TOKYO: Off a narrow corridor above a store selling Persian rugs in central Tokyo, a small office houses a private operation that won a tender in April to distribute more than US$20 billion in government aid to businesses hit by the coronavirus.
The arrangement led to confusion and delays for small business owners. Members of parliament have questioned how taxpayers' money was spent during a national emergency.Controversy over the contract - one of the largest that Japan has outsourced from its pandemic budget - is widening for Abe's government, already facing a fall in public support over its handling of the pandemic.
"The whole thing is extremely grey," said Kaname Tajima, one of dozens of opposition members of parliament who are campaigning for the ministry to release full details of how the contracts have been handed out. The economy ministry said that as of Jul 20, it had received 2.9 million applications from small businesses and distributed funds to 2.67 million; Service Design said that for the most part, funds are being paid out roughly two weeks after an application is received.
"To begin with, we did not think that it was possible for one company to handle a public project of this level," the company said in a statement to Reuters on Jul 21. More recently Dentsu, which started as a news agency, has made sports marketing a centrepiece of its business. It served as a marketing agent for Tokyo's bid to host the 2020 Olympics, for which it helped Japan raise a record US$3.1 billion in domestic sponsorship. The tournament has been postponed for a year due to the pandemic.
"I don't blame the outsourcing itself, but if they run this system with taxpayers' money, they should've operated it better," he said.Pictured on national TV as a sparsely furnished office where a handful of employees type at laptops under fluorescent lights, Service Design oversees the entirety of the small business aid project. It coordinates with companies and liaises with the ministry, METI's Tanaka said.
METI officials have told Reuters that even though Service Design subcontracted a large portion of the awarded funds, it still managed the"core" of the project.
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