Stitch: There is a bad combination of cultural and economic values that are coming together in Japan to thwart rational decision making.
First, remember that the Japanese banking sector in Japan has a near monopoly on the market for debt funds there. The reforms we're talking about involve (1) the breaking of that monopoly, and (2) the loss of power of men in positions of great wealth and influence. It is natural, in one kind of economic way, that these individuals would try and maintain their positions to the end.
There are also three (at least) very powerful cultural influences at work here. They are:
(1) The Japanese (as a people) are very proud of Japanese culture and the Japanese way of doing things. Their degree of ethnocentrism may be greater even than the British (and remember that all cultures, including are own exhibit this feature to varying degrees.) To bring in Western banks (and more importantly banking practices) means an end to the Japanese way of banking.
(2) It also means failure, and tremendous loss of face to the people in positions of power in the banking sector. You must understand that to these people this is not simply saying, "we were wrong, we need to correct this situation." It involves tremendous shame, and in some cases, the destruction of their personal identities. It would truly not surprise me to see some of the people involved commit seppuku as a result.
(3) Because of (2), there is also a cultural "way of saving face" that is not just relevant to Japan, but ubiquitous to Asia. This is also perhaps the most pernicious cultural aspect with respect to addressing the real problems here, because in some very important ways, appearances are much more important than reality, because as long as appearances can be maintained, loss of face can be avoided. Therefore, at exactly the time when the facts need to come out so both the nature and the magnitude of the problem can be clearly understood, the Japanese will go to any lengths to bury the problem to avoid public shame and humiliation. And, unfortunately, loss of face IS more important than anything else to the people involved. That is what makes the problem nearly unsolvable.
jess. |
