Samurai in the Surf: The Arrival of the Japanese on the Gold Coast in the 1980s

Citation

March, R. (2008), "Samurai in the Surf: The Arrival of the Japanese on the Gold Coast in the 1980s", Journal of Management History, Vol. 14 No. 1, pp. 105-107. https://doi.org/10.1108/17511340810845516

Do not be put off by the juvenile title. This is a fascinating and well‐researched account of the wave of optimistic and naive Japanese investors with far more money than sense who bought into Australia's tourism and leisure industry in the second half of the 1980s – and the money they lost. A more accurate title would have been “The entry and demise of Japanese tourism investment in Australia.” The author chronicles an era in Australian economic history and society that witnessed the dramatic arrival of Japanese investors in the 1980s, the resultant social backlash triggered by xenophobia and racism toward the Japanese, and the subsequent and equally dramatic scaling back of investments through the 1990s. The legacy of that investment is still evident today. In the words of the head of the Gold Coast Tourism Bureau when I met him some years ago: “If it wasn't for Japanese investors, we wouldn't have half the hotels we have now.” The Japanese tourist demanded five‐star accommodation, quality transport and quality (Japanese) restaurants. They also wanted a beachside resort lifestyle and championship golf courses.

Chapter 1 provides the background for the spending spree by explaining the extraordinary sharemarket and land boom in Japan in the second half of the 1980s. At its peak, the land value of Tokyo was greater than the entire land value of mainland USA. The rapid appreciation of the Japanese yen from late 1985 had seen it virtually double in value in 18 months. Japanese investors, faced with steepling land prices in Japan, looked overseas for opportunities and Australia (along with the USA) was open for business. Australia had relatively cheap land, was a destination increasing in popularity for Japanese tourists, and politically and culturally (at the beginning at least) it was amenable to Japanese investment.

Chapter 2 explains the appeal of the Gold Coast to the Japanese. Starved of investment opportunities at home and buoyed by a society‐wide shift toward greater leisure Japanese investors saw the potential in southeast Queensland for building first‐class golf courses, luxury apartment complexes, and five‐star resort hotels. The Gold Coast was also in Queensland, the Australian state that had courted Japanese money and tourists since the 1970s through its visionary yet corrupt premier Joh Bjelke‐Peterson.

In Chapter 3, Hajdu introduces the reader to the two leading characters in the Japanese investment boom into southeast Queensland – Shuji Yokoyama of Daikyo Kanko and Harunori Takahshi of Electronics and Industrial Enterprises, or EIE. Ambitious dreamers with more money than sense, their common targets were the development of luxury golf courses, apartment complexes, and five‐star hotels. After the main actors, Chapter 4 introduces us to the off‐broadway cast, an eccentric collection of greedy and wide‐eyed individuals and corporates with deep pockets and shallow plans. These range from balladeer Masao Sen with a penchant for trophy purchases and rock singer Eikichi Yazawa with a corrupt manager still in gaol today, to numerous companies including global names such as Mitsui and Matsushita that entered the fray late, no doubt buoyed by the apparent success of the less reputable members of the Japanese establishment that had preceded them. Leisure was the main industry the Japanese targeted, but not exclusively. For instance, Japan's largest trading company, Itochu, had drawn up ambitious plans in 1987 to develop a medical clinic to rival America's Mayo Clinic.

So who helped the Japanese in their investing bonanza. Chapters 5 and 6 reveal the motley crew of local characters. Hajdu describes them as functioning as “gatekeepers” to Japanese investors, providing them with investment advice, consultancy, legal and other services. They included politicians, lawyers, real estate agents, architects, planning consultants and developers who generously offered their advice in how the Japanese could spend the $4 billion that had flowed into the Gold Coast by 1988. The story changes direction in Chapter 7 as we learn of the growing anti‐Japanese sentiment within the Gold Coast (and Queensland in general) generated by concern of increasing “foreign investment.” The high‐profile individual in the movement was Bruce Whiteside, a New Zealand‐born painter who was galvanised into action when the Lone Pine Koala Sanctuary, with its echoes of Gallipoli, was sold to Japanese interests. But Whiteside was by no means alone. By the time Australia slid into “the recession we had to have” in the early 1990s, a potent mixture of rising unemployment, job insecurity and sky‐high interest rates provided a fertile breeding ground for scapegoats in the form of Japanese investors with difficult names and unsmiling faces. (Hajdu argues, not persuasively, that Whiteside's attitudes toward foreigners were a harbinger of the later Pauline Hanson era.) I must add a cautionary note that many of the references Hajdu uses in this chapter are from the local Gold Coast tabloid, the Gold Coast Bulletin, whose reputation for seeking an eye‐grabbing headline clearly outweighs its pursuit of a well‐researched story.

Chapter 8 details the tightrope walked by government of all persuasions during the early 1990s. While attempting to address and allay the concerns about Japanese investment expressed by a growing number of Australians, politicians were well aware of the need for Japanese investment, in particular due to Australia's faltering economy. Chapter 9 chronicles the wash‐up from the heady days of the late 1980s. The global losses incurred by Japanese investors are well chronicled elsewhere. Author Alex Kerr, for instance, wrote in his excellent Dogs and Demons that Japan during this time lost more money than any nation in human history, surpassing even Rome's losses when it was sacked in 455 AD. As for Australia's Japanese investors, Harunori Takahashi of EIE was eventually arrested for fraud and corruption. Japanese investigators revealed he had borrowed A$6 billion from a well‐established but ultimately discredited Long‐Term Credit Bank. Daikyo Kanko retains a presence in Australia today, but its ambitions, like its cash flow, have shrunk dramatically after losing millions in the inflated spending spree of the 1980s. Masao Sen was declared a bankrupt in the 1990s and has returned to singing; Eikichi Yazawa's financial advisor was convicted in 2003 of forgery and misappropriation. Only a small number of institutional investors retain a presence in Queensland.

Hajdu's of ambitions, inexperience and naivete of Japanese investors is not peculiar to the Gold Coast. Japanese lost far more in the USA, with marquee investments such as Columbia Pictures and Rockefeller Center triggering similar losses and similar racist sentiments in the late 1980s. When Sony bought the iconic film studio in 1988, Time Magazine lamented that they had “bought the soul of America.” Though the Gold Coast boasts no such icons, Japanese investment bestowed a copy of Michelangelo's David in one of its luxury shopping malls. A tribute to naked ambition perhaps?