Aug 8, 2012–The phrase “economic miracle” used to be associated with Japan in the postwar period. But no longer, as the nation has now been undergoing more than two decades of stagnation and deflation. That has been nothing but a nightmare for many Japanese who have been working so hard for themselves, for their companies and for their nation for so long.
Needless to say, there have been numerous attempts to turn things around in Japan, from stimulus policies (fiscal spending, zero interest and quantitative easing), structural reforms (privatization, deregulation and market-opening), political changes (from the conservative Liberal Democratic Party to the Democrats’ rule), and so forth for the past decade or so. But nothing seems to have worked, and the situation has been getting worse not only economically, but also politically and socially.
Some economists are still arguing that there have not been enough stimulus policies applied to help the economy out of the doldrums. Such an argument sounds hollow now that Japan appears to be completely trapped in the vicious circle of economic, social and demographic decline and shrinkage with a rising yen and mushrooming public debt, especially in the aftermath of the massive earthquake and tsunami as well as the serious nuclear accidents in 2011.
Lately, the government is turning to austerity rather than stimulus measures, resulting in yet another round of political reorganization, and possibly more confusion.
In the meantime, as if it were a mirror image of Japan, one small nation has rapidly emerged to the forefront of the world economy since the 1990s, after having experienced a “lost decade” of economic chaos in the ’80s. This country looks just like a small start-up company, miraculously hitting a jackpot of success in a turbulent business environment…Read More>>