Different technological regimes give rise to and require different business institutions. When circumstances change, so must the institutions. Otherwise yesterday’s strengths become today’s weaknesses, and economic growth slows. This is unfortunately Japan’s plight, with its analogue era champions failing to adapt to today’s digital world. No longer does Sony churn out one must-have product after another.
Japan has the world’s most aged population. As the number of elderly people increases, the benefits the government funds, such as pensions, medical care and nursing care, have been swelling. Since these benefits are mainly financed by taxes and social insurance premiums paid by the working-age population, the burden will be heavier on future generations as Japan continues to age.
In March 2021, Japan marked ten years since the 3/11 Great East Japan Earthquake and the Fukushima nuclear disaster. All nuclear power plants in Japan were stopped and only a handful have been restarted after meeting new and more stringent nuclear safety standards. This has led to a significant loss of baseload power, which has largely been compensated by natural gas and coal. Since Japan has no domestic fossil fuel resources, its energy self-sufficiency ratio dropped to the lowest among OECD economies. As an island nation, Japan does not have pipeline or grid connections with neighbouring countries. All of this exposes Japan to higher geopolitical risk.
On Thursday, Japan commemorates the 10th anniversary of the 3/11 Great East Japan Earthquake triple disaster. The 9.0 magnitude earthquake that struck northeast Japan’s Tohoku region triggered a tsunami with waves reaching 40 meters high washing away whole buildings. The tsunami also caused nuclear meltdowns in three reactors at the Fukushima Daiichi Nuclear Power Plant, the second worst nuclear disaster after Chernobyl in 1986. While Japan has learned a number of tough lessons from the disaster, its legacy still continues to haunt the country today.
Japan’s 2021 defence budget is set to be its largest ever, continuing a near decade-long trend set in motion by former prime minister Shinzo Abe. Under Abe’s watch, Japan has increased its defence budget every year since 2005. The uptick in spending has continued since Abe left office in September 2020 — last December, the Ministry of Defense released its revised budget request for the 2021 fiscal year totalling approximately 5.3 trillion yen (US$50.2 billion).
In 2020, the UN Working Group on Arbitrary Detention, under the UN Commission on Human Rights, levelled criticism against Japan’s asylum system. The Working Group’s Opinion was primarily adopted to urge the Japanese government to review its inhuman treatment of long-term detainees, the vast majority of which are seeking asylum. The Opinion also touched on a more fundamental issue: Japan’s strict refugee screening system.
Japan is facing a third wave of COVID-19 infections and the waves are getting higher each time. Debate is once again raging about the government’s balancing act between pandemic control and preservation of economic activity.
In his inaugural speech before the Japanese Diet, newly-appointed Prime Minister Yoshihide Suga laid out his policy plan for the nation. It included policy responses to the COVID-19 crisis, regulatory reforms, government digitalisation, international affairs and economic policy for rural areas.
Prime Minister Scott Morrison’s visit to Japan tomorrow is no ordinary state visit. It’s the first international trip of the year for Mr Morrison and he becomes the first foreign leader to visit Japan’s new Prime Minister Yoshihide Suga at home. They are expected to reach a defence agreement that entrenches an elevated strategic relationship. Alongside deepening bilateral ties, Australia and Japan have an opportunity to steer broader regional outcomes as they seek economic recovery from the pandemic and deal with great power rivalry between China and the United States.
After seven years and eight months in power, the abrupt resignation of Shinzo Abe due to health issues saw Yoshihide Suga installed as Japan’s prime minister on 16 September. After serving as chief cabinet secretary and Abe’s right-hand man throughout the previous government, Suga won the race to be the president of the ruling Liberal Democratic Party (LDP) and prime minister by positioning himself as a self-made man and the ‘continuity’ candidate.