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Thursday, May 25, 2006

VOWS TO KEEP PUSHING ECONOMIC REFORMS

New Keidanren chief urges Asia diplomatic thaw


Staff writer

The new chairman of the Japan Business Federation (Nippon Keidanren) has urged the government to swiftly resolve the nation's conflict with its Asian neighbors over Prime Minister Junichiro Koizumi's repeated visits to Yasukuni Shrine.

News photo
Canon Inc. President Fujio Mitarai, the new Chairman of Nippon Keidanren, speaks during a recent interview in Tokyo.

Canon Inc. Chairman Fujio Mitarai, 70, who took the helm of Japan's most powerful business lobby Wednesday, said in a recent interview that only with sound ties with China and South Korea can Japan concentrate on its most important task of creating technological and social innovations.

"It's not good to continue with this irritating situation, like having a fish bone stuck in our throat.

"It is the task of the government to thoroughly and swiftly resolve it" by heeding public opinion on such matters as how to pay respect to the war dead, he said.

Criticizing Koizumi's lack of consideration of the consequences of his Yasukuni visits, Mitarai said he would "not consider doing something like that, now or in the future" himself, because the business world must operate according to a national consensus.

But when it comes to Koizumi's successor, Mitarai said he wants to see someone who will continue Koizumi's deregulation policy, as well as his push for decentralization and greater reliance on the private sector as a provider of services.

Before assuming the business lobby's top post, Mitarai was Nippon Keidanren's vice chairman.

Mitarai's promotion has attracted interest because he is the first Keidanren chairman to come from Canon, a maker of precision equipment. Nippon Keidanren chiefs have traditionally come from industry mainstays, including chemicals, steel, heavy machinery, autos and utilities.

Some observers have expressed concern about Mitarai's lack of strong ties with politicians, as was enjoyed by his predecessor, Toyota Chairman Hiroshi Okuda. Okuda has good connections with both the ruling Liberal Democratic Party and its leader, Koizumi, with whom he had a "honeymoon," according to the media.

Under Okuda's leadership, Keidanren also started making political donations in 2004 after an 11-year hiatus in an effort to boost its clout with policymakers.

The fact that Canon's parent company is prevented by law from making political donations because overseas shareholders own more than 50 percent of its stock also raised questions about whether Mitarai's political influence will be limited.

Mitarai seems unfazed by such questions.

Although he admits he has few ties with politicians, he said such relations can also be problematic for someone in his position.

"There will be many opportunities to forge such ties and strengthen them through policy debates, and I'm looking forward to that," he said.

"But relationships (with politicians) should not be (too) cozy. It is important to maintain a certain tension and distance in order to hold heated debates."

Mitarai joined Canon's predecessor, Canon Camera Co., in 1961 after graduating from Chuo University.

After serving as president of Canon U.S.A. Inc., he took the top spot at the parent company in 1995.

With 23 years under his belt in the U.S., Mitarai has a good understanding of U.S. business and society.

Mitarai said he has deep respect for the versatility of American business and the generosity of the U.S., where, despite social disparities, there are always volunteers who help the disadvantaged.

But he said he still values traditional Japanese business practices, including the lifetime employment system that used to be a postwar norm.

"I think the current lifetime employment system matches Japan. Because unions normally (operate) within the company, labor-management relations are harmonious, and the feeling that they are in the same boat creates a strong feeling of loyalty."

Although he finds fault with seniority-based promotion, saying it hampers the vitality of an organization, he said it is "rational" for Japan to maintain its system of lifetime employment because it fits with Japanese culture and ways of thinking.

Regarding the growing economic disparity in Japanese society, Mitarai said: "A society with fair competition, where anyone has the opportunity to try as many times as he or she wishes, and with a safety net to protect the weak -- this is a prosperous society. And I want to act to promote such a direction."

He added that apart from rebuilding Japan as a technological powerhouse, reforms of the welfare system, tax, and education, as well as promoting economic partnerships and free-trade agreements with other nations, are among the priorities Nippon Keidanren will pursue under his leadership.

With respect to economic ties with Asia, he said Japan must swiftly strengthen those relations "to link Asian economic growth to Japan's growth."

Mitarai is thought to be less open to the idea of bringing large numbers of foreign workers to Japan than his predecessor.

But he said that amid Japan's aging population and declining birthrate, "it is necessary to accept the influx of foreign workers in areas where Japan falls short" and in line with economic partnership agreements Japan is pursuing.



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