TYPHOON FROM THE WEST

Suicides on the Rise as Japan's Economy Falters

By Wieland Wagner in Tokyo

04/17/2009 04:15 PM

The technology-export powerhouse of Japan has been hard-hit by the global economic downturn. It's all too reminiscent of the nation's last crisis, which ended only in 2002 -- only this time, the misery isn't homegrown.

The man was lying fully clothed on the bed in his apartment in Osaka. He looked peaceful, as if asleep. His skin was dark gray. He'd been lying there for about a month, but no one had missed him. The doctors who performed the autopsy were astonished to find that his stomach was almost empty. The man had starved to death.

The refrigerator in his apartment was also empty. There were a few coins in a tin can, not even enough to pay for a meal. Job search magazines were scattered on the floor, as well as an application form on which the man had entered his work experience.

AP

A homeless man walks with his belongings at a park in Tokyo, Japan.

The news about this unemployed man who had starved to death in Osaka came as a shock to the world's second-largest industrialized nation. His extreme case made the Japanese realize how poorly equipped their social welfare system is for the consequences of the global financial crisis.

What made the starving case so shocking is that he was not a lonely old man, but a 49-year-old computer specialist with an apparent will to work. Until the spring of 2007 he'd worked in a bank as a dispatcher. He was forced to quit his job for health reasons, but when he was able to return to work, he could no longer find a job.

The employment outlook in Japan is worsening apace. In February, exports were down by almost 50 percent compared with the previous February. And because more and more Japanese are worried about their jobs, domestic consumption has collapsed. In the last fiscal year, which ended March 31, more than 16,000 companies went out of business -- an increase of more than 12 percent over the same period in the previous year.

Prices on the Tokyo Stock Exchange have recovered since mid-March, and the Nikkei Index climbed back above 9,000 points last week. But Japan's corporations will release their annual financial statements soon, and the shock of the horrific numbers that are widely anticipated could push the markets down again.

Japan seems to be sinking back into the collective nightmare which its people believed they had escaped in 2002. Just a handful of years ago -- after the longest recovery in postwar history -- the island nation had finally overcome the severe crisis that followed an economic bubble in the late 1980s and early '90s.

Shades of the 'Lost Decade'

The current crisis has started to resemble Japan's so-called "lost decade." Unlike the bubble of the '80s, the impetus for the current recession came from abroad, from the United States. And Japanese banks were in excellent shape at first, compared with their Western counterparts -- although a few financial institutions did use their substantial reserves to buy stakes in ailing Wall Street competitors.

But an early burst of Japanese schadenfreude over the American crisis has given way to consternation. Like Germany, Japan is realizing how dangerously one-sided it can be to rely, primarily, on exports.

Now Europeans and Americans have quit buying quite so many Japanese cars and flat-screen TVs. China, the global factory next door, has also sharply cut back on imports of high-tech Japanese components that its army of low-paid workers had previously used to assemble computers and phones.

Toyota has become a symbol of the new crisis. More than a year ago, Japan's model corporation announced a record profit of 2.27 trillion yen ($23 billion). "Nothing is Impossible," read the giant automaker's advertising slogan, but now those words are coming true for Toyota in a different and macabre way. For the last fiscal year, which ended on March 31, Toyota expects to post a loss of 350 billion yen ($3.5 billion), the company's first net loss since 1950.

Widespread pessimism has also slowed domestic demand. The frugal Japanese are hoarding private assets of about 1.4 quadrillion yen ($14 trillion), and the more pessimistic they feel about their future, the more they limit consumer spending. According to information provided by the country's car dealers association, sales of cars and other motor vehicles declined by 15.6 percent in the 2008 fiscal year, compared with the year before. The number of new vehicles on the road dropped below three million for the first time since 1971.

DPA

Subsidized to the hilt.

In the past, Tokyo encouraged the Japanese penchant for saving money, because it sharply reduced government spending on the social welfare system. But since the beginning of the global crisis, the government has radically reversed course. For the third time since coming to office in the fall, Prime Minister Taro Aso announced a new economic stimulus program, the biggest in his nation's history. The new program will cost 15.4 trillion yen ($155 billion), which is equal to three percent of Japan's gross domestic product.

As part of the new program, Aso wants to provide tax credits for purchases of more environmentally-friendly cars, and generous subsidies for consumers who buy energy-efficient TV sets. The government has already started to distribute consumption coupons worth 12,000 yen ($122) apiece to Japanese citizens.

In the end, Japanese taxpayers and their descendants will pay dearly for Tokyo's largesse. The government, with a national debt of 180 percent of annual GDP, has already gone into more debt than any other leading industrialized nation.

But money hardly plays a role for Aso. He will have to dissolve the lower house of parliament and hold new elections by September. The unpopular prime minister and his Liberal Democrats, who have ruled the country almost without interruption since 1955, are also fighting for political survival.

Jobless Corporate Samurai

The strange thing about the current Japanese crisis is that it seems barely noticeable at first glance, especially in the brightly lit capital Tokyo. There are hardly any protests, and almost no one is engaging in moral debates over incapable corporate executives. But companies like Toyota and Honda have already started culling their top executives. At Toyota, 52-year-old Akio Toyoda, grandson of the company's founder, will take the helm in June to rejuvenate the struggling carmaker.

Otherwise, Japan clings to the rituals of daily life, as armies of commuters, patient as ever, crowd into overfilled subways. Many of these corporate samurai no longer have jobs. They leave their apartments in the morning, pretending to go about their routines, hoping to hide the shame of unemployment from families and neighbors.

Internet cafés across Japan are filled with job seekers, many out-of-work former contract workers. They were the first to go when the crisis erupted; they were dismissed by the thousands. In many cases, losing their jobs meant losing the rooms they occupied in company-owned apartment buildings.

Takayuki Umeshita, 41, lost his job as a welder a few months ago. Now he camps out at an Internet café in Tokyo, looking for a new job, and even sleeping in a rented cubicle. The café resembles a homeless shelter, complete with shower and hot water to make instant noodles. Umeshita, who keeps his few belongings in a blue bag, is willing to accept almost any job. But without a permanent address, he says, his prospects are dim. "It's a vicious circle."

Japan's unemployment rate, currently at 4.4 percent, is likely to rise. Sony plans to cut 16,000 jobs worldwide, for example, while NEC and Panasonic are planning cutbacks of 20,000 and 15,000 positions, respectively.

Companies are striving to bring down costs, mainly at the expense of their suppliers. But many of these highly specialized small businesses have already streamlined their production in recent years, so the wave of bankruptcies is likely to continue. The number of suicides committed by bankrupt company owners -- and dismissed employees -- may rise, too.

In Adachi, a Tokyo district with many small businesses, the district administration has launched a pilot project to combat a rise in suicides. Kyoko Yoshioka of the district hygiene department pushes a set of harrowing statistics across her desk: Since 1998, at the height of the lost decade, about 30,000 Japanese have taken their lives each year.

The Adachi neighborhood is ground zero for the epidemic. Almost a third of all suicides can be attributed to economic hardship, since many of the despondent commit suicide out of shame over their professional and business failures.

Yoshioka and her colleagues have installed an early warning system of sorts. They have instructed civil servants in all public offices, from the tax authority to the registration office, to look for telltale signs of suicidal tendencies in citizens. The goal, she says, is to help vulnerable casualties of the downturn find ways to cope with their situations.

Translated from the German by Christopher Sultan