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Hi Blog.  Fascinating article from Economist.com.  Courtesy of AW.  Arudou Debito

Asia.view 

This is Japan

http://www.economist.com/daily/columns/asiaview/displayStory.cfm?story_id=11779435

What a 50-year-old periodical tells about how the country has changed—and how it has not

THE cover is a cliché: a frothy crested wave with Mount Fuji in the background. Emblazoned on the image of Hokusai’s woodblock print from the 1830s are the words “This is Japan” and “1958”. At a hefty two kilos and 420 pages, the oversized coffee-table book was published annually by the Asahi newspaper between 1954 and 1971. Early editions came nestled in a wooden box.

The book was designed to present the emerging country to foreigners, largely to drum up business. The articles cover the spectrum of all that a Western reader might associate with Japan, from rice and kimonos to sake and shrines. Their very titles stand as totems of an earlier era: “Japan’s Ports—Past and Present”; “Iron and Steel: A Success Story”; “American Girl Finds Japan.” But while the articles appear self-conscious, the advertisements offer a more candid account of where the country was headed.

Fifty years ago Japan was still a developing country; exactly a decade later it would emerge as the world’s second-largest free-market economy after America (a position it still holds—for now). Full-page ads trumpeted Mitsubishi Heavy Industries, Asahi Glass, Mitsubishi Shipping, Toyota, Mitsubishi Electric—companies that accounted for the country’s postwar prosperity. The industries in smaller ads are evocative of the transformation: steel companies, paper mills, makers of pumps, valves, electrical wires, drill bits, bicycle chains, pens and yarn. Banks had modest advertisements. Together, it is a testament to a bygone age.

Today, Japan can look back half a century with nostalgia and pride, yet look ahead with concern. Mitsubishi and other conglomerates still dominate. Toyota, then a small car maker, is now close to becoming the world’s largest. Yet the past 50 years have sown the difficulties the country will face in the next 50. In 1958 the country had just begun a period of rapid economic growth that it would never see again. Between 1956-73 the country grew at 9.2%; in the period from 1975-91 the growth rate would be 4.1%; from 1991-2001 it barely eked out 1%.

The very factors that led to Japan’s brilliant success—political stability from a one-party state; manageable labour relations; lifetime employment; stakeholder capitalism—are now the central source of its undoing. Its most cherished industries are crumbling. Paper firms are barely profitable and glass firms need to merge. Steel companies are renewing cross-shareholdings so that Arcelor Mittal of India or Chinese firms don’t gobble them up. And the business of pumps, valves, electrical wires, drill bits, bicycle chains, pens and yarn have all gone to China.

The pages of “This is Japan” offer a chance to relive a seemingly gentler time, with quaint photo spreads of bento boxes, tea pots and kabuki theatre. The biggest advertisers are camera makers. Their names represented Japan’s technical might: Fuji Film, Canon, Konica, Mamiya, Petri, Yashica, Nippon Kogaku (later known as Nikon), Leotax, Takane, Minolta. One article basically foretold the onslaught in technology trade that was to come: Japanese camera exports increased a staggering nine-fold between 1954-56. Imports to America grew 49% in a year, while those from Germany grew only 1.5%, reported “This is Japan”.

Soon thereafter, the entire range of consumer electronics was dominated by the Japanese, decimating American and European brands. Now those same Japanese firms are sweating as South Korean rivals push them aside, and Chinese companies are coming up quickly. Indeed, the country that invented the walkman has seen Apple unleash its digital counterpart. And the nation that pioneered advanced wireless usage can barely sell mobile phones abroad. Sony Ericsson is the only Japanese firm in the top five, shipping around 100m handsets a year—about five times fewer than Nokia.

Today Japan faces a demographic crisis, as the population both ages and declines. This puts a burden on economic growth since the numbers of workers shrink annually. And it creates a pension time-bomb, because there are fewer and fewer workers to support more and more old people. In 1958 about 5% of the population was over 65; today it is around 20% and by 2058 it is expected to be creeping towards 40%.

Yet 50 years ago Japan faced a demographic crisis of another sort: a population explosion. This was in part due to a public-health campaign by the American occupational army, and later the Japanese government, which cut the infant mortality rate in half in ten years. Whereas the fertility rate is now below replacement, the problem in the past was a spike in unwanted pregnancies. Between 1947 (when abortion was legalised) and 1957, the birth rate was cut in half due to abortions. Indeed, it reached a high in 1955 of 1.2m abortions to 1.7m live births.

Of course, such data did not appear in “This is Japan”. Like all propaganda, it is a sanitized version of oneself. And things were not as tranquil as the book’s photo spreads suggest. Nearly a million demonstrators would mob the streets of Tokyo within the year, to protest against the government and American imperialism. Students scrambled to the Diet and urinated on the doors.

In 1960 Ikeda Hayato, the prime minister, unveiled his “Income Doubling Plan”, which unleashed the doken kokka or the “construction state”. Thenceforth, Japan would gash its countryside with roads to nowhere and bridges to nothing. Who could predict from the lone advertisement for a cement company that the construction industry would become the central mechanism for delivering political pork to the hinterland? These days, the construction industry accounts for 20% of Japan’s economy, which is twice as much as in American or Britain. One percent of workers are employed in construction in America compared with 12% in Japan.

In 1957, Edwin Reischauer, a respected scholar who later became America’s ambassador to Japan, noted: “the economic situation in Japan may be so fundamentally unsound that no policies, no matter how wise, can save her from slow economic starvation and all the concomitant political and social ills that situation would produce.” The very opposite occurred, of course.

So were one to publish “This Is Japan—2008” a degree of optimism is called for. No matter how discouraging Japan’s problems may seem today, the country may indeed work its way out of its difficulties before a new edition appears in 2058.

ENDS