I found this article on the Japanese remarkable.
From Debt to Desperation in Japan
By Sandra Sugawara
Washington Post Foreign Service
Friday, August 21, 1998; Page G03
TOKYO, Aug. 20-Early today, Nobuo Shibata, the 48-year-old president
of a small sheet metal company, was found slumped in his car next to his
brother. A hose attached to the tailpipe had sent deadly exhaust fumes
wafting into the car.
A suicide note found in Shibata's pocket said, "We apologize to all our
employees for the slump in our business."
As debate drags on in Japan's parliament about the best way to pull the
country out of its recession, the evidence of Japan's dramatic decline
appears daily. Struggles like Shibata's are reflected throughout the Japanese
economy as bankruptcies and suicides rise, and as increasing numbers of
people who cannot repay loans go into hiding to avoid the stigma of
bankruptcy.
Corporate failures surged 35.7 percent in July from a year earlier, to 1,710
cases, and are expected to continue rising, according to Teikoku Databank,
a private research group. Personal bankruptcies, which hit 70,000 last year,
are expected to top 100,000 this year, according to bankruptcy attorneys.
They also estimate that about 100,000 debtors are in hiding.
In 1997, about 3,600 Japanese killed themselves over economic problems,
according to the National Police Agency.
Hideo Yamada, a leading bankruptcy attorney, said an estimated 1.5 million
people are now unable to repay loans and are struggling to avoid
bankruptcy. Some turn to relatives or loan sharks -- who often have ties to
organized crime groups -- for cash, in hopes that their finances will improve
and they can repay the money soon, he said.
But with the economy sliding further, many of them may have difficulty
doing that. Indeed, earlier this week Economic Planning Agency Minister
Taichi Sakaiya said the government's assessment of Japan's economic
condition might worsen after the release of July economic data.
"In just about all the regions, the economy has become worse," Sakaiya said,
according to Reuter News Service.
And Finance Minister Kiichi Miyazawa acknowledged that the bailout of
major banks earlier this year did nothing to alleviate the credit crunch, which
is making it even harder for companies to get the loans they need to do
business. That is expected to accelerate the rate of bankruptcy filings.
The Japanese Trade Union Confederation, Japan's largest umbrella
organization of labor unions, is so concerned about the impact the credit
crunch will have on jobs that it recently decided to funnel 20 percent of its
strike fund to guarantee loans taken out by companies that employ union
members, according to Kyodo News Service.
In the United States, bankruptcy is sometimes seen as a form of creative
destruction. Many American entrepreneurs blithely recite the failed business
ventures that preceded their successes. Not so in Japan. "To have to
borrow, there is a sense of shame. And once you borrow, there is a
widespread feeling that you must return," said bankruptcy attorney Kenji
Utsunomiya.
In fact, companies often try to get rid of employees who have declared
personal bankruptcy, said bankruptcy attorney Hideo Yamada. The
companies fear such people will sully the firm's reputation, he said. "Legally
they can't fire a person because of bankruptcy. But if he gets calls from
credit companies at work, then they can use that as an excuse to get rid of
him," arguing that it is disrupting work, Yamada said.
So instead of filing for bankruptcy, many people pack up their belongings in
the middle of the night and move to another part of Japan. People from
cities move to the countryside, where they try to get work as day laborers,
while people in the rural areas try to disappear in the cities as waiters or
janitors, according to attorneys. Some eventually get caught, particularly if
they get sick and must apply for national health insurance, or if they need to
enroll their children in school. Others become weary of being away from
their family and friends and return to file for bankruptcy and face their
creditors.
"I hear that those small construction company owners, some of them have
run away because they have so little work, but they still must pay their
employees," said Kazuharu Ezawa, an executive with the Construction and
General Workers Union.
One former owner of a sporting goods store in Shikoku, a small island south
of Tokyo, ran away when he realized his store had failed. In a recent
interview, he explained that he was afraid of loan sharks. In addition, he
said, "I was scared of being labeled a bankrupt person."
He changed his mind after his daughter, whom he had contacted, convinced
him to go to a lawyer. Since then he has successfully discharged his debts
through the courts and is a taxicab driver. He wrote a book on the ordeal,
because he said he wanted to convince others that it was far better to use
the bankruptcy courts than to disappear.
However, he used a pseudonym on the book and refused to allow his real
name to be used in this story.
"I don't want my neighbors to know I was once bankrupt," he said.
Special correspondent Akiko Kashiwagi contributed to this report.
c Copyright 1998 The Washington Post Company |
