Although the sound-trucks were blaring in the streets outside and political posters were flapping from every lamp-post, the atmosphere that greeted Japan’s newest mandarin at his inaugural press conference was quiet and deferential.
Jiro Saito, a 57-year-old career public servant, had just been put in charge of the economy of the world’s richest country, although you would never know it from his modest title: Administrative Vice-Minister of the Ministry of Finance.
As the docile reporters of his very own media fan club gathered in a conference room at the grey office building in the government quarter of Kasumingaseki, one of them asked Saito what effect the turmoil and uncertainty of the pending election would have on Japan’s economic policy.
“Whatever the new Government, and whoever the new Minister of Finance, we will continue to do what we believe in,” he replied. The reporters nodded deferentially. They understood. There was no need for Saito to spell it out.
In the hierarchy of influence in Japan, it is the administrative vice-minister, the equivalent of a head of department in the Australian bureaucracy, who wields the real power. It is not Yes, Minister, but Hai, Jimujikan – the official title of these exalted civil servants.
In his definitive book on power in Japan* , the Dutch journalist Karel Van Wolferen quotes no less an authority than Masayoshi Ohira, Prime Minister of the country for two years in the scandal-racked 1970s, on who really makes the decisions: “The minister must consider himself only a temporary visitor in his government office,” wrote Ohira. “(He) must try as hard as he can not to be disliked by his officials.”
Not that any minister has ever been allowed to occupy a portfolio for much longer than it takes to find the loo – a year or two at the most. Even prime ministers are rotated regularly through the revolving door of Japanese politics – the next will be the 20th in the 47 years since the postwar constitution came into force.
Nor does any modern Japanese politician need to be reminded of the naked display of power by the bureaucracy when, in 1947, it was faced with Japan’s first, and only, socialist government. The Finance Ministry refused to fund the budget of the Prime Minister, Tetsu Katayama, and his Government fell after only nine months in “power”.
So, if Paul Keating, Bill Clinton or any of the other world leaders who do business with Japan want to get close to who will really pull the levers in the “new” Japan that will emerge after tomorrow’s election, they should not spend too much time with Messrs Miyazawa, Kaifu, Hata, Hosokawa or any of the other prime ministerial hopefuls.
The people they should be taking to lunch number fewer than 100, and must include at least the following five, who will have the final say on any major policy decision – from importing rice to supporting the United Nations – in any future government, no matter what its political hue.
* Jiro Saito, 57, Finance Ministry head. Saito is the eminence grise of Japan’s banking and securities industries, and – together with the Bank of Japan governor, Yasushi Mieno – fixes interest rates and directs budget policy. Is in charge of the world’s largest piggy bank, the $3 trillion in government savings and pension funds. Law graduate of Tokyo University; joined Finance Ministry 1959; last posting, director of the budget bureau.
* Hideaki Kumano, 55, head of the Ministry for International Trade and Industry. Although MITI has lost influence in recent years – the victim of its own phenomenal success – it is still the policy greenhouse of Japan’s export industry. Tokyo University economics graduate; joined MITI 1960.
* Hisashi Owada, 60, head of the Foreign Affairs Ministry and mastermind of recent foreign policy initiatives, including sending troops overseas for UN peacekeeping operations, and boosting Japan’s overseas development aid to the largest of any country in the world. Graduate of Tokyo University; joined Foreign Affairs in 1955; father-in-law of Japan’s next emperor. Soon to be replaced by his deputy, Kunihiko Saito, 58.
* Akira Yamagishi, 64 tomorrow, chairman of Rengo, the Japanese Trade Union Confederation. Although Japan is relatively ununionised – Rengo represents eight million workers in the public and private sectors – Yamagishi plays a crucial role in the annual round of wage deals, and delivers (mainly to the Democratic Socialists) at election time. A former post office worker from Toyama; has headed Rengo since 1989.
* Gaishi Hiraiwa, 78, chairman of Keidanren, the federation of Japanese Economic Organisations. This is the all-powerful peak body of industry cartels- petrochemicals to steel-making, cars, electronics and banking – that is the business muscle of Japan Inc. A law graduate and former public servant, Hiraiwa is chairman of the Tokyo Electric Power Co. Has headed Keidanren since 1990. Soon to be replaced after a controversy over election funding -successor undecided.
The power of these men in Japan is unquestioned. They have only to lift the phone to change government policy. In their famously grungy public service offices and after hours in the perfumed back parlours of exclusive Ginza ryotei (salons), these are the men (there is not one woman among them) who, over their sushi and mizuwari (whisky-and-water), run the country.
Japan is remarkably unbureaucratised compared with other developed countries – fewer than five public servants per 100 people, compared with 10 in the United States and 15 in Britain. But what they lack in numbers, they make up for in influence.
Most of those who will eventually form the country’s leadership cadre are graduates of Tokyo University’s ultra-elite law faculty, where they first establish their networks of influence. After they battle through the formidably tough public service entrance examinations, they face murderous working conditions if they want to stay on a career track – even junior recruits will work six days and 60 or 80 hours a week, often sleeping over at the office on makeshift bunks.
The bureaucrats form the strongest and most enduring arm of what reform-minded Japanese politicians call “the iron triangle” of politicians, the civil service and big business.
Many would say the most powerful, since over the years the bureaucrats have”colonised” the two other arms of the triangle to a remarkable extent.
About a third of LDP Members of Parliament are former bureaucrats. Industry is even more infiltrated, through the process of amakudari – literally”descent from heaven” under which at the age of 55 many senior bureaucrats”retire” to cushy jobs in the industries which they have spent their lives regulating. They see no conflict of interest in this practice.
Last year was a vintage one, with no fewer than 314 top civil servants leaving to become highly paid directors of companies – most notoriously in the corrupt construction industry, in the finance sector and in the transport and telecommunications industries. More than a quarter of the 1,517 directors of Japan’s giant construction companies were former bureaucrats, and the chairmen of most major banks in the country are former Finance Ministry officials.
A headline in last week’s economic newspaper, Nihon Keisai, summed it up: “Politics hindering bureaucrats.” The article explained how outraged the Ministry of Finance was at having to postpone a rise in interest rates on government housing loans until after the election – even though this is clearly legally an area of ministerial direction.
In Tokyo, there is no question of which side of Roppongi-Dori – the broad avenue that separates Parliament House in Nagatacho from the public service precinct of Kasumingaseki – real power resides.
While the rest of the world waits with bated breath for the election which will “end 38 years of conservative rule”, for the people who really run Japan, tomorrow is no more than an irritating and irrelevant sideshow. No matter who wins, the bureaucracy will remain in charge.
Cabinet meetings in Japan are rituals which last no more than 10 or 15 minutes for the purpose of rubber-stamping reports from the bureaucracy. If you attend a session of the Diet, Japan’s rococo opera house of a parliament chamber, you are left in no doubt who is in charge.
Beside the Speaker’s dais sit serried ranks of senior public servants, keeping an eye on proceedings, and occasionally sending a note down to the politicians on the floor of the House. The bureaucrats in Tokyo not only write the answers for the ministers, they also often write the questions for the Opposition.
The bureaucrats in Japan are unlike those in any other developed country, with the possible exception of France, which also has a highly centralised, professional bureaucracy with almost unlimited discretionary power. “Administrative guidance” they call it – policy not based on any law, decided and administered in secret, by anonymous bureaucrats wielding arbitrary power. And woe betide anyone who doesn’t want to be guided.
The Finance Ministry – not the minister – for example, not only determines which areas of industry banks can lend what percentage of money to, but until very recent times could say yes or no to individual loans. They had, literally, the power of life or death over industry.
In agriculture – just in case the rest of the world is hoping for any relaxation of the ban on rice imports under a new government – the ministry still operates under the 1942 Foodstuff Control Law, an emergency wartime measure giving the bureaucrats almost unlimited power over the distribution and sale of anything you can eat.
Recently, one corporation which imports grain dropped its contingency plans for rice imports after just a phone call from the ministry – “We couldn’t risk offending the Agriculture Ministry,” said a frightened manager. “They hold wheat hostage.”
Last year Shin Kanemaru, then the vice-president of the ruling Liberal Democratic Party, suggested that if the Bank of Japan did not lower its interest rates, the governor should be fired – the Government, whatever you might think about it, has this power under another wartime measure, the 1942 Bank of Japan Act.
Toshihiko Fukui, a member of the central bank’s policy-making board, was unable to contain his contempt for such a suggestion from a mere politician. “It’s impossible to take such an absurd statement seriously,” he said.
At the Tokyo Summit last week, there was the most arrogant example of bureaucratic muscle-flexing in recent memory, when the Prime Minister, Kiichi Miyazawa, promised the G7 nations Japan would consider boosting its economy with a supplementary budget, and tax cuts, if the economy did not pick up. Within hours, the world witnessed the astonishing spectacle of Shusei Tanaka, jimujikan of the Economic Planning Agency, calling a press conference to publicly contradict the economic policy of his country’s elected leader. An economic recovery was under way, and no stimulus package was under consideration, sniffed Tanaka.
No-one in Japan was in any doubt about whom to believe.
Politicians – particularly from the new conservative parties, and from the popular reformist New Japan Party – have been barnstorming the country for the past fortnight, campaigning on a platform of breaking the “iron triangle” and returning power to the Parliament.
Kazuo Aichi, for instance, a leading light in the LDP splinter party Shinseito and tipped as Foreign Minister in any Opposition-Coalition Government, told a campaign rally last week: “It is not up to the bureaucrats to make laws; it is up to the politicians. This iron triangle between bureaucrats, politicians and businessmen is not really democracy – information is monopolised by a small group, and the average Japanese, even many politicians, do not have access to that network. We must break the monopoly on information.”
However, it is the supreme irony that the dissolution of Parliament last month – in which Aichi played a leading role – killed probably Japan’s best chance in decades of bringing the arrogant elite of its bureaucracy under political control.
When the Miyazawa Government died, so did legislation (which had to be specially drafted by a non-bureaucrat, needless to say) which would have cut back their arbitrary power, obliged bureaucrats to give written reasons for decisions, and revised no fewer than 361 laws giving them almost limitless discretionary power.
The new, unstable political landscape that faces post-election Japan will in fact increase – not reduce – the power of its bureaucrats. The likely outcome of tomorrow’s election is some sort of Coalition Government that may be able to hold together only long enough to draw up a new electoral system -and go back to the polls.
In the meantime, Saito and his fellow jimujikans will look after the real business of running the country – there is a budget to be put together, a trade war to be averted, and a sick economy to be tended.
The old political certainties of nearly four decades of unbroken one-party rule will likely end tomorrow. But the world should not expect a “new” Japan any time soon. Not while the mandarins of Kasumingaseki remain in charge.
Pub date: Saturday 17 July 1993
Word count: 2397
Keywords: Public service Elections
Owada Drawing: Michael Fitzjames
Caption: Hideaki Kumano Jiro Saito Gaishi Hiraiwa Akira Yamagishi Hisashi
* The Enigma of Japanese Power, Macmillan.