In the Tohoku region, farmland has lost its levees in the aftermath of the Great East Japan Earthquake, and it will be very hard to restore its boundaries. It will also be difficult for older farmers to purchase new machinery and restart their farming operations. However, this is also an opportunity to change currently inefficient agriculture into a new form. Redevelopment of agricultural land into large-sized farm lots will increase work efficiency, open the way for introduction of new technologies for directly sowing on paddies and help reduce costs. The transition to next-generation farmers can be attained by allocating large farming lots to young farmers. Older farmers can earn land rent revenues by leasing their own farmland. Prior to the earthquake, the Japanese government was set to decide by June on whether to join the Trans-Pacific Partnership (TPP), also known as the Trans-... [Read more]

The Great East Japan Earthquake has renewed our awareness of the importance of food and energy, in addition to revealing the multitude of problems in Japan’s conventional policies. With respect to food, the myth about the safety of domestic agricultural products has collapsed, and there is now growing concern about the capacity of food supply. A large portion of the afflicted area comprises villages subsisting on agriculture and fisheries. While there is strong demand for rehabilitation centering on the agriculture, forestry and fishery businesses, doubts exist as to the viability of simply restoring the traditional form of agriculture with a poor production base and supply capacity. Now is the time to build a competitive and efficient agricultural framework. Following the examples of small European countries advanced in transitioning agriculture to an integrated industry is recommended. The Netherlands,... [Read more]

The Great East Japan Earthquake on March 11, 2011 severely damaged Japan’s food supply center, which accounts for 21% of nationwide agricultural production and 25% of rice production. According to the Ministry of Agriculture, Forestry and Fisheries (MAFF), damage related to agriculture, forestry and fisheries attributable to the earthquake amounted to near 1.5 trillion yen, of which damage from loss of farmland and farming facilities was 700 billion yen. Extensive farmland was immersed, flooded, or suffered liquefaction due to the quake and tsunami, and many producers were forced to postpone or give up on planting for this year due to restoration work. Before the quake, the Kan Administration was pursuing whether or not to begin negotiations on joining the Trans-Pacific Strategic Economic Partnership Agreement (TPP), a high-level, free trade agreement that nine countries including the United States were... [Read more]

The topic of revitalizing the areas affected by the Great East Japan Earthquake has been much debated, particularly in the government’s Reconstruction Design Council. Unlike the Great Hanshin Earthquake, there appears to be a consensus that this time we should not simply “restore” the original townscape, but instead aim for “reconstruction” a new type of urban development with a long-term vision. However, when it comes to specific ideas about what this should look like, there are all kinds of conflicting opinions and there is not necessarily a clear sense of direction. Should the reconstruction be led by local municipal governments that have a good knowledge of their local areas? Or should we be thinking about reconstruction strategies for a wide area, without being bound by the framework of municipal governments? How should we deal with the problem of striking a balance between the rights ... ... [Read more]

The massive earthquake and tsunami that struck the coast of Eastern Japan this past March 11 is significantly impacting the nation’s economy as a whole. This is the largest economic shock to hit Japan’s economy since World War II. The full picture is not yet clear, but I will present what is visible at this stage, including the courses and order through which the disaster’s effects will ripple, and the responses that will become necessary given our experiences in events such as the Great Hanshin-Awaji Earthquake in 1995. I will not, however, refer to loss of human life, injuries or harm, to people themselves. This is not because it is not economically important but because it is a huge challenge that extends beyond the economic impact. When considering the effects of a catastrophe such as what we are facing here, it is important to ... ... [Read more]

February brought a shocking piece of news to Japanese people. They learned that their country has become a net importer of consumer electronics–the very goods it had once exported to every corner of the globe. It had already become clear previously that Japan had become an importer of large household appliances, such as washing machines and refrigerators, but statistics for 2010 show that Japan has also become a net importer of digital consumer goods, such as flat-screen TVs. This is not due simply to an increase in imports of goods from overseas. A major underlying factor is that Japanese consumer electronics makers have shifted their production offshore. One manifestation of this can be seen in the electronics megastores in Tokyo’s Akihabara district. Many among the increasing number of Chinese tourists to Japan look forward to shopping at stores in this district. But since last ... ... [Read more]

Change may finally have begun. In the third quarter of 2010, capital investment grew above the level a year earlier for the first time in three and a half years. Shipments of machine tools expanded strongly during the second half of 2010. Early in 2011 Hitachi, Ltd., which has been one of the slowest of Japan’s major corporations to shake up its management, announced that it was reorganizing its operations and reforming its research setup. And even Japan Airlines (JAL), which appeared to be having a hard time restructuring to head off bankruptcy, now seems poised to fly into clear skies. Signs of a business revival are turning up here and there. To be sure, it is still too early to determine whether these scattered developments are indications of a broad-based recovery from the corporate malaise that appears to be the root cause of ... ... [Read more]

In the wake of the collapse of Lehman Brothers in September 2008 and the financial crisis that ensued, the traditional forms of macroeconomic policy lost their effectiveness as tools for managing the US economy. This has compelled the United States to change the direction of its economic policy. The Obama administration, recognizing that its fiscal and monetary policy mix was not expanding effective demand, has launched an effort to create jobs, using exports as the bridgehead. This policy is aimed at doubling exports within five years, based on the idea that the employment situation is unlikely to improve without an export-driven expansion of the economy. Doubling exports within five years will require an average annual increase of 15%. The participation of the United States in the Trans-Pacific Strategic Economic Partnership (TPP) emerged in this context. Originally, the TPP was conceived as a... [Read more]

The employment prospects for graduates entering the job market this year are reportedly the worst on record. This is not because companies are performing especially badly–at least not yet. Results at Japan’s big corporations in particular are not markedly worse than they have been for several years. But recruitment indicators at the big firms are dire. Though small and medium-sized enterprises are much more positive about hiring new employees, new graduates have their sights set on finding a job with a big company–preferably a major blue-chip firm offering maximum security. I am a father myself, with children in college and high school. My work as chief operating officer at the Industrial Revitalization Corporation of Japan also gave me an opportunity to study the structural problems inherent in Japanese corporate culture at close range. The impression I have of young people today based on my ... ... [Read more]

What is to blame for the tough employment situation facing new graduates in recent years? One popular argument that appears plausible at first glance points to the Japanese system of lifetime employment as the root of the problem. Basically, the argument goes as follows. Lifelong employment means that Japanese companies are unable to dismiss full-fledged “regular” company employees, protecting the vested interests of older employees and making it difficult for the poor young things leaving university to find permanent positions. As a result, they are forced to take jobs as irregular hired labor. The remedy normally put forward by proponents of this argument is to make the employment system more flexible. In plain terms, this usually means making it easier to offload the useless old codgers and hiring young people to take their place. Let me start with my conclusion: This argument is nonsense. ... ... [Read more]