The Chat of the Ambassador: Japan today

Mr. Mitsuo Sakaba, Japanese ambassador to Belgium, gave a speech at the library of our university this Thursday. The subject, chosen by the director board of KU Leuven, “challenges for Japan in the 21st century”, proved to be quite a challenge itself. Mr. Sakaba had to deal with a lot of topics. He shortly speeched about the three main issues of today: nuclear energy, foreign policy and the aging society of Japan.

The disaster of exactly two years ago in Fukushima instigated the controversy over nuclear energy. The budget framework for recovery is set on 310 billion Euro. But, the real difficulty is not rebuilding the devastated area, but rebuilding the community itself. Even if people would want to come back to their home towns, there is nothing provided for living decently. For example, no shopping malls, no schools, no hospital. Next to that, relocation is needed. Before the earthquake, people lived on the coast line while agriculture was situated on the higher inland. For safety reasons, plans are now being made to reverse this infrastructure. That means that the transport network, should be constructed in the inland now, and coastal areas should be developed as agricultural zones. To protect the coast for future tsunami, some raised the idea of building embankments. This could give problems for fishermen, though.

800px-Devastation_after_tsunami_in_Iwaki_2

Japan is highly dependent on oil, gas and carbon, resources that are scarcely to be found and has to be imported. Nowadays, 2 of Japan’s 49 nuclear reactors are working. Due to the high safety standards government applied, many had to close down. These standards include as well the safety of the plant, like requiring protection walls, as the ground. The previous government of Noda promised to close down all reactors by 2030, and a change in energy structure. He stated the goal of 30% bio-nuclear energy (up till then 10% by the use of water and wind as energy), but didn’t provide a method or any know how. Today’s Prime Minister Abe, reviewed these vague plans and opted for a more realistic vision. The close down of nuclear reactors by 2030 has therefore not been accepted.
A question was raised by one of the attendants whether the government should nationalize nuclear firms if they prove to have a lack of budget for meeting up to the safety standards. To my disappointment, the ambassador couldn’t give a fitting answer.

Next topic was about foreign policy. Abe already made some name with his drastic macro-economic changes (“Abenomics”). Noda had proved to be unable to deal with the government debt of 230% and deficit balance, though he had succeeded in raising consumer taxes by 3 percent. Abe’s goal is clear: strengthen the Japanese economy in order to create an environment where reducing government debt would be possible. His methods are monetary easing, financial expenditures and a strategic economic growth. The expectations from the Japanese people are incredibly high: Abe can count on 70% support, what is really exceptional.

The relationship with the US has cooled down, due to disputes about the air force bases in Okinawa. Especially the one situated in the residential area of Futenma, has been scene to daily protest. The Democratic Party (DPJ) promised to relocate the base outside Okinawa. Unfortunately, no potential site was found, and politicians had to slacken their promise. Now, the option of relocation in a less populated area of Okinawa, has become the only possible solution.

On bigger scale, Japan has joined the negotiations for the TPP (Trans-Pacific Partnership). The Noda-government’s reluctance whether to join or not, was made short work of at once by Abe’s firm positive answer. The TPP negotiations could help to restore confidence. What the ambassador didn’t mention was that this week Obama was shocked by Abe’s boldness to simply refuse free trade on agricultural products. In Japan, agriculture, forestry and fishery are being highly protected by the so-called NTB (Non-Trade Barriers). Free trade would help to open up Japan’s closed market and reduce or eliminate price taxes. If these NTB’s would disappear, Japanese agriculture, who now provides for 40% of Japan’s consumption, would shrink to even less than 20%.

Leaders of TPP member states. Picture by Gobierno de Chile

Leaders of TPP member states. Picture by Gobierno de Chile

A Free Trade Agreement (FTA) with Europe is next on the list. In a previous post I already mentioned the merits for both parties. Mr. Sakaba told us that one of these days a decision will be taken, and negotiations started. Japan also pursues  Free Trade with China and South Korea.

What most people underestimate, is the incredibly high mutual dependence with China. Japanese investments are strongly entangled with the Chinese market. Unfortunately, issues like Senkaku do have some negative effect on this relationship (and I experience, give the impression that China and Japan has stopped economic exchange, which proves to be far from true). “But”, remarks the ambassador, “we should overcome this kind of disputes for the benefits of both sides”.

And last but not least, the aging society. Nowadays 27% of the Japanese population is older than 60 years, a percentage that is predicted to raise to 35% in the future. On the contrary, birth rate is 1.4, while in Belgium 1.78 for example. Which means that by 2050 the population would be decreased by half.  Imagine, from 128 million to 64 million people. That also raise an economical problem, for economic growth is normally supported by population growth. The ambassador mentioned 4 solutions. Firstly, more working women (nowadays 70% of the women. Compare with Sweden: 90%). Secondly, expanding the duration of employment of older people. Thirdly, attracting more foreign workers (There are 1.5% foreigners living in Japan. Compare with Belgium: 10%). And fourthly, robots to take over human labour.

Japanese_Man-Elderly

Pension funds should be revised too. Japanese are trying to raise the starting point from 60 years to 65 years. Next to that, money should be invested. And then we have the new energy problem to take care of all these people. Fortunately, new resources are found in Japan. With the methane hydrate technology, oil can be extracted out of deep sea. An ecological traffic solution is the hydraulic car, where only city water is needed.

Despite all these challenges, the ambassador finished with, “Our goal after all, is to create a maximum happiness society”.

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