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What Japan Needs To Recover

Prior to the earthquake in March 2011, Japan was already struggling with difficult political and economic challenges and without a doubt, the earthquake only made the situation worse. In fact, it has transformed many of the lifestyles of residents because of changes in electricity utilization. The electric paradise that was once Tokyo has dimmed and is a shadow of its former self. What was affected as a result was Japan’s mainstay: tourism. They have yet to address and rebuild the necessary confidence in potential visitors that it is safe for them to return.

That is definitely going to take some time and a damn good PR campaign to make that happen. Then again, the Japanese are kings of the campaign.

As an outsider looking in with more intimate knowledge about Japan and its culture, my layman’s perspective on what Japan needs to recover is pretty simple on paper, but much more difficult in implementation.

Rebuild Confidence Among Foreign Travelers and Businesses:
When double-digit percentages of your expat population decide to up and leave all at once, you know it’s a problem. Some businesses will still conduct business in Japan, but will not actually stay there. The pervasive fear of radiation poisoning is compounded exponentially by reports of deceptive reporting by the nuclear plants themselves. Who are we to believe? If the government doesn’t know what the situation is, how can they relay any level of confidence to visitors? This requires full disclosure and swifter handling of these plants, with a full review of all other plants and their emergency procedures. They’re starting this process now, but the need to move quickly is great. More and more foreigners are leaving the country.

Establish Strong Political Leadership:
We know this is a toughie. Six Prime Ministers in 5 years? And from the look of things, Naoto Kan may not make it to his first full year in office (that’ll be on June 5th). Who knows, we’ll see. All that aside, there is a clear reason why Japanese citizens are rather ambivalent about what the government does. There’s lots of in-fighting and underhanded behavior, with the pretense of saving face. Citizens trust the government almost blindly and those who don’t agree with what is happening are overwhelmed by the enormity of the situation, so much that it almost appears to be a futile effort. It reminds me to some extent of how the average American citizen operates with regard to politicians. Until the Japanese people are rallied in some way to demand better leadership, this trend will unfortunately continue.

Examine and Develop Core Industries — From The Bottom Up, If Needed:
Far too long have Japanese businesses discounted the need to think globally. Some of them are starting to get the drift, that we are all economically interdependent on each other. In order to survive — no, thrive — developing trade relationships with other nations is key. Cultivating a workforce of adequately prepared youth is also a major component in this process. As idiotic as it sounds, the world doesn’t speak Japanese but would-be workers are not prepared to speak the languages of the global economy. As far as I’m concerned, the languages we need to ensure today’s youth should speak are English, Spanish and Chinese. Everything else is extra. Frankly, children that aren’t trained to speak a second language in the home or at school are at a distinct disadvantage.

Create Effective Economic Policies
Stagnant policies are what have lead to continued deflation and questionable valuation of the yen over the last couple of decades. Japan faces increasing pressure from the now second largest economy in the world, China, particularly in terms of manufacturing. As crazy as it is to say this, China is much more foreigner friendly on the business front than Japan. Tax policies have been a continued drag on any development for foreign companies in Japan, so it is no surprise that economic policies haven’t changed because everyone is moving to China or its environs (i.e., Singapore). We have seen the tremendous impact Japanese manufacturing woes post-quake have posed; performance is down 33% at car company Toyota in the US for the May 2011. While it is encouraging that the US is standing by Japan through this difficult time on an economic front, their “partner in crime” has their own set of woes. I’m no economist, but common sense dictates that you develop policies that are business friendly and will create sufficient tax revenue for the country. Right?

Look, I don’t pretend to have the answers. If the answers were THAT straightforward, I’m certain they would have been done by now. Much of this is a shift in mentality, in approach. I hope that the tsunami/earthquake events have pushed many people to make a change for the better. This turnaround needs to be hastened, for certain, as we move into a key tourist season for Japan. I’d love to see people get revved up about change, but that’s not such a Japanese way to approach things. All I know is that some action has to be taken. It’s well overdue.