yYAXssKCQaUWZcXZ79RJTBLvo-c;SfREtjZ9NYeQnnVMC-CsZ9qN6L0 Finance, Economics, Globus, Brokers, Banks, Collateral-Oriano Mattei: Has cronyism wrecked Japan's long-term repair?

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giovedì 7 luglio 2011

Has cronyism wrecked Japan's long-term repair?


07 Luglio 2011


There have been better times to be Japanese. Still battling the unappeased demons of stagnation, bloated national debt, and the sclerotic effects of an ageing population, the authorities now seem paralysed in their efforts to rebuild after the 2011 earthquake. Despite the country's riches and technological know-how.

Initially it seemed Japan was coping well considering the overwhelming forces that pummelled the country following the 11 March quake. Now many are criticising officials' efforts as being slow and badly synchronised. It's not a reaction adequate for one of the largest reconstruction efforts since the Second World War.

The obstacles to rebuilding, and to the renewed vitality that many hoped would characterise post-quake Japan, are varied and many. Foremost must be Japan's rigid administrative system, which historically has hindered the momentum sparked by volunteers in any domestic disaster. Many also blame ineptitude and political infighting for bringing the reconstruction to a stall.

"It's mostly a result of Japan being unable to think outside the box," says Japanese construction industry insider Steve Yamaguchi, who runs a building firm in Yamagata prefecture north of Tokyo, just outside the Tohoku disaster zone.

There is no creative thinking in Japan, he says. This will lead to "a second policy disaster" in the mould of the failed policies that brought about the Fukushima meltdown. He also claims unchecked corruption in the rebuilding process has led to evacuees remaining homeless and debris remaining uncleared.

"What is happening is a national humiliation," Yamaguchi says. "The chaos we have witnessed so far is just a glimpse of coming attractions. The rebuilding of the region is going to be a gigantic, stinking mess and all the victims are going to get steamrollered."

Yamaguchi agrees, however, that the task at hand is considerable and the scale of the problem so seemingly insurmountable that reconstruction was destined for a slow start.

At least 95,107 buildings have been destroyed, washed away or burnt down, according to official figures, while the World Bank estimates the cost at £144bn, making it one of the world's most expensive catastrophes. The total cost of the disasters and their clean-up will be close to 10 per cent of the country's current GDP. All this seems to have paralysed decision makers in Tokyo.

There is more. Yamaguchi accuses Japan's building industry and politicians of protectionism and harbouring vested interests: "It's the same old group of pork barrellers," he says, and warns that the bell jar that is Japanese national politics is sucking the life out of the recovery efforts in Tohoku.

Because the reconstruction will be worth 10 trillion yen (£75bn) ultimately the stakes are too high, he argues, for any change in the existing corrupt status quo. A corruption so deep and wide-ranging as to be terminal. Protectionism means foreign or even domestic builders and architects from outside affected areas will be scotched.

"Either you are inside the blessed circle or you are not," he says.

He points to the farrago over attempts in the first few weeks of the crisis to bring temporary housing in for the displaced. Outside bids were seen off in favour of slower domestic solutions, some with allegedly local-mafia-tainted ties. This is how rebuilding efforts could pan out.

After four months, only half of the homes for the estimated 300,000 made homeless by the disasters have been either shipped in or built. This is despite one British prefab housing specialist claiming it had 16,000 units ready to ship within days of the tsunami strike and nuclear evacuation. Its tender was declined.

Japanese architects, too, with arguably superior, greener options such as those from eco-builders Oak Village, have also been rejected because of cronyism and bureaucracy. This has led to mostly non-recyclable, non-portable temporary homes – at Y6m (£46,000) a piece – being built far from the communities that demanded them. As a result, many now stand empty.

Political manoeuvring between local governments in stricken east Japan, who have long fought Tokyo for more autonomy, also ensured that ready-to-plug-in housing offered immediately after the quake was ultimately rejected. "They are disinclined to do as Tokyo tells them," he says.

Not that Tokyo was against seeking international help. Shortly after the magnitude 9.0 quake struck Tohoku, the Japanese government sent out an international call for aid, which included a request for tenders to supply desperately needed temporary housing.

The plea was answered by many hundreds of prefab housing suppliers, including UK-owned aid procurement company CK Mondiale.

"We deployed to Japan within three days of the earthquake from our Malaysian offices. Within a week we had airlifted 380 tons of aid into Japan," says Mondiale's managing director, Hugh Mainwaring.

While on the ground in east Japan, Mondiale then offered 12,000 fully completed homes in 60 days worth more than £440m, which Mainwaring claims satisfied all requirements from central government, including that of price.

"The key thing is we were offering a solution that would house thousands very quickly. Finally after much dithering from officials, and wasted expense on our behalf, the offer was rejected. It was pretty much the same for many other outfits who were offering these quick solutions."

In the end, protectionism, red tape (Japanese laws make it difficult for local authorities to accept foreign services and even those offered from outside each prefecture) and tit-for-tat politics have kept many evacuees homeless.

Tokyo-based commentator and entrepreneur Terrie Lloyd agrees corruption and paperwork could continue to mar the reconstruction process.

"In Japan, like most places, it's all about 'follow the money'. There are huge funds going into the rebuilding of Tohoku, and those organisations representing the parties most likely to make money from this are certainly not going to want outsiders coming in and scooping up the cream. And as this is a bureaucratic nation, you only need one cog in the drive chain to say 'no' and things stop working."

Mainwaring claims that such levels of dysfunctionality led the United Nations to label Japan's response to the crisis as one worthy of a developing country, not the third-largest economy in the world.

"I was shocked to see how protectionist Japan is. We believe Tokyo was disingenuous – and officials had no intention of accepting any foreign-procured solutions. It's a situation that definitely runs counter to the needs of evacuees," Mainwaring says.

With all the shortcomings witnessed so far, it is hard to see how Tokyo's vision of building new sustainable communities that "will become a model for the world", according to the present Prime Minister, Naoto Kan, can be realised.

Blueprints for rebuilding Japan have also been slow to materialise, despite the forming of a 35-member Reconstruction Design Council by central government months ago.

It's vice-chaired by top architect Tadao Ando, who has complained of the endless meetings necessary to reach some kind of consensus. He also argues it is too early yet to make concrete proposals for rebuilding.

"I am often asked by the media to speak about what architectural plans have been developed for the reconstruction. I think this is because they are not aware of the scope of the real situation. Reconstruction involves not only the recovery of the houses of the local inhabitants, but their entire life-network," he says.

Meanwhile, the incumbent government, headed by dead-duck Prime Minister Kan, is plagued by an opposition who are refusing to co-operate over a budget for the rebuilding.

The reconstruction council says it has proposals but nothing can be done until the government breaks the political deadlock in Tokyo over passing a budget. It's a Catch-22 situation.

"Without debates on funding, we cannot discuss reconstruction. Without a vision for the reconstruction, we cannot discuss the funding," the council's latest report says.

Grand blueprints for eco "garden cities" built on hills made from rubble left in the wake of the tsunami have been posited. But that dream of rebuilding remains an idle one as Tokyo continues to argue over how to deal with the rubble and radioactive debris that still litter the region.

"Although the government has announced plans to build new eco-cities and has set aside funds for this purpose, it is unlikely that Japan's beleaguered government can undertake such an enormous task alone," says Alastair Townsend of Bakoko architects in Tokyo.

"Japan's massive home-building corporations are salivating at the unprecedented business opportunity the disaster has presented them. But left in their hands, the results will undoubtedly be disappointing."

"Surely," the Japanese must be thinking to themselves, "we deserve better." (Michael Fitzpatrick per "The Indipendent")

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