Kansai execs fret affairs of the state

by Eric Johnston

KYOTO — Senior business leaders in the Kansai region have long been able to rely on smooth relations with local and central government politicians sympathetic to their causes.

But with the Democratic Party of Japan-led government coming under increasing criticism, and Osaka Gov. Toru Hashimoto’s bashing of Tokyo politicians and bureaucrats intensifying, Kansai’s business community finds itself thinking about politics more than ever.

At the recent Kansai Economic Seminar in Kyoto, Prime Minister Yukio Hatoyama, who is also president of the DPJ, came in for sustained criticism from area business leaders on everything from a lack of a coherent policy for reviving the economy to the way the government has handled relations with the U.S. over the relocation of the Futenma air base in Okinawa.

The new government needs economic policies that demonstrate a strategy for growth, Sharp Corp. Chairman Katsuhiko Machida said.

“I’m disappointed. The DPJ has not been able to carry out the pledges in its (campaign platform),” said Kiyoshi Otsubo, president of packaging firm Rengo Co. Ltd.

But while critical, the rhetoric of Kansai business leaders has been mild compared with that of Hashimoto. The governor attacked the DPJ-led government after the head of an advisory panel to the transport ministry said it may recommend bringing international flights back to Itami airport, the most conveniently located and busiest hub for Osaka. Hashimoto and many local business leaders want the airport closed.

“The transport ministry committee has no members who understand Kansai. Even I, as governor, cannot participate in the committee considering the future of Itami,” Hashimoto said. “At this rate, I’d have to say that even if the DPJ talks about the importance of local autonomy prior the upcoming Upper House election, they’d be lying.”

Transport minister Seiji Maehara has said that while he does not favor closing the popular Itami, it might be possible to reduce the number flights and transfer others to financially struggling and less-convenient Kansai airport, a move long favored by area executives.

But Maehara’s constituency is in Kyoto and his closest political supporters include Kazuko Inamori, the founder of Kyoto-based Kyocera Corp., who was recently appointed to take the helm at bankrupt Japan Airlines.

Routes from Itami to Haneda are among JAL’s most profitable, and given Inamori’s clout in the Kyoto business community, some at the Kyoto seminar felt it politically impossible to continue to push for Itami to be closed, at least under the current administration.

Hashimoto enjoys strong popularity in Kansai, both among Osaka voters and the media. Local TV stations are particular fans, shelling out cash for the governor to appear as a commentator because he is good for ratings.

One senior executive at the forum told The Japan Times that some business leaders worry Hashimoto’s abrasive political style will further alienate Kansai from the central government at a time when the region has many problems that require Tokyo’s assistance, including what to do with Itami, Kansai and the even newer, all-domestic, Kobe airport.

The central government’s economic policy is another big worry for business leaders. They wonder whether it has the political will to pursue the regional block system of government, under which the 47 prefectures, which have been around for 140 years, would be abolished and replaced by semiautonomous blocs. Kansai’s six prefectures would become a single political unit.

Kansai’s corporate leaders and Hashimoto have pushed the idea because they say it may be the only way to reduce corporate taxes and the local bureaucracy. Predecessor administrations of the Liberal Democratic Party came up with the regional bloc idea and the last one, which the DPJ ousted last August, was looking to end the prefectural system by 2017.

But despite a decade of pushing by business and LDP leaders, informal media polls over the past few years have consistently shown Kansai residents who are familiar with the plan are divided. People in Osaka and Hyogo prefectures are more positive toward the idea, while those in Kyoto, Nara and Shiga prefectures are less enthusiastic, fearing the loss of their political voice if Osaka became the capital of a Kansai bloc.

A perceived lack of interest on the part of the DPJ-led government in the regional bloc issue may help explain a recent Kansai Economic Federation poll showing 76 percent of its members who responded faulted Hatoyama’s leadership.

Unlike the LDP, the DPJ has no advisory committee offering specific timetables for introducing a bloc system, and it made no mention of the issue in its campaign platform for last August’s Lower House poll.

Over the next few months, Kansai’s leaders are expected to meet with DPJ officials to present ideas on what to do with Kansai’s three airports.

They also have a number of long-term projects that need central government support, including funds to turn the Osaka Bay area into a free-trade zone. Hashimoto also wants the state to build a high speed railway connecting Osaka with Kansai airport.

There is pressure on the DPJ to at least tentatively approve those ideas before the July Upper House election, but DPJ supporters said patience will likely be the key to whether Kansai’s wishes are granted.

“Like others in Japan, Kansai’s leaders are critical of the DPJ. But only about five months have passed since the the party came to power, and they took over from the LDP, which governed for decades.

“It’s too early to be so critical, and you all need to understand that change takes time,” said journalist Hajime Takano, an adviser to the DPJ.