The global economic crisis is affecting families and communities across the planet. With regions bearing the brunt of the crisis, affecting businesses, jobs and people generally, regional policies are very much part of the solution.

External shocks from the run-up in commodity prices and then international financial turbulence have brought Japan’s expansion to an end. Equity prices have plummeted and the yen has appreciated substantially. With falling exports, activity is projected to remain weak through 2009, pushing up unemployment and reducing headline inflation to near zero. A recovery in domestic demand is projected to lift output growth to around 1% during 2010, still short of the growth of potential.

Until 2002, Japan was mired in a prolonged period of stagnation–the “lost decade”–which saw its per capita income drop from the fifth highest in the OECD area in 1992 to only 19th in 2002. The miracle economy that mesmerised the world in the 1980s looked decidedly weak. Now, thanks to exports and business investment, Japan has achieved the longest expansion in its post-war history.

With the world economy today experiencing turbulence on a number of diverse fronts, OECD countries are preoccupied with meeting these challenges.

4 March -
Norio Hattori is the new OECD ambassador for Japan. He succeeds Shinichi Kitajima.

4 March -
Wolfgang Petritsch takes up his post as new ambassador for Austria succeeding Ulrich Stacher.

Climate change is a pressing challenge, requiring leadership and determined action. At the same time, people are concerned that policies do not put them at an economic disadvantage or unnecessarily undermine their welfare.

Can governments balance these concerns? The OECD’s Environment Policy Committee meets at ministerial level on 28-29 April 2008 under the theme of global competitiveness. Some non-OECD developing countries will also participate, as will stakeholders from business, labour and civil society.

The economic expansion–the longest in Japan’s post-war history–continues despite some deceleration in the pace of growth since early 2007. A further tightening of the labour market is projected to reverse the decline in wages, helping to sustain output growth of some 1.5-2% in 2008-09 and pushing inflation into positive territory.

Today, energy security is an indispensable subject even in general discussions about foreign policy. Securing needed energy resources is one of the prerequisites for ensuring sustainable economic growth. Dealing with the current rapid growth in demand for energy in Asia is a high priority on many agendas. As for Japan’s perspective on energy security co-operation, I would like to touch upon the following three points: security of supply, energy and the environment, and the importance in energy response of the International Energy Agency (IEA), a sister organisation of the OECD.

Japan’s overall growth rate in 2004 had raised hopes of a full recovery from the stagnation of the 1990s. But output suddenly sagged again, as new data showed three straight quarters of decline. But the economy can get back on track in 2005.

If you are about to buy a house or rent space in the heady property markets of London, New York or Paris, then you may be bewildered by the consistent decline in property prices in Japan in recent years.

When Junichiro Koizumi, Japan’s prime minister, appointed five women to his cabinet in 2001, he was making history by creating his country’s most female government ever. Whether the corporate world follows suit is another matter.

Japan’s economic recovery has been the highlight of 2003, with strong growth particularly in the second quarter. But as Randall Jones of the OECD’s Economics Department explains, challenges remain.

The archipelago that makes up Japan is two-thirds mountains, with few indigenous energy resources. As the fourth largest energy consumer in the world, with relatively high energy prices, the most important energy challenge for Japan is security of supply.

The 2003 meeting of OECD Employment and Labour Ministers is timely, as it will look at the acute problem posed by ageing societies, as well as discussing comprehensive policy changes to promote the employment of under-represented groups.

Teamwork, goals, out-of-bounds: sport is often held up as a model for business. Now, the success of a French sports personality in Japan may hold lessons for the country’s corporate players.

The biggest business news in Japan in 1999 was the merger between Nissan and Renault. Nissan Motor, which ranks second after Toyota in Japan, had been ailing financially during the 1990s and its rating had slid into the “speculative” category. The company had been looking for a partner to salvage it from its ever-deteriorating financial condition. But in March 1999, after a number of speculative rumours, the news was confirmed that the French automotive firm, Renault, would acquire 36% of Nissan stock and would send Carlos Ghosn as Chief Operating Officer to replace the bureaucratic and slow-moving management in Nissan. Since then, there is no doubt that this Brazilian-born 45 year-old is by far the most frequently interviewed and most often quoted businessman in Japan.

Massive job cuts like those announced in October at the Japanese automotive firm, Nissan Motor – some 21,000 worldwide – always make hard early morning reading. This must be particularly true for the Japanese, who are traditionally cautious about foreign participation in their firms and for whom mergers are relatively new. Other large OECD countries are more used to the topsy-turvy world of mergers and acquisitions. Some seem frankly unconcerned about who owns their firms, as long as those firms are well managed and deliver the goods, so to speak. And in the globalised market that sentiment is likely to become more widespread.

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