No. 7 — February 18, 2000

Feature Article


Hiroyuki Takahashi


The Internet has altered our world in countless ways. In particular, it has contributed to the rise of English as the lingua franca of computers and the de facto standard for human communications on the World Wide Web. The Internet bridges great cultural and geographic boundaries and brings together people who never before have had the opportunity to link up. But just as a personal computer must be equipped to handle the Internet networking protocol, people need to speak English to communicate with others around the globe.

The dominance of English on the World Wide Web is just the latest phenomenon that has reinforced the need for businesspeople competing in global markets to be comfortable using the language. Japanese companies, which traditionally have employed large numbers of workers unable to communicate in English, are keenly aware of this need. Increasingly, such firms place a premium on employees able to conduct business in English, and this language ability is becoming more important in hiring and promotion decisions by Japanese employers.

Corporate Japan long has valued proficiency in English. Many companies have encouraged, and even paid for, their employees to study the language. Although various arrangements are available, most workers who study English do so at an independent language school. While the bursting of the "bubble economy" has meant that Japan has suffered work-force reductions and belt-tightening measures in the postbubble recession, the independent English-language schools have had to grow to meet increased demand. This phenomenon has become known as the "English boom," and has been characterized by efforts to obtain measurable improvements in students' listening and speaking skills.

The forces responsible for the growing demand for English-language skills are operating at different levels. While companies are working to cultivate English proficiency among their employees, students entering the work force are struggling to boost their English comprehension scores on employment tests. Both groups realize that Japanese employers need competent English-speakers to work in an increasingly competitive global market. This effort is taking place even in the midst of Japanese companies' recession-induced, cost-cutting measures and the general feeling among workers that it is time to tighten belts and reduce consumption.

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Weekly Review

--- by Douglas Ostrom

Economic Planning Agency chief Taichi Sakaiya got the attention of the foreign press when he said February 6 that Japan's gross domestic product probably shrank significantly in the last three months of 1999. This unofficial projection — preliminary figures will be released in March — put the government's top economist in sync with private forecasters who have been saying much the same thing. Foreign analysts claimed that Mr. Sakaiya's comments were tantamount to admitting that Japan again was in a recession given the drop in GDP in the third quarter (see JEI Report No. 46B, December 10, 1999). In the United States, downturns are defined informally as two consecutive quarters of economic shrinkage.


--- by Jon Choy

The prolonged recession, the record number of corporations reporting losses or filing for bankruptcy and the banking industry's stifling nonperforming-loan problems have cut deeply into the tax receipts of Japan's central and subnational governments. The revenue decline has put prefectural and municipal authorities between a rock and a hard place as they try to balance central government directives to pour huge amounts of money into public works projects with their worsening fiscal situation and growing demands from residents for various services. Faced with unprecedented budget deficits, Tokyo Gov. Shintaro Ishihara has outlined a groundbreaking plan to tax large banks operating in the metropolitan area based not on net income but on adjusted gross profits. The proposal has caused a stir in the central government bureaucracy and at the local level because it impacts the national debates over tax policy and local autonomy.


--- by Marc Castellano

Prime Minister Keizo Obuchi used a speech to the February 12 opening session of the quadrennial meeting of the United Nations Conference on Trade and Development in Bangkok to raise a number of developing-nation concerns, address the effects of globalization and call for the early launch of a new round of multilateral trade negotiations. He had decided at the last minute to attend the meeting, apparently sensing an opportunity to build support among developing countries for the July 21-23 summit of the leaders of the Group of Seven industrialized nations plus Russia on Okinawa.


--- by Barbara Wanner

Foreign Minister Yohei Kono and his Russian counterpart, Igor Ivanov, agreed February 11 to proceed "actively and constructively" toward the conclusion of a bilateral peace treaty that would formally end World War II. Toward this goal, they also pledged to respect previous agreements between the two nations that had established substantive goals and had set a 2000 deadline for the conclusion of the accord. But despite the positive tenor of the first foreign ministerial meeting since President Boris Yeltsin made Vladimir Putin the acting head of government December 31, some insiders are skeptical that Mr. Ivanov's February 10-13 meetings in Tokyo really jump-started the long-stalled peace treaty process much, if at all.



Steel - Sometime early in the fall, a World Trade Organization dispute-settlement panel will decide whether the United States went beyond the bounds of international trade law in June 1999 when it slapped market-excluding penalty duties on made-in-Japan carbon hot-rolled steel products. Tokyo set the stage for this outcome by charging in a November 18 complaint that Washington had played fast and loose with U.S. antidumping procedures in pursuing what became the first in a fusillade of unfair pricing cases directed against Japanese steel mills (see JEI Report No. 43B, November 12, 1999). Consultations, the initial step in the WTO dispute-resolution process, took place January 13. They were the pro forma talks that both sides had anticipated. International Trade and Industry Minister Takashi Fukaya consequently announced February 10 that Japan would seek the formation of an arbitration panel at the February 24 meeting of the Dispute Settlement Body, which consists of all WTO members. The United States is certain to exercise its right to block this move. Under the Geneva organization's rules, however, the second Japanese request for a panel, to be made at the March DSB session, will win automatic approval.


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