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32. Saburo Okita
Saburo Okita, the Japanese Robert McNamara, was born in 1914 in Dairen, China. He was graduated as an electrical engineer from Tokyo University in 1937. He soon entered government service, and in 1956 became director-general of the Planning Agency. In 1963 he left government service and became president of the Japan Economic Research Center (JERC). He has established close personal ties with
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the OECD in Paris, the World Bank, and other international organizations. In 1973 he was nominated president of the Overseas Economic Cooperation Fund of Japan (OECF). Saburo Okita is closely connected with the Club of Rome and is a member of its executive committee.
Ichiro Nakayana has written that as far as economics is concerned, solving Japan's problems could well mean solving the world's problems. Is Japan a microcosm of the problems that all the world will encounter in the near future?
Perhaps this is partly true, for many of the world's problems now exist in Japan, in somewhat condensed form. Examples are environmental limitations because of our very limited land area, very high population density, and a very high density of GNP per unit area. Ours is very similar to the situation in the Netherlands. Historically, we have the combination of Western and Asian elements. Industries in Japan have grown for the first time on different soil from the European and Western World.
Completely independently from Europe and America?
No, we imitate the advanced nations to some extent. We combine many of the world problems in our country. In this context Professor Nakayana was probably right in saying that if we succeed in finding solutions to new problems, many of the solutions may be applicable to the rest of the world.
After World War Two you had a laissez-faire policy in the Japanese economy. You let the economy grow fully through the engine of capitalism. Would you say that you now have to question the whole basis of a free economy? Is it necessary in relation to worldwide inflation to consider the psychological basis of capitalism?
I cannot agree that we have followed laissez-faire capitalism - that is something of the nineteenth century. We in Japan have in the twentieth century what one should call controlled capitalism. This came about after World War Two. We were taking advantage to the fullest extent of market mechanisms.
After the Second World War you had controlled capitalism?
We have had strong government guidance in many ways, including various forms of government controls. We basically followed the policy of
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market mechanisms and made our economy as dynamic as possible, without necessarily turning to a straightjacket type of control. In basic matters there has been some government guidance. As you mentioned, we have probably gone too far in this direction. It was all right to a certain limit until we attained a rapid economic recovery. But this tendency has gone too far, and is to the detriment of our society in many ways. Environmental problems, shortage of housing, a very sharp rise in land prices, and more environmental problems have many of us talking now about the reallocation of resources, about more social capital-building and about more redistribution of income in the form of social security and social insurance.
Isn't this Premier Tanaka's policy, to turn the wealth of Japan toward your internal problems?
We have been spending mostly for our own purposes in the past as well, but these expenses were directed at building modern iron and steel factories, large petrochemical industries, and other production facilities.
But what about the fact that only thirty percent of Japanese homes have running water in the lavatories?
This is what I said: social capital investment and a fresh water supply now have our fullest attention.
I was talking about lavatories, toilets.
The percentage is rising very rapidly, by now we have probably reached fifty percent. In the villages, even in the cities, we have concentrated in the past on recycling human debris, returning it to the soil. This has been the system we have followed for hundreds of years, until very recently. You might say this was a rather wise measure if you contemplate the environmental problems in returning human waste to the soil, using it as fertilizer for agricultural production. However, the rise in the use of chemical fertilizers and modern insecticides has also become a large problem. I think we will solve these questions within ten years. At that time all Japanese will have running water and toilets.
I only brought this up because when you spoke of petrochemical industries, I wanted to divert attention to basic social problems.
How would the concentration of wealth in Japan affect the rest of Asia? I am thinking of China and Southeast Asia. Could your wealth cause social discontent or tension elsewhere?
In other countries or Japan?
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In Asia in general. How would your exploding wealth affect relations with China?
There may be jealousy. There may be some conflicts, but as long as we use our economic output for peaceful purposes and not for destructive purposes, then, generally, the dynamic nature of the Japanese economy may bring about dynamism in other Asian countries as well, with rising capital investment, through trade and sometimes through development assistance. This can already be seen in many parts of Asia. China is following a different system. We have limited contacts, mostly through trade. In recent years we have received many missions from China, since they want to learn, to acquire experience in our technology.
But how does this work in practical terms?
China will absorb what they need and what they consider appropriate for their basic conditions. This is what Japan did vis-à-vis the Western world in the past. We absorbed what we needed. Other Asian countries, which are economically and politically weak, may be suffering from Japan's overwhelming economic influence. But I don't think this concerns China so much. With Peking, we will have no serious problems, but in relation to young and weak Asian countries like Indonesia, I think we should encourage the building up of their own administrative capabilities. For Indonesians the human elements in our relations are very important and they do not want to be overwhelmed by us.
But is it not true that Japan seems indifferent to which governments it finances or supports with gigantic loans? Your Prime Minister ran into serious difficulties during his 1974 Southeast Asian tour. In Jakarta he was virtually a prisoner of rioting students. It should be remembered that these demonstrations were aimed primarily at corrupt governments, like those in Thailand and Indonesia, run by army officers who enrich themselves and don't give a damn about improvements that should be made in the living conditions of the people on the whole.
Not necessarily. What you say is a bit too extreme. Of course, we find growing nationalism everywhere in the developing world.
But I was speaking of Indonesian and Thai students who raged against their corrupt and unstable governments run by generals.
The newspapers stress as a cause for anti-Japanese demonstrations the behavior of the Japanese overseas.
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Japanese shops, Japanese barbers, Japanese sauna baths, Japanese restaurants, Japanese food....
You know, a Japanese tourist organization recently undertook a survey with questionnaires for visiting Japanese tourists in Thailand. The result disclosed surprising things. Only three percent of the Japanese tourists were staying in Japanese hotels. Few ate Japanese food, because tourists want to experience something foreign. In any case, some of our overseas companies are now taking down their neon signs, which perhaps were too big, too visible. We are now taking measures to revise our attitudes of the past, since they only stimulate nationalism.
The Guardian recently described how you proposed a Japanese Marshall Plan for Southeast Asia for a period of ten years and up to an amount of twenty billion dollars. But everyone was against it?
Yes, I made that proposal in 1971. There are various aspects to such an aid program. Most of the criticism against it came from students. They objected to the ways in which Japanese businesses operate in those areas. Some of the critics said that Japanese firms were too efficient, that the Japanese work too hard, that local industry was losing competition. All this created resentment.
Have you given up on the idea of such a master plan?
There are politicians in Southeast Asia, like Foreign Minister Adam Malik of Indonesia, who want Japan to undertake a genuine effort to accelerate economic development for these countries. There are politicians in Japan who do not want us to exert too much influence, and urge us to be cautious in selling this idea. It is not that they are absolutely against aid, but government officials and political leaders, especially, are careful not to press too hard.
Is that why Japan is already investing more in North America - twenty-seven percent of its total - than in Southeast Asia, nineteen percent? It is perhaps easier for Japan to invest in the United States, because you and the Americans have the same business practices.
Our dealings with Europe and United States are running smoothly. These are market economies. They can be handled through normal business practices. One day, we will deal with the socialist countries, which are developing countries, and where the government is an important factor. Here, we may have to introduce a somewhat different approach from the purely business type of approach we use in the West.
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The President of Mexico has proposed the creation of a code of ethics and conduct for businessmen all over the world.
I think this is an excellent idea. Of course, there is still excessive emphasis on national sovereignty. This sometimes prevents active use of natural resources, and may produce inequality, especially among developing countries. There is a gap between countries with natural resources and those without. There will be an even wider gap when oil and mineral resources are involved.
A wider gap? Let me get this clear. You mean through excessive nationalistic feelings?
No, not quite that. Stress on national sovereignty vis-à-vis resources may create another gap among the developing countries, between those which are endowed with rich natural resources and those which are not. A typical case is India. They have to spend two-thirds of their foreign exchange just to buy oil. Those are also factors to be taken into consideration. I do think the President of Mexico made a proposal based on a progressive idea. The question is how to implement this, but there is a growing awareness that in the modern world, developing countries are becoming independent and possess nationalistic feelings, so private enterprises that are going abroad should abide by certain rules or a code of behavior and refrain from excessive profit seeking.
To review the work done by the Club of Rome in Japan. The New York Times reported that one of the Japanese teams forecast that with the present growth rates in Japan by 1980 Japan would have to dump nine billion dollars in order to maintain the position of its economy.
Nine billion dollars is only the application of one percent of the GNP resolution of the United Nations. If the GNP is one trillion US dollars, then one percent will be about ten billion dollars. The Japanese government has committed itself to reach the one percent of GNP rule in foreign aid by 1975.
But is it not correct to say that if you don't export that money, your economy will get into serious trouble?
This is not a mere giveaway. A portion includes private transfers, private investments, or supplies as credits. There are commerical transactions. It includes development aid, in terms of official development assistance, which the Pearson Commission recommended, had to reach for all advanced nations seven percent of the GNP by the latest in 1980. But I don't know if
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we can continue the present and past trends of growth into the future indefinitely, because our rate of growth is high and we may face limits to growth in the very near future.
How will that manifest itself?
Through growing resistance to a rapid expansion of Japan's export trade in the United States and other markets, for example.
How do you view the present world energy-crisis in relation to the work of the Club of Rome?
I think this is one of the indications that the problems the Club of Rome has been pointing out are hardly unreal issues, although the present energy-crisis is somewhat artificial due to its political nature. But it has brought about the general consciousness of the limits to growth, especially concerning energy-intensive physical-expansion outputs. Energy will be much more expensive, but this may be a blessing for human society in the long run. For Japan a reduction in supplies of oil meant a serious blow, since we depend very heavily on imported oil - about three-quarters of total energy consumption. Japan will have to change its industrial structure to a structure less dependent on energy and raw material consumption.
What would be the effect of all these changes on the Japanese mentality?
Japan will require tremendous changes in its social structures: shorter working hours, more social security, old-age pensions, more spending for housing, recreational facilities, urban development, and so on. Instead of the ever-increasing investments in steel factories, petrochemical factories, and shipbuilding facilities, we will need a shift in emphasis in the allocation of resources.
Japan is now exporting pollution. In other words Japan is setting up polluting industries in other areas.
Actually, Japan wants other parts of the world to share those pollution problems with us. We want an even distribution of pollution all over the world. Why should we have to concentrate the pollution in Japan by bringing into this country raw materials from all over the world, degrading, destroying natural beauty and our seacoast? There are many other places with much more available open space and much higher environmental capacities. Some countries want to have new industries; otherwise poverty will remain the worst type of pollution for them. Without industry they cannot increase their income. Of course we should be careful when we encourage industries to go
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abroad. They should introduce the most modern technology in preventing pollution. We are accumulating such technology, because we ourselves are suffering heavily from pollution problems.
Which international agency should exercise control? Which one could redistribute industry in such a way that there would be more equitable damage to the environment?
We have no worldwide government. The question of the spread of industry takes place on a private or governmental basis.
Should it be organized on a global basis?
Maurice Strong can perhaps give some guidelines. But the implementation will be up to private industry or to individual governments. That is the situation as it is for the time being. However, it will become necessary to have global views on this matter, and international cooperation will be increasingly needed in the future.
Is it true that awareness of pollution actually started in Japan around 1970?
That's correct.
When you discover something, you Japanese can make a change of 180 degrees faster than anybody else in the world.
The Japanese government produced a new five-year plan early this year. It set targets for reducing air and water pollution by half in the three major industrial areas: Tokyo, Nagoya, and Osaka. The government estimated the cost of achieving this target was some twenty-five billion US dollars in five years. This would be quite within reach of our financial capability, because of our large gross national product. Therefore, this is a feasible target.
You speak of twenty-five billion dollars in five years to combat pollution in Japan. I just learned that for five years the UNICEF had available seventy million dollars to help 200 million Indian children to get an improved diet. But let me ask you, How is the Club of Rome doing in Japan? Is it having an impact? Is it raising an interest in business and government circles?
I think the start was relatively slow, but now there is an accelerating tempo. Many leading figures in government, business, and the scholarly world are becoming interested in the idea. At first, it was thought that the Club of Rome, and especially the MIT report, were forecasting catastrophe. That was a misunderstanding. And the zero growth parts were misunderstood. Growth is a very fine concept. We should sustain growth rather
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than aim at zero growth, including the growth in the quality of life. People have come to understand the nature of the Club of Rome, that we are not an institution spreading a zero growth idea, but, rather, a club aiming to find the means of survival and finding a positive solution to all our problems. This idea is now receiving wider and wider support in Japan.
Gunnar Myrdal tells me that it is nonsense to approach the problems of the world on a planetary scale, whereas Kenneth Boulding speaks of an ‘econosphere.’ He believes the ideal way is to study the earth as a whole. Scientists seem to have many differing opinions about one subject. It is hard for the public to understand all this. Are you yourself in favor of the computer approach by MIT?
The computer approach is a very useful aid, an effective tool. We should not, however, be employed by computers, we should employ them for our own purpose: to assist our thinking and to clarify problems. Recently, our Finance Minister said at a press conference that there is no computer that could act as Finance Minister for all the world. You cannot make automatic decisions by extending the use of computers. Somebody must pass judgment. In Japan, owing to the size of the country and to the rapid tempo of change, we must solve the serious problems of future growth immediately. So, many Japanese, including scientists, are becoming more and more interested in the Club of Rome approach.
And what about politicians? Scientists without links to politicians will get nowhere.
This is indeed our problem. I recently had a discussion with Prime Minister Olof Palme of Sweden. He emphasized the importance of a strong link between scientists and politicians. I replied that in the case of Japan the dialogue between the politicians and the scientists is still rather limited. However, a triangular conversation, with the mass media in between, is now taking place.
The media acting as interpreter for the people?
That has been the case in Japan. We hope to have more and more enlightened politicians, men who can talk directly to our scientists. There are in this respect beginnings on all sides. Some of our politicians are awakening.
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