The 119th Installment
Public-private partnership mission as “promise to my mentors” (Kyrgyzstan edition)

by Mitsuhiro Maeda,
Professor

At this age, it is time for me to make preparations for the end of my life. Now is the time to do the work that I should absolutely do while still alive. I cannot just say that I will get around to doing it someday.

A typical example of what must be done is fulfilling my “promise to my mentors”. Looking back, I have been blessed with many mentors. This makes me extremely happy.

That is a good thing, but the problem is that I went too far and told them that “I will spend the rest of my life doing X, Y and Z. I swear!” All of those I promised were leading researchers, and it would be an historical feat if I could actually accomplish anything I said.

I have two choices. No one knows what I promised, so one choice is to pretend to have forgotten about it and to just let it go. I cannot do this because I am a samurai. That is something I could never do. There would be no point in living if I threw away my honor.

The other choice is to really do it.

Today, I am happy to report that I am actually doing one of those “promises”. This particular mentor is Yasusuke Murakami (referred to as my “mentor”), my former seminar instructor from when I attended the University of Tokyo. My mentor went “over there” in 1993. Now I cannot get down on my knees in front of my mentor and ask his forgiveness for being unable to do it. I have no choice but to do what I said.

In the 1980's, my mentor was working on the construction of a model that proved the “economic rationality” of Japan’s unique development strategy in which the government intervened in markets. Western countries widely criticized Japan Inc. and the notorious MITI (Ministry of International Trade and Industry) for this strategy. My mentor summarized it as developmentalism. In short, with diminishing average costs in industries, it is rational for governments to intervene in order to eliminate excessive competition and achieve fair competition (Perhaps you have no idea what I am talking about. I apologize for this. I will leave out the explanation.). Incidentally, it was not until the 1980s that this developmentalism functioned effectively in Japan, and it began to fail in the 1990s, and was officially ended in 2000.

My mentor taught me this in the mid-1980s. I chose to work in the Ministry of International Trade and Industry. Even after joining the ministry, I frequently visited my mentor and continued to seek his knowledge.

Then an “event” occurred in 1989. This was the end of the Cold War. As a result, dozens of former planned economies newly embarked on economic development based on market economy systems (These countries are referred to as transitioning economies.). Rapid marketization of the economy (shock therapy) was rolled out by experts from all over the world, who played roles such as presidential advisors in various countries.

Seeing this, my mentor said that suddenly asking for zero government intervention in countries where the government had complete control over the market would only cause confusion. In this case, the public private partnership approach typical of Japanese developmentalism would probably serve as a good reference. Of course, there are conditions such as diminishing average costs, so it may not work as it is, but it should at least serve as a great reference.

I burst into tears when I heard this and said, “I will spend the rest of my life introducing your developmentalism model to transitioning economies as a reference”.

I continued my efforts during my graduate school days at Saitama University, the National Graduate Institute for Policy Studies, Johns Hopkins University, and Cambridge University, but it would not be completely true to proudly say that I did it for my mentor.

Here I will talk about a big opportunity that finally presented itself (My introduction was a bit long.).

I had the chance to visit Kyrgyzstan in September 2017 and had me with former President H.E. Roza Otunbayeva. Kyrgyzstan is a former republic of the Soviet Union and undoubtedly has an economy in transition. At dinner, the former president said, “Please work hard for the economic development of Kyrgyzstan”, to which I replied, “Madam President, I will do my best!”

Keeping this in mind, in September 2019, I was invited to give a special lecture at an industry roundtable hosted by the Kyrgyz Office of the President (a very high-level meeting where representatives of government and industry met to discuss the direction of Kyrgyzstan's economic development). It was the first time for a Japanese person to do so. The theme was public-private partnerships (PPPs), and I was asked to introduce the industrial policies that the Ministry of International Trade and Industry had implemented in the 20th century.

My time to shine had come!

It was an unapologetic presentation of the Murakami model at a meeting at the center of one of the former Soviet republics.

It was September 20, 2019, and the location was the shores of Issyk Kul, a phantom lake on the Silk Road that writer Yasushi Inoue was eager to see but could not due to the Cold War between the East and West.

I woke up in my hotel room in the morning and found my mentor’s book (Yasuaki Murakami, An Anticlassical Political-economic Analysis: A Vision for the Next Century, translated by Kozo Yamamura, Stanford University Press, 1996) on the table, clapped my hands, and said, “Here I go”, and then took the book and headed for the conference hall.

My special lecture reinforced the essence of my mentor’s book with my own experiences as a trade and industry bureaucrat. I even told attendees to pass around and look at the book while listening to my lecture.

At a central meeting in a former Soviet republic, ministers and representatives of industry are looking at “An Anticlassical”! “Mentor, are you watching?” I was moved to tears while speaking. When I finished, I looked toward the sky and whispered, “I did it, mentor”.

However, it was only then that the real work began.

There was a storm of questions from attendees. This was the first time any of them had properly heard about developmentalism in Japan. “Wait. We in the East were defeated in the Cold War. Didn’t the East have a system where the government-controlled markets, and the West have one that did not interfere? Is that what Japan, number two in the West, was doing throughout the entire period of the Cold War? What was it that we fought and lost against?”

The questions did not stop coming, so the chairperson pushed ahead and terminated the meeting for a coffee break. Then I was surrounded by attendees whose faces had turned bright red.

A bureaucrat who had studied at a university in Japan and earned a PhD in economics after the country gained independence started to complain. He said, “At my university in Japan, my advisor kept severely and harshly saying that the government should never interfere in markets. This was all while the Japanese government was doing just that. That means the Japanese people have been deceiving those in transitioning economies for years”.

Some time after that meeting, I was called on by the Investment Committee of the Kyrgyz Office of the President on October 1. When I went there, Talaibek Koichumanov, a former economic minister and current Head of Secretariat of the Investment Council, cut to the chase. “Your lecture the other day was very interesting. I understood that it is important to not have 100% government or 100% private sector control, but rather a cooperative relationship (PPP) between the two. Therefore, we would like you to conduct collaborative research with us on the future development of Kyrgyzstan's public-private partnerships, but would you accept?” I gave the following reply: “Certainly. It would be my greatest honor”. He smiled upon hearing my response, and told me that I had been appointed advisor to the Kyrgyz Office of the President.

My appointment letter now hangs on the wall in my laboratory. Koichumanov, who was the Kyrgyz representative of the collaborative study, was also appointed as a researcher at AIIT following a resolution at a faculty meeting in November 2019.

Murakami, this is how things have gone.

I am still just getting started, but I hope that you will continue to watch over me.

Also, my special lecture at the roundtable was filmed. I want to send it to him “on the other side”, but it seems that is not possible with current technology.