Libmonster ID: JP-1205
Author(s) of the publication: E. M. RUSAKOV

The opinion of Chinese scientists that Japan is now at a historical fork is shared by most foreign experts.

However, the latter are less optimistic about the chances of the Country of the Rising Sun to sustainably overcome the long "great recession", which is not directly related to the current global financial and economic crisis, although it, of course, worsened the difficulties experienced by the Japanese economy.

The modern innovation revolution goes far beyond the rapidly developing information technologies and, coupled with globalization, is accompanied by a sharp increase in international competition, especially in advanced technologies. This situation requires any country, including an economically developed one, to break through to fundamentally new frontiers of innovative creativity in various areas of economic and social development.

The last "stagnant" two decades that Japan has been experiencing have shown that it needs modern modernization of the entire society, perhaps even more than other economically developed and some developing countries.

It seems that there is every reason to believe that Japan was hit not by a cyclical, but by a structural economic crisis.

STRUCTURAL CRISIS AND DEFLATIONARY PIT

Defining the crisis that has hit Japan since the early 1990s as a "recession" or recession not only does not help, but rather obscures the essence of the economic processes that have taken place in Japan over the past two decades. The prefix " great "to" recession " also does not save the situation, on the contrary, it brings it closer to the "great depression" in the United States in the 30s of the last century. And hardly anyone will deny that the American "depression" of those years had a pronounced structural character.

As you know, a cyclical decline is caused by overproduction, a violation of market proportions and, accordingly, the need for its adjustment, which is achieved in a relatively short time - two to three years. In its most general form, a structural economic crisis can be defined as a crisis associated with a change in an economic model (structure) that has been established over a long period of time, measured in decades. At the same time, within the framework of the structural crisis itself, the economy goes through several cycles of decline and recovery, but the recovery of the economy is unstable and weak, and recessions are longer and deeper than in calm times*.

Formally, the" great recession " in Japan (1990-2003) ended, including due to some economic reforms of the government.

But the very duration of this "recession" indicates its structural nature. And overcoming it will require much more serious changes in Japan.

Indeed, after the formal end of the "recession", Japan's development was sluggish: for example, in the pre-crisis years of 2006 and 2007, the country's real (at constant 2000 prices) GDP grew by only 0.5% and 0.4%, respectively, compared to previous years. 1 The global financial and economic crisis, of course, only worsened the situation: in 2008, the country's real GDP grew by this indicator decreased by 2.6% in 2009, grew by 1% in 2009 (starting from the low base of 2008), and slowed down again to 0.1% in 2010 by the end of June 2. The nominal (at current prices) figures for the country's economic decline were 1.2% in 2008 and 5.2% in 2009., The forecast for growth in 2010 is 2.4% and 1.8% in 2011.3 But in the second quarter of 2010, this figure fell sharply to 0.4% year-on-year4.

10.5 , or more than 192% of its gross domestic product (GDP), which was 475 trillion yen6 in 2009. At the same time, the United States, whose huge debt has become a byword given the role of the dollar as the world's main reserve currency, in July 2010, this figure was 93%7, i.e. half as much. In its Global Financial Stability Report, the International Monetary Fund (IMF) predicts that Japan's debt-to-GDP ratio will rise to 225.9% by the end of 2010, compared to Greece's 130.2%8which is being pulled out of debt together by the euro zone and the IMF.


* For more information, see: Rusakov E. M. Is this just the beginning? // Asia and Africa Today, 2009, No. 1.

page 8

Despite the "mitigating circumstances" (large gold and foreign exchange reserves [$ 1.1 trillion], a high level of savings of the population, etc.), the fact of financial "delinquency" is obvious: according to the open directory of the CIA, in the world report card on the "ranks" of 129 indebted countries in 2009, Japan was in the "honorable place" in terms of the ratio of public debt/GDP in second place after Zimbabwe, the "bronze" went to the tiny Caribbean state of Saint Kitts and Nevis (Russia with 6.1%, taking 122nd place, is among the most prosperous countries in the world in this indicator) 9.

Standard & Poor's, one of the world's leading rating agencies, criticized the economic policies of Naoto Kan's government and in early 2010, for the first time since 2002, downgraded Japan's creditworthiness (to AA - negative outlook), placing it in a company with Ireland, now one of the most problematic countries in the euro zone.10

And the extremely high exchange rate of the yen, according to the Minister of Economy, Trade and Industry M. At the time of the announcement, $1 in August 2010 was about 84.4 yen, and the risk of 40% of the country's industrial sector companies moving their capacity abroad is still high.12. Feverish attempts by the government to lower the yen provoked protests from the European Union and the United States, but the first currency interventions of the Central Bank of Japan and lowering the discount lending rate to almost zero (0.001%) did not bring success: the yen continued to strengthen as if nothing had happened. In October, for the first time in 15 years, the yen rose in price against the dollar to almost 80.5 units 13 (in pre-crisis 2007, the $1 exchange rate fluctuated between 112 and 122 yen) 14.

All this suggests one thing: whatever the formal economic growth indicators of Japan may be (even if they were encouraging), the country does not seem to be able to climb out of the deflationary hole caused by the structural crisis. Although deflation (falling prices) is not as painful as in the United States during the "great depression", it has given the Japanese economy a sustained stagnation.

Moreover, the deflationary pit is in many ways close to the structural crisis associated with stagflation (a combination of an economic downturn and high inflation) that befell the United States in the 70s of the last century. By and large, America finally emerged from the stagflationary crisis and its consequences only in the early 1990s.

It's not for nothing that many of the best economic minds on the planet are now grappling with the mystery of Japanese deflation: they are driven not so much by curiosity and empathy for the world's second-largest economy, but by fears that deflationary anemia could hit both the United States and other developed countries. It is precisely because of these concerns that in September 2010, the leadership of the Federal Reserve System for the first time since the beginning of the current global financial and economic crisis began to talk about the possibility of easing monetary policy (in other words, turning on the printing press that stamps dollars).

Unfortunately, it is still difficult to even predict at what stage of exit (or non-exit) from the deflationary impasse Japan is: both time and shifts in fundamental indicators are required. And not only in Japan, but also in the global economy (the current global crisis also has many signs of a structural nature, suffice it to mention the sluggish recovery of developed economies and the rapid process of changing the balance of power between them and emerging market countries, primarily China and India).

TOKYO'S DIPLOMATIC TWISTS AND TURNS

This is not to say that Japan is not trying to break out of the clutches of obsolete traditions and embark on the path of radical modernization. But the traditional "old regime" is fiercely resisting. The process of modern renewal moves in a zigzag, staggering gait.

The clutches of mossy patriarchal traditions and provincialism deprive creative-minded Japanese people of the opportunity to develop and apply their innovative approaches. And there are such people in the country: it is enough to mention their achievements in robotics and biotechnology, in design, high fashion, pop culture and cyberculture*, and, of course, in science (another evidence of this is the awarding of the Nobel Prize in Chemistry in 2010). Eiichi Negishi and Akira Suzuki).

But individual personalities and individual directions do not create the cumulative effect necessary for the innovation and modernization breakthrough.


* For more information, see: Katasonova E. L. Japan and problems of cyberculture / / Asia and Africa Today, 2010, N 2.

page 9

So, in Japan, they understand that in foreign policy, the country will have to solve the most difficult task - "to harness one cart... a horse and a trembling doe "is a Japanese-American security treaty and" strategic mutually beneficial relations " with the PRC, and even against the background of increasing rivalry between China and the United States for dominance in Southeast Asia. But the solution of such a task may not be up to Japanese diplomacy (again, we are not talking about individual Japanese diplomats, but about the clumsy political leadership of the country's foreign affairs).

In this regard, the episode with the seizure of a Chinese fishing trawler by the Japanese Coast Guard on September 7, 2010 is typical. He was detained in the area of the uninhabited but oil-rich Diaoyu Islands (Senkaku) in the East China Sea, which also became the object of Tokyo's territorial claims*.

The incident led to a diplomatic row between the two countries and sparked a storm of mass protests in China. Under pressure from the PRC, the crew was released, but the Japanese authorities intended to try the ship's captain. In response, Beijing froze contacts between the two countries at the ministerial and provincial levels, 15 imposed a ban on the export of rare earth metals, which are extremely important for the Japanese electronics industry, and demanded an apology and compensation from Japan for the detention of the ill-fated trawler. 16 By "coincidence", 4 Japanese were detained in China on charges of illegally filming military installations.

Tokyo was forced to back down. On September 25, the captain of the fishing vessel Zhang Qixiong returned to his homeland accompanied by a joint working group consisting of representatives of the Ministry of Foreign Affairs and the Ministry of Agriculture of the People's Republic of China. He was greeted as a national hero. As expected, the captain sprinkled salt on Tokyo's wounds, stating: "My arrest by the Japanese side was illegal. The Diaoyu Islands are a territory of China"17.

Apparently, for Tokyo, the game was not worth the candle. It is possible that the outcome of this incident may become a landmark event, clearly demonstrating the inexorable change in the balance of power in East Asia in favor of the PRC.

After all, in the countries of the Chinese-Confucian civilization, to which China and Japan belong, at first glance, purely symbolic moments play a significant role. No matter how much the Japanese authorities tried to hide behind the decision of the prosecutor's office of Naha, Okinawa province, to release the captain early from custody, the "loss of face", if such a pun can be allowed, is obvious. Moreover, it turns out that the provincial prosecutor's office thinks more sensibly than some in Tokyo: after all, its representative noted that when making such a decision, the possible impact of the incident on the further development of Sino-Japanese relations was taken into account.

Tokyo's overestimated hopes for the possibility of using the Japan-US security Treaty for its territorial claims were also confirmed. And such hopes exist. In 1972, the United States returned the occupied islands of Okinawa and Ryukyu to Japan, but at the same time unilaterally "presented" Japan with the islands of Okinawa and Ryukyu. Diaoyu (Senkaku), which according to the Potsdam Declaration and other documents of the post-war peace settlement should belong to China. And in February 2009, then-Japanese Foreign Minister Hirofumi Nakasone and a U.S. State Department official suggested that the Japanese-American security treaty should apply to the question of whether the Diaoyu Islands were under Japanese administration. Beijing issued a strong protest on 18.

In connection with the current incident, Washington seems to have taken a more prudent position. US Assistant Secretary of State K. Campbell said that while the United States strictly abides by its obligations under international treaties, it remains neutral on the issue of the islands, which have caused friction in Sino-Japanese relations. Prime Minister of Kan was awarded


Rusakov E. M. Ni prava (mezhdunarodnogo), ni zdravogo smysla [Neither Law (international), nor Common sense].

page 10

Commendation for his "statesmanlike wisdom" in solving such a complex problem in the spirit of a "peaceful diplomatic process."19 But in late October 2010, on the eve of the ASEAN Summit, US Secretary of State H. R. R. Tolkien said: Clinton confirmed that the Senkaku Islands are subject to U.S. security guarantees for Japan. The Chinese Foreign Ministry protested about this. At the same time, Clinton, in talks with the foreign ministers of Japan and China, called on both sides to reduce the heat of passions around the disputed islands.

In Japan itself, the release of the Chinese captain drew sharp criticism.20

It is impossible not to mention the statements of Japanese politicians and the demarches of Tokyo in connection with the trip of Russian President Dmitry Medvedev to the Kuril Islands. This attitude is reminiscent of an Imperial Japanese Army soldier who was discovered in the dense Philippine jungle two decades after the end of World War II. Like a true samurai, he still stood at his post, confident that the fighting was going on.

Moscow pointed Tokyo politicians to their place. Russian Foreign Minister Sergey Lavrov said: "The reaction of the Japanese side to Russian President Dmitry Medvedev's trip to the Kuril Islands is unacceptable. This is our land, and the Russian President has visited Russian territories and the Russian region. We have explained this to our Japanese partners. " 21

AMBITIONS BUILT ON SAND

As for the internal political stagnation, one can recall how much hope was associated with the first serious defeat in 1993 of the Liberal Democratic Party( LDP), which had ruled alone since 1955. Alas, this victory of the opposition essentially went " into the horn "of the short-lived and inglorious" one - and-a-half-party " rule of the coalition cabinet of the Liberal Democrats with the Socialists, and then with the New Komeito.

So far, the situation is not the best with the Democratic Party of Japan, which in 2009 was the first in more than half a century of individual or coalition rule of the LDP to become dominant in power*.

It seems that the question remains open as to how many years or decades it will take for Japan to finally and irrevocably embark on the path of modern modernization.

In this regard, experts from the rapidly developing neighboring China (even if it is still at the final stage of industrialization) are also interested in assessing trends in the political and economic development of Japan.

They also noted a number of serious difficulties that may delay the renewal of the country, in particular, its political system, for a long time.

The authors of the report of the Institute of Japan paid much attention to Tokyo's ambitious plans for turning the Country of the Rising Sun into a "political" and "quasi-military" power.

The point is that the ruling circles of Japan would like to bring the country's weight in regional and world politics in line with its economic power. In the second half of the XX century. Japan was perhaps the most conservative and inflexible in its foreign policy among the economically developed countries. Often, the Land of the Rising Sun was even called an " economic giant and foreign policy dwarf."

The need to take a fresh look at modern realities is really ripe for Tokyo. But there are few signs of a more sober approach to assessing the balance of power in Northeast Asia, as well as glimpses of flexibility and pragmatism. It seems that the strengthening of nationalist conservatism in Japan, which is described in detail in the report of Chinese experts, is just as incompatible with claims to increase the role of Japan in international relations, as with the radical modernization of the country's politics and economy.

There is ample reason to believe that with the current course of the ruling elite, coupled with the stagnant state of the economy and society, these ambitious plans will remain castles in the air.


* Japan: Alice in the Land of Information Technology and globalization. Streltsov D. V. Politicheskaya sistema - steklyonny dom, Orusova O. M. Yaponapye universitety primeryayutsya k informatsionnoi epoche [The political system as a Glass House].

1 http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=JPY

2 Ibidem.

3 The IMF website. IMF World Economic Outlook (WEO). Update. Restoring Confidence without Harming Recovery. July 7, 2010, p. 2 - http://www.imf.org/external/pubs/ft/weo/2010/update/02/index.htm

4 Wall Street Journal, 17.08.2010 - http://online.wsj.com/article/SB10001424052748704296704575432541544336872.ht ml

5 Japanese Ministry of Finance website. Ministry of Finance Japan. Central Government Debt as of June 30. 10.08.2010 - http://www.mof.go.jp/english/gbb/e2206.htm

6 Website of the Cabinet of Ministers of Japan-Quarterly Estimates of GDP (Reference Year = 2000. Tables of GDP and its components (1980: I-2009: IV). Annual Nominal GDP (calendar year) - http://www.esri.cao.go.jp/jp/sna/qe094/gaku-mcy0941.csv

7 US Treasury Department website. Treasury Department. Monthly Statement of the Public Debt of the United States. 31.07.2010 - http://www.treasurydirect.gov/govt/reports/pd/mspd/2010/opds072010.prn

8 The IMF website. Global Financial Stability Report. Sovereigns, Funding, and Systemic Liquidity. October 2010. Chapt. 1, p. 6 - www.imf.org/external/pubs/ft/gfsr/2010/02/index.htm

9 The World Factbook (the CIA World Factbook) - http://en.wikipedia.org/wiki/TheWorldFactbook

10 New York Times, 27.01.2010.

11 PRIME-TASS, 27.08.2010.

12 US Federal Reserve website - http://research.stlouisfed.org/fred2/series/EXJPUS/viewdata

13 7.10.2010 - http://www.mataf.net/en/currency/converter

14 US Federal Reserve website. Op. cit.

15 China says relations with Japan "severely hurt", will take counter measures if Japan insists mistakes. Xinhua, 19.09.2010 -http://news.xinhuanet.com/english2010/china/2010 - 09/19/c_13520085.htm

16 Arrival of the captain of a Chinese fishing boat in Fuzhou / / Renminzhibao online, 25.09.2010 - http://russian.people.com.en/31521/7149113.html#

17 Ibid.

18 China strongly opposes the application of the Japan-US Treaty on Security Guarantees to the Diaoyu Island / / People's Daily Online, 28/02/2009 - http://russian.people.com.cn/31521/6603229.html

19 US State Department. Special Briefing on Meetings in New York City. Kurt M. Campbell, Assistant Secretary, Bureau of East Asian and Pacific Affairs. 27.09.2010 -http://www.state.gov/p/eap/rls/rm/2010/09/148090.htm

Tomisawa Awai, Page Jeremy. 20 Captain's Release Sparks Furor in Japan // Wall Street Journal, 26.09.2010.

21 Website of the Russian Foreign Ministry. Transcript of Russian Foreign Minister Sergey Lavrov's speech and answers to media questions during a joint press conference following talks with German Vice-Chancellor and Foreign Minister G. Westerwelle, Moscow, 1.11.2010 - http://www.mid.ru/brp_4.nsf/0/DA11200F3ADE23D6C32577CE006561F7


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