Home > News
  print button email button

Saturday, July 15, 2000

Bailout decisions case by case, says Mori's 'younger brother'

Staff writer

Although the controversial bailout plan for the Sogo Co. department store chain and its group firms was eventually scrapped when the group filed for court-mandated rehabilitation this week, Chief Cabinet Secretary Hidenao Nakagawa is not sure how the government will handle similar cases in the future.

"It is difficult to set clear-cut standards" for government decisions on whether loans to troubled companies should be forgiven," Nakagawa said in an interview. "It depends on each individual case," He did not rule out the possibility of the government deciding to bail out firms like Sogo.

Based on Sogo's original bailout plan, the Deposit Insurance Corp., a semigovernmental bank safety net, initially said it would waive 97 billion yen of the 197.6 billion yen in loans to Sogo that it had taken over from Shinsei Bank, formerly the Long-Term Credit Bank of Japan.

But facing growing criticism of the plan to use public funds to make up for the mistakes of the management of a private enterprise, the firm finally filed for court-mandated rehabilitation with the Tokyo District Court on Wednesday.

Kimitaka Kuze, chairman of the Financial Reconstruction Commission, which oversees the DIC, has said the taxpayers' burden will now be greater than it would have been under the initial debt-forgiveness scheme.

"The initial plan might have been supported if we had focused on the taxpayers' burden, but the public is focusing on each company's responsibility and worrying about collapsing morale at private firms," Nakagawa said.

"We must admit that the government should have informed the public well about (the tax burden)," he said.

Referring to low public support ratings for Prime Minister Yoshiro Mori's new Cabinet, which was launched early this month, Nakagawa said the government takes the implied criticism seriously and will strive to introduce policies that will benefit the public. The disapproval rating for Mori's Cabinet was at 62 percent, a record high for a new Cabinet, with support at 27 percent, according to a Kyodo News poll conducted the day after the Cabinet was launched on July 4.

"The government should seriously address the public's distrust of politics as well as of the current Cabinet," said the new top government spokesman, without speculating on specific reasons for the low support figures.

Full-scale economic recovery and a successful Group of Eight summit in Okinawa next week are the most pressing issues, he stressed.

In addition, the government will push for policies to create "a reborn Japan" under the leadership of the prime minister, such as setting up a special task force aimed at turning Japan into a more technologically advanced society, he said.

Nakagawa, known as an expert on information technology, was also appointed to concurrently serve as a top official in charge of IT at the Prime Minister's Official Residence.

"By showing positive results (through achieving such policies), I want to gradually change public sentiment toward the Cabinet," he said.

Nakagawa, who also serves as director general of the Okinawa Development Agency, said the government will keep bringing up in its talks with the United States the issue of a proposed 15-year time limit on the use of a new facility for the U.S. Marines to be built in Nago, Okinawa Prefecture.

While the city of Nago has accepted the plan to relocate Futenma Air Station in Ginowan on condition that the U.S. military's use of the facility be limited to 15 years, Washington firmly opposes such a time limit.

While saying the government is eager to raise the issue in talks with the U.S., Nakagawa declined comment on whether the two countries will discuss the matter in talks to be held on the sidelines of the G8 summit, which starts July 21.

Nakagawa is considered the closest aide to Mori, who reportedly calls Nakagawa his "younger brother." He is also one of the few choices that reflected Mori's own will in the new Cabinet lineup — which is a key indicator of the power balance among rival LDP factions.

We welcome your opinions. Click to send a message to the editor.

The Japan Times

Article 11 of 15 in National news

Previous Next

Back to Top

About us |  Work for us |  Contact us |  Privacy policy |  Link policy |  Registration FAQ
Advertise in japantimes.co.jp.
This site has been optimized for modern browsers. Please make sure that Javascript is enabled in your browser's preferences.
The Japan Times Ltd. All rights reserved.