Perils of disaster fixation
By Tim Kelly
Fixated on reviving the shattered northeastern seaboard, Japan risks neglecting growth in the rest of the economy, warns Takeshi Niinami, CEO of Lawson, Japan’s second-biggest convenience store operator.
“The question is what do you do about the other 95 percent of the economy,” Niinami told the Reuters Rebuilding Japan Summit in Tokyo.
His remedy: throw Japan open to the rest of the world and deregulate, policies more in vogue before Japan’s March 11 earthquake than since.
Niinami wants Japan’s politicians to rediscover their pre-quake appetite to thrust Japan into trade pacts either with Southeast Asian economies or the Trans-Pacific Partnership, a policy that Prime Minister Naoto Kan enthused about at the start of the year but since March 11 has dropped.
Opening up Japan is not just about letting foreign people, ideas and capital in, he says, but also about companies moving out.
Japanese retailers, including his own, are among those Japanese companies that have a chance to succeed overseas as store operators worldwide shift away from megastores to small neighborhood outlets. This is something Japanese retailers have developed a talent for in their cramped cities, he noted.
“It’s something we are good at,” said Niinami, who by 2020 plans to open almost 10,000 outlets in neighboring China.
Policymakers, he said, also need to unlock growth at home by dumping regulations that hobble enterprise.
One loosening of the rules he backs, which would benefit his own retail chain, is allowing people to buy drugs beyond traditional drugstores and the licensed pharmacists who control everything from headache powders to hay fever tablets.
Niinami conceded that a hike in Japan’s 5 percent sales tax to pay for reconstruction is likely inevitable as the nation scrabbles for money to rebuild shattered communities.
The added tax burden would mean higher prices at Lawson and other retailers, which have already been hurt by a quake-triggered consumer chill.
Reconstruction-blinkered policymakers therefore, he argued, must find ways to unlock Japan’s wealth eddy.
Old folk in long-life-expectancy Japan hold a big chunk of the country’s wealth and when they die much of it ends up in the pockets of children who by then may be well into their 50s or older, with most of their big ticket purchases behind them.
Younger people “want to spend but don’t have the money,” Niinami said.