Abenomics – Positive Impact?

Can Japan Change? Yes it can

 

Having recently read a great article in TheDiplomat.com, I feel it’s well worth sharing, as it provides insights into changes that are happening to Japan’s economy and the attendant thought processes that may be contributing to make those changes

The article articulates some of the issues that Abenomics [a tag to assign the economic policies of Japan to the prime minister, Shinzo Abe] is attempting to drive into the Japanese economy. It’s a“3 arrow” approach and something different from previous regimes. Japan needs growth after years of deflation and this article provides some good insight

The article 

Written by Devin Stewart,  the article tackles a notion that Japan is stagnant – economically and socially

He observes that a more open attitude is emerging, to entrepreneurship, global education, society and women in leadership roles – these being based on earlier research

He then conducted a symposium in New York to challenge these issues further
3 myths needed dispelling;

• Japan is socially stagnant
• Japan is becoming more nationalistic
• Change can only come from massive revolution

He espouses the view that Japan’s citizens are more self-assured and confident, with a focus on improving their standard of living

Abenomics is seen as providing an economic revival relatively better than previous efforts

The comments about corporations sitting on pots of money; that they should invest and start paying higher wages is interesting.

Living expenses in our household are not high relative to Auckland, New Zealand. Food, rent, power are much cheaper here in Japan. But the wage construct is interesting, in that wages are low relative to many economies. The minimum wage is low and many companies have expressed no interest in paying much more than, or close to, the minimum wage

Minimum wage
Take the case of Marcia whom I live with. Her employment situation is highlighted where she was working on an assembly line pre Kanagawa. It should be noted this was her situation after asking for a pay rise and getting a modest lift on condition she told no one else in the plant. She now works for a Brazilian magazine publishing company in an office in Hon-Atsugi

Case study

In the BBC News week ending June 28 2014, it was reported that consumer prices rose in Japan at an annual rate of 3.4% – the fastest rate in 32 years according to the report. However this follows a sales tax rise from 5% to 8% [the first in 17 years]. As prices rise, pressure must come on those required to pay higher prices to ask for more money in their pay packet. Let’s wait and see but change is coming

And in this article it is interesting to see profits increasing for some large retail chains but consumers are really shakey on the impact increased costs will have on their lives. The issue of high childcare cost is raised here but if wages were raised the government would not be seen as the solution to the problem. Becoming more interesting

Latest The Diplomat article

Age Imbalance

Additionally there is the well publicised issue of an aging population. This typical representation shows beautifully how rapidly and consistently it has changed and a view into into the future

Japan aging

 

Gender Imbalance

Abe has also pushed for re-balancing the gender imbalance – although recent behaviour in the Japanese parliament has shown its potential to negate this

Treatment of  women in Parliament in Japan

Followed up by this

Request for names blocked

My opinion is that the grand target to have women working in greater numbers is going to be difficult given the government’s tangible behaviour and a national psyche

 

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