Cash dependence reveals paradox of Japanese society

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Most small shops in Japan — a country with over 200,000 ATMs — only take cash to avoid high transaction costs. (AFP)
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A notice for payment via PayPay outside a Koguma restaurant in Tokyo. (AFP)
Updated 28 October 2019

Cash dependence reveals paradox of Japanese society

  • YouGov pan-#Arab study finds high awareness of relative size of #Japan's economy
  • Continued reliance on cash said to reflect #Japan's combination of tradition and modernity

LONDON: Many Arabs have an accurate view of the size of Japan’s economy, a recent poll by Arab
News and YouGov has discovered, but many also underestimate the country’s reliance on cash, revealing the paradox that lies at the root of that reliance.
The wide-ranging poll, which asked residents across the MENA region for their views on a host of questions related to Japan, found that awareness of the size of Japan’s economy — the world’s third-largest — was generally high, with 63 percent of respondents identifying it as being in the top five globally.
Awareness is higher among the older generation, with 68 percent of those over the age of 40 placing the country’s economy in the top five, compared to 58 percent of those aged 16 to 24.
Interestingly, the poll’s findings suggest that Arabs who have visited Japan are more likely to misjudge the size of the country’s economy. Only 48 percent of respondents who had previously been to Japan — four percent of all those surveyed — identified the country as having one of the world’s five largest economies.
The poll found that 67 percent of respondents correctly identified Japan as a member of the G20, but only 59 percent recognized Japan as a member of the G7 — a smaller group of the world’s largest economies.
In the latter case, there was a strong divergence between age groups, with 69 percent of those aged over 40 placing Japan in the G7 compared to only 48 percent of those aged 16 to 24.
However, by far the greatest misconception that Arabs have about Japan’s economy is its reliance on cash. Cash is still the most common form of payment in Japan, accounting for four out of every five purchases, but the majority of Arabs did not know this — with only 10 percent of the poll’s respondents identifying cash as the most common form of payment in Japan. By contrast, 46 percent of respondents said credit cards were the prevalent form of payment, and more thought that cryptocurrency was most common — 12 percent — than chose cash.
In many ways, these results are unsurprising. As Anne Beade wrote recently in the Japan Times, the continued dominance of cash payments in Japan sits oddly with its “reputation as a futuristic and innovative nation,” especially given the speed with which other technologically advanced countries have adapted to the cashless society. As Beade notes, 90 percent of transactions in South Korea are now digital.
But Japan’s reliance on cash is also typical of one of the country’s central paradoxes — its combination of tradition and modernity. The reasons for the country’s continued reliance on cash are manifold — from Japan’s low crime rates to the ready availability of ATM machines. But, as Beade makes clear, a significant factor is Japan’s aging population, who are slow to adapt to change. According to data from the CIA World Factbook, almost a third of Japan’s population is over the age of 65. In Saudi Arabia, that figure is just 3.32 percent.
If Japan’s continued dependence on cash illustrates the tension that can exist between its aging population and its futuristic aspects, then there are also examples of the two forming a more harmonious relationship. At the Dubai World Congress for Self-Driving Transport on October 15, Toyota announced its intention to transform into a mobility company with an example of how new technology could help solve the challenges of Japan’s aging population.
Speaking of the island of Hokkaido, in the north of Japan, where railway services catering tothe island’s aging population have shut down, Madali Khalesi, Vice President of Automated Driving at the Toyota Research Institute for Automated Driving Development, advanced self-driving cars as a solution.
“As time goes on you become more elderly, you are feeling less comfortable to drive your own vehicle, and in Japan in many cases, you have to hand in your driving licence,” he said.
“So think about it: You don’t have a mode of transportation publicly, you can’t drive a vehicle, (but that) does not mean something has to give, right? And we believe the technology at least can help support that change.”
Arabs’ misconceptions about Japan’s relationship with cash are widespread but understandable, given the nation’s hi-tech image. But, in bringing to the fore these issues of tradition and modernity, such misconceptions unintentionally shine a light on one of Japan’s most beguiling paradoxes.


NMC Health removes CEO amid investigation of UAE firm’s finances

Updated 27 February 2020

NMC Health removes CEO amid investigation of UAE firm’s finances

  • Chief Executive Prasanth Manghat was dismissed with immediate effect
  • Chief Operating Officer Michael Davis was appointed as interim CEO

NMC Health has removed Chief Executive Prasanth Manghat with immediate effect and granted its finance chief extended sick leave, as more details emerge from an investigation into the UAE health care firm’s finances.
Abu-Dhabi based NMC said after Wednesday’s market close that it had appointed Chief Operating Officer Michael Davis as interim CEO to succeed Manghat and said Chief Financial Officer Prashanth Shenoy had been placed on longer leave.
Manghat had been with NMC for about 10 years in various roles, including deputy CEO and CFO, and had seen the company through its 2012 listing on the London Stock Exchange.
The moves are the latest blow for the firm whose shares have lost about two thirds of their value since US-based short-seller Muddy Waters late last year questioned its financial statements.
NMC had said at the time that the report was “false and misleading,” but had opened its own investigation into company finances. The review is being led by Louis Freeh, who was director of the Federal Bureau of Investigation in the United States from 1993 to mid-2001.
NMC on Wednesday said the investigation committee had identified supply chain financing arrangements that were entered into by the company and “which are understood to have been used” by entities controlled by founder BR Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi.
Reuters was unable to reach Manghat, Shetty and Muhairi for comment outside business hours on NMC’s latest statement.
The company, which operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes in 19 countries, said the committee was reviewing a drawdown of its facilities that had not been disclosed or approved by the board.
Its shares closed 6.6% higher before Wednesday’s statement.
NMC also said it had suspended a member of its treasury team over possible discrepancies in its bank statements and ledger entries, and said it would be unable to publish its annual results till at least the end of April.
Indian billionaire Shetty resigned as NMC’s co-chairman this month, after British regulators said they were looking into NMC following a disclosure that he had misstated the size of his stake.
Shetty had said this month that his NMC shareholdings were under a legal review looking into a large portion of his shares signed to two of NMC’s top investors in 2017, while some of his other stock had been pledged as security against loans.