AMPONTAN

Japan from the inside out

Edano Yukio interview (2), plus alpha, plus update

Posted by ampontan on Saturday, February 20, 2010

THE RESIGNATION OF Finance Minister Fujii Hirohisa last month resulted in a minor Cabinet reshuffle in the Democratic Party of Japan-led government. Two other ministers slid into different positions, and Edano Yukio filled the vacancy as the minister for governmental reform. He conducted a group interview with the print media last week, very little of which appeared in English. Here’s what the Nishinippon Shimbun thought was worth printing in Japanese.

*****
What are the problems with independent administrative institutions and public interest corporations?

Edano Yukio

There is little taxpayer involvement and problems frequently arise. The people are suspicious of the way tax money is spent. The independent administrative institutions should be subjected to zero-based review. In principle, they should be eliminated in accordance with our party platform. We cannot, however, eliminate national universities (which are now organized as independent administrative institutions). Some of these bodies should continue in a form with no national government involvement.

We should examine problems using the pattern we adopted for the general program review (conducted in a Tokyo gym last fall). The enterprises that can be entrusted to the private sector will be reorganized in a different form. We will also debate what sort of organizational form should be used.

The previous general program review was criticized for being controlled by the Foreign Ministry.

We should have the people understand that the process was controlled by the politicians. That must be done by communicating the process in which decisions were made about the programs reviewed.

What are your targets for reducing independent administrative institutions and public interest corporations?

The programs are reviewed to decide how many of them should be eliminated. If we knew from the start, the review wouldn’t be necessary. The reason people praised the program review last year was not because of the (money saved), but because we stopped the unreasonable expenditure of taxpayer money. Overall spending reductions will be achieved by other means, including devolution to local government.

You’re also responsible for the government’s interpretation of laws and regulations. Will a change in the interpretation of Article 9 in the Constitution be possible?

If past interpretations were mistaken it would be possible to correct them, but as of now, we do not have to change the interpretation of previous administrations.

Should Democratic Party of Japan Secretary-General Ozawa Ichiro be questioned as a witness in the Diet?

I will refrain from commenting because that will be decided in the Diet, but another occasion for a further explanation is needed to have the people accept it.

Reading between the lines

* His stated policy of subjecting the quasi-governmental entities to a zero-based review and privatizing many of them is an excellent one. Now we’ll see what he can accomplish. According to the Ministry of Internal Affairs and Communications, there were 98 independent administrative institutions as of 1 October 2009 and 24,648 public interest corporations as of 1 October 2007. He’ll have to roll up his sleeves.

* Mr. Edano was the model of discretion in this interview. For example, he would not be upset if a hole were to open in the earth and swallow up Ozawa Ichiro. Once upon a time, he threatened to leave the DPJ if it admitted him and the rest of his Liberal Party, but that turned out to be a bluff. Nevertheless, their contentious relationship is one aspect of, and contributes to, the DPJ’s inherent instability.

* He has served as the chair of the party’s special committee on research into constitutional reform. Regarding the peace clause, he has said the constitution has no mechanism for civilian control of the military and therefore cannot act as a check on the action of the self-defense forces. The use of those forces is determined by interpretation. That suggests he would prefer written law rather than interpretation, but he seems to be backing away from that in the interview. Mr. Edano is also the head of a DPJ faction with Maehara Seiji, who would amend Article 9 to allow for self-defense. The impossibility of a DPJ consensus on constitutional issues might be the reason he accepts the status quo now that he is in a DPJ-led Cabinet.

* All politicians find themselves at some point in the position of thinking they have to either lie or dissimulate. Some are as cheap and brazen about it as a concert full of Elvis impersonators. Give credit to Mr. Edano, however—his spin claiming the policy review conducted by the government last fall was under political direction is at least tasteful, if not exactly true.

* Note that one of his ideas for reducing the spending of the national government is to force local governments to make those expenditures. He misses the point entirely. Economic growth and more efficient government are achieved by reducing government spending, not by forcing taxpayers to finance a different government entity.

Plus alpha: Behind the scenes of the policy review

Journalist Wakabayashi Aki drew back the curtain to provide a glimpse of scenes at the government’s policy review last fall in the 17 December issue of the weekly Shukan Bunshun. Ms. Wakabayashi is a former employee of the Ministry of Health, Labor, and Welfare who resigned and wrote a book detailing bureaucratic waste and abuse.

The most worthwhile aspect of the project, as she notes, was that the government finally did in public, to a limited extent, what had always been done in private in the past. The proceedings drew an audience of 20,000 people, while another 330,000, on average, watched every day on the Internet. But why take half-measures? Allow all the political parties to participate and broadcast it live on NHK, in the same way the Japanese version of Question Time is now televised.

While the members of the ruling party served as the MCs, the review was set up and directed by the Ministry of Finance, contrary to what Mr. Edano might have us believe. A total of 450 programs were examined (out of more than 3,000), and the Finance Ministry’s Budget Bureau selected all of them. Of these, only 10 were Finance Ministry projects, and all of those involved several other ministries. (The Finance Ministry acts as the liaison between the government and the bureaucracy in those instances.)

The private sector experts that served on the review panel, mostly university professors, were chosen by a council that in turn was chosen by the bureaucracy.

She quoted one bureaucrat who is a veteran of other efforts to reform Kasumigaseki:

A policy review led by the Ministry of Finance will generate small sums of money, but not large amounts, and will not eliminate any programs altogether. They just declared a partial revision, without repudiating the core of the system.

Said another civil servant:

The policy review was a show that ended after an hour. That in itself is interesting, but it’s not suited for debating major issues.

Few programs were eliminated entirely. Most had their budgets cut from 10-30 percent, which was attributed to a DPJ desire to meet numerical targets.

The review did not examine at all the use of state-owned land, which accounts for one-fourth of Japanese territory. Had they done so, they could have delved into the unused assets owned by the government and other money-wasting activities. The debates this would entail require expert testimony and more time than they were willing to use.

The mass media seldom discuss it, but this was not the first such review of government programs. Kono Taro of the Liberal Democratic Party reform wing chaired a project team to examine waste in government last summer, when the party was the head of government. Some of the same private-sector experts on the LDP project team also were members of the DPJ panel—and made the same recommendations.

Mr. Kono described what happened on his blog:

We were treated in the LDP like a rebellious army…Even though the regular army (of the DPJ) conducted the policy review, they didn’t eliminate so much. Apart from the so-called buried funds, they claimed they could find JPY 2-3 trillion.

They didn’t. The Kono team cut 57 projects over a four-day period from the Education, Environmental, and Finance ministries for a saving of JPY 880 billion. In contrast, the DPJ fielded three teams with 70 people and 40 support personnel, and worked over a period of nine days. They managed to save JPY 1.8 trillion.

The LDP team offered different recommendations than the DPJ team. For example, the Kono team called for the immediate elimination of the National Research Institute of Brewing. In contrast, the DPJ merely suggested that its role be more clearly defined and then its operations reviewed.

Ms. Wakabayashi wondered about the DPJ commitment to saving money. While the review was underway, Prime Minister Hatoyama pledged JPY 450 billion in aid to Afghanistan, including job training for the Taliban, and another JPY 800 billion in aid to developing countries to combat “global warming”. (Surely he has heard by now that no statistically significant global warming has occurred since 1995.)

The policy review also came up in a broader roundtable discussion that appeared in the 13 December Sunday Mainichi, another weekly magazine. Journalist and commentator Toshikawa Takao didn’t try to claim that the DPJ ran the show, but looked instead for a silver lining in the cloud of the Finance Ministry’s primary role:

Some say this has been only a switch to dependency on the Ministry of Finance, but that can’t be helped. Only the Finance Ministry knows the issues involved regarding the money that has become lodged in the dark recesses of each ministry. Ultimately, political leadership is all about how to use the knowledge and expertise of the financial bureaucrats.

Countered Yokota Yumiko, who has become a go-to source for the discussion of issues involving Kasumigaseki:

The DPJ initially issued a declaration of hostilities, saying it would have everyone at the level of bureau head or above resign, but after taking power, it looks for cooperation with the bureaucracy. If they agree with our policies, we won’t fire them, goes their logic. They haven’t fired a single person. I don’t think they were serious about disassociating from bureaucratic dependency to begin with. They even seem ready to put off civil service reform, with salary and personnel cuts. That’s probably to be expected considering that the public employees unions and other labor unions support the party.

Fancy that. A political party says one thing before an election, and then forgets all about it after the election. Who would have guessed?

Afterwords:

Here’s the first interview we ran with Edano Yukio.

UPDATE:

Ms. Yokota may be on to something, alas.

In a speech in Saku, Nagano, on the 20th, Mr. Edano elaborated on his plans for dealing with independent administrative institutions. The government will conduct a second round of policy reviews, and here’s what he said the result might be:

It’s possible the independent administrative institutions will be returned to the (jurisdiction of the) national government…Direct control by the government would be more economical…These institutions were created to downsize government, but high-level veterans of the bureaucracy were appointed directors, and they get high salaries. That’s a case of yakebutori (i.e., getting rich–literally fat–after a fire).

If they eliminated or privatized the institutions, they wouldn’t have to worry about the identity or the salaries of their directors at all.

The DPJ campaigned on a program of disassociating themselves from the bureaucracy, and that was their mandate. This will expand the bureaucracy. They promised to fire bureau heads. This will increase the number of bureau heads. They promised regional devolution. This will increase the authority of central government.

Just who’s getting fat after the fire?

These folks are hopeless.

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