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Selected summaries of articles from Japanese magazines -2-.

TOKYO, March 29 Kyodo

Summary of 'Do You Know that You Are Combatants in the Information War?'' Seiron, April 2001.)

Raisuke Miyawaki, a former cabinet public relations secretary, sounds warning bells in ''Do You Know that You Are Combatants in the Information War?''

Originally a bureaucrat in the police administration, Miyawaki notes that Japanese companies ''are direct participants in the information war,'' and that their foreign enemies ''are not only competing companies but state organs as well.''

The end of the cold war ushered in an age of economic conflict; this conflict is an information war at its most basic level. The march of the revolution in information technology has intensified this conflict, bringing with it everything from tapping of electronic communications to corporate attacks based on hacking of computer networks, economic destabilization, and cyber-terrorism.

Miyawaki derides Japans approach to these developments as a ''see-nothing, do-nothing'' policy, saying that politicians and corporate executives are failing to discern the threat in the harsh environment Japan now faces.

He goes on to identify two failings common to the governing levels of Japanese society. First is the ''anti-intelligence structure'' that exists in the country. In the postwar era Japan has relied on the United States for all military and information-related matters, and not only will speaking out on military and information issues fail to win politicians votes, it may even undermine their position.

Second is the ''humanities-rule structure,'' in which government is centered on the bureaucracy, which is staffed mainly by graduates from universities humanities programs, with the University of Tokyo's Faculty of Law at the apex of the pyramid. This results in a government weak in science and technology.

ECONOMY

(Summary of ''The Trap Before the Japanese Economy: Collapse or Rebirth?'' Bungei Shunju, April 2001.)

Keiichiro Kobayashi, a special research fellow at the Ministry of Economy, Trade, and Industry's Research Institute of International Trade and Industry, writes about the lasting economic doldrums in ''The Trap Before the Japanese Economy: Collapse or Rebirth?''

According to his analysis, the postponement of measures to deal with the bad debts held by banks undermines companies' confidence in one another; this causes those firms to cut back on trading and coordinating business with each other, and the economy grinds to a halt.

This results in yet more bad debts piling up on the banks' books, and the economic downturn drags on even longer. Kobayashi terms this vicious cycle Japan's ''balance sheet trap.''

He gives four options for Japan to do away with this negative structure: (1) trying to tough it out through the present conditions; (2) giving in to the arguments in favor of using inflation as an adjustment tool; (3) forcing banks to do away with their bad debts through ''bank holidays,'' forcing financial institutions to close for a short period while their debts are catalogued and appraised, and keeping shut those that cannot continue doing business; and (4) relying on the market mechanism to correct banks' balance sheets.

Kobayashi identifies the fourth option as the best for Japan. What must be done to achieve this result? First, with the help of strict government oversight, banks' balance sheets must be re-appraised in line with their true content, after which nonperforming debts must be cleared away quickly and effectively. Second, measures including fresh infusions of public funds into financial institutions must be undertaken to prevent the kind of bank failure that could touch off a panic.

And third, an environment in which companies have confidence in one another must be fostered, and the inter-company network revitalized.

(Summary of ''Beyond 'Playing at Financial Crisis,'' Ronza, April 2001.)

For a time recently there were wide worries that another financial crisis was coming, the so-called ''March crisis.''

Takeshi Kimura, president of KPMG Financial, firmly believes on the other hand that if the Bank of Japan eases credit conditions or takes some stopgap measures to check the tumbling stock market, and the financial institutions get past the end of the fiscal year with no real upheaval, ''it means that the Japanese economy will have once more managed to put off tackling its structural problems.''

That will be the true crisis, he avers in ''Beyond 'Playing at Financial Crisis.'''

According to Kimura, Japan's economy has avoided dealing with its problems by maintaining a ''delicate and fragile'' balance between bad loans and excess liquidity, deflationary pressure and inflationary pressure, pressure to issue government bonds and pressure to redeem them.

If this continues, sooner or later the balance will crumble and Japan will ''die of debility.''

Kimura maintains that the seeds of a true crisis for the Japanese economy lie in its structure, which allows inefficient problem corporations and financial institutions to remain in the marketplace.

Structural reform is possible without increasing unemployment if the government takes measures against joblessness, accepting that the fiscal deficit will grow. A superficial ''playing at financial crisis,'' he says, will do no good and much harm.

TECHNOLOGY

Summary of ''Japan's Decline as a Scientific and Technological State,'' Chuo Koron, April 2001.)

Japan had a three-year lead on the United States when research on information technology strategy began, observes Yoshio Tsukio, a professor in the University of Tokyo's Graduate School of Frontier Sciences, and it got a five-year head start on the decoding of the human genome. Why then did the country fall so far behind?

The answer, he offers in ''Japan's Decline as a Scientific and Technological State,'' lies in a difference in the relationship between politics and science, namely, the absence in Japan of the political acumen to incorporate science into state strategy. At this rate, he worries, Japan is also likely to lose its edge in ''nanotechnology,'' billed as the greatest arena of science and technology in the twenty-first century.

Over the last five years Japan has seen its ranking decline in seven of the eight areas considered by the Swiss-based International Institute for Management Development in its World Competitiveness Yearbook.

It is true that Japan has preserved its number two spot behind the United States in the area of science and technology, but in terms of the IT revolution, where advances are being made at a furious pace, the four-year political vacuum that Japan has seen translates into a much more considerable lag. Urging fast action on scientific and technological goal setting and strategy formulation to build up national power during this century, Tsukio proposes the establishment of a system for evaluating R&D results and elucidating and publicizing why some projects fail, creation of a system of high-level government aides who can explain and take responsibility for policy proposals, and a move away from concentrating on ''containers'' -- network infrastructure and similar vessels for information -- and toward focusing on the content that those containers carry.

(Summary of ''The IT Revolution Was a Fantasy,'' Bungei Shunju, April 2001.)

Journalist Satoshi Higashitani sees the slowdown in the U.S. economy as nothing more than a classic sign of cyclical downturn.

In ''The IT Revolution Was a Fantasy,'' he argues that the people shocked by the slowdown are those who swallowed the idea, too good to be true, that society had undergone a paradigm shift on a par with the Industrial Revolutionthat America had entered a ''new economy'' without cyclical ups and downs, or that the IT revolution had infused the economy with new strength. These arguments are all flights of fancy, according to Higashitani.

On the subject of the booming U.S. economy, he writes: ''Given that the upswing began in 1992, before the rise of Internet businesses, it is clear that no new economy was created by the IT revolution, leading to the rise in stock prices. Rather, the new economy argument was created as a myth to explain the bubble in stock prices, and the rapid rise of IT was brought out as evidence for this myth. The cause and effect are turned around in this case.''

Higashitani argues that Japan has taken a wrong turn in falling for the tale of the IT revolution. He stresses that the country must now get down to the business of clearing away bad debts, rebuilding its financial system, and -- most of all -- revitalizing its manufacturing industries.

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Publication:Asian Political News
Date:Apr 2, 2001
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