Introduction Of The Japanese Economy Economics Essay
Japan a nation comprising of a total population of 128 million of people. Tokyo which is controversial issue alone comprises of 30 million of pollution which makes her the largest metropolitan city in the world. The society of Japan is a mixture of people from different culture who were influenced by the expats living in Japan. Japan is known be the world’s largest economy after the US. They have an influential role to play in the world wide economy. Japan is a part of NATO and also a member of G8 countries. Japanese are the third largest in the purchasing power parity. They are ranked as the third largest exporter and the sixth largest importer of the goods. The past history has been a clear evidence of the success of the Japanese economy but never could be as powerful as the US (Gibney 1996).
Economy of Japan
The economy of Japan is the second largest economy after the USA. Japan is described as the major power houses of the world economies. The economy of Japan has plenty of industries which are under the governance. The industries are adaptable to the changes which are technological and this makes the Japanese economy a powerful one. The business in Japan is widespread in fields of services like the transport, banking, real estate, insurance, telecom and motor vehicles. The Japanese economy is the leader in gadgets and electronic equipments and also in finance. Only, 15 % of its population lives on the land.
After the Hiroshima and Nagasaki incidents, Japanese Economy still has not fully recovered from the losses caused due to the erosion. It is believed that tat the Japanese economy is still declining. They have not been able to recover from the economic slump of Japanese society. The recent research conducted on the Japanese security system, says that the security system will soon be out of control of the political governance of Japan. As a result, Japan will be in a crisis scenario. But, this issue has been highly controversial. On one hand, North Korea can be a threat to Japan and in an urge will take away all the nuclear resources with Japanese economy. This means Korea will be taking away the nuclear weapons of the Japanese economy wherein the Japanese will be left with no security means. However, this can harm the foreign relations of Japanese. Japanese economy has been very powerful in the history but the threat of the foreign nations can really cause harm to the Japanese economy governed by the weak social and Democratic Party. Japan can be a major power as they have all the resources in their country but the foreign threat can be a serious issue on their success.
In the initial decades, Japanese economy made lot of profits which is seen in the light of post war economic miracle by Japan. There has been a constant rise in the per capita income of Japanese economy from 1960 onwards till the 1980s. But the growth of the Japanese economy came to a standstill in the year 1990. The rise in the GDP was less in value. The Government in Japan tried many means to bring back the economic status which was very successful in the last three decades but all the efforts failed. The global slow down badly hit the Japanese economy and they could not do anything about it. The country was in a bad situation as there was a slow down in the economy which is characterized by credit crunch, financial loss. There were speculative checks in the real estate and the stock market. The economic situation of the Japan was becoming critical day by day. All the incomes and the profits accumulated by the country in the last three decades were all utilized to curb the recession. The country never recovered or recouped from that financial crisis. But a ray of hope was seen little later with the advent of Junichiro Koizumi. He was the one who introduced the financial reforms which tried to pull the country from the situation of the financial loss and crunch. As a result, the economy was successfully able to yield a growth rate of 2.1 % in the year 2001 – 2003 - 2007. This trend was to continue but here came the year 2008 – 2009 where the growth rate began to shrink. The economic situation was now as bad as it was before. It is also noted that the forest resources were available in abundance in Japan. They comprised of about 70% of the total land. However, during the era of crisis this was not properly utilized in the economy. The country also lacked in the natural and energy resources and now in this economic situation they could not even import them from other countries which they initially did. Japan, a volcanic country did not even process the metal bearing ores now. All this is a clear evidence of why Japan could never be the most powerful of the nations. Now at this point of time when the economy was badly hit by the crisis people opted for fishing and agriculture as their primary occupation to support their living in the country. Manufacturing and processing industries came into importance in the Japanese economy. The country now plan out a strategy to ensure growth and development of the economy in the field of energy, transportation, communication and also technology. The major changes in the Japanese economy were seen after the Meiji Revolution. (Karan & Gilbreath 2004)
Japan, a volcanic country is been characterized as the richest country in the precious metals. Japan was the major exporter of cooper and silver in the 16th century. At this time, Japan was known as a sophisticated society which was characterized by the dense population, richness and also urbanized. Japan was the richest of the countries in the west. They were the only ones who had the Buddhist institutes. Japan was also master in field of craftsmanship and metal smithing. The quality was really high and Europeans were amazed to see this art of the Japanese. They also participated in the international trade for the development for the economy. For this, Portuguese ships came to the help of the Japanese in easing the trading process. (Kolodziej & Kanet 2008)
Education system followed in Japan pre and post war period
In the governance of Tokugawa, Japan was opened to the western commerce and trade for the first time under the leadership and rule of the Tokugawa governance. Under the Meiji restoration in Japan, they expanded the educational system in Japan. This was done by introducing the western education to the whole of Japan. Not only this, even the students living in Japan were sent to foreign countries of USA and Europe to complete their future education. To expand the education base in their country, Meiji rule hired 3000 professionals to expand the educational system in their country. These professional were well versed in the fields of foreign languages, math’s, technology, science and arts.
Industrialization started taking place in Japan
The business flourished as the economy had plenty of resources which were exploited to produce the finished goods. The industries developed and the growth in the trade and commerce benefited the economy of the nation to a great extent. The period from the 1960s to 1980s in Japan has been described as a period of miracle in the history of the world. The GDP and the per capita income of the citizens rose. In the later years country was hit by the financial crisis and the government also tried to increase the bank currency supply to meet the demands and increase in the flow of exchange. (Drifte 1998)
Here came the year 2005 and the economy was prospering with the growth and advancement in the service sector. Energy resources developed, petroleum, natural gas and other resources were produced in the country. The railways and the airlines came into importance. 250 high speed trains came on the track which connected the major cities in Japan. This is a time when the Japanese economy saw the rise in the service sector. There was a huge advancement in the transportation and also communication. Now, Japan saw reduced dependency in petroleum. Huge amount of money was spent over the infrastructure and also on the construction of the roads. The tolls were also collected by the enterprises to cover up the investments made by the government. The services like retailing, real estate, transportation, insurance and banking. Japanese economy also saw a boom in the manufacturing industry. There is also advancement seen in the field of automobile and the consumers also felt satisfied due to the growing development in the field of consumer electronics and durable goods. (Kawashima 2005)
Agriculture in the volcanic land
The agricultural sector was highly protected and subsidized. Cultivation became the main practice of the people of Japan. Agricultural sector was growing. Import tariffs were imposed on the agricultural goods and also cultivated crops. Japanese also imported raw materials from USA which comprised of wheat and soyabean. 490% of the tariffs were imposed. Whereas apples were also imported from European Union. In fishing, the country was self sufficient but then the decline also came in the year 1980s in the fishery in Japan. The decline in Japan became prominent after 1973 energy crisis. Even the employment rate saw a downfall in the employment of the laborers from 2006 – 2009. The fall in the number of employees increased in the increasing time period. This means that in the year 2006, the unemployment rate was 4.4% of the total population which grew to 4.9 % of the total population of Japan in the year 2009. As the year progressed the rate of unemployment also increased which was seen as a loss to the economy of Japan. The average working hours of the population in Japan also saw a decline. So such a prosperous and rich country saw the fall or the decline of the economy in Japan. Even in case of income tax and the value added tax, the increase in the income charged on the employees was quite high. As a result of the increased taxes charged on the people, they could not have much of the money as they had to pay huge taxes. The large amount of money was spent on the expenses to run the house. The employees and the citizens were not left with much choice but to cooperate in this type of an economic situation. But then on the other hand, Japanese Central Bank has been the second largest foreign exchanges.
Japanese philosophy has been to make change and consider as a continuous process for the growth of the citizens. Japan is a country that extends to the Pacific coast of Asia. The country is surrounded by four major islands. The country is known as an island country where in 75% of the land of Japan is covered by a mountain. But the total land available with Japan is slightly lesser than the land with California. The country has a fast growing rate where there are a total of 127 million inhabitants. The birth rates of the population of Japan have been increasing which has been a major challenge and also this is one of the reasons why Japan has the largest population in the world. The government also took steps for the growth and development of the nation like introducing the western legal and education system.
In the 20th century, Japanese economy has seen a steep fall in the economy of Japan. This has been prominent after the Second World War. The monetary and the fiscal policy of the economy have been very weak to overcome the problems. There is also a weak side from the private demands. There are structural gaps in the economic dynamisms. The solution to the structural problems of the Japanese economy can only bring about revival and recovery of the Japanese economy. Also, both of the monetary and the fiscal policy should be seen in full effect to get the desired change. The major problems in the Japanese economy rose from the supply side. This could be the best solution to all the major problems even to the structural issues. However, these structural problems are a large part of many factors like environmental, demographic and also educational. There were also delays in the balance sheets of the firms. There is no accumulation of the assets and liabilities all round the year as a result people faced problem when it came to the year end. As a result, there is also collapse of the firms. There was also a loss of credibility in the financial system which resulted in the collapse of the economy. 1997-1998 is a clear period of economic deterioration where the economy was badly hit and the slowdown in the economy was clearly visible. Another major structural problem faced by the Japanese economy by Rowthorn, C. was increase in globalization; here the Japanese economists pursued high rates of interest than the expansion. The rates of return declined soon in these industries which were protected by the regulations. In the period of economic stagnation there were higher rate of return on the equity and assets was seen. But because of the sluggish stock prices it was not easy and reliable to depend on the market for greater returns for the growth and development of the economy. (Fukushima1999)
The declining rate in the rate of return and also in the erosion of the balance sheet resulted in a situation of decline in the profitability of the Japanese economy. Recession also disturbed the country and its people. Now the management process of recruitment became tough during the economic slowdown. 1990 saw the advent of globalization but at the same time, Japanese industries were hit by the strict regulations which were difficult to cope up with. Further change in the Japanese economy was seen with the further advancement in globalization. The economies became globalized followed by the regulations of international trade. The advancements made in the US made tremendous improvements in working of the Japanese economy. Japanese economy is in a fix whether she can be a self sufficient economy or not. Firstly, it is very important that the economy improves the structure of the country. The improvements should first be made at the structural level. The macro economic factors should be adjusted first to get the desired change. The changes should be made in the monetary and the fiscal policy of the country. This will remove the deflationary means.
A careful analysis of the study and research shows that the Japanese economy should alter the policies for the renewal of the Japanese economy. The three structural problems which have been addressed in the above paragraphs should be sort out. The first is maintenance of the balance sheet. This could be possible if there is a structural change in the organizations management system. This would call for a separate department in the organizations ad this is the corporate governance. This department will be given the task of keeping a track of the happening and record every little transaction. Secondly, with the advancement in globalization, traditional economies should be break down and new regulations should be imposed. The change should be introduced for the welfare of the economy. Efforts of improvements should be made form the side of the supply side. This means there should be cooperation between the private sector companies and the government. They should together sort out the problems and also minimize moral hazard. Also, effective steps should be taken up by the government to tackle the problem of unemployment and also bring revival in the economy of Japan. If the structural changes are promoted in the Japanese economy then it will be very easy to transform the Japanese economy in to a more vital and a productive economy. In addition to all this, high technology, efficient labor system, managerial ability in the economic system will be able to successfully revitalize the Japanese economy. Japan had all the best of resources which could have made Japan the super power of the world. But due to the economic and political turmoil seen over the years and decades ha lasting effect which made it very difficult for Japan to be on the top of the list.
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