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Bank of Japan Governor Fukui calls for further discussion on immigration

February 25, 2008
By Ken Worsley


Speaking in Tokyo last Friday, outgoing Bank of Japan Governor Toshihiko Fukui made the following comment:

…[A] major reason for Japan’s low potential growth rate relative to the United States and European countries lies in the fact that it expects fewer immigrants and this is reflected in a lower expected increase in its working population…One way to raise Japan’s potential growth rate is evidently to ease restrictions on immigration. I think the time has come for us to think very seriously about whether we should accept more immigrants, or whether we would prefer to remain a relatively homogeneous society and be satisfied with low economic growth.

These are heavy words coming from a man of his position, though three things need to be noted:

1) Fukui is on his way out the door, and most likely will land a comfy position in the private sector sometime later this year. His comments, thus, may be seen as out of line with his peers in the Diet, though to some degree, they reflect thinking that has been voiced from Japan’s business circles, an audience which Fukui may feel more comfortable speaking to at the moment.

2) By nature of his position, Fukui has quite a bit more experience hobnobbing with top-level bureaucrats and policy setters than the vast majority of Japan’s politicians, whose vision and policies tend to be very narrowly and locally focused. Fukui is thus in a better position to view both the benefits and potential downsides to increased immigration than most sitting Diet members.

3) Fukui is now free to speak his mind. Did he want to make such statements four years ago? Perhaps, but that may have landed him in hot water. Making such a statement now certainly won’t hurt his chances for future employment, and may cause him to be seen as something of a visionary in some circles (How many Japanese ex-central bankers are seen as visionaries on monetary policy?)

Unlike folks such as Tokyo Governor Shintaro Ishihara or aspiring Prime Minister Taro Aso, Fukui has no need to keep voters happy or riled up with his statements. He’s not up for re-election, seems to have no political ambitions, and thus has no need to subscribe to populist nationalism simply to butter up voters who love to hear it.

The most telling part of Fukui’s statement may be the last sentence; it’s worth taking another look at: “I think the time has come for us to think very seriously about whether we should accept more immigrants, or whether we would prefer to remain a relatively homogeneous society and be satisfied with low economic growth.”

This is a stark choice, presented in a black and white fashion. Fukui throws up the classic either/or argument - either we allow more immigration or we accept low economic growth. His argument may be a logical fallacy bordering on strawman, but whether or not it turns out to be true can only be borne out by time.

One thing, however, is certain: The number of foreigners coming to Japan and deciding to settle here is increasing. The government has slowly been coming grips to this and seems to be developing a silent immigration policy. There has been little public debate thus far on how to proceed over the “immigration” question, and we do not expect to see any until at least after the next Lower House election.

In this context, Fukui’s comments are very welcome. It is time for Japan to have an open discussion on the topic of immigration combined with the future of the nation’s economy, and there are few public figures brave enough to spark it. Whatever the nation decides - or more properly, whatever the nation’s leaders decide, the time has come for Japan to finally take comments made by Mr Fukui to heart, though it’s a damn shame the same can’t be said of his monetary policy.

Filed Under Bank of Japan, Business, Foreigners 

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Comments

11 Responses to “Bank of Japan Governor Fukui calls for further discussion on immigration”

  1. Greg L. on February 26th, 2008 10:21 am

    As Terrie Lloyd mentioned in a recent one of his newsletters, it seems as though some of the measures that the Japanese government is looking at for better controlling foreigners could be in preparation for a larger influx.
    Hardly the way to attract top foreign talent though. Welcome to Japan - here is your electronic ankle bracelet that will monitor your location and activities 24 hours a day. This is the way to go if all Japan wants is a huge number of foreign cleaners, factory workers and fast food store clerks.
    It’s a bit of a tired expression, but I get the feeling there is a bit of a brain drain going on as well - amongst Japan’s multilingual elite. I talked to someone in their twenties recently who was moving to a tech company in Israel for significantly better pay and career prospects.
    Not sure if this is directly related to Fukui san though!

  2. Ken Worsley on February 26th, 2008 10:51 am

    Greg, I’m not sure that Japan will be keeping any more of an eye on its immigrants than, say, the US or the UK (where one is always on video).

    I personally don’t think any immigration policy in Japan is going to do much to help the economy, since whatever is put in place will be bungled and mismanaged to the point of being useless.

    I also don’t think Japan can or will attract any huge amount of “top foreign talent” as immigrants, since immigration is fundamentally about economics. Those positions (finance, etc) will remain on “guest” status with limited-term visas. The second group that you mentioned is far more likely to emigrate to Japan, given that it’s fundamentally an economic choice.

  3. WG on February 26th, 2008 3:21 pm

    The recent talk of a language requirement for long term resident visa holders (which really seemed to confuse the foreign media) at least shows that the issue is being considered, and that it’s an inevitability. But when will someone in a policy making position actually start talking numbers?

  4. seth on February 26th, 2008 9:03 pm

    Introducing a registration system for foreigners living in Japan that mirrors the system for natives makes sense. The problem is that the system for natives is pretty outdated and bureaucratic.

  5. Kraig on February 27th, 2008 11:52 am

    Welcome to Japan - here is your electronic ankle bracelet that will monitor your location and activities 24 hours a day.

    Where have you seen this?

  6. Uglee on February 28th, 2008 12:57 pm

    The uni system is going to collapse unless more foreign students are allowed in. The number of graduates has increased, but it’s still low. Japan has a hard time attracting them because work opportunities are not as abundant as elsewhere.

    Japan is also way behind in professional opportunities for women. Are Japanese women just supposed to stand aside and allow foreigners to get the jobs they’ve been denied?

  7. WG on February 28th, 2008 4:19 pm

    Immigrants to Japan - I mean when we talk about immigrants, people who don’t leave, are going to continue coming for economic reasons. By and large they will not hold office work positions and won’t contribute to raising international competitiveness or productivity rates. Whether their children are accepted into mainstream society will be a huge issue.

  8. seth on February 28th, 2008 7:11 pm

    Japan is also way behind in professional opportunities for women. Are Japanese women just supposed to stand aside and allow foreigners to get the jobs they’ve been denied?

    Does that really matter here? Are they going to be competing for the same jobs? The number of women participating in the workforce has been on the decline over the last decade, which doesn’t make it sound like they’re pushing for more opportunities.

  9. Ken Worsley on February 29th, 2008 2:38 pm

    Seth, some good points. There was a bit of a feature piece in this week’s Japan Times on the issue. Some of the figures are actually frightening:

    http://search.japantimes.co.jp/cgi-bin/fl20080224×1.html

    When it comes to gender equality, Japan has no shortage of distressing figures.

    The statistics that are most often used to illustrate the nation’s dismal status in this respect are the United Nations Development Program’s Gender Empowerment Measure (GEM), which gauges equality by tracking women’s participation in politics and business.

    In 2007, Japan’s GEM was ranked 54th out of 93 countries, compared with Australia’s 8th ranking, Germany’s 9th, Canada’s 10th, Britain’s 14th and the United States’ 15th. Among Asian peers, Japan’s rank was significantly lower than Singapore’s (16th), while China and South Korea both trailed Japan at 57th and 64th, respectively.

    Something for the nationalists to be happy about, I suppose. After that:

    Women in power are particularly few and far between, with only 9.4 percent of parliamentary seats here being occupied by women, which puts the nation in the disgraceful position of being ranked 131st out of 189 countries surveyed.

    Things are not any rosier in the private sector, where, as of 2006, women made up only 10.8 percent of all subsection chiefs (kakari-cho), 5.8 percent of section chiefs (kacho) and a mere 3.7 percent of department heads (bucho). And as for female researchers, Japan’s 96,000 represent only 11 percent of the total.

    Given the lack of opportunities for women who actually are Japanese in their own country, I don’t see how anything more than a very low glass ceiling will be set for immigrants, aside from those few with very specialized skills.

  10. Georg on February 29th, 2008 10:58 pm

    Why can’t japan lead the way in outsourcing service industry staff? It certainly doesn’t need more people to just keep their money in savings.

  11. Ponzi on March 4th, 2008 9:54 pm

    Something tells me there won’t really be much more open discussion on this issue.

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