Land of the setting sun

Discussion in 'International Politics' started by SHASH2K2, Oct 29, 2010.

  1. SHASH2K2

    SHASH2K2 New Member

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    Japan isn’t in the best of shape, but at least no one has lost their traditional bashful politeness. In Tokyo for Prime Minister Manmohan Singh’s potentially path-breaking state visit to Japan, I was trying hard to put together a list of the recent prime ministers of Japan.Not easy. Did Fukuda come before Abe? Was there someone in-between Mori and Koizumi?
    So I asked two Japanese standing around in my hotel. They both whipped out pieces of paper and began writing the names down. They came up with different lists. Turning slightly pink in the face, they began whispering with each other.
    “Too many prime ministers,” one said. They ran off to find help. That led to three Japanese discussing who followed whom. A techie solved the problem by turning to Google. A list was produced and consensus reached. I got my list. The techie added, “I hate Fukuda. So sorry.”
    Tower of power
    The media team made an obligatory stop at the Tokyo Tower. I’d been there before. But a local Indian businessman told me the tower was going to be pulled down in the next few years. Local residents complained the tourists it attracted were too noisy.
    I felt a twinge. Japan blazed a trail of modernization for all of East and Southeast Asia. It built the Tower in 1958, it built a high-speed train in the early 1960s, staged an Olympics soon after, and became an automobile-making superpower. South Korea to Malaysia, Vietnam to China – they’ve all tried to mimic those milestones as much as possible.
    But now Japan is ageing. Its trains can’t go any faster because of noise pollution limits. Toyota is having a recall every quarter. And now it’s pulling down the Tokyo Tower because old people want some peace. No obvious sign Japan is replacing this with any new totems of accomplishment. Asia’s great trailblazer is fading into a setting sun. Or is it?
    Little bit of India
    The Indian Foreign Ministry gave us a dinner-cum-river boat cruise on the Sumida river on the last night in Tokyo. The Indian food served wasn’t anything to write about, but the surprise was four young Japanese dancers who did enthusiastic Bollywood dances for us.
    Vikas Swaroop, a minor celebrity pretty much everywhere he goes because of his authorship of Slumdog Millionaire, is the Indian consul-general of Osaka. Even on the river boat, Japanese journalists politely asked for an interview and were equally politely turned down. But he said that India was a growing craze in Osaka.
    “I can’t find enough bharat natyam dance teachers in the city to match the demand from middle-class Japanese families,” he said. I was assured you could find Japanese dancing pretty much every form of Indian classical dance: Manipuri, Odissi et al.
    More peculiar was the demand among Japanese to get their kids into Indian schools in Tokyo. A Japanese official, who lived an an area with such a school because of a concentration of Indian infotech firms, said this was driven by a desire to know English and “Indian style mathematics.” The latter it seems reflects a widespread belief in East Asia that Indians are whizzes in math. The only evidence: IIndian students study the 14 times table.
    China on the mind
    When it comes to foreign policy, the only topic in Tokyo is China. Japan”s establishment has been severey shaken by the recent island clashes between ships of both countires.
    “That incident was not an accident. Fishing ships don’t charge gunships,” said a Japanese diplomat.
    The English editions of Japanese newspapers for the two days in Tokyo were all about China: anti-Japanese riots across China; Chinese leaders warning Japan about the boat business; Japanese scholars discussing how to handle China.
    Manmohan Singh got the most coverage when the Indo-Japanese joint statement spoke of India providing rare earths to Japan. Rar earths are crucial to Japanese industry and China has banned rare earth exports to Japan. Polls showed 80 per cent plus Japanese now distrusted the Chinese. And every arbitrary Japanese we asked: Have you been worried about what China is saying responded with “Of course.”

    http://blogs.hindustantimes.com/foreign-hand/2010/10/28/land-of-the-setting-sun/#more-173
     
    Last edited: Oct 29, 2010
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  3. SHASH2K2

    SHASH2K2 New Member

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    The Land of the Rising Sun’s economic setting

    Dylan Grice of Société Générale’s Cross Asset Research recently made the case that Japan’s dismal demographics – the world’s worst – may be the true cause of its economic decline. The IMF recently forecast that by 2015 Japanese gross government debt will be larger than gross household financial assets.

    “At some point, there won’t be enough household savings to recycle into the Japanese government bond market,” said Grice.

    Even at the lowest interest rates in the history of capitalism, debt service this year is expected to exceed 22 per cent of general account revenues and 55 per cent of tax revenues.

    Grice notes that the Japanese government’s ability to fund itself will be drastically impacted as workers retire and spend their savings. “As the population continues to age, the savings ratio will be increasingly pulled down, leaving less available capital to lend to the government,” said Grice.

    It’s popular to blame Japan’s economic problems on the bursting of the bubble economy. But perhaps there is more to the story. A rate of less than 2.11 children per woman leads to declining population, assuming no immigration. Japan reached this level in the 1950s, well before other industrial nations. The official Japanese forecast is that unless fertility turns up quickly, its population could decline 50 per cent by the end of the next century. The U.N.’s low variant projection sees Japan losing nearly thirty million in population over the next fifty years, almost a quarter of its present level.


    “Japan might just have spent the best part of 20 years trying to fiscally stimulate its way out of the demographic compression. If this is correct, and population decline has blown the hole in Japan’s government balance sheet, there’s still plenty of damage in store because the demographic compression isn’t over yet,” he said.

    So what does this mean for the rest of the world?
    If we take into consideration the statement that, “Maybe Japan is what economies that demographically peak look like”, then a picture tells a thousand words.

    I have downloaded the 2010 demographic population pyramid snapshots from the US Census Bureau for a selection of countries. It makes for interesting reading and tells us that in the future the one-child policy in China will be a cause for concern.

    Also illuminating is the fact that the USA is demographically well placed for the future. This would suggest that once reality is forced upon them and the American population starts to live within their means and save rather then spend and consume then they will be able to return to being a nation of prosperity, innovation and leadership. Their technology, medical and science sectors remain at the forefront of breakthroughs and they will be back, hopefully sooner rather than later.

    See below for country snapshots and clues of regions to consider gaining investment exposure to.
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