Saturday, August 8, 2009

Good bye, the old good days of Japanese economy

Dr. Nobuo Ikeda is a professor teaching economics at Jobu University in Tokyo. He is better known as one of Japan's most popular bloggers. He is a great commentator as well as a belligerent agitator who vehemently criticizes contemporary Japanese people's complacence.

He was recently interviewed by a famous British business magazine, The Economist. He found the questions of the interviewer quite reasonable but sometimes hard to answer. To make his points clear, he posted an entry titled "Why Japan Is So Slow" on his blog site.

He points out the fact that although a long-term relationship between a supplier and a maker used to be efficient and help boost Japanese economy, its effectiveness is disappearing very quickly now due to change of the economic climate.

Now the game is over: when the future is not so bright, the payoff of "defection" would be greater than that of "cooperation". So the long-term relation became inefficient and fragile. It also changed politics: the Liberal Democratic Party has redistributed the rent of growth, but the source of the rent dried up. So voters want change, but they don't know what to change. And the DPJ doesn't know either. So we can't expect too much from them. Real change would occur when the LDP is divided after it lose the election, and the "third party" emerges.

I could not agree with him more. Japan's future is bleak. Japan will see hope only after going through several political turbulences. It's still a long way to go.