Special Roles of Government and Institutions in the Experience of North Asian Countries - Case Study Example

Running Header: Special Roles of Government and institutions in the Experience of North Asian Countries (Japan). Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Special Roles of Government and institutions in the Experience of North Asian Countries Introduction Today, many countries recognize the milestone that Japan has gone through from its experience in the World War through the years to become the second economic power house after the United States of America. Japan has gone beyond its historical challenges to being an economic icon today. This certainly has taken the government and other institutions which have played special role in every experience that Japan has gone through. Japan has a long history, history tells us that the renaissance Europeans found it admiring when they arrived in the country in the 16th century, for it was then considered to be rich in a number of natural resources particularly precious metals. At the time Japan mainly exported copper and silver, and the high level of metalsmithing and craftsmanship also amazed many people. Japan also was involved in the wars later with America and this led to devastating impacts to its economy, after the nuclear bomb were detonated in Hiroshima and Nagasaki. However, over time the government with additional support of other institutions in the country has played a crucial role in shaping the state of the country, through their involvement in many areas of experience in the country such as the economic and social aspects. Japan, is said to be the second biggest economy after the United States. This achievement has been reached at after the combined effort of the government, the institutions in it, and the culture of the Japanese people. Japan’s Economic Experiences from the 1980 In the 1980s, Japan’s economic situation was picking after the depression and the effects of the wars which had previously affected the country. The major challenging factor that the Japanese Government and the institutions in the country put their focus on was to see to it that the economy of Japan is rebuilt. In the 1980’s the economy was picking, and the government took stern economic measures to streamline the economy and this caused the Gross National Product (GNP) to shoot up from US $9, 068 which made the country to be ranked first among the major industrial nations in the 1990. This was additional to the statistics of the 1970s where Japan was ranked second after the United States with regard to its gross national product (GNP). The Government and other institutions in the economic sectors worked hard to boost the economy, and this led to a period of economic expansion in the 1986, after the nation went through the mild economic slump that took place at around the mid-1980s. There was an increase in the number of institutions in the agricultural and industrial sectors that took an active role in the economy then, and this led to a further increase in Japan’s economic growth, which was estimated to be at 5% from 1987 through 1989. This economic growth was special for it was characterized by the revival of key industries such as the steel and construction which were dormant in the early to mid eighties. The revival of these two sectors of industry meant a lot for Japan as a country, and to its people, for it led to a big change in employment, where more people got to be employed in salaried jobs (Carl 2001, pp. 44-55). The economic experience of 1992 was however not appealing, for it was characterized by the GNP of Japan slowing to 1.7%. This led to industries such as automobiles as well as electronics, which previously were characterized by phenomenal growth in the 1980s to fall, at this time when the country entered a recessionary period. At the time, Japanese domestic market for automobiles shrank, and this was accompanied by the declining of Japan's share of the United States' market. Things went from bad to worse as the foreign and domestic demand for electronics made in Japan also went down. Japan was viewed to be losing its strategic leadership position in the semiconductor market to Korea, United States and Taiwan. Role of Government & Institutions in Japan’s Economic Rebuilding Experiences The experiences that Japan went through called for more intervention to be taken by the Government and other institutions to rebuild the economy from the mid-1990s. The Government and other institutions had to learn from history to mend the loopholes that would act as a barrier to economic growth in the country. This included making efforts to empowering the industrial capacity of the country. The efforts were focused on the areas of electric power production, coal, iron, steel mining and processing, chemical fertilizers and manufacturing of automobiles. Many institutions in the Japan alongside the Government also devoted themselves to addressing the issue of education in the country. This is because the Government of Japan realized the importance that education and literacy levels played in shaping the economic, social and political spheres of the Japanese people and economy. In fact it is said that the Japanese education system that was introduced by the Government from the post war period was highly acclaimed in the region and internationally. The Government and other institutions in the 1990s took time to improve a number of issues in its education system that would promote the country to grow. These efforts culminated in making Japan to be ranked among the top countries globally with regard to high literacy rate alongside its high education standards (Takafusa 1995, pp.46-54). Many researchers and authors agree that this formed the basis for the current Japan’s successes with regard to its achievement as a technologically advanced economy in the world. The Government put more emphasis on its strict schooling program characterized by high discipline standards. Essentially, the Japanese school encouraged discipline. This directly contributed to the Japan’s economic growth and development through the good workforce that came as a benefit from the discipline in its schooling program (Charles 1991, pp. 307-330). It is also important to note that various institutions with the front line support of the Japanese Government crucial gave the economic growth priority. This was characterized by the ushering in of the new and innovative industrial development strategies which was geared towards opening the economy to the international economy. This began with the heavy machine and chemical manufactures, which were open for export to other countries so that they can compete with other countries which had excelled in these areas such as the United States. The other products that were also released to the international market were the light and textile manufactures, which were sold out and maintained their profitability in the different countries they were exported to (Robert 1996, pp.31-42). This gave the economy the strength to venture into other key areas that turned around the economic and social state of the Japanese people. These other core areas that Japan’s Government gave priority and which shaped the economy of Japan until today is in the area of manufacture of automobiles, machine tools, and ships. The economic growth rate of the country shot up, even as these efforts were coupled with the Government of Japan prerogative in streamlining operations in information, retail trade, real estate, finance, and other service industries in the country. It is evident that the Government as well as other institutions within the country has played crucial roles in the building of Japan into an economic hub in the region and across the world (Japan Statistical Association 1997, pp. 34-47). Maybe of importance to note is that the Government of Japan and other institutions besides the roles mentioned that they played to the economy of Japan. They also played a big role in promotion of investment led growth where they promoted the domestic infrastructure which became the driving force for growth with regard to increasing the output from the economy. The Government came up with policy frameworks that promoted Japan to be investment led as opposed to export-led. This was characterized by an increase in domestic savings, and giving the private sector exclusive rights to deal with investment in manufacturing capacity. Other institutions played a role in ensuring that the total factor productivity growth was sustained and improved through promotion of rapid growth in output per input (Maddison 2000, pp. 49-56). Institutions also did a lot in building up the social capacity in the country with regard to adapting foreign technology. Social capacity was further promoted through investing in children’s education at the household level. It was also promoted through the creation of internal labor markets in firms. These markets bounds firms to worker and vice-versa, which acts as a motivation, and thus increases the flexibility of the workers to adapt to new technology. This creates improved social capability. The Government of Japan also took an active role in this through the establishment of the industrial policy that was geared towards reducing the cost of private firms with regard to securing foreign technology (Ryoshin 1994, pp.38-44). Conclusion All in all, Japan is an icon today looking back at its war history, challenge of earth quakes and comparing this facts to its current economic development. A lot is to be learnt about the role that the Government and other institutions played for its success. This is with regards to its economic and social experiences that the country has gone through. The Government and other institution have done a lot in improving the social capability of the country, alongside their effort in the promoting economic growth and development. References Charles Y. 1991, "Future Trends in Japan's Savings Rate and the Implications Thereof for Japan's External Imbalance." Japan and the World Economy, Vol. 3, no. 3, pp. 307-330. Carl. M 2001, Japanese Industrial History: Technology, Urbanization, and Economic Growth, M.E. Sharpe, New York. Japan Statistical Association. 1997, Historical Statistics of Japan, Japan Statistical Association, Tokyo. Maddison, A 2000, Monitoring the World Economy, Organization for Economic Co-operation and Development, Paris. Ryoshin. M 1994, Economic Development of Japan: A Quantitative Study, Macmillan Press, Hampshire. Robert, U 1996, Troubled Industries: Confronting Economic Challenge in Japan, Cornell University Press, Ithaca. Takafusa, N 1995, The Postwar Japanese Economy: Its Development and Structure, University of Tokyo Press, Tokyo. Read More