Japan Background

Japan Economy

BACKGROUND:

The Liberal Democratic Party retook control of the lower house of parliament in 2012, returning Prime Minister Shinzo Abe to office. The LDP’s resurgence was due in large part to the electorate’s rejection of the Democratic Party of Japan for its ineptitude and corruption scandals. Voters also view Abe as more likely to stand up to an increasingly aggressive China, which claims sovereignty over Japan’s Senkaku Islands. Although Abe has proposed pragmatic changes in Japan’s defense forces, his revisionist comments about its wartime actions have angered others in the region. The LDP won another landslide victory in the July 2013 election for he upper house, largely on popular hopes that “Abenomics” would rejuvenate the economy.

Quick Facts:

• Population:

127.6 million

• GDP (PPP):

$4.6 trillion

2.0% growth in 2012

• 5-year compound annual growth –0.2%

$36,266 per capita

• Unemployment:

4.4%

• Inflation (CPI):

0.0%

• FDI Inflow:

$1.7 billion

• Public Debt:

237.9% of GDP

Its GDP composition is divided in 4 big sectors

• 1.22% Agriculture

• 73.15% in services

• 25.64% Industry

• 18.19% Manufacturing

Top Industries

Motor Vehicles; Electronic Equipment; Machine Tools; Steel and Nonferrous Metals

Trade

Top 3 Trade Partners: China, United States, and South Korea

Top 3 Exported Goods: Motor Vehicles & Parts, Industrial Machinery, and Electrical Machinery

Politic System

Japanese political system is a much more recent construct dating from Japan's defeat in the Second World War and its subsequent occupation by the United States. The post-war constitution of 1947 is an anti-militarist document which includes the renunciation of the right to wage war and prohibits the maintenance of armed forces (Article 9) although later a limited re-armament was permitted ("self-defence forces").

Japan is a constitutional monarchy (like Britain) where the power of the Emperor is very limited. As a ceremonial figurehead, he is defined by the constitution as "the symbol of the state and of the unity of the people". This is a dramatic contrast to the situation prior to Japan's wartime defeat by the Americans when the Emperor was regarded as divine.

The Prime Minister is chosen for a term of four years, although the political turbulence of the Japanese system is such that he rarely serves a full term. He must win a majority in the Diet in a single signed ballot. If the two houses cannot reach agreement, the decision of the House of Representatives always prevails. The official residence of the Prime Minister is called the Kantei (a new building was opened in 2002).

Traditionally the Japanese political system has been dominated by one party in a manner unknown in the democracies of Europe and North America. That party is the conservative Liberal Democratic Party (LDP). Since

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