JAPAN'S ECONOMIC MIRACLE

Before you read ahead, I want you to know why I chose to write about Japanese economy over the other both structured economies like that of US and China.

Japanese economy is a miracle.

From the famous 'lost decade', Great recession,Earthquakes,Tsunami,Nuclear disaster, COVID, to recent threat of aging and declined birth rates, Japanese economy is under consistent threat. Yet they remain World's third largest economy and fourth in purchasing power parity. NO! Their records don't end there. 

Japan has the world's fifth largest stock exchange market.

In 2018,it was world's fourth largest exporters and importers. 

It has second largest foreign exchange reserves.

It is first in economic complexity Index and has fourth largest consumer market. 

Who isn't familiar with Kawazaki, Mitsubishi, Toyota?

Japan has world's second largest automobile manufacturing industry.

This article however deals with the economic miracle of Japanese economy. 

Japan's economic miracle was never an overnight success of an economy. It was a result of collective strategic seventy years of consistent hard work and policy implementation of an entire population. 

The land of rising sun began its road to recovery post war. Year 1946.

The entire economic miracle is divided into four stages;

1. Recovery stage [1946-1954]; The primary stage of development right after the war. the economy was incomplete ruins. This was time when inclined production mode introduced and quantity of labor force increased. Korean war that broke out during this time helped revive that economy of Japan when arms and ammunitions and its raw materials was bought from them.

2.The high increasing stage [1955-77]; This was a period where the entire population spent its income on vast consumption of goods. And producers spent their time in vast production.

3. The slow/steady increase stage [1977-92].  

4.The low increasing stage [1992-2017]. 

                                                                        Plaza accord, 1985

Was this particular period of time when oil shock hit Japan and its economy. The price of oil increased from $3 to $13 per barrel. The period when Japan fought hard to improve the purchasing power of an entire nation, second oil shock hit on its back. This was also the same period when famous 'The plaza accord' was signed. 

THE LADDER

1.  There was this unimaginable corporation among manufacturers, suppliers, consumers, banks, and hands of production process which was famously called KEIRETSU.

 

      2.   Another major step was inclined production mode [my personal favorite]. This method focused on increasing exports. For a product to be exported to another country, the quality should meet a certain level of quality check. Japanese producers focused on producing raw materials such as [in context of successful textile production] silk, cotton etc. This helped in using just the right number of raw materials focusing on one particular sector. This is wildly similar to 'one state one good policy' of Indian government. 

      3.    The labor quantity increase. all the way until 1946, men were the bread winners of the family. after the economy went into drains, they chose to call women to contribute. Now, women were included in the production process. not just that this increased the quantity produced, it increased the amount of income earned per head, leading to purchasing power and reduced the gender inequality in workspaces

      4.   Another method was Focused production. Example, unlike many economies, if an automobile is ordered by a consumer, the order reaches the manufacturers. This is when the product starts getting produced. the producers of raw materials are notified. And then the materials come together to make the final product. Which means the vehicle is not made beforehand. instead, the production is started when the consumer places the order. In cases where the vehicles are kept ready, if it is not sold, on a long run the engines or any parts of the vehicle could be damaged. There are chances of loss of resources during mass production. But Japan intellectually tackled this problem with a perfect plan in which there is hardly any draw backs except the time consumed to produce this vehicle. 

THE PRESENT

There is this recent threat that Japan and its economy faces. This might be the biggest threat of all that it has faced so far. The threat of aging population and decline in birth rates. 

How?

 When a nation's population gets older, labor available to do the work is scarce. At this point Japan is a major hub of industries and manufacturing. Now on one hand, the labor wages may increase exponentially owing to high demand for labor. And on the other hand, as youth population is more into service sector, there is hardly anyone available for the industrial sector. Now this is so serious that makes an article on its own 

                                                                        Tohoku, 2011

However, I believe Japan is that one nation that always overcome any hurdles thrown at them. decades ago, when United States dropped a nuclear bomb on their land, they faced it with optimism.

When tsunami hit their shores, they revived and stood back on their legs. 

With about 1500 earthquakes a year they still make it a point to present itself as one among the most powerful nation on global face.

It's not just anime and manga, this land of rising sun is more about undying spirits and a tale of gallant of its minds.

-Edna Anna Vilot.