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2009年8月16日 (日)


--The Asahi Shimbun, Aug. 14(IHT/Asahi: August 15,2009)
EDITORIAL: Growth strategy



Japan's rapid recovery from the devastation of World War II and strong postwar growth were admired by the world as an economic "miracle."

Japanese confidence in the country's performance was bolstered in 1969, when its gross national product surpassed that of West Germany, making Japan the second-largest economy in the Western bloc after the United States.

But Japan is about to lose the No. 2 spot to China, whose economy has been growing at a breakneck pace.

Now, Japan is gripped by pessimism, in a sharp contrast to the uplifting mood of 40 years ago.

The country is reeling from an unprecedented economic crisis, and people are concerned about the prospects of low economic growth and the shrinking population.

The heady days of booming economic growth in tandem with an expanding population are long gone.

Some might shrug and say it is time that Japanese people sat back and enjoyed the fruits of their matured economy.

But unless a country's gross domestic product grows, it is difficult to maintain its standard of living.

A new model for economic growth is crucial to increase the economic pie and shake off the nation's sense of stagnation.


To that end, Japan must take up three challenges: compete and coexist with the world's emerging economies such as China, overcome the consequences of an aging society and reshape the nation into a low-carbon society.

While these tasks are all daunting, there is no reason to worry. Japan can turn these challenges to its advantage if it approaches them from new angles.

Here is one example. China is not only morphing into a formidable rival to Japan; it is also shaping up to be a rich, neighboring market. The world is looking to China's robust growth to help pull the global economy out of the recession.

Asia, which includes India and Southeast Asia, offers far greater economic growth potential than the United States or Europe. The region's middle class has expanded to nearly 900 million people.

Japan needs to devise a strategy to maintain competitiveness in this new phase of economic globalization led by multiple key players.

Japan should work to integrate Asian countries into a common market in which all the region's countries share in its wealth, while expanding global trade. This would create huge opportunities for Japanese business.

To transform into a low-carbon society, Japan should slash greenhouse gas emissions within an international framework.

While it will be a demanding task for a manufacturing economy like Japan, the transition will open up great opportunities to develop new technologies and products.

Solar power generation is a case in point.

According to Sharp Corp. Chairman Katsuhiko Machida, whose company is a major manufacturer of solar cells: "Japan's solar cell plants are like oil fields. Oil-producing countries in the Middle East have asked our company to build (solar cell) factories there."

Japan can emerge as a winner in a low-carbon society if it improves on such world-class environmental technologies.

Meanwhile, the aging of its population means Japan will find it increasingly difficult to secure labor force and maintain its pension and medical insurance systems.

Given that concerns about these prospects are crimping consumer spending, Japan must make it a key economic priority to bolster its social safety net and allay public anxiety.

Populations are aging fast in many other countries, too, such as Italy and South Korea. China's 1.3-billion population will also start graying quickly in the near future.

But Japan is the world's first country to go through this radical demographic change, and it will be closely watched as a model of how to build a successful advanced-age society.

Japan could establish world-leading industries if it promotes the development of nursing care robots and highly advanced medical and welfare services through policy incentives, including deregulation and tax breaks.

If such cutting-edge products and services create new jobs and ease the burden of people caring for aging family members, tackling the challenges of the aging society will lay the foundation for renewed growth.


A fundamental question as the nation gears up for the Aug. 30 Lower House election, which could result in a change of government, is how to secure a decent future for our nation.

Unfortunately, the election manifestoes of neither the Liberal Democratic Party nor the main opposition Democratic Party of Japan offer a grand vision on this question.

Granted, the LDP has set a few numerical targets, such as achieving economic growth of an annualized 2 percent in the latter half of fiscal 2010 and creating demand worth 40 trillion to 60 trillion yen over the next three years.

The DPJ, criticized for offering few growth strategies, has added some campaign promises, such as transforming Japan's economy into one led by domestic demand.

But both parties have failed to offer a road map to reach these goals, leaving their entire economic strategies unclear.

To achieve economic growth, political parties need to put together a comprehensive program that draws on the synergies of government policies and taps private-sector resources in Japan and abroad.

In addition, the parties need to win the public's understanding by explaining not just the benefits that growth will bring, but also the pain and burdens that will accompany the shift in the nation's industrial structure.

Turning Asia into a booming common market will call for the creation of a free trade zone centered on Japan, China and South Korea.

Now is the time to seriously consider the vision of an East Asian community, along with a common Asian currency.

Meanwhile, Japan should also work toward concluding a free trade agreement with the United States.

To overcome the fallout from a liberalization of farm imports, Japan will have to carry out drastic agricultural reforms. We may have to scrap the acreage-reduction program and introduce income-supplementing payments to farmers, for example.

Expansion of the distribution networks between Japan and other Asian countries will also be imperative.

One effective way to do this will be to enter into projects to build highways, railways and ports in other Asian countries at the planning stage, perhaps by mobilizing the government's official development assistance programs.

Japan must view all these challenges as golden opportunities and reinvent itself as a matured economy.

More than ever before, Japan's political leaders are required to offer innovative visions and a broad perspective to lead the way for a new industrial revolution.


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