Girl group and sumo champ team up to tackle Japanese debt

Bubblegum pop and the dry world of government bonds might make for an unlikely pairing, but Japan's cash-strapped government would beg to differ, writes Felicity Glover.

Japan is pinning its hopes on the popular girl band AKB48, above, to help it sell "reconstruction bonds". Nicholas Kamm / AFP

Bubblegum pop and the dry world of government bonds might make for an unlikely pairing, but Japan's cash-strapped government would beg to differ.

Japan, you see, is pinning its hopes on the popular girl band AKB48 to help it sell "reconstruction bonds", which will be used to finance projects in regions destroyed by last year's tsunami, according to Agence France-Presse.

The home-grown band, which also happens to be one of the world's highest-grossing acts, with more than US$200 million (Dh734.6m) in CD and DVD sales alone last year, will team up with Hakuho, the Mongolian sumo champion, and Homare Sawa, the female football star and reigning Fifa World Women's Player of the Year, to drum up public interest in the low-yield bonds.

Although the spotlight has been on the euro zone and its sovereign-debt woes, it is surprising to learn that Japan has the industrialised world's worst public debt, which comes to more than twice its GDP and tops even that of Greece.

As of last week, the interest rate on Japan's benchmark 10-year bond stood at what many would call a highly unattractive 0.88 per cent.

While the 90-member band (it is made up of four 16-member sub-groups, bolstered by trainees waiting in the wings, to ensure a constant stream of concerts and albums, and, therefore, revenue) has a large following of teenage fans, it also has a large older male following (although we are not so sure if that's a good thing) - and it is this demographic that the government is targeting to invest in its bonds.Whether the debt campaign will work or not remains to be seen. But at least the government has reached a consensus on a course of action - unlike its counterparts in the euro zone.

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Over to Italy and a proposal by the government to levy a tax on cats and dogs was withdrawn on the same day thanks to public outrage.

Local media last week reported that a parliamentary commission had proposed a tax on domestic "animals of affection" in an effort to raise cash for debt-strapped cities and towns. According to Reuters, protests were voiced by everyone from animal rights groups to politicians, many of whom described the proposal as grotesque, surreal, idiotic and shameful.

"The only thing that's left to tax are wives and children," Domenico Scilipoti, a parliamentarian, was quoted by Reuters as saying.

Perhaps Italy should be taking a leaf out of Japan's book.

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Forget the usual ways of finding an ethical wealth adviser, such as checking the person's credentials or via glowing recommendations from friends. According to researchers at the University of Exeter and University of Cambridge in the United Kingdom, it's as simple as giving them a moral dilemma and seeing how much they sweat before you decide to hand over your hard-earned money. The researchers found that "gut feeling" can override rational thought when people are faced with financial offers that look unfair, Reuters reports.

The researchers gave 51 people a series of offers based on dividing £10 (Dh56.95) between two people.

"They found that although an offer to split the money 50:50 was mostly accepted, an offer of less than a 'fair share' was often rejected, even though rejecting it left them with nothing," Reuters says.

The test is apparently a take on a "well-known" psychological mind-bender called the Ultimatum Game, the purpose of which is to show gut reactions made under pressure with incomplete information.

"It's a bizarre finding, but it's very robust," Barney Dunn, the clinical psychologist who led the study, told Reuters.

"At a time when ideas of fairness in the financial sector - from bankers' bonuses to changes to pension schemes - are being widely debated, it is important to recognise why some individuals rebel against perceived unfairness, whereas other people are prepared to accept the status quo."