|
| 1. THE "YAKUZA RECESSION" | ||
| In mid-January 2002, the Far Eastern Economic Review carried a feature article on Japan entitled "The Yakuza Recession". This article quoted a highly respected American economist and investment banker as saying that "a small cadre of former FBI agents and other US lawmen had uncovered a pattern of collusion between banks and corporations that dominate the Japanese economy and Yakuza gangsters that might even make a Russian oligarch blush. What is more, the economist said, those links suggested that the Yakuza, far from being just a motley band of pimps, drug pushers, gamblers and extortionists - with only a peripheral role in their nation's multibillion dollar banking crisis - were in fact one of the most significant obstacles to its resolution." | ||
| The Review said it was estimated that up to 50% of the bad debts held by Japanese banks could be impossible to recover because they involve organised crime and corrupt politicians. Independent banking analysts estimate the bad debts to run between $US800 billion and twice that figure and say that in the Japanese fiscal year 2 ending March 31, Japan's four biggest banking groups were expected to lose 1.6 trillion yen. At the same time, earlier attempts to kick-start the economy and rescue the banks have saddled Japan with a national debt of about 650 trillion yen or 130% of the nation's GDP. | ||
| The American economist said the US law enforcement agents who thought they were familiar with the Yakuza "found Yakuza active in literally every sector of the Japanese economy; not only in areas such as construction, entertainment and trucking that have long been suspected of heavy Yakuza involvement, but in everything from chemicals to hospitals." It was estimated that "nearly half the companies that hold the key to resolving Japan's bad-debt crisis - that is, nearly half of Japan's most heavily indebted enterprises - probably are working with, have strong ties to or are controlled outright by gangsters". Between them, these companies were thought to have borrowed $US300-400 billion from Japanese banks and to have funnelled about half of it to the Yakuza. | ||
| The Review quoted an authority on Japanese organized crime as saying that following the killings and suspicious deaths of a number of investigators and senior bankers, the banks are "still afraid of foreclosing on some companies because they are afraid of what the Yakuza will do to them." On top of that there are a lot of LDP figures involved in the mess." | ||
| The above is of particular interest to Asia Pacific Report because in September 1998 we ran an issue, APR 7, entitled "The Japanese Economy and the Asian Crisis: Cultures of Corruption" which looked at the origins and profound influence of secret societies and criminal gangs on the polities of Northeast Asia. Because we have so many new readers around the region since then, especially university students, we have decided to reprint it below in a slightly edited version. As will be obvious to readers, APR 7 was written before the political victories of Kim Dae Jung in South Korea and the Democratic Progressive Party (DPP) in Taiwan. | ||
| 2. CULTURES OF CORRUPTION | ||
| APR No. 7, 3rd September, 1998 To read "Cultures of Corruption", please click on the link. | ||