RSS

Category Archives: ECONOMICS

Japan must reject American pressure against oil sanctions on Iran

Japan must reject American pressure against oil sanctions on Iran

Murad Makhmudov and Lee Jay Walker

Modern Tokyo Times

The United States is continuing to put pressure on Japan about sanctions against Iran’s oil industry and thankfully the Finance Minister of Japan, Jun Azumi, was sidelined after appearing to cave in several weeks ago. However, foreign policy specialists and many bureaucrats in Japan understand that this issue is extremely delicate and Japan doesn’t want to appear to be hostile towards Iran. After all, other nations have developed nuclear weapons like India and Pakistan and after making a lot of noise it appears that this issue is on a backburner in Washington.

Similar pressure is being put on South Korea but the issue in Japan is extremely severe because of the Fukushima nuclear crisis. Therefore, now is the wrong time for Japan to put even greater stress on a valuable source of energy. Surely America must understand that the “special relationship” between both nations must be based on greater equality and that this demand is too great given the internal energy crisis in Japan.

The vast majority of nuclear reactors are not in working order in Japan at the moment and nobody knows the real future of this sector within Japan. At the same time, alternative sources of energy will mean that Japan is taking sides in a dispute which doesn’t concern Japan at the moment. After all, Iran is not a threat to Japan and both nations have cordial relations.

From a Japanese perspective, if Washington truly cares, then why is Iran a bigger concern than the nuclear stockpile of China and continuing modernization of the armed forces of this nation? It is unimaginable that Iran would ever threaten Japan or create a major international war based on irrationality.

Also, from Iran’s point of view then it is inconceivable that nations like Pakistan and Israel have the right to defend themselves but Iran doesn’t. This isn’t implying that Israel and Pakistan don’t have the right to develop nuclear weapons when all the major powers have a nuclear arsenal. However, from Iran’s geopolitical point of view then the nuclear arsenal of Israel and Pakistan may be making policy makers in Tehran nervous.

While all the focus is on relations between Iran and Israel the real uncertain nation is Pakistan. The Taliban and other Sunni Islamic extremists have killed and massacred Shia Muslims in Afghanistan and Pakistan and for this reason Iran supported anti-Taliban and anti-Al Qaeda forces in the past. Ironically, Iran had this policy when America still had open relations with the Taliban prior to September 11 which was done by Sunni Islamic extremists who were mainly Saudi Arabian nationals.

Also, the central state of Iran is much more dynamic and in control of the nation rather than the reality in Pakistan. This fact can’t be debated currently and China is seriously concerned about this issue despite having very good relations with Pakistan. The possibility of a failed state in Pakistan is a nightmare because radical Sunni Islamists in this nation are extremely militant and this applies to being anti-Shia, anti-India, anti-democratic, anti-secular, and so forth. Therefore, nations should be more focused on the power of central forces in Pakistan and the internal Sunni Islamic jihad against the Pakistan army rather than Iran.

This isn’t underplaying the Iranian issue but surely this “game” concerns America, Israel, Saudi Arabia, Iran, Lebanon (Hezbollah and links with Iran), and other regional nations, irrespective of being pro or anti Iran. However, it isn’t an issue which should concern Japan from a military angle. Instead, Japan should be trying to influence greater restraint on all sides and be a “middle broker” in order to contain negative forces from either side.

Much is mentioned about the US and Iran relationship but this is also complex because America left “a window of opportunity” for Iran to break the arms embargo which had been put on Bosnia during the three sided civil war. Also, Iranian intelligence clearly gave tacit approval of the American led invasion of Iraq because Iran knew that this would end a regime which was anti-Iranian and in the long term the power shift would work in the favor of the Shia.

In a recent article by Modern Tokyo Times it was stated that “If political leaders in Tokyo believe that Iran is a threat to the national security of Japan or that Iran is an international threat, then clearly Japan must state this categorically and not hide behind the political intrigues in Washington. However, Iran does not have any ill intent towards Japan and clearly with China, India, Israel, and Pakistan, having nuclear weapons in Asia, it is understandable for Iran to be concerned about this reality from their respective geopolitical point of view.”

“It must be stated that September 11, Afghanistan, Iraq, Pakistan, and Saudi Arabia, have one common theme and this applies to radical Sunni Muslims being involved in the deaths of American civilians and American soldiers. The Shia community in Afghanistan, Iraq, Pakistan, and Saudi Arabia have not protected or funded global terrorist networks which were responsible for September 11, London, Bali, and countless terrorist attacks in Iraq and Pakistan. Therefore, the government in Tehran is much more responsible than the ruling elites in Saudi Arabia which have many ratlines and hidden agendas.”

Liu Weimin a ministry spokesperson for the government of China commented that “To place one country’s domestic law above international law and press others to obey is not reasonable.” Other nations share this point of view and if America believes that Iran is a threat to the security of America, then Washington should deal with this without putting pressure on Japan. After all, the pressing concerns for Japan are many and this notably applies to the energy shortfall after the devastating March 11 tsunami and the ongoing Fukushima crisis.

It must also be stated the tangle web of America and Saudi Arabia is not aimed at democracy and human rights, after all just look at the crisis in Bahrain whereby the Shia face daily oppression and outside meddling from Saudi Arabia. The Shia community is also often attacked in Yemen and Japan can’t afford to take sides in “a dirty political game” which is taking place.

Of course Japan must maintain the strong relationship between Washington and Tokyo when it applies to Northeast Asia and other important issues. However, the nuclear crisis in Iran isn’t a national security issue for Japan and the neutral nature of Japan’s foreign policy must be respected.

If political leaders in Tokyo believe that the government of Tehran is a threat to the security concerns of Japan and the international community, then Japan must fall in line. Yet clearly senior politicians in Japan don’t share this view and the main concern for the people of Japan is maintaining the economy and having a steady flow of energy. Therefore, the timing is wrong and Japan shouldn’t get involved in the American-Saudi Arabian alliance against Iran.

leejay@moderntokyotimes.com

http://moderntokyotimes.com

 

Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,

Review of 2011 internationally and events in Japan (March 11 and brutal tsunami)

Review of 2011 internationally and events in Japan (March 11 and brutal tsunami)

James Jomo and Lee Jay Walker

Modern Tokyo Times

In 2011 many political convulsions have challenged nations in North Africa and the Middle East. The optimism of the so-called “Arab Spring” remains to be unfulfilled because you have so much uncertainty in nations like Bahrain, Egypt, Libya, Syria, and Tunisia. At the same time the death of Osama bin Laden wasn’t the decisive blow to international terrorism because recent events in many nations show that this menace is still potent. This notably applies to the recent slaughter of Christians in Nigeria by Islamists belonging to Boko Haram.

Images of Christians, Muslims, and secularists, celebrating political change in Egypt seems like a distant dream. After all, many Coptic Christians have been killed and a sizeable minority of Muslims supported an Islamic party which seeks to restrict the role of Christians in Egypt.

President Obama, much like the ethical policy of Tony Blair (past leader in the United Kingdom), showed his hand clearly by announcing a huge military deal with Saudi Arabia. Therefore, any notion of democracy and supporting human rights was thrown out the window. In fairness to Obama this is a systematic reality within the body politic of America. However, it makes a mockery of his ethical stances because in the land of Saudi Arabia not one single Buddhist temple is allowed or Christian church and of course all apostates from Islam face death in this nation.

Meanwhile the Euro crisis and the foundations of the European Union have been challenged to the hilt. This applies to one economic crisis after another and monetary issues will continue to be a major issue in the early months of 2012. At the same time political leaders have lost power in Greece and Italy and European technocrats who have been unelected now rule the roost in these two nations. Therefore, the “Arab Spring” appears to be ushering in “a non-democratic new dawn” while in Europe new leaders can obtain power despite being unelected – not a pleasant thought.

On a more positive note you now have a new nation called South Sudan and providing the international community supports this new entity, then some “rays of sunshine” will have happened in 2011. However, the path ahead is fraught with danger because Arab Islamists in Khartoum still desire to rule the many different African ethnic groups which comprise of Sudan. This means that bloodshed will continue in 2012 in places like Darfur and the fear is that the Khartoum government may seek to create instability in South Sudan because of the delicate nature of this new nation. Given this, the international community must develop mechanisms with political leaders in South Sudan in order to help this new nation and to guarantee its future, while major obstacles are being challenged by central forces in Juba.

The Russian Federation and Kazakhstan are entering 2012 with certain levels of uncertainty. This applies to political challenges and outside meddling from international powers which seek to cause mayhem internally. Therefore, the world is waiting to see if Putin can remain all powerful alongside Medvedev or if “the house of cards” will collapse because of external and internal agitation.

The forgotten Serbian Orthodox Christians in Kosovo still face a bleak future because they can’t freely travel around Kosovo. At the same time, power processes are against the Serbian Orthodox Christians of Kosovo and political leaders in Belgrade have to walk a tightrope – but, if the current leaders could abandon their brethren in Kosovo, it would appear that they would do so in order to enter the EU club. However, internal events and a backlash could alter the political landscape in Serbia and this is the main concern of the current political leadership in Belgrade. This means that the ghettoization of an entire religious and ethnic group will continue in the heart of Europe and what does this tell us about the new Europe?

In Myanmar the international media is focusing on current positives because political elites in this nation appear to be opening up. Yet, despite this, many minority ethnic and religious groups are still being persecuted and Free Burma Rangers continues to highlight the reality on the ground. The fear is that these minority ethnic groups will be further abandoned in order to establish short-term goals. Also, if the regime turns away from China – then minorities have much to fear from further abandonment and isolation.

Therefore, the mainly Christian Karen elites and other ethnic groups like the Shan and Chin will continue to face an uncertain future. At the same time, the majority of the international media will give scant coverage outside of issues related to Aung San Suu Kyi and issues related to the current leaders of Myanmar.

Madness sadly hit Norway in 2011 when Anders Breivik killed 77 people in Oslo. The reason for this barbaric attack was then manipulated like a political football but the truth is that this individual was clearly deranged. He was neither a Bible thumping individual nor a regular churchgoer but this didn’t stop the anti-Christian brigade from having a field day. However, the bare fact is that the majority of people he killed were white Norwegians and Christian – this hardly matches the “mad racist” and “devout Christian” image which was being brandished about. Indeed, Breivik stated that  ”I’ve always been very pragmatic and influenced by my secular surroundings and environment.”

Sadly, the gruesome murder of innocents was lost and the massacre committed by Anders Breivik was clearly aimed at a political party he detested. The events of this day will never be forgotten in Norway because it highlighted the weakness of security agencies because one individual managed to throw the entire nation into deep shock. Hopefully, Anders Breivik will never be released from prison and different ethnic and religious communities will work more closely together in order to show the real spirit of Norway.

Natural disasters hit many nations, including Australia, Japan, New Zealand, the Philippines, and many others. Therefore, tens of thousands of people died because of natural disasters. The March 11 tsunami which hit Japan was felt all over the world because of the harrowing scenes which were caught on camera. Also, Japan became the first nation in history to be hit by a devastating earthquake, tsunami, and nuclear crisis, at the same time.

The reverberations of the nuclear crisis can still be felt today in Japan and throughout the world. Therefore, the nuclear energy issue became a hot topic and nations like Germany did a u-turn without much thought, irrespective if individuals agree with Germany or not. Ironically, this u-turn will not stop Germany utilizing the nuclear power stations in France but this is a different issue. Meanwhile, the government of Japan is caught between realism, business issues, energy concerns, the green movement, power shortages, a general public which is still divided, and other important factors related to the nuclear sector.

 

The March 11 earthquake which unleashed the tsunami was truly devastating because tens of thousands of people died. Also, the speed of events shocked people because the tsunami literally destroyed towns and villages that were in its path. Therefore, even today many people are still missing and vast numbers of people are without proper homes in areas hit by the tsunami.

Residents who reside (and who resided) near the Daiichi nuclear power plant in Fukushima continue to face a bleak future. Also, the tourist industry, fisheries, and other important areas which created jobs have been hindered by the devastating events of March 11. Given this, the central government needs to work closely with local governments and various agencies in order to get the region back on its feet.

It isn’t all doom and gloom because many communities have started to fight back and rebuild and this also applies to attracting new investment. Therefore, the picture is very mixed but clearly all positive mechanisms need to work together in order to resolve the major obstacles which people and the local business community still face.

2011 isn’t only based on negative events but clearly the political, economic, and natural disasters, have all unleashed convulsions which still can be felt. In this sense, the early period of 2012 will be a natural continuation. After all, the nuclear ill wind in Japan remains unresolved when it applies to radiation and its impact on the natural environment and on local people. The economic crisis in Europe remains and the same applies to other parts of the world but some positive signs can be felt in some nations. Also, the so-called “Arab Spring” may turn out to be truly democratic in the long-term or it may be a false dawn where Islamists take control and new despots emerge – it is impossible to say either way with confidence.

Nations like Nigeria and Somalia will continue to face the menace of radical Sunni Islamic terrorist attacks and attacks against central forces will continue. Issues related to democracy in China will be monitored more deeply given the current political climate and North Korea will probably remain on the same footing. However, North Korea may implement some economic reforms and the new leader may turn out to be more independent minded. Meanwhile, the political merry-go-round will continue in Japan whereby political leaders in the two main political parties will face internal struggles.

The Olympics in London in 2012 offer a positive note because this event will be watched by billions of people. Also, you have signs that China and Japan will focus on greater economic initiatives which will strengthen cooperation between these two powerful neighbors. Overall, 2012 looks like another stuttering year whereby economic issues and political convulsions will continue to create new major problems.

leejay@moderntokyotimes.com

http://moderntokyotimes.com

 
 

Tags: , , , , , , , , , , , , , , , ,

Economic growth in Japan but external factors remain troublesome

Economic growth in Japan but external factors remain troublesome

Joachim de Villiers and Lee Jay Walker 

Modern Tokyo Times

The economy of Japan despite all the scaremongering continues to show great resilience and this is despite many massive internal and external factors. Of course, the events that unfolded on March 11 led to major economic convulsions and the loss of life was enormous but on top of this is also the global economic situation. Therefore, for Japan to rebound when America and the European Union are suffering so much is also remarkable.

Tens of thousands of people died because of the potent and deadly tsunami which was unleashed by the 9.0-magnitude earthquake. This was followed by a huge nuclear cloud which hung over Japan and the mass media didn’t help. Therefore, many embassy staff fled alongside foreign nationals and this uncertainty put enormous strains on the economy.

Also, for major manufacturing companies who were based in the areas hit by the earthquake and tsunami, it was essential to restructure and solve the huge cog in the machinery which was hindering the supply chain. However, corporate Japan and the government pumped vast sums into the economy and the banking system. Therefore, a huge capital base was built in order for Japanese companies to obtain funds internally (applies to companies hit by March 11) and also to expand internationally because of the strong yen.

Not only this, the weakness of the American dollar and the Euro meant that exporters would have been hit badly during natural economic events. Yet despite everything, including typhoon Talas which killed many in Wakayama and other prefectures, Japan’s economy is showing signs of economic growth and a rebound was announced.

This applies to gross domestic product growing by 1.5% and while the government of Japan can’t rest on these laurels, it is still a remarkable achievement given the reality of 2011 in Japan. Of course, the ill-winds of America and the European Union will continue to hinder further economic progress but a base is being built and stability is the first step after such internal disasters this year related to nature.

In an earlier article by Modern Tokyo Times it was stated that If you want to study about the uniqueness of Japanese capitalism and how companies respond to enormous adverse conditions, then the Tankan survey by the Bank of Japan will make you fully aware. After all, the devastation caused by March 11 and the ongoing crisis at the Fukushima Daiichi nuclear plant would have caused most nations to bow down to mass uncertainty.  However, welcome to corporate Japan where the response may seem slow but once the juggernaut starts, then it eats into the crisis and returns to normal.”

“Let us also remember that unemployment in America remains within the 9% range to just below 10% despite enormous debt borrowing and having no internal devastating consequences to face.  Also, remember, that the dollar is very weak and should be helping exporters but in Japan the opposite is happening because the yen is too strong and causing many problems.”

“However, unemployment in Japan is falling despite all these negatives to below 4.5% and it is Japan and not America which is trying to help the European Union and crisis hit Greece.  This applies to buying more Eurobonds and making it fully aware that Japan will step in and help Greece providing a sound economic policy is put on the table.”

Therefore, the announcement that Japan’s economy is picking up is remarkable given the adverse conditions but sadly the economic situation isn’t out of the woods. This applies to external factors like the high yen; the sluggish global economy; recent floods in Thailand hindering Japanese companies with regards to the supply chain; the ensuing crisis in Europe and the “Euro cloud;” and other factors.

If the global economy was in a healthier condition and the international exchange rates of major currencies were based on realism; then Japan would have more hope for optimism. However, it is hard to imagine other nations rebounding so quickly from such a traumatic event and for this fact alone it is clear that Japan can recover quickly from major internal convulsions.

The next quarter may show that all is not well because of external factors and consumer spending internally remains problematic. Yet the scaremongering of the demise of Japan can be seen for what it was.

leejay@moderntokyotimes.com

http://moderntokyotimes.clom

 
 

Tags: , , , , , , , , , ,

Japan seeks greater transparency about the banking issue in Europe

Japan seeks greater transparency about the banking issue in Europe

Pierre Leblanc and Lee Jay Walker

Modern Tokyo Times

The government of Japan continues to be more outspoken under Prime Minister Yoshihiko Noda when it comes to international relations, geopolitics, and economic issues.  Therefore, the Finance Minister Jun Azumi once more urged leaders in Europe to be transparent about the banking sector. This was in relation to the sovereign debt crisis and other issues connected with the ongoing financial situation.

After a working dinner for finance ministers from the Group of 20 the Japanese representative spoke frankly to reporters. Azumi commented that “If Europe needs worldwide support, even after doing what it can in addition to revealing sufficient information (about banks), then it might lead us (Japan) to consider.”

It is clear that Azumi is offering support to the European Union providing certain conditions are met which will enable Japan to increase its financial holdings in Europe. Capital injection and stability is needed in order to calm markets but for the last few months it is clear that every step forward was met with another step backward.

More alarming, the banking crisis in Europe appears to be spreading and nations like Greece are in crisis.  Japan, despite its own debt issue is still a nation with huge reserves and with massive financial holdings. Therefore, in recent months the government of Japan appears to be stepping up its priorities and this especially applies since Noda took office.

However, it is a continuation of the past leader of Japan, Naoto Kan, who was equally worried. Therefore, earlier in the year Japan stepped in and bought more Eurobonds but the March 11 earthquake, tsunami and nuclear crisis, meant that more urgent issues were needed to be met at home.

Recently, despite the high yen, it appears that the government of Japan is feeling more confident and Noda is clearly concerned about internal debt issues in Japan and the international financial malaise which is ongoing.

Masaaki Shirakawa, the Governor of the Bank of Japan, also weighed in and made it clear that Japan had great experience in this area because of serious problems in the late 1990s.  Shirakawa stated that “It is necessary to correctly determine assets of financial institutions and have them raise capital by themselves if they run short of it…If (the institutions) still need more capital, then it requires capital injection.”

The approach from Japan is that Europe must try to grasp the situation and galvanize the financial sector by internal mechanisms. However, providing these internal mechanisms are based on a sound footing then Japan will purchase rescue bonds which will help the Eurozone.

Under Kan Japan stepped in by buying bonds to help Ireland and Portugal in January and June. This financial support by the Kan government was considerable because the total purchase of European Financial Stability Facility bonds accounted for approximately 20 per cent. Therefore, the Democratic Party of Japan is clearly concerned about events in Europe and the new leader Noda is determined to provide support after internal mechanisms are installed by European leaders.

In a past article by the Modern Tokyo Times it was stated that “Japan also knows that the European market and American market are very important for Japanese companies and it appears that the government is thinking about the long-term.  Therefore, providing a feasible plan is put on the table the government of Japan will help Greece which is in dire straits at the moment.”

“Japan’s economic system is far from perfect but it somehow keeps on ticking and the reserves of the nation are a blessing.  However, while America sits on its feet and does little to ease global pressure, the government of Japan is willing to help the European Union providing plans have a firm foundation.”

Azumi also commented about this issue the week before and stated that “If there is a scheme that is based on a firm process, involves a reasonable amount of money and could provide the world and markets with a sense of security regarding a Greek bailout, I would not rule out the possibility of Japan sharing some of the burden.”

Japan is letting it be known that support will be forthcoming and that the political leadership is fully aware about the seriousness of the crisis.

http://moderntokyotimes.com/2011/09/28/japan-may-lend-support-to-greece-bailout-plan/

leejay@moderntokyotimes.com  

http://moderntokyotimes.com  

 

Tags: , , , , , , , , , ,

Japan government: $43 billion credit to main banks for M & A abroad

Japan government: $43 billion credit to main banks for M & A abroad

Joachim de Villiers and Lee Jay Walker

Modern Tokyo Times

 

The government of Japan decided on providing a $100 billion dollars lifeline to help Japanese companies during this difficult time. This was agreed in August and the main area is to fund exporters and help with foreign purchases in order to counteract the strong yen. 

Therefore, the three main banks have been allocated a $43 billion dollar credit line in order to help Japanese companies to expand overseas.  The high yen is putting a huge burden on exporters and this economic incentive is designed to sure up the business community, which is feeling the consequences of an unbalanced currency market.

Mitsubishi UFJ Financial Group Inc. is being offered a $15 billion dollars credit line and Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. are both being offered $14 billion dollars. The money is being channeled via the Japan Bank for International Cooperation (JBIC) and the move is seen to be positive.

The weakness of the dollar is creating major problems and in the last 6 months alone the yen rose 11%. At the same time you have mass instability in the Eurozone and tensions are rising between America and China because of China’s manipulation of its currency. Therefore, the yen is seen to be a safe haven given the current economic instability which is infringing on all major economies.

Yoshihiko Noda, the Prime Minister of Japan, and senior figures in the Democratic Party of Japan (DPJ), are alarmed by the currency market because the high yen is not based on Japan’s economic reality. Therefore, a huge burden is being put on Japan at a time when funding is needed domestically because of the devastation caused by the March 11 tsunami and the ongoing consequences of Fukushima.

The logic behind the initiative is to help banks obtain dollars and then to utilize this credit line by offering loans to companies which are focused on obtaining acquisitions abroad.  This initiative will provide much needed capital and provide a cushion to the three megabanks and companies which seek to expand internationally.

Yoshinobu Yamada, an analyst for Deutsche Bank AG and who is based in Tokyo, commented that “This is a preparatory measure for any future event that may make it difficult for Japanese banks to procure the dollars in the market.” He continued by stating that “…Japan’s government needs to swiftly reconstruct the earthquake damaged nation and push domestic economic growth.”

Recent overseas acquisitions have totaled $56.7 billion dollars and this is the highest for three years and it is clear that despite all the mayhem that Japan seeks to counteract all these negatives.  Also, you have genuine fears that the yen will force some Japanese companies to relocate production abroad and the same applies to research and development.  Therefore, it is imperative that the government steps in and supports companies in Japan to weather the storm and to help in foreign acquisitions.

leejay@moderntokyotimes.com

 

 

Tags: , , , , , , , ,

Japanese nuclear consortium hoping to expand in Vietnam

Japanese nuclear consortium hoping to expand in Vietnam

Olivier LeCourt and Lee Jay Walker

Modern Tokyo Times

In the last few weeks it appears that the nuclear reality is gaining momentum in Japan. This applies to Prime Minister Noda insisting that the nuclear reality will exist in Japan for the next few decades at the very least.  This was followed by a pro-Nuclear mayor winning a local election at the expense of an anti-nuclear campaigner. Then to top it off a nuclear consortium from Japan just signed a feasibility study with Vietnam with regards to two new reactors.

The Tokyo-based utility consortium played on the strengths of the nuclear sector in Japan which is amongst the best in the world. Also, Japan and Vietnam have very strong relations and both nations share similar geopolitical concerns in relation to China.  Therefore, with a powerful political and trade angle between Japan and Vietnam, it is not surprising that Vietnam listened carefully because nuclear power gave a fresh momentum to Japan’s economic rise and stabilized the energy supply.

Japan’s recently maligned nuclear industry appears to be gaining momentum and with China, India and South Korea expanding their nuclear industry, it would be travesty if Japan gave up on a sector which is powerful.

The Fukushima Daiichi crisis was clearly based on human failing but the reaction in some media outlets and in Germany was over-the-top because powerful lobby groups have vested interests.  Also, where will Germany get its new power supply from and will it rely on “dirty energy” in order to eradicate nuclear power?

In an in-depth article related to Germany by the New York Times which was written by Elisabeth Rosenthal (Germany Dims Nuclear Plants, but Hopes to Keep Lights On), the author raises important questions.

Elisabeth Rosenthal comments As a result, electricity producers are scrambling to ensure an adequate supply. Customers and companies are nervous about whether their lights and assembly lines will stay up and running this winter. Economists and politicians argue over how much prices will rise.”

“It’s easy to say, ‘Let’s just go for renewables,’ and I’m quite sure we can someday do without nuclear, but this is too abrupt,” said . He characterized the government’s shutdown decision as “emotional” and pointed out that on most days, Germany has survived this experiment only by importing electricity from neighboring France and the Czech Republic, which generate much of their power with nuclear reactors.”

“Then there are real concerns that the plan will jettison efforts to rein in manmade global warming, since whatever nuclear energy’s shortcomings, it is low in emissions. If Germany, the world’s fourth-largest economy, falls back on dirty coal-burning plants or uncertain supplies of natural gas from Russia, isn’t it trading a potential risk for a real one?”

Ironically, it would appear that Japan is enacting a more realistic approach and this applies to maintaining nuclear power plants until a genuine alternative is found. Japan also may be biding its time until the Fukushima Daiichi crisis loses its potency and the nuclear issue gradually loses its power within Japan.

Alternatively, Japan may be sincere and actually reduce its dependence on nuclear power at home but maintain a powerful lobby for exporting its nuclear industry abroad. In other words, nuclear energy is ok but “not in our backyard” and given the fact that Germany will import electricity from nuclear energy France, and from other nations, then it is difficult to see a moral principle emerging.

Vietnam, noticing how the nuclear sector helped Japan in the past is following the same route in order to maintain rapid economic growth.  Therefore, Vietnam is planning to build eight new nuclear plants which will hold thirteen nuclear reactors by 2030.

Japan, the Russian Federation, and other nations, see a chance to expand the nuclear sector in Vietnam and in other nations.  Yasuo Hamada, the President of Japan Atomic Power Co., comments that “We pledge to work hard to ensure the nuclear power development of Vietnam.”

In an article written by Chester Dawson and Vu Trong Khanh (Vietnam, Japan Sign Deal for Nuclear-Plant Study) in The Wall Street Journal. They comment that On Thursday, a larger consortium of 13 Japanese companies, including the nine electric utilities, along with Hitachi and Toshiba, plan to sign another memorandum with Vietnam Electricity to start talks on reactor bids. Called the International Nuclear Energy Development of Japan Co., it was set up last year under the trade ministry to promote reactor exports.”

“The Japanese government is expected to foot most of the bill for the plant through development aid and export-promotion programs run by state-owned Japan Bank for International Cooperation and Nippon Export and Investment Insurance. The government will cover the entire ¥2 billion ($26 million) cost of the 18-month feasibility study.”

“The planned Japanese reactors will each have a 1,000-megawatt capacity and are slated to begin operation in 2021 and 2022, immediately after two Russian reactors planned for nearby. The sites of the two twin-reactor plants are about 20 kilometers apart along the coast of southern Vietnam, about 400 kilometers northeast of Ho Chi Minh City.”

Irrespective of the final outcome, the most likely being that it will be favorable towards Japan and the Russian Federation, it is clear that other nations like Turkey are interested in Japanese nuclear technology.  Also, the government of Japan will continue to support the export side of the nuclear industry.

http://www.nytimes.com/2011/08/30/science/earth/30germany.html?pagewanted=all – NEW YORK TIMES

http://online.wsj.com/article/SB10001424052970204138204576598164235317774.html?mod=googlenews_wsj  -THE WALL STREET JOURNAL

http://moderntokyotimes.com/2011/09/27/pro-nuclear-mayor-wins-despite-anti-nuclear-lobby-in-japan/ Pro-nuclear Mayor wins despite anti-Nuclear lobby in Japan – MODERN TOKYO TIMES

http://moderntokyotimes.com

 

 

Tags: , , , , , , , , , , , , , , , , , , ,

Japan may lend support to Greece bailout plan

Japan may lend support to Greece bailout plan

Joachim de Villiers and Lee Jay Walker

Modern Tokyo Times

The European debt crisis and the inability of the American government to solve the unemployment crisis and to support the dollar, means that Japan may once more buy more Eurobonds and step-in and give support to Greece.  This may seem ironic, after all, Japan’s debt is enormous and is also problematic but the reserves of this nation remain strong.

Also, the strengthening yen and growing debt and unemployment crisis in America and Europe is setting off alarm bells in Japan. After all, Japan relies heavily on exports and the yen rate is creating enormous problems.

Japan also knows that the European market and American market are very important for Japanese companies and it appears that the government is thinking about the long-term.  Therefore, providing a feasible plan is put on the table the government of Japan will help Greece which is in dire straits at the moment.

Greece is being forced to adopt austerity measures but many workers are increasingly disillusioned and many mass demonstrations have broken out.  Also, it isn’t only about Greece because several other European nations have major problems and some banks in France have come under close scrutiny.

Jun Azumi, Finance Minister, is clearly alarmed by the rise of the yen, the weakness of the Nikkei, export related issues and other global problems which are collectively leading to mass economic instability.   

Jun Azumi commented that “If there is a scheme that is based on a firm process, involves a reasonable amount of money and could provide the world and markets with a sense of security regarding a Greek bailout, I would not rule out the possibility of Japan sharing some of the burden.”

It appears that European leaders and America are at a loss about what to do and the wait and see approach and tentative moves haven’t solved anything.  The more America and the European Union do little then confidence in both currencies goes further down and this means that more investors will flock to the yen. 

This is a nightmare for Japan because exporters are feeling the crunch already and the longevity of the crisis because of the ineptness of both America and the European Union is clear for all to see.

The British government is trying to decrease spending and focus on restoring economic order. Therefore, while economic measures in the United Kingdom may not be popular, at least the methodology is better than President Obama’s logic. This applies to more borrowing and racking up a huge debt burden for future generations.

Japan’s economic system is far from perfect but it somehow keeps on ticking and the reserves of the nation are a blessing.  However, while America sits on its feet and does little to ease global pressure, the government of Japan is willing to help the European Union providing plans have a firm foundation.

http://moderntokyotimes.com

 

 

Tags: , , , , , , , ,

Japan: export dip but trade surplus in July was $946 million

Japan: export dip but trade surplus in July was $946 million

Lee Jay Walker

Modern Tokyo Times

Riots in the United Kingdom, chaos in Greece, endless circle of economic problems in America and millions lost their homes in recent years. However, despite all the doom and gloom mentioned about Japan this nation once more shows its resilience and announces a large trade surplus in July.

Therefore, despite the over-hyped scare mongers and the devastating events of March 11 it is clear that the economy of Japan is bouncing back.  Also, it is abundantly clear that the ineptness of Japanese politics is not infringing on the major company powerhouses in Japan because they are the real power brokers. 

Of course Japan faces major debt problems but the reserves of Japan are enormous and even in such a tumultuous year this nation still assisted the European Union by investing heavily. Also, the over-valued yen which is too strong and not realistic based on realism may create many problems for Japan but it also opens up new opportunities.

The BBC highlighted that Japan’s trade surplus is boosting optimism that an economic recovery is ongoing.  However, the BBC also noted that exports had fallen and that this may indicate that demands for Japanese products are suffering in key international markets.

It must be stated that production issues for some Japanese companies were caused by the devastating earthquake and tsunami.  Also, the global economy is clearly not buoyant and this notably applies to America and many nations in the European Union.

Recent economic data from China and the Russian Federation also hint at problems underneath the surface which may worsen given the current worldwide economic malaise. 

Naomi Fink, a Japanese strategist at Jeffries and who is based in Tokyo, commented that “…while the export figures were not as good as hoped there were still signs of recovery shining through…….Japanese firms have shown a bounce back, even if company profits and growth may not be as strong as in the boom years of 2000…. (however) There are a few more months of recovery to go.”

“The strong yen that hurts the export side is also helping to keep the price of imports in check”

It is often reported that Japan is in economic meltdown but the resilience of this nation keeps on proofing many individuals wrong.  Also, the riots in the United Kingdom and millions of people losing their homes in recent times in America, shows you that the Japanese model is based on cushioning social ills and maintaining low unemployment figures.

http://moderntokyotimes.com (please visit)

 
 
Leave a comment

Posted by on August 20, 2011 in ASIA, ECONOMICS, Japan

 

Tags: , , , , , , , , ,

Time for Japan to think more deeply about holding U.S. Treasuries

Time for Japan to think more deeply about holding U.S. Treasuries

Lee Jay Walker

Modern Tokyo Times

Japan must implement an independent economic policy which is based on helping the people of Japan and the future of this nation.  Currently, the government of Japan holds $900 billion dollars of U.S. Treasuries and only China owns more internationally but given the ills of the American economy then should Japan maintain such a high holding?

Standard & Poor downgraded the credit rating of America and clearly the dollar is sliding and the American government appears either “toothless” or is focused on manipulating the value of the dollar against economic rivals.  Either way, America does seem aloof about the impact of the dollar and major Japanese companies are feeling the pain.

Obviously, currencies always fluctuate when government control isn’t allowed to manipulate like China. However, a collective approach to stability will be taken by major powers during times of upheaval in order to reduce the impact of the economic crisis.

Kenji Nakanishi, who belongs to a new opposition party called Your Party, indicated that Japan must focus on the well-being of its people and that the government should think seriously about selling U.S. Treasuries.

Kenji Nakanishi stated “…..that Japan shouldn’t sell all its holdings at once, but should reduce them by about ¥10 trillion each year, and earmark some of that money for recovery spending in the Tohoku region, which was devastated by the March 11 earthquake and tsunami.”

However, the ruling party in Japan made it clear that Japan will continue to buy more U.S. bonds and that the government will not sell bonds.  This policy, in light of America’s credit rating being downgraded and growing uncertainty about the dollar seems rather limited in scope.

The Chief Executive of Euro Pacific Capital, Peter Schiff, commented that  “The more money the world lends to America today, the more money they’re going to have to lend tomorrow……..It’s a giant Ponzi scheme. Nobody is ever going to get their money back.”

The economy of Japan faces enormous problems and this applies to the huge public debt that it holds.  It is true that Japan does have enormous reserves and recent support of the Euro shows the power that Japan still maintains.  However, Japan is not in a position to weaken or assist other nations which may be detrimental to the long term future of Japan.

The financial balancing act in Japan is already problematic and it appears that Japan is helping America for no real reason apart from the special relationship between both nations.  Nobody is talking about this special relationship coming to an end but the vibrant years of the 1960s to late 1980s no longer applies to Japan.

If government and economic leaders in Japan believe that maintaining huge U.S. bonds is in the interest of Japan.  Then this is fine.  However, if this policy is not based on the interests of Japan then this policy is wrong and currently it appears that this serious issue is not being debated openly out of fear of upsetting the applecart.

Therefore, an alternative policy should at least be put on the agenda because proposed tax hikes during the current economic reality of Japan, alongside buying more U.S. bonds from a nation which was recently downgraded, does appear risky?

Why not utilize part of the holdings in America in order to help areas damaged by the earthquake and tsunami by a gradual sell-off policy?  Also, a more diverse economic policy should at least be on the table and debated openly.

If no change is the final outcome and this is based on being in the best interest of Japan then all well and good.  However, if an open debate and policy renewal can’t be discussed then something is wrong and political leaders should be taken to task by the Japanese electorate.

http://moderntokyotimes.com (please visit)

 

 

 

Tags: , , , , , , , , , , , , , , , ,

America and the European Union debt crisis: the enigma of Japan

America and the European Union debt crisis: the enigma of Japan

Lee Jay Walker

Modern Tokyo Times

Japan for the last twenty years was the nation to kick and look down with disdain and the American model was deemed to be dynamic, flexible and based on market principles. The banking crisis in America clearly showed the world that state intervention was the order of the day and several years later the “apple pie” appears to be getting covered in more debt. 

The European Union is also engulfed by a different debt crisis but one in which the situation appears to be spreading and no solutions appear to be on the table in order to remedy the crisis.  Therefore, both America and the European Union seem to be following the Japanese model but with different characteristics.

Ironically, despite Japan “throwing away two wasted decades” and the terrible events of March 11 when the earthquake unleashed a potent and deadly tsunami; the government of Japan stepped in and bought more of Europe’s debt in order to boost the European Union. Also, given the huge economic crisis generated by the tsunami and ongoing radiation crisis it is difficult to imagine America coping with such a strong currency despite all the problems which are happening in Japan.

However, it appears that Japan keeps on ticking while America keeps on selling more of its debt and given the lack of government policy directed towards the weakening dollar, it does appear that the government of America is not responsive to the international community. Therefore, the currencies of Japan and Switzerland are paying a high price and it is not based on market fundamentals. 

In The Economist article called Debt and Politics in America and Europe: Turning Japanese the opening paragraph states “A GOVERNMENT’S  credibility is founded on its commitment to honor its debts. As a result of the dramas of the past few weeks, that crucial commodity is eroding in the West. The struggles in Europe to keep Greece in the euro zone and the brinkmanship in America over the debt ceiling have presented investors with an unattractive choice: should you buy the currency that may default, or the one that could disintegrate?”

Currently Japan’s debt ratio is the highest in the world but nothing is clear in Japan because this nation still intervened and offered a helping hand to the European Union. Also, Japan’s unemployment rate remains relatively low when compared with the speed of unemployment in America and in other nations where it is even higher, for example Spain.  Therefore, while America’s debt may be half the rate of Japan’s it is clear that the government of Obama did not step in to provide support to the European Union and nor does the American government appear to care about stabilizing the dollar.

However, Japan, the nation of two decades of little economic growth and periods of stagnation, keeps on mystifying many because the real picture appears disjointed and difficult to work out. 

The Chinese Communist Party must be at a loss because many major democracies and economic powers are in crisis.  Also, more important, it does appear that some democratic nations are blighted by political systems which focus on power at the expense of long-term benefits for society. 

Therefore, while it is easy to point the finger at Japan because of political infighting and leaders resigning like it is second nature. It appears that America is going through the same crisis because why did it take the Democrats and Republicans so much time to increase the overdraft of America to a higher ceiling?

Turning back to the article in The Economist the author stated America’s debt debate seems still more kabuki-like. Its fiscal problem is not now—it should be spending to boost recovery—but in the medium term. Its absurdly complicated tax system raises very little, and the ageing of its baby-boomers will push its vast entitlement programmes towards bankruptcy. Mr. Obama set up a commission to examine this issue and until recently completely ignored its sensible conclusions. The president also stuck too long to the fiction that the deficit can be plugged by taxing the rich more: he even wasted part of a national broadcast this week bashing the wealthy, though the Democrats had already withdrawn proposals for such rises.”

Xinhua which is state owned by China commented about the recent debt debacle in America that “Given the United States’ status as the world’s largest economy and issuer of the dominant international reserve currency, such political brinkmanship in Washington is dangerously irresponsible.”

The Prime Minister of the Russian Federation, Vladimir Putin, commented about America that They are living like parasites off the global economy and their monopoly of the dollar.” The language by Vladimir Putin was strong but clearly many individuals share similar sentiments but based on more moderate language.

The Soviet Union bit the dust because it could no longer create a viable economic system which could maintain economic growth.  The Chinese Communist Party understood this therefore all emphasis was put on economic growth and generating wealth irrespective “if the mouse was communist or capitalist.”

Will certain members of the European Union and America learn from the failure of Japan and implement genuine measures? Or will they follow the Japanese model and do little in the short-term in order to preserve political power bases?

The European Union also faces many internal convulsions because why should Germany face the brunt of supporting incompetent governments in the euro-zone?

http://www.economist.com/node/21524874 – The Economist

leejay@moderntokyotimes.com

http://moderntokyotimes.com

 

 

Tags:
 

Tags: , , , , , , , , , , , , , , , ,

 
Follow

Get every new post delivered to your Inbox.