EDITORIAL: Keidanren's new leader

Nippon Keidanren (Japan Business Federation) on Wednesday picked Sumitomo Chemical Co. Chairman Hiromasa Yonekura as its new chief to succeed Fujio Mitarai, who retires from the post at the end of May.

Yonekura's main job will be to discuss economic policy with the government and the ruling parties.

Unlike the previous Liberal Democratic Party-led government, which had long worked in tandem with the business community, the administration of Prime Minister Yukio Hatoyama is keeping Japan Inc. at a distance. The government led by the Democratic Party of Japan is focusing its economic policy on the demand side, including consumers.

Nippon Keidanren will be unable to have productive debate with the government if it simply continues making policy proposals aimed only at invigorating corporate activities.

The challenge for Yonekura will be how to reinvent Nippon Keidanren, which has traditionally been an organization dedicated to maximizing corporate profits.

During the past 20 years following the end of the Cold War, when globalization has changed the world dramatically, the gap between corporate profits and the interests of the people has widened.

The rapid economic growth of China and other emerging countries has intensified global competition. Meanwhile, Japan struggled for long to recover from the damage caused by the burst of asset-inflated bubbles. Companies have been getting through this period of anemic economic growth through radical restructuring efforts.

During this period, the nation's employment situation has deteriorated significantly. One in every three workers has resigned themselves to accepting nonregular jobs. While companies have grown more efficient, the lives of the people have become less stable. Even during a period of improved corporate earnings, many people don't get the feeling that their lives are getting better.

For a long period after the end of World War II, growth of domestic companies created jobs at home and raised incomes. The growth of companies and the nation's standard of living were closely and strongly linked.

Over the past two decades, however, corporate growth has become less relevant to the economic fortunes of the people. The link between corporate profits and the interests of the people has weakened.

Nippon Keidanren has been pressing companies to make political donations, mainly to the ruling party, as part of its lobbying efforts to have the government adopt policies beneficial for companies.

Such efforts may have been acceptable for the public when corporate profits were linked directly to the people's well-being. But companies are unlikely to win public support for their political donations now that there is a considerable gap between the prosperity of companies and that of the people.

In addition, the public has become more critical of corporate political donations because of deeper suspicions and concerns about the role of money in politics since Hatoyama's DPJ came to power last year.

The DPJ pledged in its election manifesto to ban political contributions by companies and other organizations in three years. Yonekura must start taking steps in that direction as soon as he assumes the top post at Nippon Keidanren.

One big question facing Nippon Keidanren is what kind of mission it should pursue. There is no longer an identity of interests among members of the business community. There is even a deep and bitter rift among companies over how to deal with the challenge of global warming.

The Japanese word for economy, keizai, comes from the old phrase keisei saimin, which means maintaining order in the world and providing relief to the people. Nippon Keidanren should remember the original meaning of the word and remake itself into an organization focused on offering policy proposals as a social entity dedicated to promoting the well-being of the people.

If Nippon Keidanren remains a lobbying group that makes political donations to influence government policy for the sake of companies, it will only keep sinking deeper into irrelevance.

We hope Yonekura, who is known as a decisive business leader with an international way of thinking, will embark on a radical makeover of Nippon Keidanren.

--The Asahi Shimbun, Jan. 28