What was Lost 30 Years of Japan?
The lack of vigor in Japanese economy for decades after the collapse of the bubble economy is self-mockingly referred to as Lost 30 Years.
Compared to the period of high economic growth and the subsequent period of stable growth, the momentum has indeed been completely lost.
In the early days, there was widespread acceptance of the idea that Japan had become a wealthy enough country and that there was nothing to be done about it.
But after decades of such a weak economy, a sense of crisis has been getting strong.
People think that something was wrong and that Japan could not continue like this.
It is no wonder that Japanese economic growth is sinking relatively low compared to the world economy, especially the less developed and middle developed countries whose economies are still growing.
However, it is certainly strange that Japanese economy is not as healthy as other developed countries such as the US.
In fact, business owners, investors, and other economists have been aware of the reason of Lost 30 Years from before.
To put it simply, it is the deindustrialisation.
The essence of international political economy is international balance of payments and international finance.
The obvious logic is that countries which can produce high value-added goods and services will become more prosperous.
The same is true in a general market economy consisting of ordinary individuals and companies.
When you think about it on international level, it becomes the international balance of payments and international finance.
As a result of the globalization of the world economy and its development, industries within Japan have been hollowed out.
Instead, investment to overseas has been steadily increasing, and before we know it, Japan has transformed itself into a country that earns money not through trade but through investment to overseas.
3. Structural Problems of Japanese Economy
The structural problem of Japanese economy is that it has become a completely aged society with a low birthrate.
Most of the social insurance premiums and taxes collected from the people are used for social security.
To put it simply, much of the revenue is spent on medical care, nursing care, pensions, etc. for the elderly, and that percentage will continue to increase as the population ages.
Japan's domestic industry is being hollowed out and much of the national budget is being spent on social security.
Since Japanese electorate itself is aging, it can be said that most of Japanese people approve of the current situation and want to maintain it.
Since there is no deregulation or investment for growth in the first place, there is no way for the economy to grow.
4. Future of the world and Japanese
(1) The Japanese desease
In contrast to Japan, whose economy has passed its peak, the US economy is growing.The spread of personal computers and the Internet, the birth of smart phones, and other breakthroughs in the ICT field all occurred after the collapse of Japanese bubble economy.
Will Japan have no choice but to give up on domestic economic growth, unable to deregulate due to resistance from vested interests?
Some critics say that Japan is like the UK of old.
Just as the UK experienced the British disease, perhaps Japan needed to experience the Japanese disease.
(2) The world economy needs the growth
And, whether Japanese economy will recover or not, the world economy will continue to grow.
There are still countries in Asia and Africa that do not even have stable electricity, sanitary water and sewage systems.
What is really needed for the world's socio-economy is not to lower the global temperature.
It is economic growth and infrastructure development.
The world economy needs to continue to grow.
There is no truth more self-evident than this, yet many people pretend not to notice or know it.
In an age where we can freely interact with people from all over the world via the Internet, can we have new hope in this world?