Is Spring coming to Japan?

After achieving its post war economic miracle in the 1960s, Japan emerged in the quarter century after 1965 as the main economic challenger to the United States. Indeed, it played a role somewhat similar to that now being played by China. Then, in 1992, its bubble collapsed and since then commentary on Japan has focused ...

TORU YAMANAKA/AFP/Getty Images
TORU YAMANAKA/AFP/Getty Images
TORU YAMANAKA/AFP/Getty Images

After achieving its post war economic miracle in the 1960s, Japan emerged in the quarter century after 1965 as the main economic challenger to the United States. Indeed, it played a role somewhat similar to that now being played by China. Then, in 1992, its bubble collapsed and since then commentary on Japan has focused almost exclusively on its two "lost decades" of stagnation and decline.

While this has been exaggerated (Japan's GDP growth over the past twenty years when adjusted for population growth and inflation is about the same as America's), it is a fact that Japan's population is shrinking and that its relative weight in the global economy and influence in world affairs has fallen.

After achieving its post war economic miracle in the 1960s, Japan emerged in the quarter century after 1965 as the main economic challenger to the United States. Indeed, it played a role somewhat similar to that now being played by China. Then, in 1992, its bubble collapsed and since then commentary on Japan has focused almost exclusively on its two "lost decades" of stagnation and decline.

While this has been exaggerated (Japan’s GDP growth over the past twenty years when adjusted for population growth and inflation is about the same as America’s), it is a fact that Japan’s population is shrinking and that its relative weight in the global economy and influence in world affairs has fallen.

Is it now possible, however, that all that may be about to begin to change? For instance, in nominal terms, Japan’s GDP per capita at about $48,000 is now greater than America’s $47,000. Of course, that is before adjustments for price differentials and is also partly a result of the recent dramatic strengthening of the yen. Nevertheless, as the Economic Strategy Institute’s Vice President for Asia, Hiromi Murakami, notes in the following excerpt from a recent article in Japan Times, there are other more concrete political and social developments that may well herald the blossoming of a Japanese "spring" to match the "springs" of the Middle East.

Led by the governing class of samurai, Japan experienced its first opening during the Meiji Restoration, triggered by the threat posed by Commodore Matthew Perry’s Black Ships. The second opening was led by Gen. Douglas MacArthur, when the Allied occupation government initiated reforms and political purges after our disastrous defeat in World War II. While the past two openings were driven by external factors in a top-down fashion, the third opening has been triggered internally by the Fukushima (nuclear) disaster. It is a civil-sector-driven, bottom-up transformation.

While the authorities failed to deliver substantive action, individuals started to act on their own. Many donated money for the first time and participated in voluntary activities; scientists gathered to offer credible information and explanations via Twitter; voluntary individuals in various regional areas monitored radioactivity levels and gathered data through the Internet that they made immediately made public; and parents organized and demanded that the authorities measure ground and food radioactivity levels in kindergartens and schools, which quickly became the norm. Japanese citizens now strongly demand transparency, so that they can judge how to protect themselves.

Energy shortages due to the Fukushima disaster have had a profound impact on individuals’ priorities and lifestyles. Households and corporations achieved 18 percent energy conservation last summer in Tokyo through various efforts. How to better preserve the environment for future generations has now become a part of our thinking. LED lights, expensive household fuel cells and wood-burning stoves are selling surprisingly well; and the demand for solar panels is exceeding supply.

Innovative trials are now taking place that will have even greater effects on a larger social and economic scale. The "2:46 Quakebook," promptly published online worldwide, established new ways to donate money to Tohoku. Innovative microfinancing schemes have been operating to help small businesses that are desperately in need of cash at a time when traditional financial institutions are reluctant to take risks. The Tomodachi Initiative, a public-private partnership led by the governments of Japan and the United States, whose programs include the fostering of entrepreneurship, is also making an impact.

Fukushima gave us a great opportunity to transform our way of life and recognize that individuals can make a difference in the society if they act together. Long-overdue reforms are possible today as established barriers weaken and room for innovation emerges. For its democratic system to truly function, Japan’s infant civil society still needs to learn from other societies by establishing horizontal links in various sectors, including NGOs, researchers and scientists. This is a chance to get globally connected and gather global expertise.

Of course it is early days and no one can be sure that everyday Japanese citizens will continue to take the initiative. But if they do, Japan could once again emerge as an island of vitality in Asia and the world.

Clyde Prestowitz is the founder and president of the Economic Strategy Institute, a former counselor to the secretary of commerce in the Reagan administration, and the author of The World Turned Upside Down: America, China, and the Struggle for Global Leadership. Twitter: @clydeprestowitz

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