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Tuesday, July 24, 2012
WORDS TO LIVE BY
Noriko Hama, Japanese economist and Dean of Doshisha Business School
Noriko Hama, is a Japanese economist, the Dean of Doshisha Business School in Kyoto and a contributor to The Japan Times. Well known for her candid television commentaries, popular columns, she is completely absorbed in the world of economics, and utterly unfazed by its ups and downs. Hama has never been interested in making money, however, only thinking about it — a lot. And talking about it, eloquently and often.
Japan needs to be saved from our politicians. Japanese people experience fear, uncertainty and loss of confidence as deflation continues. Prices don't go up as they should. All in all, Japan has an economy that is not functioning and it needs saving, both with policy and politics — neither of which currently work in Japan.
Growth is for the young. Both the Japanese political establishment and business people make the mistake of assuming that growth is what we need to save Japan. This preoccupation with growth is our biggest problem as it leads to economic deadlock. Growth is for young countries. We're a refined economy and past the growing stage — except spiritually.
What we need is a new story and that must be about sharing. One way to do this is for the Japanese elderly to share their riches with the community. The enormous wealth accumulated by them could be used while they are alive; they could feel happy about contributing instead of just being users of the system. They should donate to local communities, neighborhood hospitals and nursing homes. It's excellent that the Japanese government is often the largest donor to many international aid groups and that our citizens donate often and a lot, although quietly, to charities abroad — but circulating more money domestically is also necessary.
Investing is only for those who can afford to lose it all. The key to investing is not to try to make a profit but to avoid losses. So unless you know how to hedge your bets wisely — so that even if you lose all your money in one area, you can still cover your losses in another — then investing is not for you. I think trying to make money on money is not a good idea. Investing in one's life and enjoying life, however, is. So have fun and enjoy what you have, instead of wishing for more.
Economists should be independent, like voices in the wilderness. They lose their edge if they are too connected. That's why I am not on the boards of companies and I don't invest.
Japanese universities are lacking when compared on a global stage. One way to look at that would be to say, "We don't care," and ignore international rankings. Or we could say we do care — and then we must raise our standards.
If you're dragged away by dreams, your mentality will change and you'll soon find yourself in a nightmare. That's what the hope of making a fortune on an investment can turn into.
Being too Tokyo-centric is bad for Japan. I had lived in London and Tokyo all my life, but I felt that I needed to live in a different type of city, so I took a job in Kyoto. Now I travel around the country more and see firsthand the difficulties of rural Japan: lack of jobs, fewer young people, factories closing down and elderly with nobody to care for them.
I enjoy not being listened to — that's a sure sign that I'm saying something different. The establishment is slowly beginning to share my views, though. For example, since 1995 I have been certain that $1 would eventually reach a value of ¥50. In 1995, that was considered a joke and an extremely frightening prediction. But it needs to happen because if we do get to that point, the U.S. dollar will find itself at a suitable level and position in the world. That would balance the world economy. People could live within their means and not survive on borrowed money. For Japan, if $1 becomes worth ¥50, it is good news. People wouldn't use the dollar as much, so we'd be free of anxieties caused by current price fluctuations. Though Japanese factories abroad would not be affected by this, the dollar's fall would mean they wouldn't need to be located abroad to avoid exchange rate risks. Maybe some would even bring their plants back to Japan.
We must rethink what cities and the countryside are all about. Outdated policies that helped rebuild Japan still govern it. According to these standardized rules, every prefecture and every town had to be equally developed, and they had to have the same kind of success as each other. Equality in success, however, means failure might be equal, too. Now the Japanese countryside is very rich: People there have bigger and better houses, more cars and more resources than city people. Yet many farmers don't farm any more, so we also have wastelands and an inefficient use of resources.
One can never be rich enough not to worry about money. Japan is the richest nation in the world but government bankruptcy is still possible. By GDP, we are ranked third after the United States and China, but the level of our net savings is largest in the world: ¥1,700 trillion. As for debt, 95 percent of Japanese outstanding debt is owed to national entities, not to private individuals. This is dangerous, especially since Japanese banks own as much in government bonds as their net worth in equity. Japanese government bonds are unsafe and we should be aware of the serious danger.
An aging society is wiser. It is full of people with greater experience and knowledge of life. That is Japan now: We don't have a hungry spirit because we are full — we are rich, grown-up and satisfied.
If you want a change, go into politics. Policy in Japan has been lazy because companies offered good wages and lifetime employment. That safety net, however, is damaged and companies must lay off more people — so now we need policy that provides security.
Judit Kawaguchi loves to listen. She is a volunteer counselor and a TV reporter on NHK's "journeys in japan" Learn more at juditfan.blog58.fc2.com. Twitter: @judittokyo.