TED Case Studies

Japan and Golf



     CASE NUMBER:        259
     CASE MNEMONIC:      JAPGOLF
     CASE NAME:          Japan Golf

A.   IDENTIFICATION

1.   The issue

The Japanese golfing craze has spilled over into other countries of
the Pacific Rim.  One of the most dramatic examples of this type of
touristic imperialism occurred in Malaysia.  Developers hoping to
profit from the popularity of golf in Japan have moved to construct
golfing resorts in Malaysia, destroying hundreds of acres of
rainforest for an 18-hole golf course and related developments. 
Environmentally this adversely affects the rainforest habitat and
wildlife.  Once constructed, the golf course and chemicals used on
it create problems of equal magnitude.

2.   Description

Japanese affluence and the consumption that accompanies this
lifestyle have forced the Japanese to look beyond its shores for
recreational diversions and other interests.  This is mainly due to
the small geographic size of Japan.  With its high population
density and the small available amount of land in Japan to live on,
many Japanese travel to other countries to participate in Western
sports such as golf and skiing.  This has led to an outflow of
money from Japan to invest in such recreation places.  A strong
Japanese economy and currency has helped to make investments in
cheaper overseas properties a popular investment.  

A burgeoning interest in golf and increasing opportunities made
available in air travel created a new type of tourism: Japanese
golf tourism.  Development of golf courses by Japanese investors is
seen by many as major contributors to another country's economic
development.  This specific case involves Japanese investment in
developing nations of Southeast Asia and the effects that this type
of sport imperialism has on the environment and social structures
of a country.

Environmental concerns associated with the construction and
maintenance of golf courses are many.  In Southeast Asia
(specifically Malaysia) hundreds of acres of rainforest are
sacrificed to create a chemically dependent and environmentally
unsound form of monoculture.  Course irrigation, infrastructure
construction, and development that accompanies golf courses
(hotels, restaurants, parking lots, sewers,  etc.) significantly
damage already fragile ecosystems.  Most 18-hole golf courses are
referred to by critics as "green deserts".  These deserts of grass
typically cover 100 hectares and have one-quarter the water
retention capacity of the rainforest that it replaced.(1)  

Another potential problem is how social displacement occurs when
courses are built in rural areas.  Residents of these areas are
usually not consulted or made aware of a fact that a course is
going to be built on their land.  Subsequently, they are usually
forced off their land by their government which is eager for
foreign exchange.  These golf development refugees then end up
moving to the city and adding to the myriad of social, and
ecological problems in the developing cities of Southeast Asia.

This trade dispute is not very old.  It has its roots in Japan's
"bubble economy" of the 1980's and the affluence that it created. 
With increasing deficit spending in the U.S., there was an influx
of dollars going into the Japanese economy.  The Japanese did not
have to look hard in order to spend it.  Japanese investors began
to put large amounts of money into overseas real estate.  Golf
course and resort development were a popular arena of this type of
investment.

As was mentioned earlier, the small size and density of Japan is
also considered to be a motivator to look overseas for golf course
locations.  Another reason was the growing opposition within Japan
to golf courses that were beginning to be built near mountains and
eliminating forests in Japan.  Also, the Japanese government made
a move in 1992 to tighten controls on the development of courses
within Japan.  This put a great deal of pressure on the 1700 golf
courses and driving ranges within Japan given that there are 12
million Japanese who regularly play golf.(2)

Another reason for their move overseas is the high price that
golfers must pay in Japan to play golf.  Besides the fact that many
Japanese golfers must sometimes play in adverse conditions in order
to keep their tee times, golf club memberships have become
expensive and elevated to icons of status.  Everyday fees for a
round of golf to non-members of a club range from Y20,000 to
Y30,000 per day.(3)  Corporate memberships which have also been
known to be traded as a commodity, ranged in price from Y40 million
and Y400 million during the late 1980's.(4)  High prices for tee
times was not the only reason for some Japanese to look overseas
for course lands.  The growth of golf in popularity and among the
Japanese middle class aided overseas development.  For many
Japanese, it can be less expensive for them to take a trip to a
golf resort in Southeast Asia, Australia, Hawaii or California than
it would be for a week of golf in Japan.  Lower global airfares
aided this also, making international travel available to a wider
spectrum of individuals.

Because tourism is not a commodity and marginally more difficult to
measure, it is more difficult to determine the stance that the
issue has in the international arena.  However, the case involves
Japanese golfers, investors capitalizing on their fanaticism with
the sport, and countries such as Malaysia.  Publicly, Malaysia
welcomes the influx of capital and jobs that golf courses and
resorts provide for their domestic economies.  Countries of this
region often give developers special incentives to build such
places in their countries.  

On the other hand, there is a growing anti-golf movement mobilizing
environmentalists in Japan and other nations that feel they are a
victim to development.(5)  Citizens from Japan, Thailand, and
Malaysia launched the "Global Anti-Golf Movement" two years ago to
coordinate regional opposition to further course development.  This
group wants to use information about the ecological and social
problems associated with course development as a way to change
public opinion.  However, these groups are not very well organized
and have not been able to make any large strides in changing
attitudes in this region of the world.  The investors of such
developments have the most to gain from this status quo being
maintained.  And, as usual, the losers are those displaced by
course development or those who suffer health problems due to
chemicals used in maintenance.  

3.   Related Cases 

     ASIAGOLF case
     FRANCE case
     JUMBO case

     Keyword Clusters    
     (1): Forum                    = MALAYsia
     (2): Bio-geography            = TROPical
     (3): Environmental Problem    = DEFORestation

4.   Draft Author: Andrew W. Roberts

B.   LEGAL Filters

5.   Discourse and Status: Disagreement and ALLEGation

In this case there a disagreement does not exist between the Malay
and Japanese governments per se.  However, this seems to be a
disagreement between environmental activists such as the anti-golf
movement and with developers and the nations that back the
development of these resorts.  No formal treaties or proceedings
have been implemented as of yet.

6.  Forum and Scope:  Japan and UNILATeral

7.  Decision Breadth: 1

8.  Legal Standing: LAW

This is key word is used to highlight the law that Japan instituted
in order to curtail and tighten regulations on the construction of
golf courses.  These tighter regulations forced many developers to
look overseas to further develop golf courses.

The legal standing for this case essentially has nothing to do with
either government.  Agreements made to construct these courses are
made in the private sector which has the backing of the host
government because it is an investment in Malaysia.

C.  GEOGRAPHIC filters

9.   Geography

     a. Continental domain:   Asia

     b. Geographic Site:      East Asia

     c. Geographic Impact:    Malaysia

Entire ecosystems are adversely affected through the construction
of golf courses in tropical Malaysia.  The impact of this type of
tourist trade on the environment begins with the destruction of
hundreds of acres of rainforest to build these courses. 
Environmental impact studies are not done, nor are displaced
residents consulted before construction begins.  An average golf
course uses over 3,300 pounds of carcinogneic chemicals and enough
water to sustain 2,000 families.(6)

Chemicals used on these courses adversely affect ground water
supply and harm the health of caretakers.  Chemicals used are
easily absorbed through the skin and lungs.  Many chemicals contain
nitrogen and phosphorous, which invites increased algae growth in
water supplies.  In turn, higher amounts of the algae require
increased amounts of bleach in drinking water, creating a reaction
that produces a carcinogenic substance called trihalomethane.(7)

Increased travel to and from these resorts in Malaysia contributes
to air pollution.  Destruction of rainforests in this region
destroys habitat for wildlife as well.  Construction of necessary
infrastructure also has degenerative affects on the tropical
environment of Malaysia.  This type of tourism also requires the
construction of industrial parks/zones, entertainment facilities,
housing,  and export oriented agriculture (flowers, exotic fruits
and vegetables).(8)
  
10.  Sub-national factors:  No

11.  Type of Habitat: Tropical rainforest and savanna

D.  TRADE Filters

12. Type of Measure: Regulatory Standard [REGSTD]

13. Direct vs. Indirect Impacts: Indirect

It is doubtful if the environmental aspects of building golf
courses in Malaysia have led to the slowdown in their future
development.  It can be assumed that the Malaysian government is
welcoming the foreign investment, leaving environmental issues in
the background.  Environmental concerns are not paramount over
finance and development.  Environmental groups are not yet strong
enough politically to prevent further degradation of the
environment in Malaysia in this manner.  For example, in order to
satisfy the demands of developers, the Malaysian government
recently paid more than $7.5 million to build a pipeline from the
mainland, where a recent cholera epidemic due to an inadequate
supply of water,  to provide a nearby island golf course water.(9) 

14.  Relation of Trade Measures to Resource Impact
 
     a.  Directly related to product:        Yes  GOLF
     b.  Indirectly related to product:      No
     c.  Not related to product:             No
     d.  Related to process:                 Yes Habitat Loss

15.  Trade Product Identification: GOLF

16.  Economic Data

Industry Output:  Unknown for Malaysia, due to lack of
documentation.  But, the golf industry is a multi-billion dollar
industry worldwide.  This type of tourism funnels profits out of
the country.  For example, in neighboring Thailand, it costs about
$47 million to develop a golf course.  Displaced peasants were paid
1.5 per square meter of land by the developers.(10)  Profits end up
in other regions of the world, not in the resorts host country. 
Investment effects in Malaysia are minimal in comparison to the
massive amounts of capital needed to build such resorts.

17.  Degree of Competitive Impact: LOW

18. Industry Sector: TOURism

19. Exporter and Importer:  Japan and Many

E.  Environment Clusters

20.  Environment Problem Type: HABIT Loss

Some relevant examples from the United States suggest the types of
problems encountered in building and maintain golf courses.(11)  In
Hempstead, New York, a heavy application of dizinon, an
insecticide, killed 700 Atlantic brand geese.  It was banned from
use on golf courses in 1990.  

The construction of a golf course in North Carolina depositied tons
of mud in pristine mountain strams, killing most of the trout
population.  Two-thirds of the trout were killed between 1988 and
1992.  

In Palm Springs, California golf courses are watered from deep
aquifers.  Their out take is about to 430 million gallons per year,
equal to the needs of a town of 11,000.

Isleworth golf course in Florida (a wealthy development community
where Sahquille O'Neal, the basketball player, among others, lives)
secretly dumped course run-off into an adjacent lake.  The nitrate-
rich runoff polluted Lake Bessie, a 175-acre sink hole, turning its
clear waters green and algae-filled.  In August, 1990 a jury
awarded $6.6 million to local residents for legal fees and damages.

21.  Species

     Name:          MANY
     Type:          MANY
     Diversity:     MANY

22.  Resource Impact and Effect: HIGH and Structural [STRCT]

23.  Urgency and Lifetime:  LOW and 100s of years

24.  Substitutes: Conservation [CONSV]

25.  Culture:  Yes.

Culture plays a large role in the way that the Japanese have
aggressively embraced this Western sport.  It has become another
ritual in the Japanese business world, mimicking the American
model.  Golf is seen as just as important to business and
networking in the Japanese corporate culture as is working long
hours and going out to a bar with one's boss after work.  In the
late 1980's, there were an estimated 10 million golfers in Japan,
these numbers increase everyday as the sport moves from an elitist
sport to being more accessible to those in the middle classes. 
Increased availability in overseas air travel has also contributed
to this increased golfing demand overseas as well.(12)  

26.  Human Rights: YES

The rights of individuals also comes into play in Malaysia as rural
dwellers are forced off of their land to make room for the "green
deserts".  Peasants are poorly compensated as well as coerced off
of their land by developers who profit considerably.  Many of these
rural residents either end up working for the resort development
whose health is jeopardized by course chemicals, or they move to
the city, adding to the myriad of urban ecological problems
afflicting cities in the developing world.

26.  Trans-boundary:  No
 
28.  Relevant Literature

Carlton, James.  "Big Japanese Influx Enriches Guam, but Reveals
Old Scars."  New York Times. 17 August, 1992.  p. A:1, 4.   

Chatterjee, Pratap.  "Clubbing Southeast Asia:  The Impacts of Golf
Course Development."  Multinational Monitor.  November, 1993. p.
23-25.
Chatterjee, Pratap.  "Golf Poses Too Many Hazards."  World Press
Review.  October, 1993. p. 52.

Hadfield, Peter.  "Good Life Could Ruin Japan's Environment." New
Scientist.  18 December, 1993.  p. 9.

Kunihiro, Yamada.  "The Triple Evils of Golf Courses."  Japan
Quarterly.  July-Sept. 1990.  p. 291-297.

Rimmer, Peter J.  "Japanese Investment in Golf Course Development." 
International Journal of Urban and Regional Research.  v. 18, n. 2,
p. 234-255.


                           References

1.   Kunihiro, Yamada.  "The Triple Evils of Golf Courses".  Japan
Quarterly, July-September, 1990, 293.

2.   Rimmer, Peter J.  "Japanese Investment in Golf Course
Development:  Australia-Japan Links."  International Journal of
Urban and Regional Research, 18/2, 235

3.   Ibid, 237.

4.   Ibid, 237.

5.   Chatterjee, Pratap, "Golf Poses Too Many Hazards".  World
Press Review, October, 1993, 52.

6.   Ibid, 52.

7.   Kunihiro, 295

8.   Chatterjee, 24.

9.   Ibid, 23.

10.  Ibid, 25.

11.  Bruce Selcraig, "Greens Fees," Sierra, July/August, 1993,
78/4.

12.  Rimmer, 128.




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