by Pino Cazzaniga

The year 2008 was a bad year with huge losses, lay-offs, homelessness, cold weather-related deaths and pessimism. A new moral dispensation is needed.

Tokyo (AsiaNews) – The worldwide economic crisis is forcing Japan to rethink its model of development. In mid-May media looked at the country’s performance in the fiscal year 2008 and came up with a desolate picture. The best auto and electronics companies, which had record profits in 2007, showed losses running in the billions of yen.

Of course, Japan’s economic crisis cannot be divorced by the broader global crisis caused by the collapse of the US financial system, but it has its own peculiar features. Now the future of the country will depend on choosing the right path at home and abroad. Japan, in short, is facing a major turning point in its history.

Cultural factors at the basis of the crisis

“A recession, a difficult situation, is a good opportunity to think about what is right,” said Konosuke Matsushita (1894-1989), the venerated founder of Matsushita Electric Industrial Co. (now Panasonic Corp.), who was quoted in the editorial page of the Asahi newspaper in order to shake up the Japanese and get them to conquer the sudden economic disaster.

And they better believe it is a disaster. On 13 May Asahi reported that Japan's 10 automakers suffered a combined operating loss of 320 billion yen (US$ 3.3 billion) in fiscal 2008 due to plummeting sales worldwide and the high yen compared to more than 5 trillion yen (US$ 51 billion) in operating profits on a consolidated basis the previous year.

In fiscal 2007, Toyota's operating profit was more than 3 trillion yen (US$ 30 billion), making the auto giant the largest carmaker in the world, US included. But just a year late, in fiscal 2008, Japan’s juggernaut suffered a 461-billion-yen operating (US$ 4.7 billion) loss.

The electronics industry, which with the car industry is the backbone of Japanese manufacturing, is not doing that much better and its future is bleak.

Although cautious about making alarming predications, even the best economists have avoided giving too much of a positive spin to the current situation. Like Matsushita they are trying to use the crisis to think it through to see what went wrong and what can go right.

Whilst admitting a boom was good, the ‘grand old man’ of Japan’s post-war industrial miracle also said that “a recession is even better.” That's because he believed an unprecedented difficulty, an unprecedented recession can produce unprecedented innovations, Asahi’s editorial page said.

 The human toll of the crisis

According to a recent report by Japan’s Industry Ministry there were 486,398 foreign workers in Japan. But these are official figures. Unofficially that number is much higher, especially in small and medium size factories.

“Behind the 'prosperity' of Japan's economy that was pulled by the auto industry as the major strength of its exports, were legions of foreign workers who have worked hard under uncertain employment conditions," noted Reverend Watanabe, a pastor of the United Church of Christ in Japan.

But now lower demand in foreign markets (US and Europe) has forced companies to cut their workforce, both foreign and Japanese.  In the auto industry alone some 30,000 ‘temporary ‘workers have lost their job.

The situation is especially hard for Dekasegi, Nippo-Brazilians who immigrated to the country of their forebears and who now must make the trek back to Brazil.

Leda Shimaburo, who heads a Nikkei (foreign-born Japanese and their descendants) group that helps these workers, said that every month about 150 Nippo-Brazilians are going back to Brazil but under worse conditions then when they left. Few have any professional skills and some of their children cannot even speak Portuguese.

The path of hope

It is illusory to think that this crisis can be resolved quickly.  “We've begun to see the bottom, but there's no sign of recovery,” Mitsubishi Motors President Osamu Masuko said. But Japan can overcome it and its recent story is proof of it.

In the past 150 years Japanese society has successfully responded to two major challenges: opening to the West and accepting democratic values. 

The challenge now lies in building a new economic order in which intelligence and ethics are used to respond to history’s latest test.

Again to quote Matsushita, a “recession [. . .] is a good opportunity to think about what is right,” and also about what went wrong.

There is no error in having the economy expand intelligently and a lot, but in the goals pursued by such growth: money and emulation.

Japan’s great development, based on steady and intelligent efforts, is certainly of great value but on one condition: the development of man in his totality.

Cast in stone on a wall outside Panasonic’s head office, the founder’s modus operandi reads as a spiritual testament: “Since its establishment, Panasonic has operated its businesses under its basic management philosophy, which sets forth that the mission of a business enterprise is to contribute to the progress and development of society and the well-being of people through its business activities, thereby enhancing the quality of life throughout the world.”

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