FREE ESSAY ON JAPAN

JAPAN

During the 1980's, Japan had one of the most profitable and efficient economies in the
world. But a recent recession has forced Japan to make changes and pushed them back, out
of the realm of being an economic superpower. This leaves just one question; when
analyzing Japan's strengths and weakness, is it likely for them to return to the economic
status they enjoyed during the 1980's? The answer is no. Because of Japanese false
illusions, increasing national debt and deflation, combined with other factors, it is
unlikely that Japan will be able to make a full recovery.
When analyzing something as complex as a country suffering from a national recession, it
is important to note their various strengths. During the 1980's, Japan exploded onto the
global economic scene. The Japanese established themselves among the ranks of the United
States and various European powers. One of the greatest strengths enjoyed by Japan is the
absence of any military institution. After World War II, the United States, in congruence
with the other allied powers, declared that Japan was no longer to have a national
military. Just think about that, military expenses account for a great portion of any
countries national budget. Japan, now without military, had large amounts of money freed
up by this policy (Nishiyama, 2). They no longer had to endure the expenses of
maintaining any standing military, nor did they have to invest money in keeping pace with
military technological advancements. Instead, Japan was promised military assistance by
the United States, if any situation were to arise. 
With more money available to the Japanese government, they were able to distribute more
to other sectors of the country. This was an extreme boost for the economic situation of
Japan and their citizens (Nishiyama, 2). But as time moved on, the United States slowly
moved to lessen it's role in the protection of Japan. They allowed Japan to form what is
called Self Defense Forces, and gradually began to transfer the responsibility of
national security back to the Japanese (Alexander, 3). The concept of Self Defense Forces
is pretty evident. It means that Japan is know capable of defending themselves against
attack, but cannot make an attack of their own. This has placed a burden on Japan, one
that they have not had since the conclusion of World War II. This can be compared to an
individual that has worked for the last 50 or so years for the same wages, and then
suddenly he is informed of a large expense that he would have to endure, using only his
previous wages. This is what Japan had to deal with, and is still trying to deal with
today.
Probably the most important strength of the Japanese economy is their relation both
economically and politically with the United States. The United States, for one thing,
has been one of the most prominent importers of Japanese products (Motohiro, 1). The
United States rely on a number of Japanese goods, ranging from automobiles to
electronics. Japan, being the small country that it is, needs to export a majority of its
domestically produced goods. The United States satisfies this need through their
dependence on Japanese goods and by imposing minimal tariffs and taxes on Japanese
products (Motohiro, 1). The United States has been a stable and reliable market for
Japanese goods.
Before Japan feel into deep recession in the early 1990's, Japan was often relied upon to
keep the global economy intact (Yomiuri Shimbun, 1). But in recent years, Japan has not
been able to contribute at the same levels as it had in prior years. Presently, the
United States has shouldered the weight of the global economy, providing relief to Japan
during their own personal downward turn (Yomiuri Shimbun, 1). What is meant by relief is
the United States contributing more to the Global economy, so that Japan doesn't have to
maintain its previous contributions. The United States realized that if Japan had
continued its immense role in the global economy, it would have eventually meant the
overall demise of Japan's national economy (Yomiuri Shimbun, 1). With the United States
taking on this extra burden, they are allowing Japan to attempt to rebuild their own
economic system, without any added global pressures.
The United States has also played a direct role in improving Japan's economy. It is
widely known that Japan is lacking in the area of foreign investment (Rowely, 3). They
have always relied on domestic investors to support them. Since this is creating a
problem now in Japan, being that the economy is down as well as domestic investment, the
United States has tried to step up and cure this looming problem. In recent months, the
United States has unveiled plans to deregulate the Japanese economy, thus opening it up
to foreign investment (Rowely, 3). Among the sectors included in this plan are:
telecommunications, pharmaceuticals, medical equipment, energy and construction, all of
which Japan has relied on domestic investment to fund in the past (Rowely, 3). 
The United States is proposing to do this by breaking down the trade barriers that exist
in Japan. It is widely known that the United States has provided Japanese imports with a
stable market, while the Japanese have not returned the favor. American products are
expensive and rare in Japan, and it seems that this is the way that the Japanese
government wants it. Even now when foreign investment seems to be beneficial to the
Japanese, they are against the policy initiatives of the United States. Japanese
officials maintain that good economic relations between Japan and the United States are
essential to both countries, yet they continually challenge the policy initiatives
provided by the United States. It is obvious that American-Japanese relations are
important to both countries, in that Japan is in need of economic assistance, and the
United States needs future assistance in the global economy. But the Japanese continue to
resist foreign influence and investment.
Along with recent policy initiatives, Japanese officials have instituted their own
domestic policies. Former Prime Minister Yosano developed a number of policy ideas that
possessed great potential for the revitalization of the Japanese economy. First he spoke
about a 60 trillion yen program to pay off bad loans and restore the strength of Japanese
financial institution (Daily Yomiuri, 1). Next Yosano spoke about initiatives that he had
on addressing the so call "Credit Crunch" of Japanese businesses (Daily Yomiuri, 1). And
lastly he showed his intentions of injecting over 27 trillion yen into the economy to
restore and stimulate consumer confidence and demand (Daily Yomiuri, 1). So as you can
see, Japan is making efforts to address their social-economic problems from within as
well.
It may seem that Japan has the numerous strengths; including minimal military
responciblity, strong markets for exports in the United States and United States
assistance in both the global economy and domestic economies. These strengths may lead
one to believe that the eventual restoration of the Japanese economy is inevitable. But
this is not the case. The weakness of the Japanese economy makes it almost impossible for
them to reach the economic heights that they once enjoyed. One of these weaknesses is the
recent deflation that Japan is experiencing. Deflation is an overall decrease in the
value of money, goods and services inside a particular country (Matthews, 26). This
deflation effects both the consumption of the Japanese people, and the amount of
confidence that the Japanese people have in the economy. When people witness the value of
their currency decreasing, it is only natural that they express deep concern. This means
that they have to work just as hard to earn less (Matthews, 26). When people feel that
they are losing money, they cut back on the amount that they spend, thus dragging down
consumption (Matthews, 26). Even though deflation has started to slow now in Japan, they
have already reached a point that is difficult to completely rebound from. It is possible
for Japan to make a moderate recovery, but to restore themselves as an economic
superpower is highly unlikely.
Another problem facing the Japanese people is the national debt. By the beginning of the
year 2000, Japan estimated their debt around 117.6% of the Gross Domestic Product
(Tamamoto, 25). This is an astounding number, in that it is the highest debt ratio of any
of the modern industrialized countries. Japan is by far the deepest in debt, and that
includes the United States and Great Britain, two of the top foreign and domestic money
dispensing countries in the world. To make matters worse, Japan's Finance Ministry
projects an increase in the debt to 132.9% by the end of the year 2000 (Tamamoto, 25).
With debt so high at the present time in Japan, and matters not looking any better in the
future, Japan's economic restoration will likely be halted.
The Japanese financial and banking sectors are also dragging down the economy. Banks
throughout Japan are ready to fold, due to the decrease in domestic borrowing and
consumption (BNP Economic Newsletter, 5). What the Japanese have to do is use public
funds to reestablish the banking system. If not, the banks will go under, and the
economic condition will worsen even further (BNP Economic Newsletter, 5). Japanese
officials have addressed this problem, but there has not been anyone that stepped up and
took action. This is another problem in Japan. 
Various political and economic officials have called out for policies and funding, but
none have actually turned their proposals into action. The words of these people are
"empty," and the Japanese public can not rely or even consider what they hear, because
they know that nothing will ever get done (Tamamoto, 25). It seems that Japanese
officials are scared to take action. The issue concerning the economy in Japan is very
touchy, and officials do not want to get the blame if their polices do not work. 
It has been nearly nine years since the Japanese economy collapsed, leaving Japan in an
economic recession, comparable to that of the Great Depression experienced by the United
States in the 1930's. But the Japanese people still cannot let go of the notion that
perceives Japan as an economic superpower (Shibata, 1). They are simply obsessed with
this thought, which many seem to be grasping in order to remember the economic success
they had nearly a decade ago. They are unable to forget figures like the second largest
gross national product, highest per capita income and the world's largest foreign
reserve, all of which Japan earned during the 1980's (Shibata, 1). But this reliance and
reflection on the past is hurting Japan more than anything else. This prohibits Japan
from considering any reform. They are left with the thought that they will once again
reach the pinnacle of the global economy, while at the same time neglecting change that
may be beneficial. It is as though Japan is living through the illusion of an economic
superpower, one that the Japanese public cherishes and lives according to. What the
Japanese people need is a reality check if they are to salvage what is left of the
economy, and begin to make gradual changes and improvements.
Japan is obviously facing numerous economic problems. Many people will be quick to say
that Japan will likely return to a position of economic superiority, but this is false.
Although they have the support of the United States, combined with tremendous profits
from exporting domestic goods to foreign countries, Japan has far too many weaknesses in
their strategy and self-perception. Until Japan is able to realize the position they are
in and make quality reforms, they will continue to spiral downwards deeper into economic
despair.
Bibliography
Works Cited
Alexander, Arthur J. "Recent Indicators Suggest End of 
Japanese Economy's Decline." JEI Report. 7 September
1999: 1-3.
"The Japanese Economy Convalesces." BNP Economic 
Newsletter. 29 February 2000: 5.
"Change is a Matter of Urgency." The Daily Yomiuri.
7 March 2000: 1-2.
Matthews, Jane. "Japan." Barclays Bank International 
Financial Outlook. 1 May 1999: 26.
Miller, Rich. "Prospects Look Good For Trade Deal Opening
Doors to Japan." USA Today. 28 April 1999: 01B.
Motohiro, Kondo. "Watching America Watch Japan." Japan
Echo. 1 April 2000: 52.
Nishiyama, Hidehiko. "Japan MITI Minister Speaks of
Economic Future, US Relations." Asia Pulse. 13 
January 1999: 1-2.
Rowely, Anthony. "Positive Flip Side Seen to Japanese 
Economy." Business Times. 13 March 2000: 3.
Shibata, Yasuhiko. "Sayonara' to Days As Economic 
Superpower." The Daily Yomiuri. 29 December 1999:
1-2.
Tamamoto, Masaru. "The Privilege of Choosing: The Fallout 
From Japan's Economic Crisis." World Policy Journal.
1 October 1999: 25.
"U.S. Can't Shoulder Burden Alone." The Yomiuri Shimbun.
28 March 1999: 1-2.