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No.43 ,Economy  Feb 28, 2018

20th Anniversary: Countries Affected by the Asian Financial Crisis Are Confronted with Common Issues Accompanied by Growth
― Japan Must Be a Successful Example of Tackling the Income Gap and Aging Population

Key Points Criticism of East Asia’s unsuccessful development model misses the point. Economic growth requires robust initiatives in both the private and public sectors. Leapfrogging may be possible for latecomer countries in the field of information technology. The Asian financial crisis started in July 1997, wreaking havoc on economies in the region throughout the following year. It had a devastating impact on countries like Thailand, South Korea and Indonesia, which had previously enjoyed strong economic growth, causing significant currency devaluation and a collapse in domestic demand. The debacle could be characterized as a new type of crisis caused by the massive short-term capital flows into countries where international capital transactions had become liberalized. What was the impact of the financial turmoil in the Asian region which has had a long history of economic development? Following the crisis, significant social changes occurred in the most ... ... [Read more]

No.43 ,Politics
Feb 25, 2018

Restoration, Revolution or Reform?
― The Unexpected Fortune of Winners and Tenacious Efforts of Losers

Shimizu Yuichiro, Professor, Keio University 

Influential politicians in modern Japan such as Hara Takashi, Goto Shinpei and Hirata Tosuke rose to prominence as individuals from “rebel” parts of Japan that had opposed the new Meiji government established in 1868. The key to the Meiji government’s success was a flexible, forward-looking plan for recruiting human talent for higher positions.   How has the Japanese term “Meiji Ishin” been translated into English? For a long time, the generally accepted English translation for this phrase has been the “Meiji Restoration.” The translation appears to correspond to the idea of “a restoration of imperial rule,” but something may have been lost in translation. What about the “Meiji Revolution” as an alternative translation? There was certainly a distinction between the pro-imperial Ishin army and the pro-shogunate “rebels,” but the author is somewhat at a loss when asked whether or not the Meiji Ishin changed ... ... [Read more]

No.43 ,Economy
Feb 22, 2018

Is the Bank of Japan Technically Insolvent?
Dangers Involved in Long-Term
Deterioration of BoJ Financial Position

Increasing interest is focusing on the Bank of Japan’s exit strategy, or its strategy for ending its ongoing ultra-easy monetary policy. On April 19 [2017], the Liberal Democratic Party Administrative Reform Promotion Headquarters ([formerly] chaired by House of Councilors member Kono Taro) advised the government to study the risks associated with the Bank of Japan’s exit strategy. World central banks in charge of monetary policy are steadily moving to normalize monetary policy. On June 14 [2017], the Board of Governors of the Federal Reserve System in the United States unveiled a new exit strategy. The Fed will gradually reduce reinvestment of bond principal payments on securities holdings acquired in the course of its conduct of monetary policy with a view to reducing its total assets. It will begin reductions within the year if all goes well. Following its Governing Council meeting of June 8 ... ... [Read more]

No.43 ,Economy
Feb 22, 2018

ASEAN’s Problem of Declining Birthrates and Population Aging
― How to Cope with Widening Domestic Gaps

  ASEAN countries are facing more rapidly declining birthrates and population aging than Japan. At the same time, the widening income gaps are leading to increased social unease, and this situation is aggravated by the digital society. As regional issues shift from the economy to politics and society, how should Japan relate to ASEAN countries?   Depopulation, declining birthrates and population aging are common issues not only for Japan, but for the entire Asian region. The global population will continue to increase this century, whereas Asia, including the Association of Southeast Asian Nations (ASEAN), will see populations decrease by the middle of this century. That is, Asia will become a depopulation region half a century earlier than the rest of the world. This is because declining birthrates have been progressing throughout Asia. The total fertility rate (equal to the number of children that women ... ... [Read more]

Dialogue: Will the Day Come When China and India Coexist as Major Powers?

Horimoto Takenori, Visiting Professor, Gifu Women’s University of Japan Kawashima Shin, Professor, University of Tokyo Kawashima Shin: China is making a range of moves, both large and small, with the National Congress of the Communist Party of China imminent this fall. But we need to keep our eyes on India, in addition to observing how China will change in units of 10 years and 20 years when we think about the future of the world and the future of Asia. Horimoto Takenori: China and India combined are said to have accounted for half of the global GDP in the middle of the 18th century. The same situation is likely to emerge in the second half of the 21st century. To begin with, only two countries in the world, China and India, have populations exceeding 1 billion at the present time. The framework of the ... ... [Read more]

No.43 ,Economy
Feb 08, 2018

Future of the Automotive Industry: Preparing for structural changes in the supply chain networks

Although a gasoline-fueled car is usually said to contain approximately 30,000 parts and components, a closer look reveals that depending on the way of counting, it can be as large as 100,000 with some 10,000 parts used to make just an engine. In the case of an electric vehicle (EV), which runs on a battery-powered motor instead of a fuel-powered engine, there is no need for fuel system parts such as a fuel tank, ignition system components such as a spark plug, exhaustion and emission control system parts such as a muffler, air intake system parts such as a throttle, lubrication system parts such as a fuel pump, cooling system components such as a radiator, and transmission system components such as an automatic transmission (AT) (according to the EVsmart Blog). As such, the number of parts and components used to make an EV is ... ... [Read more]

No.43 ,Economy
Feb 08, 2018

Future of the Automotive Industry
Strategies with a View to the Future of EVs and Beyond: Exploring the Application of Technologies to Other Fields

Key Points The elimination of either FCV or EV  by market competition is unavoidable Competition will intensify as obstacles to market participation are lowered by the widespread popularization of EV Current revenues cannot be maintained with a changeover to EV Both the British and French governments have announced policies to ban the sale of conventional combustion engine-powered vehicles by the year 2040. This, together with the toughening of environmental regulations by other countries such as China and the United States, indicates that the global movement shifting away from engine-powered cars is accelerating. Amidst all of this, the greatest issue for Japan is that the road that lies ahead, after this shift away from engine-powered cars remains unclear. Does it lead to electric vehicles (EV), or to fuel cell vehicles (FCV)? The major reason for this uncertainty is that manufacturers have divided into two camps. ... ... [Read more]

No.43 ,Society ,Discussions
Jan 23, 2018

Dialogue: Challenge by Tottori, the Least Populous Prefecture in Japan
There is a Right Size for Democracy

Motani Kosuke, Chief Senior Economist, The Japan Research Institute, Ltd. vs Hirai Shinji, Governor, Tottori Prefecture Tottori, a Unique Countryside Motani Kosuke: I read your book, Chiisakutemo Kateru (You Can Win Even if You Are Small). I think this book is like the novel, Shitamachi Roketto (Rockets of an Old Commercial District) by Mr. Ikeido Jun. It’s the story of a young man who grew up in Tokyo and migrated to Tottori. In the story, the protagonist leaves a large company, finds a job at a second-tier company and achieves success as a hired business manager with his strenuous efforts. Hirai Shinji: Thank you, Mr. Motani. I’ve asked you for help in many ways, including a visit to a symposium held in our prefecture and guidance with our prefectural employees, because I really wanted to try what you called the capitalism of the satoyama ... ... [Read more]