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No.10
No.10 ,Economy  Feb 08, 2012

DON’T FEAR HOLLOWING OUT–TRANSFORMING INTO AN INVESTMENT NATION Will SAVE JAPAN

Photo : Hayashi Yoshimasa

From GDP to GNI In Japan, economic policy discussions are no longer capable of providing us with dreams. The country is full of gloomy storylines: population decline, ongoing deflation, social welfare difficulties, the incessantly strong yen, and stalled growth. People are also not interested in pursuing the subject of change as they are caught in the grips of past success stories. Things are decided in a trickling way, as if people are thinking that, “at least for now this is all we have to do.” Japan is currently facing many thorny problems, ranging from short-term challenges such as how to recover from the earthquake... [Read more]

No.10
No.10 ,Economy  Feb 07, 2012

TIME TO RECREATE JAPAN THROUGH GREEN AND SILVER INNOVATION

Photo : Komiyama Hiroshi

Japan Echo Web: Could you tell us about the background for considering revitalization of Japan? Komiyama Hiroshi: When I consider the revitalization of Japan, I look at Japan’s historical position. Japan was a world industrial power in the sixteenth century. From the seventeenth century industrialization paused, while institutions and culture developed.... [Read more]

No.10
No.10 ,Economy  Feb 05, 2012

PRIORITIZING THE MAINTENANCE OF LONG-TERM, COMPREHENSIVE, AND OPTIMAL COMPETITIVENESS

Photo : Fujimoto Takahiro

(i) Japanese firms have become extremely pessimistic about the outlook for their businesses, reflecting concerns over the effects of the Great East Japan Earthquake and the unprecedented strong yen. Managers often make the wrong decisions when they are in excessively bearish mood. If they start developing dual supply chain systems, which will result in higher costs, or if they make hasty decisions to shut down domestic plants only in the pursuit of short-term gains, companies may lose the capability of long-term balanced growth. When facing emergency situations, it is necessary to minimize additional costs, transfer design information to other plants, and develop structures in which the status of suppliers can be monitored efficiently.... [Read more]

No.10
No.10 ,Economy  Feb 03, 2012

JAPANESE BANKS HAVE THE POTENTIAL TO SAVE THE GLOBAL ECONOMY

Photo : Kuratsu Yasuyuki

The financial sector has reached freezing point More than three years have passed since the collapse of Lehman Brothers in the fall of 2008, and it has been two and a half years since the U.S. economy–which was hard hit by the collapse–bottomed out of its economic downturn. During these periods, despite difficulties in dealing with nonperforming assets, major financial institutions in Western countries have somehow managed to cope with the crises, aided by public money and business restructuring. However, they have not fully recovered. Indeed, their ailments appear to have exacerbated by the fiscal crisis in Europe, which began in Greece.... [Read more]

No.9
No.9 ,Economy  Jan 31, 2012

JAPAN SHOULD MOVE QUICKLY TO PARTICIPATE IN THE TPP NEGOTIATIONS

Photo : Yamashita Kazuhito

Disciplining big powers’ actions in line with international economic rules China has emerged in the East Asia region, with its GDP now exceeding Japan’s. It has also attempted to use its military to protect its maritime interests, stirring conflict with neighboring countries. This situation raises concern that China could implement measures that threaten both Japanese and global economic activities, such as by banning exports of rare earths and other natural resources, imposing restrictions on investment and resorting to other means backed by its tremendous national strength. In the same way the World Trade Organization (WTO) dispute-settlement... [Read more]

No.9
No.9 ,Economy  Jan 30, 2012

THE JAPANESE ECONOMY AMID AGING AND DECLINING POPULATION AND FISCAL DEFICITS

Photo : Kato Hisakazu

The effect of Japan’s “lost decade” lingers today, nearly ten years later, and there are still few signs of convincing recovery. Faced with new challenges of recovery and reconstruction from the Great East Japan Earthquake, Japan’s economy will likely continue to confront medium- to long-term constraints that lie ahead, including further population decline, a lower birthrate combined with population aging, and accumulating fiscal deficits. Viewing the current situation it is hard to say that deflation is under control. Advancing strength of the yen and low stock prices tied with the increasing sovereign risk in Europe and the United States are making it increasingly difficult to identify a new growth path.... [Read more]

No.Array
No.9 ,Economy  Dec 08, 2011

SHIFTING TO A COUNTRY THAT INCREASES GROSS NATIONAL INCOME (GNI) INSTEAD OF GROSS DOMESTIC PRODUCT (GDP)

Photo : Nagahama Toshihiro

The Great East Japan Earthquake has forced Japanese companies to renew their awareness of the risks of operating in Japan. Meanwhile, the extremely strong yen, at less than 77 yen to the dollar, has become a persistent condition. Japanese companies, mainly manufacturers, are hit hard by the reduced export competitiveness resulting from the exchange rate. The yen is expected to remain strong for some time since investors have no choice but to buy yen given the euro zone debt crisis and the slumping economy in the United States. On top of this, rapid aging of society and the declining birthrate have made falling domestic demand inevitable. This has... [Read more]

No.9
No.9 ,Economy  Dec 07, 2011

WORRY ABOUT HOLLOWING OUT FOR THE RIGHT REASONS – LIQUIDITY OF RESOURCES IS IMPORTANT TO QUICKLY FILL EMPTY SPACES AFTER COMPANIES LEAVE

KOMINE Takao, professor at the Graduate School of Regional Policy Design at Hosei University; Project Leader at the 21st Century Public Policy Institute

Globalization and foreign direct investment of companies We can begin to think about this from the first step. Corporate activities are globalized in two ways: international trade and direct investment. Until the 1970s, the globalization of Japanese companies was overwhelmingly centered on international trade. Japan imported energy and raw materials, which it lacks, and manufactured industrial products and exported them. Production bases were located in Japan, and the imported products centered on those Japan cannot produce domestically. Therefore, hollowing was not a topic of discussion.... [Read more]

No.9
No.9 ,Economy  Dec 06, 2011

DETERMINED TO BUILD A WORLD AFTER STEVE JOBS

Photo : Natsuno Takeshi

A messiah for users On October 5, 2011, Apple Inc. CEO Steve Jobs passed away. The news shocked the world, indicating just how big his global influence was. Jobs was indeed a messiah for people all over the world. Products he created revolutionized the cell phone and telecommunications industries and their users. In the early 2000s, long before the release of Apple’s iPhone smartphones, everyone in Japan was using cell phones that could... [Read more]

No.8
No.8 ,Economy  Oct 07, 2011

THE NATION NEEDS TO CONDUCT FISCAL POLICY REFORMS THAT CORRECT THE UNFAIRNESS BETWEEN THE GENERATIONS

As society ages, childbirth declines, and the economy globalizes, the Japanese economy and its fiscal situation have continued to stagnate and worsen since the collapse of the bubble economy in 1990. Public debt is about to reach a figure that is about 200% of our gross domestic product (GDP). And when the Great East Japan Earthquake hit on March 11, the situation was exacerbated. While recovering from the quake is important, we must at the same time work on two reforms today to solve the medium- to long-term issues faced by Japan. One is a growth strategy to increase the potential growth rate of the Japanese economy, and the other is correcting the unfairness between the generations by reforming fiscal policy and social security. In terms of the latter, the politicians are currently split between being pro-tax increase and anti-tax increase, but this is ... ... [Read more]

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