“Walk in U.S. Talk on Japan”
Ambassador Sakaba Speaks about Today’s Japan
• His visit to Chicago was a part of the “Walk in U.S.
Talk on Japan” program, which has sent groups of Japanese to the U.S.
to discuss the strengths and appeal of Japan since 2014.
• Ambassador Sakaba’s talks included Japan’s current economy, social issues, energy issues, free trading, and security issues.
• Current Economy
• When Prime Minister Shinzo Abe took his office in December
2012, he announced economic initiatives called “Abenomics”, which consisted
of three components of economic strategy or “three arrows”, to revive
a Japanese economy that had suffered from two-decade-long recession and
• The third arrow is a structural reform of the Japanese
economy with deregulations and innovations, along with foreign investments.
• Another economic issue of Japan was heavy public debt, which has reached 220 % of GDP. Although some economists said that injecting more money to the economy by fiscal expansion was not healthy under the condition, economic revitalization must be implemented by creating more spaces for economic activities and getting more tax payments. Sakaba said, “We still must inject public money to revitalize the economy. Prime Minister Abe has been trying to overcome the problem of public debt in this way.”
• Energy Policy
• Japan completely stopped operation of nuclear power generation after the Fukushima Daiichi incident that was caused by the earthquake and tsunami of March 11, 2011. For four years after the incident, Japan has generated necessary energy by coal, gas, oil, water, and other reusable methods. However, when Japan takes into consideration the problems of climate change and greenhouse gas emission, the country should seek a new way. Only 11 % of the energy supply has been covered by renewable energy so far.
• To supply enough energy to economic sectors and homes,
Japan has embarked on a New Energy Mix Strategy that ensures nuclear power
generation will supply 20 % of Japan’s energy. The percentage was 30 %
before the Fukushima Daiichi incident.
• Social Impact on Economy
• The average age of Japanese is 47, while Americans’
average age is 37. Japanese women’s life span is 87, and 80 for Japanese
men, so Japan has aging-society issues.
• Japan also is going to invite foreign workers, particularly
in some sectors of nursing, caretaking, and construction. The government
has examined new policies on aging. Another way to tackle the aging society
• Security Policy
• Japan’s new security law recently was passed by the parliament in one day. The new legislation enables the expansion and promotion of US-Japan cooperation amid the increased tension in East Asia. The new laws will make possible closer cooperation between the two countries in terms of the defense of Japan. If the U.S. forces are attached by a third party, the Japanese Self Defense Force is able to help it.
• Keiji Shigeoka, former president of Itochu Petroleum
Co., spoke about the unique feature of Japanese trading companies which
are called “sogo shosha” in Japanese.
• Four major trading companies are Mitsubishi, Mitsui,
Itochu, and Sumitomo, which were founded in 1873, 1876, 1858, and 1919
• The companies started to import natural resources from
other countries and export “made in Japan” products. They handle about
30,000 items from noodles to satellites. Because they handled huge quantities,
a trading company was divided into divisions, and the trading companies
are called “Division Companies.”
• The trading companies had led Japanese industries by playing the role of intermediary, and their major revenue came from commissions until the 1980s. However, the business circumstance changed when Japanese big companies such as Sony, Panasonic, Toyota and Nissan began to set up offices abroad.
• Shigeoka said, “The key word is change,” to survive
in new circumstances. Each trading companies had human resources, who
had various experiences in foreign business environments, so they could
invest in profitable business areas such as oil, tanker transportation,
oil storage, and more.
• A Quick Interview with Shigeoka
• Q: Why are Japanese trading companies unique?
• Shigeoka: All divisions are not always profitable, but profitable divisions cover non-profitable ones. This kind of business operation doesn’t exist in other countries.
• Q: The business commissions have increased?
• Segeoka: No. They don’t make a profit, so we operate profitable companies directly that have become major revenue sources now.
• Thank you.
Ambassador Mitsuo Sakaba