JIN-173 -- A Contrarian Economist Says Koizumi Just Doesn't Get It

J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News

Issue No. 173
Wednesday, March 20, 2002


++ Viewpoint: A Contrarian Economist Says Koizumi Just Doesn't Get It
++ Noteworthy News
- Softbank to Sell Most of Stake in Aozora Bank
- Sony Robot Puts on a Show
- J-Phone Experiments With Medical Image Transfer
++ Events

BiOS knows data centers. Why? For years our expert
IT engineers have been servicing clients in almost every
data center in Tokyo. We know them from inside and out.
That is why we have recently created our own. It is the
only 21st Century purpose-built data center in town.
http://www.advanceserv.com or phone +81-3-3499-2499.
Further info from info@AdvanceServ.com

++ VIEWPOINT: A Contrarian Economist Says Koizumi Just Doesn't Get It

For those of you cheering on Prime Minister Junichiro Koizumi in his
fight to reduce the size of government spending, Gregory Clark, the
chairman of Tama University, has a message for you: You're dead wrong.

"There are large areas in the structure of the Japanese economy which
badly do need reform," the professor says. "Unfortunately, that's not
what Koizumi and his friends are really looking at. They're more
interested in an economic policy of fiscal restraint and, until
recently at least, letting the weak go to the wolves, which in a
normal, healthy economy is quite reasonable. But when you have an
economy as weak as Japan's is at the moment, it's highly dangerous."

Clark wades through the 700 trillion yen in public sector debt and the
several trillion yen more in bad bank loans to point to what he says
is a tremendously important figure: Japan has 1,500 trillion yen in
personal financial assets. That's about $90,000 for every man, woman
and child. That is not a typo -- a nine followed by four zeros for
every person in Japan. In US dollars.

"You could have the most efficient enterprises in the world, but
without demand, you're finished. This should be obvious," Clark says.
The Japanese are happy to sock their yen away in postal savings
accounts, bank time-deposits and other low-interest vehicles like
government bonds. In other words, Japan is starved for demand.

It's not that the Japanese are cheapskates. Just ask the people at
Luis Vuitton or NTT DoCoMo. But Clark says the Japanese consumer just
doesn't want the things Westerners want. "The thing is that us
Westerners, particularly the Anglo Saxons, just want everything and we
want it now -- round-the-world trips, yachts, second houses, the
latest electronic gadgetry, second cars, third cars; you name it."

He calls excessive demand a "tremendous aphrodisiac" for an economy.
But it's rare in Japan. And while the West often chides itself for not
saving more, Clark points out that savings and economic health do not
go hand in hand. "We have this situation today where there is an
absolutely clear inverse correlation between economic health and
savings rates," Clark says. "America is at the top of the health scale
and zero savings. Australia is very close behind. Some European
economies are lower because they save 8-10 percent. And there's Japan
at the top of the savings scale, even during the bubble, and it's the
weakest economy."

Read what solutions Clark proposes for Japan's economy, why he thinks
Shizuka Kamei is the LDP's best man for getting the economy back on
track (that's also not a typo), what he thinks of Makiko Tanaka and
Muneo Suzuki and where to find land in Japan that is cheaper than
land in Australia in a freewheeling interview in the May edition of
J@pan Inc magazine.

-- Bruce Rutledge

(Long URLs may break across two lines, so copy to your browser.)

** Softbank to sell Most of Stake in Aozora Bank

Extract: Softbank's Masayoshi Son has all but pulled the plug on his
one-time dream of using Aozora Bank to fund startup companies. The
Nihon Keizai Shimbun, a leading business daily, has reported that Son
plans to sell most of his 49 percent stake in the bank to raise about
$750 million. Softbank carries a debt load of about $3.7 billion,
according to CNN.

Softbank has yet to officially announce this decision. It told Kyodo
News on Tuesday that no decision had been reached, but the move would
be in keeping with Son's latest strategy of focusing the company's
energies on the broadband Internet connection market, specifically

Other major Aozora shareholders are Tokio Marine and Orix, with about
15 percent each.

"Broadband Wars" from the December 2001 issue of J@pan Inc

From CNN

J@pan Inc magazine produces three other newsletters:

++ Wireless Watch (WW): Mondays -- A weekly digest of news and
commentary focusing on Japan's wireless industry. Stay up to date
on i-mode, 3G phones and everything else wireless with WW.

++ Gadget Watch (GW): Thursdays -- Looks at the latest gadgets
being rolled out in Japan and is the perfect newsletter for gadget
freaks. Note, however, that we're not responsible for any cases of
"Japan gadget envy" that develop -- in many cases the products you'll
read about are available only on these shores.

++ Music Media Watch (MMW): Tuesdays -- A new addition to J@pan Inc's
collection of weekly newsletters. MMW provides in-depth news and
comment on the major developments in Japan's fascinating and
fast-moving music media industry. Subscribe, unsubscribe, and find
out more at:


We don't sell our lists to spammers, so breathe easy.

** Sony Robot Puts on a Show

Extract: The latest entertainment robot from Sony, unveiled yesterday,
can sing in vibrato, do a little two-step, or a "complicated,
personalized" dance, Sony says, and can recognize images and sound.
The bipedal SDR-4X (how's that for a catchy name?) is 60 cm tall and
can "adapt its performance to its environment and situations found in
the home," according to Sony.

This new entertainment robot is chock full of sensors that control 38
joints in real time. It can control its movements based on memory,
Sony says, and it has cameras in its head to help it recognize
people. Sony has not set a date for putting the little chap on sale.

"Robots R Us" from February 2002 issue of J@pan Inc

From the International Herald Tribune

Ever wonder where cutting edge companies like LINC Media's J@pan Inc
turn for Web and IT Solutions? IBM? EDS? Think again! Try HydraNet,
the fastest growing IT Consulting Firm in Japan. HydraNet specializes
in database development with a focus on streamlining your business.
Our motto is "Twice the Speed... Half the Cost." The Content
Management System we built saves J@pan Inc magazine 40 hours a month!
What can we do for your business? Call us now at 81-3-5456-5314.
Email sales@hydranet.com or visit http://www.hydranet.com

** J-Phone Experiments With Medical Image Transfer

Extract: J-phone has developed a system to transfer medical images via
its cellphone network. By connecting a phone to medical equipment,
such as X-ray machines, CT scanners and magnetic resonance imagers
(MRIs), the technology allows the transfer of two-dimensional digital
images for remote diagnosis. In collaboration with Philips Medical
Systems and INFOCOM, the company is currently testing the reliability
of the technology. J-Phone is also planning to up the quality to deal
with three-dimensional images.

From Nikkan Kogyo Shimbun, March 19, 2002

The ULTIMATE business resource you cannot afford to miss out on.
For more information, please go to:
or contact:
fabien@japaninc.com or 03-3499-2175 ext.1709

+ No events this week
SUBSCRIBERS: 5,296 as of March 20, 2002

Written by Bruce Rutledge (bruce@japaninc.com) and Sumie Kawakami
Edited by J Mark Lytle (mark@japaninc.com)


To unsubscribe from this newsletter, click here:

To advertise in this newsletter, contact:

Subscribe at:

We welcome your viewpoint:
(NB Please do not reply to this newsletter -- it's outgoing only,
so we won't get it!)


(C) Copyright 2002 Japan Inc Communications KK. All Rights Reserved.