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Missed deals: Japan’s COVID travel restrictions exact economic toll

  • October 4, 2021
  • , Nikkei Asia , 4:13 a.m.
  • English Press

RINTARO TOBITA, MINORU SATAKE and KOSE FUKAO, Nikkei staff writers

 

TOKYO/LONDON/FRANKFURT, Germany — As Sumitomo Chairman Kuniharu Nakamura sees it, Japan’s stringent travel restrictions come with a hefty price.

 

“Our rule as a trading company is to actually go and see the business site before deciding on an investment,” Nakamura told a forum sponsored by the Japanese business lobby Keidanren on Thursday.

 

Nakamura believes Japan’s onerous travel rules that make overseas travel a challenge are detrimental to seizing opportunities abroad.

 

As countries with high vaccination rates move to waive quarantine requirements for incoming travelers, Japan has kept one of the strictest travel regimes, including a de facto entry ban on foreigners.

 

Japanese who go overseas on business trips must quarantine for 14 days upon returning. The duration is shortened by a mere four days if returnees have been vaccinated.

 

An investment bank in Tokyo eliminated business trip expenses altogether for the last half of fiscal 2021 through March.

 

“We had a deal that was snatched away by a foreign competitor, but there is nothing we can do because it’s the company policy,” said a banker in his 30s.

 

The impact is spreading to the agricultural sector. The Hokkaido city of Yubari, known for the famous namesake cantaloupe, was forced to slash this year’s production target.

 

The city will produce 140,000 fewer melons than the 2.6 million originally planned because of a worker shortage. It could not receive the usual 60 or so foreign trainees who work on the farms due to the entry ban. 

 

A U.S. Embassy staffer in Tokyo called Japan’s strict rules “the Galapagos syndrome,” using the term for the nation’s peculiar customs or rules that often leave it isolated from the rest of the world.

 

When the delta variant began to spread in March, Japan capped foreign arrivals at 2,000 a day. The number has been raised since, but only to 3,500. Neither the U.S. nor major European nations have such a cap.

 

Yet Japan already has surpassed the U.S. in the vaccination rate. With 70.73% of the population having received at lease one dose, Japan is catching up to the U.K.’s 71.64% and France’s 74.33%. But Tokyo has no plan to ease the restrictions.

 

The U.K. has waived preflight COVID-19 tests and a 10-day quarantine for vaccinated people from the countries on its “safe” list. France and Italy, similarly, have waived quarantines for those inoculated with accepted vaccines, including the Pfizer shot. The European Union introduced a vaccine passport in July for travel within the bloc, resulting in an immediate boost to air travel.

 

Europe’s international travel demand as measured by revenue passenger kilometers — kilometers traveled by paying passengers — recovered to 51% of 2019 levels in August, the International Air Transport Association says, an improvement of 20 points. This compares with a 4-point improvement worldwide.

 

The U.K. is trying to balance resuming normal life while containing infections. British Health Minister Sajid Javid stressed the need to consider the impact that pandemic-related restrictions have on the economy and education.

 

Unofficial government data does not seem to support Japan’s policy. Of those who arrived in Japan during the spring or summer, around 0.5% tested positive for COVID-19 at airports. The positivity rate among those who quarantined for 14 days was less than 0.1%. The 14-day quarantine requirement matches that for individuals who had close contact with someone who tested positive. Other countries have asked the Foreign Ministry about the scientific reasoning behind the policy.

 

Both the Suga and Abe governments were initially criticized for slow action on border controls. The next prime minister, Fumio Kishida, has yet to reveal his plans for the travel restrictions.

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