[Viewpoint] What the whales say about Japan

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[Viewpoint] What the whales say about Japan

Want to know why Japan’s earthquake recovery efforts are moving in slow motion? Ask the whales.

Tokyoites have grown accustomed to shocking news items since the earth shook and the oceans rose: the nuclear meltdown has proven far worse than the government admitted; radioactive cesium made its way into baby food; more leaks were found in the damaged Fukushima reactor; warnings by seismologists still go unheeded.

Yet the tale of the whales and the $30 million is what proved most disturbing - and shed fresh light on why Japan is either unable or unwilling to undertake the broad reforms needed to avert credit-rating downgrades and reverse deepening deflation.

Japan spent about 2.28 billion yen on whaling hunting expeditions from funds allocated for recovery from the earthquake and tsunami. It’s a drop in the proverbial bucket, given that the government plans to spend at least $300 billion rebuilding the Tohoku region. It’s a highly telling expenditure, though, with significance far beyond the price tag.

The whaling programs carried out each year flout international conventions and dent Japan’s reputation, and for very little. Demand for whale meat is negligible: The industry survives because of huge public subsidies. Japan contends that using earthquake funds to boost security for ships will help them elude activists protecting whales. A successful hunt, it’s thought, will revitalize local coastal communities.

You know what would help more? Some fresh thinking.

The devastation from March 11 required new ways of viewing and addressing Japan’s creaky economic model, aging population and waning competitiveness. It necessitated a reboot of politics, the government’s role in the economy and Japan’s change-resistant, consensus-obsessed mindset. What we’re seeing instead is an inability to adapt on a national level.

Nine months ago, the ground shifted under Japan’s feet not only literally, but figuratively. There was a fleeting glimmer of change, a hope that the disaster would end the political and economic stasis that has gripped Japan for more than two decades. Instead, tossing money at every problem without critical thought suggests that Japan is reverting to the wasteful ways that created a massive national debt and little growth to show for it.

One big question that hasn’t been tackled: Whether to bother rebuilding parts of Japan’s northeast - given that they were dying a slow, steady demographic death anyway - or relocate the communities away from the sea. Rather than grapple with it, Japan is pursuing whaling. But you have to wonder: How many young people who long ago fled to cities like Tokyo are going to rush back to their ancestral homes to become whalers?

Consider what the brain trust in Tokyo is up to. Last month, Standard & Poor’s hinted that another credit downgrade is brewing as Japan’s public debt, already the developed world’s largest, increases unchecked by distracted lawmakers. So how do they spend their time? In tit-for-tat one-upmanship.

In November, a deputy to Defense Minister Yasuo Ichikawa was fired for comparing the relocation of a U.S. airbase on the island of Okinawa to rape. Rather than move on and tend to the many dilemmas facing Japan, lawmakers spent last week crafting censure motions for the ousted official’s bosses. That’s a week that will never be used for developing strategies to address anemic growth, deflation, a shrinking workforce, Chinese competition or rebuilding needs.

Both story lines, supporting whalers and pointless political posturing, are microcosms of why Japan isn’t rising to this year’s challenges. What we have is a failure to adapt to a dynamic set of problems that threaten economic well-being.

Take Tokyo Electric Power Co. (9501), a poster child of bad management that makes the shenanigans at Olympus Corp. look harmless. Tepco’s safety failures are responsible for the radiation still leaking into the air and water 135 miles from Tokyo. Yet Tepco hasn’t been nationalized or delisted from the stock exchange. Instead of reform, there’s talk of bailouts.

Japan is a top-down society. Right now, mayors in the northeast need a figure: how much they will get to fix airports, train stations, roads, bridges, schools, hospitals, telecommunications and ports. It’s hard to hire architects, assemble construction crews and procure materials when you don’t know your budget. Tokyo, instead, is obsessed with political infighting and old remedies for very new quandaries.

Bureaucracy is running amok. There’s great confusion about who is handling what phase of reconstruction - the central government or local ones? Rural leaders fed up with all the foot-dragging are finding it’s not easy to forge ahead on their own. There are endless stories of towns that want to rebuild schools or hospitals on higher ground to avoid tsunamis only to find that regulations say they must be put up in the same place.

The upshot is that trust is breaking down on too many levels. Companies are reluctant to hire, communities are split between those who want to stay and those tempted to leave, citizens don’t buy the nuclear industry’s protestations of safety, and cynicism toward officialdom in Tokyo has rarely been higher.

It’s not a great environment for economic revival, never mind any semblance of confidence as Europe’s crisis foreshadows a global economic slowdown. That’s what happens in a country that gives higher priority to killing than to reassuring a traumatized population.

*The writer is a Bloomberg View columnist.

By William Pesek
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