Talks needed to boost Japan-U.S. alliance
Saturday marked the 50th anniversary of the automatic ratification of the revised Japan-U.S. Security Treaty--without the approval of the House of Councillors--amid demonstrators surrounding the Diet building.
There is no question that the Japan-U.S. alliance has played an important role in ensuring peace, stability and economic prosperity in Japan and the rest of Asia during the past half century.
Setting aside the way the revised treaty was approved by the Diet, the political decision of the Cabinet of then Prime Minister Nobusuke Kishi to revise the treaty and maintain the bilateral alliance was correct.
The conflicts surrounding the 1960 security treaty mirrored the Cold War between the East and West abroad and a showdown between conservatives and reformists at home. At that time, this country was completing its postwar reconstruction and entering a period of high economic growth. Public opinion was split over the revised security treaty, with memories of tragic war experiences still fresh in many people's minds.
Govt appeals to public
The government and the Liberal Democratic Party, which were promoting revision of the security treaty, appealed to the public by promising to correct inequalities of the original security treaty signed in 1951 and clarify the U.S. obligation to defend Japan. A group opposing revision, including the Japan Socialist Party, insisted the pact be abolished, saying it would make it easier for Japan to become embroiled in a war.
Lawmakers of the ruling and opposition parties, as well as the general public, spent a huge amount of political energy on the issue. After the LDP steamrolled a bill to ratify the revised security treaty through the House of Representatives on May 19-20, 1960, large-scale demonstrations against the security treaty took place.
In mid-June of the year, Michiko Kanba, a 22-year-old University of Tokyo student, was crushed to death during a clash between demonstrators and riot police, and a planned visit to Japan by then U.S. President Dwight Eisenhower was canceled. The Yomiuri Shimbun and six other Tokyo-based newspaper companies issued a joint appeal to the demonstrators that said, "Abandon violence and protect parliamentarism."
Kishi announced his resignation right after the security treaty went into effect on June 23, 1960.
The Japan-U.S. alliance, which was born after many difficulties were overcome, effectively staved off the military threat posed by the former Soviet Union during the Cold War.
In the post-Cold War period, the bilateral alliance functioned as a deterrent to new threats from regional conflicts, including that on the Korean Peninsula, weapons of mass destruction and terrorism. By redefining the Japan-U.S. Security Treaty, Japan and the United States came to regard their alliance as a kind of public asset to bolster the stability of Asia-Pacific region.
The Japanese and U.S. governments later reviewed the Guideline for Japan-U.S. Defense Cooperation, increasing the effectiveness of the bilateral alliance.
South Korea and Southeast Asian nations were now seriously concerned about the deterioration in the Japan-U.S. relationship caused by former Prime Minister Yukio Hatoyama's poor diplomacy--evidence that other Asian nations also perceive the Japan-U.S. alliance as a public asset.
Ironically, Hatoyama's words and deeds, which could have been interpreted as distancing Japan from the United States gave many people a good opportunity to reconsider the Japan-U.S. relationship. It is vital for us to think about how to deepen and develop the Japan-U.S. alliance based on history and past developments in the relationship between the two countries.
Has DPJ really taken realistic turn?
The Democratic Party of Japan, the Liberal Democratic Party and other political parties have announced their campaign pledges for the House of Councillors election scheduled for July 11.
A number of issues require deep discussion before the election--not least whether the consumption tax rate should be raised. We hope every party will discuss their policies with gusto.
The DPJ manifesto for the upper house poll has a healthier dose of realism than the pledges it made for last year's House of Representatives election.
However, doubts linger over whether the new DPJ manifesto is merely a political gesture intended to draw votes, or if it is a genuine change of direction based firmly on realistic calculations.
On restoring fiscal health, the DPJ has a goal of achieving a primary balance surplus in the budget 10 years from now. To achieve this objective, the manifesto stipulates the party will start a suprapartisan debate on drastic tax reform--including consumption tax.
Clarify tax reform picture
The LDP manifesto says the consumption tax rate should be raised to 10 percent for the time being. The main opposition party came up with this figure based on the costs needed to finance social security.
At a press conference Thursday, Prime Minister Naoto Kan said, "We'll use the 10 percent proposal contained in the LDP pledges as one reference." As long as the DPJ is calling for suprapartisan debate on tax reform, the party should clarify the whole picture of this reform and what this would entail.
In its latest manifesto, the DPJ erased the "monthly amount of 26 yen,000" for the child allowance it pledged in last year's manifesto. Instead, the 2010 manifesto says the party will provide "something additional" to the 13,000 yen currently handed out each month. The DPJ has given up trying to provide the promised amount because there is not enough money to fund it--although last year the party insisted the cash would be found.
However, the party has retained dole-out measures such as income support for farming households and a plan to abolish expressway tolls. We think the DPJ should review these measures, too.
In diplomatic and security fields, the party dropped the expression "move in the direction of reexamining" the role of U.S. military bases in Japan. On the relocation of the U.S. Marine Corps' Futenma Air Base in Okinawa Prefecture, the party vows to "do its utmost to lessen Okinawa Prefecture's burden based on the Japan-U.S. agreement."
Last year, the DPJ did not mention China's steady military expansion. This time, however, the manifesto calls for China to be more transparent in its national defense policy.
It is only natural that the ruling party has shifted its stance after taking into consideration the importance of the Japan-U.S. alliance and Japan's security environment.
Notable in the latest DPJ manifesto is the omission of a time schedule for each policy measure in each fiscal year. Last year's manifesto included such information. Similarly, the party did not provide a booklet of policy details; until last year, the party printed such a booklet to go with its pledges for each national election.
We assume the DPJ left these items out because it does not want voters to later go back and check which policies the party abandoned or revised.
In its "Index 2009," the policy booklet for last year's election, the DPJ included controversial issues including its plan to swiftly introduce local suffrage to permanent foreign residents. The booklet's absence will leave voters unsure if the DPJ still considers these issues as planks of its agenda.
The DPJ should immediately explain where it stands on these matters.
(From The Yomiuri Shimbun,June 18, 2010)
DPJ must stop 'cop-out tactics'
Public expectations that the latest Diet session would usher in an era of "new politics" following last year's change of government have faded. Instead, the session showed all too clearly the deteriorating state of politics in this country.
The ordinary Diet session ended Wednesday. Political parties have now started preparing for the House of Councillors election scheduled for July 11.
The Democratic Party of Japan recently withdrew a proposal to hold a budget committee meeting and decided against extending the Diet session. These actions can only be criticized as "cop-outs" and neglecting the party's duty.
The two-day session of interpellations by party representatives regarding new Prime Minister Naoto Kan's policy speech was too short. More intensive discussions should have been made at the budget committees of both Diet chambers.
It also remains unclear how the Kan administration differs from the previous one of Prime Minister Yukio Hatoyama, which ended up disappointing many people.
Although Kan made no secret of the fact that his selection of cabinet ministers and top DPJ leaders were intended to rid the party of the influence of former DPJ Secretary General Ichiro Ozawa, the shape and direction of his policies--a key point for the new administration--remain opaque.
How will the new administration put the fiscal house in order and reform the tax system? How will it soothe strained bilateral ties with the United States?
Don't put party 1st
In an ideal political world, the administration would face the upper house election only after clarifying--through Diet deliberations--the course for policies the Kan administration hopes to accomplish.
The DPJ avoided budget committee deliberations apparently because it felt the party would have the upper hand in the upcoming election while public approval ratings for the DPJ-led administration, which rose with the new cabinet, remain high.
These are tactics that put party interests before all else. Giving the ultimate priority to winning the election speaks volumes of the party's complete disregard for Diet affairs.
The DPJ-led coalition government did not hold a meeting of the Deliberative Council on Political Ethics, which Ozawa had indicated he would attend to clarify his involvement in a political funds scandal. The government's decision has prevented it from fulfilling its accountability.
When a scandal over questionable office expenses made by a political organization of Satoshi Arai, state minister in charge of national policy and consumer affairs, surfaced, the DPJ-led administration tried to sweep the issue under the carpet.
The DPJ must realize that its attempts to conceal swirling suspicions only amplify public distrust of politics.
Several bills the government and ruling coalition had considered important did not get passed into law during the Diet session. These bills included one on postal service reforms, measures to combat global warming and one that would establish a decision-making system at the initiative of politicians.
LDP has lost its bite
The DPJ-led administration used its superior weight of numbers to manage Diet affairs even more high-handedly than Liberal Democratic Party-led administrations did. However, it appears disarray within the government and the ruling coalition parties over key policies and the simultaneous resignations of Hatoyama and Ozawa affected the fate of these bills.
Just 54.7 percent of government-proposed bills passed the Diet during the session--a postwar low. We do not think the DPJ has fulfilled its responsibility as the party in power.
On the other hand, the LDP failed to make its presence felt as the largest opposition party. The LDP failed to put the government on the defensive and present better counterproposals. LDP President Sadakazu Tanigaki's kid-glove questions during Diet debates between the prime minister and opposition party leaders, and the party's tired old tactics of boycotting the Diet session also triggered grumbling within party ranks.
A string of new parties have appeared on the scene, such as the Sunrise Party of Japan, New Renaissance Party and the Spirit of Japan Party. Their emergence reflects discontent at the fecklessness of the two major parties--the DPJ and the LDP.
The election is just around the corner. Political parties must try to restore people's trust in politics by discussing responsible and basic policies, rather than competing with one another with claptrap election pledges.
(From The Yomiuri Shimbun, June 17, 2010)
Sumo world must sever mobster ties
Illegal gambling is rampant among sumo wrestlers. Popular sumo wrestler ozeki Kotomitsuki has admitted to the Japan Sumo Association that he gambled on professional baseball games--a criminal act. Following his admission, he will sit out the upcoming Nagoya Grand Sumo Tournament.
Sumo recently has been rocked by a string of scandals. Yokozuna Asashoryu was forced to retire earlier this year following allegations he assaulted a man outside a Tokyo club after a drinking session. The gambling blight even managed to taint an ozeki, sumo's second-highest rank. These extraordinary developments will shake the foundation of the association.
The JSA recently asked sumo wrestlers, stablemasters and other association members to voluntarily report whether they had been involved in gambling activities. Kotomitsuki and 28 others admitted they had gambled on professional baseball games. Thirty-six others confessed to betting on golf, hanafuda playing cards and mah-jongg.
The association said it would report its findings to the Metropolitan Police Department and decide what further action to take after the police have completed their investigation.
JSA let guard down
Association officials initially planned to put the scandal to bed after reprimanding those who voluntarily reported their wrongdoing. However, the association was forced to reverse the policy after the Education, Culture, Sports, Science and Technology Ministry, which oversees the association, stepped in. The ministry warned the association it would be premature to extenuate the misconduct before making a report to the police.
As such, the latest developments have exposed the association's lax way of dealing with serious matters.
Organized crime syndicates are often behind gambling on professional baseball. Money wagered by sumo wrestlers must not be allowed to end up as funds for gang activities. We think the wrestlers involved should be severely punished.
The latest scandal came to light in a report by a weekly magazine that Kotomitsuki had gambled on professional baseball and that gangsters had intimidated him into paying hush money.
Although Kotomitsuki initially denied any involvement in gambling, he finally seemed to run out of excuses because other sumo wrestlers came forward to admit their misconduct to the sumo association. Regrettably, Kotomitsuki completely lacked the good sense expected of an ozeki, a rank expected to portray sumo values.
Wealthy sumo supporters called tanimachi traditionally have provided financial assistance to wrestlers and stablemasters. Wrestlers and association members are said to sometimes come in contact with gangsters as they socialize with their tanimachi.
There have been reports that criminal organizations have been involved in sumo events, such as tournaments held in local regions.
It recently came to light that a number of gangsters had watched sumo from special ringside seats essentially set aside for the sumo association's financial supporters. A stablemaster who arranged seats for the mobsters has since had his stable disbanded by the association. The stablemaster eventually admitted he had socialized with gangsters.
This series of unseemly incidents suggest there are deep-rooted links between sumo and organized crime.
The JSA is a public-interest corporation, which receives preferential tax treatment, meaning sumo wrestlers and stablemasters belong to an organization supposed to contribute to society. In this respect, it is only natural that they immediately sever all ties with "antisocial forces."
Freeing itself from unbecoming traditions is the only way the association will be able to survive.
(From The Yomiuri Shimbun, June 16, 2010)
Hayabusa's achievements should be built on
Hayabusa, a space probe of the Japan Aerospace Exploration Agency, has finally returned to Earth. This is a great accomplishment in the history of space exploration.
Hayabusa, which means peregrine falcon, left Earth in May 2003. It landed on Itokawa, an asteroid 300 million kilometers from Earth, in November 2005 and attempted to take samples of sand and other surface materials there. The probe's entire space voyage lasted seven years, ending with its homecoming on Sunday.
Hayabusa is the first space probe to return to Earth after landing on a celestial body other than the moon.
The probe's main body burned up upon entering Earth's atmosphere, but before that it released a capsule, which landed safely in the desert in Australia, that may contain samples from Itokawa. JAXA will bring the capsule back to this country and confirm whether it contains sand or other materials from the asteroid.
Unlike sand and stones on Earth, which have become oxidized and changed over many years, geologic material on asteroids is believed to have remained as it was in the early stages of the solar system. Such material would give important clues to understanding the history of the solar system.
Unfortunately, however, it is not certain whether the probe actually was able to take samples of surface material, since Hayabusa's gathering device did not work as expected. But JAXA said that sand stirred up when the probe landed on the asteroid may have entered the capsule.
Needless to say, the return of Hayabusa itself is a miracle. The probe experienced technical and mechanical malfunctions throughout its systems as it traveled a total distance of 6 billion kilometers, 40 times the distance between the sun and Earth.
First, fuel leaked from one of Hayabusa's chemical engines after it left the asteroid to return home, which caused JAXA to lose control and later communications. Although the agency fortunately was able to restore communications and put Hayabusa back on its homeward journey in 2006, JAXA had to constantly walk a tightrope for the remainder of the probe's long space flight.
Almost all the probe's devices malfunctioned, but a new type of engine manufactured by a Japanese company did outstanding work.
Called ion engines, these new thrusters have much weaker propulsion than chemical engines, which expel jets of high-pressure gas. The power of an ion engine's thrust could only keep a 1 yen coin aloft on Earth, but it can work for long hours on far less fuel than a chemical engine needs. The ion engines were used for a total of 40,000 hours to control the probe's attitude.
This, along with the automatic control technology that made it possible for the probe to land on the asteroid, demonstrates to the world how advanced Japan's technology in space exploration is. We can expect Japanese-made ion engines to be sold to other countries for use in their space probes and satellites.
Don't block progress
However, we are concerned with the next project. Development is currently stalled on Hayabusa 2, which is intended to conduct higher-level exploration of another asteroid. Learning from the lessons of Hayabusa's development, which cost 13 billion yen, the new project's budget is set at almost the same amount.
Nonetheless, the Education, Culture, Sports, Science and Technology Ministry's budget for space exploration was cut drastically, a victim of the Democratic Party of Japan-led government's plan to make high school education free, which costs nearly 400 billion yen.
Funding this fiscal year for Hayabusa 2 was cut to just 30 million yen, compared with the 1.7 billion yen made in its budgetary request before the DPJ took office from the Liberal Democratic Party.
The government should spend money on a meaningful project, rather than on handout measures.
There could be a blank period of more than 10 years until the next space probe project, given the positional relationship between Earth and asteroids. Memories of the successful space mission could fade during this downtime.
There must be no retreat in efforts to pass important technology in space exploration to the next generation of scientists and engineers, so they can improve it further.
(From The Yomiuri Shimbun, June 15, 2010)
Small firms' 'protector' betrayed expectations
A bank trumpeted as a "protector" of small and midsize companies when it was established in 2004 has been smeared by allegations of criminal irregularities.
The Financial Services Agency recently filed a criminal complaint against Incubator Bank of Japan, which specializes in providing loans to small and midsize firms. This prompted the Metropolitan Police Department to search the bank's head office and other locations last week on suspicion the bank had sabotaged an audit by the FSA, a violation of the Banking Law.
The FSA was quite right to file a complaint. We hope the police will thoroughly investigate the alleged wrongdoing and uncover the whole truth.
Last month, the FSA ordered the bank to suspend part of its business for about four months after alleging its operations gravely violated the law. The agency followed this up with its criminal complaint last week.
The financial watchdog's additional action suggests it believes the bank's operations were so malicious that an administrative punishment alone would not suffice.
Former Bank of Japan official Takeshi Kimura and members of the Tokyo Junior Chamber International established the bank in 2004.
By setting its interest rates higher than those offered by major commercial banks and providing loans without secured collateral, the bank touted itself as a financial institution catering to startup businesses with high growth potential.
Off to a bad start
However, the bank quickly ran into trouble. A string of executives resigned one after another due to differences over management policy.
Kimura became president in 2005 and started overseeing the bank's management by himself. The bank ran a profit for three consecutive business terms starting with the year to March 2007, but fell into the red in the term ended March 2010 with a loss of more than 5 billion yen. Kimura resigned in May to take responsibility for the bank's deteriorating performance.
Question marks hung over the feasibility of the bank's business model of concentrating on loans to small and midsize firms. On top of that, the FSA investigation has revealed the bank's operations actually differed considerably from the management principles it had put forward.
For example, the bank allegedly purchased loan claims from financially strapped moneylenders while collecting commissions from them, and then asked these moneylenders to buy the loans back about a month later.
On a par with loan sharks
On the surface, this appears to be a simple transaction of loan claims. But the commission--which for all intents and purposes was interest--translated into an annual rate of 46 percent, far above the legally allowable ceiling. This would not be out of place in a loan-shark operation.
Moreover, the bank allegedly tried to dominate management of its clients by pressing them to have a majority of seats on their board of directors occupied by people the bank recommended. If the clients refused, the bank allegedly demanded increased collateral.
The bank also is suspected to have covered up other irregularities, including the deletion of e-mails detailing its business transactions from the bank's server.
Kimura was an adviser to the FSA from October 2002 to August 2003 under Heizo Takenaka during the administration of Prime Minister Junichiro Koizumi. He was deeply involved in the nation's financial administration.
Kimura has resigned from the bank's management lineup. But he bears heavy responsibility for the alleged misconduct because he was closely involved in the bank's management for years as president and chairman.
Kimura must cooperate fully with the police in their investigation. We also urge him to come clean in public by holding a press conference or using other avenues to speak about the bank scandals.
(From The Yomiuri Shimbun, June 14, 2010)
Swift, steady action key to halt foot-and-mouth
The outbreak of foot-and-mouth disease in Miyazaki Prefecture has spread further from its origin and could expand to the entire prefecture.
New infections have been confirmed in cities including Miyakonojo, which is located about 50 kilometers from the epidemic's locus in the eastern part of the prefecture.
The epidemic now has reached a crucial juncture--whether the disease will spread outside the prefecture. Prime Minister Naoto Kan visited the prefecture Saturday and pledged the government would take all possible steps to support affected livestock farmers. The central and prefectural governments must strengthen epidemic prevention measures and do all they can to contain the disease.
The central and prefectural governments have been trying to prevent further infection by slaughtering and burying cows and pigs on disease-affected livestock farms, as well as by restricting movement and transfer of the livestock in the vicinity.
At farms within a 10-kilometer radius of major outbreak locations, livestock that have not been infected with the disease are being vaccinated to prevent the virus from spreading and then culled.
However, infections have been confirmed on farms far from the locations of the disease's initial outbreak about 50 days ago. It must be asked whether there has been any lapse in preventative measures against the disease's spread since then.
Minimize infections' impact
What is now necessary is to minimize damage to areas where new infections have been detected.
The city of Ebino in the prefecture successfully contained the disease by slaughtering livestock immediately after infections were confirmed. Learning from its example, the Miyakonojo city government began culling livestock after informing the central government of certain animals' symptoms through photos, without waiting for results of genetic tests conducted by the central government. Such swift responses are necessary to deal with the disease from now on.
One of the reasons for the spread of infections seems to be the fact that the cull of cows and pigs has not been conducted smoothly because it is difficult to find people to slaughter the livestock and places to bury the animals. It is possible the virus might have spread from these livestock. Slaughter of the remaining 30,000 cows must be sped up.
A special law on foot-and-mouth disease that took effect June 4 allows the central government to slaughter healthy livestock without farmers' consent if necessary. The legislation aims to prevent new infections by creating a livestock-free "blank area" where animals are culled.
The Agriculture, Forestry and Fisheries Ministry does not plan to apply this law in areas where new infections have been confirmed. However, if infections do expand, it is inevitable that this measure would be taken.
Find out how disease spread
Also, it is an urgent task to find out why foot-and-mouth disease has spread. One theory holds that people and vehicles that visit livestock farms have slipped through designated sterilization points. Others noted the possibility soil with the virus was carried by the wind. The government should strengthen field studies by epidemic prevention experts.
Miyakonojo produces some of the best livestock in the country. Neighboring Kagoshima Prefecture is well known for its Berkshire pigs and black cattle. The spread of the disease to Kagoshima Prefecture would immensely impact the country's livestock industry as well as adversely affect people's diets.
We hope the Kan Cabinet will place top priority on tackling foot-and-mouth disease.
(From The Yomiuri Shimbun,June 13, 2010)
Interparty efforts needed for fiscal reconstruction
Prime Minister Naoto Kan can be praised for displaying a realistic, down-to-earth approach in his first policy speech to the Diet--unlike his predecessor, Yukio Hatoyama, whose words were filled with philosophical ideas that ended up going nowhere.
However, Kan's address was short on concrete policy measures, and we have to say it was not enough.
In Friday's speech, Kan said his most important duty was to overcome the setbacks Hatoyama suffered and regain the public's trust.
He listed three key items for the new Cabinet's policy agenda: "an exhaustive cleanup of the postwar government," "reviving the economy, rebuilding public finances and turning the social security system around in an integrated manner," and "a foreign and security policy grounded in a sense of responsibility."
"An exhaustive cleanup"--referring to the administrative style of the postwar era--is a slogan initially coined by Hatoyama and used by Kan to express his intention to continue with such ongoing efforts as budget screening, elimination of wasteful spending and decentralization of power to local governments.
It is not clear, however, exactly what the new administration will do to tackle these issues, or how it will do it.
Seeking a 'third way'
Kan has spoken many times recently of reconstructing the economy, public finances and social security system in an integrated manner. It hardly needs to be said that it is vital to put this nation's economy on a stable recovery track and set a course for fiscal reconstruction.
Kan said he would pursue a "third way" to do so, rather than the "first way" in which the government pours funds into public works projects or the "second way" represented by the drive for structural reforms under former Prime Minister Junichiro Koizumi.
The so-called third way aims to create new demand and employment by channeling government funds raised through tax increases to social security and other areas, thereby achieving growth.
It will never be easy, however, to realize a strong economy--one that registers nominal annual growth of more than 3 percent--just through such an approach.
Kan's policy address apparently was drawn up hastily. Nevertheless, a speech that does not establish measures to be given priority in different growth areas and map out how to reflect those measures in budgeting and policy implementation cannot be convincing.
Parties should join panel
Kan's proposal to create a suprapartisan panel to discuss how to restore the nation's fiscal health, with an eye to carrying out drastic reform of the tax system, was appropriate.
Raising the consumption tax rate is essential for this country to escape from its chronic budget deficits and secure revenue sources for social security. To tackle such important policy issues, the ruling and opposition parties should have a common understanding and build consensus. The Liberal Democratic Party and other opposition parties should not hesitate to join such an initiative.
In the foreign and security policy arena, Kan called for "pragmatism" and said the Japan-U.S. alliance was the cornerstone of this country's diplomacy. He said he plans to visit Okinawa Prefecture on June 23 and is resolved to make progress on the relocation of the U.S. Marine Corps' Futenma Air Station in the prefecture.
Kan apparently learned from his predecessor's negative example, as Hatoyama sought to put Japan-U.S. relations on "an equal footing" and triggered unnecessary friction and confusion.
But Kan failed to give details about what he would do to deepen the Japan-U.S. alliance and improve relations with China and South Korea.
A summit meeting of Group of Eight major nations is scheduled to be held later this month in Canada. The prime minister must quickly flesh out the specifics of his policy outlines.
(From The Yomiuri Shimbun, June 12, 2010)
Pay disclosure law goes too far
The rule imposed by the Financial Services Agency on corporations to reveal the salaries paid to their executives must be regarded as excessive.
In February, the FSA announced the rule requiring listed companies to disclose the names of senior officials whose annual salaries exceed 100 million yen, as well as how much they were actually paid. This rule took effect in late March.
Under the FSA rule, listed corporations must release, by the end of the month, financial statement reports that include these details, if their accounts were closed in March.
Admittedly, it is important to encourage corporations to disclose meaningful information as thoroughly as possible. However, great care must be taken to protect the confidentiality of corporate executives' private information. In fact, business circles, including the Japan Business Federation (Nippon Keidanren), have strongly objected to the new rule.
It is difficult to say that the pros and cons of the rule were fully discussed before it went into effect. We believe the FSA should reconsider the propriety of obliging corporations to disclose their executives' salaries.
Following the crowd
Before the rule came into force, companies were only required to reveal the total amounts of salaries paid to board members. The FSA has said its decision to oblige corporations to disclose each board member's salary reflects the fact that global financial crises triggered in recent years by turmoil in the United States and some European nations raised questions about the appropriateness of hefty paychecks pocketed by corporate executives in these countries. In defending the disclosure rule, the FSA said the United States and many European nations have introduced similar regulations.
The global financial crises were the end result of ill-advised decisions by executives at some U.S. and European financial institutions to carry out high-return, high-risk investment schemes, hoping to pick up large paychecks. These institutions were too extreme in paying their board members salaries in proportion to their performance. This is not the case with the large majority of Japanese corporations.
There is a marked difference in the pay levels of Japanese, U.S. and European companies. Chief executive officers at listed corporations in the United States earn an average of 3.9 million dollars annually (about 350 million yen). There are 300 U.S. companies whose CEOs are paid an average of 10 million dollars annually (900 million yen). This is in stark contrast to the state of affairs in this country. Board members of listed corporations here are paid, on average, a modest 25 million yen annually.
Shiseido Co. has voluntarily revealed the salaries paid to three board members. The major cosmetics manufacturer's president and another executive receive more than 100 million yen in annual salaries. Shiseido has reason to pay annual salaries on this scale, given its status as a large corporation.
A key sticking point in corporate disclosure is whether company shareholders have suffered losses through disproportionately high salaries paid to the firm's executives, compared with the company's size and business performance. This objective could be achieved under the old rule that only required disclosure of the total sum of salaries paid to board members.
There are concerns that including personal information, such as individual corporate officials' salaries, in financial statement reports could open the door to wrongdoing. These reports can be easily seen by anyone using the Internet. Access to this information online could encourage crimes targeting these officials.
Several years ago, the government decided not to disclose a list of the nation's highest taxpayers. This was because a stream of top taxpayers had been singled out as targets of telephone fraud and harassment. We fear the FSA's disclosure rule could spark similar abuses.
When the FSA proposed the new rule in February, it sought opinions from the public about it. As it turned out, the financial watchdog body received many objections to the rule. However, financial services minister Shizuka Kamei enforced the rule without setting a grace period. "If [a company] doesn't want its [board members'] hefty paychecks made known to the public, they could be reduced," Kamei said.
The rule has been implemented too forcibly and hastily. The disclosure requirement--apparently intended to play to the gallery by taking a swipe at large corporations--is little more than a form of populism.
(From The Yomiuri Shimbun, June 11, 2010)
Hold policy debates at budget committees
With less than a week to go before the end of the ordinary Diet session, the question on many people's lips is: Will it be extended?
The People's New Party, a junior member of the ruling coalition, is pressing the Democratic Party of Japan-led administration to extend the session so the bill on the postal services reform can be passed into law.
The opposition parties also want the government to extend the session, but for a different reason. They want the Diet budget committees to discuss such issues as political funds scandals, including one involving former DPJ Secretary General Ichiro Ozawa, and the relocation of the U.S. Marine Corps' Futenma Air Station in Okinawa Prefecture.
However, appeals for an extension of the Diet session are falling on deaf ears as far as the DPJ is concerned. The prevailing view in the party is that Prime Minister Naoto Kan should deliver his policy speech followed by interpellations on that speech by representatives of political parties, and the session should then be closed on June 16 as scheduled.
This view is based on the belief that it would be advantageous for the party to hold the House of Councillors election on July 11, by closing the Diet on schedule, while the public approval rating of the newly inaugurated Kan Cabinet remains high.
Q&A sessions needed
It is true the Diet session is nearing its end, but the nation's politics is in an abysmal state with the recent change in prime ministers.
Kan should first present the policy targets his Cabinet wants to aim for and explain what concrete actions are needed to implement them.
Also, to clarify points of contention in the upper house election, the ruling and opposition parties should debate their policies.
Interpellations on Kan's policy speech, which would be basically in the form of a "one-way" question-and-answer session, are hardly sufficient in providing a thorough understanding of the prime minister's political stance or diplomatic issues in general.
It would be much better to hold budget committee sessions so the views of both sides could be exchanged in a question-and-answer format.
A party that only considers its relative advantages in an election deprives its rivals of an opportunity to present their viewpoints.
This reminds us of political developments in the Taisho (1912-1926) and early Showa (1926-1989) eras, when major parties, including Rikken Seiyukai (the Friends of Constitutional Government Party) and Rikken Minseito (the Constitutional Democratic Party), alternately held the reins of government and dissolved the House of Representatives rather than answer questions posed by their rivals. This led the people to lose trust in party politics.
Diet debates will help voters
Like the latest development, prime ministers changed during the ordinary Diet session in 2000 with Yoshiro Mori assuming the top post. At that time, however, his policy speech and interpellations were followed by question-and-answer sessions at the budget committees of both houses of the Diet before the lower house was dissolved for a general election.
With a change in prime ministers, it is only reasonable for an administration to offer voters more information to decide, through Diet debates, how to cast their ballots. The DPJ should support the call for budget committee sessions.
The issue concerning the political funds scandals remains unanswered.
The Deliberative Council on Political Ethics at the Diet, which Ozawa had earlier showed his intention of attending to clarify the extent of the political funds scandal he is involved in, has yet to be held.
If the Diet closes without the council meeting, the Kan administration will be criticized for keeping everything in the dark.
When the DPJ was in the opposition camp, Kan tenaciously questioned the government during budget committee sessions. Kan is an experienced debater and will disgrace himself if he becomes defensive now that he is prime minister.
We hope the prime minister will go on the offensive and exchange verbal blows with representatives from the opposition parties.
(From The Yomiuri Shimbun, June 10, 2010)