My opinion this week(46):
The Kyoto Forum on global warming
The COP3 (the Third Session of the Conference of the Parties to the
UN Convention on Climate Change) started in Kyoto on December 1.This
is really a big international conference participated by total around
8,000 people representing governments of all countries and officials
of UN. Needless to say, this is one of the most important interna-
tional meeting which relate to the existence of globe and the people
who live on it in 21st century.
The purpose of the meeting is obvious. It is to set some numerical
target to cut greenhouse gas emission after 2000 for each countries
on earth so that various hazardous phenomenon resulted from warming
globe including possible hike of sea level and various other hazards
due to irregular weathers on glove. A number of such irregular weathers
have been observed in recent years due to the warm-up of the globe.
@Facing to such serious situation, all countries in the world
generally agree with the necessity of cutting out such greenhouse
gases including dioxide carbon. But there is no concrete agreement
at all on how much and by when each countries should cut specifically
CO2 gas , for example. The opinions and policies of EU, U.S. and
developing countries, etc. on this issue are all different .
Japan , the host country of this meeting, set rather low level of
cutting target like 5% and got some criticisms both from inside and
outside of the country. Also their stance to modulate two distinct
groups, i.e. EU , which request very high uniform cutting rates from
all participating countries and U.S., which assert zero target for
the time being, is not quite clear at all and seems to lack a strong
leadership to make up such big difference in opinions. Then ,there
is a criticism as to why Japan raised hand to become the chairman
country with such weak stance on this important issue.
Not only in Japan but also in any other countries, the reason to
object to high cutting target is very clear. The high cutting target
will provide a minus effect on industrial and economic activities.
Japan, which is now in serious economic recession, face the same
problem as many economists and bureaucrats had observed. 5% cut of
CO2 gas means weakening of competitive power in various industries.
That will bring higher unemployment rate which is one most serious
concerns for the economy at the moment. We can understand such worry.
However, we must make another look when we see the economy of the
country in coming years. The economic structure of Japan is now in
the turning point. Isn't it the the time when some drastic change in
the economic structure is necessary changing from mass production,
mass consumption, mass consumption of energy to less consumption of
goods, higher consumption of services and software, less consumption
of energy.
Japan as a big energy consumption country should try to construct
such energy saving economy and show the good example of lifestyle of
small energy consumption to the world. In such economy, Japanese
people should establish a new life style which fit to small energy
consumption and become pioneers of such new life style in the human
history.
Unless we Japanese could establish such new way of life, and the
change of economic structure had been fulfilled, there is no future
for us Japanese and for all people in the world.
How do we understand the meaning of such conference being held in
Kyoto while economy is in serious recession facing a number of bank-
ruptcy of financial firms? How do the country take this opportunity
hosting such international meeting under such economic conditions?
I dare say that this is a chance given by God which oblige us to
follow this right road in the years to come.
1997/12/6
Tadashi HAYASE
My Opinion this week(47):
Dispute on films
In relation to the US's appeal concerning the Japanese film market,
WTO(The World Trade Organization) has rejected the assertion of the
United States saying that Japanese film markets are unfairly protected
by several barriers set by the Japanese Government and by several
business customs in the market. The organization clearly admitted that
there is no such facts which the U.S. and Kodak Film Company insisted.
It is true that in Japan there are a number of regulations set by the
Governments that make foreign enterprises difficult to do business in
the country. There exists a number regulations for any firms to start
business which request firms to get license from the Governments,
to prepare a number documents to get such license to start business.
Such regulation provide restraints not only to foreign firms but also
to Japanese firms. This is why some deregulative actions are being
requested in all industries in order to activate various industries
and economy in general which is in serious recession today.
It is also true that in some industries such regulations become a
crucial factor for any foreign firms not to be able to enter into
Japanese market. As to the Japanese film market, however, I have
observed that the story is different. The market is relatively open for
anybody compared with any other industries.
But the U.S. Government and Kodak Company has insisted that the
reason why such strong film manufacturer like Kodak which has 70% of
market share in the United States is not in a position to increase
sales share in Japan is that there are several unfair regulation and
business practices in film retailing market in Japan. Because of
existence of such unfair practices, the chance to make free competition
is lost. That is what the U.S. side has appealed to the WTO.
Japanese government and Japanese film industries had made an
counterargument saying that there is no such unfair trade practice at
al in Japanese film retailing market and the reason why the U.S. film
manufacturers cannot increase market share is entirely due to the
lack of their marketing and business efforts. I myself have expected
that any such assertion of the United States would not be accepted by
the WTO. And I was right.
According to my opinion, in many circumstances, some American firms
in some industries are quite unreasonable in their way of thinking on
Japanese business practices. One typical example is the case of
automotive industry which has been a long dispute between automotive
industries of two countries.
The reason why American car sales have not increased so much so far
in Japanese market is obvious. They are not providing the products
which meet some basic needs and requirements of Japanese consumers.
That is true with prices, qualities and services of U.S. made cars.
We are able to point out many of such facts. Here we can point out
one most typical example of all. Any American cars which are imported
here in this country have never installed the handle on right-hand side
until quite recently. There are some today, but still a very few.
The basic principle of marketing is that products are provided in
accordance with the needs and favors of consumers in any markets.
Without following to the principle, it is absolutely wrong for them
to talk about the existence of regulations and the difference of business
customs compared with their home market.
I agree to deregulate any unreasonable business rules and irregular
customs which exist today in Japanese market. Even all domestic
mafacturers in the same industry will surely agree with this.
But I want to say definitely that any manufacturers must surely
provide the products and services which consumers want and follow
any business customs and rules in the industries. That is the only way
to succeed in the market for anybody regardless they come from that
country or from abroad. They should not forget the maxim which says
" In Rome, do as Roman do."
1997/12/13
Tadashi HAYASE
My opinion this week(48)
Introduction of public fund
Due to the collapse of such major @financial firms as @Yamaichi
Securities Company and Hokkaido Takushoku Bank, there exits today
some strong fears about financial panics in Japan and financial markets
in the world. Many financial authorities of major countries expressed
concerns about financial panics which may start worldwide triggered by
recent Japanese financial turmoil and they requested Japanese Govern-
ment to take all necessary actions to avoid such situation.
@In compliance with this situation, Japanese Government officers
including Prime Minister Ryutaro Hashimoto and Finance Minister
Michizuka expressed the possible introduction of public fund to save
this financial difficulties. Most opposition parties which are critical
about the failure of practice and financial policies of the Government
and the ruling Liberal Democratic Party, mostly seem to admit the needs
to introduce public funds to save this financial situation.
Therefore, the introduction of public fund will be decide sooner or
later regardless there exist many optional ways in itself. As to the
introduction of public funds, there are various opinions which differ
from each others presented by the Government officials financial
authorities, economic critics, etc. They are mainly divided into two
groups. The one assert that the introduction of public fund should
be limited only to save depositors. While the other maintain such funds
should even be put to save some financial institutions including banks
which are in financial difficulties. The Government and ruling Liberal
Democratic Party seem to take the latter position.
On December 15, LDP finalized its financial stabilization package,
including 10 trillion yen Government bonds for Deposit Insurance Corp.
to protect deposit and to help recapitalize troubled financial insti-
tutions. Those plans will be materialized by making necessary laws
as soon as possible. In additon, a special 2 trillion yen tax cut will
be included in this fiscal year's supplementary budget, Prime Minister
Ryutaro Hashimoto announced on December 17, signaling an abrupt about-
face in his fiscal restructuring efforts. Those two seem to be main
measures to be taken to save financial difficulties and serious
economic recession at this time.
Yes, any banks which face financial difficulties are responsible by
themselves because of the failure of their management, and lack of
management efforts by themselves. They are obliged to go bankrupt.
But, now is not the time to say so.
Even though their bankruptcy is due to their poor management, and
they are responsible for it, their bankruptcy itself may provide serious
concerns extensively in financial market and may start financial panics
worldwide. This must be stopped.
This is true under the present circumstances. But such idea was
the typical Convoy Ship system of banking world which has created
this financial turmoil today. We should not forget about that also.
Some critics who support the idea of assisting banks which face
financial difficulties with public funds say that it is not the time to
discuss who is responsible for starting a fire, while a fire is already
going on. The fire must be extinguished first before discussing who is
responsible for it.
It is very arrogant logic I may say, but we must admit the necessity
to put off the fire first. So introduction of public fund to put off a
fire may be necessary at this moment. But after the financial market
is stabilized to some extent, some stronger market principle should be
brought about which work to select good banks and and bad ones.
It is generally agreed that any deposit should be protected by
deposit insurance guarantee scheme as DIC by public funds as now
presented by the LDP, but depositors should also have stronger
intention and eyes to select good deposit banks and avoid bad ones
by themselves.
1997/12/20
Tadashi HAYASE
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