TR EMERITUS

From our Correspondent The National Environment Agency has given itself a pat on the shoulder for raising the hygiene standards of Singapore's food stalls. More than 90 per cent of Singapore's food stalls have achieved either an A or B grading for hygiene standards, and there was no stall with D grading, it said. NEA officers have been actively visiting stalls and distributing educational pamphlets on hygiene to the stall holders in the aftermath of Singapore's worst mass food poisoning outbreak in April this year. Three Singaporeans died from eating contaminated food from an Indian Rojak stall which was graded a "B" by NEA. There was one miscarriage and over 100 casualties. It turned out that it was in fact graded a "C" but somehow the stall holder did not receive the new label. The lapse in surveillance had dealt a blow to NEA's reputation. The temporary market committee which was supposed to oversee the cleanliness of the site was not taken to task. Neither did NEA's CEO Andrew Tan or the Minister of Environment Yaacob Ibrahim offer Singaporeans any apology. Instead, Singaporeans were blamed for their poor hygiene standards. The Indian rojak man was subsequently charged in court. There were no updates about his case so far. Following public furore over the standard of public hygiene at hawker centers and markets, the NEA introduced a series of stringent measures to raise the hygiene level.   Related articles: >> Photo Gallery: Geylang Serai market in the aftermath of food poisoning >> Interview with Geylang Serai stall holders  Read More →

Bank of America Corp. will pay $150 million to settle a class-action lawsuit brought against the former Merrill Lynch & Co., which BofA acquired this year. The suit was brought by two Louisiana pension funds. They alleged Merrill and its executives gave false and misleading statements in connection with the sale of bonds and preferred stock between 2006 and 2008, before BofA bought the brokerage, court filings show. The settlement was disclosed Monday by federal Judge Jed Rakoff of U.S. District Court in Manhattan. He has scheduled a Nov. 23 hearing to grant final approval. Charlotte-based BofA purchased Merill Lynch on Jan. 1 and still faces other lawsuits related to the merger. Those cases include a proposed $33 million settlement with the Securities and Exchange Commission awaiting approval from Rakoff. Source: Triangle Business Journal   EDITORS' NOTE: Why didn't Temasek sue BOA to seek compensation for the loses suffered? Or did its executives "go in with their eyes open"?  Read More →

By Yuka Hayashi from Wall Street Journal On Sunday, voters here are poised to remove the country's ruling party from power after 54 years of nearly continuous rule, even as they express skepticism about the opposition party's chances of carrying out its slate of overhauls. Polls show voters in Sunday's election heavily favor the Democratic Party of Japan, an 11-year-old collection of market reformers, union leaders and consumer activists that has never held full political power. A landslide would give the group broad powers to enact an agenda that includes a generous domestic-spending plan, strong climate-change rules, a reduction of Japan's bloated government bureaucracy and a reassessment of the nation's ties with the U.S. A landslide would also mark a sound rejection of the Liberal Democratic Party, which has ruled Japan almost continuously since 1955 but is hobbled by scandals and one of the deepest recessions of Japan's postwar era, a gloom that deepened Friday when the governent announced unemployment reached a record high in July. The party's hand-in-glove relationships with business, the bureaucracy and the U.S. have become liabilities as incomes have fallen and more Japanese begin to doubt the nation's direction. It is unclear how much a victorious DPJ will be capable of achieving in Japan. The country's massive debt could hobble the party's social-spending plans. Many of its members will have to learn the ropes as they take powerful government positions. Others may be reluctant to endorse big changes: The party was formed by veteran lawmakers, including LDP defectors who continue to fill its top rungs. A DPJ victory would test Japan's appetite for a break from tradition. The DPJ has made "Change" the slogan for its campaign and unleashed a pack of candidates who are younger and who have more women in their ranks than the LDP. Young, urban voters in particular are attracted to a platform that promises higher minimum wages and more job security, and advocates letting married women keep their original names. But while many of Japan's older voters favor jettisoning the LDP, they may balk at its more ambitious changes. Some younger voters, too, are skeptical. "Politicians always give us sweet talk before elections," said Yumiko Kosugi, a 31-year-old who lost her temporary job this year and says she doesn't plan to vote. "I don't expect anything to change -- no matter who becomes prime minister or which party takes power." In a survey conducted by the Nihon Keizai Shimbun daily last Friday, 38% of respondents said they support the DPJ as a party, compared with 29% for the LDP. In many areas, voters who say they generally support the ruling party say they don't necessarily like its candidate this time around. As a result, pollsters predict a wide election gap -- as many as 320 seats for the DPJ and fewer than 100 for the LDP out of the 480 seats in the lower house of Parliament. "There is an irresponsible stance of, 'I don't care what, I just want a change,'" said Fumio Kyuma, a 68-year-old LDP veteran and twice former defense minister, who has represented the area around the city of Nagasaki in Parliament for nearly 30 years. "People are looking for a leadership change just for the sake of leadership change." His challenger: Eriko Fukuda, a 28-year-old political novice. Ms. Fukuda, who contracted hepatitis C as an infant from tainted medication, became a national figure after battling the government over its cover-up of information about tainted blood products. "This election is a battle for the survival of those who are disadvantaged, and we must not fail," Ms. Fukuda said at a recent rally. In local polls, Ms. Fukuda leads Mr. Kyuma, who has repeatedly apologized for saying two years ago that the 1945 atomic bombing of the city by the U.S. "could not be helped." Like many LDP heavyweights who are no longer able to count on the party machine to drum up enough votes, he has hit the campaign trail for the first time in years. The DPJ faces challenges on many of the fronts where it proposes change. To woo Japanese discouraged by nearly two decades of slumping growth, the DPJ has proposed ambitious spending programs. It is promising families an allowance of $3,300 a year for every child aged 15 and under. It also says it will remove the fees that Japanese now pay to attend public high schools, and eliminate highway tolls. The DPJ estimates such spending programs will cost 16.8 trillion yen ($177 billion) annually when they are fully implemented in the fiscal year beginning 2013, a significant cost for a country that has a huge fiscal deficit. According to the Organization of Economic Cooperation and Development, Japan's government liabilities -- debts and other obligations -- could approach 190% of its gross domestic product this year. The DPJ, fearing a voter revolt, ruled out raising Japan's 5% consumption tax for at least four years, closing the most effective way to raise revenue. The party says it can pay for its spending in part with untapped financial reserves, including a fund Japan has built over the years by intervening in foreign-exchange markets. The party says it can also free up funds by eliminating government jobs, part of its proposal to remake Japan's administrative branch and curtail the influence of Tokyo bureaucrats who have long assisted the LDP in exchange for job protection. Following the example of the British system, the DPJ wants to strengthen the role of the prime minister and his cabinet, and send 100 lawmakers to ministries to oversee career workers there. Laws in Japan are often written by bureaucrats in ministries, then passed to the legislature for a vote. "Bureaucrats can't make dynamic policy changes because they are always burdened by past policy precedents," says Kazuya Mimura, a 33-year-old DPJ candidate who left his own bureaucratic position in the Ministry of Economy, Trade and Industry last year. "They have to be made by politicians." Some voters are skeptical about the DPJ's ability to turn such talk into action. Many of its themes were sounded by political rebels the last time the LDP was briefly booted from power in 1993 -- and they went nowhere. The party's desire to eliminate bureaucrat jobs, for example, could be compromised by its need to please an important constituency, the labor unions of government workers. The party may also have trouble ruling because it encompasses both activists and political insiders. DPJ president Yukio Hatoyama -- widely assumed to be Japan's next prime minister -- and Secretary General Katsuya Okada both hail from wealthy families with powerful business connections. Top official Ichiro Ozawa is a former LDP heavyweight known for his behind-the-scenes political maneuvering. Another top name, Azuma Koshiishi, is a former union leader. The party also walks a fine line in its proposed policies toward business. Unlike in the heydays of LDP rule in the 1970s and 1980s, when Japan was united in the pursuit of economic growth, the nation today is divided. The country's corporate executives are looking to cut costs and shift operations abroad as their strength in exports faces greater competition. At an estimated 4.1% this year, Japan's share of world exports is roughly half the level of 15 years ago. Many workers, meanwhile, face dimming prospects. In a country that has long prized lifetime employment, job security is slipping as manufacturers hire temporary workers to cut costs and keep staff levels flexible. Incomes are stagnating: Japan's per-capita gross domestic product was the world's fourth-highest two decades ago, but it has fallen out of the top 10. The DPJ proposes raising the minimum wage to 800 yen ($8.42) per hour from the current 618 to 739 yen, eventually boosting it to 1,000 yen. It also wants companies to turn temporary jobs into permanent ones, and stop hiring temp workers altogether on factory floors. While both parties propose similar measures, the union-backed DPJ's policies are seen as the more worker-friendly. Business executives say such steps would erode the competitiveness of Japan's companies and eventually pull down its economic growth rate. "They say, 'People's Lives First,' but without economic growth, people are not going to feel better off," says Mitsuo Ohashi, chairman of Showa Denko KK, a major chemicals company. Mr. Ohashi, who heads the political committee of Nippon Keidanren, a powerful business lobby, says that instead of reducing temp workers, Japan needs to help its economy compete globally and attract foreign investments. He advocates cutting Japan's corporate tax rate to below 30% from the current level of 40%, among the highest in the world. Mr. Ohashi says he supports most of the ruling party's policies. But he added that the LDP is responsibile for some of its own problems. "When one party stays in power for five decades, various evil side effects naturally emerge," he says. "Now, sensing the possibility of a change in administration, people are suddenly full of expectations." In international relations, the DPJ wants to loosen ties with the U.S. It promises to re-examine the role of U.S. bases in Japan and has said it could alter or end its deal to provide refueling services to U.S. vessels in the Indian Ocean when the agreement expires next year. To address the bitterness lingering among Asian neighbors invaded by Japan in World War II, the party says it is willing to discontinue political leaders' visits to a shrine honoring Japan's war dead. If it does, it risks angering politically active but shrinking groups of veterans and war widows. The main difference between the DPJ and LDP may lie in the upstart party's willingness to challenge traditional social customs. The country's seniority-based organizations, and the low participation of women and foreigners in the society and workplace, are often seen as a root of the economy's stagnation. "These things have been sucking energy out of women in this country as we try to work hard on our jobs and contemplate starting families," says Fumie Furukawa, a 36-year-old college history instructor near Nagoya who supports the DPJ. One rule that annoys many women: They must take the husband's name upon marrying. Ms. Furukawa and her husband, a hospital administrator, have lived as a married couple for five years but legally remained single so Ms. Furukawa could retain the name under which she has gained professional recognition. Resolving the name issue, she says, will probably lead them to tie the knot. "I might even consider having a child," she said. It will take more than the youth vote to sweep the upstart party to power. Japan's falling birth rates mean older voters are potent, making some younger Japanese feel disenfranchised as retirees turn out en masse to protect their benefits. In the last lower house elections in 2005, only 46% of voters in their 20s cast ballots, compared with 83% for those in their 60s. Kensuke Harada, a junior at the University of Tokyo, formed a nonpartisan group called ivote last year to encourage young Japanese to vote. His group has thrown parties at pubs that bring together students and young politicians and has solicited online pledges to vote in Sunday's elections. As of Thursday, it had received 1,140 pledges. "Everyone knows Japan's pension system has a problem, and we all wonder what will happen when we reach our 50s and 60s," the 23-year-old Mr. Harada said. "But politicians don't pay attention because the population of young people is so small and we don't even vote." Last Sunday, Mr. Harada spearheaded a movement for change that fell well short of a mass demonstration. Several dozen students paraded through the streets of Shibuya, a Tokyo neighborhood with trendy boutiques and popular student watering holes. Playing on the similar-sounding words for "politics" and "festival," many wore the traditional robed garb of a summer festival. Others wore Santa Claus hats. "The biggest festival of the year is coming," they chanted as they passed out leaflets telling young people to vote. "Join the fun and change our future!" Onlookers were amused. Stopping during a bicycle ride with her boyfriend, 25-year-old Saya Takasaki said she hadn't really been interested in politics before. But this time she planned to vote, she said, though she hadn't decided for whom. "I feel we have to make Japan a much better place," she said, before pedaling away. Source: Wall Street Journal   EDITORS' NOTE: Temasek Review is a paid subscriber of Wall Street Journal  Read More →