FREE ESSAY ON JAPAN'S RISE FROM THE ASHES TO THE PINNACLE OF ECONOMIC PRESTIGE

JAPAN'S RISE FROM THE ASHES TO THE PINNACLE OF ECONOMIC PRESTIGE

JAPAN'S RISE FROM THE ASHES TO THE PINNACLE OF 
ECONOMIC PRESTIGE
Japan is one of the world's leading economic powers when concentrating on 
its Gross Domestic Product of four point two trillion United States dollars. Its economy
is only 
second to the United States in terms of production. However, Japan has not always
contained a 
relatively strong economy. The Japanese's economic strategies have boosted economy to new

heights since its fall during the second world war because of their unorthodox manner of
business 
etiquette, innovative strategy, and strong relations with stable economies such as Canada
and the 
United States. The rise to the top did not occur without a large struggle as many
problems did occur 
after the Second World War left Japan economically devastated. Japan's journey has left
them at the 
present with recession conditions.
Following world war two, Japan's economy was absolutely devastated. 
From 1937 to its defeat in 1945 Japan poured all of its strength into the war. The
industrial sector 
was diverted into a swollen military production sector. The strongest and swiftest
workers were 
placed in the military, and quite often sent to die on the front lines of the war. The
citizens who 
stayed in Japan often worked in military factories, and faced the constant threat of air
raids. Once 
the war was over there was not a need for the military industries that were created and a
thick 
number of four million citizens became unemployed. The new unemployed total had then
reached 
thirteen point one million people. After the war Japan was on the verge of bankruptcy in
its 
international payments. The trade deficit had expanded drastically and the balance of
payments 
equilibrium was completely destroyed. Since Japan was allocating all of its resources
into the war 
and to begin with was not a country with many raw materials they had no choice but to
import an 
excessive amount of raw material in order to produce military hardware. Even so, the war
did 
award JaPan with some benefits. The industries developed during the war became the major

postwar industries, such as the steel and transportation industries. Wartime technology
was reborn 
during the postwar as Japan became one of the world's leading countries in the technology
industry. 
Japan's technology advances made it more competitive. These technological developments
included 
advancements in the production of steel by utilizing new technologies. The increase in
electrical 
power produced by the Sakuma dam, as well as increased technologies in the area of
shipbuilding; 
automobiles, electrical machinery, sewing machines and cameras helped put Japan on a path
to 
being more competitive. Through massive restructuring and the creation of niche markets
such as 
Mitsui mining being split up into Mitsui coal mining and Mitsui metal mining, Japan was
able to 
establish a base for its future economy.
The Japanese have a very different method of thought from everyone else in the world. In

the beginning of this century, Japan lost its ability to feed it citizen's and began to
panic. They had 
money to import food however, due to their morals they would rather conquer than pay
money and 
give in. The country comes together as one to try to gain control as a nation. There is
very little if 
any competition among Japanese companies when it comes to the foreign market. Japanese 
corporations do practice a form of conventional economic competition, but all within
their own 
borders. This is what is known as the one set philosophy. Each company produces a set of
various 
products. For example, all beer companies produce a lager, and draft and a dry beer. This
is only 
inside Japanese borders. Economists state that it is impossible to specialize in
everything, but the 
Japanese have an urge to be on the top in every field. Even in the schools children are
pressured to 
be the best. It is a very competitive environment and if they can not cut it their career
goals will not 
be anything but an ever-lasting dream. The whole society is based on being the best at
what ever it 
may be. Although recently the new younger generation is shifting towards a conserver
society, less 
work and more play is the credo for this new breed of human beings. Married couples as
well as 
single, free thinking individuals are no longer willing to let their jobs consume their
lives, they take 
two day weekends and escape to quite places like a beach.
The Americans complain about declines in their steel industries but few Americans believe

that it is a problem to import CD players and TV's. The United States government does not
have 
any form of a plan to create a domestic CD player or anything of the sort. This is where
the 
Japanese are different from the rest of the world. The key is that within the country of
Japan 
companies, and corporations competitive with each other or not they stick together to
ensure the 
success of their country; the United States on the other hand does not compete with the
rest of the 
world as one for it is the companies and corporations that compete individually
representing the 
United States. As well, the Japanese capacity to produce high quality products is very
emphasized 
in the world market. This is what permits them to ask themselves why import if we can
produce a 
higher quantity with a better quality for a cheaper price? For example in 1985 a Boeing
747 crashed 
into a mountainside while flying from Tokyo to Osaka. The plane was purchased from the
United 
States and the crash was due to a faulty repair job performed by Boeing engineers. I
quote from a 
Japanese pollster, Takayoshi Miyagawa, the Japanese people think we should make by
ourselves 
whatever concerns human life. Another case in which Japanese pride is well demonstrated
is when 
the space shuttle the Challenger exploded. For a year afterwards the Japanese repeatedly
said, if 
we had built it; it would not have happened! This goes to prove how highly the Japanese's
think of 
their craftsmanship. However, in 1988 they refused to use an American vaccine, which
protected 
children against measles, mumps and rubella all in one vaccine. The Japanese Ministry of
Health 
and Welfare instead coordinated three of the country's vaccine making companies to
produce an 
alternative to the American vaccine. The Ministry made it mandatory to be vaccinated. The
refusal 
of importing the American vaccine caused much grief. The American version had little if
any side 
effects but the Japanese version caused outbreaks of meningitis c causing death and
paralysis. Once 
these outbreaks were reported the vaccine was not mandatory but optional. Still this just
goes to 
show the different ideals of Japan. In short the Japanese and even the whole east of Asia
believes 
that the inconvenience of importing to the consumer is less damaging in the long run than
the 
weakness of a nation's productivity base. This truthfully explains the Japanese and East
Asian 
mentality. The idea of the invisible hand is one ideology brought on by the decesed
capitalist Adam 
Smith. He stated that there should be no government intervention in the economy. The
producers of 
Japan Produce goods for the people who buy certain products which appeal to them. Adam
Smith 
said that the producers would have to adapt to consumer needs since the consumer will
only 
purchase what they want to. Therefore, the economy will take care of itself through
guidance from 
the consumer, hence a consumer run society. Adam Smith's theories are very much a
reflection of 
Japan's economy.
The Japanese Canadian Relationship began with aspiration of exports to Japan, 
development and increased efficiency in Canadian agriculture, industrial and fishery
sectors. The 
overall incentive was the growth of national income through better, more profitable and
more 
certain export opportunities. Canadians viewed the trade agreements as an opportunity to
improve 
productivity and competitiveness abroad and at home. Canadians had two main goals for the

agreement; to secure a substantial further reduction in the level of foreign tariffs
facing our exports 
and to reduce and bring under control NTB's inhibiting Canadian exports. Canada reduced 
protection on industries to boost efficiency and lower consumer costs however kept
protection 
where it was still needed. The results of the agreement yielded a comparable reduction of
Canadian 
tariffs- forty percent of Japanese, United States and EEC tariffs together helped along
with 
comparable reduction of Canadian tariffs. Agreements were made to instate international
discipline 
to government procurement policies. The biggest gain of the conference for Canada was
with 
United States exchange of tariff concessions. A deal with the United States was made that
stated 
that there must be an injury to their economy as a precondition to imposing
countervailing duties. 
What Japan gave us were tariff reductions in machinery, chemicals, automotive and
transportation 
equipment. There was another agreement signed covering subsidies, countervailing duties,

government procurement, technical barriers to trade, import licensing, (clear publication
of 
procedures and simplified administrative practices) customs valuation and dumping. The 
agreements also brought into perspective future opportunities for both countries; one
which was 
optimistic. Tariffs and other trade barriers are in the process of being reduced, and
improved 
framework for international trade co-operation through numerous agreements was falling
into 
place, less trade restrictive measures were being used by governments, and there was
greater 
transparency in the system and less uncertainty for the business community. Due to the 
transparency in the Japanese market, Canada's role in the Japanese economy became one of
the 
largest consumers of machinery, cars, steel, and electronic products. Canada also plays
the role of 
supplier of raw materials to Japan. Canada sells natural resources to a quickly expanding
country 
with ever expanding needs for raw materials with which to fuel their thriving industrial
sector. 
Canada's exports to Japan include lumber, wheat, corn, and products that are land
intensive. Arable 
land in Japan is scarce and extremely expensive and fifty-six percent of the forest area
is privately 
owned. The land that is used is very commonly on steep hills, where decades of reworking
the soil 
has left it in stages of plateaus on which rice patties and farmland are held. The arable
land is 
divided into many small farms averaging three point five acres in size. Most of the land
is over 
used since the farmers overwork it trying to get as much out of as possible. Thus, Japan
must rely 
on outside sources of agriculture to supply its people with the necessary products such
as wheat, 
corn, and other grains. Canada's position directly across the pacific from Japan made it
a variable 
partner for trade in these commodities. The USSR is in closer proximity with Japan;
however, 
political differences and problems made Japan view the USSR as an extremely unstable and

undependable source of agriculture. 
As Japan drastically increased its capacity to produce and to consume, it became a major

part of the worldwide economy. However, as strong as the Japanese is, it is nonetheless
susceptible 
to problems. There is a current recession in Japan caused by many factors, one of them
being fiscal 
tightening representing an increase in government revenues and decreasing government 
expenditures. Other factors contributing to the Japanese recession included Asian
economic 
turbulence and a Japanese banking system deprived of strength. The magnitude of the
fiscal 
tightening was too large for the Japanese economy. Japan was not able to absorb the
fiscal 
tightening due to the economic crisis in some Asian countries and because of the failure
of major 
financial institutions. After nearly four years of expansion from1987 to 1991, the
Japanese 
economy went through a recession starting in 1991 and lasting for thirty-two months. This

recession ended in March of 1993. The recession of 1991 to 1993 was the second largest
recession 
in the postwar period. The government made efforts to reactivate the economy and
introduced 
seven fiscal stimulus packages in four years from 1992 to 1995. The Bank of Japan cut the
bank 
rate to 0.5 percent in 1995 and has since kept it at this record low. The government
undertook a 
major tax reform in 1994 and cut income taxes through the tax schedule and through
increases in 
standard personal and employment income deductions. Therefore by decreasing revenues the

government attempted to promote spending. As a result the national debt increased by
about six 
percent of the Gross Domestic Product. Another reason for this increase in debt was that
the private 
sector was unresponsive to the stimulus. One of the reasons for sluggish business
investment within 
Japan was due to the unstable nature of the economy and a thus a flight of capital to the
United 
States and other stable markets. Manufacturing industry investments increased during the
1995-
1996 period, which was a sign to economists that the economy was back on the path of
self-
sustaining expansion. However the investment boom which was confined to a few machinery 
sectors was sort lived. Investments by construction and real estate firms continued to
decrease, 
dragging down the economy. These private sector companies were increasingly investing
their 
capital abroad in the form of direct investments which was leaving less and less money
being inside 
Japan to stimulate production, increase jobs and therefore increase the money supply. To
worsen 
the situation, a significant increase in import penetration observed from 1993 to 1995
was snuffing 
out domestic production. The decreasing amount of household consumption in the 90's
reflected the 
weak state of the economy. Unemployment grew, which raised concerns about job security
and 
reduced people's willingness to consume. Weak demands for goods and services began to
affect 
employment. Employment in manufacturing started to fall; however the difference was
absorbed by 
the construction industry which soon became overloaded. The construction industry soon
followed 
suit. The unemployment rate reached high national levels. Due to corporate restructuring
as well as 
other factors, male labor unemployment grew forcing the women of the households to try
and find 
jobs, which was contrary to traditional values illustrating the severity of the
situation.
As the Japanese economy struggled to rise from the ashes, it built itself an economy
based 
on technology, which is evident especially in the machinery, transportation and steel
industries. In 
addition, Japan is one of the world's leading research platforms for new technologies in
robotics 
and electronics, making Japan a self-sustained ever-expanding country. Japan has stayed
on the 
leading edge of the world riding a wave of technology, which will definitely carry it
into the next 
millennium. Broad-based technological firms combined with innovative, even unorthodox,
business 
strategies are the supporting columns of this immense notion. It is very possible for the
Japanese 
people to overcome the conditions brought upon by the recession through the policies they
have 
adopted, different from our own, and become the number one leading country in Gross
Domestic 
Product. This would put Japan in the spotlight of the rest of the world, and maybe then,
we will 
begin to consider many of the different ways they do business.