The Japanese Economy During The Second World War

The Japanese economy has gone through many changes over the past six decades. After the Second Sino-Japanese War ended, the Japanese nation was defeated by America and the nation was occupied by American military forces. During this period many changes occurred in the Japanese economy. The economy was opened up to foreign investors, and Foreign Direct Investment (FDI) was now being allowed in the country with minimal government interference. “The Japanese currency was revalued making merchandise from Japan less practical, as it got too expensive for other countries.”1 The Japanese economy flourished and recorded significant economic growth during the 1980s and the stock market was booming. An economic bubble was formed however, and by the late

“This achievement has been regarded as a ‘miracle.’’3 However, a look at the high growth rate of the Japanese economy during the post-war period can highlight the fact that Japanese pre-war economic performance was also remarkable in its own right. Although Japan experienced severe destruction and poverty during the Second World War, their situation should not be compared with that of the Third World at that time. “Japan at the end of the 1930s was a player of the league of industrial nations with more than 50 years of successful modernization and industrialization experience.”4 Japanese growth statistics have shown that “the growth rate over each decade during the 1874-1967 periods were 48.3 per cent.”5 This indicated that Japan’s growth rate was the highest among the developed countries at that time. This is not only based on the effects of high growth during the1950-1973 period but, the preceding periods’ contributions were also of significance. “The heritage of the Tokugawa period and especially the long modernization period after the Meiji Restoration in terms of institutional structure, education level, skilled labor and accumulation of technology and capital should be highlighted to understand this

“Fewer non tariff measures would better enable Japanese firms to access the efficiency gains and opportunities for innovation by further developing global supply chains.”16 Immigration also has a major role to play in limiting the impact of the shrinking Japanese labour force on long term growth and the sustainability of public finances. Moreover, further internationalization of graduate education will help Japan to boost performance and develop globally-competitive talents. Japan’s agricultural sector has strong growth potential and the capacity to produce new and high value products. Therefore, the reform process should create a framework that enables famers to compete domestically, to improve productivity and efficiency, and to exploit new markets abroad. A major step would be the reduction in trade barriers that limit competitiveness, reduce opportunities for farmers, and prevent the economy as a whole from benefitting from increased trade and greater participation in regional trade agreements. Japan needs to focus on establishing better trade relations, especially with its Asian neighbours since emerging markets will continue to rise and Japan needs to make sure that they have a share in those markets. "Japan can benefit from high Asian growth rate even with low domestic demand."17 Closer relationships with Asian economies, particularly in terms of agricultural trade and free-trade agreements are important. If