NO. 1 -- January 10, 1997


Feature Article


Japanese companies with U.S. operations have made considerable progress over the past decade in understanding the importance to business of contributing to host communities. Many Japanese business leaders had difficulty grasping the concept of corporate philanthropy -- also referred to as corporate citizenship

when it was proposed in the late 1980s as a means of protecting existing or potential U.S.-based investments in the face of mounting anti-Japanese sentiments. In the intervening period, however, community-directed donations of money, goods or services have taken root as a significant part of corporate life in both American and Japanese operations.

In step with trends in U.S. corporate philanthropy, major Japanese company donors increasingly are designing programs that further their own business interests. This strategic approach to giving, in turn, has led to greater collaboration across subsidiaries or divisions in developing philanthropic initiatives, many of which feature product donations rather than simply cash contributions. Among a wide array of U.S.-based Japanese companies there also has been a notable increase in recent years in employee volunteerism, another uniquely American tradition.

Business insiders suggest that the evolution of Japan-sponsored corporate citizenship programs in the United States both has propelled and been reinforced by marked changes in attitudes at home toward the company/community link. Despite the post-1980s' bursting of the economic "bubble" and the onset of sluggish business conditions, Japanese companies of all sizes have continued to develop philanthropic programs. Moreover, business leaders currently are pushing legislation that would encourage the formation of nonprofit organizations in Japan. A related bill favored by corporate Japan would revise the tax code to encourage greater giving by companies as well as by individuals.

These changes notwithstanding, some U.S. philanthropy experts remain critical of Japanese corporate citizenship efforts. Small and midsized companies in particular have been slow to embrace the more innovative strategic approach to giving, they say. Others contend that U.S.-based Japanese companies continue to lag in terms of the hiring and the promotion of Americans and on other workplace-related issues often considered under the rubric of corporate citizenship. All told, though, the U.S. corporate giving programs of major Japanese companies have advanced to the stage where the managers of these activities grapple with many of the same issues as their American counterparts.

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Weekly Review

Tokyo Expects Slow Growth In FY 1997 by Douglas Ostrom

Households in Japan, which have seen little evidence during the past three years that the economy is speeding up following the bottoming out of the recession in late 1993, understandably might be frustrated by the official economic outlook for the fiscal year starting in April. The forecast, released by the Economic Planning Agency December 19, indicates that inflation-adjusted gross domestic product will grow only 1.9 percent in FY 1997.


Hashimoto Cabinet Declares War On Deficit In FY 1997 Budget by Jon Choy

Even though the economy continues to expand at a modest pace, Prime Minister Ryutaro Hashimoto and his cabinet apparently have decided that reducing the government budget deficit should be their top fiscal priority. Both the supplement to the FY 1996 general account budget and the cabinet's proposed spending and tax plans for FY 1997 are evidence that Mr. Hashimoto and his ruling Liberal Democratic Party plan to apply the brakes to government spending as well as increase the tax burden on individuals and companies. Domestic reaction to the government's pending fiscal moves is mixed.


Tokyo Stands Firm In Resisting Terrorist Demands In Peru by Barbara Wanner

Apparently anxious to live down Tokyo's reputation for inept crisis management, Prime Minister Ryutaro Hashimoto responded to the December 17 seizure of the Lima residence of the Japanese ambassador to Peru by Tupac Amaru Revolutionary Movement rebels in a timely, assertive manner. He stressed that, while the Japanese and the Peruvian governments would stand firm in resisting terrorist demands, authorities in Lima nevertheless should avoid the use of force in an effort to end the standoff.


Hostage Crisis Brings Attention To Japan's Economic Presence In Peru by Christopher B. Johnstone

When leftist guerrillas seized the residence of Tokyo's ambassador to Peru, leaders of the group pointed to Japanese influence over the nation's economy as one reason behind the attack. Members of the Tupac Amaru Revolutionary Movement singled out for criticism Japan's foreign assistance program in Peru, arguing that this aid benefits only a narrow segment of society. The nature of the attack fueled speculation that the guerrillas' efforts were targeted specifically at Japan as well as the government of President Alberto Fujimori, himself the son of Japanese immigrants to Peru.

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