“Amakudari,” the custom of setting up retired senior bureaucrats in cushy jobs in industries they previously oversaw, has no shortage of critics, who lambaste the practice as an abuse of power and a source of corruption.
Catching flak from opposition lawmakers during the current Diet session, Prime Minister Taro Aso announced Feb. 3 he wants to ban amakudari and its variant known as “watari,” a serial form of the employment arrangement.
Though the ban is to take effect by the end of this year, it remains to be seen if the notorious practice can be effectively rooted out, observers say.
Following are basic questions and answers about amakudari and watari.
What are amakudari and watari, and how do they differ?
Amakudari, which literally means descent from heaven, is the practice of bureaucrats landing lucrative postretirement jobs at companies or organizations under the jurisdiction of their government ministries.
Watari, which translates as migration, is the practice of retired bureaucrats landing posts in semigovernmental bodies or private companies many times for short stints, walking away from each with a lucrative retirement package. Simply put, watari is amakudari done over and over.
According to the book “Amakudari System Hokai” (“Collapse of the Amakudari System”) by political analyst Taro Yayama, bureaucrats are urged to retire at age 55 on average and to begin their “descent from heaven.”
One function of the early retirements is to maintain the power structure in the seniority-based Japanese promotion system. Only a handful of top bureaucrats remain at the ministry to control the pyramid-style management system.
Every year about 400 elite bureaucrats go out the door, Yayama said.
Why are these practices criticized?
A huge amount of taxpayers’ money in the form of government subsidies goes into creating numerous semigovernmental organizations for the bureaucrats to retire to. From these spring manifold inefficient government-linked projects.
For instance, according to the House of Representatives research bureau, in the first half of fiscal 2006 ¥4.08 trillion in subsidies funded 4,059 projects by 4,576 organizations employing former bureaucrats.
Consequently, the cozy relationships formed between the ministries and the organizations that accept retired bureaucrats foster corrupt and wasteful practices among government bodies or private corporations under ministry jurisdiction.
How much can bureaucrats receive through amakudari and watari practices?
During a Lower House budget committee meeting Feb. 3, DPJ member Goshi Hosono brought up a case of a former chief of the Fisheries Agency who landed six different jobs at agency-related organizations, including the Overseas Fishery Cooperation Foundation of Japan, in three- to four-year stretches.
By continually moving on, the official collected an estimated ¥325 million in total in retirement bonuses, Hosono said.
Will Aso’s ban put a stop to amakudari and watari?
Not really, according to opposition party members.
Under the current government scheme, a public-private personnel exchange promotion center set up in December will arrange only a single placement for each retiring bureaucrat, taking over the task from the various ministries.
The center will not arrange further job transitions for ex-bureaucrats.
According to the government, the center was established to increase the transparency of the outplacements and end the cozy ties between bureaucrats and government-linked corporations and private companies.
However, as a transition measure, a government ordinance gives the prime minister the power to approve amakudari or watari based on requests from ministries for the next three years.
Aso pledged to ban ministries and agencies from arranging amakudari and watari jobs. After the transition period, the center alone will be able to resume providing a single amakudari placement to each bureaucrat, although ministry placement requests will be banned.
But Aso has made clear that the government will not ban job changes “privately” arranged by ex-bureaucrats.
According to media reports, currently active senior officials at ministries will no longer be allowed to systematically arrange jobs for ex-bureaucrats after the transition period.
Opposition lawmakers have pointed out that former bureaucrats may take the place of active officials in arranging jobs for their juniors.
During a recent Diet session, DPJ lawmaker Akira Nagatsuma asked Aso to investigate job hopping by ex-bureaucrats and ban all watari arrangements, either by active or retired bureaucrats.
In response, Aso argued that it is “hard for the government to restrict it” because once bureaucrats leave a government body, they are private individuals and it is therefore difficult to intervene in their affairs.
What are likely to be the functions of the public-private per sonnel exchange promotion center?
The center says it will match up retiring officials with companies and organizations only once, increasing transparency in the outplacement process.
But DPJ members remain critical of the center, which they label an “amakudari bank,” saying it differs little from the old system. Most workers at the center are dispatched from government ministries.
Nagatsuma argued that the center should be closed down once the early retirement custom is abolished by 2013 as indicated in a recently adopted government reform road map.