Japan trade minister courts AIDS controversy


African teams have gained strong support from some fans in Japan, such as these Cameroon supporters

By Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan (CNN) -- Japan's trade minister, Takeo Hiranuma, reacted sharply this weekend to a rating agency downgrade that equates Japan's creditworthiness with less-developed nations.

But Hiranuma's speech will likely provoke a frosty diplomatic response.

"The Japanese government bond was rated lower than that of Botswana," Hiranuma said on Sunday, according to Kyodo news wire. "Half of the people are AIDS patients, and it is outrageous the rating is lower than such a country."

Rating agency Moody's Investors Service recently cut its take on Japan by two notches, despite official protest from Japan. Its credit now rates A2, the same as Poland and South Africa but below Botswana.

Japan at 0.02 percent infection rate

According to World Health Organization figures, there were 10,000 people infected with HIV in Japan at the end of 1999.


South Africa competed in South Korea in the World Cup, and is a better economic comparison with industrialized Japan

Given Japan's population, that is an adult infection rate of 0.02 percent. A total of 150 people died of AIDS-related illness in Japan that year.

Using comparable data, Poland's adult infection rate is 0.07 percent, with 13,000 people carrying the virus. The WHO report showed that "fewer than" 100 Polish residents died in 1999.

In Botswana, 35.8 percent of the population is infected with HIV, the virus that causes AIDS. That's 290,000 people, in raw terms.

Japan's government often takes overseas banks, analysts and rating agencies to task over their assessment of Japan's economy. It called on Moody's to justify its downgrade in tough questioning before parliament (full story).

Honor of Botswana at stake

But Hiranuma said he was willing to take his remarks beyond economics and into the social and political sphere.

"It will affect the honor of Botswana if I say this," Hiranuma said in the northern city of Akita. "Japan is the largest donor nation, but it (the rating) was cut."

South Africa's economy is perhaps a better comparison to Japan's. Its total gross domestic product of $112 billion averaged growth of 2.2 percent over the last four years.

Japan is South Africa's third-largest trade partner, taking 7.1 percent of its total exports. Japan's GDP of $4.2 trillion is averaging growth of 0.6 percent.

South Africa is also widely believed to have the highest rate of HIV infection in the world, in people terms. In all, 4.2 million people carried HIV at the end of 1999, an infection rate of 19.9 percent.

Contrast with World Cup welcome

Hiranuma's comments also contrast sharply with the warm image Japan is promoting during the soccer World Cup.

Japan has sought to use the world's largest sporting event as a platform to promote its economy, companies and culture. Five African nations are competing: Cameroon, Nigeria, Senegal, South Africa and Tunisia.

The village of Nakatsue even lobbied intensively to host the African country of Cameroon in the warm-up to the events. Cameroon, a semifinalist in the 1990 World Cup, has an HIV infection rate of 7.73 percent.

The stock markets of Japan and co-host South Korea have responded to the World Cup. Select stocks have gained leading up to and into the tournament, typically in service industries.

But Japan's stock market is lower on Monday, the broad Topix index trading down 2.51 percent at 1027.82 in mid-afternoon trade.

There are doubts over the strength of economic recovery and the commitment to reform in Japan (full story). Those concerns are hurting Japanese bank stocks.

Investors had hoped finance ministers at this weekend's meeting of the Group of Seven industrialized nations would push reform.

But little concrete came of the meeting, with U.S. Treasury Secretary Paul O'Neill saying there has been no change in stance on exchange rates.