Japan is the first of the “Asian tigers” and an excellent example of quality industrial policy, which prevented the country from falling into an irreversible recession in the crisis years. The story of the economic miracle began 70 years ago. Japan, whose path China is trying to follow today, is a pioneer of the Asian growth model. The high labor culture of Japan played an important role (Vogel, 2018). This included the tradition of rice farming, which is impossible without collective labor, and the hierarchical nature of society, in which everyone knows his place. The zaibatsu industrial conglomerates inherited from the Meiji Revolution – Mitsubishi, Mitsui, Sumitomo, and Yasuda – survived the postwar years in a radically transformed form. At the end of 1989, Japanese exporters sensed a weakening demand in Europe and the United States (Schaede, 2012). This was the trigger for the collapse, and in 1990, Japanese assets underwent a brutal sell-off.
A severe recession in the 1990s was avoided only through government intervention. Against the backdrop of falling private demand and investment, it sharply increased its spending, switching to a deficit budget strategy (Noble, 2010). The crisis was cushioned at a heavy price. The government did not allow everything to collapse in a year, artificially stretching the recession over time. An irreversible recession could not have been avoided if it had not been for the leadership’s timely and well-coordinated actions. Thus, we can conclude that the leaders of Japan are an example of good governance in a crisis. This is evidenced by their actions aimed at resolving the economic crisis. Thanks to good leadership, now, after two lost decades, this country can once again open to the world, and the years of stagnation can finally come to an end.
References
Noble, G. W. (2010). The decline of particularism in Japanese politics. Journal of East Asian studies, 10(1), 239–273.
Schaede, U. (2012). From developmental state to the “New Japan”: The strategic inflection point in Japanese business. Asia pacific business review, 18(2), 167–185.
Vogel, S. (2018). Marketcraft Japanese style. Oxford scholarship online.