There’s been more news about the Yamaha Motor flap:

Yamaha Motor Co. sold a top-of-the-line unmanned helicopter to a Chinese company that was established in 1993 by high-ranking officers of the People’s Liberation Army, sources said over the weekend.

Yamaha is also suspected of having received several tens of millions of yen in rebates from another Chinese company that bought the helicopters, said the sources close to the police investigation into the alleged illegal exports.

Investigators now expect Yamaha will face charges of violating the Foreign Exchange and Foreign Trade Control Law for the unapproved exports.

The PLA-linked company to which Yamaha sold the unmanned helicopter is Poly Technologies Inc., based in Beijing.

…

The vice chairman and president of China Poly Group is He Ping, the husband of Deng Rong, the youngest daughter of the late paramount Chinese leader Deng Xiaoping.

It’s not what you know….

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Though the new Japan Post holding company has just started operations, Nippon Express (Nittsu) is already planning its strategic response to the privatization (or “privatization”):

As a defensive move against the operations of the new Japan Post public corporation, Nippon Express will become the first private provider to deliver personal correspondence on a nationwide scale. The new service will target documents with a delivery cost of ¥1000 or higher; parcels will be picked up from the user’s address and delivered by the next day. Nationwide delivery of personal correspondence is now monopolized by the Japan Post registered mail service, but Nittsu will provide delivery at lower cost in certain regions.

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Japan is modifying its approach to angling for a permanent UN Security Council membership:

Japan’s new proposal has taken into account the United States’ position that Security Council membership should not be expanded by more than six seats, to a maximum 21 from the current 15, including the five permanent members–Britain, China, France, Russia and the United States.

The proposal calls for a country seeking permanent membership on the council to receive a seat if it can win the backing of two-thirds of the U.N. General Assembly in a vote, the officials said.

Under the plan, such permanent members, however, would not be given veto power, the ministry said.

The government is considering presenting the proposal at the United Nations this spring. Whether other countries concerned will support the plan is not known, they said.

The new draft seeks to have the present Security Council framework comprising the five permanent members and 10 nonpermanent ones increased by six to make the council a 21-member body.

According to the plan, a maximum of six countries–two each from Asia and Africa, and one each from Latin America and Europe–should be allowed to join the existing five permanent members.

Japan contributes almost a fifth of the UN’s general budget.

I fear that to some American readers, the Asahi‘s “NHK’s aim to become BBC of Japan, duck Takenaka’s control” headline will give the wrong impression. Here’s how the accompanying article starts:

Japan Broadcasting Corp. (NHK), choked by scandals, a sharp drop in viewer fees and wariness of tighter government control, has unveiled a new management plan that tears pages from the BBC’s book of operating.

The new three-year plan not only de-emphasizes NHK’s old policy of expansion, but also stresses independence and stronger corporate self-governance.

That is apparently aimed at deflecting recent government moves to wield more control over the public broadcaster.

In December last year, Heizo Takenaka, minister of internal affairs and communications, set up an advisory panel to review NHK’s operations.

Before you snigger, “More like the BBC?!” let’s remember a few things. Like the BBC, NHK began as a government entity; unlike the BBC, it’s still a government entity. [Whoops–thanks, Toby. I was sure the BBC had undergone that neither-here-nor-there semi-public-corporation thing–a la Japan Post, whose new corporation just started operations, BTW–but no.] No, it still hasn’t been privatized; instead it’s stuck in Japan’s public-corporation limbo. That means there’s been nothing over the line about the Koizumi administration’s talk of reforming it. At the same time, it’s perfectly reasonable for the board of governors to want to be able to operate as it sees fit. From the above link to the NHK’s English website (corresponding Japanese here), this is its own wishful line about the way it functions:

NHK is financed by the receiving fee paid by each household that owns a television set. This system enables the Corporation to maintain independence from any governmental and private organization, and ensures that the opinions of viewers and listeners are assigned top priority.

Everyone in Japan knows that that’s a crock. Plenty of households manage not to pay NHK fees (mostly by simply bringing a television into the house without letting NHK know, rather than in the process of righteously opposing its misconduct), its news service plays along with the chummy press club game as much as that of any other major broadcaster or publication in Japan, and viewers and listeners have been making a beeline for other broadcasters that give them what they actually want to watch and hear.

So in theory, it sounds like a great idea for NHK to undertake reform from within. Vice President Taeko Nagai, in an interview with the Asahi, “said NHK can learn a lot from the BBC, which puts priority on high-quality programs ranging from news to drama to comedy.” Fair enough. NHK’s historical dramas and documentary shows are frequently first-rate, but it certainly broadcasts plenty of junk. (Whether excising that junk would be in line with better serving consumer demand is an impolitic question that I will humbly receive the favor of not answering here.)

Additionally, the resignation of its last board president exactly a year ago, mostly over embezzlement but also over the possibility that LDP higher-ups (including current star Shinzo Abe) pressed the producer of a mock trial program about Japan’s use of comfort women during the occupation of Asia to soften its contents. To be fair, that wasn’t the first time NHK reports and “documentaries” were shown to have been cagily edited or even outright staged, and in other cases, NHK acted on its own volition.

In any case, the government views NHK as a public body with responsibility to Kasumigaseki, and NHK views itself as a government-funded semi-independent body striving toward (dare we say it?) BBC levels of objectivity and independence. Unfortunately, NHK wants to have its freedom of the press and eat citizens’ money, too:

[Nagai] also indicated NHK’s system of mandatory viewer fees should be maintained, because there are many high-quality programs that can only be provided by public broadcasters like NHK or the BBC.

Conveniently–and in this sense readers won’t be getting the wrong impression at all–the arguments that have been made about the BBC apply pretty much equally to NHK: if it plans to wow us with all that high-quality programming and is serious about serving the public’s needs, won’t it be able to survive even if it’s competing with other broadcasters? At least, wouldn’t that be the case for its news service (which is the division in most obvious danger of being corrupted by too-close ties with the government)? NHK doesn’t think so. I mean, it really doesn’t think so.

Other elements of the new plan include offering services that play to NHK’s strengths as a public broadcaster: strengthening news reports and disaster bulletins, and creating broadcasts catering to specific regions.

As for scrambling NHK programs for households that do not pay, a move recommended in some quarters, the plan insists it should be avoided.

It said steps will be taken to urge people to pay, and, as a last resort, preparations would be made to sue anyone who does not sign a contract.

I think that’s pretty much what they are, indeed, going to have to be prepared to do.

Koizumi’s three-pronged reforms (usually more literally translated “trinity reforms”) are not part of his campaign that we’d been hearing a whole lot about lately, what with the emphasis on Japan Post and the resulting landslide election victory and cabinet reshuffling. They’re back in the spotlight these last few days, though. Yesterday, the government made a few announcements:

On 8 November, the federal government gave instructions to slash ¥630 billion from the budgets of seven ministries. The purpose of the move is to effect decreases in the amount spent on subsidies, in line with the ¥600 billion worth of the tax revenues that will no longer be transferred to the federal government as a result of the national and regional three-pronged reforms. Though the goal is to speed [the implementation of the Koizumi administration’s platform through] cabinet-level leadership, Kasumigaseki has objected to what it sees as quotas. The government and the LDP have mobilized their machine to take the lead politically through, for example, the new establishment of regular talks between the vice-ministers and the party chairman.

“It is necessary for us as the cabinet to throw even more energy into coordinating [these reforms]. The relevant cabinet members, we would ask to marshall all their resources swiftly”–so said Chief Cabinet Secretary Shinzo Abe at an informal gathering after an 8 November cabinet meeting. He requested concrete proposals for fulfilling [each ministry’s quota of reductions in] allocations by 14 November.

That was one of those little articles that are easy to understand but surprisingly difficult to translate. (Or maybe the difficulties I was having in getting it into non-mangled English were a signal that I was missing something, but I don’t think so.)

Assuming the vice-ministers referred to are the administrative vice-ministers, the meetings with the LDP point person are going to be very important. When cabinet ministers appointed by the PM (and their immediate subordinates) have problems, it’s usually because they run afoul of and are outmaneuvered by those under them: the career bureaucrats, who are led by the administrative vice-ministers. These are the people who have devoted their entire post-university careers to going up the escalator in their chosen arm of the government, and they are notoriously resistant to change–especially the kind of change that involves cutting their budgets, and thus their power and influence.

To recap, the three prongs of reform are

• to slash outright federal subsidies to regional and local governments

• to overhaul the federal “revenue sharing” system, in which tax revenue comes from local taxpayers to Tokyo, is divided for redistribution in little packets after being haggled over by agencies in the federal ministries, then makes a U-ey back to local governments (or local branches of federal agencies)
• to make up for the resulting loss of federal subsidies by increasing the amount of locally collected taxes that goes straight into the coffers of regional and local governments–which is to say, to decrease the role of the federal middle man

You can imagine what the middle man thinks of all this, but self-serving complaints from Kasumigaseki are not the only ones being leveled at Koizumi’s plan. The “three-pronged reforms” have been portrayed as simply shifting much of the government debt burden from federal to regional bodies. One might note that, given the federal government’s notorious wastefulness in handling money, shifting its debt somewhere–anywhere–can hardly make things worse. There’s another problem, though, as noted, for example, in this Asahi editorial from a month or so back: decision-making power is not necessarily being decentralized along with tax collection.

With regard to the transfer of 3 trillion yen in tax revenue, some people say a figure of 2.4 trillion yen has already been agreed upon. But in reality, the Education Ministry is still against slashing 850 billion yen from compulsory education fees now paid from national coffers. The Central Council for Education, an advisory body to the education minister, took an extraordinary vote during a recent meeting. It is scheduled to issue a report shortly recommending that state funding of compulsory education be maintained at current levels.

In addition, entities like the Ministry of Health, Labor and Welfare, or the Ministry of Land, Infrastructure and Transport, have refused to cooperate with a plan submitted by the National Governors’ Association to abolish state subsidies.

Thus, the situation has not changed from last year. Koizumi is still at odds with the ministries.

Final resolution of the issue depends on the outcome of talks between the government and the ruling parties. In order to prevent having the subsidies under their control abolished altogether, the various ministries will probably offer their own versions of reducing subsidy rates, or suggest ways to switching to grants, whose purpose is not designated, and, therefore, more convenient for local governments.

But we cannot approve of switching purpose-specific subsidies to nonspecific grants. This would allow the ministries in Tokyo to retain their power of allocating money. That would be counterproductive to the decentralizing principles of reform.

It’s worth noting that while left-leaning organizations such as the Democratic Party of Japan and, uh, the Asahi editorial board are reliably against privatization, they often do support decentralization of government budgeting and allocation. Whether that testifies to their economic liberal-mindedness or to the sheer undeniable inefficiency of the bureaucracies is an open question.

It will be interesting to see what happens on and after the fourteenth.

Prime Minister Koizumi has announced the results of his cabinet reshuffling:

Prime Minister Jun’ichiro Koizumi, at the first meeting of his third cabinet of the evening of 31 October, laid out the fundamental direction [of his latest administration] in five items:

1. To persevere in [transferring power and resources] “from public to private” and “from Tokyo to local districts”
2. Economic vitality
3. Ensuring safety and security in [Japanese] life
4. Diplomacy, national security, disaster management
5. Political reform

Concerning structural reforms, he stated that “the October 2007 privatization of Japan Post will be smoothly executed” and that “the scale of government will be limited through a review of the financing of programs, general labor costs for private sector employees, and the management of government assets and bonds.”

Particular positions of interest: Shinzo Abe is the new Chief Cabinet Secretary. Taro Aso is the new Minister of Foreign Affairs. Sadakazu Tanizaki was reappointed as Minister of Finance. Each has been tipped as a possible successor for Koizumi, who has vowed to step down in 2006 and has not been grooming any obvious candidates to take over at that point.

Aso, the new Foreign Minister, was previously Minister of Internal Affairs and Communications. A few weeks ago he got in PR hot water for calling Japan a “single-race” nation. You can imagine how resident Koreans and indigenous ethnic minorities loved that. He’s had a reputation for being tart-tongued for quite a while, though, and he’s been a rising star in the LDP for some time. The last outspoken rising-star Foreign Minister under Koizumi was Makiko Tanaka, and we all know what happened to her. The post of Foreign Minister is a particularly strategic one at the moment, given Japan’s delicate relations with the PRC and the Koreas and its push to become a permanent member of the UN Security Council. Aso’s profile on his website is here. A less interesting English version is here at his old ministry.

BTW, in addition to Minister of Finance Tanigaki, banking/Japan Post reform czar Heizo Takenaka was reappointed to his posts.

Added on 2 November: Didn’t anyone catch that “Heizo Tanaka” screw up? Glad I seem to have seen it first.

Prime Minister Koizumi has announced that Heizo Takenaka, the driving force behind the banking cleanup and Japan Post privatization, will retain his position after the cabinet reshuffling at the beginning of next month. Kazuo Kitagawa, the Minister of Land, Infrastructure, and Transport, will also retain his position. (Whether that’s connected to the privatization of the Japan Highway Public Corporation and other transportation bodies is not clear from the Nikkei article.)

…

One of NHK’s social commentary shows is doing an installment on the future of Japan’s youth, featuring an array of eyecatching fringe types. Whether anything illuminating will emerge remains to be seen. Atsushi (he’s home for the weekend again) and I are a little dubious about the resolute freakshow aspect. Many of the teenagers being interviewed hang out in Shibuya, which is not exactly noted for attracting the studious rank-and-file.

Japan Post privatization was approved by the House of Councillors today:

The Japan Post privatization bills were approved and enacted by a majority, mostly from the ruling coalition, in a session of the upper house on 14 October. The final vote was 134 in favor, 100 opposed. On 1 October 2007, the Japan Post Public Corporation will be privatized and spun off into four companies: one for postal service, one for postal savings, one for postal insurance, and one for window services.

No surprise here, but the Japan Post privatization bill package has passed the House of Representatives:

On Tuesday morning, the Lower House special committee on postal privatization held deliberations on the bills presented by the government and those submitted by Minshuto (Democratic Party of Japan), the main opposition party. After receiving approval at committee level, the government-proposed bills were immediately sent to the Lower House plenary session for voting in the afternoon. Koizumi’s Liberal Democratic Party and its junior coalition partner New Komeito supported the bills. Minshuto, along with the Japanese Communist Party, the Social Democratic Party and the newly established People’s New Party and New party Nippon, opposed the bills.

Of the total of 480 lawmakers in the Lower House, 17 are former LDP lawmakers who voted against the bills in the previous Lower House plenary session in July. Some now belong to the two new parties or are independent.Of those independent lawmakers, some, including former posts minister Seiko Noda, voted for the bills.

See also this Yomiuri article on the shifting meaning of being a faction leader within the LDP. Of course, we’re still in the midst of the special Diet session, but it’s not surprising that the ripple effects from the Koizumi-led election victory in the summer are already discernible.

“Don’t make highway privatization a failure,” warns this morning’s Nikkei editorial:

The goal of the Japan Highway Public Corporation was to stop building any more pointless expressways and to decrease debt, now at about ¥40 trillion, as quickly as possible. However, there’s a slim chance that we can hope for much from the new corporation regarding those items.

The new private corporation holds no capital but will stick the nation with its debt balance. New road construction will also be ultimately decided upon by a state council. In this structure, which will be completely under state protection and governance, there will be almost no elements through which discipline will come into play in operations. Plans for the laying of 9342 kilometers [of new roadway] are for the most part complete, and there is a strong possibility that the resulting ballooning debt will be shunted off onto the next generation.

This new company, with its complete reliance on state support, has also shown its true colors to the market. Top managers have been arrested on suspicion of bid-rigging, and the books show nothing resembling a drop in losses from unprofitable roads. Even under these exigent circumstances, Japan Public Highway Corporation bonds have remained stable in value. It all makes it look unlike a corporation that’s about to be privatized.

In a risk-free world, ethical considerations go out the window. At the instruction of the Prime Minister, the Privatization Promotion Committee formed three years ago proposed “complete privatization,” by which buy-off of all assets for the privatized corporation would be accomplished in a projected ten years. But LDP Diet members and the heads of regional government bodies violently opposed the proposal, and it was defanged through the machinations of the Ministry of Land, Transport, and Infrastructure and part of the privatization committee. Perhaps because [interested parties] saw this and felt a sense of confidence in their untouchability, it was at this point that large-scale institutionalized bid-rigging really began to effloresce.

The Nikkei editors want Koizumi to use his surge in popular support to make sure the privatization of the highway corporation stands a chance of being a significant part of government finance reform. I don’t know–Japan Post (speaking of defanged proposals) and highway construction? He’d have to be a miracle worker.

This week’s column by the always-acute Anne Applebaum is even more deadly than usual:

In its scale and sheer disregard for common sense, the Louisiana proposal breaks new ground. But I don’t want to single out Louisiana: After all, the state’s representatives are acting logically, even if they aren’t spending logically. They are playing by the rules of the only system for distributing federal funds that there is, and that system allocates money not according to the dictates of logic, but to the demands of politics and patronage.

Nor does this logic apply only to obvious boondoggles such as federal transportation spending, the last $286 billion tranche of which funded Virginia horse trails, Vermont snowmobile trails, a couple of “bridges to nowhere” in rural Alaska and decorative trees for a California freeway named after Ronald Reagan (a president who once vetoed a transportation bill because it contained too much pork). On the contrary, this logic applies even to things we supposedly consider important, such as homeland security. Because neither the administration nor Congress is prepared to do an honest risk assessment, and because no one dares say that there are states at almost no risk of terrorist attack, a good chunk of homeland security funding is distributed according to formulas that give minimum amounts to every state. The inevitable result: In 2004 the residents of Wyoming received, per capita, seven times more money for first responders than the residents of New York City.

Unfortunately, I can’t identify the buddy who sent it to me–if his unanimously leftist colleagues found out he was communicating with libertarians, they might tar and feather him–but I think I can get away with quoting his parting shot: “I am so glad to live in a democracy that is free from the pork and corruption of Japan’s… (laughing so hard I am crying, or would that be vice versa?).” Uh-huh. The only reason we Americans living in Japan can get away with smirking at the degree of pork-barrel transport and construction spending here is that the federal ministries are so unbelievably profligate they make Washington look frugal by comparison.

As Applebaum says, most people don’t get too exercised over waste on infrastructure because it’s not a very sexy topic. (Prime Minister Koizumi’s push for Japan Post privatization ran into this problem, too–how many citizens want to sit around talking about the financial structure of the postal service?) There’s also the fact that things actually do get built. It’s hard to arouse voters’ ire over poor allocation and inefficient use of resources because those problems are not as easily visible as roads and bridges that don’t materialize. And even boondoggles–perhaps especially boondoggles–provide employment.

Applebaum’s suggestion is this:

But maybe at least it is time for a change of terminology. After all, taking $200 million of public money to build a bridge, name it after yourself and get reelected isn’t merely “pork.” Demanding $250 billion of public money for your hurricane-damaged state–in the hope that voters will ignore all the mistakes you made before the hurricane struck–isn’t just “waste” either. As I say, corruption comes in many forms. But whatever form it comes in, it will be easier for voters to identify if it’s called by its true name.

In an age in which there are news agencies that consider it an affront to call terrorists “terrorists,” I’m not sure the idea will catch on. It’s a good one, though.

Added at 21:24: Virginia Postrel points out that there are non-infrastructure pork provisions that would be much more useful to cut if we meant business about curbing spending. Alex Kerr made a pertinent point a few years ago–though he was speaking of Japan and in a slightly different context:

At a bank in Tokyo, you can make 10 plus 10 equal 30 if you like–but somewhere far away, at a pension fund in Osaka, for example, it may be that 10 plus 10 will now equal only 15. Or even farther away, implications of this equation may require that a stretch of seashore in Hokkaido must be cemented over.

He was speaking of the shell game Japan plays that makes it seem to defy economic laws that obtain elsewhere, but I think he also illustrated one of the reasons it’s hard to get people to think of government spending in big, big, big Jonathan Rauch terms: the different parts of the machine don’t seem to be related to each other. How agricultural subsidies could have implications for homeland security resources, say, is (understandably) not something most people give a lot of thought to. With infrastructure spending, on the other hand, there’s a direct, vivid connection to a current news story with lots of human interest angles. That doesn’t mean that people will necessarily be spurred by Hurricane Katrina to pressure their congresscritters to rein it in a bit, but that seems to be the best hope.

Koizumi has reappointed everyone from his previous cabinet for the remainder of the Diet’s special session; his predicted reshuffle will be made after the next regular session begins in November.

On the Japan Post privatization, which is the main order of business after the selection of the Prime Minister, the Mainichi has this article, which contributes little new information but has an interesting point buried in it:

The main opposition group, the Democratic Party of Japan, expects to come up with its own counterproposal. But that proposal has been delayed by the disarray in the party following a painful defeat in elections and a change in leadership.

The LDP privatization plan, larded as it is with concessions, has plenty of flaws that the DPJ could be trying to exploit. I doubt that it could somehow come up with arguments powerful enough to counter the Koizumi cabinet’s level of public support, but if it started systematically explaining the plan’s weaknesses now, it might be able to begin establishing credibility that would help it later. Unfortunately, it has bigger things to worry about, such as, you know, continuing to exist.

Something else that the government has been working on that the Japanese public, if not most international observers, has been paying attention to is the new asbestos victims’ compensation bill:

The fund will cover the medical costs of those with mesothelioma, lung cancer and other diseases caused by the inhalation of asbestos particles. It will also pay consolation money and cover funeral expenses for family members of those who have died from such diseases.

The bills stipulate that applications for the fund can come from anyone who thinks that his or her disease was caused by asbestos. Family members of workers at factories that used asbestos or those who live near those plants can also apply.

Applications will be accepted at labor standards inspection offices or public health centers, the officials said.

The story has been gaining steam since spring.

It is to be hoped that the asbestos fund won’t end up being milked by enterprising false claimants. Cf. today’s disclosure about two nuclear power corporations:

The Japan Nuclear Cycle Development Institute and the Japan Atomic Energy Research Institute were revealed on 22 September to have illegally paid over 120 million yen to employees who were not actually eligible to for benefits for those who work with radiation. There were workplaces in which such illegal disbursement was routine.

From April 2002 to May of this year, the JNC paid out 119.55 million to 604 employees; the JAERI, 9.41 million yen to 113 employees. The greatest amount to a single employee was 600,000 yen. Both organizations will require the employees involved who have not retired to return all the money.

The benefits to those who work with radiation are to be paid when the number of days [a worker] has entered into a radiation control zone exceeds a fixed monthly figure. Payments are made based on the work attendance logs employees keep, but those logs were not systematically verified through comparison with sign-in/sign-out sheets at the radiation control zones.

In this context, the motto displayed on the JNC’s website is darkly (radiantly?) comical. It must be very easy to fake 出勤簿 (shukkinbo: “work attendance log”) at large companies where payroll is handled far from workstations.