Posted by ampontan on Wednesday, November 14, 2012
JAPAN is now in the business of making money for other countries. The Finance Ministry and Japan Mint announced they have accepted an order for manufacturing 500 million coins in the Bangladesh currency. The Mint had received overseas orders for commemorative coins, including those for New Zealand and Sri Lanka, but this is the first time since the end of World War II they have received an order for a country’s currency in general circulation. Demand for bills in Japan is declining due to the growing use of e-money, and the Mint wants to promote this business a way to utilize its idled equipment and maintain its technological capabilities. It is not unusual for developing countries to outsource the production of its currency.
Bangladesh has eight types of currency, and this order is for the two taka coin. It is made of stainless steel and has a value corresponding to two yen in Japan. (One taka is subdivided into 100 poisha.) The Bangladesh Central Bank conducted an international bidding process, and they accepted a bid for JPY 520 million. Manufacturing will begin at the main office in Osaka early next year, and they will send 100 million coins every month to Bangladesh starting in April.
The spread of e-money and the slumping economy has spurred the Finance Ministry and the Mint to find ways to receive more of these orders. Among the losers in the bidding were Slovakia, the Netherlands, Germany, Great Britain, and Spain.
Since 2003, Japan Mint has been an “incorporated administrative agency” headquartered in Osaka. That means it is still affiliated with the national government.
One way the Abe Shinzo government of 2006-2007 wanted to continue the Koizumi reform policies was to privatize the Mint. This was stopped by the then-opposition DPJ working with the Finance Ministry. The ministry, one of the primary political power centers in Japan, always fights any measure that would diminish its power and authority. It often fights dirty, sometimes manipulating events to bring down governments. Exhibit A for that charge is the downfall of the Hashimoto Ryutaro government when it tried to split the oversight of the financial services industry from the Finance Ministry. (It eventually happened a few years later.)
The slogan for the Koizumi reforms was to remove from the government and entrust to the private sector anything the private sector could do. The principle is that the private sector always does everything better than the public sector except the mass extermination of people in warfare.
Had the Abe administration successively privatized the Mint, they most likely would have been involved in this business for several years already and creating new capital without using any from the public sector.
The people in the Finance Ministry probably know that as well, but it is not in the interest of people to understand anything that puts their interests at risk.