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2011 Vol.3
How can Japan be Rebuilt?

2011/07/01

Is there a way for Japan to recover from the Great East Japan Earthquake and the nuclear plant accident and once again become one of the most influential countries in the world? It is extremely difficult to make appropriate proposals on such an immensely complex issue. Therefore, this paper focuses on two issues: what to do with the nation’s nuclear power plants and how to understand the meaning of the “lost twenty years”.
With regard to nuclear power, if Japan looks ahead thirty years and declares it will close all its nuclear power plants, it is possible that breakthrough technological innovations in the field of natural renewable energy will ensue, and that Japan will recover from the disaster as one of the major countries in the world in the development of renewable energies. As for the lost twenty years, it is important to recognize what Japan actually lost during the period, instead of accepting a reformist explanation that slow structural reforms led to the long-term economic stagnation. In particular, one should note that attacks on the bureaucrats and banks played a significant role. In order to stop the country letting its economic stagnation continue and repeating mistakes that would extend the lost years for another ten or twenty years, it is crucial that we clearly understand what the country lost during those lost twenty years.
After discussing what we lost during that period, the paper does not mention concrete actions that we should take: there are a number of challenging issues including a declining population, an enormous national government debt, continuing deflation, battered rural economies, and relationship building with China and other Asian countries. The creation of a policy mechanism centering on post-modern ideas is considered essential in realizing Japan’s recovery. This complex issue, however, will be discussed in detail on another occasion.

 

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