When Botswana ranks higher than Japan
Until about five years ago, Japan was on a par with the U.S. -- in short, a first-rate country. But after the government's deficits began to soar, people started comparing Japan to Italy. Then, as its credit rating plunged below those of second-tier countries, Japan was spoken of as a third-rate country. In sumo terms, over the last five years, Japan has plummeted from an ozeki (champion) ranking into the bowels of the juryo (lower) division). Its pride in tatters, Japan now has to look up to, of all places, Botswana.
All of this talk of Japan's rapid retrogression was triggered by the downgrading of Japanese government bonds to the sixth-highest rank by Moody's Investors Service, Inc., the U.S. credit-rating agency. The downgrading incurred the wrath of Finance Minister Masajuro Shiokawa, and Minister of Economy, Trade, and Industry Takeo Hiranuma. "It is an outrage for (Japan) to be ranked below a country half of whose population has contracted AIDS," said Hiranuma. He was later forced to apologize for his inappropriate remarks. The Ministry of Finance lodged protests with Moody's three times for ranking Japan below Botswana.
Though the Republic of Botswana is a tiny country in southern Africa with a population of only 1.65 million, and a per-capita GNP of 3,300 dollars, or less than one-tenth the size of Japan's, it has earned a credit rating higher than Japan's because it practices sound fiscal management.
Japan imports a larger percentage of the diamonds that Botswana mines, but Botswana is probably one of the most well-known African countries in Japan today because it has a higher credit rating.
"We are very happy to be ranked above Japan," a Botswana government official told a fellow journalist who visited that country recently.
The irony is that Japan happens to be Botswana's largest foreign aid donor. To demonstrate that Japan bears no hard feelings, Deputy Vice Finance Minister Haruhiko Kuroda felt obliged to pledge that "Japan will not reduce its official development assistance (ODA) to Botswana."
The root of Japan's credit-rating woes has been its reckless deficit-spending over the last decade. In sumo terms, it was as if a rikishi, upon achieving the rank of ozeki, immediately went out on the town every day and night to booze it up, and then hit bottom after a major injury kept him from training. It is Japan which should be engaged in self-reflection. Botswana is merely a bystander.
If we look into the rear-view mirror, we will discover that Japan has been quite un-Botswana-like for more than a decade. Even after its economy tanked, Japan funded its fiscal expenditures with deficit spending, and the government tried to conceal its policy failures from the Japanese people by issuing bonds to dampen the pain of the recession. The result: Japan has become the most highly indebted country in world history.
Sadly, Prime Minister Junichiro Koizumi, in an attempt to cling to power, has recently begun to waver from his pledge to cap bond issues at 30 trillion yen. But if he tries to entice us with tax cuts that lead to even higher deficits, Japan will no doubt fall to a level not only below Botswana, but even below South Africa. We mean no offense to Botswana and South Africa, but give us a break! (From the Mainichi Shimbun, Aug. 11)
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