Bush to Encounter a Much Less Formidable Japan
Reviewed By Hitoshi URABE
"Bush to Encounter a Much Less Formidable Japan"
The New York Times, Feb 17, 2002
These days Japan is often compared to Argentina as a serious risk in the world economy. Even worse, Japan may be considered a political risk in Asia, where China has been gaining its economic and political strengths vis-a-vis Japan, possibly, upsetting the balance of power in the region. On the occasion of President Bush's visit to Japan beginning Monday, February 18, one can expect more of this kind of reporting on foreign media. In fact, there are already such articles and commentaries appearing in major Western newspapers and magazines, as exemplified by Forbes' alarmist article, "The Panic Spreads" (Forbes International, Feb. 18; http://www.forbes.com/global/2002/0218/022.html)
In this New York Times article, however, we can find a well-balanced opinion on the current status of the Japanese economy, as it is clearly stated that "unlike Argentina, which depended on foreign capital to balance its books, Japan is expected to work out stopgap solutions within the family. It has the world's largest reserves of foreign exchange, $401 billion. Japan's public debt is the largest in the industrial world, but 95 percent of government bonds are held by Japanese. A loss of confidence by the outside world would have limited effect here."
Of course, this does not mean that we can be optimistic about the Japanese economy. Without more drastic policy measures than the ones currently proposed by the government to deal with deflation and structural reform, Japan could not be revived in the foreseeable future. Hopefully, President Bush's visit will work as a pressure ("Gaiatsu") on the Japanese government in this direction, so that we may agree with Orix Chairman Miyauchi in saying that "many years from now, we will look back and see 2002 as the bottom," as quoted in the concluding part of this New York Times article.