Chapter14: Inside – Inside/Outside Japan

Chapter14. Inside – Inside/Outside Japan

The Kyoto Prefectural Representative office was in the newly renovated section of JETRO New York. The assistant’s cubicle which I occupied was outside of the director’s office overlooking 49th Street. The Japan Highway Corporation Representative office (JH) was next door with the same arrangement. The American assistant, who had worked for the JH for several years, was in her early thirties and a graduate of an Ivy League university. She had a child with her former husband who was Chinese.

The adjacent office was occupied by a MITI non-career officer, an engineer, who monitored American EPA regulations, small machinery production and the aeronautical and automobile industries. A Japanese woman who was married to an American assisted him.

A MITI career officer who was also an engineer occupied the next office down. With the support of consulting companies and an American assistant he monitored US politics. His male assistant was in his late twenties and had attended a university in Kyoto where he met his Chinese wife. Although he did not read, he spoke Japanese and we enjoyed chatting in Japanese.

At the opposite end were the offices of the two MITI Directors in Industrial Research. Both officers who were in their late thirties had law degrees from Tokyo University and were on their way up the MITI pyramid. Together with the Managing Director they were regarded as the top officials at JETRO. Their research was supported by an American male in his mid-thirties who had a degree in International Relations. He had been working for Industrial Research for about five years but he did not speak Japanese.

The secretary for the Industrial Research Division had worked at JETRO since the 1980s and considered her position to be a rank above the executive secretary. The two women did not engage with each other. She was very discrete about her directors’ activities and doted on them. In her late fifties, despite a brusque façade she was kind. I never asked her about herself but she confided that she had married a GI with whom she had a child. She was currently living with a much younger Japanese man whose sister owned a Japanese restaurant in Manhattan.

EID/MITI, the Export-Import and Investment Insurance Division occupied two offices and a large research area in the expanded section. A MITI career officer in charge occupied one office and his assistant, a non-career female officer, occupied the second office.

EID/MITI was MITI’s Export/Import Insurance Trade Division with a budget of $175 billion ($1=¥120) for FY 1992. The fund covered Japanese companies’ losses in foreign countries resulting from bankruptcy, war, political instability, default, war, etc. The fund expanded to provide funds to foreign firms as well, including businesses that was unrelated to Japanese exports.

MITI’s U-Turn

By the early 1980s, Japan, whose economy was export-driven, was showing a marked trade surplus with its leading trading partners, particularly the US, which was in recession. There was significant pressure from the US government to deregulate domestic markets and raise import quotas for such goods as agriculture products, electronics, motor vehicles, and car parts. Realistically, JETRO’s role as a promoter of Japanese exports was no longer as relevant to Japanese businesses as it had been in the 1960s and 1970s. Also, JETRO’s role as a surveyor of foreign markets and a collector of economic and political data had, in part, become extraneous because research was being conducted by large Japanese multinationals, research institutes and MITI officials posted in embassies and Japan Chamber of Commerce offices.

However, MITI intended to continue operating a corporation that had effectively resulted in creating more territory for its officials. As a gesture of compliance with US demands, MITI began the process of re-orchestrating JETRO’s function so that the organization would serve as a promoter of foreign imports and foreign investment. In 1983, JETRO set up a task force to look at import promotion.

In 1981 MITI established the Japan Economic Foundation (JEF) as a JETRO subsidiary. The JEF published the bi-monthly journal The Journal of Trade and Industry which is now known as Spotlight. The JEF website states its mission:

…to deepen mutual understanding between Japan and other countries through activities aimed at promoting economic and technological exchange. With this goal in mind, JEF engages in a broad range of activities; it provides information about Japan and arranges opportunities to exchange ideas among leaders from many countries in such fields as industry, government administration, academia and politics in order to break down the barriers to mutual understanding.

The members on the JEF board of trustees also served as the chairmen and presidents of MITI’s industrial associations; the Japan Automobile Manufacturers Association, Japan Electronic and Information Technologies Industrial Association, the Japan Iron and Steel Federation, and the Japan Society of Industrial Machinery Manufacturers.

In 1984, import promotion activities such as trade fairs were held in Nagoya, Yokohama and Kitakyushu. In the same year, a second task force was set up to promote international economic cooperation for industry. In 1989, MITI completed the conversion of JETRO export promoter to JETRO import promoter with the establishment of yet another organization, the Institute of Trade and Investment. The number of JETRO’s foreign offices increased to eighty in fifty-seven countries while the domestic offices increased to thirty eight.

Kyoto Prefecture (but not for long)

The new representative for Kyoto Prefecture was in his late thirties. Since we spoke in Japanese I could not assess his English fluency. One of our first conversations regarded his weight. He confided that he was from Osaka but his wife was from Kyoto, which has the questionable reputation for being socially impenetrable to anyone born outside of Kyoto. This is particularly true of Kyoto City, the capital. When he entered the Kyoto Prefecture government as a civil servant he gained twenty pounds from the stress of not fully being accepted on the workplace.

The representative had lived in an area in Osaka where fifty percent of the population was Korean. His schoolmates in primary school were second and third generation Koreans who had taken Japanese surnames to avoid discrimination. After primary school some of his Korean friends were sent to Korean schools which were funded by South and North Korean organizations. Many of these schools have since been shut down due to years of political hostility between the North Korean and Japanese governments.

His father had a distribution business with Pepsi Cola and took his son to baseball games when he made deliveries. The representative’s uncle had lived in New York for thirty years and a cousin lived in Los Angeles which was fortunate because the representative experienced problems adapting to his new post.

He was very nervous being alone in a big office on the forty-fourth floor of a skyscraper.  The walls creaked as the building swayed in the wind and riding the elevators which plummeted at fifty miles per hour before slowing down a few floors above the lobby was unpleasant but unavoidable for all staff. The huge windows behind his desk gave him an unobstructed view of Forty-Ninth Street but whenever rain pelted the windows he hurriedly exited the building and stayed outside until the rain had stopped.

When I interviewed him in 1994 he confessed that he had suffered from depression and had sought counselling which helped him to adapt to the stress of being in an entirely new environment for which he had been ill-prepared either by JETRO or by local government or by his predecessor who did not reveal his activities during his three year term at JETRO New York:

When I first came here I didn’t know about many things regarding American lifestyle and how to get along here. First of all, there was a different way of thinking. Even though I understood things intellectually, I really didn’t understand and experienced many difficulties. It’s been two years now and there were times when I misunderstood or was misunderstood and suffered because of these mistakes. It’s a relief that I can acknowledge this now. In America, in this kind of office, you must have an objective and know precisely what you are doing. In Japan, it is not clearly defined and, therefore, when I came here I didn’t know what I was supposed to do.

In Japan I didn’t have to think and decide for myself. There were even situations when I didn’t know what I wanted to do. Here the pressure doubled because I was alone. There is a lot of pressure because I must do something specific. In Japan, an employee doesn’t act on their own volition but here one must come to a decision and report to home office that this action is what you would like to do. Then one must wait to receive confirmation. In Japan, there are proposals which are passed up to your superiors for consideration. There can be problems because decisions are not made immediately. In Kyoto, I worked together with many people so even if I didn’t understand I could ask others. In a sense, it is easier.  However, suddenly I am sent here and am alone. I have become used to it and I think that it has been a good experience.

The representative was certainly not alone. A number of the officials had never lived abroad and their comprehension of English was superficial. The complex Japanese language is rarely spoken outside of Japan and some of the officers were at a distinct disadvantage and on the defensive because they were unable to easily communicate with Americans. Furthermore, as did the Kyoto officer, they had worked as members of divisions and not independently, which for some officers was very stressful. The officers were dependent on JETRO management for their relocation to New York.

For several months the representative was out of the office much of the time or sitting at his desk contemplating how he should proceed. He asked me to peruse several Oklahoma newspapers for articles on Japan because Oklahoma and Kyoto were Sister-States. A Senior Trade Advisor was posted in the Oklahoma State Economic Development office. It was questionable why such a relationship had been established because the similarities between Oklahoma and Kyoto were few. The representative said that a former Japanese professor who had taught at an Oklahoma university had decided to initiate the ties. I also looked for articles in the New York Times and Washington Post but they were non-existent.

A Riddle

The work was minimal and I spent most days reading Japanese newspapers and magazines. I visited the Japanese assistants’ cubicles to chat and to find out what their bosses enjoyed doing on a daily basis. Their replies were similar; in general, the representatives’ schedules were relaxed and they enjoyed shopping, going to Broadway shows and being with their families if they had joined them in the US. Often they left the office by 5 or 6pm.

 I wanted to know more about MITI which western commentators and political economists were habitually lauding as the ministry responsible for policies that propelled Japan’s rapid economic development. Because the US economy was flagging the international business community considered that the Japanese Inc. model of capitalism was superior. However, my experiences gave me a contrary view.

At Kinokuniya I searched for books on the bureaucracy with the hope that there would be a current assessment of MITI. The only book available was An In-depth Research of the Bureaucracy (Kanryou Dai Kenkyuu) by Tetsuo Ebato, published in 1990. Ebato graduated with a degree in economics from Tokyo University before entering Mitsui Bank. He left the company to become a freelance writer. His book regarded the Defence Agency, the Supreme Court, the former Ministry of Health and Welfare, the Ministry of Agriculture and Fisheries and MITI.

His chapter concerning MITI revealed the views of many Japanese civil servants at the time. For example, MITI officials felt that they had to continuously generate new policies and had the reputation of being skilful debaters, arguing to promote their policies. On the other hand, although MITI officials were said to be skilful analysts, their policies were often hastily planned and incomplete. National ministry officials cynically alluded to MITI as “aggressive MITI” because MITI no longer had a cogent industrial policy since the end of the Cold War in 1989 and in order to justify its budget and protect its existing administrative territory, MITI officials pursued the territory of other ministries.

The Changing of the Guard

Management announced that the president would soon be returning to Japan and that a new official would be replacing him in June. Since I had never met the outgoing president I assumed that I would not meet the new one, an elite MITI official who would serve as the figurehead of JETRO New York for a period of two years. However, without prior warning, I was introduced to him one afternoon in June by the Executive Director of Research and Planning and the director who had taken me for drinks. I was wearing a red cotton suit and a white pique blouse, appropriate attire for meeting a MITI official.

The Executive Director of Research and Planning had conceived of a monthly paper that would serve as a platform for articles regarding US–Japan relations, economics, trade and social issues. It would promote Japan’s industrial and trade policies and JETRO as a trade promotion organization and would be sent unsolicited to both Japanese and American government officials, well-recognized academics and business leaders.

In order to formally receive MITI’s permission, he asked the president to engage and to contribute a short editorial on the first page. He also needed other JETRO staff to contribute articles each month thus introducing me to the president as the first prospective writer.

I sat directly opposite the new president who was enthusiastic about the project. He was a graduate of Kyoto University Law Faculty before entering MITI as a career officer. A Director of Policy Planning in the Minister’s Secretariat, he also served as Secretary in the Japanese embassy in Indonesia. MITI sent him to the Royal Institute of International Affairs in London for a year of study and also to the School of Management at the University of Syracuse for eight months. His interests included classical music, movies, and Japanese and English literature.

The president was without his family because his wife had to remain in Tokyo to care for their two sons and daughter who were in school and could not interrupt their studies. The two directors probably assumed that due to my musical background and bilingual skills, the president would find me interesting and easy to communicate with. We discussed the paper’s format, design and the name.

A subsequent meeting was arranged in a room near the president’s office. I showed the president a possible title Japan On-Line which had been printed in green on cream colored paper. He liked it but preferred his name Inside/Outside Japan which was more appropriate and very creative. Another meeting was scheduled for the following week.

 At the meeting besides the president, and the two directors, one of whom would be the editor, were myself, the American researcher from Research and Planning and the American researcher from Industrial Research. I was the only writer not connected to MITI and the only female. I offered to write short columns on marketing and was allowed a second by-line, two-paragraph blog. “To Market to Market” which would appear on the second page. The president wanted to engage other members of staff to contribute articles as well. The president requested that we each choose a topic and to write a piece with the word-count no longer than 2500 words. He committed to writing a short commentary for the title page of each issue.

At a meeting the following week we offered our topics and promised to submit our articles within two weeks to ensure that the first issue would be released by end of July. Relying on my exposure to the market in Japan, I chose beer for the topic and the competition between the main Japanese producers. Titled “One Hundred Bottles of Beer on the Wall” the article received a thumbs-up from the president. Instead of the heading “Editorial” the president chose “Perspective” thus giving readers the impression that his opinions were personal and not from government.

After a scurry of activity the newsletter went out as scheduled. I used the Nikkei Shimbun as the source for the To Market to Market blog titled “The Name of the PET Food Game is Fiber!” The piece concerned Japan’s growing pet food products which, in league with products for health conscious consumers tackled insufficient fiber in pets’ diets. Such brand names as “Renewal” and “Healthy Dog” revived my memories of underground commuting in Tokyo and “Fresh Man.”

The president’s Perspective was an effort to convince readers that the government was no longer driven to catching up with the West but was intent on alleviating the discrepancy between the country’s wealth and that of the populace:

A  national plan calling for vastly upgrading sewage systems and parks, bringing down the price of a home to the level five times the average annual income, and reducing, by 1996, the yearly working hours from 2,100 to 1,800. It’s about time.

The editor contributed “Japanese Firms Respond to L.A. Riots” which regarded the “worst riots in U.S. history in decades” and the donation of several million dollars from Japanese affiliates based in Los Angeles for rebuilding South Los Angeles after a six-day rampage of arson, looting, killing triggered by the release of four white police officers who were indicted for brutally beating an African American. While touting the response of Japanese firms, the editor was also playing to the Japanese readers’ paranoia.

Bill Whittaker was the chief correspondent in Japan for CBS Television from 1989 to 1993. When I interviewed him in 1994 for an article in Inside/Outside Japan he said that he was often disturbed by how Americans were portrayed on Japanese television, the reports focusing on racism, crime and the deterioration of American society. He himself was affected by what he saw on the tube in Japan and was initially afraid of returning to the US after his term was over. Although he emphasized that gun crimes were “outrageous,” he also realized that he would not be a victim when he drove downtown to his office.

The American researcher from Research and Planning contributed an article about the Japan Overseas Cooperation Volunteers and Japanese youth volunteer activities in developing countries. The researcher from Industrial Research wrote about the demands of Okinawans for a big reduction of American troops from the Marine base, which to this day is still a bone of contention between the US and Japan.

The president’s English remained a mystery to me until the meeting with all of the contributors where he said that he was an avid reader of English literature. When I asked him the name of his favorite Japanese author he replied Yukio Mishima which indicated his conservatism. I admired Mishima but not for his narcissistic and nationalistic views but for his brilliant use of Chinese characters and his vocabulary.

The first issue was released by Research and Planning on time at the end of July. I joined the office to help stuff the manila envelopes and to stick on the address labels for the mailing. The executive secretary and the Ehime Prefectural representative also assisted.

Getting to Know You

The first issue was considered a success and I decided to write about topics which I knew well through past work.  For the August issue I contributed “The Art of Marketing-Mind-Over-Matter” which was based on the Levi Strauss and the canned coffee beverage adverts as some of the best examples of creating an image of the product being advertised.

The To Market to Market blog announced a new product developed to record a baby’s first cries. “Out of the Mouths of Babes’ described the “For My Baby, Memorial CD” as “perfect for parents who want to relive the joyous events of the birth of their child.”

The president promised in his September Perspective that Japan’s economy would recover within seven years which was the prognosis of many government officials at the time. It was also the consensus view in the international business community:

Real estate prices continue to drop, vacancy rates of new office buildings remain high, banks are competing among themselves trying to dispose of bad loans, manufacturers are struggling to reduce excess capacity and personnel…This is not a description of the United States a few years ago, but Japan today…

Seven-Five-Three is a traditional Japanese festival for congratulating children on turning seven, five, or three years of age.  But the term is now used to forecast Japan’s economic recovery: real estate will take seven years, banks five, the securities market three before regaining their footholds…The bursting of the economic “bubble” seriously injured the United States: now it is injuring Japan no less.

However, he acknowledged that his government had been too optimistic in its original forecast of economic recovery and was now going to release a stimulus package to ignite the economy:

The recovery plan, announced on August 28 provides for $86 billion to achieve four main goals: (1) expand spending on public housing; (2) increase loans to small businesses); (3) promote investment in plant and equipment; (4) to give financial institutions incentives for depreciating bad debts.  The package includes $250 million earmarked for promoting imports.

 My article “Oil & Art, West and East” concerned the lives of two oil magnates who were passionate collectors of art which they exhibited in their museums. J. Paul Getty (1892-1976) built a museum in Malibu, Los Angeles in 1974 for his eclectic collection of Greek and Roman antiquities, European paintings, sculptures and photographs.

Across the Pacific Sazo Idemitsu (1888-1981) the founder of Idemitsu Oil, one of Japan’s biggest oil corporations, began collecting Gibon Sengai in the 1920s  and housed his burgeoning collection in his museum in Tokyo built in 1966 where I had visited numerous times to see the work by one of my favorite artists.

 While in San Francisco I attended my first and only auction of Japanese and Korean art objects. It was summer and there were few people perusing the exhibit, which boded well because hanging on the wall was what I recognized to be a painting by the 18th-century Zen Buddhist priest Sengai (1750-1837). His pictures were always combined with poems in his unmistakable script. During his lifetime he was well-known for his humorous drawings of the Zen Buddhist monastic world. He was a prolific artist and his irreverent paintings of Zen monks were held in high regard. The auction was scheduled the following week and I put in a silent bid of $500, never thinking that I would win considering that the average price for a Sengai was $10,000. A week later I received word from the auction house that I was the owner of a Sengai!

When I visited the Idemitsu North American corporate headquarters to interview the manager about Sazo Idemitsu he generously gave me a copy of the Idemitsu Oil anniversary edition of its corporate history, a book given to Japanese companies which had close relations with Idemitsu. It is a remarkable account of Idemitsu Oil’s engagement in Manchuria before the Second World War. The photographs represent the infrastructure which Japanese industries installed during the Japanese occupation, a reminder of Kishi’s involvement.

The To Market to Market blogs “The Two Step” announced Matsushita Electrics’ dual function radio-odometer and “I Can See Clearly Now” was about Eye Health, a new product which enabled purchasers to tell when their light bulbs should be replaced.

The American researcher from Industrial Research wrote about Japan’s quasi-military entrance into international peace keeping operations (PKO) with the passage of a PKO bill in June allowing Japan to send troops overseas to engage in UN operations. The vote in the Lower House was an overwhelming 329-17 and in the Upper House at 137-102:

A basic fear that remains is that this law might open the door to militarism in Japan. It is important to remember, however, that the new law allows the Japanese government to dispatch only lightly armed contingents abroad on narrowly defined missions. Japan’s participation will be limited to non-military activities such as election monitoring…Clearly Japanese leadership is committed to supplying personnel for the protection of international order.

The PKO bill was the first step of Japan’s current expanded SDF activities in the Pacific.

At the end of the last page JETRO provided details of the stimulus package. $69 billion was slated for public works and $17 billion for small business and capital investment: “The government expects the package to push up economic growth by 2.4 percent in the coming year.”

“Creative MITI”

Ebato reported that the officials in the other ministries cynically referred to MITI as the ‘creative’ ministry. Inside/Outside Japan  created a façade contrived to support MITI’s numerous objectives; to pursue other ministries’ turf such as MOF and MOFA, to promote and defend MITI’s industrial policy and most importantly, to present JETRO as the Japanese government’s trade promotion organization. The paper was a vehicle which MITI used to present itself in different ways, depending on what the audience wanted to hear while furthering its own interests.

The paper was also an effort to encourage the perception among foreign readers that JETRO was a multifaceted government-funded organization which promoted trade and investment in Japan and was managed by officials who understood Americans, their political economy and America’s relationship with Japan. Simultaneously, the paper’s tone promoted to readers the importance of ‘mutual understanding’ and acceptance of the Japanese way of governing and doing business. Although the paper was, in effect, an attempt to revise JETRO’s image and, therefore, maintain and increase its budget, it equally gave MITI officials the opportunity to answer US officials and the US media’s contention that Japan’s markets were closed to foreign business and investment.

Although some of the articles were biased in defending Japan’s position at the US–Japan trade negotiations and flexing Japan’s muscle in the international political arena, the articles were cleverly conceived and relatively informative. The paper provided an excellent representation of Japan’s economic conditions and government policies regarding US–Japan trade relations. Incredibly, the articles forecast Japan’s future economic dilemmas.

The president was very creative in his use of the paper in the promotion of his government’s trade and foreign policies. He succeeded in creating a positive image of both MITI and JETRO, using methods that differed from past presidents, who primarily relied on networking personally with national and state government officials, businessmen and academics. The president preferred to supplement his networking activities with Inside/Outside Japan and to use the paper to disseminate information about Japanese business and promotion of government policy.

Calm before the Storm

The situation concerning my involvement in Inside/Outside Japan was heating up. The paper took me often to Research and Planning, the hub of JETRO New York. Although the president called me “the Jane Austin of JETRO” my articles merely served to support what was essentially a propaganda sheet. The titles of my articles were famous American songs with the lyrics from the songs woven into the articles.

Since I was working for Kyoto Prefecture, I took the lingerie manufacturer Wacoal Corporation, a company based in Kyoto, as the subject for the October 1992 article. The title “Midnight Lace and a Pretty Face Make the World Go Round” was taken from one of my husband’s favorite songs “Chantilly Lace.”  Since the editor was a bit of a voyeur I hoped that the piece would pass muster.

This tiny article proved to be significant because the reaction to it and ensuing issues regarding my participation in Inside/Outside Japan spurred my decision to stay at JETRO New York:

Can a small lingerie company from Kyoto compete in an international lingerie market?  Can a manufacturer of foundation garments, exclusively designed for the Japanese female understand the needs and desires (for lingerie, of course) of the American woman?

It took forty-seven years for Koichi Tsukamoto, founder and chairman of Wacoal Corp., to answer these questions in the affirmative. But before considering greener pastures overseas, it was essential for him to establish a strong corporate image in Japan. And in order to maintain a substantial share of the fickle she loves me-she loves me not market, he knew that entertaining the slightest hope that the consumer was telling him, “Hey Baby, you know what I like,” was strictly taboo.

Until as late as the 1960s, the bra was sometimes worn to cover and suppress the bust.  But, today, the young Japanese woman has become as body-conscious as her American counterpart and enjoys emphasizing her femininity.  Her revised conception of herself has radically changed the lingerie market in Japan. Although the padded bra is still the mainstay of foundation wear, the non-padded bra is gaining popularity. Nearly a million of the current hot seller, “Good Up Bra,” have gone out the window. It is a ¾ cup little number, fastens in front and sharply defines the bust-line.

The bra-burning period of the Women’s Lib Movement in the late 1960s almost forced the company to close down operations.  Refusing defeat, Tsukamoto shaved his head as a symbolic gesture to his disheartened employees that the brassiere would indeed prevail. “Bras will come back in fashion.  After all, breasts are the most distinguishing part of a woman’s body. As long as women have breasts we can sell brassieres.” Wacoal came up with a seamless bra which could be worn undetected and sales were resuscitated.

Japanese men are becoming imbued with the American spirit. They have begun to discover what American men have known for quite some time. Buying lingerie for a loved one (or a liked-one for that matter) is not such a bad idea. White Day (March 14) is the occasion when men reciprocate with a gift to women who gave them Valentine gifts. The usual is white chocolate, but forays to the lingerie department are becoming commonplace.

Wacoal America became a reality six year ago.  Its slogan, “European elegance, American fit, Japanese technology,” illustrates the company’s production methods for a non-Japanese market. The average bra size of the Japanese woman is 32A. The average size for an American is 34C.  Bigger is not necessarily better, but this obvious discrepancy requires that design be entrusted to the Americans… Bra & panty sets, the bread and butter items for Wacoal America, are nearly twice as expensive as those from other domestic manufacturers…

Customers do not seem to object to this higher price for higher quality, basic-is-best attitude. Inside/Outside Japan recently visited four major Manhattan department stores to hear a few “just between us girls” comments from customers and sales personnel.

“It’s like a Honda.  It sells itself.”

“It’s cult-like.  Once people wear it, they never wear anything else”

“The product fits, which is strange, because they (the Japanese) are so small over there.”

The JH officer contributed an article about highways in Japan. “Highway to Heaven” announcing the release by government of a $3.5 trillion package for infrastructure, including highway construction to be used over a period of ten years. I learned ten years later how this $3.5 trillion package was distributed.

Occasionally the representative for the Japan Small and Medium-size Enterprise Agency (JASME) visited my cubicle to request help searching for statistics on the US economy and business activities. The female non-career officer in EID/MITI also began dropping by to ask me to help her translate the Japanese version of the new Trade Insurance regulations. The requests from the officers were welcomed because they connected me to high calibre civil servants and engaged me in their work. Inside/Outside Japan also helped to establish a relationship with officers in Research and Planning and provided the opportunity to observe the interaction between civil servants ensconced in the office, an opportunity which I would never have had in Japan because the officers were sent from different agencies.

Despite the relaxed atmosphere at JETRO New York and despite the fact that the officers were from separate organizations, the hierarchical structure of Japan’s governing system, with the national ministries on top and prefecture governments towards the bottom, was well defined, as was also the case in the majority of Japanese government offices overseas.

A Slap on the Wrist

Some of the officers at JETRO New York took exception to the “risqué” nature of the Wacoal article and I was cautioned. It was disappointing because the Japanese business community in the US seemed to enjoy the article and I received compliments for what I considered to be an innocuous promotion of the paper. My marketing blogs were discontinued and my article in the November issue was limited to one page.

The president’s Perspective in November 1992 preferring to ignore his bureaucracy’s complacency regarding Japan’s own troubled economy, took a swipe at the US economy:

…But Bill Clinton, elected next president of the United States, knew we were in the midst of change. That’s why he used “change” as a keyword in his campaign…

We expect him to change the overall American stance from traditional (and highly commendable) optimism to something less optimistic, a little more serious, a sense of urgency in grappling with reality…

American people have awakened to the need to face reality and change. We wish President Clinton success in all his endeavors.

The contribution by the researcher from Industrial Research is again entirely relevant today. The piece lauded Japan’s leadership in Asia and its attempts to promote peace and improve relationships among Asian countries through the regional trade organization ASEAN. The article reported that Japan was trying to repair relations with China and Korea to demonstrate its commitment to this end. While admitting that Japan must promote China’s ties with the West, the article also revealed Japan’s paranoia regarding China’s rapid economic development in Asia and its economic and political influence in the international community.

The article expressed concerns that issues such as China’s human rights violations and arms dealings would serve to frustrate Japan’s efforts to help China internationalize. Significantly, the article pointed to Japan’s dependency on the US to protect its interests:

Japan’s Asian policy will have to take into consideration the concerns of its most  important ally, the United States…Despite facile talk of a world splitting into trading blocs, Japan is firmly opposed to pursuing an Asian policy that isolates the United States or other Western nations. To the extent that a U.S.-Japan partnership serves to promote democratization and economic cooperation in the Asia-Pacific region, we can expect continued prosperity.

I used Mercian’s Beaujolais Nouveau debacle for my one-page article.

Getting to Know the Boss

The president and his editor extended invitations to me to various functions. Sometimes Japanese corporate executives from the North American corporate headquarters would attend and their submissiveness to an elite MITI official was evident. Although the president remained aloof from JETRO staff, within five months after his arrival it became apparent that he was controlling the office environment. He was well-liked and, compared to the majority of Japanese males whose stature were short and stocky, he was tall and slender. Female staff called him elegant and handsome. His executive secretary was smitten.

The editor claimed that the president was “not a typical bureaucrat” referring to his diverse interests such as writing film reviews for Toyo Keizai (‘East-West Economics’). The editor and the president’s relationship was mutually beneficial. While the president was able to rely upon the editor for polishing his prose and arranging entertaining evenings during his family’s absence, the editor was given stimulating work and a position in JETRO other than serving as the in-house translator.

The president took the opportunity to introduce me to his family when they visited New York in August. I met them at the editor’s flat in lower Manhattan for drinks before we went to a Vietnamese restaurant for a meal. The wife, in her early forties, was very pretty. The two sons in their teens were handsome and the six-year old daughter was quite adorable. It must have been difficult for the family to be separated.

I introduced the president to the noodle restaurant in Soho to which he gave a five star rating and where he continued to entertain his guests. He introduced me to his second cousin who, having left his job as an architect in one of Japan’s major construction companies, was staying with him while trying to decide what he wanted to do next. He was considering getting a doctorate in environmental issues at a university in the US or Canada.

The president, who doted on Andrew Lloyd Webber whom he called the Puccini of the West gave us tickets to Phantom of the Opera which had opened recently on Broadway with the original cast. The president also invited me to a Japanese karaoke bar in lower Manhattan because, as did the director of the Mercian wine division, he enjoyed performing before a captive audience.

Sayonara Kyoto

The Kyoto Prefectural Government representative seemed unconcerned that I was writing for the newsletter even though I was visiting the Research and Planning division, attending weekly editorial meetings and stuffing envelopes. Since he was busy acclimating to his job, he rarely asked me to engage. But I was becoming increasingly uncomfortable because the president, although very kind, was also creating a difficult situation in JETRO New York. Not only was I writing for his paper but also socializing as well with both him and the editor. In reality, I was under the president’s aegis.

I began going to the office on weekends to write unobserved and to alleviate tensions. The forty-fourth floor was empty of staff and the atmosphere eerie. The McGraw Hill building fire warden would announce over the load speaker that a fire had been reported on one of the floors below and that the elevators were not operating. Although always a false alarm it was an unpleasant experience. Sometimes the director of the JH worked in his office and on those occasions it was evident that he was suspicious of my presence.

Perhaps because the JETRO Trade Promotion Division Executive Director had conceived of the Business Support Centers (BSC) which were to open the following year he was awarded a secondment to JETRO New York. He enjoyed golf but not necessarily Americans whom he called “Whites” (hakujin), a mildly racist term. He urged officials to bear babies in America so that they were American citizens and thus eligible for US benefits. He was extremely displeased that his division, the promotional arm of JETRO New York, did not publish the paper. He protested vigorously to the Managing Director that Inside/Outside Japan usurped his division’s territory.

He persuaded the representative officers from the other prefecture representative offices and agencies to lobby both the Managing Director and the Kyoto officer to terminate my involvement in the paper. He also tried to pressure the officials to prohibit their assistants from contributing. He further inflamed the situation by perpetuating gossip about my relationship with the president.

Officials began visiting the Kyoto Prefecture office to lobby the officer, plying him with lunches and other incentives. It was disconcerting being the brunt of their derogatory remarks uttered as they stood in front of my cubicle. However, their behavior sparked my curiosity about what these officers actually did for their agencies while in New York and what JETRO was all about.

By November the posting of Inside/Outside Japan became a monthly two-party exercise.  The American researcher in Research and Planning and I stuffed 600 envelopes. One copy was sent monthly to the US Department of Justice because the paper was being published by a foreign agency. The president’s and managing director’s secretary abstained as did the Ehime Prefecture representative whose father happened to be the governor. Dressed immaculately in expensive tweeds his remit was to entertain Ehime businessmen who rarely came to town. He was wise to avoid involvement because his participation was considered an affront to the Trade Promotion Executive Director and to JETRO, which was managed by MITI.  I was to discover a few months later that Ehime was very dependent upon the national ministries for subsidies and that Governor Iga was a master at bringing in the cash. The unfortunate Managing Director, struggled to keep the peace and was caught in the middle of a very petty situation. Nonetheless, I was determined to continue contributing monthly to the paper because through this vehicle I could establish an abiding relationship with Research and Planning and dig deeper into the reasons for not only JETRO’s existence but, also, for the other ministries corporations being represented in the office.

The Kyoto officer, who was overwhelmed by his new environment, finally acquiesced to their pressure. But contributors to the paper were sparse and the president decided to arrange my transfer to the Reference Library. He persuaded the Kyoto representative, formally yet sensitively, to allow my departure by taking the two of us to dinner at a Japanese restaurant and, afterwards, to his luxurious Eastside apartment for tea. The officers’ conversation was easier because the president had graduated from Kyoto University and was raised in Shiga Prefecture, which is adjacent to Osaka Prefecture.

Although there was no allusion to my future transfer to the Reference Library, the Kyoto officer understood that he did not have a choice and that soon he would be given a new assistant. He revealed his underlying humiliation when he blurted out that I should get drunk and dance on top of the restaurant table but I had become inured to such remarks.

Crazy about Clinton: the honeymoon

Some officers seconded by the prefecture governments and by MITI’s other corporations regarded MITI as a ministry weakened during the previous decade because it no longer had an effective industrial policy. However, the December 1992 issue of Inside/Outside Japan was a tour de force with the president promoting MITI’s industrial policy by praising President Bill Clinton for his determination to fix the US economy through the restructuring of its industrial policy and for his seemingly liberal attitude towards Japan’s trade surplus with the US:

As the new administration contemplates ways of strengthening U.S. competitiveness, “industrial policy” seems to be on the lips of many policy makers. In devising and pursuing industrial policy, however, it is important to recognize that a government’s role in fostering industrial competitiveness is limited … In speaking about Japan’s industrial policy, the impression is often given that its function is to “pick the winner.” And in noting this, it is stressed that since the government can’t work better than the market, industrial policy can produce mainly errors … As has been the experience of some countries, the government arbitrarily choosing potential “winners” can lead to market distortions, as well as collusion and corruption.

No reference was made to the recent scandals of collusion between the MOC and construction companies or to some of the elements specific to Japan’s industrial policy, which, in contrast to America’s industrial policy, covered all of Japan’s industrial sectors. Japan’s industrial policy protected domestic companies from foreign competition through recession cartels, production rationalization and tax incentives to Japanese corporations who procured from domestic suppliers. The policy is implemented by administrative guidance (discussed in chapter 15) enforced through built-in control mechanisms such as amakudari and MITI’s industrial associations.

The president cleverly tried to persuade readers that MITI had a softer side, as the promoter of R&D for environmental protection and as a ministry which took only a peripheral role in guiding industry: “One vital point that tends to be missed, though, is that industrial policy is not the matter of choosing winners. Instead, it is a joint effort between government and industry to respond to it appropriately.”

He suggested that a government “may introduce tax breaks and low-interest loans for the producers of such equipment. In such government–business working schemes, competitive vitality of each industrial sector is indispensable and taken for granted. The main actor is always the industry.”

The Executive Director of Research and Planning contributed a piece to the same issue which lauded Clinton’s recognition that the US’s trade deficit with Japan was not entirely Japan’s fault nor due to Japan’s “misconduct” (i.e. protected markets and non-tariff barriers) while stressing that the US must get its act together and revive its economy.

The American researcher for Industrial Research wrote a forthright piece on the state of the Japanese economy which admitted that banks were extremely exposed to the real estate bubble and were burdened with $100 billion of non-performing loans at the end of September, a fifty percent rise from the end of March. He also confirmed that the extent of NPL was still an unknown.  Ironically, the article could have been written today:

The latest economic shock presents Japan with a task more complex than any in the past, as well as a unique opportunity…What is crucial in the process is acting quickly. At a time when the world community is expecting more leadership from Japan, quick and decisive action is likely to inspire strong confidence at home and abroad.

The president requested that I contribute a piece about MITI’s promotion of protecting the environment from global warming. I was permitted the usual 2,500 words for “Beyond the Blue Horizon” which publicized MITI’s programs to incentivize companies through tax breaks for the recycling of industrial waste:

Recycling also translates into big bucks; a mayonnaise company, for example, turns egg shells from its mayonnaise and liquid egg production into palatable cookie-calcium supplements. Under the auspices of the Ministry of Agriculture, Forestry, and Fisheries, fifteen food, cosmetics, and stock-feed producing companies are doing extensive research into the extraction and refinement of DNA, the unsaturated fatty acid found in the heads of tuna and bonito, which cannot be synthesized (don’t through away those fish heads).

The president was satisfied with the article. By mid-February I was sitting at a desk in the Reference Library and in the thick of it.