Japan Economy.docx - Running head ECONOMIC AND POLITICAL...

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Running head: ECONOMIC AND POLITICAL DEVELOPMENT OF JAPAN 1 Economic and political development of Japan Name Institution Date
Economic and political development of Japan 2 Japan stands out to be the third largest economy in the world. This is highly attributed to the exposure to external markets since Japan has a very high dependence on exports . Japan’s economy has in recent years experienced both up and downs with periods of a recession occurring alongside a slowdown of the country’s impact in the global economy. The furthering of the recessionary trend is also attributed to natural disasters which frequently have hit the nation. Four decades after the World War II, Japan has effected a remarkable as well as a successful industrial transformation and trade that has seen the country’s economy recover from the devastating post-war effects ( Armstrong & Drysdale, 2014) . Also, Japan was able to catch up with the per capita levels of income and also the standards of living of the advanced industrial countries. Within the four decades after WWII, Japan’s trade policy aimed at strategizing on how to penetrate the global markets. This paper looks at the economic and political processes that have impacted Japan on her development path. Japan knew that by gaining access to global markets, this would serve as a prerequisite to obtain capital goods at a low cost, acquire new technologies, raw materials for the industries as well as international food supply. All these positively impacted the industrial success of Japan and saw the prosperity of the highly populated and resource-deficient nation. Diplomatic efforts of Japan focused on selling the “Most-Favored-Nation” strategy that gave the country the hopes of accessing the international markets and ensuring that Japan was a member of both the Organization for Economic Co-operation and Development and the IMF. During the period, lowering of tariffs on imports was a bit slower, but negotiation and bilateral pressures marked the period after the war as a period of significant progress in the liberalization of Japan’s markets for the tradable products. However, there was a pushback against trade liberalization systems
Economic and political development of Japan 3 which came in the form of restrictions on any form of trade bilaterally negotiated behind the system. During the participation of Japan in the multilateral liberalization and despite the formal adherence to the all-around liberalization of trade, Japan’s trade policy retained strong currents of mercantilism. By doing this, the country’s focus was on export promotion and also expanding the markets for exports rather than focusing on liberalization of the import markets. This saw an undervaluation of the Japanese currency, rapid growth of exports compared to the imports as well as a steady piling up of the trade balances and the account surpluses which resulted from other factors responsible for Japan’s net savings growth. As the Japanese economy

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