In the second part of his report on Japan, African Business editor Anver Versi reflects on Japan’s new attitude to Africa and also describes episodes that gave him glimpses into the character of the Japanese.
September was a bitter-sweet month for the Japanese. It began in the most worrying way possible when it was discovered that the Fukushima nuclear plant, badly damaged by the great earthquake and tsunami of 2011, was showing higher levels of radiation leakage. Nuclear radiation has a particular horror for the Japanese as they are the only people on earth to have felt the full impact of a nuclear blast when the US bombed Hiroshima and Nagasaki during World War II.
When I visited Japan in June to cover the TICAD V Africa-Japan conference (which I described in the July 2013 issue), I was not taken to the site of the Fukushima reactor (it was considered too dangerous) but I saw the scale of damage that the tsunami had caused and the gigantic efforts the country is making to combat similar natural disasters.
But back in September, after the gloom of the nuclear leakage, came the announcement that Tokyo has won the bid to host the 2020 Olympic Games and the mood turned to one of euphoria. This will be the second time that Tokyo will host the games, having first done so in 1964.
Japan’s premier, Shinzo Abe, could not hide his delight. Grinning broadly, he said the games would not only revitalise the economy but “will lift our spirits”.
Japanese spirits need lifting. Over the last few years, they seem to have upset a powerful god or two. The economy stagnated and then went into deflation, wiping off billions of yen worth of government revenue year by year. Exports declined and the Japanese seemed to draw in on themselves. They seemed to have lost confidence in themselves, in the future and in their leadership.
Then came the biggest earthquake in their recorded history and in its wake, the terrifying tsunami. We visited sites where the tsunami had wreaked havoc and we were able to imagine the awesome power of enraged nature. If the earthquake and tsunami were not bad enough, it soon became clear that the nuclear power stations on which Japan depends for much of its energy had buckled under the force and that the Fukushima plant was spewing deadly radiation.
All but two of the country’s nuclear plants were shut down and large slices of emergency budgetary allocations went to buy more natural gas from around the world to make up for the shortfall.
During TICAD, the only bilateral agreement that was signed was with Mozambique, which has vast reserves of natural gas.
After a lacklustre first stint as premier, Abe was re-elected on his pledge to revitalise the economy. This time he abandoned his former ultra-conservative, safety-first approach and launched his ‘three arrows’ – a bold, if risky, strategy to curb deflation, kick-start growth and attempt to regain Japan’s former position as the world’s second-largest economy. This became the famous ‘Abenomics’ that promised to not only rejuvenate the Japanese economy but also inject optimism into the sluggish global growth.
In an interview with Global: the international briefing magazine, he explained what this entailed. “The most pressing task for me has been to blow away in a single great breath the pessimism associated with the Japanese economy. The narrative was always like this: Japan is unable to change, deflation is firmly entrenched, and our ‘revolving door’ politics are only exacerbating our economic sluggishness,” he said.
To justify his departure from previous policies, he says: “Incremental piecemeal, muddling-through sorts of remedial measures no longer amount to anything meaningful. Decisive policies in a different dimension than what has come before were needed to drastically alter the narrative and the economic landscape. At the end of the day, what matters to the financial markets is perception as much as reality. But you need to have a sizeable amount of political capital to precipitate major moves in the market.”
His ‘first arrow’ was a daring monetary policy that sent shivers down the spines of many in the financial markets. He twisted the arm of the Bank of Japan to commit to a price-stablisation target of 2%. “It worked,” he says. “If you think about it, which is better for global prosperity, a Japan mired in deflation moving in reverse, or a Japan that stimulates demand? The answer is self-evidently the latter.” To put this in context he says: “Japan growing at an annual rate of 4.1% for a year would be equivalent to an economy the size of Israel emerging”.
His second arrow was to push parliament into enacting a supplementary budget which would be one of the largest emergency budgets ever in its history; and his third arrow was a growth strategy that would harness private investment to sustain the growth.
TICAD took place while he was in the midst of firing his arrows. Despite the tremendous pressure he was under domestically, Abe attended all sessions of the conference and made it a point to meet all the African delegations. He also announced a massive $32bn five-year package for Africa. Part of this is ODA but a substantial part is aimed at improving African technical capacity through training and technology transfer. The aim is to pave the way for more Japanese companies to set up store in Africa and become far more engaged in the continent than hitherto. (For details, see ‘This time Japan Means Business’ in the July 2013 issue.)
Abe repeated the importance of Africa to Japan’s own growth strategy in his Global magazine interview: “In Africa in recent years, the market has been growing rapidly against a backdrop of high economic growth, and Japanese companies have been paying close attention to opportunities in Africa. For Japan, Africa is our business partner with whom we can now grow together and also foster world growth together,” he says.
“At the TICAD V conference, held in June,” he goes on to elaborate, “we reached the conclusion that, in order to enhance the quality of Africa’s growth, the private sector should serve as a driving force for growth. We also agreed that it will be essential for us to improve infrastructure and foster human resources. The assistance package – comprising up to approximately 3.2 trillion yen [$32bn], including approximately 1.4 trillion yen [$14bn] in official development assistance – that I announced during the conference, would promote such efforts through the public and private sectors working together, and then expand private investment directed at the African continent. My government will continue to strengthen cooperation that harnesses the power of the private sector.”
These are the magic words that Africa has longed to hear for quite a while. Japan’s interaction with Africa – even that country’s harshest critics will concede – has been exemplary. If there is a valid criticism, then it is that Japan, and in particular Japanese companies, have not engaged enough. Japanese products, from sewing machines, to television sets, to cars and motorcycles to various digital devices have always found a ready and enthusiastic market in Africa but Japanese companies have kept a low profile.
It is quite clear from Abe’s pronouncements that he wants this changed. He wants Japanese companies to take the bull by the horns in Africa and regard the continent, as, he says, as “a business partner with whom we can now grow together and also foster world growth together”.
Of course it is far too early at this stage to expect a stampede of Japanese companies heading for the continent but the groundwork is being laid – and the one thing we can be sure of is that when the Japanese say they will do something, they do it.
Having said all that, one should not underestimate the contribution of Japanese companies already at work in Africa. There is no better example than Toyota. This brand has been so ubiquitous up and down the continent that it has woven itself into the fabric of four-wheeled transport on the continent. I can recall that in the 1960s, in many parts of Kenya, the generic term used to describe any four-wheel vehicle – passenger cars, pick-up trucks or minibuses were ‘Toyota’, irrespective of the real marque of the vehicle in question. My correspondent in South Africa assures me that that is still the case in parts of that country. It is encouraging to note that Toyota has set itself some stiff targets to expand both its sales as well as its assembly volumes in Africa and that despite its huge presence across the world, it still sees Africa as a important component of its growth strategy. (See page 59.) In the wake of Shinzo Abe’s new direction, we should expect to see many other Japanese companies becoming household names in the near future.
The Japanese character
My trip to Japan was not entirely about covering bilateral agreements and high-level economics. I wanted to get a feel of the Japanese character because, after all, business, thank God, is still a relationship between people with all their strengths, their weaknesses, their foibles and their eccentricities.
I cannot claim to have learnt anywhere near everything about the Japanese character – no one can – but the glimpses I obtained during the short period I was there deepened my respect and admiration for these highly resourceful, gritty, determined yet implacably polite people. Practically every act, even the most mundane ones such as exchanging business cards, is done with ceremony and gravitas. The presentation and consumption of food is a form of art. The containers in which food is served are beautifully painted and lacquered as if in homage to the life-giving properties of their contents. This is no slap-dash, take-it-for-granted society. Life is a gift to be cherished and celebrated in all its infinite variety.
Yet this is one of the busiest societies in the world with the cities bursting at the seams with their teeming populations, which have to be housed, fed, clothed, educated, employed and transported. The logistics of just moving the millions of people daily to and from their places of work are terrifying yet they seem to be able to do so with a minimum of fuss and bother even if this entails train officials having to shove people onto crowded trains at peak time. The one outstanding feature of both Tokyo and Yokohama is the bewildering maze of roads, flyovers, underpasses and train tracks. My hotel room in Tokyo overlooked a busy train station. Hardly a second seemed to pass without trains coming and going. The Bullet trains, with their long, blunt noses, seemed like white snakes on speed.
I wondered about the system that kept these essential machines functioning like clockwork. I got my answer when I was taken to visit the vast complex that houses the East Japan Railway Company – the largest in the country. It handles and services some 13,000 trains carrying 16m passengers every day. The average time delay, I was told, is 0.4 minutes for Bullet trains and 0.7 minutes for local trains. The supervisor shook his head and said they were working to reduce the delays! Britain, eat your heart out.
An early earthquake detection system ensured that even during the Great Earthquake of 2011, the casualty number was zero. The mammoth workshop routinely inspects, repairs and refurbishes both the locomotives and the carriages without creating any disruption in the services. The company, not surprisingly, has been invited to work on many railway projects in emerging economies. Will they come to Africa? They haven’t been asked was the answer but, yes, they will if asked.
Talking of making structures earthquake-proof, I was taken to visit the newly opened Tokyo Sky Tree. At 634 metres, it is the world’s tallest broadcasting tower. This is an architectural masterpiece and the construction combines the latest technologies with traditional tried-and-tested methods to ensure that even if the strongest earthquake hits the area, the tower will stand and continue to function. Providing breathtaking views of the city, it has become a major sightseeing attraction pulling in thousands from all over Japan and overseas.
Smiling through adversity
But of course, despite all the advances that have been made, the threat of earthquakes remains a constant fear in people’s minds. Tokyo itself was burnt to the ground following an earthquake in the 19th century and nothing could stop the devastation caused by the quake and tsunami in 2011. I went to the city of Sendai, which was close to the epicentre of the 8.8 magnitude quake that hit the country. The city itself was spared most of the damage but the airport was flooded. The greatest damage, however, was to the coastal areas where large swathes of trees were wiped out and farms obliterated. Only one building, a wooden house built in the old style remained. Farmers who had made a prosperous living growing vegetables were left destitute. I saw several of them bent over, weeding the land damaged by sea water. They were paid a small amount by the government in order to keep them busy. I though they would be bitter or depressed but met cheerful faces who said they were confident they would make the land productive again. They had survived when many others hadn’t and for that they were thankful.
Others worked on a gigantic reforestation programme, planting 500,000 Japanese black pine trees on a hundred acres of land while a massive wall, stretching kilometres away along the beach was being constructed to ward off the effects of another tsunami. A little distance away, some farmers had set up a system of greenhouses where they were cultivating a variety of vegetables in water baths. The lettuces, chives and other greens looked fresh and succulent. They said the demand for their produce was growing by the day.
In the city itself, Ms Yumi Nakano, an energetic young lady who runs a coffee shop, had organised a number of the female tsunami victims to make obis (these are the elaborate belts won by both men and women over the traditional Japanese dress, the yukata) using, to my surprise and delight, from khanga and kitenge material purchased in Tanzania through fair-trade deals. The aim is to help both the Japanese victims as well as do some good in a far off African country. The ladies burst into loud peals of laughter and applause when I translated the Swahili proverbs that are a feature of the material from East Africa.
These glimpses opened a few small windows in the Japanese character for me. Their resilience in the face of adversity, their willingness to cooperate cheerfully when they had lost everything and their desire to still help people in another continent, I must confess, filled me with admiration for them.
Strangely enough, although Japan is a very advanced country, I saw a lot of similarities between the people and their attitude to life to Africans. In Prime Minister Shinzo Abe’s wish for a partnership with Africa, I see much more than merely economic relations.