The coming shutdown of the Japan Economic Institute is a time for reflection about the implications of its absence for informed, objective analysis of economic, business, political, diplomatic, defense and security developments in Japan and of the U.S.-Japan relationship broadly defined. It also is a time for retrospection.
The contemporary JEI, known on both sides of the Pacific for its independence despite primary funding from the Ministry of Foreign Affairs, has evolved far from its start as the United States-Japan Trade Council. That organization was cofounded by Nelson Stitt and Noel Hemmendinger, both Washington lawyers, in 1957 to represent Japanese trade interests in the United States. For 20 years, the Trade Council supported this objective by publishing reports and pamphlets on U.S.-Japan trade and such associated subjects as activities on Capitol Hill and in the White House affecting Japanese exporters as well as by undertaking a variety of public relations initiatives, appearing before congressional committees and interacting with the executive branch.
The transformation of the Trade Council from a public relations and lobbying group to a think tank-like institution began in 1976, triggered, in quick succession, by the death of Mr. Stitt and the filing of a civil lawsuit against the company by the Department of Justice. The reinvention process gathered momentum after Robert C. Angel joined the Trade Council in 1977 as deputy director and later became its top executive. He envisioned an organization that would be recognized through its publications program and other activities as an authoritative, unbiased source of analysis and information on a broad range of Japan-related issues, including the vital bilateral relationship.
Implementation of the new operational thrust, marked by the adoption of the Japan Economic Institute name in 1981, was not problem-free. The main challenge occurred in 1984 when the Embassy of Japan in Washington and the Foreign Ministry, which previously had supported the reorientation of JEI's activities away from public relations, began to question the value of an organization that did not necessarily convey the official Japanese government position on various matters. At that point, the future existence of JEI was very much in doubt.
To add detail and insight to this overview, JEI President Arthur J. Alexander discussed the history of the organization through the mid-1980s with two of its former principals. Mr. Hemmendinger recounts the formation of the Trade Council and its operations over the following 20-plus years. Edward J. Lincoln, who was the executive vice president and chief economist at the time that he left JEI in June 1984, then picks up the story. In the next and final JEI Report, William J. Barnds, the president from early 1985 to the spring of 1990, and Mr. Alexander will continue the review.
NCB PRIVATIZED, BUT JAPAN'S
FINANCIAL-SECTOR PROBLEMS PERSIST
--- by Douglas Ostrom
A comparison of this article, the Japan Economic Institute's final discussion of what has come to be known as the crisis in Japan's banking system, with A Savings And Loan-Style Crisis For Japan? (see JEI Report No. 37A, October 2, 1992) leads to the inescapable conclusion that the risk of severe distress in that country's financial sector remains even after eight years. In 2000, as in 1992, overall economic conditions will determine whether a full-blown emergency develops or if the problems continue to dissipate, as they appear to have done since 1997.
CORPORATE RESTRUCTURING IN JAPAN: A
--- by Arthur J. Alexander
A key aspect of corporate restructuring in Japan involves the revaluation of assets according to market principles. As financial markets there have been deregulated and competitive market forces allowed greater sway, profitability and return on assets have begun to claim their proper roles in asset valuation. For these forces to be effective, however, actual market values for assets must be established and those values made known to market participants. Several methods have become increasingly important to accomplishing these vital economic tasks: asset securitization, mergers and acquisitions, and bankruptcy and corporate reorganization.
TOKYO'S WHALING POLICY REOPOENS RIFT WITH
--- by Jon Choy
The Japanese government's continued insistence on taking a limited number of specific whale species for scientific research once again has provoked an American response to this controversial practice. Significantly, the issues have not changed since 1982, when the International Whaling Commission voted to halt the killing of whales for commercial purposes. Tokyo still maintains that its scientific program is needed to prove that certain whale species have populations numerous enough to support a carefully controlled harvest. Anti-whaling nations counter that such data can be gathered by nonlethal means. At the same time, the Japanese repeatedly bristle at what they consider to be an effort by the United States and other countries to dictate culinary, ethical and environmental norms that reject the eating of whale and dolphin meat. For environmentalists, whaling illustrates how greed can push a species to the brink of extinction as well as mankind's lack of empathy for the other intelligent creatures that share this planet.
STEEL: THE TRADE ISSUE THAT GOES ON É AND
--- by Susan MacKnight
No transpacific trade issue has had the staying power of steel and the terms of Japan's access to the big American market. U.S. steel mills prepared, regardless of cost, to pursue their conviction of chronic unfair pricing and other misdeeds by Japanese rivals have ensured the 30-years-and-counting longevity of this conflict. An increasingly combative Japanese government and steel industry, equally certain that the United States is engaged in rampant protectionism, have given the problem new endurance.