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Newsletter Vol. 2 Winter 2016

On 8th December 2015, Japanese Civilization Institute held its second symposium at Japan University of Economics in Shibuya, Tokyo.
Minister in charge of regional revitalization Shigeru Ishiba delivered a keynote speech on the topic, “Reconsidering Regional Revitalizationand the future of Japan on the day Japan and the United States opened war.”
After the speech, Minister Ishiba was joined with analyst David Atkinson—author of the popular “Shin-Kanko Rikkoku Ron” (New Strategies for a Tourism-Oriented Country)—Hisao Harihara, former Executive Assistant to the Minister of the Ministry of Agriculture, Forestry and Fisheries, together with Naoki Inose, director of Japan Civilization Institute and MC of the event, to discuss the theme, “Japanese
Civilization and Regional Revitalization──Strategies for Japan to survive through its strengths and weaknesses.”
The following is a passage extracted from the event:

Keynote Speech

Regional Revitalization andJapan’s Future
by Mr. Shigeru Ishiba(Minister of State for Special Missions〈National Strategic Special Zones〉and
Minister in charge of Regional Revitalization)

Good evening. I’m Ishiba, Minister in charge of Regional Revitalization. It’s 8th December today, and I
think it’s a day in which we ought toreconsider why we had to start sucha war on the same day back in 1941.
There’s Mr. Inose’s book; “Showa 16nen, Natsu-no Haisen” (Defeated in
War in the Summer of 1941), which
I think is a book everybody should
read no matter what else they don’tread. At that time, Imperial Japan
had an organization called “Total
War Institute,” which was based in
Nagata-cho, around where The Capitol Hotel Tokyu is today. Despite its
grand name, the building was more
like a base camp, they say. 30 elites,
including Captain of the Imperial
Army, Lieutenant Commander, andpeople from the Ministry of Commerce and Industry, Ministry of Foreign Affairs, Ministry of Finance,
the Bank of Japan, Nippon Steel

About the groupJapanese Civilization InstituteEstablished in August 2015

Co., Nippon Yusen and Domei Tsushin were assembled there to make asimulation on what would happen if
Japan declared war against the United States. In the summer of 1941,
the team came up with a conclusionthat no matter how hard they tried
they would never be able to win thiswar. Japan must avoid the outbreakof this war, despite any reason there
may be. The then Prime Minister
Fumimaro Konoe, Minister of Army
Hideki Tojo and members of the
Cabinet, were present to hear this.
Still, why did that war have to happen? Mr. Inose’s book clearly answers to this question. I read thisbook during my last days of being
appointed Director General of the
Defense Agency. I think throughthis book, I formed my fundamental
ideas on collective security.
Former Vice-Minister of Agriculture, Forestry and Fisheries Mr. Har-ihara, is an old friend of mine. Ourfriendship goes back 30 years, andwe have discussed Japan’s current agricultural policy many times in the
past.
Meanwhile, Japanese tourism
cannot be discussed without readingDavid Atkinson’s book “Shin-Kanko
Rikkoku Ron” (New Strategies for a
Tourism-Oriented Country).

Creating asustainable,
independent nation
Sometimes, I’m asked the question; “What kind of country do you
want to build?” I reply; “I want tocreate a sustainable, independent nation that has the power to endure.”
Then, most people reply, “this country is already an independent nation.” But is this really so?

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State sovereignty I believe is built
on three aspects; land, people andgovernment structure. These three
aspects must be protected from foreign countries no matter what. The
Falkland Islands—also known as Islas Malvinas—is a British overseas
territory off the coast of Argentina.
When it was invaded by Argentina,
Prime Minister Margaret Thatcher
immediately dispatched fleets without a slightest hesitation. The Japanese people might know where theNorthern Territories are, but mostpeople would probably find it difficult to spot the Takeshima Islands.
Even if they are able to spot them,
there are very few people, most likely
even in the Diet, that can explain
why the Takeshima Islands belong toJapan from a historical and International law point of view. A country
that is ignorant about its land like
Japan is extremely rare. The abduction issue was brought up for the
first time during the Koizumi Administration. The issue was neverbrought up until then. North Korea
admits that they kidnapped many
people including Megumi Yokota,
but some of them still haven’t returned, which is nothing but a violation of state sovereignty. A country
that is unable to protect one citizen
will lose all of its people and its
country with it. Some heroic people
might say they should dispatch the
Self Defense Force and bring thepeople back. But the Self Defense
Force cannot be put into action unless there’s an imminent and unlawful infringement.
The third point I would like tomake with all respect to foreign people, whether central or district, I
think that a country should have agovernment structure, where peopleof its own nationality govern the
country. These three aspects should
never be invaded by people outsideof Japan. A sovereign state I thinkneeds to be like this. I wonder how
many people are aware of this?

2

The notion of statesovereignty is weakin Japan
I might also add that unlike theUnited States and Europe, our democracy is not something we foughtfor. What used to be monarch sovereignty turned into a sovereignty ofthe people and then into a nation-state. Individual people started
ruling the nation instead of sovereigns. Today when we vote, each
person is required to think what theywould do if they were administrators. However, the notion of statesovereignty is very weak in thiscountry. Can we call such a country
as independent?
The same people stressing thewithdrawal of American militarybases from Japan are against exercising the right to collective defense.
They do not realize that what they
are saying is logically inconsistent.
That Japan is providing military bases to the Americans is a duty thecountry must owe instead of exercising the right to collective defense.
Therefore, if the country claims theright for the American military baseto withdraw from Japan, then it
must perform its duty by exercising
the right to collective defense. The
Status of Forces Agreement is affiliated to the U.S.-Japan Security Treaty, so the Status of Forces Agreement
cannot be altered on its own. Can
you call this kind of U.S.-Japan Security Treaty, a truly sustainable treaty?
“We have no permanent allies, wehave no permanent enemies. We only have permanent interests,” arewords left by British Prime Minister
Palmerston (1784-1865). Under alliance, a nation always has to operate
while facing the terrifying dilemmaof getting involved in war and being
abandoned by its allies. The fear ofgetting involved in war always seems
to be the issue, but what about thefear of being abandoned by your allies? How do you overcome that?
People of this nation should understand this before talking about alliances.
This is a very delicate issue thatshould be carefully said, but Japanwas destroyed to ashes with WWII
and lost its state sovereignty on 15th
August 1945. The Emperor systemremained, so the fundamental structure of the state was protected. But I
think it’s not too much to say that bylosing state sovereignty, Japan banished as a country altogether. How
should we contemplate this? The
book, “Showa 16 nen, Natsu-no
Haisen” makes many interesting suggestions regarding this.

The preconditions forJapan to thrive
have disappeared
If we had thought rationally, we
never would have started that war.
But public discourse at the time
seemed to have lost its confidence,
and all these notions about “Japan
being a country of God,” “Americans and English people being satanic animals” and “luxury is enemy”
was at full force. Was there any othernation in the world that ordered its
people to make suicidal attacks like“kamikaze” and “Battleship Yamato”? How many efficient men losttheir lives in that war? We have to
face this truth today.
Nobody wants to think for the
worst, but what if one day North
Korea suddenly announced, “Hey,you Japanese! Agents of Americans!
We’ve got our missiles pointed atyour nuclear power stations andwe’ve started countdown!” How
would we respond? We should think
about such situations.
Of course we mustn’t forget themagnificent effort the Japanese people showed, which led to the strenuous thriving of Japan accomplishedafter the war. But Japan paved its
way amid the structure of the Cold
War, economic growth, increase inpopulation and rise of land prices.
Now, these four preconditions thatwere required for Japan to thrive
have completely disappeared. Today,
the way in which this country is trying to continue its old methods,
while leaving debt for the next generation and putting burden on
workers and subcontracting companies, is unreasonable.
Up until now, regional employment and economy was supported
by public utilities and invitation ofcompanies. But when we look at thiscountry’s current financial conditionand decline in population, it’s impossible to develop employment andincome that regional prefectures
used to have with only public utilities and invitation of companies. Instead, I think there might be power,
which this country has yet to discover. For instance, there is no othercountry that is suitable for agriculture, fishery and forestry like Japan.
Agriculture is an industry of land,
light, water and temperature. Japan
has the 6th longest coastline in theworld, and the 4th capacity of sea inthe world. Then why is it that thecatch and haul of fish is now below
half of when it was at its peak? Similarly, 70% of our land is covered bytrees.. But why is forestry facing adecline? Maybe we politicians havebeen too protective of our electoral
support and less protective of ourrice fields. I mention this with responsibility and awareness, but I
think we deeply have to reexamine
these kinds of issues.

What we can learn
from the past
Tourism is founded by the four
seasons, nature, art, culture andfood. If so, is there a country thatexceeds Japan? To say the least, have
we made full effort to make the mostof our environment? Last week, I
traveled again to various parts of Japan. Hakui-shi of Ishikawa Prefecture is where the TV drama “Napoleon-no Mura” (Village of Napoleon)
is based. Also noteworthy is Hamada-shi, Masuda-shi, Oonan-cho,Unnan district of Shimane Prefecture and Sapporo where I was up
until now. Places where they don’t
wait for the local administration to
do something, but rather work on

what they can do themselves are theplaces that are making a clear difference. It’s not easy for this country tomaintain sustainability, but it’s not
something that we can’t do. I’m only
saying let’s think about what we cando, based not on intuition and experience but data.
Also, let’s contemplate on what
we can learn from the past. What isstate sovereignty? What is an independent nation and what is nationalism? We need to unfold these theories as well. I dislike the term, “apolitician of such level for a countryof such level.” Maybe Japanese people no longer believe in politics.
Well, do politicians believe in theirpeople and talk about the future?
The people of Japan are intelligent
enough to respond when they are
told the truth. Therefore, when wetalk we should believe in this. “Regional revitalization” is not about
boring ways to please the regional
people or scatter Tokyo’s people andits wealth to the districts. It’s about
questioning how Japan should standand rebuild its country. This is how I
feel right now.
a reprint of “Shukan Dokusyojin”<published on 22th January 2016>

Shigeru Ishiba

Naoki Inose, Showa 16nen,
Natsu-no Haisen (Defeated in
War in the Summer of 1941),
Chuko bunko, 2010.

Member of the Liberal Democratic Party, House of Representatives. Born in 1957. Ishiba graduated from Keio University, Law Department and started working in MitsuiBank (the now Mitsui Sumitomo Bank). Member of the Liberal Democratic Party, House of Representatives (Elected
10 times). Minister in charge of Overcoming Population Decline and Vitalizing Local Economy in Japan, Minister ofState for the National Strategic Special Zones and Ministerin charge of Regional Revitalization. Head of Sui-getsu-kai(Ishiba group). Minister of Agriculture, Forestry and Fisheries (49th), Minister of Defense (4th), Minister of State ofDefense (68th and 69th), Policy Research Council chairmanof the Liberal Democratic Party (52nd) and Secretary-General of the Liberal Democratic Party (46th).

3

2nd Symposium

Japanese Civilization andregional revitalization:
Strategies for Japan tosurvive through its
strengths and weaknesses
Shigeru Ishiba vs. David Atkinson vs. Hisao Harihara
Naoki Inose(MC) Thank you for making thetime to attend the second symposium of Japanese Civilization Institute Inc. I am Kayoko Ikushima andI will serve as MC today.
Today, Minister in charge of regional revitalization Shigeru Ishiba
will give a keynote speech followed
by a panel discussion by our threepanelists. Before we begin the symposium, we would like to have a few
words from chairperson of the Japanese Civilization Institute and chancellor of Tsuzuki Educational Institution Group, Ms. Kimiko Tsuzuki.
Tsuzuki: Good evening everyone.
Thank you very much for attending.
I’m grateful to face a fully packed audience today. Japanese Civilization
Institute kicked off on 28th August,and today we’re happy to hold our
second symposium. Today’s symposium features three panelists; Minister Ishiba, Mr. David Atkinson and
Mr. Hisao Harihara, discussing thetheme, “Japanese Civilization andRegional Revitalization.”
When we say “Regional Revitalization,” it seems we refer to every
regional district in Japan apart from
Tokyo. I confirmed this, so there’s
no mistake. In other words, Japan is

4

Kimiko Tsuzuki

mostly made up of regional districts.
Therefore, the quickest way to revitalize them—and finding all the hidden treasures—is no doubt the travel
and tourism industry.

Horyuji was
the ﬁrst Japanesearchitecture thatranked with Western
civilization
I personally think that if we revitalize the tourism industry not only
to foreigners but also to the Japanesepeople, Tokyo and of course Japan
itself will become more revitalized.
Also, there’s the UNESCO World
Heritage that’s playing one or tworoles in revitalizing the regional districts. World Heritage consists of
two categories; Cultural Heritage
and Natural Heritage and Japan
presently has 19 registered sites. The
first Cultural Heritage that was registered by UNESCO World Heritage was Horyuji back in 1993.
However at the time, it is said that
there was a big debate inside UNESCO whether or not they should register Horyuji as a World Heritagesite. This is because Western architecture is built of stone. Their culture is a culture of stone. In contrary,
Horyuji is the world’s most ancientwooden architecture. Also, it has
suffered numerous fires up until
now, so its authenticity was questioned. What remains now is notexactly the same as when it was initially built. Regarding this point, anargument rose as to whether they
can still call it a world heritage ornot.
However, Horyuji today is acknowledged to be an architecturethat passes down all the details ofwhen it was first built, including its

materials and architectural technique and is said to be an architecture that has the same authenticity
and value of the Pyramids, which isa stone architecture. In other words,
Horyuji was the first occasion thatJapanese civilization and Japanesearchitecture ranked with Western
civilization and Western architecture.
In that sense, in this debate regarding Japanese civilization, Japanese Civilization Institute would liketo perceive once more, Japan’s
uniqueness in the world and thecharacteristics of Japanese civilization especially in this important moment of 70 years after the war.
Where does Japan stand in theworld? What are its characteristics?
What kind of tradition and history
does it have? These kinds of questions will be answered from a “civilization” point of view.
Also, this institute is working toward transmitting Japanese civilization to children and adults of thenext generation who will be living
the next 70 years to 100 years tocome. The subtitle of the event is;“Japanese Civilization and regional
revitalization: Strategies for Japan tosurvive through its strengths andweaknesses.” I hope you will enjoy
the event until the end.
MC: Thank you very much. Next,
we would like a few comments from
Mr. Toshio Goto, executive director

Toshi Gotoof Japanese Civilization Instituteand dean of Business Administrations Faculty, at Japan University of
Economics.
Goto: Good evening. Thank you formaking the time to attend. Ourchairperson just made a comment,
but could you please have a look at
the leaflet you have with you? It’s inboth Japanese and English, but if
you look at the Japanese, you’ll see alist of what Japanese Civilization Institute covers on the top right handside. Today, there are a few people
from universities attending theevent, so let me explain a little.
The first in category, Ideology,
Philosophy and Ethics is exactly
the field of our chairperson. The second category is Economics/Business
Field, Long-established Stores andthe third is Industrial Art/Technological Field, Fashion, Pop Culture,
Architecture and Technology. The
fourth category is Medical Field,
which covers Chinese medicine, Japanese food and healthy, balanced
food and is supervised by a professorof Yokohama University of Pharmacy. The fifth category is Synthetic
Field, which covers Politics and Religion.
I myself specialize in studies oflong-established stores. Among thepanelists today is Mr. Atkinson,
whose company Konishi Decorative
Arts and Crafts is one company I’m
studying. I was looking forward tomeeting Mr. Atkinson today. I’msure some of you know Konishi
Decorative Arts and Crafts. It’s acompany that is said to be foundedin the first half of the Edo Period,
during the Kanei Era(1624-1644).
When counted from the oldest Japanese company, it comes at 916th
place. You can see it’s extremely old.
As to why there are so many long
lasting companies in Japan, I’d liketo explain in another occasion but
actually there’s one secret to answer
this. Those companies that last morethan 100 years are all run by familybusiness. The owner of Konishi

Decorative Arts and Crafts is Mr.
Konishi, whose family has ceaselessly run the company over the years.
Long-established stores like Konishi
Decorative Arts and Crafts is something that Japan can take pride andshow to the world. I would like you
to keep this in the back of yourminds and enjoy today’s event.

Panel Discussion
a reprint of “Shukan Dokusyojin”<published on 22th January 2016>

Inose: How should we pursue thisargument regarding the possibilityof maintaining this country? With
Japanese civilization at the basis, this
symposium’s goal is to consider astrategy for Japan to survive throughits strengths and weaknesses.
The government is promoting theslogan for the policy, “Ichi-oku
So-katsuyaku” (a society in which all
100 million take active parts) and isvowing to raise GDP (Gross Domestic Product) from 500 trillion yen to
600 trillion yen. Meanwhile, thepopulation is continuously declining
and there is no system to accept refugees.
In his book “Shin-Kanko Rikkoku
Ron” (New Strategies for a Tourism-Oriented Country)—which wasawarded Shichihei Yamamoto Award
the other day—David Atkinson refers“tourists” to be “short-term refugees”
and notes “tourism” to be a possible

David Atkinson

5aspect that could contribute to raising
Japan’s GDP. Could you please talk alittle about this, Mr. Atkinson?
Atkinson: There were 1.133 billion
tourists in the world last year, and it
is said that the number will increase
up to 1.2 billion yen by 2030. Backin 1950 there were only 25 million.
You can see that tourism is a growing
industry. 9% of the world’s GDP iscovered by tourism and in major
sightseeing countries like France andSpain tourism is a big industry thatcovers 9.5% to 10% of the country’sGDP. Meanwhile, the number is justabove 2% in Japan. Moreover, when
the world’s GDP is compared to theincome of international tourists, thefigure is 1.61%. In contrast, Japan is
0.41%, marking 126th place in a total of 129 countries. Japan comes
last among the developed countries.
This, in other words, means that
there are limitless possibilities for Japan to expand. When we think
about Prime Minister Abe’s policy of
600 trillion yen, we can make an estimation of covering half of the 100
trillion yen we want to raise throughtourism. Japan has the resources fordeveloping tourism, but it has not
yet tackled the genre actively. It’s nodoubt a developing industry, so
there’re chances for remarkableprogress by the way it’s tackled.
Inose: What is the current problem?
Atkinson: It’s not a problem. The
country just hasn’t taken the tourist
industry seriously, so almost nothingis equipped. There are only 10 countries that possess all four conditions
required for tourism: climate, nature,
history & culture, and food. Japan is
one of them. But is there a resort inJapan that it can boast to the world?
The answer is no. For example, Japanese ski sites are said to have the bestsnow in the world; however, by wordof mouth, Japanese ski sites are
known to be merely ski sites and not
ski resorts. Sad music echoes the skisites at 5 p.m. and everyone must go

6home. The fun after that is not provided. Similarly, cultural heritages are
only protected as architectures. There
are no guides let alone events. There’s
a growth in economy and population
has increased this year compared tolast year, so there’re able to gain profit
even if they don’t provide something
special. They needn’t worry about
management or whether people aresatisfied or not.

about 9 trillion yen. But gross production including agriculture, food
manufacturing, food service industry and retailing amounts to 100 trillion yen, the country’s largest industry. If you consider Engel’s coefficient of the Japanese people to be
25%, the Japanese are spending approximately 100 trillion yen on
food, out of the national income of
400 trillion yen.

Inose: You’re saying there are sightseeing sites in Japan but there is nosightseeing industry to manage it.
Everything in Japan is compartmentalized vertically; tourism is managed by the Ministry of Land, Infrastructure, Transport and Tourism,
small and medium-sized companies
are managed by Ministry of Economy, Trade and Industry and agriculture is managed by the Ministry ofAgriculture, Forestry and Fisheries.
Mr. Harihara has played an active
part in TPP, and has worked on Japan’s agricultural reform. Even
though there’s industry resources inJapan’s regional areas, the Ministryof Agriculture, Forestry and Fisheries is separated from corporations,
tourism & service sectors, which is
the reason why there hasn’t beenmuch merit. What can we do tochange this situation?

Inose: We are eating 100 trillion
yen. You’re saying there’s a demand
there.

Harihara: We just heard from the
Minister that there is no other country that is more suitable to pursue
agriculture and fishery than Japan.
Japan is the only country that has
succeeded in the Industrial Revolution which hasn’t lost its forests.
That 70% of the country’s land iscovered in forest is a huge advantage
for Japan to pursue forestry. In addition Japan comes 6th in the world
for longest coastline and 4th forquantity of water. There are not somany countries that have as muchfishing resources as Japan. It justgoes to show how much Japan is failing to make the most of its strengths.
Similarly, agriculture in Japan is said
to be a dying industry, raising justHarihara: However, the producers
are only raising 9 trillion yen. This
leads to what we were talking about,that each industry is divided vertically. There in no connection between
primary, secondary and tertiary industries, so for example, producers ofrice just forward their rice to the agricultural cooperatives and that’s it.
Meanwhile, there are the people withdetermination who produce and process rice of their own kind and sell iton the Internet. Naraomi Imamura, aprofessor emeritus at the Tokyo University multiplies these primary, secondary and tertiary industries andcalls them the “6th sector” industry.
No matter how carefully the producers make their rice, when they forward it to the agricultural cooperative
it gets mixed with other rice and soldat the same price. To avoid this, weneed to arrange a structure so that thedorsing a reform that converts Central Union of Agricultural Co-operatives into a general incorporated association. We are also abolishing theright for compulsory auditing andmaking it an obligation to have acertified public accountant to audit
agricultural co-operatives.

Hisao Harihara

value of the primary industry reaches
the consumers. This policy is now being worked on, as is TPP, which istrying to indicate a broad outline on
this matter.
Inose: You’re saying that the primaryindustry is the Ministry of Agriculture, Forestry and Fisheries, the secondary industry is the manufacturingindustries, and the tertiary industries
are comprised of distribution, service
and the food service industries. The
primary, secondary and tertiary industries are multiplied and called the“6th sector” industry. Then the question arises; what is blocking the “6thsector” industry?
Harihara: Indeed, I think the agricultural co-operatives are one problem. The control center and politically strong Central Union of Agricultural Co-operatives (Zen-chu) is
putting them in order, restricting the
agricultural co-operatives so that they
are standardized. Perhaps there is a
structure, where producers can only
buy machinery and fertilizer that theagricultural co-operatives allow.
Inose: You’re saying that because theCentral Union of Agricultural
Co-operatives holds the right to audit
and guide, the regional agricultural
co-operatives are unable to make themost of their original ideas.

Naoki Inose

Harihara: Yes. That’s why we are en-

Inose: There’s the National Federation of Agricultural Co-operative
Associations etc. too. Federation of
Economic Agricultural Co-operative
Organization in each prefecture, arethe ones undertaking the purchaseof feedstuff. They’re also in charge offinance. Maybe these kinds of organizations have binding powers too.
Harihara: We already have a legal
framework to convert National Federation of Agricultural Co-operative
Associations into a joint-stock corporation. But the National Federation of Agricultural Co-operative
Associations itself needs to take control, or else it won’t be carried out
even if we make the law. Future agriculture greatly depends on how agricultural co-operatives are going toreform themselves.
Inose: The tourism industry of every district is financially examinedby the National Federation of Agricultural Co-operative Associations.
They are the ones in charge of thefinance of agricultural co-operatives.
But I don’t think there are people
there who have an eye to decide
what’s best.
Minister Ishiba, the simplest plan of“regional revitalization” is, I believe,
the method in which the local government that comes up with the best
idea is granted tax benefits. Can you
talk about this in more detail, whilereferring to Japan, which has sightseeing sites but no sightseeing industry,
which we have been talking about?
Ishiba: The number of tourists staying overnight differs greatly according to the prefecture; however, if
there are no people wishing to stay,

Shigeru Ishiba

their accommodation is wasted. Surprisingly, Nara Prefecture has theleast number of tourists staying overnight simply because it doesn’t haveenough hotels. There is somethingcalled a Tourist Association for eachmunicipality, but there is no organization to think out the best way todevelop tourism that suits their district. Taking this into consideration,
there is a need to create a new organization called DMO and analyze
the statistics in order to work out asustainable regional strategy. We’resaying that the government will finance the district, which can systemize this, and come up with a goodidea to develop their tourism industry based on the data they gained.
Inose: About 25 years ago, there wassomething called “Furusato Sousei”(Hometown Creation) in which
Takeshita Administration gave out
100 million yen to 3000 municipalities across the nation. Similarly, 20
years ago, through the Uruguay
Round, the Howokawa Administration made an agricultural investment of 6 trillion yen. But the money was used for structure improvement projects and engineering work,and not for developing agriculture
and the district altogether. Thistime, there’s a hundred billion yen to
be used for regional revitalization…
Ishiba: There’s a need to calculate
the target value of KPI (Key Perfor-

7

Inose: Are you referring to Ritz
Carlton? When was that built?

mance indicator) and verify its levelof achievement not only by members of the municipal office andtown office, but also by well-informed people from the outside andmembers of the assembly representing the taxpayers. If concepts of PDCA (Plan, Do, Check, Act) are notincluded in the system, no money
whatsoever should be paid.
But isn’t this fun? Don’t you think
there could be treasures hidden invarious parts of Japan? There’s nodevelopment in tourism just conjecturing inside government offices.
We’re saying that we will finance the
incentive of people from various
fields—including people from theindustrial world, students, credit
union and television—to get together and exchange ideas. We want, forexample, for them to think about
how they could send out messages
about their district to the world.
Inose: Mr. Atkinson, we have hotels
sited in various parts of Japan. Why
are we lacking the structure to taketourists in?
Atkinson: There are a lot of businesshotels. But when traveling, nobody
wants to stay in an environment
lower than the one they’re already in.
If, for example, Bill Gates shouldcome to Japan, apart from Tokyo,
there’s only one hotel in Osaka andanother in Kyoto that’s suitable forhim to stay in.

8

Atkinson: Osaka was first, at the endof the 1990s. When it opened, everyone said it was too expensive, that is
was probably going to go bankrupt.
Diversity is what’s important for
tourism. In Japan, there are several
hotels that provide rooms for a few
thousand yen up until 20,000 yen,
but the reality is, hotels that offer
more are scarce. Despite having numerous national treasures, important
cultural assets and nature, Nara’s
tourism industry is poor simply because visitors cannot spend money
even if they wanted to. Chinese people spend an average of 230,000 yen
in Japan, but 660,000 yen in the
United States. They’re unable tospend 660,000 yen in Japan, you see.
The most expensive hotel in theworld costs 6 million yen for a night’s
stay. But because it targets 7.2 billion
people of the world, there are people
who are willing to pay 6 million yen
every day of the year. Up until now,
Japanese tourism has only focused on
the 130 million population of theirown country. Plus, taking into consideration that Japanese people only
travel during Golden Week, Obon(festival of the dead in the summer)
and the New Year, it’s clear that a 6
million yen per night hotel is not going to make money. Is Japan going toseek customers abroad, or is it only
going to focus on its own people?
That is the question.

Inose: You’re saying Japanese tourism
shouldn’t answer to just domestic demands, but rather do a market research and transmit information to theoutside world so that more tourists
from around the world come to Japan.
Atkinson: Another problem is thatthe overall Japanese concept is“product-out.” It’s not “market-in.”
Inose: You’re saying everything ispresented from a producer side and a
supplier point of view.
Atkinson: When you go to the toppage for Tourist Association on theInternet, you find the words, “Mustdo Top Ten.” That’s something
someone from the outside evaluates,
not something said by the provider.
Until last year, Japanese people havebeen sending out the message,“Omotenashi”(hospitality). But tourism studies made by one of theworld’s top universities shows that
there are no data for foreigners wanting hospitality and traveling to gain
it. No matter how much Japantransmits the message; “Please comeand experience our hospitality,” thetruth is, they’re not reaching foreigners at all.
Ise-Shima Summit is scheduled totake place this year, and I’m often
asked how many foreigners will cometo Japan. They haven’t made any investment and they haven’t sent out any
messages to the world, yet they thinkforeigners will come just because of thesummit. I’ve made inspections in various parts of Japan, and what I find isthat the regions that have made effort
succeed, while regions that do not, deteriorate. This bipolarization is going
to continue, I think.
Inose: Specifically, what kind of approach do you think is long-lasting?
Atkinson: Simply said, I think people who are listening to the customers and responding to them are raising profit. A large hot-spring hotel

in Beppu is undergoing a huge rehabilitation. The new manager got ridof all the banquet halls and madelarge rooms for families. The room ischarged per night. It doesn’t matter
how many people stay in the room.
This room is booked everyday, 100% in occupancy. It’s an example of a
success that was achieved by reading
the trends, and making investmentthat answer to the market’s demands.
There is no region that is inappropriate for tourism. Even under same
circumstances, there are cases where
they are making effort and changing
and cases where they are not, therefore, deteriorating.
Inose: 30 million tourists visit theUK, a country with a population of
65 million. Moreover, 80 million
tourists visit France, a country with apopulation of 65 million. Meanwhile, Japan—a country of 120 million—has something around 20 million tourists entering the country.
This number goes to show how
much competition of services, basedon marketing research is necessary. If
Japan succeeds in having more foreigners stay in their country on along-term basis, they’ll become
short-term immigrants, ultimately
influencing GDP to rise.
Harihara: The same kind of situation can be said about agriculture
too. Food supply was poor after thewar, so no matter how bad it was, if
you produced food and you suppliedit, it got sold. But today, you can getyour hands on high quality, cheap
food from in and outside Japan. Also, the average stereotypical way ofJapanese thinking—like a loaf ofbread should absolutely be between
100 yen to 200 yen—is blocking
progress. As a matter of fact, customers are searching for something
more diverse; for example, a loaf ofbread that costs 500 yen but is madeof local wheat, a jar of jam that costs
2,000 yen but is produced from tangerines and grapes from a small island, or quality wine produced in awinery that uses grapes carefullyraised in a local farm. There are people out there who are succeedingwith new ideas and a strong belief
that they’re able to succeed.
Inose: Mr. Ishiba, maybe the government shouldn’t barge in and givea useless hand.
Ishiba: That’s exactly the point. The
central government is a parliamentarycabinet system. The person taking responsibility is vague. On the other
hand, a governor, or a mayor of a city/
town/village is chosen by its residents
like a presidential government, so theperson taking responsibility is clear. I
think it’s better done by people who
can take responsibility, who are actually on the scene and who have done
business in the past. The central government just needs to sit back andhandle foreign affairs, collective security and financial policy because that’s
something the regional government
can’t do. Also the central government
should try and improve the standardof social security and decide the basic
principles of education. The rest
should be up to the regional districts
to do. When the economy was soaring, members of the Diet served as
spokesperson of regional benefits.
They did the work of governors andmayors and tried to win votes by doing so. The local assemblymen only
did the kind of work the chief ofneighborhood associations did, andgovernment officials did the work ofmembers of the Diet. Everyone
thought it had to change, so a single-seat constituency system was adopted and we’re at last able to talkabout foreign affairs and collective security. Next, we have the question of
how much we should loosen decentralization of power. You have to understand that if we were to ease regulations and decentralize the power,
there will be of course the responsibility that comes with it.
Relating to what Mr. Atkinson justmentioned, I think the movement tomake something of world class has already begun. One night at JR Kyushu
Nanatsu-boshi costs 250,000 yen at
the least. It can cost more than 1 million 500 thousand yen for or a threenights stay. There seems to be 30 applicants for each room chosen by lot.
Of course “inbound” is important, but
I think there are many things we Japanese have not yet experienced.
Inose: Up until now, we Japanese
have ignored putting emphasis ontechnically developing things that we
can’t grasp such as the service sector.
Western culture is advanced in making an industry out of culture andtourism. I think we must build anindustry that answers to the various
needs of tourists, including the rich,long-term visitors, shopping spree
customers, and customers both inand outside Japan. Then perhaps thenumber of tourists in Japan mightrise from 20 million today to 30 million and 40 million, ultimately influ-

9encing a growth in the country’s
GDP.
Atkinson: Japan’s GDP is huge, so
there’s a need for many tourists tovisit Japan or it won’t show in thenumbers. The Japanese population is
big too, which is the reason why its
economy comes third place in theworld. But when you look at the
GDP rate per person, Japan comes at
28th place. The population of the
UK is only 65 million, so they needto raise twice the productivity of theJapanese in order to win. However,there are many people who misunderstand that it’s the technology of
the Japanese people that’s making
the difference. Japan’s GDP rate perperson comes at 28th place, but in alist of developed nations, it comes atthird from the bottom. Lower thanJapan is Italy, a country with an unemployment rate of 11.5% followedby Spain with an unemployment rateof 21.6%. Then, how come their
GDP rate per person is not so different to that of Japan? But in otherwords, by raising Japan’s GDP to
600 trillion yen, Japan will merely
come in 18th place in the world instead of 28th. There are many people
who think it’s impossible to achieve
Prime Minister Abe’s policy of 600
trillion yen, but I personally thinkit’s an achievable number.
Trip Advisor’s Tourist City Ranking states Kyoto as number one in
the world. However, when you lookat the ranking of tourist numbers
visiting world tourist sites, Kyoto
comes at 96th place. It’s setting thegoal to increase tourists visiting Kyoto to 3 million, they just need to set
their goal to reaching 47th place..
The biggest problem of the Japanese
economy today is that there’s a huge
gap between its potential capacity
and its achievements. There’s noneed to conclude that it’s impossible,
just think logically. Blaming it all on
population decline is just quibbling,
I think.
Today we see a lot of tourists from
China, but I think next we should

Today, we began this discussion bylooking back on how Japan declared
war against the United States andwent on to discuss how we can survive as a country. The initial aim of
the Japan-U.S. War was to acquire

answer to the needs of Westerners,
because they are the ones who comefrom far away. A tourist spends 26%of their travel fee on accommodation and 19% on food, so the ones
that stay the most nights are the best
customers. Tourists who travel far
stay long. Also, people who comefrom far away have high income.
But because they come from far
away you have to satisfy them so thatthey want to come again. Are we going to aim for Nanatsu-boshi andreceive high payment per customer,
or are we going to stick to answeringto the demands of low-paying customers? The answer I think is clear.
It’s better if we have customers fromvarious parts of the world visit Japan. For that, you need to exclude
fantasies and delusions and analyze
service logically with data. You haveto do business. It’s impossible for theadministration to supervise and provide attentive service to the customers. The private sectors have to comein and do a clear research. The government should just focus on indicating the right path and solving
problems such as regulations etc.
Inose: You’re referring to the technological development of the service
sector. We have to bid farewell to thetimes when we didn’t need market research. We must work toward building tourism into a major industry. I
think it’s the government’s role to indicate some sort of goal or guideline.

Ishiba: Labor productivity differs
depending on the prefecture. Tokyo
comes at top, while Totori, myhometown, is at the bottom. If you
compare the two, there’s about atwice difference. Why is that? You
have to analyze each district to understand why. GDP is, in short, how
to raise labor productivity of eachprefecture. It’s an issue of number ofworkers, investment in equipment
and labor skills. You need to make asimulation for each prefecture. Japan’s labor productivity in the service sector is half of that in the United States. It’s below Germany, Franceand England. The service sector ishuge; electricity & gas & water supply, construction, wholesale & retail,food & accommodation, transportation & warehousing and finance &insurance. If you take it apart andlook at the list individually, you notice that food & accommodation
comes last, only a quarter of that of
the United States. If you don’t take itapart and analyze each one carefully
by district and by industry, Ichi-oku
So-katsuyaku” (a society in which all
100 million take active parts) will
not be possible. It’s the government’s
role to indicate a policy guideline,
but if people in the private sectors
remain silent and just rely on thegovernment I don’t think there will
be any improvement at all.
Inose: I think the areas that are notindustrialized are, in other words, areas that have the potential for growth.

the oil resources of Netherlands Indonesia; however, the government at
the time, declared war ignoring asimulation that pointed out that Japan would lose its merchant fleetsand supply routes if they forced their

way to obtain oil. We would like towrap up this discussion by pointing
out that success is unlikely to befound unless things are carried out
with statistics and logic.

The panelists
David Atkinson
CEO of Konishi Decorative Arts and Crafts. Born in 1965. After graduating Oxford University with
an M.A. in Japanese studies Atkinson joined Goldman Sachs where he rose to fame as a banking
analyst with his reports that uncovered the debt crisis of Japan. Atkinson served as Managing
Director and Partner at Goldman Sachs before leaving the company in 2007. In 2009, Atkinson
joined Konishi Decorative Arts and Crafts, a 300-year-old restoration company which restoresnational treasures and important cultural heritage. He serves as CEO from 2011. He has entered
the Urasenke School of tea ceremony with the master name Soshin.

Hisao Harihara
Former Executive Assistant to the Minister of the Ministry of Agriculture, Forestry and Fisheries.
Born in 1956. Harihara graduated Tokyo University and entered the Ministry of Agriculture, Forestry and Fisheries. Served as Director of International Economic Affairs Division, Director of
Budget Division, and Director General for Policy Coordination. Served as Executive Assistant to
the Minister of the Ministry of Agriculture, Forestry and Fisheries until August 2015. Harihara
now serves as advisor for Sumitomo Corporation.

Naoki Inose
Author. Born in 1946. In 1986, he received Souichi Ooya Nonfiction Award for his book “Mikado-no
Shozo (Portrait of Emperor).” In 1996, he received Bungeishunju Readers’ Award for his book
“Nipponkoku no Kenkyu (A Report on Japan).” From then on, he actively worked toward abolishingand privatizing government-affiliated corporations. In June 2002, Prime Minister Junichiro Koizumi appoints Inose as member of Promotion Committee for the Privatization of the Four Highway-Related Public Corporations. He included the story of the battle in his books, “Doro no Kenryoku (Authority of the Road, Bunshunbunko)” and “Doro no Ketchaku (Settlement of the Road,
Bunshunbunko),” In October, 2006, Inose served as Research Professor at Tokyo Institute of Technology and in June, 2007, he served as Vice Governor of Tokyo. He served as Tokyo governor from
December 2012 to December 2013.

Translation : Ayako Karino
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