Continuing economic stagnation in Japan
The more than a decade long economic stagnation in Japan is a reflection of the insolvable crisis of the world capitalist system. Japan is suffering under the weight of the overproduction crisis and the intensity of US imperialist competition for limited markets especially in the Asia-Pacific region.
The failure of Japan to decisively overcome the crisis is presently one of the biggest headaches of the imperialist powers. Japan has served as one of the principal markets importing the raw material and semiprocessed products exported by backward semicolonies and as the biggest financiers of reactionary governments.
The Japanese bubble economy, fueled by all-out real estate speculation and funding of infrastructure projects, burst in 1990. Since then, the Japanese economy has failed to recover.
To resurrect the economy, the Japanese government repeatedly carried out pump-priming projects pouring billions of dollars in construction. It has spent $1.5 trillion in the past eight years. From July 1998 to December 1999, it spent $142 billion in public works.
Despite these successive programs, whose benefits, such as employment and boosting production, are necessarily temporary, the Japanese economy continues to stagger. The Japanese economy plunged into a recession in 1992, 1994-1996 and 1998. Last year, it is estimated that the Japanese economy grew by only 0.6%.
Problems continue to plague Japan�s financial system. Japanese banks went bankrupt as they served as the principal source of funding for unproductive infrastructure projects and large-scale real estate and money market speculation. In mid-1998, after the Asian economic crisis erupted, Japanese banks� bad loans were estimated to have reached $531 billion.
This is aside from the mounting public debt resulting from the pouring of funds into construction. The total bad debts of local governments in Japan (up to January 2000) has reached $6 trillion. Last year, total public debt in Japan represented 130%-200% of domestic production.
Local production continually went down as a result of the export of production or the setting up of industrial factories in the semicolonies to exploit cheap labor power especially in the 1980s. Corollarily, the unemployment problem in Japan started to grow slowly, fueling disgust among the Japanese workers.
Because of the economic crisis in the Asian semicolonies, the largest market of Japan, local production plunged. In the manufacturing, construction and agricultural sectors, 1.7 million workers lost their jobs from 1997 to 1998. In March, the unemployment rate was estimated to have reached 4.9% � i.e. 3.29 million workers are unemployed. A government report last April boasted that there are 130,000 new jobs.
The truth, however, is that most of these are part-time jobs: the number of full-time workers dropped by 1% compared to the April 1999 figure.This situation will worsen because of the Japanese economic restructuring being pushed by the US and IMF. Among the policies to be carried out is the raising of interest rates as determined by Japan�s central bank (the Bank of Japan). In the interest rate hike planned for the end of the year, the Japanese government hopes to compel business to restructure their operations to make them more �efficient�, which primarily means carrying out widespread labor flexibilization including large-scale retrenchment, labor contractualization and other similar policies. Since 1997, the real wages of Japanese workers have been dropping by 1.5% each year.
The social status of the Japanese people and proletariat is deteriorating and their living conditions are becoming more diffi cult. Millions of unemployed, homeless and ordinary people are poised to suffer heavy blows from the neoliberal policies of deregulation and liberalization. Consequently, the Japanese people and proletariat are rapidly being persuaded to march along the militant path of resistance. The efforts to lower costs of production and push flexibilization are igniting widespread workers� strikes.
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