The Economic Performance of Japan - Assignment Example

Economic development Economic development For a country to become rich a number of factors must be considered. Natural resources, human, capital and technology and appropriate institution are the fundamental essentials for economic development in any economy. Economic growth presides economic development; economic growth is the increase in GDP of the economy that is calculated over a period. For economic development to occur the individual economy must be able to have institutions that that promote and sustain modern economic growth through economic development is defined as the sustained, concerted actions of policy makers and communities that promote the living standard and economic health. The qualitative and quantitative changes in the economy are also aspects of the economy. There are deferent aspects defining the difference between economic development and economic growth. Economic is termed as development of policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. According to the International Monetary Fund Japan is ranked the third largest economy in the world; this is through the nominal GDP. The country is also ranked as the fourth country in terms of is purchasing power. The level of development of the country is ranked the second globally (Banno, 2004). The Japanese use a Currency called the Japanese yen symbolized as (JPY) the Fiscal year of the state begins on the 1st of April and ends on the 31st of March. Japan has joined a number of trade organisations in the region; they include: APEC, WTO, OECD, G-20, G8 and others By the end of the year 2014 the country is expecting to have a GDP of ¥536,122,300,000,000 (2014) with that of the previous year being $4.90 trillion (2013). Japan was hence rank third on the basis of its GDP 2013(Ito, Motoshige 2014). GDP by sector agriculture: 1.2%, Industry: 27.5%, Services: 71.4% (2012), Inflation (CPI) 3.2% (May 2014), Population below the poverty line 16% (2010), Labour force 65.93 million (2011). Labour force by occupation; agriculture: 3.9%, Industry: 26.2%, Services: 69.8% (2011.) Unemployment4.6% (2011) (Ito, Motoshige 2014) Primary industries The major industries in the country include Motor vehicles industry, electronic equipment production, machine tools industry, ships manufacture, chemical production and foods processing. In terms of doing business, the country is ranked 24th worldwide. A lot of studies have been done on the historical economic development of Japan, studies have identified three different development periods (Arisawa 1967). First was the foundation of Edo this occurred in the period before 1603. The second was the Meiji Restoration occurring in the period before 1868, this stage of the development lead japan to be the 1st non-European power. The third development time was after the defeat of World War II (in 1945) when Japan nation rose to become the worlds second-largest economy. In this paper, we will concentrate on the postwar period of economic development (1945-present) the economic development of japan in the last decade has been based on a number of industrial sectors, these industries may include: Agriculture Automobile Mining and petroleum exploration Labour force Law and government Agriculture The agricultural sector in Japan accounts for about 1.4% of the total countrys Gross Domestic Product. Most of the Japanese land is not suitable for farming thus proving the little contribution of agriculture to the GDP. Arable land accounts for only 12% of Japans total land (Arisawa, 1994). This has made japan become the worlds highest economy of crop yield per unit area. The government of Japan seeks to protect the agricultural sector, by establishing subsidized and protective, government policies that are in favor small-scale cultivation rather than large-scale agriculture that is practiced in the North America. For example, Rice being one of the largest cereal products of the country is most protected as its importation is subject to tariffs of 777.7%. Automobile Infrastructure is very essential for economic development; Japan is ranked the third biggest producer of cars globally. Toyota a company in japan is currently the world largest car maker, other Japanese car makers companies such as the Nissan, Honda, Suzuki, and Mazda which also are some of the major car producers in the world. The automobile production in the country accounts for an enormous share of the country’s exports that, therefore, leads to the increased GDP and in turn the betterment of the living standards of the citizens. Mining and petroleum exploration Japan is considered a country with very insignificant mineral production, and Japan has up to date discovered very little mineral deposits. Nevertheless, considerable deposits of rare earths have been found off the coast of Japan. In the 2011 fiscal year, the domestic yield of crude oil was 820 thousand kiloliters, which was 0.4% of Japans total crude processing volume (Fujimoto 2005). Labor Force Manpower is very essential for the development of every economy; an economy can only attain economic development if the country can reduce its dependency ratio. The rate of unemployment as at December 2013 was 3.7%, down 1.5% points from the rate of unemployment as at 5.2% in June 2009 this was as a result of economic recovery from the 2008/2009 economic recession. A significant long-term anxiety for the Japanese labor force is a truncated birthrate. In the 1st half of 2005, the Japanese experienced a declining population growth with the number of births being lower than the number of deaths this was initially expected to begin in the year 2007. Law and government Japan is ranked 27th of 185 countries in the world on its ability to Ease Doing Business Index 2013. The country has one of the least tax rates in the developed economy. After tax deductions are made standard workers personal income are not taxable. The consumption tax rate in the country has been maintained at a lower level of 8% while corporate tax rates are relatively high, at 36.8 %( Ito, 1988). On the other hand, the House of Representatives is set to pass a bill that will see an increase of consumption tax to 10% from October 2015. The government consequently set to reduce corporate tax and lender automobile tax-free. This tax model of the country has enabled the growth of the industry sector significantly. This is a significant boost to the growth of the economy. With reduced consumption tax it’s easier to access labor force for the industry thus economic development. References List Abe, T,., & Nishikawa (1990). Japanese Economic History vol. 4: The Age of Industrialization 1. Iwanami Shoten Arisawa, H., (2012). One Hundred-Year History of Japanese Industries 1 and 2, Nikkei Shinsho, Nihon Keizai Shimbumsha. Arisawa, H. (990. A Commentary on the Postwar Economy: A Testimony to the History of Showa. Tokyo University Press. Arisawa, H., (1994). History of Japanese Industries vol.1. Nikkei Bunko. Arisawa, H., (1994). Economic History of the Showa Period 1, Nikkei Bunko. Banno, J., (2004). Decisive Moments in the History of Showa, Chikuma Shinsho. Dore, Ronald P., (1994). Education in Tokugawa Japan, Center for Japanese Studies, Michigan: University of Michigan. Fujimoto, Takahiro, (2004). Japanese Philosophy of Manufacturing. Nihon Keizai Shimbunsha, Fujimoto, T., & Akira T., (2001). 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