Japan needs stability and a new vision but are some things a mirage?
Lee Jay Walker
Modern Tokyo Times
Strong yen despite 20 years of economic negativity
The 1990s and continuing until today have not been kind to Japan in the economic arena and the political situation appears to be going from bad to worse. The Nikkei stock market continues to be in the doldrums and this applies to the last twenty years. At the same time, the national debt continues to spiral and the recent earthquake, tsunami and nuclear crisis is adding to the woes of Japan.
Politicians in Japan are not helping because it is all about factionalism and petty infighting, therefore, the political merry-go-round continues. This applies to prime ministers resigning or being forced out of office and political shenanigans within each major party.
Even now, despite around 28,000 people dying because of the March 11 earthquake the political system remains “overtly childish” and based on “self-interests” to the extreme. The tsunami which was unleashed by the earthquake killed the vast majority of people and the nuclear crisis in Fukushima is ongoing.
Despite this, and with more than 10,000 bodies still not being recovered, you have no mutual political system whereby the politicians come together during a time of national crisis.
More alarming, Prime Minister Naoto Kan does not only face a political challenge from the opposition but even faces an internal power struggle based on the chaotic nature of Ichiro Ozawa. The internal factionalism is destroying the political system and all political parties appear to just want to mock the respective opposition and to force the prime minister to resign.
Therefore, you have a nation which is “leaderless” and while the bureaucracy remains intact and major companies keep Japan afloat. It is strange to have such a political system in a nation which is mainly based on consensus but the “political rat race” shows no sign of ending and the national debt continues to gather in pace.
Other major areas of concern applies to the strange economic system which allows virtual zero interest rates and seems to be happy about the yen being based on carry trade. Added to this, is the demographic time bomb and the huge costs which are needed in order to bring up a child in Japan.
In truth, you have so many areas and this applies to the pension system, stagnant wage structure, too much centralization, a collapsing health service and many other important areas.
Added to this are important social issues and this applies to the huge suicide problem, hikikomori, mental issues, lack of adequate care for an increasing elderly population and other important factors.
The nation of China is looming on the horizon and this applies to continuing economic growth and a strong sense of ambition. Yet for Japan, it often appears that the political system is based on being “a mere shadow of America.”
This does not bode well because it is difficult to find what makes “Japan tick.” After all, you have no major political ideology, religion is weak, the bullish nature of business in the 1980s appears to be a distant memory, the armed forces play second fiddle to America, and you have no clear sense of the future direction of this nation because of the ongoing political meltdown.
However, Japan is an enigma and some economists claim that nothing is what it seems. Therefore, a minority of economists and political scientists are claiming that Japan is undercutting its true economic power.
By doing this, Japan can play the exporters dream and maintain positive trade balances in this field with major economic partners. This in turn means that Japan’s reserves continue to be vibrant and Japan clearly owns a huge amount of America’ s debt and recently this also applies to European Union debt.
It must be remembered that the yen is very strong at the moment but how can the yen be gaining in strength against the dollar and other major currencies? After all, twenty years of small growth and times of economic stagnation should have meant that the opposite would happen.
Also, if you look at Japan’s main exporting sectors then clearly high technology and state of the art products is evidence that Japan remains vibrant in many important fields. This applies to consumer electronics, optical fibers, optical media, semiconductors, automobiles, facsimile, copy machines, and other important areas.
Therefore, the dollar rate and the increasing nature of foreign nations owning America’s debt may be telling a different story? After all, since President Obama came to office the national debt continues to mushroom and now the figure is $14 trillion dollars and growing.
I have resided in Japan for a long time but in Tokyo it is difficult to believe that you have had twenty years of economic misery. This applies to the employment rate being very low, low crime rate, feeling of vibrancy, continuing building projects, and an ever increasing population in and around Tokyo.
Also, you have major hubs of information technology in Kyoto and the Kansai region is still an economic powerhouse despite recent problems. More important, it does appear that local government leaders in Osaka are starting to think about the bigger picture and this applies to embarking on a greater metropolitan area, focusing on the international community and restructuring weaknesses within the system.
It is apparent that Japan faces many serious problems, however, not all is lost and many Japanese companies still play a powerful role in the global economy. More important, does anyone understand the enigma of Japan?
This applies to a huge national debt followed by major economic reserves; a powerful currency despite twenty years of little economic growth; and while Japan’s internal debt grows the same nation continues to hold vast sums of America’s debt and is now helping the European Union by buying Europe’s debt.
Yes, Japan is a real enigma!
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