Opinion Is Japan too scared to succeed? By Michael Schuman OF ALL of the scary economic data that routinely streams out of Japan, this statistic should terrify you: $800 million. That’s the total value of venture capital deals completed in Japan in 2015, according to accounting firm Ernst & Young. Compare that to $72 billion in the US and $49 billion in China. Even tiny Israel managed $2.6 billion in deals. It’s a staggeringly small figure, and one that explains a great deal about why the world’s third-largest economy continues to struggle, no matter how much cash the central bank pours into it. Too few Japanese are starting new companies. The reasons for their reluctance are many and complex. For one thing, Japanese seem to be more risk-averse than their peers in other countries. In a 2014 report from the Global Entrepreneurship Monitor, less than one in three working-age adults in Japan considered starting a company a smart career choice—the second-lowest proportion in the study. That sentiment grows out of a conformist culture that puts a premium on stability and success. Fifty-five percent of potential Japanese entrepreneurs admitted in the same survey that they were afraid of failure, the second-highest rate among the countries studied. Nor do Japanese youngsters get enough experience outside the Japanese system, which could stir their entrepreneurial instincts. According to the Institute of International Education, Japanese account for a measly 2 percent of all foreign students enrolled in US universities, behind not only China and South Korea, but Brazil, Saudi Arabia and Taiwan. Worse, the ratio has been falling. Outdated business practices pose additional hurdles. Banks remain overly fixated on receiving collateral for loans—something most startups don’t have. Japan’s fussy bureaucrats make life particularly difficult for entrepreneurs. According to the World Bank’s Doing Business study, Japan ranks a dismal 89th in the ease of starting a company, behind such paragons of efficiency as Afghanistan and Burkina Faso. The government and financial sector tend to protect established firms. Japan has a long and sad history of keeping inefficient “zombie” companies alive with continued financial support and other measures, diverting resources from potentially
more productive investments. Research firm Capital Economics figures that the level of government debt guarantees, relative to the size of the economy, is far higher in Japan than in other advanced economies. What all this means is that Japan doesn’t undergo the “creative destruction” necessary to infuse fresh blood into the economy. The Global Entrepreneurship Monitor reveals that a mere 3.8 percent of Japan’s working-age population is starting a new enterprise or running a company no more than three-and-a-half years old—the lowest ratio among the countries studied, except for Suriname. By comparison, the rate in the US is 13.8 percent. The vast majority of Japanese work in older firms. Unfortunately, unlike wine, companies don’t necessarily get better with age. A 2014 study by the OECD figured that young firms contribute more to job creation than older ones. Examining all these factors in an August report, Capital Economics concluded that Japan’s “productivity growth is unlikely to be strong enough in coming years to close the gap with the world’s most productive economies.” Japanese policymakers can start fixing this problem by streamlining regulation to make it easier to start companies and opening coddled sectors to more competition to spur entrepreneurs. In that regard, the (now troubled) Trans-Pacific Partnership could help. An overhaul of Japan’s archaic schools would also be a good idea. William Saito, an entrepreneur who encourages young Japanese to follow in his footsteps, has made the case that an exam-obsessed, competition-inducing education system renders Japanese less able to cooperate collegially in teams, a critical factor in any thriving start-up culture. Saito also argues that the Japanese business community requires greater diversity —not just more women, but greater openness to a wider range of ideas—in order to drive innovation. Japan’s entrepreneur gap gets at a much larger problem. The BOJ can try its utmost to stimulate growth and inflation, but unless inventive, aggressive companies are around to pick up that cheap cash and do something productive with it, policymakers will never be able to jump-start the economy. The lesson is simple. Before embarking on wild experiments in economic management, get the basics of business right first. Bloomberg
Trolled... From A4
*** Personally, I think that the government should stay out of social media, except when it intends to enforce rules that apply to the real world, not just the virtual. For instance, people should still be punished for libeling or slandering other people or for attempting to destabilize the country, incite rebellion or flout the law. If those who spread misinformation are hurting other people or their reputations online, they must be made answerable for the offense. And as far as I know, they can be made to do so under existing cyber-crime laws. But trolling and spreading misinformation online should not really bother politicians like Aquino, who knew of and even participated in the efforts of the previous administration to use social media to sway public opinion. And they used government funds, too, to ensure that massive cyber-ops like those
conducted by Ricky Carandang succeeded. In the end, unless private persons and reputations are harmed and government is being destabilized, I don’t think Aquino should try to somehow regulate social media. Politicians like himself and his Yellow confederates, of course, should not take offense at the barbs they receive, being fair game as public officials. As far as the denizens of social media are concerned, I think they can be trusted to discern fake news from the legit. And if they can’t, it’s not the government’s job to find out for them, because it cannot infringe on the constitutional guarantee of free speech. Having said that, I believe Ramos will outlive many politicians who are much younger than him. Perhaps he will outlast even those who cannot stand being on the receiving end of trolling and disinformation, for a change.
WEDNESDAY, NOVEMBER 2, 2016
A5
mst.daydesk@gmail.com
The FVR factor BACK CHANNEL ALEJANDRO DEL ROSARIO ON A long four-day weekend when the news dwelled mostly about Filipinos visiting the cemeteries to remember their dear departed, former President Fidel Valdez Ramos seized the moment to announce his resignation as the government’s special envoy to China. It was nothing earth-shaking, but still FVR’s resignation made the headlines. The Palace has not yet received the official letter from Ramos but said it would continue to consult the former president. Normally, the Ramos resignation would have been dismissed as just a blip in the Duterte radar screen. That Digong did not speak with his usual acerbic remarks shows he is deferential to the former president and that FVR is still a factor in Philippine politics. Ramos is not yet the spent force that some political observers perceive him to be. A graduate of the US military school West Point, the 84-yearold Ramos could yet turn out to be the rallying figure in the
event of an upheaval by the local military establishment. Do not take him lightly and his ominous comment that “old soldiers never fade away.” We are not implying Ramos is hatching up a sinister plot to unseat Duterte. Still, the Philippine political situation is always a volatile one. It could suddenly erupt into a regime change as we have witnessed in People Power One and Two which toppled strongman Ferdinand Marcos and popularly elected President Joseph Estrada and replaced them with Cory Aquino and Gloria Macapagal Arroyo, respectively. The Edsa uprisings happenedwith the complicity of the military establishment. By simply withdrawing its support to then-presidents Marcos and Estrada, the two were deposed by the people and the backing of big business. Ramos recently faulted Duterte for saying he would not ratify the Paris accord on climate change and for continuing to slam the United States, the United Nations and the European Union—known allies that grant the Philippines huge investments and foreign aid. Two weeks earlier, Ramos compared the Philippines to a “sinking ship skippered by Digong who’s unmindful of the danger signs
ahead.” According to him, Duterte was not steering the ship to safer waters. “I have accomplished my mission of breaking the ice between China and the Philippines,” said Ramos, referring to his back-channel effort to repair the strained relations between the two countries. It may have been the right decision since President Duterte has already appointed Chito Sta. Romana as the Philippine ambassador to China. Beijing as receiving state has not given its “agrement.” Pronounced as agremon, this is the diplomatic term for approval of an ambassador by the host or receiving state. Without mentioning FVR’s role in President Duterte’s fourday state visit to China, the Philippines reaped billions of pesos in loans, grants and investments. But more than these pledges and memoranda of agreement, the most significant—although not in the official communiqué —is the easing up of the Chinese control of Panatag known internationally as Scarborough Shoal. The shoal was seized by China in April 2012 after a standoff that saw Chinese gunboats staying and later driving away Filipino fishermen from plying their trade near the shoal.
There is no official announcement from Beijing about allowing the Filipino fishermen to sail back to the Scarborough Shoal waters which is about 230 miles off the Zambales coast line. The Chinese patrol boats are still in the area but this time they did not harass Filipino fishermen to go away with loud speakers and drive them away with water cannons. The Permanent Court of Arbitration in The Hague ruled that China’s nine-dash line has no legal basis and upheld Manila’s challenge to Beijing’s sweeping claim to nearly the entire South China Sea and encroachment on the West Philippine Sea. Bejing made clear it is not accepting The Hague court’s decision and that it would deal with the issue on a bilateral basis with other SCS claimants. Its easing of control over the area may be seen as a result of bilateral talks and quiet diplomacy between Beijing and Manila during Duterte’s visit. “This is a win-win situation for both sides,” said National Security Adfviser Hermogenes Esperon, Jr. who is a known Ramos man in the Duterte administration. Will Esperon stay in the Duterte Cabinet even after his political patron Ramos has resigned?
Bias? SO I SEE LITO BANAYO WE WERE in Tokyo for the presidential visit, and had just listened to the President’s speech before the Keidanren (Japanese business federation) which was warmly applauded because he defined in very succinct terms what he meant by an independent foreign policy and insisted that all nations must respect the dignity of the Filipino people, when we were informed about an article in another paper, the PDI, written by Nikko Dizon. The article stated that a “Chinese construction firm banned by the World Bank…were among the companies that bagged big-ticket infrastructure projects in the Philippines during the recent state visit of President Duterte to China.” Specifically, the article mentioned the contract of China Road and Bridge Corp. with the Bases Conversion Development Authority for the bus rapid transit system from Bonifacio Global City to the Naia, a plan to decongest the extremely traffic-saddled road artery (Lawton Avenue, named after an American general) that connects the business center, and even Makati (via McKinley Road, an American governor general) to the airport. The writer very clearly failed to get the side of government (the BCDA is a GOCC) before making such a damning accusation. What was signed in Beijing was a memorandum of understanding which is an agreement to study or plan a project proposal before a more comprehensive contract is agreed upon. It is similar to a letter of intent or a letter of interest; it is not a contract to allow the CRBC to construct. In the first place, the bus rapid
transit system which will surely alleviate the plight of both domestic and foreign commuters rushing to the airport for their flights, has yet to find an actual location. The DPWH under Secretary Mark Villar has yet to clear the path for the new road. What all these need is a feasibility study, not yet a contract to build. The article made a big thing about the World Bank having banned the Chinese firm from its infrastructure projects. Big deal! The project will not be funded by the World Bank. The study would be at the expense of CRBC, not BCDA, not the Republic of the Philippines, not Ms. Dizon’s tax contributions. I liked BCDA president and CEO Vince Dizon’s retort that while “he admired the diligence of the PDI”, he suggested that “the same diligence should have been exercised in simply reading the text of the MOU.” Touche! Apparently, the PDI writer sourced her opus from a Facebook post by ex-DoF secretary Cesar Purisima’s chief of staff, Louie Abad, son of ex-DBM Secretary Butch Abad and incumbent Batanes Rep. Henedina Abad, and brother as well of ex-PMS head Julia Abad, all of whom lorded it over the economic management team of the previous administration. Louie Abad’s post asked with malice intended, “And the wheeling and dealing begins?” Come on guys. You had six years to do everything possible to alleviate the traffic nightmare every Tom, Dick and Harry had been suffering day-in and day-out, but you blew it. Your transportation czar, first Mar Roxas (after the good Ping de Jesus resigned unexpectedly, probably fed up with the procrastination of Malacañang decision-making) tweedled his fingers and analyzed till paralysis set into his kingdom which never came. Then there was Jun Abaya who was clueless from Day One till Day Out about solutions to the gridlock that has beset
the metropolis, not that all this was unexpected from the very beginning. Now, well into the first 100 days of a new government that has to grapple with a drug-induced wave of criminality that has transformed our islands into a narco-state, you chide it for “failure” to address the traffic crisis you allowed to fester with nary a solution, and where you did implement solutions, the same turned out for the worse, as in the case of the maintenance of the MRT along Edsa which you guys gave to a totally incompetent contractor from the yellow hills of Pangasinan. President Duterte and his officials now have to play a desperate catch-up game, as our woeful infrastructure has become an albatross on further economic growth, aside from driving every Filipino and every visitor from foreign countries absolutely exasperated. I flew in from Taipei to Manila, and thence to Caticlan to attend the wedding of my good friends RenRen and Mabi Cayetano on the 30th. Mercifully, my SkyJet plane arrived on the morning of the 30th with just about a 30-minute delay. But some of the guests who flew in the previous night were shunted off to Kalibo, and arrived in Boracay past dinnertime, when they were supposed to have checked into their hotel before sunset. The lovely beachfront wedding made us all forget the nightmare many suffered in getting to “paradise” (that’s how the locals welcome you). The reception had even the Executive Secretary, Bingbong Medialdea, crooning two songs for the newlyweds as everyone had a jolly good time. I sashayed into the jampacked Caticlan terminal at about two in the afternoon for a 3:10 flight, also aboard the amazingly fast though unheard of Skyjet. There I found out that several friends had been waiting for their PAL flights since nine in the morn-
ing, and still no PAL or Cebu Pacific plane. Two were already in the tarmac, awaiting instructions from the control tower to fly to Manila, and as usual the “traffic congestion” in the gateway was the problem. While commiserating with them, I asked why the Clark facility seemed unable, even in such foreseeable peak load periods such as this long week-end, to absorb part of the traffic. The answer from an expert who was cooling his heels from nine that morning, hot in his head: “Because the airport terminal there can only absorb a million passengers each year.” “But wasn’t a new terminal at Clark already planned since Arroyo’s presidency?” I mumbled. Yes of course, the CAAP functionary replied. “But the previous government sat on it, for six long years.” And now Art Tugade has to take the flak? Or was it simply because Gloria Macapagal Arroyo named Clark the Diosdado P. Macapagal International Airport? In any case, my Skyjet flight left, mercifully at 3:45 that afternoon, and after making several pass-by rounds atop Metro Manila, finally landed at 4:55 p.m. for what was supposed to be a 40-minute flight. My PAL-riding friends who waited at the terminal from 9 a.m.? They sent me a text message when they finally, mercifully arrived in Domestic Terminal 4. It was 6:10 p.m. More than eight hours in the Caticlan terminal, and an hour and so on the wings. Postscript? They left ahead of their Cebu Pacific-riding counterparts–in- misery. Now that the Duterte administration is pushing all possible buttons to quickly address the legacy transport crisis, you get a carping and destructive social media troll operation plus hostile and ill-researched media looking for loopholes just to deride. C’est la vie!
Losing... From A4 Death, though, is not always a physical loss or separation. It can mean the loss of a loved one still alive. In such a loss, there is no closure. In Saratoga, from my secondfloor window, I noticed the leaves turn from green to purple to orange and then to gold and falling, as winter competes with fall to assert their true colors. Green, of course, symbolizes being fresh and alive. Purple is often associated with magic, mystery, even piety. Orange is warmth, energy, danger. Gold, of course, needs no explanation. Complex thoughts raced in my mind. Suddenly, I was overwhelmed by sadness. So I turned on my laptop and managed to compose two poems in 22 minutes. After a day, I went back to my drafts and made slight changes to make the poems sound more generic. Here are the poems (with apologies to my usually cynical and jaded readers):
I miss you I wake up and stare at the window I see purple and gold leaves falling Beckoning the drift of winter looming My heart flutters with pain and sorrow Fearing the faint hush of a cold tomorrow. Life without you is dark and dreary And everyday is a task for the weary For the mind with the face of worry And the heart that is sad and sorry Precious time is running out on me. Still I sit here waiting, expectant In the land of dreams and
billions Hoping somehow to see the visage Of the love to me none is more important The love who is worth more than zillions I miss the warmth of your hands I did press I miss the smile on your face I did caress I miss the haunting looks oblivious to stress I miss the lips I kiss as I touched your tresses I miss you my only love, my faith, my fortress. I love you
More than a priest can ask me to say I do More than my heart can beat and sing a song for you More than what my mind commands me to do for you More than what perdition brings for me to rue. My love for you is real, genuine, thru and thru. Love me too for I have been good and true to you. For I am forlorn and think of nothing else but you.
I love you more you think than you know I do
My heart is sad, I hear no rhapsody, and I am feeling blue.
More than words can express and say to you
So please, please take me with you.