councilor.org
| Source | Ian Murray |
| Date | 03/03/04/02:26 |
| The International Herald Tribune | www.iht.com
Japan's paradox: prosperity amid decline Howard W. French/NYT Tuesday, March 4, 2003 12 years of economic failure seem to produce little more than a dull ache TOKYO It is a paradox that looms for every arriving visitor. The streets here are immaculate. People are fashionably dressed, and chic restaurants overflow with guests throughout the week. How can Japan possibly be a country in financial crisis? Numbers, though, paint a very different picture. Japan may still have the world's second-largest economy, but for 12 years - ever since what is universally known here as the bubble period - there has been barely any sustained growth. Nine governments have come and gone during this time, some hoping to wait out the crisis, others hoping to spend their way out of it. Prime Minister Junichiro Koizumi came to office two years ago promising a sweeping overhaul of a stagnant system, but few measures have been enacted and his decision last week to name the safest choice to run Japan's monetary policy suggests that little will probably change soon. All the while, regional competitors like China, South Korea and others have made giant strides. Over the last half-century, Japan has grown so accustomed to success that what comes easiest now is denial of the need for urgent measures. This pattern can be seen in those who govern, in corporate boardrooms and among an electorate that has continued to return the Liberal Democratic Party to power since 1955, with only one brief interlude. Japan's situation defies facile solutions, of course, just as it evades easy description. Often, it seems more like 100 subtly interrelated mini-crises, none of them terribly serious by itself, but that together portend monumental difficulties. By seeking to spend their way back to growth, successive cabinets here have turned Japan into the industrialized world's most indebted country. The biggest chunk of this spending has gone into public works projects that briefly create the illusion of growth but generate little new production. While other countries have rules that force even mainstays of their industries to restructure or disappear when they can no longer compete, Japan expends huge public resources preventing its corporate zombies - from supermarket chains to its largest banks - from going to their graves. Money spent on dead weight is money not invested productively, and the economic cost is gradually making itself felt in social terms. The jobless rate, 5.5 percent, is at a historic high. Women are flooding the job market, yet still face severe limits on career options. And they are postponing marriage. Japan's fertility rate, already the lowest among the world's advanced economies, is plummeting. As fewer children are born, the malaise spreads. A shrinking population means a crumbling tax base and may portend a fiscal emergency as pension and health bills come due for its aging generation. All the while, younger Japanese are showing less of the legendary spirit of self-discipline. Instead of devotion to the company, this era is becoming famous for "parasite singles," young adults who flit from one part-time job to another, living with their parents rather than making it on their own. Indeed, most Japanese still feel their country's problems more as a dull ache. Violent crime and homelessness are rare. Travel abroad is near record levels. If fancy restaurants are full, it is because many people can still afford them. "People don't take drastic measures until they feel like they have exhausted every other option," said Richard Katz, an economist and author of "Japanese Phoenix: The Long Road to Economic Revival." "With all of the savings people in Japan have accumulated, most people still don't feel desperate. They are preservationists, clinging to the status quo." |
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