JAPAN: Tokyo Faces Mounting Public Anger over Real Estate Mess

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Feb 1 1996 (IPS) - Keiko Maruyama recalls with anger and sorrow how, 10 years ago, her landlord forced her to leave the apartment she and her late husband had occupied for many years.

“He just asked me leave,” said the 67-year-old widow. “When I told him I could not afford to go anywhere else I was threatened by a gangster who kept rattling my door in the evenings which frightened me horribly.”

Maruyama, who is childless, now lives in a small two-room flat. Her former apartment has been torn down and in its place now stands a new office building.

“But my former landlord is now in big trouble,” she says. “He’s heavily in debt after the realty company he was dealing with went bankrupt.”

Maruyama is a fervent supporter of a citizens’ group campaigning against the use of public funds to settle bad loans of real estate agencies that raked in huge profits by buying and selling land at prices the average Japanese could not afford.

The issue, known here as ‘jusen’, is a burning topic in Japan. Many people are outraged at how banks and realtors enjoyed a cosy relationship in the pursuit of profits, and at a government plan to spend 356 billion dollars to help pay back the bad loans.

The combined losses of the seven jusen companies are estimated at about 60 billion dollars. According to investigations at least 10 per cent of this figure has gone to gangster-related groups which went into real estate development taking advantage of the easy loan terms made available by banks.

“The Japanese people have been quiet too long,” says economist Makoto Sataka. He claims that the banks and the government have reached the “nonsensical” decision to spend taxes because they think nothing of the rights of people.

The Finance Ministry and bank bureaucrats are clearly responsible for the problem of jusen, Sataka told the Jusen ni Ikaru Shimin on Kai, an organisation of concerned citizens who feel strongly about the issue.

“For the sake of profits, greedy politicians and bureaucrats have ignored the needs of the people. Jusen is a good opportunity for Japan to develop a fairer system,” says Kumiko Furusawa, an independent MP who organised the group.

The organisation, which now has more than 100 members, wants the Finance Ministry to publicly admit its responsibility for the mess. It says the ministry had encouraged land prices to soar by allowing banks to lend heavily to real estate firms that made a fast buck by buying and selling land at exorbitant prices.

“If the government cared for the ordinary person, it could have stopped this terrible practice,” said Furusawa.

But bureaucrats did nothing to prevent the mess, she added, and a closer look into the problem shows why.

In 1990, 64 former economic officials served as chairman or president of Japan’s top 156 banks. The custom, called ‘amakudari’ (descent from heaven), is part of a traditional system that honours revered bureaucrats.

In the 1980s land prices in Tokyo and other major Japanese cities were so exorbitant that an average 80 sq m patch of land in an exclusive residential area would fetch more than one million dollars.

That made it impossible for the average Japanese to buy real estate, said Furusawa. “Coupled with Japan’s high inheritance and property taxes based on the sky-high prices of land at that time, even home owners were forced to sell their land to companies to make ends meet.”

This led to other problems as well, Furusawa pointed out. For example, the real estate boom left Tokyo without natural greenery or recreational park facilities as profit-hungry companies developed every patch of spare land into apartment buildings, office complexes or golf courses.

Activists hope the mounting public anger over the issue will result in a system wherein Japan’s top policy makers are held accountable for their actions.

“Japan has grown economically but there is no clear direction where we are going. The system is faceless, the public just follows blindly. But we are now at a turning point,” says Sakata. Furusawa hopes ordinary Japanese citizens will finally be allowed to have a say on how the government spends their tax money.

“If we have to fork out for jusen then officials should heed our demands for an apology. This is the kind of system that must be developed,” she says.

Furusawa says her office is now being swamped with faxes and telephone calls from concerned citizens expressing support for their campaign.

“By the look of it I think jusen has sent an important message to Japan’s downtrodden public,” she says. “Public awareness is growing. Japan is changing.”