There are two countries in the world that are often held up as examples of what not
to do.
Two countries that for a long time seemed able to conquer the world but which have been
undergoing chronic crisis for decades. Crises from which they cannot escape.
Do you know which countries I'm talking about?
One is Argentina, that’s easy. The other is 18,000 km away, and is none other than
Japan.
Of course this doesn’t mean that these two countries are the same, not at all.
The fact is that whenever a developed country has problems, Japan always appears as an example
of what not to do.
Europe’s Remedies for Japanization. Weak growth and slowing inflation could have Europeans
afraid of repeating Japan’s mistakes. WSJ)
Perhaps, folks, the person who experienced the most negative aspects of Japan’s decline
in recent decades was Emperor Akihito, who abdicated the throne on April 30th, 2019.
Allow me to explain. Japan’s emperor has no real power, and Akihito’s reign was a
particularly unlucky one.
When he came to the throne in 1989, Japan seemed to be ready to take on the world.
That same year, Japanese company, Sony, got a major foothold in Hollywood by buying Columbia
Pictures;
Mitsubishi’s real estate division got the Rockefeller Center itself, Japanese companies
were investing everywhere and all forecasts indicated that the Japanese economy would
surpass even the US’s economy within a few years.
However, in just three years everything fell apart.
The Japanese bubble exploded, the Tokyo stock market collapsed and the crisis spread throughout
the Japanese financial system. The years of strong economic growth had ended forever.
Since 1991, the average economic growth has been only 0.9% per year,
public debt has increased from 50 to 236% of the GDP;
It was China that snatched second place in the largest economies in the world,
Japanese companies lost ground and Japan was left out of the top positions in the great
internet revolution
The cost of this decline? Strenuous working hours of 12 hours or more are still common,
Japanese workers barely enjoy ten days of vacation a year and wages are even lower than
three decades ago in real terms.
And that’s not all. The last three decades haven’t only been bad from an economic point
of view, they have also been very rocky in political terms. Japan has had 17 prime ministers
from five different political parties in the last thirty years. That’s insane!
And as if this weren’t enough, during Akihito’s years the birthrate has been low resulting
in an aging population and the country has faced disasters such as the tsunami and the
Fukushima nuclear accident of 2011. Not to mention the North Korean threat...
Now you understand why we say that Emperor Akihito had bad luck?
But hold on a second. When we think of Japan it’s not just this
crisis that we think about. There’s manga, sushi, car brands like Toyota so:
Are things really so bad in Japan?
What if I told you that things haven’t been as negative as they seem? What if Japan were
somehow starting to shine again?
In this video we decided to look at Japan’s best features.
And also, at a social revolution that is stealthily taking place and that could set a benchmark
or at least provide an experiment for the rest of the world.
Listen up.
THE BEST SIDE
Japan has been having a bad time for three decades, it’s been stuck in a kind of stagnation
that it cannot overcome.
Yet despite this, their numbers are still pretty good.
Obviously, it won’t surprise you when I say that Japan is still a very wealthy country,
we all know that.
But, the question is, how rich or, rather, how prosperous is the country of the rising
sun?
Well, folks, we could say that Japan is still one of the top 20 countries in the world where
households have the most income after taxes.
With $ 28,641 USD, Japan is at the level of countries such as Denmark, Finland or the
Netherlands and is above the United Kingdom, New Zealand or Ireland.
And it’s also one of the five or six countries where, on average, families have the most
financial assets once their debts have been deducted.
It also has one the highest life expectancies, is one of the safest countries and has one
of the best educational levels. In the PISA index Japan is just behind Singapore.
In R & D, research and development, more than $150 billion USD are invested each year, ranking
them third highest country in levels of spending and the fifth highest when you compare the
amount spent to their GDP. Japan comes in just below South Korea, Israel, Sweden and
Taiwan.
And, folks, even though they have the highest public debt in the world, no less than 237%
of the GDP, it really isn’t as serious as it seems.
The Japanese government has several debts, yes, but it also has a lot of financial assets,
and if you take these in to account, its net debt is decreased to approximately 150%.
You shouldn’t only count what you owe but also what you have.
And that's not all. The government’s main creditor is the Central Bank... which in a
way means that the entire debt has already been shared among the Japanese for the last
three decades:
For example, with a lower financial return, with a good part of the capital going into
public hands due to Central Bank purchases of assets and with less real wages.
In any case, the entire debt is in the hands of the Japanese so to speak. Japan has no
external debt, it isn’t a debtor, but quite the opposite.
Japan, China and Germany world's top creditors. Japan kept its position as the world’s largest
creditor nation for the 22nd straight year last year. South China Post Morning)
And unlike other countries, their companies aren’t linked to the debt either.
Look no further than the Tokyo Stock Market, the 4th largest stock market in the world,
where 60% of the companies have no net debt.
Seen this way, in spite of all of the country’s problems – because they do have them – things
don’t look so bad, do they?
And what’s more, in recent years, between 2007 and 2017, a curious development has taken
place.
See, the Japanese economy is barely growing, that’s a fact, but as its population is
shrinking and its economy has no inflation, the real growth per capita, which ultimately
determines the level of well-being, has risen to equal the growth rate of the US and is
ranked above countries such as France or the United Kingdom.
Surprised?
You shouldn’t be. This has been largely driven by the Asian continent’s economic
explosion.
After all, Japan has neighbors such as China, Vietnam and India, where, for example, Suzuki,
a Japanese car company, accounts for just over 50% of the entire Indian car market.
We’re talking about billions of potential consumers.
Want another example? Look at what has happened with tourism.
You see, traditionally Japan has had very few tourists. Mainly because of its distance
from other developed countries.
However in recent years, it’s become quite the theme park.
Japan has the largest growing tourist arrival rate in the world.
Within a short time, and largely thanks to Chinese visitors, the number of foreign tourists
has gone from just over six million in 2011 to over 31 million in 2018. And forecasts
say that this figure could exceed 60, 60 million by 2030.
Obviously all this means a lot of new jobs. But its population is the oldest in the world
and is, in fact, reduced every year. So, how can they fill all these new positions?
Folks, that’s where the social revolution promoted by the Prime Minister, Shinzo Abe,
comes into play.
Listen up, because Japan is becoming an experiment on how to deal with demographic aging. And
I think their solution will surprise you
(THE SOCIAL REVOLUTION)
Okay, something is very clear for Japan; in such an old country where the population is
expected to decrease significantly during the upcoming decades, only productivity and
investment in technology and robots can save them.
But, friends, this takes time... and of course to be able to invest as much as they need,
they have to become a prosperous economy, so the question is:
How can a stagnating economy recover and keep public finances under control while the population
ages at full speed – especially when an aging population means in terms of pensions
and health spending?
Well, the prime minister, Shinzo Abe believes that it’s essential to increase labor participation
in the short term, raise the percentage of people who work, which is precisely what is
happening in Japan:
But... Have you noticed? How are they managing to increase the number of workers in a country
if the population is both shrinking and aging at a rapid pace? What the hell is Japan doing?
Well, folks, the answer is that Shinzo Abe is leading a social revolution in Japan.
Obviously with less demanding jobs and shorter shifts.
This has led more than half of all Japanese men aged between 65 and 70 to go back to work.
More than double the average in the OECD countries, which includes almost all of the most developed
countries.
Have you seen the movie “The Intern” with Robert de Niro? Well... something like that.
On the other hand, the government is also promoting a historic increase in female labor
participation, which in Japan has not traditionally been very high.
Japan is experiencing a huge transformation. The number of women working and occupying
leadership positions is growing.
This change has been driven by what has become known as the "Womenomics", a policy that for
example has increased day care services, incentivized part-time contracts or encouraged companies
to adjust their schedules to the needs of women with children.
That is how Japan has become one of the countries with the greatest percentage of working women
today.
However, the truth is that despite all these measures, the Japanese economy still needs
many more workers. In fact, there are so many vacancies that there are currently more than
150 jobs for every 100 candidates.
Yes, you heard that right. There are more jobs available than candidates. Many more.
That’s why, in recent years, Shinzo Abe has been demolishing what has so far been
a taboo for Japanese society.
(THE ARRIVAL OF NEW BLOOD)
Since time immemorial Japan has been one of the countries most closed to immigration in
the world. We already talked about this a while ago on VisualPolitik.
In Japan, the immigrant population accounts for only 1.8% of the total. One of the lowest
percentages, if not the lowest, in the entire developed world.
However, that is changing.
Japan to Asia: Give us your young, your skilled, your eager workers”. Nikkei Asian Review)
Since Shinzo Abe came to power in 2012 the number of foreigners has doubled.
And that won’t be the end of it. In December of 2018, Japan approved new laws to boost
the arrival of immigrants.
We need to break free of the conventional thinking. I will create a Japan that can attract
great talent from around the world". Shinzo Abe.)
Folks, the new regulations make allowances for two new status for the foreign population.
On the one hand, a very appealing status to attract the most qualified workers, who can
settle in Japan, practically indefinitely, with their families.
On the other hand, a new status designed so industries can bring less qualified workers.
Here the conditions are more limited, but even so the new regulation seeks to eliminate
all the problems and the bad conditions that these foreign workers have typically suffered,
something that we already talked about in this other video.
In any case, folks, Japan has many, many problems, we have talked about them a lot of times and
we will do so again in the future. But there are also reasons it can remain one of the
richest countries in the world.
So I really hope you enjoyed this video, please hit like if you did, and don’t forget to
subscribe for brand new videos. Don’t forget to check out our friends at the Reconsider
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