Ramsey,
In order to facilitate the changing the topic I'd like to post something appropo to your the words in your closing paragraph:
"What is likely to happen in Japan? What is the government's next move? Are Japanese saves going to start a mass exodus of yen to other countries, now that they are free to do so?"
In case anyone is unfamiliar with what's taking place in Japan this article:
mercurycenter.com
is the impetus behind Ramsey's question.
As many of you may remember I was the one that posted the link to the free Global Intelligence Updates from Stratfor Systems some time ago. Since that time I have tried unsuccessfully on a few occasions to get the Chairman, George Friedman, to post here in this forum. To make a long story short, Dr. Friedman and I have had some emails back and forth concerning this implications of the subject of the above article. I thought his response to me to be something that might interest everyone here so I asked him if it would be OK to post his emailed response to me. For those of you who would like a little background on Dr. Friedman's publications, outside of the daily Global Intelligence Updates, point your browser here:
stratfor.com
Here are Dr. Friedman's comments:
Subject: Re: Japan ready to open up its economy (3/27/1998)
Date: Sun, 29 Mar 1998 21:54:27 -0600
From: "George Friedman" <friedman@stratfor.com>
To: "Craig Siebels" <craigs29@worldnet.att.net>
I've studied Japan for ten years. I have always been amazed by how western
reporters miss the point, and Japanese deliberately mislead them
Japan is a customary country. We are a legal one. When we pass a law, we
expect that to supersede customs. In customary countries (and that
includes most of the world outside the Northern European countries) customs
continue to take precedence to laws. This has frustrated Americans
tremendously in their 150 year relationship with Japan. They think they
have reached an agreement with Japan, and indeed, the Japanese pass a law.
Then nothing changes. The customs guide people rather than the law. The
bureaucracy refuses to implement the law and even citizens refuse to follow
it. One of the great limits on auto imports to Japan was that in spite of
laws, customs officials simply refused to clear them, auto dealers refused
to stock them, and people who bought them were ostracized by neighbors.
Americans make lots of mistakes in the world by looking at what the law is.
First, you have to consider whether law is the ruling modality. In
countries like Japan contracts mean very little and neither do treaties.
Agreements must be implemented by their custom to have
force. And so we are frequently taken by surprise.
A study of the past twenty years of U.S. Japanese history shows a continual
pattern in which we regard a treaty and a law as a commitment to change,
while the Japanese regard it as irrelevant to their main course of action.
We'll see if this is different. But as to clueless, in my experience that
is exactly what Americans are when it comes to Japan. For example, every
Japanese knows that a bank balance sheet is essentially a lie, intended to
save face. Westerners, who look at balance sheets see legal documents.
Westerners thought that Japan was going to be the superpower of the 21st
century when I was writing that Japan was going to go into a depression. I
knew what the balance sheets meant and how to read them. The others
didn't. So being clueless about Japan (and the rest of Asia as well) is
pretty much standard.
But again, we will see if this is different.
There have been many agreements reached after intense negotiations that
seemed to solve all the problems existing between Japan and the United
States or other Western countries. Most of these turned into
disappointment. The Japanese position appeared to be that the United
States was never satisfied no matter what Japan conceded and the Americans
felt that Japan never kept its words. Neither perception was true. Each
viewed the agreement reached in a very different way. For the Japanese, it
was a commitment to begin a process that would inevitably take a long time
since established custom and law were in opposition. For the Americans,
the new law was expected to sweep aside all custom.
I'm reminded of the decision to introduce Toys R Us into Japan. The net
result of this would have been the destruction of tens of thousands of
Japanese toy store owners. The Japanese were committed to Toys R Us but
understood that there were massive customs to be dealt with. The Americans
felt that the Japanese were simply stalling on carrying out their bargain.
I have always followed the following principle in Japan. Before assuming I
knew how the agreement would be implemented, I would examine the
consequences to Japan if the agreement were implemented as it appeared to
be written. If the result would be severely damaging, I would assume that
it would not be implemented as written, that the Japanese never intended it
to be implemented in that way, and that they expected that the Americans
would have the common, decent courtesy to understand what was possible and
what wasn't. I also expected that a new crisis on the same subject would
be on the agenda at the next summit meeting.
So, when I see an agreement which if implementing will have profound
effects on Japan, I immediately begin by wondering whether the two sides understand clearly what has been agreed to.
George Friedman
STRATFOR Systems, Inc.
friedman@stratfor.com |
