The Japanese Economy is Strangling Itself
Akio Kawato / Former Ambassador in Uzbekistan and Tajikistan , Newsweek Japan Columnist
January 11, 2022
Lately, one of my friends complained to me, saying "Japan has become poor." When asked to explain, he said that hotel charges in the United States and Europe are about three times those in Japan. It is true that in recent years, the Japanese GDP has steadily lagged behind that of the United States and China and is now likely to be overtaken by Germany.
However, that statement doesn't really feel correct. When I went to the United States two years ago, I was shocked by the poor looks of the passengers in subway. Even though the standard of living of the upper middle class in the United States is comparable to that of the upper class of Japan, the overall status of those below the middle class in the United States can hardly be referred to as "doing well". Even though Japanese houses used to be disparaged as "rabbit huts" and even now are smaller in size than those in Western countries, the interior amenities have definitely surpassed the average of those countries.
Taking the opposite view of my acquaintance, the fact that you can stay in a hotel that is more comfortable than the average hotel in Western countries for one-third the price means that the Japanese are rich, doesn't it?
So actually, rather than the Japanese standard of living declining with respect to Western countries (certainly, the cityscape is still inferior), for the past several years, the two regions have been experiencing an economic disparity caused by continued inflation in the West and deflation in Japan and exacerbated by the recent over depreciation of the yen.
In the 10 years since the subprime mortgage crisis of 2008, the cumulative total of inflation in the United States is 27.8%, and in France, 12.2%. In comparison, Japan's cumulative total is about 5%. In the same period, the yen's rate against the dollar fell by about 34%. The United States greatly eased its monetary policy and the result is inflation. In Japan, the Abe Administration enacted "unprecedented monetary easing" but was ineffective in countering deflation.
Why? The basic reason is that many Japanese are wary of "making money with money", i.e., speculative investments. In the United States, the majority of people manage their retirement savings with investment trust funds. These trust companies leverage the money 20 or 30 times in "investments" and yield a profit for themselves in the process. Because of this, the finance and insurance industry accounts for 6.8% of the United States' GDP. This is 4.1% in Japan, which may not seem to be a large difference but amounts to almost 120 trillion yen. In other words, the United States has a bubble economy, but as long as the bubble does not burst, the wealth is real.
Some people in Japan want to maintain the status quo and say that growth is not currently necessary. However, if the economy fails to grow and revenues do not increase, the quality of social security and medical care will decline and the armaments of the Self-Defense Forces will eventually be surpassed even by South Korea.
The trauma after the burst of the economic bubble still remains deep in our psychology and consumers continue to tighten their purse strings. Companies limit pay raises and refrain from investing. Thus, the economy does not grow, and consumers and businesses become increasingly frugal - this is how we are strangling ourselves in a vicious cycle of restraint and deflation. This will indeed make us poor.
There is an economic indicator known as the "Big Mac Index". This index uses the cost of the ubiquitous Big Mac in the local currency to calculate the actual purchasing power rate. According to this index, one dollar is equivalent to about 70 yen instead of the current 115 yen. If Japan's GDP were converted into dollars using this index, 115 ÷ 70 = 1.64, the result would be 64% larger than the current figure.
Overambitious measures are not necessary. However, we do need to renovate the aging infrastructure regularly every year, prepare for ever-increasing catastrophic disasters, and increase investment in renewable energy. Furthermore, even if pay raises are not possible, if the companies decide to distribute a portion of increased revenues as bonuses, I think that the vicious cycle of deflation may be broken.
A fixated belief in a shrinking economy will definitely result in a shrinking economy. In comparison with most of the countries in the world, Japan has abundant historical and social factors that can contribute to growth, so let's press forward with less worry.
Akio Kawato is Former Ambassador to Uzbekistan and Tajikistan, Columnist Newsweek Japan.
However, that statement doesn't really feel correct. When I went to the United States two years ago, I was shocked by the poor looks of the passengers in subway. Even though the standard of living of the upper middle class in the United States is comparable to that of the upper class of Japan, the overall status of those below the middle class in the United States can hardly be referred to as "doing well". Even though Japanese houses used to be disparaged as "rabbit huts" and even now are smaller in size than those in Western countries, the interior amenities have definitely surpassed the average of those countries.
Taking the opposite view of my acquaintance, the fact that you can stay in a hotel that is more comfortable than the average hotel in Western countries for one-third the price means that the Japanese are rich, doesn't it?
So actually, rather than the Japanese standard of living declining with respect to Western countries (certainly, the cityscape is still inferior), for the past several years, the two regions have been experiencing an economic disparity caused by continued inflation in the West and deflation in Japan and exacerbated by the recent over depreciation of the yen.
In the 10 years since the subprime mortgage crisis of 2008, the cumulative total of inflation in the United States is 27.8%, and in France, 12.2%. In comparison, Japan's cumulative total is about 5%. In the same period, the yen's rate against the dollar fell by about 34%. The United States greatly eased its monetary policy and the result is inflation. In Japan, the Abe Administration enacted "unprecedented monetary easing" but was ineffective in countering deflation.
Why? The basic reason is that many Japanese are wary of "making money with money", i.e., speculative investments. In the United States, the majority of people manage their retirement savings with investment trust funds. These trust companies leverage the money 20 or 30 times in "investments" and yield a profit for themselves in the process. Because of this, the finance and insurance industry accounts for 6.8% of the United States' GDP. This is 4.1% in Japan, which may not seem to be a large difference but amounts to almost 120 trillion yen. In other words, the United States has a bubble economy, but as long as the bubble does not burst, the wealth is real.
Some people in Japan want to maintain the status quo and say that growth is not currently necessary. However, if the economy fails to grow and revenues do not increase, the quality of social security and medical care will decline and the armaments of the Self-Defense Forces will eventually be surpassed even by South Korea.
The trauma after the burst of the economic bubble still remains deep in our psychology and consumers continue to tighten their purse strings. Companies limit pay raises and refrain from investing. Thus, the economy does not grow, and consumers and businesses become increasingly frugal - this is how we are strangling ourselves in a vicious cycle of restraint and deflation. This will indeed make us poor.
There is an economic indicator known as the "Big Mac Index". This index uses the cost of the ubiquitous Big Mac in the local currency to calculate the actual purchasing power rate. According to this index, one dollar is equivalent to about 70 yen instead of the current 115 yen. If Japan's GDP were converted into dollars using this index, 115 ÷ 70 = 1.64, the result would be 64% larger than the current figure.
Overambitious measures are not necessary. However, we do need to renovate the aging infrastructure regularly every year, prepare for ever-increasing catastrophic disasters, and increase investment in renewable energy. Furthermore, even if pay raises are not possible, if the companies decide to distribute a portion of increased revenues as bonuses, I think that the vicious cycle of deflation may be broken.
A fixated belief in a shrinking economy will definitely result in a shrinking economy. In comparison with most of the countries in the world, Japan has abundant historical and social factors that can contribute to growth, so let's press forward with less worry.
Akio Kawato is Former Ambassador to Uzbekistan and Tajikistan, Columnist Newsweek Japan.
The English-Speaking Union of Japan
自縄自縛で萎む日本経済
河東 哲夫 / 元駐ウズベキスタン・大使、日本版Newsweekコラムニスト
2022年 1月 11日
この頃よく知人に、「日本は貧しくなりました」というグチを聞く。どうしてと聞くと、アメリカやヨーロッパのホテル代が日本の3倍くらいするからだと言う。確かに近年、日本はGDPでアメリカや中国にどんどん差をつけられ、今やドイツに追い抜かされそう。
だが、それはどうも実感に合わない。二年前米国に行って地下鉄の荒れ方に仰天した。中流の上以上の人の暮らしは日本の上流なみでも、一般の中流以下の暮らしは豊かとはとても言えない。日本では、以前は「ウサギ小屋」とさげすまれていた住宅も、欧米に比べて小ぶりでも、インテリアは欧米の平均を確実に上回るようになった。あえて知人の逆をいけば、欧米の平均より快適なホテルに、三分の一の値段で泊まれるのだから、日本人は豊かなのではないか？
だからものごとの実際は、欧米と生活水準で差がついたと言うよりも（確かに都市の景観ではまだ劣る）、この数年、欧米がインフレ、日本がデフレ傾向を続けたせいで、両者が別の価格世界に住むようになった、そしてそれに最近の過度の円安が油を注いでいる、ということではないか？
2008年のリーマン危機以降の10年で、米国のインフレ率は累計27，8％、フランスでも12，2％に達している。これに対して日本は約5％ (1)。そして円の対ドル・レートは、約34％下がっている(2) 。米国は金融を大幅に緩和したので、インフレ傾向になった。日本も安倍政権が「異次元緩和」したものの、デフレ傾向は治らない。
なぜだろう。そこには、日本人は「カネでカネを作る」、つまり投機的な投資を怖がる、という基本的な要因がある。米国では老後への貯金を投資信託で運用する者が過半数。信託会社はそのカネを20倍、30倍にも膨らませて「投資」をし、自分でも儲けていく。だから米国では金融・保険業がGDPの6.8％を占める。日本ではこれは4.1％で大差はない (3)ように見えるが、絶対額では120兆円弱もの差になる。別の言葉で言えば、米国経済はそれだけ水ぶくれ（カネぶくれ）しているのだが、そのバブルが破裂しなければ、リアルな富になる。
日本では、現状で十分、成長など要らないという声もあるけれど、経済が成長して歳入が増えないと、社会保障、医療の質が落ちるし、自衛隊の装備もそのうち韓国にも抜かれるだろう。今は我々の心理にバブル崩壊後のトラウマが深く残っていて、消費者は財布の口を締めることばかり。企業は給料のベースアップを抑え、投資も控える。すると経済は伸びないから、消費者も企業も益々ケチになる――そうやって、自縄自縛の悪循環、デフレ・サイクルにはまっているというわけだ。これでは、本当に貧乏になってしまう。
「ビッグマック指数」というのがある。万国共通のビッグマックを地元の通貨でいくらで買えるかを比べ、そこから実際の購買力でのレートを算出するものだ。それによると1ドルは、現在の115円あたりではなく70円周辺となる。これで日本のGDPをドルに換算すると、115÷70＝1.64、つまり今の数字より64%も大きくなる。
無理に背伸びする必要はない。しかし老朽化していくインフラを毎年計画的に改修するとともに、増える一方の激甚災害への備えを固め、再生エネルギーへの投資を増やす。更に企業の増収分は、ベアは無理でもボーナスで確実に一部還元することを決めておくだけでも、デフレの悪循環は断てると思うのだが。
縮む、縮むと思えば、必ず縮む。世界の中でも日本は、経済成長を実現できる歴史的・社会的な要因を豊富に持っているのだから、もっと伸びやかにやったらどんなものだろう。
(1). https://ecodb.net/ranking/old/group/XB/imf_pcpipch_2011.htmlから自分で計算。
(2). 2011年～2020年 https://ecodb.net/exchange/usd_jpy.html
(3). US Bureau of Economic Analysis（2020年）と内閣府「2019年度国民経済計算」
筆者は元駐ウズベキスタン・大使、日本版Newsweekコラムニスト
だが、それはどうも実感に合わない。二年前米国に行って地下鉄の荒れ方に仰天した。中流の上以上の人の暮らしは日本の上流なみでも、一般の中流以下の暮らしは豊かとはとても言えない。日本では、以前は「ウサギ小屋」とさげすまれていた住宅も、欧米に比べて小ぶりでも、インテリアは欧米の平均を確実に上回るようになった。あえて知人の逆をいけば、欧米の平均より快適なホテルに、三分の一の値段で泊まれるのだから、日本人は豊かなのではないか？
だからものごとの実際は、欧米と生活水準で差がついたと言うよりも（確かに都市の景観ではまだ劣る）、この数年、欧米がインフレ、日本がデフレ傾向を続けたせいで、両者が別の価格世界に住むようになった、そしてそれに最近の過度の円安が油を注いでいる、ということではないか？
2008年のリーマン危機以降の10年で、米国のインフレ率は累計27，8％、フランスでも12，2％に達している。これに対して日本は約5％ (1)。そして円の対ドル・レートは、約34％下がっている(2) 。米国は金融を大幅に緩和したので、インフレ傾向になった。日本も安倍政権が「異次元緩和」したものの、デフレ傾向は治らない。
なぜだろう。そこには、日本人は「カネでカネを作る」、つまり投機的な投資を怖がる、という基本的な要因がある。米国では老後への貯金を投資信託で運用する者が過半数。信託会社はそのカネを20倍、30倍にも膨らませて「投資」をし、自分でも儲けていく。だから米国では金融・保険業がGDPの6.8％を占める。日本ではこれは4.1％で大差はない (3)ように見えるが、絶対額では120兆円弱もの差になる。別の言葉で言えば、米国経済はそれだけ水ぶくれ（カネぶくれ）しているのだが、そのバブルが破裂しなければ、リアルな富になる。
日本では、現状で十分、成長など要らないという声もあるけれど、経済が成長して歳入が増えないと、社会保障、医療の質が落ちるし、自衛隊の装備もそのうち韓国にも抜かれるだろう。今は我々の心理にバブル崩壊後のトラウマが深く残っていて、消費者は財布の口を締めることばかり。企業は給料のベースアップを抑え、投資も控える。すると経済は伸びないから、消費者も企業も益々ケチになる――そうやって、自縄自縛の悪循環、デフレ・サイクルにはまっているというわけだ。これでは、本当に貧乏になってしまう。
「ビッグマック指数」というのがある。万国共通のビッグマックを地元の通貨でいくらで買えるかを比べ、そこから実際の購買力でのレートを算出するものだ。それによると1ドルは、現在の115円あたりではなく70円周辺となる。これで日本のGDPをドルに換算すると、115÷70＝1.64、つまり今の数字より64%も大きくなる。
無理に背伸びする必要はない。しかし老朽化していくインフラを毎年計画的に改修するとともに、増える一方の激甚災害への備えを固め、再生エネルギーへの投資を増やす。更に企業の増収分は、ベアは無理でもボーナスで確実に一部還元することを決めておくだけでも、デフレの悪循環は断てると思うのだが。
縮む、縮むと思えば、必ず縮む。世界の中でも日本は、経済成長を実現できる歴史的・社会的な要因を豊富に持っているのだから、もっと伸びやかにやったらどんなものだろう。
(1). https://ecodb.net/ranking/old/group/XB/imf_pcpipch_2011.htmlから自分で計算。
(2). 2011年～2020年 https://ecodb.net/exchange/usd_jpy.html
(3). US Bureau of Economic Analysis（2020年）と内閣府「2019年度国民経済計算」
筆者は元駐ウズベキスタン・大使、日本版Newsweekコラムニスト
一般社団法人 日本英語交流連盟