According to the nominal GDP, Japan is the third largest country in the world in terms of economic growth and the fourth largest for purchasing power parity. It is also considered as the second largest economically developed country in the world. Despite the calamitous earthquake that hit the country in 2011, Japan has managed to stay in this position for a long time now. The country has managed to overcome all its negative consequences in just a matter of six years. This has set an example for the other countries in the world to learn and in this article, we’re going to shed light on four of such things that you ought to know about Japan’s economy.
One of the drastic changes implemented on Japan’s economy is based on their agenda for the working class and the working economy. After the disastrous earthquake, the entire economic climate of Japan was changed for good. Japan’s Parliament based labor legislation set a cap on the working hours of the people. Some of their rules and policies included the following:
- Set a legal cap on long working hours (overtime included)
- Equal treatment of regular and non-regular workers
- Exempted skilled professionals from all the working hour regulations
- Bringing more laborers and workers into labor force, which included women as well as foreign workers.
Like mentioned above, Japan’s success of bringing in more labor into the working economy and the labour class with men, women, and foreigners is at a slow success rate. However, this is also working as a boon for the country. Due to the declining population and the shrinking of workforce, the per capital performance is increasing strongly. Some reports published also throws light on the demographic challenges that might be outperforming the long-term economic growth potential of the country. The Japanese government has finally started accepting foreign immigrants in the aim for increasing the future economic growth regarding tourism, education and of course labours.
After the reduction in the deflation size, the gross debt of Japan has piled up to currently more than 200% of the GDP and is expected to rise to an eye-watering 600% by the time the country reaches’ stagnation by 2060. This is mainly due to fall in revenue. Although Abenomics has helped to a great extent to refalte the economy, the spending limit has increased the debt burden on the country and the country is skeptical whether it will last.
Abenomic is the name given by the current Prime Minister of the country, to launch the economic reforms. They aimed to increase the GDP by 20% or to 600 trillion Yen by the year 2020. But due to the since of pandemic, the goal seems to be unreachable. However, the land of the rising sun is putting in all efforts in term of import-export, trading, agriculture and invention to reach their goal.