Free Importing Diversity: Inside Japan's JET Program by David L. McConnell Page A

Nakasone formed the Maekawa Committee to study mediumand long-term policy measures to deal with Japan's economic and social
structure in a changing international environment. One of the mandates of
this high-profile advisory committee was to expand domestic demand and
to consider the social or "nontariff barriers" to foreign investment, includ ing the closed nature of local governments in Japan. As this was the turf of
the Ministry of Home Affairs, a number of its officials, including Nose,
were brought into the process, and the race was on to piece together a package of reforms that would appease the American negotiating team at the
upcoming summit between Nakasone and Reagan in 1986. Nose recalls:

    During the year of the trade conflict between Japan and the United
States-and I didn't get a vacation at all that summer-I was thinking
about how to deal with the demands that we buy more things such as
computers and cars. I realized that trade friction was not going to be
solved by manipulating material things, and besides, I wanted to
demonstrate the fact that not all Japanese are economic animals who
gobble up real estate. There was no one in Japan who intentionally
planned all this economic conflict, especially out in the countryside. I
wanted to show things like that, simple truths in Japan.
    In order to do all this, I decided local governments must open their
doors and let people come and see the truth directly-not just any people, but those with a college degree and under the age of thirty-five,
since people start to lose flexibility after that age. I thought this would
be a much better way of solving the trade conflict than using money or
manipulating goods. I thought that seeing how Japanese live and think
in all their variety, seeing Japan the way it really is, would improve the
communication between younger generations in Japan and America.'
    The upcoming summit provided a perfect opportunity for the Ministry of
Home Affairs to revisit the plan for an English teaching program involving
public schools. The JET Program was particularly attractive because it
would provide a solid nucleus around which to fashion other efforts to enhance the ministry's international reach. Now that the trade conflict had
been recast in terms of opening up local governments, it could count on the
support of both the Ministry of Foreign Affairs and the Prime Minister's
Office for a major initiative. Nose and others in the secretariat quickly
hatched a plan for a large program to be jointly sponsored by three ministries.
    Getting the Yen for Change
    Many a proposal that looks good on paper has fallen under the budget ax,
and the first problem that Ministry of Home Affairs officials faced in realizing the JET Program was locating a viable source of funding. Though the
initial price tag of approximately $120 million was relatively insignificant
during the heyday of the bubble economy, the annual JET Program budget is now more than four times that amount. Clearly, packaging and selling
the JET Program to the Finance Ministry was no easy matter.

    In pursuing this task, Home Affairs officials were in their element. Playing to their primary strength as managers of local taxes, they devised an
ingenious plan for financing the program through the local allocation tax
(kof uzei). The allocation tax is a form of general revenue sharing that provides about one-fifth of local government revenues. Basically, the Ministry
of Home Affairs calculates the demand for services that local governments
provide, subtracts the annual revenue of the local government, and then
supplies the difference up to a certain ceiling." By allowing JET participants
to sign their employment contracts with the prefecture or municipality in
which they were hired, the ministry enabled those localities to include expenses for the JET Program in the list of services they provided. In turn,
calculations of the allocation tax benefit for each local