The small island nation of Japan emerged into the global economic scene as a major player in the past half-century. Equipped with quality industrial leadership and technicians, a well-educated and industrious work force, high savings and investment rates, and intensive promotion of industrial development and foreign trade, the country was able to quickly and effectively create a successful industrial economy. Yet, it currently faces uncertainty surrounding its shaky economy (OECD data shows huge government debt – 189.6 percent of GDP in 2009 and 199.8 in 2010) and a dramatically aging population.
Japan’s current population, at just over 127 million, is one that has experienced phenomenal growth over the past 100 years as a result of rapid modernization. This accelerated rate has only recently slowed due to falling birth rates, and in 2005, Japan’s population declined for the first time in nearly 60 years.
This demographic change is expected to be one of the most pertinent and troubling issues for the country’s future. With a declining birth rate and rapidly greying population, Japan will face growing demands for social welfare in the near future, with a much smaller work force to support it.
There remains some optimism amongst the public the new government will be able to help meet these rising needs under the leadership of Prime Minister Naoto Kan and his centre-left wing Democratic Party of Japan. The party won a landslide victory in August 2009, ending more than 50 years of rule by the conservative Liberal Democratic Party.
The Japanese free market economy remains the second largest economy in the world, despite a major slowdown starting in the 1990s, with the bursting of the bubble economy. After a major recession, the first since WWII, the economy was able to slowly recover primarily through trade of its primary exports of: vehicles and vehicle parts, computer equipment, chemicals, scientific instruments and other electronic goods. Having few natural resources, trade continues to assist the country in earning the foreign exchange needed to purchase raw materials for its economy. Despite this, the Japanese economy began to slow with the most recent global economic downturn, and the country fell into its first recession in roughly six years in 2008 as worldwide demand for its goods fell. The Bank of Japan reported real GDP growth of -1.8% in FY 2008.
Japan has diplomatic relations with nearly all independent nations and has been an active member of the United Nations since 1956. Japanese foreign policy has aimed to promote peace and prosperity for the Japanese people by working closely with the West and supporting the United Nations. In January 2009, Japan assumed a non-permanent seat on the UN Security Council for the 2009-10 term. In recent years, the country has clashed with other nations (notably Australia), and conservation groups who have accused it of unethical fishing and whale-hunting practices. Japan is one of the largest consumers of fish and tropical timber, contributing to the depletion of these resources in Asia and elsewhere. The nation is making moderate efforts in assuming environmental responsibility, and hosted the G8 Summit in July 2008, for which environment and climate change were one of the four main themes of the conference. Ex-prime minister Hatoyama pledged at a UN climate summit in September 2009 that Japan would cut its greenhouse emissions by 25 percent compared with 1990 levels by 2020.
Japan’s society has been dubbed moderately traditional, with the family model of a working husband and a stay-at-home wife still prevalent across the nation, and families following paternal lines of inheritance. However, influence from the West has led to some ideological and cultural changes particularly in urban areas where traditional models continue to become more ‘Western’. The country’s foreign policy continues to strongly promote ties with the outside world. Japan has been increasingly active in Africa and Latin America (concluding negotiations with Mexico and Chile on an Economic Partnership Agreement- EPA) and undertaking negotiations with Peru. It has extended significant support to development projects in both regions. Japan has also concluded EPAs with Singapore, the Philippines, Thailand, Malaysia, Indonesia, and Vietnam. Overall, Japanese foreign policy has aimed to promote peace and prosperity for the Japanese people by working closely with the West and supporting the United Nations. According to the Global Peace Index, maintained by the Institute for Economics and Peace, Japan ranks 7th in the world and the highest in the Asia-Pacific region for various measures of peacefulness as a nation.
By: Takehiko Kambayashi, Japan Correspondent </p