24-5 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031
Tel: 03-5456-8082 Fax: 03-5456-8388
Mail: info@japancivilization.org
http://www.japancivilization.org/

Newsletter Vol. 10 Winter 2018

On 21st August, the 10th symposium held by the Japanese Civilization Institute took place at the Japan University of Economics in Shibuya, Tokyoon the theme, “Where should Japan go from here? Abenomics and reforming strategies beyond that.” The panelists were Shigeru Ishiba—the first
Minister of State for the Promotion of Overcoming Population Decline and Vitalizing Local Economy in Japan and former Liberal Democratic
Party Secretary—Kazuhiko Toyama who has participated in numerous business revitalization and industry consolidation as CEO of Industrial
Growth Platform Inc., and Naoki Inose, author and director of the Japanese Civilization Institute who moderated the panel. Part 1 consisted of aseminar by Mr. Ishiba, while Part 2 included a symposium in which the Japanese economy—its conditions and its future—was discussed. Time was
extended as the talk proceeded fervently and harshly. The conditions that Japan is facing today is unpredictable, but there was hope in the strategies
that the panelists came up with during the event for Japan to revitalize in the future. Here is an extract from the event.
(Part 2 is reprinted from “Shukan Dokushojin,” 2018, 19th January, No. 3223, and WEB “Shukan Dokushojin.”)How can we solve the problem of
the declining population, which
has become so acute?

Shigeru Ishiba(The first Minister of State for the Promotion of Overcoming Population Decline
and Vitalizing Local Economy in Japan, Member of House of Representatives)

There are one hundred 27 million Japanese people today, but by
the year 2100, it is said to decline to 52 million. 200 years later it is
supposed to decrease to 13 million 91 thousand, and 300 years
later, to 4 million 230 thousand. Why is it that the Japanese population is declining at such speed?
There are roughly three reasons. Firstly, fewer people are getting
married. Secondly, people are getting married later in life. Also,
people living in the top five prefectures that produce the most babies—Okinawa, Shimane, Miyazaki, Tottori and Kumamoto Prefectures—are crowding into Tokyo where babies are least born.
Synergistic effect of these three factors are working toward creatinga society with decreasing birth rate in Japan, which the rest of theworld has never experienced before.
The Japanese population exceeded 50 million at the end of the
Meiji Era. It’s true that some people only say that we’re just returning to those days, but this is a mistake. 50 million Japanese population of the Meiji Era mainly consisted of mostly young people.
There were very few seniors. I wouldn’t say we’re doing the absolute

About the groupJapanese Civilization InstituteEstablished in August 2015

opposite direction today in this present era, but still, there’s going to
be few young people and many seniors from here onwards. So even
if it’s 50 million people, its content is very different. Now, when weface this reality, we have the question; how are we going to sustainsocial security, finances and agriculture, forestry and fisheries?
The issue of the declining population that Japan is facing fromhere onwards is severe. Just thinking about it gives me the headaches. There are no jobs in the regional areas—where food is made,energy is produced, and the birth rate is high—so they come toTokyo. But Tokyo—which doesn’t produce food or energy, and is aplace with the lowest birth rate—can not exist alone as a country.
What’s more, people, money, and commodities are gathering inTokyo—a place where a major earthquake or the eruption of Mount
Fuji can happen any time now. In fact, a social security company in
Switzerland lists Tokyo at the top of cities in the world that they
think is most dangerous. Are we alright with this kind of situation?
People are aging fast even in Tokyo, where most of the Japanese
population live. During just 15 years between 1955 and 1970, 5
million people moved to Tokyo and other big cities from regional
areas around the country. The year 2015 marked the 90th year of
Showa, so people who came to Tokyo when they were 15-years-old
at the time in 1955 will have turned 75. In 1955, Japan suddenly
became filled with young people, but it’s going to the opposite andTokyo will be filled with old people soon. Not only the regional
areas but also Tokyo is going to head straight to deterioration. I
think our generation has some responsibility in creating such a
country.
“Let’s leave the issue of debts to the next generation.” “Who cares
about the rest, as long as we enjoy ourselves.” I don’t think we cantake pride in these kinds of mindsets. It’s clear that Japan is facing acrisis. Saving the country all depends on how we can revitalize regional areas and accelerate the local economy. So what can the geographical regions do for Tokyo? What can Tokyo do for the geographic regions? We need to think about these issues immediately
thoroughly. What can Japan do other than eat up the heritage of thepast, not to mention leave burdens to the next generation? Throughthe discussion today, I hope to learn from Mr. Inose and Mr. Toyama regarding these issues.

Address: 24-5 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031
Tel :03-5456-8082 Fax:03-5456-8388
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A Report on Our 10th Symposium

Where should Japan gofrom here?

Abenomics and reforming strategies beyond that.
Shigeru
Ishibavs.

Member of House of Representatives, Liberal
Democratic Party, the first Minister of State for
the Promotion of Overcoming Population Decline
and Vitalizing Local Economy in Japan andformer Liberal Democratic Party Secretary

What wasAbenomics?
Inose: In the morning edition of
Nikkei on 29th November, there wasan article that read “Japan’s tax revenue surpassing 58 trillion next year,
likely to hit highest in 27 years—
equivalent to the amount amid thecountry’s massive asset bubble. The
actual amount is approximately 50
trillion yen, but it’s still a considerable amount.
Meanwhile, this is often heard innews, but the household income in1985 before the bubble was 4.18
million yen. In 1995, it was 5.5 million yen, and in 2015, it was 4.28
million yen. It’s gone back to what it
was before. It’s said that Abenomics
worked towards improving employment, but has it truly worked? What
exactly was Abenomics? Could you
explain this to us, Mr. Toyama?
Toyama: This isn’t my idea (laugh),but maybe I can explain what cameforth as a result of it. To begin with,the yen becomes weak if you do that2

Kazuhiko
ToyamaModulator

vs.

CEO of Industrial Growth Platform Inc.,an expert member of Council on
Economic Fiscal Policy (MOF)much amount of monetary easing.
When the yen becomes weak, theJapanese stock price goes down. It’s
the overseas branches that are earning money in Japanese global companies like Panasonic and Toyota. It’s
dollar-based transaction, so you deserve a profit of 1.5 just by calculating with the strong yen which isabout 80 yen a dollar. In other words,
corporate earnings rise regardless ofthe manager’s ability. As a result, they
consider it had a significant effect on
the global economy. And when thiseffects the stock rate and stock pricesof global companies rise, at least therich people who earn stock makemoney, and expensive items get soldat department stores. This is how it
works. But I think nothing more canbe expected from macroeconomy.
Then has deflation worked? I
don’t think peoples’ consumption
activities have improved just becauseof this. People say we’re in the phaseof consumer recession, but if we lookat it from the consumer’s point ofview, the fact that our wages are continuing to fall is affecting us morethan the fact that monetary value is

Naoki
Inose

director of Japanese
Civilization Institutefalling. People in their 20s and 30s
have only experienced wage cut eversince they started working. Meanwhile, social security is rising, whichmeans our disposable income is continuing to minimize. In other words,
unless we’re given hope that our wages and our disposable income is going to rise, our consumption will not
improve. So no matter how muchthey try and lead inflation—or maybe raise the inflation rate to 2 % in
the future—things aren’t going tochange.
Then how should we respond tothe consumer’s needs? Wages aren’t
going to rise unless we can increase
productivity persistently. In the past
20 to 30 years, Japan’s productivity isdeteriorating immensely comparedto other countries in the world.
Now, which industries are decreasing their productivity and whichhave hopes to increase? The richnessof global companies such as Toyota
and Panasonic cannot be raised further. The richness of these groups intheir domestic plants and production
base are all already highest standards
in the world. But if you think abouthow much productivity these global
corporations occupy in the Japanese
economy altogether, the number isonly 30 %. For employment, it’s just
20%. In the end, the problem lies in
low wages of the local economy andthe declining productivity.
Today, they say that employment
is improving in Japan, but this ismainly because of the baby boom
generation who started to retire inlarge numbers right at the timingthat the Abe Administration emergedin 2012. This completely changes
the structure of labor supply and demand.
From 10 years ago, I have been
managing a bus company in Fukushima Prefecture and Iwate Prefecture,but bus drivers always lack these past
10 years. Recently, manpower isshort in Tokyo too, but in regional
areas, young people have been moving to Tokyo for some time now, sothey’ve lacked in manpower for quite
a long time, resulting in the lagging
recession. The declining population
is a severe issue for the Japanese future, but if you view it from the opposite side, all you need to do to stop
the population from declining is toincrease productivity and raise peoples’ wages. You need to raise peoples’ incomes, try and avoid people
flowing to Tokyo and have people
give birth and raise their children inregional areas. This must be done
fast. When this issue is tackled fromthis angle, you realize there are nopolicies that can solve these points.
Inose: In other words, Abenomics
does not correlate revitalizing the
economy like how Mr. Toyama justmentioned. If so, what is the meaning of adopting policies?
Toyama: Having been involved in
the management of small and medium-sized companies as well as local
economy companies, I feel that the
local economy is in a so-called zombie state—a state where the government heavily subsidizes them.

When we try and reform a bus
company belonging to a regional area, we almost always succeed. Whentackled strategically, we can increase
both profit and wage. The bus company that I manage increased its salary to nearly 20% during the last ten
years. I think what we shouldn’t domost, is prolong the life of these existing zombie companies. Just by doing so, I think we can reduce quite
an amount of wage and labor.
Shigeru Ishiba

Inose: The naming “zombie” is somewhat harsh, but it’s true that local
companies are surviving from loans
they acquire from banks, the Credit
Guarantee Association and the Shoko
Chukin Bank even though they’renearly broke. In the past, Shizuka Kamei strengthened these remedies,
thinking they could save companies
that are nearly bankrupt. They
thought if they could support themto manage the place in a modern stylethey could keep them. However, thisresulted in being just a powerful shotin the arm, not something that couldchange the structure of the companies
altogether. I think this is one reason
that the Japanese economy is lagging
behind.

gional areas and link companies toimprove them. Bring talented people
with skills—who may not necessarily
be in essential positions in big firmsin Tokyo—to regional areas and activate them, thereby creating a mechanism of personnel. By circulatingthem in geographical regions, productivity that was lacking before will
be produced. I think policies thatmake these kinds of things effectiveis meaningful.

Inose: Social, economic online
news, “NewsPicks” had an article
mentioning that BizReach—a company that runs a career change website—is going to start a new businessto support business transfer. I thinkit’s an interesting approach.

Inose: Mr. Ishiba, you travel aroundthe regional areas of Japan all
throughout the year, so I’m sure you
feel a lot of things when you look atthese sites, but I think it’s sad that ever since Abenomics, people don’t refer
to “decentralization” at all anymore.
During the first Abe Administration,
the Decentralization Committee wasformed, and I also was a member.
The staff of Hello Work are all government officials, but they had plansof relocating all of them to regional areas. But the Administration switchedto the Democratic Party during thedebate and the whole project diminished. Then when the second Abe Administration emerged, the term “decentralization” changed to “regional revitalization.”

Toyama: M&A of small, medium-sized companies is all about thematching of managers and businesses, so BizReach will probably succeed in that area. I think it’s vitalthat we place circulation in the re-Ishiba: It was hard enough just trying to get the licensing authority to
relocate the cropland diversions
from the Minister of Agriculture to
the prefectural governors. It’s ashame that we couldn’t transfer Hel-

Placement of
employees—fromTokyo to regional
areas

3

lo Work, but at least we were able tocreate a link between the Ministry of
Health, Labor and Welfare and Hello Work that wasn’t there before.
I’m sure many people have doubts
about Abenomics and the government, but I feel that there is themood in regional areas that “theydon’t have to make that much effort.”
Many of them feel that their sons aren’t returning to their hometown
anyway, so they think their businessis going to end with their generation.
This was combined with Shizuka Kamei’s idea of “Tokuseirei” (a decree
for wholesale debt forgiveness issued
in the Middle Ages to bail out cashstrapped vassals) of Heisei,” and I
think this whole notion of sticking
with what we already have spread tothe public.
On the other hand, however, there
are the people who are making aneffort in regional areas, like the bus
companies that Mr. Toyama manages
such as Michinori Bus, Tokachi Bus
of Obihiro in Hokkaido and Eagle
Bus of Kawagoe in Saitama Prefecture. Up until now, customer’s needs
were not reflected at all in the way
they run local buses. It’s a service industry so they should try and meetthe needs of their customers, buteven Michinori Bus didn’t review bus
routes and tackle ways to create amore convenient way to travel.
It might be rational for humans tothink that their business is going to
end with their generation, but if everyone starts feeling that way, thiscountry will go downhill fast. If people don’t start thinking seriously
now, this country will disappear altogether.
Also, Jinya, a Japanese-style ryokan(hotel) in Tsurumaki Onsen in
Kanagawa Prefecture is a place that’s
trying something new. Animation
film director Hayao Miyazaki’s nephew—who graduated the Faculty of
Science and Engineering at Keio University, entered Honda Motor andwas developing fuel cell—took after
the ryokan when its director passed

4

away. With an engineer’s point ofview, he started reforming old management ways, which still used paper-based records and lacked efficient supervision of customers andstaff. Today, it even sells a cloud app
called “Jinya Connect” that collectively manages reservations, customers, and operators. But no one belonging to the Ryokan Association isaware of this.
Meanwhile, Dry Cleaners Happy
Cleaning in Uji-shi, Kyoto is increasing its profit through a multiplying
game they incorporated. This manager has written his example of management innovation on his website,
but this too is not known by people
in this industry. Most people aren’tinterested in finding out more. They’re
not thinking of changing the situation
they are in.
Inose: Mr. Toyama, you have published the book “Why Japan will revive from the Local Economy.” Employment in global companies thatare fighting against the world is merely 20%. Similarly, they only cover
30% of the GDP. Economic realms
exist separately as global and local,
but you’re saying the Japanese economy will start rising again if the remaining 70%—the local economy—shows signs of recovery, right?
People who ride the bus in Fukushima are the local people who live there.
In other words, bus companies aremaking a profit from the local people. Similarly, stores in small towns
all belong to the local economy.
People in the global economy
must try extremely hard—as if they
were aiming for medals at the Olympic Games—or else they are going tolose, and the game will be over.
However, people in the local economy are aiming for the Prefectural
Games, and that’s all. Everything iscompleted inside themselves.
I think the Japanese local economy has yet to modernize their management structure. Also, there’s theissue that public nature is robust in

Kazuhiko Toyama

regional areas. How can it we solvethese problems? Could there be apolicy to change these situations?
Ishiba: “Regional Revitalization”
was received with much attention,
but then it changed to “One hundred million total active.” After ayear it was “Work Style Reform” andthen it was “Human Resource Development Revolution.” It’s like they’rechanging their program every single
year. But I think if the local economy
doesn’t recover, both the regional areas and Tokyo will decline. In thatsense, I think “One hundred million
total active,” “Work Style Reform,”and “Human Resource Development
Revolution” can be all included in“Regional Revitalization.”
A company’s profit changes drastically when the president changes.
Similarly, the local economy canchange immensely by the city mayor
or the town mayor. I think picking
the leader with management skills iswhat democracy is all about. I guessthrough politics, we need to demonstrate that justice can be both terrifying and amazing.
Inose: Mr. Ishiba, you started theJapanese edition of the City Manager System. Direct election chooses
governors and mayors, but vice town
mayors and local creation section
chiefs are going to be matched fromyoung government officials and university scholars, right? You’re sayingthat the nation is going to be involved

in supporting human resources for regional areas, right? Is this working?
Ishiba: It’s my feeling, but I think
there is a rise of 60%. We’re taking
great care in how we match people.
Of course, we’re not after super government officials who have contacts
with the Ministry of Finance. We
hope to find people with motivation
and aims to revitalize regional areas
and match them with towns thathave specific goals like; “we’re trying
to put strength in tourism” or “we’retrying to build our agriculture.”
Inose: I think we need to publicize
these kinds of measures at a larger
scale. This project involves only a
few hundred people so far. It’s notenough.
Ishiba: The problem lies in who will
pay these people after we dispatch
them. If we dispatch a vice mayor
from City Manager, his salary is obviously going to be paid by the town
he’s dispatched to, but the city requires that the central government
pays for it. If the government decides to spend these peoples’ salaries,
probably 2/3 of 1718 towns and villages in Japan will raise their hands
to join the project. But that won’t
do. If that person were to move to aregional town, he should be prepared
to be paid by the local peoples’ tax.
The person dispatched will lack responsibility if he receives a salaryfrom the central government.
Dispatching personnel is not allfrom the government office. People
who have retired too can maybe getreemployed at a local company in thelocal area they used to live in. Not
everybody can become executives atprivate banks and trading companies.
We can perhaps make a system forthese people so that they can smoothly return to their local town. One
problem is the wife, who might say
she doesn’t want to accompany herhusband to his local village. Then wecan come up with a system in which

the wife can remain in Tokyo, andthe husband returns to his homeland, and they can come and forth
regularly. We can make plans like“super discount” or “early discount”
and create a structure that can makeit happen.
Inose: We should give that a name
Mr. Ishiba, as one of your policies.
It’s not spreading with the title, “CityManager System.”
Naoki Inose

Ishiba: Please let me know if youcome up with a better naming (laugh).

“Decentralization”
once more

we want these people to return andraise productivity. That these people
become dedicated taxpayers insteadof tax eaters—who are dependent on
tax—is one of the keys to recovery.

Inose: Jobs-to-applicants ratio is rising now, but this is because we regard people who are 64 and below tobe productive. Today, even if people
retire when they reach 60, they can’t
receive they’re pension until they’re
65. Therefore, people aren’t supposed to work are working, which iswhy employment as a whole seems
to be on the rise. If these people whoare 60 and above work toward supporting regional areas, I’m sure theJapanese economy will change.

Inose: The GDP depends immensely on regional areas. There are many
talented people today who have
dropped out from the global economy. We need to make a connection
there. It’ll be great if we could comeup with a clear plan.

Toyama: The eldest bus driver inour company is 75. People say thatpeople in their 60s cause accidents,
but statistically, people in their 60s
cause the least accidents, while people in their 20s produce the most.
The productivity of people in their60s, by no means, fall.
What’s unfortunate for people inregional areas is that they let out talented personnel for 4 to 5 generations ever since the Meiji Era. The
global economy is deteriorating now,
so sadly you’ve got to be Hideki Matsuyama if it were golf, or Kei Nishikori if it were tennis, to play actively
in the scene.
But even if you drop out of thatspecific field, there are many jobs
you can pick up in regional areas, so

Ishiba: When I became Minister ofState for the Promotion of Overcoming Population Decline and Vitalizing Local Economy in Japan, I
don’t know how many times I asked
Keidanren (Japan Business Federation) about management in personnel. There are no banks, trading companies or manufacturers that don’t
have regional branches so I asked
them to send more people out tothese places or perhaps they could relocate specific functions of businesses
to the suburbs. But they just laughed,saying, it’s an exciting idea.
A few years ago, Masahiro Sakane,
Councilor and Senior Adviser ofKomatsu, made a drastic change inthe company by relocating the whole
research development function—

Toyama: This is not only the case ofJapan. It’s about the same rate inGermany, while in the U.S., it’s evenhigher. Their local economy occupies 90% of the GDP.

5

6while leaving just a small number ofpeople in its head office in Tameike—to Komatsu, Ishikawa Prefecture, where it was originally founded.
As a result, it raised productivity immensely. Simultaneously, the birthrate of women employees increasedin the company. It’s such a good example, but why is it that when I ask
them to do similar kinds of reformwith other firms in Keidanren, they’re
not interested?
Even if the government grant subsidies or if they provide them withevery possible support, people in theprivate sectors need to feel the needto change, or it won’t work.

privatization of the Japan Highway
Public Corporation, so I remember—the national budget was 83
trillion yen. Even though there was arise in consumption tax, should we
use as much as 100 trillion yen?

Inose: However, I do think that private sectors can go bankrupt if they
fail, whereas people working in government offices don’t have to worry
about losing their jobs. There’s a big
difference there.
Also, there’s the question of fiscal
discipline. During the Koizumi Administration, I was involved in the

Inose: So you must be the one tospeak out, Mr. Ishiba. There’s nosuch thing as a budget of 100 trillion
yen. They say they asked the financial world to pay 300 billion yen forchild care support, but can’t that beprovided by cutting a little bit out
from 100 trillion yen? At one time,
an amount of 300 billion yen was

Ishiba: The budget for the Ministryof Defense is 7 trillion yen, for Ministry of Agriculture, Forestry and
Fisheries it’s 2 trillion 4 thousandbillion, and for medical expenses, it’s
42 trillion. It’s a huge number. Insurance covers half, 10% is coveredby personal, and the tax covers therest. Moreover, 35% of that amountis a loan, but nobody talks about it.

plunged into the Japan Highway
Public Corporation. Putting a stopto that and investigating other sectors, and you find an amount of 1
trillion 4 thousand billion yen. Maybe you must arrange fiscal discipline
more appropriately. Then, you can
supply that money to regional areas.
Ishiba: But I think regional areas
must make their own money too.
Inose: That’s true. Anyway, why
don’t you start by raising the idea ofdecentralization again?
Ishiba: It goes without saying, but
decentralization involves authority
but also a responsibility. I must pointout that democracy is exceptionallyfrightening. Districts can become
happy or unhappy just by the way
you handle it. We must teach students that freedom is substantial.
Probably, a lot of people have nevereven thought about national sovereignty. It’s not sovereignty unless youvote considering you are a statesman.

What is local autonomy?
Changing the relationshipbetween regional areas andthe central government.
Inose: There is the saying, “Near isbetter,” meaning problems should be
solved nearby. Other words, mattersregarding the city, town or village
should be decided by the people wholive there. Moreover, financial resources should be collected with thepower to levy taxes.
But when that happens, there is
the issue of the Constitution, forthere is the word “local public entity”
written in Act 92 of the Constitution. Mind here that it’s “entity” not“local government.” From about the
1960s, the media started to refer to it
as “local authority.” In fact, after thewar, the GHQ tried to name it the“local authority” but the Home Ministry resisted and it became the “local
public entity.” In other words, self-determination for regional districts is
not written down in the Constitution.
I think there is the necessity to revise
the Constitution regarding self-determination of the local government assoon as possible.
Ishiba: So you’re saying there ismore than Act 9 of the Constitutionthat needs revising. Like you say, I
think we need to change the relationship between regional areas and thecentral government while rethinking
what a “self-government” is, otherwise this country won’t last. We needto shift the peoples’ focus that’s always pointing to Tokyo from regional areas and try and turn it the opposite way. The structure of the population, society, and industries havechanged, so the relationship between
geographical regions and the central
government needs to change too.
During the House of Representatives general election, the appointment of the judges of the Supreme

Court was examined, but did youeven know one name of the judges?
The dismissal of the Supreme Court
judge is something up to the people,
not the diet. But hardly anyone
knows the names of the judges letalone the judicial decisions they have
made, so it’s become a mere façade.
Being in such a state, can we say wehave three separate branches of legislative, executive, and judicial that’s
indeed working?
Also in the Constitution, it says,
the Emperor shall “perform only suchacts in matters of State as stipulatedby the Constitution.” Therefore,
strictly speaking, isn’t the act of theEmperor visiting disaster-stricken areas and battlegrounds—which heconsiders to be extremely important—illegal?
Amongst these issues, I think “local government” is an important issue which our Party should solve
upon changing the relationship between regional areas and the government. However, the Liberal Democratic Party is undertaking four problems now: Act 9 of the Constitution,
emergency response, education for
free and disparities of one vote. Presently, we’re in fact making the Heisei
24 Draft that covers all of this, buttoday I cannot go into this.

Act 9 of theConstitution andcivil-military
relations
Inose: I don’t know what will actually become of Act 9 of the Constitution, but Prime Minister Abe suggests that we note the existence of
the Self Defense Force in Paragraph
3 of Act 9. But he intends to leave
Paragraph 2 of Act 9 that reads, “Toaccomplish the aim of the preceding
paragraph, land, sea, and air forces,
as well as another war potential, will
never be maintained. The right ofbelligerency of the state will not berecognized,” as it is. That means
we’re only going to affirm the Self
Defense Force, not position it as anarmy. Prime Minister Abe thinks the
New Komeito is going to acknowledge this, but there is concern thatpeople may think he’s just arranging
its shape. How do you think itshould be tackled?
Ishiba: I’m thinking we add the line,“To contribute to Japan’s independence and world peace, the country
maintains a Self Defense Force ofland, sea, and air forces led by thePrime Minister as Commander-in-chief.” Is this peculiar?
Japan, after the war, is a country
in which a Self Defense Officer inuniform has never attended the dietto respond to questions. Then how
are we to understand the military situation? It’s a country where people
can become the Defense Minister,even though they’ve never experienced work at the Ministry of Defense. As long as they know someother field, it’s okay. How can theadministration be in control like this?
That’s why we need to add something
like “For the operation and maintenance of the Self Defense Force weneed the greatest consideration fromthe judicial, legislative and administrative field.” We must think of betterwords to express this, however.
One thing that can’t be acceptedby Japan is the idea of Max Weberthat goes, “the state is a human community that claims the monopoly of
the legitimate use of physical force(army and police) of violence withina given territory.” It’s realism if you
say that this is the essence of a nation. An army belongs to the country
and the police to the government.
Although they’re both organizations
that use force, there is no notion ofcivilian control for police. Under the
National Government Organization
Law, the police are entirely includedin the administration. But in Japan,
the Self Defense Force is also involved in the National Government

7

Organization Law. There is no othercountry like this in the world except
Japan.
Prime Minister Abe thinks it disrespectful that while people believe theSelf Defense Force is illegal and theyteach that in schools, there are people
who risk their lives for this country. I
don’t deny that, but the “right of belligerency” is not the right to take partin the war, but rules that you need tofollow during the war. If you don’t
acknowledge that, it’s like you’re taking part in war without rules. To say“the nation’s right of belligerency does
not acknowledge this” is almost thesame as not admitting the nation’s
right for self-defense. Isn’t that frightening as a country?
People who participate in the Self
Defense Force—the country’s mostinfluential power unit—are people
with a strong sense of justice andmission. Do you know the war song
“Showa Ishin-no Uta” (Showa Restoration Song)? It’s a song that was
popular during the Koki Hirota Administration when the 2.26 incident
occurred. It sings; “politics and thefinancial world is full of decay, sowhat are we waiting for, let’s rise andstart a revolution.” There was a time
like that in Japan just 80 years or soback.
I don’t think the Self Defense
Force will suddenly start a coup, but
we can’t say for sure that there won’t
be a time when we reflect and regret
the fact that we didn’t state civil-military relations explicitly in the Constitution. The civil society needs tobuild a framework so that suchthings don’t happen. Are we alrightwith a social context in which everything is in the hands of the Self Defense Force’s morals and sense of
mission? Isn’t it wrong that we’re escaping into a somewhat fictional
world where we refuse to call the Self
Defense Force an army?
Armed forces exist to protect thecountry’s independence, and the police to protect the citizens’ life property and public order. They are two8very different things. These two are
the country’s most potent divisions,so shouldn’t we identify them explicitly in the Constitution? The reality
won’t disappear even if we try andlook away.
When public officials are appointed they must submit a documentthat pledges the Oath of Service, but
in the case of Self Defense Force officers it just goes; “I pledge that I willcomplete my mission heedless ofdanger and answer to the interest of
the nation.” The phrase “heedless ofdanger” is not included in oaths for
firefighters let alone police officers.
It’s disrespectful to make thempledge that they’ll complete their
mission no matter how dangerous it
is while stressing that they are against
the Constitution. Prime Minister
Abe is right about this. But is it aquestion of just mentioning it in theConstitution? I don’t think so.
Inose: Regarding military power,
America comes first, followed by
Russia and China. Japan is in fourth
place. Japan is, in fact, a country
with quite a scale of military power.
But it’s bizarre that its laws aren’t
maintained properly.

The paradigm
shift to the local
economyInose: Returning to the debate on
the economy, the causal relationshipbetween policies and their achievements have yet to be explicitly analyzed regarding Abenomics, so we
don’t know what the problem is apartfrom monetary easing. What do you
think is at the heart of the problem?
Toyama: At least Abenomics isworking toward the global economy
to some degree. Having made corporate capital investment reform, it’strue that ROE (Return on Equity)
has increased as well as capital pro-ductivity. The problem is the local
economy, but as I said earlier, possibilities for economic growth is extremely high. Because presently the
productivity a Japanese person produces in Japan is about a half of an
American and 2/3 of a European.
Productivity is the number calculated by dividing the labor productivityof added value by hours spent on labor. Multiply this by the country’s
population, and you roughly have
the GDP. Exceedingly said, 80 % of
those working in the local economy
realm still have room to double thesize of the economy. In other words,
we can cover the loss we’re receivingfrom the declining population by
doubling productivity and extending
the years we spend on labor. Besides,
if we can raise productivity, wages
will rise too. Also, if family income
increases, the decline in population
will stop. Moreover, if labor productivity increases, it’s added value, so it’ll
mean people won’t be working longhours anymore. This will all work toward raising the birth rate, so I thinkthe local economy is the key to a sustainable strategy for us to grow.
Up until now, no economists—including macroeconomists—have discussed macro economy seriously.
Nobody has proven it scientifically.
Therefore, people have been goingaround circles discussing the traditional macroeconomy, monetary easing, and financial policies. But these
20 to 30 years have demonstrated
that the macroeconomy has alreadycome to an end. The global economic model didn’t work, so in the U.K.
the Brexit occurred, and in the U.S.,
President Trump emerged.
If Mr. Ishiba, you were to become
President, I would like you to launcha policy in which Japan leads theworld in changing the paradigm ofeconomic policies. The U.S. is already facing this problem and China
will too sooner or later. If Japan canmeet this challenge of local economics and find a solution before anyother country, then it will be able tolead the world again in the 21st Century as a role model.
Inose: Why is the productivity of Japan so low?
Toyama: This number is produced
by added value according to the timespent on it, so it means the Japanesepeople are spending time where
they’re not receiving money. So I
think we don’t need “omotenashi”(hospitality) anymore. Primarily, we
should receive money for the hospitality we provide. However, for example, almost every ryokan is providing service for free. The more weoffer service, the more labor productivity falls. Many managers don’tquestion that.
The reason why this was overlooked is that during the past 25
years since the bubble burst until thebaby boom generation retired inlarge numbers, we had an excess labor force. In a country where there’s
excess labor force, the employment
absorption force becomes stronger iflabor productivity is low. So, in thatsense, the government’s policies not
to mention company managers andpeople in finance, have been unconsciously taking behavior patterns ofwork sharing. Companies had theexcessive personnel, and those who
dropped out from the global economy were absorbed into bus companies, distribution companies, andconstruction companies which productivities are low. Therefore, eventhough Japan is in a period of a prolonged recession, the unemployment
rate is about 7% percent at the most,which is extremely low compared toother countries. In other words, because we were restraining productivity, there was employment absorption force in the local economy. Plus,
there were these monetary easing methods, subsidies, and grants that supported this. Up until now, I think the zombie companies played an important rolein keeping the society stable.
But from around 2012, there’s notenough labor, so we don’t have enoughroom or the necessities for continuingthis. We can no longer help black companies becoming zombie companies.
Instead, it’s better that firms withlow productivity disappear so thatfirms with high productivity can besupported. Local economies arecalled, “low-hanging fruit” in English, but it’s precisely that. There aremany fruits in tremendously low areas, which you can reach if you justreach out with your hand. But as aresult, these few 20 or so years, wehave been adopting policies that arelowering productivity. The same goesfor the agriculture, forestry and fisheries industry. So, if we go after thesefruits, I think the Japanese economy
can grow.
Inose: We need a system that can
support such a paradigm shift.
Ishiba: So how are we going to builda system, and how are we going topromote the project? We need private companies to realize the need totackle these issues, or it won’t work.
Initially, subsidies for the revitalization of regional areas were aimed topromote that.
Usually, there is no zero assessment for subsidies, but there werequite a few during the two years I
was in charge. We kept the town
names confidential, and we triple
checked, so I’m sure it was done with
fairness.
But by doing so, for the first time,
we’re faced with opinions like, “howcome that town which is in the same
Prefecture as ours receive the fullamount, while we get nothing?” So
inspection is made, and those whoare granted have to answer to the responsibilities, or else there’s no meaning of providing incentives. Talks onchoosing good managers also rise.
This is not a system, but one other thing I’d like to point out is theemployment of local officials. State
officials have economic positions
that they can take, but local officials

have administrative positions andlaw-related positions but not financial positions. In reality, is no person
who can analyze the economy of thetown they’re in, based on the Ministry of Economy, Trade and Industry’s
annual table or someone who can use
the RESAS (Regional Economy andSociety Analyzing System). It’s strangethat no one can analyze the region’s
productivity, employment, and income statistically and build a planfrom there. To hire someone who has
those abilities can be done with one
decision from its leader. If it’s the casethat that kind of standard management logic lacks in local government
offices, we need to support them inareas where we can expect the mostsignificant growth like Mr. Toyama
said.
From as old as the Heian Period,
Japanese traveled to the city and became subordinates of people withpower. It’s not like that in Europe.
It’s something typically Japanese
based on our culture, and it’s probably going to be challenging to try
and change that, but if we don’t thiscountry won’t last.
People of “kenjinkai” (associationof people from the same Prefecture)
all say; “let’s fulfill our aspirations in
big cities and someday return.”
Shouldn’t we stop thinking like this?
I think from now on, and we shouldsay, “let’s return to regional areas tofulfill our aspiration.”

Proposing a
Ministry for Public
Interest, a Ministry
for Startups andthereby building a
new nation
Inose: 100 billion was given out for
decentralization. Is the list of scoresfor assessment open for the public tosee?
Ishiba: Yes, it is.

9Toyama: I was a scoring officer too,
but they’ve graded it with ABCD,
and it’s pretty clear. If you look at
the ones that are ranked A, you’ll geta good idea of how you should tackle the plan. Most of the ones thatjust filled in the blanks with advice
from a consultant are graded D. For
example, if the idea on fireworks of
Oma in Aoyama Prefecture was received well, almost everyone aroundthe country would start promoting
their fireworks. Similarly, if they hearthat farming abalones are accepted

well, they’ll start chanting, “abalone.”
The plans that have no material aremarked D. It’s quite clear.
Inose: I see. Just one more thing. I
do think we need a National Remodeling Plan. I’m presently a special advisor for Osaka City in Osaka,
but what I’m suggesting is Firansoropi, like the way Mark Zuckerberg
donated 5 trillion yen. Giving grants
out not by the government, but by
individuals.
We have the responsibility of paying tax, and as taxpayers we will, ofcourse, take part in the nation including elections, but while there’s
one artery where the National Tax
Agency collects tax and the Ministryof Finance creates a budget out of
that, we could perhaps form a second
highway where people can donate
money to NPO corporations andthereby be deducted the amount. I
think we need the flexibility of not
only casting a vote in elections but
also actively taking part in politics
through tax. For example, how about
creating something like a Ministry of
Public Interest?

Regional revitalization begins by discovering Japanese strengths
Toshio Goto, President

From ancient times, Japan has a history of continuously absorbing the culture, art, and civilization from abroad. It started in the Nara Era, where “kentoshi” (Japanese envoy to Tang
Dynasty China) were dispatched and brought “Wakon Kansai” (Japanese spirit imbued with
Chinese learning) into the country. Then at the end of the Edo period, around the Meiji Restoration, there was “Wakon Yosai”(Japanese spirit imbued with Western learning). Now there’s
even the notion of “Wakon Eisai” (Japanese spirit imbued with English learning), but all ofthem have “wakon” (the Japanese spirit) in common.
The Japanese spirit known as “Yamato-gokoro” is at the heart of Japanese civilization. The
key to the theme today— the revitalization of Japan and regional areas—might lie in Japanese
civilization. We often forget the good parts of our country, and it’s quite often that we’re reminded them by foreigners.
Foreigners have discovered many useful parts of our country. If we go back as far as the 3rd
Century, the following is stated in the “Gishiwajinden” (an ‘Account of the Wa’ in “The History of the Wei Dynasty”); “the Japanese civilization is of an extremely high standard. There
are no crimes, and it is safe. Furthermore, in the “Chosen Tsushin-shi” of the 15th Century, it’s
written, “whether you’re a man or a woman, you’re educated the language. The literacy rate isextremely high in this country.” I don’t intend to praise everything about Japan, but it’s truethat we often forget our beauties and are reminded them by those who come to Japan from theoutside world. And I think the clue to solving regional revitalization lies in rediscovering Japanese civilization, which is our strength.

10Ishiba: We haven’t indeed arranged
that yet, but it would be good if we
could function something like a
Ministry for Public Interest and create supreme leaders who will provide
money but also say what they want.
Can we perhaps build something
like a Ministry of Public Interest in
Osaka City? Also, the rate of starting
up a business is very low in thiscountry. The age of company presidents in Japan is probably the highest amongst the developed countries.
Japan is no doubt a challenging envi-

ronment to start a business. So maybe we could also build something
like a Ministry for Startups?
Inose: Let’s go with those two plans.
The relationship between the rulingparty and the opposition parties arelike a company and a union. Executives are not exchanging ideas. Company managers have got to get involved in severe debates in order toimprove. As leaders of the country,
they need to take part in discussions
actively. I think maybe Mr. Ishiba,
you could be the one to bring thatissue out to the public.
Ishiba: If there is no one doing it,then I’ll make the utmost effort totry and be that one to do it.
Inose: Thank you for discussing
with us for such an extended period.
(Reprinted from “Shukan Dokushojin,” 2018, 19th January, No. 3223,
and WEB “Shukan Dokushojin.”)

The panelists
Shigeru Ishiba
Member of the Liberal Democratic Party and the House of Representatives. Born in 1957. He graduated from Keio University, Faculty of Law and started working in Mitsui Bank (the now Mitsui
Sumitomo Bank) before pursuing his career as a member of the Liberal Democratic Party and theHouse of Representatives (10th). He is the chairman of Suigetsukai (Ishiba group). He served as
Minister of Agriculture, Forestry and Fisheries (49th), Minister of Defense (4th), Senior State Secretary for Defense (68th and 69th), Policy Research Council Chairman of the Liberal Democratic
Party (52nd), Secretary-General of the Liberal Democratic Party (46th), Minister of State for the
National Strategic Special Zones and Minister in charge of Promotion of Overcoming Population
Decline and Vitalizing Local Economy in Japan.

Kazuhiko Toyama
Representative Director/CEO of IGPI (Industrial Growth Platform Inc.). After he graduated the University of Tokyo, Faculty of Law, he went on to acquire an MBA at Stanford University. He is the CEO
of Boston Consulting Group and Corp Directions Inc. He was appointed to lead Industrial Revitalization Corporation of Japan, a government-backed restructuring fund, as COO before he founded
IGPI. He has been involved in numerous company reform and industrial revitalization. He serves
outside director of Panasonic Corporation and Tokyo Electric Power Company Holdings, Inc. and isalso the Vice Chairperson of Keizai Doyukai (Japan Association of Corporate Executives). He is also an expert member of Council on Economic Fiscal Policy (MOF), member of The Tax Commission(CAO) and member of the Trade and Industry Industrial Structure Council, New Industrial Structure
Committee of the Ministry of Economy, etc.

Naoki Inose
Author. Born in 1946. In 1986, he received the Souichi Ooya Nonfiction Award for his book “ Mikado
no Shozo” (Portrait of the Emperor).” In 1996, he received the Bungeishunju Readers’ Award for his
book “ Nipponkoku no Kenkyu” (A Report on Japan).” In June 2002, Prime Minister Junichiro Koizumi appointed him to the Promotion Committee for the Privatization of the Four Highway-Related
Public Corporations. He served as Tokyo Governor from December 2012 to December 2013. In
December 2015, he became Special Advisor to Osaka City. His books include “Show 16-nen no
Haisen” (The Defeat in Showa 16), “Persona—Mishima Yukio Den” (Persona: The Story of Mishima
Yukio) and “Picaresque—Dazai Osamu Den.” (Picaresque: The Story of Dazai Osamu). Upcoming
books include “Kyushutsu” (Rescue), “Senso, Tenno, Kokka” (War, Emperor, State), “Seigi ni tsuite
Kangaeyo” (Let’s Think about Justice), “Minkei” (Posse Man), “Tokyo no Teki” (Tokyo’s Enemy) andin collaboration with Lully Miura, “Kokumin Kokka no Riarizumu” (Realism and the Nation-state).
Translation: Ayako Karino
11

Japanese Civilization Institute 2018 11th Symposium
Can Japanese athletes play an active role in the Pyeongchang Olympics? What is going to become of Japanese national
sports Sumo? Tradition and science, what exactly is sports? How further are athletes going to evolve? We will invite
sports experts, Olympians and sports journalists to talk about the history and the latest science on sports.

▶ Panel discussion:

Japanese people and Sports
Dai Tamesue

Miyako Tanaka-Oulevey Seijun Ninomiya

Bronze medalist in men’s 400 metershurdle, at the World Championships
Organizer of DEPORTARE PARTNERS

IOC marketing committee member
Seoul Olympic bronze medalist insynchronized swimming, duet

Date: 6 th February, 2018, 7 p.m.-9 p.m. (doors scheduled toopen at 6:30 p.m.)
Venue: J apan University of Economics, Tokyo Shibuya
Campus Hall (the hall seats approximately 100 people)
Address: 25-17, Sakuragaoka-cho, Shibuya-ku, Tokyo, 151-0031

Traditional Crafts
Online Site

Sports journalist
Rakuten Eagles Management
Board of Trustees

Naoki Inose
Author, Director of Japanese
Civilization Institute

Admission: 2
 ,000 yen (please pay at the door on the day)How to attend: a pply through the site below:
http://www.japancivilization.org/
Contact: J apanese Civilization Institute03-5456-8082

Worldwide：https://shops.japancivilization.org
Japanese：http://japancivil.shop9.makeshop.jp

Messages from Director
Japanese Civilization Institute has been introducing and selling traditional crafts of Japan.
Although it is said that there is approximately 1,200 types of traditional crafts in Japan, its
production is declining. As part of our activities, we hope to discover valuable traditional crafts
spread across the nation, enjoy Japanese craftsmanship and its beauty inherited over the
centuries, and develop it with you.

Tsumami Kanzashi(Crepe)Folding Screen(half size)

Folding Screen(full size)

KYO-YAKI
Earthenware

Japanese Bamboo
Basket Tokyotrad

Odoshi Samurai Armor

Contact：Japanese Civilization Institute 24-5 Sakuragaoka-cho, Shibuya-ku, Tokyo 150-0031 Phone : 03-5456-8082 Mail : info@japancivilization.org