LETTER FROM OSAKA
The Next Japan
FORTUNE.COM
Wednesday, September 18, 2002
By Justin Fox
The view from my hotel room here in Osaka includes a canal (my map calls it a river, but I don't buy that). It's a nice scene. People jog along its banks. Somebody was playing a trumpet on a bridge last night. This morning there were a few people fishing.
Then there are the blue tarps, partly hidden in the trees. At first I couldn't figure out what they were. Then I went for a walk today, along the Ajigawa River. I saw a lot more blue tarps. And now I know what they're for: People live under them. The wooded banks of Osaka's waterways have become shantytowns, or tarp towns, housing hundreds, maybe thousands of people. Hoovervilles, as it were, except by now Japan's economic ordeal has been going on far too long for it to be pinned on any one politician. LDPvilles, maybe.
The weird thing, though, is that by any objective measure Japan's economic troubles are nowhere near the scale of the Great Depression that spawned America's Hoovervilles. In fact, the unemployment rate here right now is well below that of the U.S.
Still, there are the shantytowns. And the two fancy shopping malls I visited today here on the east side of town were almost deserted. Osaka, once the heartland of Japan's amazing boom, has the feel of somebody wearing a shirt that's too big for him. It's got lots of big buildings, but there's just not enough going on to fill them. Or at least not enough to pay the rent.
Of course, the same could have been said of any U.S. Rust Belt city in the early 1980s. And it turned out the U.S. economy was headed for better days, not worse. But after reading Bill Powell's essay in the current FORTUNE arguing that the U.S. is not the next Japan, and looking around Osaka a bit, I think I have an idea of what the next Japan is. It's Japan.
I should point out here that I don't really know what I'm talking about. I'm in Osaka not to research an article on the Japanese economy, but for an OPEC meeting (more on that in a moment). But Japan, which I last visited four years ago, still feels like it's going nowhere. Yes, the cell phones are cooler here (the newest ones being advertised on TV can transmit video). But they don't work anywhere else in the world, and the feeling that Japan is becoming a fascinating but not all that economically relevant chain of islands is only growing stronger.
Whatever the troubles of the U.S. economy, irrelevance doesn't seem to be a real danger anytime soon. If any other major economy seems about to slip into an extended Japan-style malaise, it's that of Western Europe, not the U.S.
America is working off the effects of a massive investment bubble, something it has done several times before. Every time, the hangover has been painful. Sometimes it has faded quickly, other times not. But after all the bankruptcies and layoffs and hand-wringing, the U.S. economy has always come back on its own strength. In fact, writing off losses and starting over has become perhaps the defining element of American capitalism.
Japan never had that kind of capitalism, and still doesn't. Neither does much of Western Europe. France and Germany are full of corporate disasters right now, mostly but not exclusively telcos. But politics in both those countries dictates that these walking dead won't be allowed to die, or to pare expenses (read: labor costs) enough to get healthy again. European politics also dictates that no changes be made to government-funded pension plans whose funding problems make Social Security's look puny.
Now I'm not saying that Western Europeans don't lead pleasant, vacation-filled lives. And, as noted above, the Japanese have way-cool mobile phones. But if economic dynamism is what you're looking for, look somewhere else. Like the East Asian mainland. Or the U.S.
***
As I mentioned above, I'm here for an OPEC meeting. The actual meeting is tomorrow. So far the main activity of most of the journalists on hand has been standing around in packs in the lobby of my hotel, in the lobby of another hotel nearby, and in the arrivals area of Kansai International Airport, waiting for OPEC ministers to show up. I caught one of these arrivals, that of Algerian oil minister Chakib Khelil, this afternoon. "What are you going to do about production quotas?" the journalists shouted at him. "I'm tired," Khelil responded, and walked straight to the elevators.
To which I can only say: Mamas, don't let your babies grow up to be oil journalists. |
