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Okinawa Nostalgia

February 17, 2019

Recently, the Nikkei Asia Weekly published an article entitled Okinawa’s Most Popular Beer Taps Military Ties to US which underscores the complex post-World War II history of what was formerly called the Ryukyu Islands that later became known as Okinawa. Ryukyu was once an independent kingdom which traded with both Japan and China. The battle for Okinawa was the largest amphibious landing in the Pacific Theater of World War II. It also resulted in the largest number of casualties accounting for over 100,000 Japanese and 50,000 Allied casualties.

Okinawa was viewed as the Japanese last stand before an invasion of the mainland and occurred from April to June of 1945. As the image below indicates, the Japanese were heavily dug in and prepared to fight to the end for the Emperor and defend the mainland. In fact, the intensity and casualties experienced in Okinawa led to the estimates of lives that would have been lost in an invasion of the mainland which underscored the horrific decision to utilize atomic warfare in an effort to end the war.

Okinawa was handed over to the U.S. in 1946. It officially separated from Japanese rule by the Treaty of San Francisco signed by 49 nations in 1951 which gave control of Okinawa to the American-led Allied Occupation of Japan. Moreover, Japanese overseas assets of some US $25,000,000,000 were transferred to north Asian countries and war reparations of US $1,000,000,000 were awarded to Japanese-invaded Southeast Asian countries. Naha, the capital of Okinawa, is only a 626-kilometer distance from Taipei whereas Tokyo is 9,618 kilometers away. This fact became a later consideration in political chess moves between the U.S. and mainland China. From that time forward until the present, the military presence of the United States on Okinawa has been a lingering issue though Okinawa’s sovereignty was resolved in late 1971.  

It was early 1970 that the author appeared on the Tokyo/Okinawa landscape in an interlude from the preferred home of Southeast Asia. However, it became an interesting time with the evolution of a return of Okinawa to Japan and the demise of the U.S. dollar to the strength of the Japanese Yen given the exponential growth of the Japanese economy. The backdrop was severe pressure from Japan, increased U.S.-approved financial support from Japan to Okinawa beginning in 1969 and President Nixon’s desire to develop relations with mainland China without necessarily throwing Taiwan under the bus.

Accordingly, Nixon and Prime Minister Sato of Japan reached an understanding in 1969 with the objective of a reversion of Okinawa to Japan as early as 1972. As the concepts were floated in the U.S. and Japan, the reactions in both countries became galvanized. In the U.S., the massive casualties during the war were, and remain, a rallying cry in more traditional circles.

From the Japanese perspective, the ownership of Okinawa was a focus of every Japanese nationalist youth. The author took it upon himself to photograph a stand-off between Japanese riot police and “liberate Okinawa” youths in Tokyo in front of the Green Fantasia Apartment complex which is much less exotic than it sounds. The result was a scene much like that shown below taken at another time and another place, as the personal images of the moment did not survive. However, one should know that the concepts of Japanese robocops in cartoons were taken from their actual forces. The cops have shields which they beat with batons as they advance and at the right moment the cannon cop goes to the front of the line, kneels down and shoots a tear gas grenade into the oncoming charge. Tear gas is particularly bad when you are stuck in it with no mask and no place to go.  

As the reversion negotiations progressed, the U.S. military presence in Okinawa was topical. In actual fact, the Japanese were guaranteed military cover at no cost as their economy continued to roar. Having a strong U.S. military presence close to Taiwan to use against the wily Mao Tse Tung and an ongoing war in Vietnam fit the U.S. agenda. Therefore, an accord was reached on the continued American military presence leading to an agreement for future U.S. military bases in an occupied landscape to be returned to Japan. Needless to say, it remains a considerable presence with some 25,000 U.S. Marines and Air Force personnel stationed there.  

Once the reversion of Okinawa seemed to be a likelihood, the author became a frequent flyer from Tokyo to Naha in an attempt to resolve commercial arrangements that were totally incompatible with U.S. ownership in an expanded Japan sovereignty. The more ethnically impure nature of the Okinawan people was far less rigid than that of the Japanese which represented an escape from the buzzkill structure of Japan.  

Moreover, there was a duty-free advantage as one could purchase the legal three bottles of Johnnie Walker Black Label Scotch, take them back to Japan, sell two of them, pay for the air flights and have one for free! Over time, the U.S. military presence began to wear with the local folks following numerous transgressions and the alleged murder of a bar girl by a U.S. serviceman. Subsequent to reversion, U.S. military land reductions occurred and nuclear weapons were removed though demonstrations continue against the U.S. military presence.

Denny Tamaki, the son of an Okinawan waitress and an American Marine, who left the island before he was born, was recently elected governor of Okinawa based on a campaign promise to dramatically reduce the U.S. presence. The Japanese government provides some $1.7 billion per year to support the bases which, in turn, provides a significant measure of economic flow through to the island. His position is at odds with the ruling LDP party in mainland Japan that takes a more pragmatic approach to relocate some of the bases to a less congested area in Okinawa which would likely result in more direct economic incentives to the local government. Mainland Japan would prefer to keep such unpleasantness some 9,000 kilometers away and will be willing to keep Denny and his folks happy.

To fast forward to the moment, Nomura Holdings and the Carlyle Group acquired the Okinawan Orion brewery that has built a cult following in the U.S. The Japanese investment bank and U.S. private equity firm acquired the brewery with the objective of expanding its growth in the U.S. as Japanese brewery sales in Japan have diminished such that the potential for domestic sales growth is history. Small Orion has an advantage its larger Japanese peers do not have and that is Orion has built up a strong following from U.S. military personnel and their families who drank it while stationed in Okinawa.

Moreover, as Orion sits closer to Asian markets, nearly half the people who tour its brewery in Okinawa are Asians. Therefore, the nostalgic appeal is not limited to U.S. military-related individuals. As the Japanese beverage market constituency ages and their tastes change, the challenge is to define future markets with growth potential. Who knows, you may walk into a convenience store near you and see Orion beer in the chiller next to cans of Lone Star which would represent a difficult choice for a Texan with fond memories of night-life on Okinawa.

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