Worthwhile Reads for October 28, 2012

Philip Brasor is a professional writer...and it shows. He has been writing for the print edition of The Japan Times for what seems an eternity, which makes him eligible for some kind of "bravely facing adversity" award. A while back he and I both contributed essays to a book produced by the tireless Our Man from Abiko. The difference in the quality of the essays left me feeling a deep sense of shame.

Brasor and his partner Tsukuba Masako have published a cracking essay for anyone who has ever wondered, "Given the parade of turkeys the major parties foist upon the electorate, why is it that individuals possessing talent, charm and a modicum of sense fail to throw their hats in the ring? This blessed land boasts an educated and informed electorate, half of whom have no allegiance to any party. A bright and competent person, clearly able to walk and eat a rice cake at the same time, should be able to waltz in and crush the party offerings."

One answer, and it is a big one, is the kyotakukin. Brasor and Tsukuba explain it -- and pay tribute in passing to the Japan Communist Party's almost insane commitment to electoral democracy. For those in need of a comparative figure, 3 million yen is one third of the annual salary of a managerial class employee with 10 years service in a company.

Brasor and Tsukuba - "Candidate deposit requirement guarantees same faces on the ballot"

The essay is the latest post to the pair's economics blog Yen for Living, hosted on The Japan Times' website.

Brasor and Tsukuba also produce a fascinating personal blog on what would seem an unpromising subject: looking for housing in the Kanto area: Cat Foreheads & Rabbit Hutches.

In the "Could it be that simple?" department, The Diplomat published an essay a few weeks back offering possible relief for Japanese exporters exhausted by the hoops one must leap through to do business in China. According James Parker, to finance consultant and lecturer, the China-ASEAN Free Trade Area (CAFTA), which the PRK government has promoted as a way of increasing Chinese influence over the economic life of ASEAN countries mutual prosperity, opens a back door, through the law of unintended consequences, for Japanese companies to sell their wares and services in China without the hassle of being in China,. That these companies will also likely end up paying lower wages is a bonus.

Parker - "The Coming Economic Shift?"

It sounds all to good to be true -- and Parker admits, given the gap in between the logistics web and the transport infrastructure China offers and and the capacities of ASEAN countries (pax Singapore and pockets of Malaysia, Thailand and the Philippines) -- making the "ASEAN workaround" pay off will be difficult, in the short run.

However, with the government of China making only cosmetic efforts at lessening the risks and aggravations Japanese companies face in China, and with the government of Japan, probably at the initiative of pro-active bureaucrats, quietly ramping up economic diplomacy in the parts of ASEAN where the China has enjoyed undue influence for the last few decades (Link), predictions of an inevitable decline in Japan's engagement with ASEAN (Link) may turn out to have been premature.

We Will Cut Off Our Heads to Cure Our Dandruff

A bit overwrought, but this Yomiuri Shimbun article gets the point across: improving transportation links between the urban core and the rural districts will put the more isolated rural business centers at a disadvantage.

A bridge too far for Shikoku / 3 links provide more advantages to Honshu side
The Yomiuri Shimbun

The three routes linking Honshu and Shikoku across the Seto Inland Sea have had a significant impact on the tourism and distribution industries in the Kansai, Chugoku and Shikoku regions, but while Honshu has benefited, Shikoku has received the short end of the stick.

According to the Shikoku District Transport Bureau, 3.96 million people shuttled between the Shikoku and Kansai regions by bus in fiscal 2006, taking one of the three routes. The figure nearly equals the population of the Shikoku area, which stands at 4.04 million.

But despite the increased flow of people and goods, the bridges have contributed to declining sales in the Shikoku region. A Tokushima Economic Research Institute estimate shows Tokushima Prefecture lost about 23.4 billion yen in consumer spending to other prefectures in 2007.

(...)

One-third of the stores are shuttered on shopping streets in Sakaide, Kagawa Prefecture, located near the southern end of Seto Ohashi bridge.

Twenty years ago, Goro Ono, a former official of what was then the Shikoku Industry and Technology Promotion Center, warned of such dangers. The center has since been renamed the Economy, Trade and Industry Shikoku Bureau.

Attending a meeting with employees of financial institutions just before the opening of the Seto Ohashi bridge in 1988, Ono said he thought the bridge would cause the economically weaker Shikoku region to be further overwhelmed by the mainland.

To make his point, he drained an iced coffee with a straw, showed the others the glass with only the ice cubes remaining and said, "All that will be left in Shikoku will be the ice cubes."

(...)

Trucks are constantly going in and out of the Okayama Synthesis Distribution Center in the hills of suburban Okayama. The 200-hectare center, located three kilometers north of the Hayashima interchange connecting to the Sanyo Expressway, was developed by the Okayama prefectural government to take advantage of its proximity to the Seto Ohashi bridge and is now used by 113 firms, including warehouse, wholesale and transport companies.

Okayama Prefecture has the largest amount of warehouse space in the Chugoku and Shikoku regions, and the distribution center, which plays a key role in the prefecture, owes its success to the bridge.

The Hiroshima prefectural distribution center in Onomichi is located at a crossing point of the Shimanami Kaido route and the Sanyo Expressway. Most of its plots have been purchased by 36 firms. The area around the center is expected to develop along with the Onomichi Matsue route through a mountainous region in Chugoku when it opens in a few years.

Shikoku presents the other side of the coin, however. Whereas most of the Honshu plots have been purchased, a third of the plots at the Nishinagamine industrial park in Awa, Tokushima Prefecture, remain unsold.

Prefectural governments in Shikoku say the reason for the gap between Honshu and Shikoku is the high tolls on the bridges, which increase distribution costs for firms based in the Shikoku region and Awajishima island.

(...)

As each bridge opened, visitors to Shikoku's four prefectures increased. The number is currently more than 20 million per year, far greater than the number before the Seto Ohashi bridge opened.

However, the bridges have led to fewer overnight guests. In Tokushima Prefecture, only 12 percent of visitors to the prefecture stayed overnight in 2006, a record low. Only 17 percent of Kagawa Prefecture visitors stayed overnight with the number decreasing by nearly 500,000 over five years.

At Dogo spa resort in Matsuyama, 1.38 million tourists stayed overnight after the Seto Ohashi bridge opened. But in 2007, the number fell to 810,000.

Now I am not sure the bridges are to blame for the fall in overnight visitors in Tokushima and Ehime Prefectures. Likely as not, the easier transit across the Seto Inland Sea means more visitors are staying overnight in Kōchi Prefecture than before. I also sense a bit of statistical flim-flammery in the Tokushima and Kagawa figures since the "record low" percentages could be result of a huge increase of the total number of visitors, many of whom might have never visited at all had it not been possible to make the trip in a day.

Nevertheless, the "straw effect" on local business centers--where customers get sucked down the tubes--was predictable. Humans will take advantage of increased choices, if accessibility is improved.

The bridge promoters on the Shikoku side believed Japanese would never abandon their neighbors in search of better service elsewhere. Or perhaps because the construction firms got their contracts and then swung around to provide donations and votes to the politicians, the promoters just did not care about the knock-off effects of the mega-projects...

...all of which does not explain how the Yomiuri Shimbun can print both this article and editorials demanding that the Democratic Party of Japan grit its teeth, annoint itself with ashes and accept the Liberal Democratic Party leadership's capitulations to the Road Tribe.

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For ever-changing views of the Honshū-Shikoku bridges, visit the Honshu-Shikoku Bridge Expressway Company, Ltd.'s website.

Your test, should you choose to accept it

Psychology 101 - Mass delusion
(Essay question - 20 points)

With the enthusiastic support of Diet members, Shinkansen train lines are being extended to Kyūshū in an effort to improve access to economically disadvantaged areas. Income projections indicate that these lines will never earn enough to settle the loans taken out to build them. In order to pay for the rights-of-way and settle "nuisance" claims, the railway companies intend to transfer to the prefectural governments their landholdings ("Excellent economic development opportunities!") along existing JR rail lines. The prefectural governments, strapped for cash, decide to in turn transfer these landholdings to local communitie--this in lieu of transfering tax revenues. Local mayors and town councils, knowing they are given improperly assessed landholdings in lieu of the cash they need for their operating expences, refuse to accept the land. The prefectures and the railway companies sign an agreement to build the Shinkansen lines anyway. The new Shinkansen line will have no stops servicing the local communities being saddled with the twice-transferred trackside landholdings.

With the stars invisible, the late night television programs cover the last run of the overnight Blue Train service from Kyōto to Kyūshū and from Tokyo to Ōsaka. All is sepia-tinted floods of tears and plastic-wrapped bouquets. Silver-maned male commentators and their mahogany-tressed female counterparts recall how wonderful the Shōwa Era was. They wonder why the Japanese people are abandoning their cultural treasures and touchstones. Individualism and Koizumi reforms are mentioned as the likely culprits.

Discuss.