Land of the Setting Sun: Can Japan Reverse Its Long Decline?
Back in the 1980s, Japan was an economic powerhouse and the envy of the world. But there appears to be no end in sight to its current decline, as jobs are lost, pensions cut and companies move overseas. The country's much-vaunted social cohesion is also disintegrating as people find themselves forced to rely on their own resources.
Japanese businessmen and women pray for a good business year at the Kanda shrine in Tokyo (January 2009 photo): Japan has been in an extended crisis for almost two decades.
The man who was listed in the records of the city of Tokyo as its oldest citizen had been lying dead in his bed for years. The body of the man, whose name was Sogen Kato and who was supposedly 111 years old, had become mummified. His 81-year-old daughter and his granddaughter told authorities that he had gone into his bedroom after a family argument and had never reemerged. That was decades ago. Since then, the Katos had been collecting the old man's pension and a government premium for centenarians.
In another Tokyo district, authorities found the skeleton of a woman, who was thought to be 104, in her son's backpack. The son, who was 64, said that when his mother died in 2001, he had washed her body, cut it into pieces and stuffed the remains into the backpack. He explained that he couldn't afford a funeral.
The macabre discoveries in Tokyo weren't the only bodies of elderly people the Japanese authorities had incorrectly listed as living citizens. After conducting a hasty, nationwide review, the government discovered that more than 234,000 people who were reportedly over 100 years old were in fact missing and presumably long dead.
Loss of Traditional Virtues
What shocked the nation most about the findings was not the fact that records were being kept so poorly, but the realization that so few of Japan's traditional virtues are still in evidence today, and that the country's once-vaunted harmonious society, with its supposed intergenerational solidarity, had fallen into such decline. Japan, formerly Asia's largest economy, has been in the throes of an extended crisis for almost two decades. Growing impoverishment is only one of the symptoms.
The country has become accustomed to a steady flow of bad news. In August, China replaced Japan as the world's second-largest industrialized nation. Tokyo's Nikkei stock index is only at about one-quarter of its all-time high at the peak of the boom in 1989, and this year the index fell by about 15 percent. Japanese real estate, too, is only worth about a quarter of its value in 1974.
Japanese politicians were determined that their high-tech country should at least serve as a role model for addressing the problems of an aging society, for example through using robots to care for the elderly. But even that effort was a failure. "If things go on this way, Nippon will go under," warns Shintaro Ishihara, Tokyo's 78-year-old governor, using the Japanese name for his country.
The Japanese were once obsessed with their goal of overtaking the West. Now they have succeeded -- but not at all in the way they had imagined. Today, industrialized countries like Germany can look to the example of the Japanese economy, with its collapse in 1991 and subsequent decline, as a harbinger of the doom they could also face.
End of the Boom
Japan's decline began in the mid-1980s. The economy was overheated. In response to pressure from the United States, Tokyo was forced to substantially revalue the yen, making its exports more expensive. To offset the losses, the Japanese government pumped massive amounts of money into the economy, and the central bank drastically lowered its prime lending rate.
With the cheap money, the Japanese began speculating in stocks and real estate. The property where the emperor's palace stood in downtown Tokyo was supposedly worth as much at the time as the whole of California. And because terrestrial profits were no longer enough for them, Japanese developers seriously began planning cities in the ocean and on the Moon.
But then the Bank of Japan began feeling queasy about the boom and raised interest rates. This led to a massive crash on the Tokyo stock market, followed by a sharp decline in the real estate market. After that, Japan kept launching new economic stimulus programs to save what was left to save. In the process, it accumulated more debt in relation to economic output than any other leading industrialized nation.
The stimulus programs didn't do much good. Admittedly Japan is by no means Greece, which profited at the expense of its European neighbors. Instead, the Japanese government borrowed from its own thrifty citizens. The Japanese are now doing their best to save face. It is a dignified decline, but in the process Japan is in danger of using up its own reserves.
'All People Think about Now Is Money'
Akira Nemoto, 59, has been running the department charged with caring for the elderly in Tokyo's Adachi district -- where the mummified remains of Sogen Kato were found -- for the past 10 years. His staff is currently combing the district on bicycles for other forgotten old people. Nemoto points to a thicket of wooden houses and apartment buildings. "Nobody here knows their neighbors any more," he says. In this neighborhood, residents' only contact with the tentative recovery that Japan's export industry is experiencing this year, thanks to demand from booming China, comes through the evening news.
At first, the small suppliers in Adachi went under, or they migrated to China together with larger companies. Then the stores closed, and finally the last places in the neighborhood where local residents could meet disappeared.
The Japanese are withdrawing more and more into the private sphere, from the elderly to their unemployed children, who are living on the pensions and savings of their parents. Many of the elderly are being downright exploited by their children, says Nemoto. "All people think about now is money."
For many families, Japan's thrifty older generation represents the last financial hope, and has replaced the state in many cases. The other nucleus of Japanese society, the company, pays very little attention to its employees these days.
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