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Japan Economy

    Economy—overview: Government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) have helped Japan advance with extraordinary rapidity to the rank of second most powerful economy in the world. One notable characteristic of the economy is the working together of manufacturers, suppliers, and distributors in closely knit groups called keiretsu. A second basic feature has been the guarantee of lifetime employment for a substantial portion of the urban labor force; this guarantee is eroding. Industry, the most important sector of the economy, is heavily dependent on imported raw materials and fuels. The much smaller agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan must import about 50% of its requirements of other grain and fodder crops. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades overall real economic growth had been spectacular: a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in 1992-95 largely because of the aftereffects of overinvestment during the late 1980s and contractionary domestic policies intended to wring speculative excesses from the stock and real estate markets. Growth picked up to 3.9% in 1996, largely a reflection of stimulative fiscal and monetary policies as well as low rates of inflation. But in 1997-98 Japan experienced a wrenching recession, centered about financial difficulties in the banking system and real estate markets and exacerbated by rigidities in corporate structures and labor markets. In early 1999 output has started to stabilize as emergency government spending begins to take hold. The crowding of habitable land area and the aging of the population are two major long-run problems.

    GDP: purchasing power parity—$2.903 trillion (1998 est.)

    GDP—real growth rate: -2.6% (1998 est.)

    GDP—per capita: purchasing power parity—$23,100 (1998 est.)

    GDP—composition by sector:
    agriculture: 2%
    industry: 38%
    services: 60% (1997)

    Population below poverty line: NA%

    Household income or consumption by percentage share:
    lowest 10%: NA%
    highest 10%: NA%

    Inflation rate (consumer prices): 0.9% (1998 est.)

    Labor force: 67.72 million (November 1998)

    Labor force—by occupation: trade and services 50%, manufacturing, mining, and construction 33%, utilities and communication 7%, agriculture, forestry, and fishing 6%, government 3% (1994)

    Unemployment rate: 4.4% (November 1998)

    Budget:
    revenues: $407 billion
    expenditures: $711 billion, including capital expenditures (public works only) of about $86 billion (FY99/00 est.)

    Industries: among world's largest and technologically advanced producers of steel and nonferrous metallurgy, heavy electrical equipment, construction and mining equipment, motor vehicles and parts, electronic and telecommunication equipment, machine tools, automated production systems, locomotives and railroad rolling stock, ships, chemicals; textiles, processed foods

    Industrial production growth rate: -6.9% (1998)

    Electricity—production: 948.559 billion kWh (1996)

    Electricity—production by source:
    fossil fuel: 61.47%
    hydro: 8.34%
    nuclear: 29.83%
    other: 0.36% (1996)

    Electricity—consumption: 948.559 billion kWh (1996)

    Electricity—exports: 0 kWh (1996)

    Electricity—imports: 0 kWh (1996)

    Agriculture—products: rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish

    Exports: $440 billion (f.o.b., 1998)

    Exports—commodities: manufactures 96% (including machinery 50%, motor vehicles 19%, consumer electronics 3%)

    Exports—partners: US 30%, EU 18%, Southeast Asia 12%, China 5%

    Imports: $319 billion (c.i.f., 1998)

    Imports—commodities: manufactures 54%, foodstuffs and raw materials 28%, fossil fuels 16%

    Imports—partners: US 24%, Southeast Asia 14%, EU 14%, China 13%

    Debt—external: $NA

    Economic aid—donor: ODA, $9.1 billion (1999)

    Currency: yen (�)

    Exchange rates: yen (�) per US$1—113.18 (January 1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995), 102.21 (1994)

    Fiscal year: 1 April—31 March

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)