• Text size      
  • Send this article to a friend
  • Print this article

As Others See Us: The View from Japan

They've never worried about Scottish independence in Japan.

Why? Because they've never thought it would happen.

For decades the big corporations of Tokyo and Osaka have invested in Scotland.

They see it as a high-skills bridgehead in to Europe with a stable currency, good government and the rule of law.

Nothing they have seen in the polls or the politics of the country has suggested that might change in September.

At least until now.

Support for independence is up, by just a bit. And - whisper it - international investors have noticed.

Those with money in Scotland have also felt the tougher rhetoric from London on a single currency and from Brussels, or at least European Commission President Jose Manuel Barroso, on EU membership.

The result? Not panic, no. Not even worry. But maybe some firms have started to be concerned about whether they should be concerned. Scotland's own Standard Life last week articulated such angst. It is not thought to be alone.

Take Japan. Its government has no dog in the Scottish independence fight. Its big interest in Scotland is the investments its firms have made. And whether they would be affected by our vote.

So I asked somebody in Tokyo familiar with the views of his government for a Japanese take. I am not sure either side of the Scottish debate will like what he said.

I know this annoys some readers, but I can't tell you who this source is. But I think his or her insights are worth sharing. So please bear with me.

"Japanese businessmen in Scotland are optimistic: they think the status quo will continue," the source told me. "They are surrounded by people who say there is no chance of independence. But if Yes supporters become more visible; then they will start worrying."

Why worry? Two things, my source explains: currency and EU membership.

"The worse-case scenario is Scotland becoming independent but being refused membership of the European Union then not securing a currency union with the UK," the source said.

"Scotland might issue its own currency but that is very difficult," the Tokyo insider said. "Scotland would try to keep parity with Sterling but could face market speculation."

Businesses, the source did not need to point out, don't like uncertainty.

Even the slightest uncertainty; because here is a diplomatic qualifier: the Japanese view is that an independent Scotland would most likely be in both the EU and a currency union with the rest of the UK.

"My opinion is that if Scotland goes independent, it will not affect Japanese business too much," the source explained. "It is my view that a currency union would materialize. I think Osborne was bluffing: Westminster would negotiate.

"[Finance Secretary John] Swinney has said he would give up sovereignty; Westminster will say 'OK'."

"Scotland will get in to Europe. It has rich natural resources and a very high-quality labour force."

So why suggestions - from Barroso, primarily - that Scottish membership would be "difficult if not impossible"?

"I think there is some intrigue going on there," said the source.

By the Tokyo insider stressed risk, especially on the currency. "I am optimistic about a pound union but that is just my view," the source said. "If Westminster is stubborn and says 'the pound is ours and you can't have it', then that's a disaster for Scotland and for investors."

Japan, until now, has not been giving much thought to the prospects of independence - or of the possible consequences of a currency backlash from London.

In fact, my source said some investors were so focused on what they see as the danger of David Cameron's in-out vote on the EU that they weren't even aware of the indyref.

That might be changing.

There is, I understand, a new tone in consular cables sent home from Edinburgh and London.

Diplomats used to tell their superiors that Scottish independence was "improbable".

Now they are minded to qualify their assessment.

A Yes vote, they say, is still an unlikely eventuality. But it's not, they add with a caution typical of their trade, impossible.

Will this prompt states hostile to independence to say something out loud? Perhaps not. Will it spark concern voiced by companies close to those governments? We shall have to wait and see.

We've already had Standard Life announcing contingency plans for independence; a thinly veiled threat to at least quit the country.

Will some foreign investors be so spooked by rising polls - and ever sterner warnings from London on currency - that they will do the same?

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

216559