Chance or hurdle? Covid-19 and yakuza’s adaptation skills

Martina Baradel

University of Birkbeck

Japanese organised crime groups, the yakuza, are involved in a variety of legal, semi-legal and illegal activities. Therefore, the restrictive measures due to the spread of Covid-19 in Japan had an impact on their business as well. In particular, the night-time entertainment sector in most cities was affected by the limitations applied on movement, and, despite some governmental subsidies, a deep crisis invested bars and clubs. The collapse of the night-time economy in big cities represents serious damage for the yakuza, which offer protection services and are more or less directly involved in the management of some of these venues. Many restaurant owners whose business is closed or operates within a restricted opening time are now unable to pay the rent, even with the support provided monthly by the government. As purported by a yakuza executive, some shops operate in a clandestine manner behind a facade of closed doors and shuttered windows. For example, hostesses keep inviting their favourite customers in for a fee of half the customer’s bill. In addition, so-called ‘gyara nomi’ are spreading, whereby yakuza groups provide hostesses to customers who request to eat and drink with a woman in a place that does not usually provide a hostess service, such as taverns and restaurants. Since there is no actual penalty in Japan for circumventing anti-Covid regulations, yakuza groups have a wide margin of action to make up for the losses.

The spread of coronavirus has also disrupted the festival season in Japan, causing further losses to the yakuza. Indeed, in each region there is a yakuza group that manages the festival area and the disposition of the stalls, known as tekiya. The representative of such yakuza groups collects the ‘applications’ of the vendors and the fee for the place, which ranges from ¥5,000 to ¥10,000 (£35-£75) a day. However, this year the cherry-blossom viewing season was disrupted by the spreading of the virus. In Tokyo, spots popular for cherry-blossoms gatherings such as Ueno Park and Yasukuni Shrine were confined, causing losses for stall-holders (and consequently for the yakuza) in the order of tens or hundreds of millions of yen. In the summer, Japanese cities have a tradition of fireworks shows, and operating a stall at the fireworks of the Sumida river in Tokyo makes up for a big profit even for a one-day event. This year most summer gatherings and events were cancelled, causing further losses to the stall-holders as well as the yakuza managing the area.

As a result, the yakuza are looking for new revenue opportunities, and the shortage of masks opened up a new, profitable market. A Yamaguchi-gumi executive who had bought a big stock of masks at the beginning of the emergency reported that he is making good money by reselling them. Even though there is a ban on mask reselling, it is enforceable exclusively to people selling on the Internet, and not to those who make the transaction in person. However, masks prices rose rapidly and only those who managed to buy a big stock very early could resell them for a profit. A yakuza boss who was not quick enough reported that, because of the rapid increase of masks prices, an investment for a big bulk of masks would have been too risky. Furthermore, masks are difficult to move because they are voluminous and come in big cardboard boxes, and their stocking, shipping and delivery costs are expensive and difficult to organise. However, as masks prices are decreasing again, some yakuza groups prefer to distribute their stocks for free to nursing homes or other associations in need: given the yakuza’s deteriorating relationship with the population, they do not miss any opportunity to do a good deed and make a good impression on the population. In other words, rather than a pure humanitarian spirit, these efforts display their need to gain a return in image: once the business resumes, payback is concrete, as the yakuza group is perceived as socially acceptable and thus as a legitimate business counterpart. To the same end, yakuza groups were reported distributing masks to passers-by in the streets, exchanging words with citizens and encouraging them through this difficult time.

Even though the crisis hit yakuza businesses, at the end of the month low-ranking yakuza still have to pay the jonokin (association dues). They are trying to exploit this emergency to gather enough money to pass on to their superiors: there have been many reports of yakuza members trying new frauds, selling testing kits and airplane tickets and demanding payment in advance. Frauds are becoming a common activity of low-skilled yakuza members, who are the most affected by the general decline of the yakuza in the past 15 years. Disasters and periods of emergency also provide a chance for illegal money lending, the interest rates of which can be as high as 30% every 10 days for sums up to ¥100,000 (around £700). Furthermore, similarly to other countries hardly affected by the coronavirus-induced economic crisis, the risk of an increase of corruption and loan-sharking is particularly high. At the same time, illegal activities such as drug trafficking do not seem to be compromised: in Japan, transports and shipments have not been disrupted severely as in many European countries, therefore granting the mobility of legal, as well as illegal, goods.

It is still impossible to understand to what extend coronavirus and the ensued economy crisis have affected the yakuza. Covid-19 has surely stopped the activities of the yakuza on the surface, as gang meetings and gatherings came to a halt, as well as the activities of the night-time entertainment. However, despite the apparent calm, the yakuza are organising swiftly and efficiently to take advantage of the current crisis to meet their monetary goals. Weaknesses in institutions and holes in regulations are easily exploited by the yakuza and their front companies, and the adaptation to the new rhythms of the city has resulted in the creation of new inventive businesses. Although the yakuza have been considered a rapidly declining force of the Japanese underworld, Covid-19 highlighted that they are learning increasingly well how to cope with crises and now to adjust to adverse situations. Perhaps, the much-discussed end of the yakuza is not as near as it was thought.

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This blog aims to reflect the opinions, thoughts, and concerns of academics and researchers related to COVID-19. All views belong to authors and it does not represent the views of any organisation.