Japan Press Weekly

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2012 October 24 - 30 [GREAT EAST JAPAN DISASTER]

Consulting firm selects corporate recipients of gov’t subsidy for post-disaster recovery

A private consulting firm, Nomura Research Institute, Ltd., has chosen the recipients of the government subsidies to the private sector which was allocated under the name of the post-3.11 disaster recovery assistance.

The Ministry of Economy, Trade and Industry in the third supplementary budget for the FY 2011 has used a total of about 300 billion yen for a project to subsidize corporations as part of the ministry’s post-disaster reconstruction program. The program gives a maximum of 15 billion yen in subsidies for capital investment such as for the construction of a new factory.

Among 510 accepted applications, the number of programs in the disaster-stricken prefectures of Iwate, Miyagi, and Fukushima amounted to only 31 or 6%. The Japanese Communist Party through Diet deliberations revealed that 80% of the ministry’s subsidies were given to major corporations such as Toyota, Canon, Toshiba, and Kyocera.

Using staff shortages as an excuse, METI contracted out the whole project to NRI.

Recipient companies and the amount of public funds provided to them were determined by a committee established by NRI which consists of 26 members, including professors and accountants. NRI also set standards for judging which companies should be subsidized preferentially.

The NRI’s standards for selecting subsidy recipients are favorable to large corporations as it takes into consideration if applicants possibly shift their plants abroad due to a strong yen or have enough competitiveness instead of assessing the extent of their damages caused by the disaster.

NRI said that no committee members “have a special interest in recipient companies” and that “they all come from outside NRI.” The firm, however, concealed members’ names and other pertinent information.

The METI approved the NRI’s decisions without checking whether appropriate companies were selected and how much in subsidies they received. “Because the ministry allowed NRI to conceal its committee members’ information, there is no way to determine the fairness of the NRI’s decisions,” said METI.