International Business: JAPAN
A TALK WITH RYUTARO HASHIMOTO
With his trademark cigarette holder, sideburns, and ink-black pompadour, Japan's Ryutaro Hashimoto mixes flair with a lifetime experience in the political trenches. After watching two reform leaders fail, voters seem to favor him to become Japan's next Prime Minister. Hashimoto, currently International Trade & Industry Minister, discussed Japan's future on Sept. 13 with BUSINESS WEEK International Managing Editor Robert J. Dowling and Tokyo correspondents Brian Bremner and Edith H. Updike in his Tokyo office.
Q: After four years of recession, Japan is said to be suffering a crisis of confidence. Do you agree?
A: The collapse of financial institutions has damaged confidence in the Japanese economy. And this is shown by the very miserable ratings from the international rating agencies and the extra premium that Japanese banks have to pay in money markets. Because of the Kobe earthquake and terrorism, the myth of the safety of Japan has also collapsed. This is a sad story.
Q: You are on the verge of becoming president of the Liberal Democratic Party and possibly Prime Minister. How would you suggest to change things?
A: I want voters to regain confidence in politics. I'm concerned about the very low level of voter participation. That is the main
reason why I have challenged the leadership in the upcoming LDP election. There are many uncertainties right now in Japan. I would like to wipe them out and restore a very vital society.
Q: What will you do to stimulate the economy?
A: What I have to do in the next year or so is restore the economy so that competitive manufacturing industries don't feel they have to leave Japan [but] feel more secure to do business [here at home]. I will use any weapon in my power, whether it's tax policy or anything else. In five years' time, we would like to base our economy on new scientific and technological development. Maybe government will have to make aggressive investment in research and development where we've solely depended on the private sector.
Q: Would you use public money to bail out the banks?
A: If we find out that [private] resources are not enough, then I would like to use some public
Q: Recent policy moves have cooled off the yen. Will moves to deregulate the economy follow?
A: Deregulation has been accelerated in many areas. In the past year, we have seen deregulation in the gas and electric businesses. There is a lot more to do. We have to review the existing regulations regarding telecommunications.
Q: Your tough performance during the U.S.-Japanese auto talks suggests you are an economic nationalist. Is this true?
A: In most other cases, I have been more cooperative with the Americans. Last year, I was in Washington urging dialogue. If the U.S. side had listened to our suggestions, then we wouldn't have needed to expend unnecessary energy.
Q: Japan has protested Beijing's current nuclear weapons testing. Do you view China as a threat in Asia?
A: Our position is to abolish nuclear arms. We are against nuclear testing by any country. The biggest issue for Japan is how we can support China's current position of opening up the country and how we can make that policy stable. We have to appeal to China to act in line with international rules, such as [those of] intellectual property rights.
Q: Are the U.S. and Japan destined to be economic rivals?
A: Japan and the U.S. should be able to become better partners. Today there is basically no communication in areas other than the economy. When we look back at the postwar era, there was a lot of communication. Now, when Japanese go to the States, all they think about is what to buy. And in the endaka era, fewer U.S. tourists come to Japan.