For Japan, joining the OECD also meant regaining its rightful place among the world’s most advanced economies, following the post-war reconstruction period. The OECD was created in 1961, and for the first three years of its existence remained an “Atlantic” community, bringing together Europe and North America. With Japan’s joining, the OECD took its first steps as a globally relevant organisation. Japan brought new perspectives and policy experiences, and provided a link to one of the world’s most dynamic regions.
Japan’s accession to the OECD came at a time of unprecedented growth for the country, as the economy expanded by nearly 10% per year for most of the 1960s. The 1970s and 1980s were also marked by high growth rates, led by strong innovation in engineering, automotive and electronics sectors. The so-called Japanese miracle was to mark a generation of economists, academics and politicians in other OECD countries, as proof of what ingenuity and the pursuit of excellence in education and other disciplines could achieve. Then, in the 1990s growth slowed markedly after the collapse of an asset price bubble. This led to major challenges over the following two decades, which included dealing with deflation, social pressures and unprecedented levels of public debt. The country also faced increased competition in export markets as other Asian economies opened up and consolidated their place in the global economy.
This half century of OECD membership has witnessed many positive changes in Japan, which is now the third largest economy in the world and the second largest among OECD members. It is actively engaged in every aspect of the OECD work, and has successfully led many initiatives in areas such as innovation, skills, trade, and development aid, as well as risk management. At present, Japan plays a leading role in the OECD’s global relations with Southeast Asia. Today, Japan’s economic prospects have improved notably, accompanied by a marked upswing in private sector confidence and public optimism. Prime Minister Shinzo Abe’s economic revitalisation strategy (known as the “three arrows”) encompasses bold monetary policy, flexible fiscal policy and targeted measures to reignite competitiveness through structural reforms. These are all welcome developments. As this special edition of the OECD Observer explains, economic recovery can be sustained if public debt is reined in and associated structural reforms are vigorously pursued, particularly in the areas of competition, labour markets and gender equality. Such measures are essential to restore long-term growth and address pressing social challenges.
Japan must continue its efforts to open up its economy and more fully integrate into global value chains, through international trade and investment, but also by nurturing and fostering the innovation and creativity that characterised its expansion during the second half of the 20th century. Japan can play a larger role in the global innovation networks, building on its renowned prowess in electronics, robotics, optic lenses, electronics, and several other particularly dynamic sectors of the Japanese economy.
In this edition we also pay tribute to Japan’s rich tradition of art and architecture, whose vibrancy reaches well beyond its borders. We also highlight the country’s resilience and its inexhaustible capacity to recover and thrive in response to economic shocks and in the wake of natural disasters.
This was evident during the Great East Japan earthquake in 2011. This was the most powerful earthquake ever to hit the country, costing tens of thousands of lives and leaving wide areas destroyed. The OECD stood alongside Japan throughout this enormous tragedy, providing policy advice in the reconstruction efforts and helping the country recover from the resulting social and economic disruption.
This catastrophe also reminded us how resilient the Japanese people are. As the Japanese say: After the rain, the ground always hardens ( ). Out of this tragedy, Japan is forging a stronger, more resilient society.
This is why we are doubly pleased to have Japan as chair of the 2014 Ministerial Council Meeting (Paris, 6-7 May) and for members to have chosen “Resilient Economies and Inclusive Societies: Empowering people for jobs and growth” as the main topic for this year’s meeting. Japan has shown us that it is not only possible to recover from extremely challenging natural disasters and profound economic adversity, but to do so while emerging stronger than before. We draw a valuable lesson from these experiences on how the world economy can also “bounce forward” and recover from the worst crisis of our lifetimes.
All OECD countries feel inspired by the example Japan has set over the past half century, and Japan continues to benefit from its membership of the organisation. This exchange of visions and experiences makes progress possible. Japan’s 50th anniversary at the OECD is an occasion for us all to celebrate. Thus, I invite you to participate in the activities and events planned for the 2014 OECD Week.
©OECD Observer No 298, Q1 2014