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毎日デイリーニューズ/2018/12/6 16:10

Gov't should consider abolishing public-private investment funds

The Ministry of Economy, Trade and Industry has been in a rare confrontation with the Japan Investment Corp. (JIC), a public-private fund overseen by the ministry.
The row has its roots in confusion over the salaries for executives and employees of JIC, which was launched in September. Industry minister Hiroshige Seko determined the development as a case of mishandling by bureaucrats, and announced that he will return his pay for one month to take responsibility as the top manager of the ministry.
The rivalry between the two entities still remains unresolved. Perhaps we should question the very existence of public-private investment funds from their foundation.
JIC came into existence after a shakeup of the former Innovation Network Corporation of Japan (INCJ) as the government orchestrated the reorganization to shore up public-private funds, which have faced heavy criticism. JIC aimed to strengthen its management of funds through new leadership.
However, JIC's proposal for salaries, based on a ministry plan, faced criticism as being "too high" and failed to gain approval. The corporation is vehemently critical of the ministry, and now the relationship between the two parties seems to be beyond repair.
This case shows fundamental contradictions inherent to public-private funds.
Of the 14 public-private funds, 12 were launched under the administration of Prime Minister Shinzo Abe, and were regarded as a dependable force leading the growth strategy under the "Abenomics" economic policy mix pushed by the administration. But six of the funds posted losses as of the end of fiscal 2017, and Board of Audit inspections found problems within the organizations.
At the core of the unsuccessful performance of the funds lies the contradictory nature of those organizations with public and private faces. As public bodies, those funds are expected to play a role of supporting high-risk businesses that private entities would refrain from investing in. While as private bodies, the funds have to be efficient and achieve results with no regard for public responsibilities such as salvaging or supporting businesses.
This contradiction leads to their salary arrangements. To make risky investments successful, talented people need to be attracted with salaries equivalent to those offered by top-notch private funds. But most of the salaries are paid out of public coffers, sparking criticism for excessive payments.
The government apparently wants to integrate other public-private funds such as the Cool Japan Fund, into the newly-launched JIC. But the new president and other executives at the corporation place top priority on the success of new investments. A head-on clash with the government over how to run the organization would have been inevitable, in addition to the salary fracas.
Superficial measures cannot solve this impasse. The government should start considering shuttering or cutting down on public-private funds before their losses become even larger.




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