Diana Farah

DUBAI: Japan’s Minister for Digital Transformation KONO Taro said Wednesday that the recent slush fund scandal would not have happened in Japan if things were done digitally, rather than on paper.

During a panel discussion at the World Economic Forum (WEF), Kono explained that discovering the discrepancies in Japan’s Liberal Democratic Party (LDP) “would not have taken 20 years to notice if things were done digitally.”

In the high-profile scandal, LDP factions are suspected of creating slush funds by distributing to member lawmakers’ parts of fundraising party revenues, with the kickbacks not being recorded in political funds reports.

“The political scandal has been going on for maybe 20 years,” Kono said. “Nobody knew about it. But one professor gathered all the paper declarations of the political contribution, put it in a computer system, and he found out there’s a huge discrepancy.”

“That’s how he found out there’s an undeclared amount of money involved in this. If it was done by digital transfer of money, it would have been right there in front of you,” the Japanese minister continued. “It will probably take 20 hours to find out there’s something wrong going on. So, it’ll be good to move data on to digital.”

Speaking at the ‘Building Trust Through Transparency’ panel, Kono told WEF that “trust is a source of power, and transparency is what leads to trust in a government.”

In recent years, the Japanese government has made many attempts in digital transformation, especially as many official government documents were still done on paper, floppy disks and fax machines.

However, Kono explained that a lot of people in Japan were not happy with the new digital system.

“For example, with the national health insurance, all you had to do previously was to show a little health insurance card, which is on a paper, and you give it to the hospital,” he said. “Now, we are getting rid of that paper and moving that on to an Integrated Circuit (IC) chip card. So, you must put it on the system, do the face recognition, which many don’t find convenient.”

Kono added that many people were wary of what went on in the back end of the machines collecting their data. He explained that in order for the Japanese to be more trusting of the digitization they have to see and understand what is happening.

“We have to show them what this new system can do. You have you can see all your past health records, or you can see all your drugs that have been prescribed. And when you’re doing tax return, you don’t have to get a receipt from the hospital. It’s done on a computer like that,” he added.

Kono admitted that Japan did not have the highest trust rate at the moment due to the recent political scandal, but he said that it is a lesson to be learned.

“We are just trying to rebuild our trust among the taxpayers and consumers,” the minister said.

The session was hosted by Bronwen Maddox, the Director and Chief Executive of Chatham House. She was joined by several speakers including François Valérian, the Chair of Transparency International, Helena Leurent, the Director-General of Consumers International and Michael Miebach, CEO of Mastercard International Incorporated.