happening in temporary job sector while big industry unions have agreed to push for 4% rise for their members' permanent jobs next spring. Keidanren, too, has already requested its member companies to grant 3% rise for their workers as PM asked for.

Government parties have drawn up a JPY 2 trillion additional public spending package that will be pushed through Parliament when it convenes again in January. Most of it will go to pay for improved child care and free education, something that Abe promised in his election campaign. The target is to make all day care and kindergartens for 3-5 year olds free to get more women to the work force as well as assist low-income families to pay high school fees for expensive private schools. Keidanren has promised its member companies will chip in JPY 300 billion for the child care part as requested by PM. Those companies that also follow his request to pay higher salaries, will get a corporate tax cut in return. The relation between government and corporate sector here still is different from other countries.

The special relation also comes out in the handling of the continuous parade of quality control scandals that has blemished Japan's famous big companies recently. There's been surprising lack of serious remorse and concern by those who should show it: top CEO's, Keidanren, METI. It's not just a few more bad apples, it's Japan's international reputation as High Quality Country that has been brought in doubt. Yet company leaders seem to get away with a ceremonial bow and high level officials just shrug shoulders with humble request "could you please take care it will not happen again". No punishment, no shame, just continue business as usual. Like many others, I find this unacceptable and worrying.

Having worked 40 years in materials industry myself, I know how hard it is to maintain quality standards day by day, year by year and thus cannot be against "tokusai" practice - sometimes asking customers to take delivery of materials that slightly slipped off the self-set company standards, yet remain above general standards. What we cannot accept are cases where out-of-standard quality are regularily shipped out in secret, yet top leaders tell us they didn't know it. Even worse if they knew it and were complicit in the deceat. Kobe Steel top people didn't know what was going on in some of its factories for 30 years, Toray CEO would not have even disclosed his findings if there was not an internet leak. The best remedy Toray promised was to build a computer system in three years that would prevent factories rewriting their quality data. Sounds miserable. Widening the total picture further, it was Keidanren's chairman Sakakibara, who was Toray CEO when the quality fakes started. Not very good for the chief representative of the Japanese industry!

Combined with financial scandals earlier, it looks like that Japan's international image is on way to become what we have been always thinking of China - just as Chinese companies are raising their game to become what Japan has been until now. Without an honest look at the mirror and tackling these things seriously, that just might happen.

In contrast, Mongolian Grand Champion Harumafuji "took responsibility as yokozuna" and resigned for "going a bit too long" in educating manners to his junior "for his own future benefit". The "senpai-kohai" respect of elders seem to be even more pronounced value in Mongolian culture: it turned out the victim for the violent attack had been looking at his mobile when being adressed by the top champion Hakuho, not by Harumafuji himself. It was Harumafuji's duty to correct the young up-start for his "senpai". No wonder, Hakuho, in turn, wished he would be forgiven. That was, of course, impossible. Sumo world is different from business as much as from any other sport.

To get back to positive note for the column finish, we got the happy news that the final details of the EU-Japan trade deal have been now agreed. Providing that EU side will get all its members ratify them unchanged next year – no last moment extra demands from Wallonian farmers or Hungarian pig growers! – it will take effect from beginning FY2019. There was also news from Europe that EU and the political mess formerly known as Britain have "agreed that they agree" on basic divorce terms so that they can start talks on the actual topic of how to arrange their future lives side by side. There's now hope that Brexit, that also takes place in April 2019, can be an orderly process, not a Europe-wide mess for all companies manufacturing in or trading with UK.

Best news for Japanese people, however, must be that His Imperial Majesty's retirement day was finally set in all official institutions: government, parliament and Imperial Council which hadn't adjourned in 24 years. As it happens, it will also take place in April 2019 so that the Heisei period can be extended to 30 years. Government is already planning to add extra 3 holidays into Golden Week then to make it 10 consecutive days. That will add further for memorable time for all of us here.

Wishing the 83 year old Emperor good health for the long wait until then.

Timo Varhama  
Tokyo, December 11, 2017   


Previous Columns

28 November 2017
"Foolish things sell in retail, but sports are to be serious"

20 November 2017
"Making China Great - with Gaffes, Platitudes and Bullying"

10 November 2017
"Good news week: Finland business grows, EU trade deal gets cleared, Nikkei hits new heights and Trump visit goes smoothly"

20 November 2017
"Japan: Endless Discovery"

1 November 2017
"Japan: Endless Discovery"

21 October 2017
"Power play in Japan and elsewhere - some potentially serious, some not"

10 October 2017
"Abe's useless snap election sparks big changes he did not count on"

26 September 2017
"North Korea boost Abe popularity - opportunity to extend his rule"

7 September 2017
"Kims'allah, Japan is OK and doing well"

28 August 2017
"From North Korea's missiles to Turku Terror and US Navy Mishaps"

17 August 2017
"Raining cats and dogs, missiles and threats, but strong sunshine in economy"

27 July 2017
"Forests, floods, fish and consumer prices - stories too good and data too bad to be true"

21 July 2017
"From Cool Finland to Hot Tokyo: A Round-Up of Recent Happenings"

26 June 2017
"Anniversaries and Memories: Finland, Japan, USA."

19 June 2017
"Rainy Season in Japan, Political Storms in Europe"

8 June 2017
"Trump impact spreads - Japan struggles with workforce issues"

30 May 2017
"Taormina to Tokyo: Heavyweights and fashionable ladies"

"New Missiles, Diet Debates, Yet Big Business in Big Profits - Down on Ground Challenges Remain Basic and Simple"

9 May 2017
"Golden Week, Special Trains, Luxury Spending, Even North Worries Makes for Good Business"

20 April 2017
"North Korea, USA both worry Japan - Koike worry Abe and LDP even more"

5 April 2017
"Spring, Sakura and New Year Start in Japan - Commotion, Tensions Rise Around the World"

27 March 2017
"Questions Unanswered, Unasked – Lifestyle and Surveys Bring Light"

21 March 2017
"Finland in Focus: Friendship, Dictionary, Music, Food - Even Elevators?"

13 March 2017
"Uncertainty Increases Around Japan - At Home Rebuilding Uncompleted in 6 Years - Abe Popularity Takes a Hit."

3 March 2017
"Book Readers, Police Jokes, Nerdy Napoleon and Poison Scare"

24 February 2017
"Populism, Ignorance and Isolationism Leads to Mayhem and Mess"

16 February 2017
"Golf Diplomacy, Chocolate Festa and Hokkaido Deams-Come-True"

9 February 2017
"Tokyo overcoming winter, business changes, political battle and Trump threats "

2 February 2017
"Warm Feelings in Japan, Wild Winds from USA"

20 January 2017
"Ready for Rooster? It will be a wild ride!"



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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