(Originally sent to Fukuzawa, ISSHO, HIBA, and Friends Thu, 26 Mar 1998)

Over beers this weekend, fellow DFSer OK made a striking comment (paraphrased): "I have had many of your experiences and shared many of your thoughts on the issues you raise. The difference is that I haven't the time or inclination to write them up such detail." He's right--the verve I have to record noteworthy events on cyberspace is practically a hunger. And here I go again, writing up how the MOF speech actually went. If you're disinterested, please delete, but it's a hellish story of beating the odds...

MARCH 23, 1998 1:30 - 3:30 PM
MOF HOKKAIDO RESEARCH BRANCH (shisho kenkyuujo)

I arrived an hour early and met host Mr Satou, a friendly but rather nervous man who had a thing about not leaving me alone in the building at any time (including bathroom breaks). I eventually nudged him into letting me into the conference room to get my multimedia presentation set up. I had prepared a video, several stats photocopied from the Economist to be put up on an opaque projector, and a 3-page statement (in Japanese here) that I would be distributing. A sound check was done, a spotlight was trained upon me, and the building's PA system announced my impending speech to the whole world--adding to the tension that would eventually help cause a catastrophe.

After getting used to the feeling of the room, I was escorted out to be introduced to the biggest cheese in the Hokkaido Ookurashou. Mr Higo (try imagining the kanji!) was a balding man, with a confident air in an opulent office (rich wood textures everywhere, and leather chairs that farted whenever you parked or fidgeted). You knew that you were talking to a man of influence when you looked at his meishi and saw his name and position, but no contact information. Sort of like meeting Toyota's American boss--whose cards are round like a beermat, with his name, a sketched portrait, and nothing else. Mr Higo and I had a bit of small talk over lidded cups of tea (they remembered I don't drink coffee!), where, after the basic "how long" and "Japanese-level" ascertaining questions, he told me to say anything I liked about MOF and inject some overseas ideas.

As I have this odd inability to engage in small talk (I treat every conversation as an excuse to say something hopefully meaningful), I said I would be glad to mention a few regulations that businessmen find cumbersome. He asked if overregulation was the sticking point for overseas businessmen, and I said not exactly. It was more the arbitrary enforcement of the regulations. I mentioned our old Fukuzawa debate (Flannigan vs. Thieme, plus off-list Pelander) where respondents were inconclusive whether foreign businesspeople can found their own companies without native participation (joint partnerships, required hiring with set minimum salaries). The conclusion I drew was that it depended on the city (trader Pelander in Sapporo was required to hire Japanese by Sapporo bureaucrats, and that drained him enough financially to drive him out of business; translator Thieme in Tokyo, in contrast, is sole shareholder and worker. Right?)--which makes it much harder to do business if we are at the whim of individuals, not laws.

Mr Higo nodded and we looked at our watches--our five minutes of face-time was up. After an (escorted) preemptive pitstop, I was escorted into the near-full (about thirty men and a few women) conference room. Most attendees were kachou-looking middle managers, with a couple of secretaries and buchou on the ends of the bell curve. Everyone was told to stand up, I was introduced at length (CV stuff to establish credibility), and after seating I got started.

OPENING

To soften the audience up a bit, I opened with an apology. I am not an expert on economics by any measure, and most of the knowledge I have on the subject is introductory, theoretical without practical experience, or else gained by hearsay from my wired friends. But regardless of origin, these are some points that I think could improve matters for both the system and the public at large. I want to stress that I intention is not to attack (kougeki) the MOF [hey, I have to keep my needles soft]. But any place can use some improvement, and my views reflect the public's view through the mass media, which, unfortunately, has been sharply critical of your organization.

I also stressed that because I am not a native speaker, my reading may be slower and my points less clear. I wrote this speech only yesterday in Japanese, and my proofreader wife, tuckered out after another day of raising two kids, missed quite a few mistakes I had made. Although it isn't nice to pass the buck (nasuri o tsukeru) on to her for my errors, I will anyway (this caused chuckles--we were getting into a groove). Anyway, sorry for such sloppy Japanese. Please feel free at any time to raise your hand and ask for clarifications. (Lots of nods and eye contact at this point.)

You have two documents before you. The first is a speech I made to the National Personnel Agency last November on "Bureaucratic Improvements for Non-Japanese" [the dreaded "gaijin rights" spiel], which Mr Matsui back there attended (he nodded sheepishly; more chuckles). I think he enjoyed it, because his introduction to Mr Satou over there is the reason I'm here today. Unfortunately, this first document is not today's speech. Looking it over, I realized there is very little there which the MOF can do much about. So I wrote a whole new speech just for MOF, which I hope will measure up. You will find it on 3-page Document Two, which from now I will be reading from. Please keep the first speech for your reference. [thus, folks, I slipped in what I really wanted to say as a take-home addendum]

So let's get started:

THE NEED FOR REFORM

I went into detail on this in my previous post to you all, so points in passing: Japan's economic conditions are worsening on several fronts. Economically: GDP is dropping in real terms. Production and business confidence are negative. Long-term interest rates are zero and short-term negative. Unemployment is a record high. Public debt is equivalent to GDP, private is estimated to be twice that. New major bankruptcies every day. For substantiation, I projected stats from pages of The Economist onto the big screen.

Politically: arrests, resignations, and suicides of prominent leaders and enforcers are Legion. Corruption is endemic. Yet the sense of urgency is deflated by prominent Japanese bureaucrats (MITI's AVM Watanabe Osamu) defending wining-and-dining "nomunication" (drinking-communication), or "settai", as a necessary evil.

This cannot go on. Japan's growth is being drained by corruption and debt. Here are some proposals for:

MOF REFORMS IN GENERAL (again, all covered elsewhere, so briefly:)

1) Strengthen the laws and organs necessary to establish and enforce freedom of information acts.

VIDEO: I here played a 25-minute video of a TV program that aired on March 1 on local network UHB. It took much the same tack as I had, with recaps of the news up to that point, supplemented by interviews of Susukino hostesses and scared businessmen (who had their faces and voices masked out of fear of bureaucratic reprisal). They said that there probably will be no change in settai practices as they stand, as businessmen's incentives are clear: they need the information and privileges that the bureaucrats can and do provide.

A lawyer was the guest commentator and he gave a damning critique of the practice. With diagrams he explained the dynamic and the closed nature of the rents-seeking. He also noted that foreign businesses, who know nothing about all this, face real disadvantages in the patronage system.

On came a foreign businessman at this point--Randal Irwin, shareholder in an internet-providing corporation, who worked for other Japanese companies and paid bureaucratic tribute every night for months. His current company forbids after-hours fraternization, which means that their company will remain a peripheral non-player in the market, but will have far more efficient and higher-quality contacts with the business world.

On came another foreign academic (wheeled out at the last minute, since other foreign businessmen, afraid of bending bureaucratic belly-buttons, refused to comment), Dave Aldwinckle, who felt that this system was very Asian, and patronage of this sort was common and understandible in countries with strong bureaucracies. What's needed is for a watchdog agency independent of the bureaucracy, with the power to enforce strong laws of crime and punishment, to weed out this corruption.

The lawyer came back on and compared the bureaucrats to kids in a candy store. Sure, they know that they shouldn't shoplift (manbiki), but they know they probably won't get caught. The trick is to get the fear of God [loose translation] into them by making the crimes and punishments clear and without exception.

The video went on about the American system and what to do (the $20 rule, etc.), and the legislative funk the Japanese political parties are in (their proposals are divided and differ in dilution; the ruling LDP is dragging its feet). At this point, the dark room was lulling people to sleep, so I called it a day, turned up the lights, and returned to my speech transcript.

DISASTER STRIKES

I was proceeding through proposals at a pleasant clip: Employ managers from the private sector, eliminate amakudari for the top levels, strengthen reporting requirements for banks, securities and insurance companies. I mentioned that my understanding of the last proposal was incomplete; I had consulted our university's accounting teacher and been drowned in all the jargon, which I probably wouldn't understand even in English. I got a few more laughs from the audience here, and thought that things were going to go smoothly to the end.

Wrong. Suddenly, it happened.

I got a migraine.

And not just one of those evil, cold-sweat-inducing, head-in-a-vice, ten-sandwich-eating-thug-smacking-you-with-a-mailsack-full-of-steel-sea-urch ins, acid-brain-bath just-let-me-die-already types of migraine. My migraines are inconvenient not because they hurt like the Dickens, but because they actually blind me. Yes, blind. The blind spot that every one has near the corner of their eye gravitates to the center of my vision, and expands--occupying my sight with a shimmering vein of mercury for a good half hour. Which was very bad news--I had an hour left in my speech, and a page and a half of Japanese to read without actually beeing able to see it.

So here I was, watching my vision drain away, knowing that soon my head would start to throb, and if I didn't hit a pillow and sleep it off within two hours, I would become nauseous and throw up everywhere. But as keynote speaker I couldn't move. I contained the panic, like a woman coolly realizing her time of the month has started at an inopportune time, and contemplated the necessary measures: Sedate? I had no more migraine medicine (which only belays the pain schedule one hour anyway) left in my wallet, oops. Sleep? I was ninety minutes from home and had a meeting scheduled after this event anyway. Solder on? I had never tried to find out if sheer concentration would make the migraine more merciful.

I chose the third option and came clean to the audience. I mentioned the migraine (hen zutsuu), described the blindness, and said that I would continue reading, but as I have to look out of the corner of my eye at the words it's going to be much harder going. I couldn't see their reactions (hell, I could barely see anything at all), but there were no objections. Continuing:

DISASTER PART TWO

More reforms: Stop fixing the stock market, get out of the yen exchange markets. And here I was about to read Murray Sayle's piece on how Japan exported its bubble economy when I looked at my English-language speech outline and realized:

I had forgotten it.

I'm referring to the six-page MOF speech I sent you all last week containing that huge quote from Sayle. In its place was an abbreviated 3-page rough version I had hammered out last Thursday, before retyping it up in its full glory and emailing it to you all.

"Idiot!", I thought, getting ready to slap my pate but realizing it wouldn't help my headache much. I stalled for about five seconds before realizing that in my backpack was my "Current Projects" folder, and in it was the whole JPRI writeup. Somehow I found the citation I was looking for, and, for the first time in my life, sight-translated from English into Japanese, stumbling only on the words "industrialize" and "East-Asian Co-Prosperity Sphere". I realized that by now I was on automatic pilot, the type one enjoys after a few stiff whiskeys or when love is in the air. I was no longer reading and comprehending. I was number-crunching--just mechanically processing words like a translating program in a computer--because that was all I had left. All other cognitive processes were taken up by stage two of the migraine--the descending veil of electrified razor wire and swarm of thorns.

And, believe it or not, kanji-crunching alone worked. People were apparently nodding in apparent comprehension, and I could proceed without further ado:

MOF REFORMS FOR HOKKAIDO

Remembering that the word used to describe the Hokkaido "branch" of MOF is "shisho" (a place sent off from the center--sounds like an outpost), I wondered whether these MOFers were just Tokyo transplants or actually had eggs in the Hokkaido basket. So I asked how many people in the audience were "Dosanko" (Hokkaidoites). Surprisingly, the majority raised their hands. How many were temporary transfers (ichiji teki tenkin) from Tokyo? Five or six of the older men.

Since I, like the audience, will be living here for lord knows how long, I would like to press home that we, the Dosanko, need the following reforms. (Tokyoites, too, please consider these local problems when you return down south):

I gave the basis for Hokkaido's dependency on the south: politics determined by the military and by restricted import-export access. Tokyo absorbs our best graduates and in return sends us "Sapporo bachelors" (satchon) who treat their post like an exile (ruikei) into Siberia. Tokyo treats us like a playground, with discount tour packages we cannot get, while we have to pay 30% more just to travel abroad.

I suggested MOF push for more regional autonomy, as is promoted by recent laws, including lobbying MITI to open more ports to import access. After stating a few more small measures, I realized that there were only about ten more minutes left in the presentation, so I opened the floor up for questions:

There were a couple about the abbreviations I'd used (FOIA and TSE). Then one person, not hostilely, asked about Ishikari New Port, which I had requested be given Customs authority:

Q: "I thought Ishikari NP had been given Customs authority."

ME: "Really? It hadn't five years ago."

Q: "Well, I think it has. It still doesn't account for much volume, though."

ME: "Well, if it has, I'm happy to hear that, and I stand corrected. However, the reason I mention this is because about six years ago, when I was working in a trading company, we tried to use Ishikari NP for importing Malaysian freshwater sand, used for cementmaking. We had a very cheap offer from Malaysia, but when we took it to some cement companies, they gave us a very low purchase price, perhaps as a refusal (kotowari nedan). Anyway, we tried to import it as cheaply as possible. We had to ship it, unload it, truck half of it and store the other half. Tomakomai's storage rates were okay, but the trucking to Sapporo was too expensive. Ishikari NP was closer, with cheaper warehouse prices, cheaper transportation and unloading charges, cheaper everything really. But since Ishikari NP didn't have Customs facilities, we would have to clear Customs at Otaru, paying the unloading, clearance, reloading, and reshipping all over again, effectively doubling our charges before the transaction at Ishikari NP was complete. That was why the deal fell through.

ME AGAIN: "Anyway, my point is that without ports opening in the provinces, such as Wakkanai, Hiroo (for Obihiro), Kushiro or Abashiri, the outback will have immense charges for trucking from Tomakomai over the Hidaka Mountains. Just from Tomakomai to Sapporo it cost half as much (15 man en) to truck as to ship from Seattle to Tomakomai. To Obihiro, one of my friends imported a whole pre-fab house, but ended up trucking the whole thing over the Hikakas at near double the shipping costs. Opening Hiroo to international trade would reduce costs for all of Hokkaido and stimulate our economy. Do you have any objections with the way I've portrayed this?"

Q: "No, it's as you say." (ossharu toori desu) He smiled.

CLOSING REMARKS

I said to everyone that this speech had been like an obstacle course for me, noting the migraine and losing my speech outline. I apologized for the falteringness of the presentations, but got a large round of applause. After a deep bow, I was escorted out.

After 15 tortuous minutes of migraine-riddled speech post-mortem with Mr Satou and Mr Matsui (who were very happy with the speech, they said, and offered a few corrections and addenda. The most significant of them being that Hokkaido has the highest proportion of State-Owned Industries (Koukyou jigyou)--10%--in all of Japan.), I was set free. I walked outside into the bright sunlight and my vision, which had cleared up, registered huge bolts of agony. I walked on to my next appointment, and got home by 9pm that night without being sick.

I had beaten the odds. But I hope I never have to repeat a day like this again.

Dave Aldwinckle
Sapporo