TT-535 -- Why Tokyo may lose its Olympic bid, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, September 27, 2009 Issue No. 535

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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+++ WHAT'S NEW

On October 2nd an important overseas decision will be made
that will determine the future of Tokyo as a city of
international standing. That decision will be made by the
International Olympic Committee (IOC), whose members will
convene in Copenhagen to decide which of Rio de Janeiro,
Chicago, Tokyo, or Madrid will get to host the 2016 summer
Olympic games. All the big wigs involved with trying to get
the Games for Tokyo, from Tokyo Governor Shintaro Ishihara
on down, flew out to Copenhagen on Saturday (Sep 26th) for
their date with fate.

They won't have to wait long.

Ishihara is trying his best to swing things Tokyo's way,
and reportedly has even asked newly elected PM Yukio
Hatoyama and Seattle Mariners batter Ichiro Suzuki to
attend the Copenhagen vote. However, he may have left his
final run for the finish line too late. In its report
released earlier this month (September), the IOC Evaluation
Commission had some criticisms for Tokyo after their visit
in April to examine the city's facilities and planning. They
particularly referred to a February poll that the IOC
commissioned itself and which found that Tokyoites who
"Support Strongly" the Games was just 25.2% -- a
surprisingly low number compared to any of the other three
contenders. Strong support in Madrid, for example was 57.9%.

Indeed, as a result of the poll, the IOC Evaluation
Commission specifically noted that Japan's bid had the
strong support of government but correspondingly lacked
support by the public. Put another way, we have a classic
case of those in charge of the local bid trying hard to get
Japan's "establishment" on board so as to provide sufficient
financial support, which was indeed forthcoming, but they
somehow forgot to involve the little people -- the general public.

[Continued below...]

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[...Article continues]

When the results of the February poll became public, we
don't know, but the Bid Committee finally "fixed" their PR
problem a few days ago (in September, months too late),
when a moving, talking 20-meter Gundam character robot was
parked in Odaiba to pull in a reported 400,000 people who
came to demonstrate their support for the Games bid. As a
result, the public support in Tokyo for the Games is now
supposed to be around 70%. The only trouble is that few
members of the IOC can actually read Japanese newspapers or
watch Japanese TV, and so these last-minute efforts are
unlikely to have much effect.

Indeed, this lack of reach by Japanese media to a world
audience is frequently lost on Japanese politicians and
governmental organizations, who think that because they can
view the media, everyone can. This, in our opinion, is a
good reason why Japan fails so frequently in its
international bids for just about anything. A good example
of this very domestic thinking can be found in the recent
"Yokoso Japan" (Visit Japan) campaign. As far as we
understand, almost all of the billions of yen allocated by
the government to promote tourism were spent in Japan in
the Japanese media.

It's true that domestic tourism was also part of the agenda
but foreign tourism was the main target, as proven by
setting a high target for increased foreign visitor numbers. As
it happened, luckily a short-lived economic boom in China
and Korea in 2005-2007 helped pulled in several extra million
Asian tourists, but despite some mutual back-patting this was
largely accidental, and was certainly not the result of the
almost non-existent overseas PR campaign.

Back to the local Bid Committee. In our view, not only did
they forget to get buy-in from the man-in-the-street, but
they seem have also bypassed 10% of those people who will
be paying extra taxes to pay for the extravaganza
(Minato-ku, Shibuya-ku, Chiyoda-ku, etc.). We refer, of
course, to the invisible foreign community.

Yes, there is an English-language website, which from the
dates of the photos and videos we presume was mainly put
together for the benefit of the visiting IOC evaluation
committee in April to show how cosmopolitan Tokyo is. But
frankly it's embarrassing to look at. Take the the section
that carefully provides one and one-only restaurant (well,
OK, there are two French establishments) representing 12
different national cuisines. Why couldn't they make a
proper effort to garner support of those hundreds of
English-speaking venues that will actually be called upon
to look after tens of thousands of non-Japanese speaking
guests if we actually win the games?

You can see the Olympic bid English site at
http://www.tokyo2016.or.jp/en/. You can see the IOC
Evaluation Commission's report, which includes the Tokyo
bid at: http://multimedia.olympic.org/pdf/en_report_1469.pdf

As a further comment to the Bid Committee's lack of
awareness that the Olympics might actually be an
international affair, if you go to the site's organization
chart, you will quickly notice that of the 19 officials
named on the site, not one is a non-Japanese, and of the 56
"advisors" not one is a non-Japanese either. So we can only
assume that foreigners will be asked to keep a low profile
while Japan hosts the Games... and to pay their taxes on
time.

OK, enough of the sour grapes. It's not like Tokyo has no
chance of winning, although with the Beijing Olympics only
just done here in Asia, and there never having been a Games
in South America before, the odds are apparently on Rio
taking the honors for 2016. You won't read that fact in the
Japanese press, since they're all saying Tokyo will win.

But it's not a shoe-in for Rio. In their review, the IOC
evaluation commission was concerned about the fact that
Rio's games facilities are spread out over hilly terrain,
and the city will need an overhaul of its public transport
systems to get guests around. There was also concern about
violent crime.

Chicago also has a strong chance according to observers,
but it has the problem of whether or not it can really
afford the expense of the Games, given the poor shape the
local economy. Also some of the Chicago venues are apparently
a long way out of the city and not currently well serviced
by public transport.

The other contender, Madrid, got a reasonably negative
response that they may not fully appreciate the complexity
of management required to host the Games.

Thinking positively, though, if we do win the right to host
the Games, it will give the Tokyo Metropolitan Government
a worthy project to focus on, and will cause them to
finally do something with those ugly vacant lots built
during the bubble era, that they are stuck with out at
Odaiba. The venue plan for Tokyo calls for substantial
planting of greenery in the area, as well as making the
entire athlete's village ecologically sound -- with the
latest solar, waste processing, and transport technologies
being employed to give Japan a showcase to the world.

To wrap up, we do in fact hope that by some miracle Tokyo
wins the 2016 Olympic Games. It would be a blast to be in
the middle of all the buzz that will come with such an
event. It will also significantly ramp up the world's
awareness of what a great place Tokyo is to live and visit
-- doing wonders for tourism.

But, in our heart of hearts, we fear that those handling
the city's bid may not have realized that to play a global
game, you need to have a world-class team, not just money
and government support. We're not sure that such a team
was brought to bear, and so we're betting that Rio will
probably win the hearts of IOC members -- especially since
South America is long overdue to host what should be a
global event.

**************

For over 20 years we have watched the good works of The
Japan Helpline, run by Ken Joseph. Always there 24 hours a
day, 365 days a year, they have been there for the
International Community with help ranging from emergency
assistance to help with day to day problems.

Ken regularly copies us on the many appeals they get from
foreigners all over the country, having personal crises and
begging for help. Ken selflessly responds to each person
and works through their problems -- seeing the police,
talking to immigration, landlords, and embassies, arranging
repatriation of coffins and belongings, and much more
besides.

It's a thankless task, and recently with the financial
crisis the donations to The Japan Helpline have fallen
dramatically. In times like these when things are tough, we
need The Japan Helpline even more. But they rely 100% on
private donations to keep going.

So we appeal to our readers to join us in being one of
their "One Hundred Club" members. If just 100 people sign
up to give 3,000 yen per month to Ken's team, they will be
able to cover their costs.

To donate:
https://www.lincmedia.co.jp/jhelp?lang=en
Your support keeps The Japan Helpline going.

...The information janitors/

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+++ NEWS

- Private speculators go back to FX
- DPJ takes aim at Amakudari practice
- Flower imports soar
- Suntory to buy Orangina for US$3.3bn
- Yen appreciation likely to continue

-> Private speculators go back to FX

According to the Investment Trusts Association of Japan,
the total foreign exchange (FX) denominated assets managed
by domestic funds was JPY26.93trn on August 31st, the
highest level since the Lehman Shock in September 2008.
Margin trading is also experiencing a strong rise.
Apparently much of the FX investments are going in to
resource-rich exporters such as Australia, South Africa,
and Brazil. (Source: TT commentary from nikkei.co.jp, Sep
22, 2009)

http://www.nni.nikkei.co.jp/e/ac/tnks/Nni20090921D21JFA01.htm

-> DPJ takes aim at Amakudari

The practice of "amakudari," the appointment of government
officials to head private and semi-public organizations
after their retirement from a governing ministry (clearly a
conflict of interest), will be subject to greater scrutiny
according to the new DPJ government. All ministries and
agencies will be required to disclose and report internal
correspondence concerning any appointments which appear to
involve amakudari. ***Ed: Tackling the bureaucrats
successfully is going to be extremely time-consuming for
the DPJ. It's heartening to see that they have already set
aside at least 40 people to start the job.** (Source: TT
commentary from japantimes.co.jp, Sep 26, 2009)

http://search.japantimes.co.jp/mail/nn20090926a4.html

-> Flower imports soar

In these hard financial times, you'd think that flowers
imports would drop, but a report from the nikkei says that
because imported flowers are significantly cheaper than
locally-grown plants, bargain seekers are switching to the
imported varieties. According to the Ministry of Finance,
in the first half of 2009, Japan imported 19,300 tons of
flowers, 6% up on last year. Imported roses were in
particular demand, jumping 34% over last year. The strong
yen seems likely to ensure that local production will drop
further. Imports now account for 18% of all flowers sold in
Japan. (Source: TT commentary from nikkei.co.jp, Sep 25,
2009)

http://www.nni.nikkei.co.jp/e/ac/tnks/Nni20090925DA5J9252.htm

-> Suntory to buy Orangina for US$3.3bn

Suntory has announced that it will buy European drinks
company Orangina Schweppes for a mere US$3.3bn... Gulp.
That's a lot of cash in a down-economy. The purchase gives
sellers Blackstone and Lion Capital a gain of about
US$700m on their US$2.6bn purchase made back in 2006 -- a
respectable return and certainly a handy one when cash is
getting harder to come by. ***Ed: The rationale from
Suntory for its purchase was that sales are slowing in an
aging and recession-bound Japan and to get more growth the
company has to go international. Funny thing is that this is the
exact same rationale given by several pharma and other food
companies for their international M&A moves over the last
few months. Maybe they're all using the same PR company?
;-)*** (Source: TT commentary from wsj.com, Sep 24, 2009)

http://online.wsj.com/article/BT-CO-20090924-702282.html

-> Yen appreciation likely to continue

As an old friend used to tell us, Japan historically has
had two Foreign Exchange "seasons": the pre-tax period
when the yen rose due to repatriation of profits around
February/March, and a second period several months later
when the yen fell due to importers buying U.S. dollars to
buy raw materials. However, as Reuters observes, that old
saw may have fallen by the wayside as the overall weakening
of the U.S. dollar has caused importers to start buying raw
materials in yen, not dollars, thus causing the yen to
strengthen. According to Reuters, it is therefore likely
that so long as Japan experiences a manufacturing recovery
and is buying in more raw materials, foreign exchange
intervention by the government is unlikely to occur. ***Ed:
So maybe we'll see JPY85 to the U.S. dollar in the next week
or so?** (Source: TT commentary from reuters.com, Sep 18,
2009)

Note: For a more professional FX analysis of the JPY-USD
currency pair, take a look at Ian Copsey's excellent
column at
http://www.japaninc.com/dollar_strength_should_return.

http://www.reuters.com/article/newsMaps/idUSTRE58H1CB20090918?sp=true

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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+++ CANDIDATE ROUND UP/VACANCIES

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+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------- ACCJ Event - Green Marketplace --------------

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- Mayor Hiroshi Nakada of Yokohama
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- Paul Sands, General Manager of Virgin Airlines
- Kiyotaka Fujii, President of Better Place Japan
- U.S. Govt. expert on emerging GOJ policy around carbon
reduction targets

DATE: Wednesday, September 30, 9:00 - 18:30
VENUE: Four Seasons at Chinzan-so in Tokyo
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Morning Session: Members: 7,000 yen; Guests: 8,000 yen
Afternoon Session: Members: 7,000 yen; Guests: 8,000 yen
Full Day: Members: 10,000 yen; Guests: 11,000 yen

Contact Misaki Kondo: (mkondo@accj.or.jp)

REGISTRATION AND CANCELLATION DEADLINE:
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The deadline to apply for the program is October 23, 2009.
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- Thursday, September 17th, 7:30-9:00pm,
American Chamber of Commerce in Japan

- Tuesday, September 29th, 7:30pm-9:00pm,
Temple University Japan Campus, Azabu Hall, room 212

- Wednesday, October 7th, 7:30pm-9:00pm,
American Chamber of Commerce in Japan

- Thursday, October 15th, 7:30-9:00pm,
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- Tuesday, October 20th, 8:15-9:15am*,
Temple University Japan Campus, Azabu Hall, room 212
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Entrepreneur's Handbook Seminar 17th of Oct, 2009

The next in our highly popular business start-up seminars
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----------- Entrepreneur Association of Tokyo -------------

Seminar - Tuesday, October 6th
Speaker: Caroline Pover,
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Seminar Title: 'Overcoming Adversity to Survive and Prosper'

While teaching by day, Caroline launched her own magazine
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Establishing Alexandra Press under which to self-publish
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issues per month and revamping the business until she sold
it in 2008.

Caroline Pover will speak on the scaling up and down of her
business activities and how to handle a business when the
unexpected occurs based on her personal experience in
overcoming health issues to write the Guide to
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Please sign up early while seats are available.

Date/Time: Tuesday, October 6th - Doors open at 6:30,
Seminar starts at 7:00
Location: The Foreign Correspondents' Club of Japan
Language: English
Website: http://www.ea-tokyo.com
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** In TT532, we covered the likely swift changes to take
place in the Japanese auto industry as companies that
supply the Internal Combustion Engine (ICE) industry
struggle with the changeover to electrics. We used
Tsubakimoto Chain as an example, and got the following
response:

=> "It is interesting that you chose to run comments by
someone who amplifies your points rather than the
comments from the Tsubakimoto Chain Co. that point out
your potential misunderstandings about the company. In all
fairness, you portrayed the Tsubakimoto Chain Co. as
somewhat clueless about the coming of EV motors in TT-532.
That simply isn't the case.

Tsubakimoto works directly with the motor development teams
of the manufacturers years in advance of new engine models.
We have a very good idea of what's in the pipeline for the
coming years. Hybrid cars still use timing chains and
that's where you're going to be seeing major growth, not
pure EV models. Your predictions about the auto industry's
move to EV are arguably many years premature.

The Tsubakimoto Chain Co. also isn't just an automotive
timing chain company. Our 90+ year history is in industrial
chain, and we also have many other power transmission
products, and work in materials handling systems.
http://tsubakimoto.com

*** We respond: OK, Tsubakimoto may well be positioned to
handle the change to hybrids, but if Nissan is more right
about the future than Toyota about the popularity of EVs
versus hybrids, then your company could be headed for
trouble unless they have an auto electric motor
manufacturing division. Do they?

Further, if you're working on the EV/Hybrid transition,
then why not tell your investors about it? The issue of
EVs is not addressed even once by your Chairman
Fukunaga in the 2008 Annual Report. And yet the change is
clearly great enough that every Japanese auto company,
including anti-EV makers like Honda, have announced EVs
as part of their product line-up. So clearly Tsubakimoto's
major customers are gearing up for a possible rapid
transition.

We respectfully suggest that Tsubakimoto's PR department
realize that while the company is the world leader in drive
chains today, if the market for ICE autos disappears in the
next five years then your firm's relationships with the auto
majors will be quickly replaced by an electric components
firm... This would definitely be of concern to your investors.

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***********************************************************
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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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Newsletter:

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With the eyes of the world about to be focused on Copenhagen for next weeks IOC announcement of the winner of the 2016 Olympic Games, Japan's new Prime Minister Yukio Hatoyama, is set to step into a political minefield. Hatoyama today announced his decision to go to Copenhagen to help Tokyo, one of the four cities contending the bid, in a move that many see as show of support for Tokyo's Governor, Shintaro Ishihara, an avowed and unapologetic extremist who also happens to be the Chairman of the cities bid for the games.

After years of being in the shadows of the LDP, the ruling party for most of Japan's democratic life, the Prime Minister, a member of the NDP, has now been pressured by the very conservatives he sought so hard to replace, into standing behind arguably the most radical and offensive LDP Politician of recent years. A Google search with keywords, Tokyo Governor Ishihara Racist recently revealed articles from around the globe detailing his outrageous statements that have commonly been seen as racist, sexist, xenophobic and potentially destabilizing to a region still at odds with it's past. Certainly the Governor is no friend to the Chinese, having infamously denied the Nanjing Massacre, where hundreds of thousands of Chinese citizens were massacred by the Japanese Military, “They say we made a holocaust there, but that is not true. It is a lie made up by the Chinese."

Now, if this was the only such attack on the sensibilities the Governor may be excused, for being uninformed, however his hostile attacks on everything from foreigners to Olympic Committee Members have been well recorded and he show no signs of stopping. At a recent IOC briefing press conference held in Tokyo, Ishihara dismissed the concerns of foreigner (myself) 'Doesn't matter, just a foreigner' who had written to him regarding the contradictions of Tokyo's 2016 Olympic Bid, which the Governor claims will be 'The Greenest Ever'. The Japanese journalist who raised the issue was also attacked 'What nationality are you anyway?' Shouted the visibly irate Governor, before moving onto less sensitive issues. But it seems foreigners do matter and as the winds shift against the Tokyo bid, the Governor may well live to regret his words.

The contradiction noted by the journalist has turned into a major issue that not only threatens to derail the Tokyo bid, but also puts the governor's job in jeopardy. Recognizing the growing trend for nations to host a 'Green Olympics' he has loudly proclaimed that Tokyo will host 'The Greenest Olympics Ever'. Not so, claim leading Japanese and International environmentalists, who point out that the jewel of the 2016 Games, a Sea Forest being planted on an an 88 hectare island of garbage that's been dumped into the Tokyo Bay, is actually a cover up for the destruction of the much loved and well forested 87 hectare Minamiyama Mountain that sits on the other side of town. During the press conference the journalist, Hajime Yakota, a leading investigative journalist covering the story for several national magazines, raised the contradiction of promoting a Green Games while destroying the forests of Minamiyama, to which the Governor bizarrely claimed that it was necessary to destroy the forests because Minamiyama “Is a Devil's Mountain that eats children.' To support this statement Ishihara referred to the death of two children who died in a landslide.

Mr. Yakota investigated statement for truth and discovered that the children had drowned in a pond over twenty years ago. As a response to the Governor's Press conference a video was made and distributed to leading organizations and media around the planet and overwhelmingly the response was shock (from the global community who found the governor to be racist) and embarrassment and offense from Japanese citizens who were dismayed that the Governor could so casually use the death of two children in his argument to shore up Tokyo's bid for the games. Distribution of this video has led to a very solid movement to preserve Minamiyama and a consensus that the best way to do that is to take away the political support of the Governor who is pumping 4.7 Billion Yen of the cities tax money into the development of the mountain, which is in Inagi City, a part of the Governor's domain, by stopping the 2016 Olympics coming to Tokyo.

Once this plan was decided my wife and I were invited to deliver messages from the Save Minamiyama Movement and a copy of the Governors' Press Conference to the next IOC meeting at the IOC Head Quarters in Lausanne Switzerland in June of this year. While the Governor and the Tokyo Bid committee were making their presentations to host the 'Greenest Games Ever' the package was delivered and an avenue of communication was established with the IOC.

For the Governor the heat is again on, with articles gathered from around the globe, being sent to the delegates of the IOC that tell the story of a man who many see as having two very different faces.

A brief search of the internet reveals just how powerful these articles may be in swaying the opinions of those making the choosing in Copenhagen just who will win the 2016 Olympic Games. A brief look and it's easy to see that Governor Ishihara has ruffled many feathers; including those of a number of leading Canadians, among them professors at prestigious McGill University, who published an open appeal to Canada's delegates not to support Tokyo's bid, quoting some of the Governor's less than politically correct comments... a few of which can be seen below.
On the French Language: “French is a language that doesn't allow for basic counting and arithmetic, so doesn't that disqualify it from being an international language?"
On the Chinese: "There's some savage and criminal DNA dating from way back in Chinese people's blood," and although a quick look at the statistics reveals the following is nonsensical, he said, "Illegal immigrants and Third Nation people [a derogatory term for Koreans and Chinese] keep on committing serious crimes."
On the disabled, which seriously questions the sincerity of his appeal to the Para Olympians: "Do those people have personalities? From what I can see, people like that are discarded in Western societies. I get the sense this problem leads to euthanasia."

Into the middle of all this comes Prime Minister Hatoyama, who promises to do away with the age old conservative ways of the LDP, the Governor's political party, yet who now seems destined, win or loose to be dragged into the mire of an Olympic Bid surrounded in controversy. If Tokyo looses the Governor will surely put the blame squarely on the man he invited, possibly denying those who want Ishihara removed from office for his dangerous, inflamatory views, a golden opportunity to set things right.

On the other hand, if Tokyo wins, the Governor and his extreme nationalist supporters will be empowered and this cannot lead to anything but a troubled path for the Prime Minister and the party who have only just been elected to office. A positive result for Tokyo could also lead to nationalists ultimately gaining control of the nation, a possibility that alarms many people.
Stuck between a rock and hard place the Prime Minister should do the honourable thing and leave the Governor to face the music by himself. For if he doesn't, a lot of people, especially those wanting to save Minamiyama, will feel let down by the man and the party they so recently chose to change Japan. With every tree that falls on the slopes of Minamiyama another nail may well be set into the coffin of the new government and it's leader.
By Paul Coleman - September 29th 2009.
for much more information on this issue visit:
http://minamiyama.ning.com/

Paul:

This is a great post. Many thanks for such excellent insight. I'd heard that the IOC had received private submissions contradicting some of the JOC's claims, and it's interesting to see that your's may have been one or these.

I wrote in my previous Terrie's Take that the IOC itself stated that while the Tokyo 2016 bid had the obvious and full support of government, the organizers had managed to forget about the public. Entitlement and privilege are terms that quickly come to mind about this bid, and I hope it will be remembered if Tokyo makes another bid for the 2020 games.

Foreigners matter to Japan now more than ever and our Tokyo governor is indeed an embarrassment to those of us that like living and working in Tokyo. It's a great city but it deserves a younger and more sensitive person to run it.

Best regards,

Terrie Lloyd

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