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Monday, Oct. 31, 2005

JAPANESE PERSPECTIVES

Why should Japan's Pharaohs fear the locusts of change?


"God said to Moses, 'Extend your hand over Egypt to bring the locusts, and they will emerge on Egypt. They will eat all the foliage in the land . . . " (Exodus 10:12)

This was what Franz Munterfering, chairman of the German SPD party, was afraid of when he made his scathing remarks about the coming of the locusts to Germany back in April.

The specific species of predatory insects to which he was referring go under the modern-day names of hedge funds, investment funds and private equity firms.

Munterfering's concern was that the descent of these creatures upon German companies would destroy all the harmonious business practices that German society holds dear, that the creatures would in fact gobble up "all the plants on the ground and all the fruits of the trees . . ." (Exodus 10.15).

Six months later, Munterfering's predicament has landed upon the heads of some of the most prominent pharaohs of Japanese industry.

In the immediate firing line is Hiroshi Inoue, president of Tokyo Broadcasting Systems Inc., the TV broadcaster. He is confronted with what could end up being a radically hostile takeover move by Rakuten, the Internet shopping mall operator. Rakuten President Hiroshi Mikitani has declared himself ready to "become penniless" in order to have his way with TBS.

Inoue, who possibly may not be as avid a reader of the Old Testament as Munterfering, has responded to Mikitani's aggressive overtures by saying that he wondered whether Mikitani had ever read Aesop's tale of "The Wind and the Sun."

Sunshine policy is something that appeals very much to the Japanese business psyche. Lulling each other into a mutually comfortable sense of security is how things were done here. Each company had its particular place in the sun, and no jarring northerly winds were allowed to disturb the tranquility.

Upon this idyllic scene came the locusts, not quite in the droves that descended on ancient Egypt, but enough to shock the sleepy Japanese pharaohs.

Indeed it does not take all that many intruders to cause turmoil in the Japanese business community, so highly well protected as it has been from alien presences and hostile invasions.

Indeed, for the moment, there are only three such invaders who are sending established Japanese business leaders scuttling for cover. They are: Takafumi Horie aka "Horiemon," president of the Internet portal site operator Livedoor; Yoshiaki Murakami, the erstwhile very shadowy but more recently extremely high profile investment fund leader, and Mikitani.

Softbank President Masayoshi Son, who was very much a forerunner in the flight of the locusts, seems to be taking a breather for the moment.

It has to be said that none of the young locusts currently in action look particularly convincing as the new leaders of Japan Inc.

They are by and large a bratty looking lot. It is actually quite easy to sympathize with the pharaohs, who are so inclined to turn up their noses at what they see as corporate raiders who have no regard for the codes of political correctness followed by upright Japanese businesses.

Yet however unpleasant they may be, or indeed the more unpleasant they seemingly are, the locusts do bring winds of change into the Japanese economy.

Those winds may feel quite chilly to those so accustomed to sitting in the sun, but rather than wrapping one's cloak ever more tightly around oneself in self-defense, one may do more good by braving their full force fearlessly.

After all, we do eat locusts in some parts of Japan -- as delicacies cooked in soy sauce.

There is really little to fear from what you can eat. Food for thought.

Noriko Hama is an economist and a professor at Doshisha University School of Management.


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