Lessons from JAPAN - From Magic to Tragic by PhilmanVanuatu


									                                    Lessons from JAPAN (日本) – From Magic to Tragic
By Phil Manhire
JAPAN – a country that is often misunderstood by the rest of the Western world. There are,                                                   There is an old expression that states – “There are
however, some facts that we know about Japan that stand as a reminder and indeed, a                                                          lies, lies and damn statistics”. Whilst it’s a great
                                                                                                                                             adage to keep in mind, in this instance, the statistics
warning for other nations, including Vanuatu.                                                                                                reveal some interesting “truths” and hypotheses.
                                                           During the Meiji period from 1868, Japan expanded economically with               Vanuatu also has an aging population, even though
                                                           the embrace of the market economy. Many of today's enterprises were               we know that currently, the major demographic is
                                                           founded at the time, and Japan emerged as the most developed nation               under 30 y.o. - the YOUTH of the nation.
                                                           in Asia. The period of overall real economic growth from the 1960s to
                                                           the 1980s has been called the Japanese post-war economic miracle; it              In spite of the government’s appalling track record in
                                                           averaged 7.5 percent in the 1960s and 1970s.                                      providing quality health services at grassroots level
                                                                                                                                             upwards, modern technology and drugs have had a
                                                           NOTE: A “market economy” is an economy in which decisions regarding               favourable impact on Vanuatu’s mortality rate in the
                                                           investment, production and distribution are based on supply and                   65+ age group. In fact you may be surprised to learn
                                                           demand, and prices of goods and services are determined in a free price           that there are around 150 Vanuatu citizens over
                                                           system.                                                                           100 y.o., approx. 20 of which live in Shefa Province.
What lessons can we learn from the Japanese? They have a totally different culture from us and are on the                                    With the continuing advent of improved health
other side of the world. By comparison, they have a huge population (approx. 128Billion), are far more technology                            services, the population at large should continue to
savvy and have an excellent education system and infrastructure.                                                                             live longer. Vanuatu’s infant mortality rate should
It mainly comes back to demographics. Now, on first appearances, what follows may seem a little “dry”.                                       also decrease from its current “third world”-type
Nevertheless, please take the time to digest it as it will help to clarify the “lesson”.                                                     figures. That’s the good news.

                                                                                                    Japan experienced net population loss    The bad news is our literacy rate. Overall – 53%.
 80.0                                                                                               in recent years due to falling birth     Let’s be generous and presume that it has increased
 70.0                                                                                               rates and almost no net immigration,     (?) to 60% in the past 5/6 years. Even at 60%, this
                                                                 69.5                               despite having one of the highest life   does not augur well for the economic future of this
                                                                                         63.7       expectancies in the world at 81.25       country. The economy, in addition to subsistence
            59.6                                                                                    years of age as of 2006. Based on the    farming, needs educated, productive, private sector
                                                                                                    Health and Welfare ministry estimat-     people in it to provide the income needs of the entire
 40.0                                                                                                                                        community. Failure to aspire and reach this goal
                                                                                                    ion released in January 2012, Japan's
 30.0                                                                                               population will keep declining by        would ensure the on-going dependency on the
             35.4                                                                        23.1
                                                                                                    about one million people every year in   largesse of other countries and hence, the
 20.0                                           24.3                                                                                         progressive loss of sovereignty.
                                                                                                    the coming decades, which will leave
 10.0        4.9                                                                                    Japan with a population of 87 million    Unless the government gets over its political self-
                                                                                                    in 2060. By that time, more than 40%     serving approach in favour of one that is nation-
            1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
                                                                                                    of the Japanese population is            serving and starts prioritising the education of “the
                                                                                                    expected to be over the age of 65.       masses”, true economic independence will never
                               0-14 y.o.           15-64 y.o.           65+ y.o.                                                             happen for Vanuatu. Sad to say, all we seem to get
                                                                              As Japan’s working population has
                                                                              declined in numbers over the past                              is lip-service from most of the pollies.
several decades, it is interesting to note what has happened to their sharemarket during this same period – from the                                        Frankly, the only political organ-
investors’ “darling” in the late 80’s to the disaster we see today......                                                                                    ization that appears to give a damn
                                                                                                     Don’t get me wrong, as well as the      is the GJP. With their MP’s allocation including
                                   NIKKEI 225 Highest Point                                          demographic influences on the           mandatory education financial stimuli, the GJP is
                                                                                                     markets, there have also been other     making a transparent and very real contribution to
                      38,915.87                                                                      financial factors at work. Neverthe-    the educational development of the people.
                                                                                                     less, an aging population combined      The global and national economy. The RBV’s latest
                                                                                                     with a diminishing work-force will      economic report on Vanuatu can be found by going
30,000                    30,159.00
                                                                                                     continue to be a major issue for the    to the www.themoneyconnection.vu website and
25,000                  24,488.00                  22,666.80                                         Japanese economy going forward.         clicking on the RBV Logo at the top of the page - it’s
20,000                                                                    18,261.98
                     18,701.30                                                                                                               worth reading. Why? By looking at the report’s
15,000                              21,148.00                                                        OVER TO VANUATU and some brief
                   13,113.32                                                                         statistics from the Vanuatu National    charts, it’s relatively easy to identify Vanuatu’s
                                                                  11,161.71           10,395.18      Statistics Office (VNSO):               financial trends. Still, as this is a far-reaching
                                                                                                                                             subject, in next week’s column we shall be having a
        0                                                                                            ** Note the trend in people over the    closer look at Vanuatu’s struggling economy and
            1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011                    age of 65 (keep Japan in mind here)     what that potentially means for you.
                                                                                                          The VNSO charts also show that     The US officially hit its $16.394 trillion legal debt
                                                                                                          the average age of Vanuatu                      st
                                                                                                                                             limit on 31 December. As a result, until the debt
                                                                                                          citizens is 20.5 y.o!              ceiling is raised, Treasury is not allowed to borrow
            Census years                    1967         1979           1989          1999        2009
                                                                                                                                             new money to help it pay all the country's financial
Percent of population:
                                                                                                                                                                      Remember who this comic is?
Under 15 yrs old                           44.80%       45.80%       44.10%        42.70%         40%                                                                 It’s Ben Bernake, the head of
                                                                                                                                                                      the US Federal Reserve and
65 yrs old and over                        2.90%        2.90%        3.60%         3.40%          6%**                                                                the same guy who said –
                                                                                                                                                                      “Gold is not money”!
                                                                                                                                             Well, apparently Ben’s had a major “senior’s
More demographic facts from Vanuatu (Wikipedia), current as at 2006:                                                                         moment”, again. In an act that would qualify him for
AGE STRUCTURE                                     POPULATION GROWTH RATE                                               BIRTH RATE            a long-term gig in one of Vegas’ Casinos, now he has
0-14 years: 32.6% (male 34,804/female 33,331)           1.49%                                               23.02 births/1,000 population    come out and stated that the US should dispose of
15-64 years: 63.7% (male 67,919/female 65,138)                                                                                               its “debt ceiling” (an arbitrary borrowing limit set by
65 years and over: 3.7% (male 4,027/female 3,650)                                                                                            Congress). "Raising the debt ceiling gives the
                                                                                                                                             government the ability to pay its existing bills,"
DEATH RATE                                                 INFANT MORTALITY RATE                              LIFE EXPECTANCY AT BIRTH       Bernanke said. "It doesn't create new deficits. It
7.82 deaths/1,000 population                               53.8 deaths/1 000 live births                     Total population: 62.85 years   doesn't create new spending."
                                                                                                             Male: 61.34 years
TOTAL FERTILITY RATE                                                                                         Female: 64.44 years             Ahahahahahaha! Now THAT’s funny! Given the
2.7 children born/woman                                                                                                                      US Government’s track record of economic mis-
                                                                                                                                             management over the past few decades, to give the
Local languages (more than 100) 72.6%, Bislama 23.1%, English (official) 1.9%, French (official) 1.4%                                        pollies no limit on borrowing would be like giving a
LITERACY                                                                                                                                     security job (looking after a warehouse of drugs) to a
Definition: age 15 and over can read and write                                                                                               long-term crack addict!
Total population: 53%                                                                                                                        Until next week.......
Male: 57%
Female: 48% (1979 est.)                                                                                                                      “HAPPY INVESTING!”

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