familiar with the multipurpose cultural halls, museums, and communications centers that are becoming the predominant features of urban life. Even tiny villages have them. Halls and centers that cost tens or hundreds of millions of dollars each go up across the nation, it is said, at the rate of three a day.
In the ancient Chinese philosophical treatise
In libraries devoted to Japan, shelves sag under the weight of hundreds of volumes written about the gardens of Kyoto, Zen, Japan's youth culture, and so forth. Yet we must concede, after looking at the Construction State, that these are not the areas into which the energies of Japanese society are really flowing. The real Japan, sadly ignored by travel writers so far, lies in its many modern monuments; visiting a few of them will give us a taste of the true Japan.
Our first stop is Tokyo's Teleport Town, a waterfront construction project like the ones that almost every Japanese city with access to the sea now boasts. These Utopian visions of high-tech «cities of the future» are Japan's pride, with their expensive landfill in harbors, followed by museums, convention halls, and superexpensive «intelligent buildings.» The costs are astronomical, high enough to drag Osaka Prefecture and Tokyo, Japan's two major metropolitan regions, into bankruptcy. But the local governments are pressing on regardless.
Teleport Town was built on land reclaimed from Tokyo Bay by the Tokyo metropolitan government and developed with state-of-the-art infrastructure. Time 24, one of its «intelligent buildings,» boasts fiber-optic wiring and other equipment, and is serviced by a shiny new train system. The trouble is that there was no need for Teleport Town. Time 24 has been almost empty since it opened, and so has the train. So few tenants moved in that in February 1996 Time 24 tried to lease floors to the Fisheries Department, to be filled with fish tanks – unsuccessfully. Projections indicate that Teleport Town will run up a ¥5 trillion shortfall over the next three decades.
From here we move on to Tega Marsh Fountain, built by the Chiba prefectural government, northeast of Tokyo. This fountain, spouting water from the most polluted inland body of water in Japan, was built to «symbolize the community's hopes for the future.» So poisonous is the spume that operators halt the fountain when the wind is blowing hard or when there is an outbreak of toxic algae. In a newspaper interview, one man summed up the view of local residents: «I don't have a good feeling when I see the fountain.»
While Teleport Town is a monument in progress and Tega Marsh Fountain is in its terminal stages, in Gifu, between Kyoto and Nagoya, we can see a monument at its inception. The town of Gifu is a dreary conglomeration of little shops, home to thousands of low-end manufacturers of T-shirts and cheap clothing. This local industry, at a sharp disadvantage to China and other cheap foreign producers, is mired in chronic depression, hardly an encouraging sight, but in December 1995 Gifu Prefecture announced that it intended to become the «Milan of Japan.» At great expense, it redeveloped the wholesale market near the train station, raising a gleaming new complex that Gifu hoped would solve the problem of structural decline in Japan s apparel industry.
Northwest of Gifu, the Hokuriku Express, a spur train line, was built for ¥130 billion during the course of almost thirty years simply to shave fifteen minutes off the rail time between Tokyo and Kanazawa, and it is now to be overshadowed by a newer monument. In addition to the fact that there was no real need for it in the first place, it appears no one will ever use the line because Japan Railways is extending the bullet train to Kanazawa. A Hokuriku Express executive says, «Although no one openly says so, everybody's worried. We hope to attract passengers by developing tourist attractions.» In other words more monuments.
Last, there is the Hakata Bay project, a container port being built on mud flats in the harbor off Fukuoka City. When completed, the 448-hectare island, second in size only to Teleport Town, will destroy bird habitat, the last remaining place in Hakata Bay for migratory birds. There was some opposition to this project in the early 1990s, but Fukuoka Prefecture claimed the port would be needed for new commerce with Southeast Asia, though this is unlikely, given the high yen and increased competition from other ports in Asia and Japan. Kaneko Jun, a manager at Evergreen, a company that handles the largest volume of containers at Fukuoka, said, «As far as our company is concerned, the island is not necessary.» Would Fukuoka protect the birds, cancel the plan, and save itself ruinous expense? The answer is predictable. Although the World Wildlife Fund Japan petitioned the national government to review the project, the Environment Agency approved it and construction began in April 1996.
Japan's monument mentality is in evidence everywhere. Not only the Construction and Transport ministries raise monuments – every department does. One of the biggest builders is the Ministry of Agriculture, Forestry, and Fisheries (MAFF), which receives 20 percent of the public-works construction budget, far more than it needs. Nevertheless funds, once budgeted,
There are four veggie airports already built, and five more under construction. However, as it turns out, flying vegetables costs six to seven times as much as trucking them, and far more labor to load and reload them from trucks to aircraft to larger aircraft and back to trucks. Kasaoka Airfield flies vegetables to Okayama City, only a few dozen kilometers away, even though flying them takes just as long as sending them by road.
Boondoggle fever is infectious. It has expanded beyond government into endowed foundations and cultural groups. Even the Red Cross, it seems, is not immune. In March 1997, newspapers revealed that the Japan Red Cross had secretly diverted much of the $10.3 million in earthquake-relief donations that came from Red Cross organizations in twenty-six countries to build a facility called the Hyogo Prefecture Disaster Treatment Center.
«This money was collected for victims of the Kobe earthquake,» said Vedron Drakulic, the public-affairs manager of the Australian Red Cross. «We didn't know about other uses.» One could hardly blame the Australians for not understanding the way things work in modern Japan. The socially prominent Japanese who sit on the Japan Red Cross board and the millions of contributors across the nation who support it are sincere in their desire to be philanthropic. They, too, are victims for they are no match for the bureaucrats who manage the organization like every other, programmed to make construction a priority.
Mitsuie Yasuo, a Construction Ministry official who has argued in support of higher public-works budgets, makes the claim that «Japan is still a developing country compared with Western Europe and the United States.» This open admission of the Construction Ministry's ineptitude is, incredibly enough, a truthful one. Perhaps the single exception is Japan's rail network, one of the most extensive and efficient in the world. Railroad building is an example of a policy that grew far beyond its original aims and became one of officialdom's unstoppable tanks. A high priority in the postwar years, railways took on a life of their own as the ultimate pork barrel beloved of politicians, with the result that gigantic new lines continue to expand across the nation regardless of economic need or environmental impact. As Richard Koo, the chief economist for the Nomura Research Institute, puts it, «Good projects are a luxury. Recovery is a necessity. How money is spent is not important.
That so much money has brought so little real improvement to life is an aspect of Japan's modern development that most defies comprehension. As boondoggles burgeon madly over the landscape, the sorely needed improvements that would really enhance life remain in the future: burial of power and phone lines, construction of sewage lines (still lacking for a third of Japan's homes), provision of good public hospitals and educational institutions, cheap and efficient air travel (Japanese domestic air travel is the most expensive in the world, and Narita Airport in Tokyo features such poor design and management that travelers recently voted it the forty-second worst airport in the world out of forty-three), and waterproof waste-disposal sites. This is not to mention a massive
To understand how the monument frenzy can continue at fever pitch, we need to take another look at how these projects are funded. Where do the bureaucrats get their money? They get it from Zaito, or FILP (Fiscal Investment and Loan Program). Zaito is Japan's second budget, the shadow budget, through which MOF's Trust Fund Bureau draws on a huge pool of deposits in the postal-savings system to fund its agencies and programs-with almost no parliamentary overview. Zaito is the bureaucracy's private piggy bank.
Zaito works like this:The government grants tax exemptions and other preferential treatment to postal-savings accounts managed by local post offices; interest on postal-savings deposits is consistently higher than in the private sector. Lured by these higher interest rates and by the convenience of banking at post offices, the Japanese people have put more and more of their money into postal savings, to the extent that by the end of the twentieth century they accounted for about a third of all bank deposits in Japan.
This enormous pool of capital – trillions of dollars' worth – is handed over to MOF's Trust Fund Bureau to manage. With the funds from postal savings, pension funds, and other special accounts combined, the Trust Fund Bureau has, in effect, become the worlds largest government bank. It invests much of the money in Japanese government bonds, which helps to explain why these bonds, which paid interest of only 1 to 2 percent or less for most of the 1990s, still found buyers – or, at least, one large buyer, the government itself, using captive savings deposits managed by the Trust Fund Bureau.
With money like this at its disposal, how could MOF resist the temptation to dip into the honey pot? It didn't take long. In 1955, only three years after the American Occupation ended, MOF borrowed a little money from the Trust Fund Bureau to support certain items for which there was not enough allocation in the general budget; the purpose was obviously to get around the official budget process in the National Diet.
It worked all too well. By 1999, Zaito borrowings had skyrocketed to ¥52.9 trillion annually, including ¥39.4 trillion overseen by the Trust Fund Bureau and another ¥13.5 trillion lent by the Postal Life Insurance system. In 1999, the ¥52.9 trillion Zaito program amounted to two-thirds of the money disbursed in the official «first budget.» The beauty of Zaito, from MOF's point of view, is that it flows from an inexhaustible pool of public savings and is largely invisible to politicians and the press. So far so good. The problem is that the people who manage Zaito are the same «brilliant, creative, tenacious, public spirited» MOF men who have run Japanese banks into the ground. With an endless supply of money at their disposal and no public accountability, the fifty-seven
When these corporations and agencies found themselves unable to repay their Zaito borrowings, the tobashi started.
Tobashi, or «flying,» is a word we have met before as the term used by banks to describe the method whereby they pass bad loans on to subsidiaries, thus causing them to «fly» off the books. In the case of Zaito, MOF lent more money to Zaito borrowers to cover the interest payments. By 1997, troubled Zaito loans were estimated to be as high as ¥62 trillion, although even this is a conservative figure. These Zaito obligations, added to the cumulative deficits of the central and local governments, the «hidden debts» (such as ¥28 trillion for the old Japan National Railroad Resolution Trust), and the juggling of inter-governmental accounts, raise Japan's real national debt to a level higher in absolute value than the U.S. national debt, equal to as much as 150 percent of Japan's GNP.
