International and Pacific Asian Business - Japan - Case Study Example

JAPAN’S ECONOMIC SUCCESS Student’s name: Institutional affiliation: Introduction Prior to the interaction with the European countries, Japan had a wealth of blacksmiths who were the first wonder that the Portuguese experienced once they set their feet on Japan. This was out of the metal richness and a constant interaction with China who were also good in blacksmith activity. The following periods; Edo and the prewar period, were critical to the development of Japan as it is at this time that merchant trade, banking, foreign trade and urbanization thrived in Japan. For a hilly and rocky country, this was not enough (Chris, 2010, 21). The effects of war had their toll of the country which was densely populated; relatively reducing its masses and the development the country had attained with the Mejia leadership (William, 2009, 36). Thus the post war development (1945 to date) has been a subject of economic study to many economists as the country has grown to be in the top three in almost all areas that are; national GDP, electronic production, economic growth, financial assets and production of motor vehicle. This paper analyses the factors that have contributed to the immense growth in the country and the effects of both these factors positively and negatively (Elise, 2008, 96). Japan in the 1950’s The post war period was important to the budget of Japan as one of the important and consuming budgetary allocations was not being catered for by the Japanese government. After the surrender of Japan, America had taken to cater for the defense expenses of Japan. This enabled the leadership to embark on one of the two factors that the Mejia leadership was involved in; rich country and strong army (Chris, 2010, 62). With the strong army being catered for by the American government, the wealth creation for the country was the major factor that it considered. While this was a good gesture to the Japanese government, it was also a sign of dependence of the country, the country could not pride in having to guard its borders and this could come as ridicule to the government from the neighboring states. The move had seen the decommissioning of the Japanese navy and the imperial army under the Treaty of Mutual Cooperation and Security between the United States and Japan. However, the American forces were to work with the Japan’s self defense force. The self defense force was established after the end of the Korean War at the command of Douglas MacArthur the supreme commander of the forces in Japan. Japan has since strengthened its army and the operations of the USA in the country have reduced. Industrial policies The industrial policies in Japan are overseen by five major ministries that are related to trade. These ministries are the Ministry of Finance, MITI, Ministry of Land Infrastructure and Transport, Ministry of Health, Labor and Welfare, and the Ministry of Posts and Telecommunications. The involvement of Japanese government in trade is occasioned by the influence of the rich in trade which creates a threat to the economy since they have traditionally given credit to the economy at will, and denied at will (Chris, 2010, 51). This has been termed as Japan Inc internationally as the government has been able to tame the few rich individuals and created an almost even economy. This has it negative effects too. With the opening up of economies world wide, the individual who feel locked out of business in Japan may opt to go for trade elsewhere this may lead to the shift of investments in Japan by its own nationals. Should this happen, there can be a shift from the dominance of the local investor in the economy to the dominance of the international investor. Dominance of the international investor creates a loophole since the foreign policy plays a pre-dominant role in the local trade (William, 2009, 37). Land reform The greatest land policy success that was evidenced in Japan was the 1946 land policy. The land policy required all the landlords who had land in excess of the maximum land that the government provided to sell the excess to the government. The policy was authoritative rather than a provision (Explorer Publishing, 2008, 213). The policy was aimed at ensuring that the landlords who were few in the economy did not have the extreme control in the land policies. The government later sold the land to the tenants at the same price. While this was an expense to the government due to the land processing expenses, the government of Japan was able to control the productiveness of land in the economy (Steven, 2006, 51). This policy was able to succeed due to two main reasons; one, the government had the power to authorize such a policy and the economy was balanced enough to empower the tenants to make the purchase (Robert, 2011, 145). The policy was however a threat to the economy since the peasants who purchased land did not necessarily have the power to turn the land into production. This was a prospective threat that could stall the economy in the near future (Chris, 2010, 73). However, the government was able to give incentives to these tenants and this enabled them to make their land productive. Education The two laws that were passed after the Second World War on education were vital to the growth of the education sector in Japan. The two laws are Fundamental Law of Education and the School Education Law. The country has since saw the growth in the level of education in the country. The rate of education has further been increased by the fact that there has been collaboration between the companies in the country and the education institutions. The collaboration has seen most of the students in the higher secondary attend industrial training in the industries which has an impact in the level of training and experience (Ronald, 2012, 17). The law provides for free elementary and lower secondary education. This has seen an increase of the attendance of students at these two levels while upper secondary attendance is greater in private institutions. The post graduate courses that are popular are social sciences, business and law with engineering humanities and education also gaining popularity. For a country that is production based, the rate is worrying since the future may have more foreigners in their industries than locals (OECD, 2012, 25). Trade – GDP The growth in the international trade must always be analyzed by first understanding whether the trade is import based or export based. While Japan is not rich in arable land, the country has been able to invest in other field whose raw products can be gotten locally. The improvement of the motor vehicle production, electronic production, development of information technology and the construction industry has formed a key role in the growth of Japan (Elise, 2008, 43). The existing deficit that is being serviced by Japan is the deficit with OPEC. In order to improve its international trade, Japan has made international treatise and joined trade agreements both regionally and inter nationally (Ronald, 2012, 82). Some of these trade agreements and trading blocks include; General Agreement on Tariffs and Trade and Organization for Economic Co-operation and Development. Japan is also a partner in four major word financial institutions which place it at an advantaged position in trade these financial institutions are the international monetary fund, the World Bank, Asian development bank and the United Nations (Chris, 2010, 58). While the latter is not necessarily a financial institution, its policies are vital in coming up with international financial policies. Exports Between 1945 and 1960, there was a balance in the international trade as the country could not be able to have as much import to sustain the imports it made. This created urgency by the government of Japan to come up with policies that would enable the country to cater for the deficit (Ronald, 2012, 24). This led to a two dimensional approach by the government to this end. The first dimension was to help in upgrading the industries in Japan to be at par with other countries in the first world. This involved the construction of bigger factories and importation of larger plants that would be able to handle the production of mass products enough for exportation. The second dimension was to enhance the processing of grants and incentives to the factories in order to optimize the capacity of the factories that had been built (Robert, 2011, 23). This was a good gesture at ensuring that there was improvement in the exports made by the economy. However, the country was at a risk since the construction of these high class plants involved both international borrowing and public borrowing (Hashimoto, 2010, 135). This was a threat to the economy of Japan should be unable to pay the international debt as it would lead to lack of financial independence (William, 2009, 64). However the move was important. The strictness of the government in international trade led to the country being named among the unfair competitors I developed countries and later the playing ground was leveled by the Omnibus Trade and Competitiveness Act. It is good to note here that the state has since been reverted with the country giving 17 percent of the international debt globally (Lyoda, 2010, 39). Conclusion From the above paper, it is true that the economy of Japan has not grown un-proportionally; the growth is evidenced in local trade, international trade, merchant trade, education and even in the military (Robert, 2011, 119). The government policies that have been set have been able to provide a good guideline in these developments. With the current trends as seen in the paper the fears and threats that the various factors pose can be easily overcome. The fact that the government has only one servicing the trade deficit (with OPEC) is a clear indication of the government’s commitment to the establishment of its position in the great eight nations. The developments in the motor vehicle and the information technology are also promising in the future of the country in international trade (Chris, 2010, 12). References Chris, R., 2010. Japan .Tokyo: ICI Elise, K., 2008. Modern Japan: A Social and Political History. New York: Willey Explorer Publishing, 2008. Explorer Tokyo: The Complete Residents' Guide. Tokyo: Author Hashimoto, R., 2010. Reforms for the New Era of Japan and ASEAN. Japan: Willey Lyoda, M., 2010. Postwar Japanese Economy. Tokyo: Cengage Brain OECD, 2012. OECD Economic Surveys: Japan 2011. Washington: Author Steven, K., 2006. Japan Remodeled. London: SAGE Robert, G., 2011. Global Political Economy. New York: Willey Ronald, D., 2012. Land Reform In Japan. New jersey: ICI William, T., 2009. A Companion to Japanese History. 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