NEW YEAR'S GREETINGS
Consul General Mitoji Yabunaka Happy New
Year As we now embark upon the new millennium,
I wish all of you a joyous and prosperous
Year of the Dragon.
News from Japan In the year 2000, news from Japan will become increasingly bright. At long last, my country is on the right path toward economic recovery and growth.
Since the summer of 1998, the Government of Japan, under the leadership of Prime Minister Keizo Obuchi, has undertaken a monumental effort first to put the fragile financial sector in order and then to stimulate domestic demand. Although the initiatives are ongoing, the Japanese economy has already turned the corner and is now on the way toward realizing positive and strong growth.
An even more far-reaching development is the "fundamental change" in Japan's economic and social systems. This almost revolutionary change is so pervasive that I refer to it as the "mega transformation" of Japan. It became necessary because Japan's former economic system, which was once heralded as the most successful economic engine in the world, was antiquated as it failed to keep pace with the global competitive environment.
Today, a new economic system is emerging with important differences. The lifetime employment, seniority and keiretsu systems are now being swept by the wayside. These previously sacrosanct practices have become stumbling blocks to competitiveness and growth. Across Japan, companies are proactively implementing drastic steps.
For instance, Nissan will eliminate 21,000 positions and NEC will lay off 9,000 employees. Individual achievement rather than seniority is becoming the basis for career advancement. Finally, some keiretsu groups are now diminishing in importance and are becoming relics of the past. The merger of Sumitomo Bank and Sakura Bank shook the foundation of their respective keiretsu groups, Sumitomo and Mitsui. With the bank merger, the two groups had to reassess their roles since their member firms compete in many sectors. Sumitomo Chemical competes with Mitsui Chemical and Sumitomo Real Estate competes with Mitsui Real Estate etc.
Another major change is Japan's openness to the outside world. The heightened participation of the United States and Europe in Japan has not only helped set the tone of the "mega transformation" but has also been warmly welcomed. While foreign participation is not new in Japan, it is contributing positively to the staggering pace of change.
As with any new direction, the "mega transformation" is both painful and challenging. It is painful because the dislocation of surplus workers results in increased unemployment and the related social costs. To fill this gap, new jobs should be created by new industries. Clearly, the most promising area is information technology and the Internet. Cellular telephone usage has soared in Japan. Today, more than 40 million cellular telephones are in use compared to less than 1 million cell phones just one decade ago. In fact, cell phone usage in units has now surpassed that of conventional telephones. Similarly, Internet usage has doubled annually during the last few years. It is estimated that more than 20 million Japanese are now on line and each day thousands of new Internet surfers log on.
These developments signal that Japan is changing. While they represent a significant step forward, they are not the entire solution. Japan now faces the colossal challenge of global competition. The prescription calls for new, foresighted entrepreneurship and highly skilled young professionals eager to advance the cutting edge in all fields including information technology and the Internet. Educational reform, along with proficient English ability, must be achieved.
In my view, Japan stands on the threshold of a new beginning. As we enter the new millennium, it will meet the challenges on its doorstep as the next generation assumes positions of responsibility. Most importantly, Japan will continue to work closely with the United States as a major contributor to global well-being.