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Economy of Japan

Japan's industrialized, free-market economy is the second-largest in the world after the United States. Its economy is highly efficient and competitive in areas linked to international trade, but productivity is far lower in areas such as agriculture, distribution, and services. After achieving one of the highest economic growth rates in the world from the 1960s through the 1980s, the Japanese economy slowed dramatically in the early 1990s, when the "bubble economy[?]" collapsed. Its reservoir of industrial leadership and technicians, well-educated and industrious work force, high savings and investment rates, and intensive promotion of industrial development and foreign trade have produced a mature industrial economy. Japan has few natural resources, and trade helps it earn the foreign exchange needed to purchase raw materials for its economy.

While Japan's long-term economic prospects are considered good, Japan is currently in its worst recession since World War II. Plummeting stock and real estate prices marked the end of the "bubble economy" of the late 1980s. The impact of the Asian financial crisis also has been substantial. Real GDP in Japan grew at an average of roughly 1% yearly between 1991-98, compared to growth in the 1980s of about 4% per year. Growth in Japan in this decade has been slower than growth in other major industrial nations. The Government of Japan has forecast growth in Japan fiscal year 2001 at 1.7%. A number of economic indicators remain in negative territory, and growth for first quarter 2001 was -0.2%.

Agriculture, Energy, and Minerals

Only 15% of Japan's land is suitable for cultivation. The agricultural economy is highly subsidized and protected. With per hectare crop yields among the highest in the world, Japan maintains an overall agricultural self-sufficiency rate of about 50% on fewer than 5.6 million cultivated hectares (14 million acres). Japan normally produces a slight surplus of rice but imports large quantities of wheat, sorghum, and soybeans, primarily from the United States. Japan is the largest market for U.S. agricultural exports.

Given its heavy dependence on imported energy, Japan has aimed to diversify its sources. Since the oil shocks of the 1970s, Japan has reduced dependence on petroleum as a source of energy from more than 75% in 1973 to about 57% at present. Other important energy sources are coal, liquefied natural gas, nuclear power, and hydropower.

Deposits of gold, magnesium, and silver meet current industrial demands, but Japan is dependent on foreign sources for many of the minerals essential to modern industry. Iron ore, coke, copper, and bauxite must be imported, as must many forest products.

Labor

Japan's labor force consists of some 64 million workers, 40% of whom are women. Labor union membership is about 12 million. The unemployment rate is currently 4.9%--a post-war high. In 1989, the predominantly public sector union confederation, SOHYO (General Council of Trade Unions of Japan), merged with RENGO (Japanese Private Sector Trade Union Confederation) to form the Japanese Trade Union Confederation.

GDP: purchasing power parity - $2.95 trillion (1999 est.)

GDP - real growth rate: 0.3% (1999 est.)

GDP - per capita: purchasing power parity - $23,400 (1999 est.)

GDP - composition by sector: agriculture: 2% industry: 35% services: 63% (1999 est.)

Population below poverty line: NA%

Household income or consumption by percentage share: lowest 10%: NA% highest 10%: NA%

Inflation rate (consumer prices): -0.8% (1999 est.)

Labor force: 67.76 million (November 1999)

Labor force - by occupation: trade and services 65%, industry 30%, agriculture, forestry, and fishing 5%

Unemployment rate: 4.7% (1999 est.)

Budget: revenues: $463 billion expenditures: $809 billion, including capital expenditures (public works only) of about $94 billion (FY00/01 est.)

Industries: among world's largest and technologically advanced producers of motor vehicles, electronic equipment, machine tools, steel and nonferrous metals, ships, chemicals; textiles, processed foods

Industrial production growth rate: -0.1% (1999 est.)

Electricity - production: 995.982 billion kWh (1998)

Electricity - production by source: fossil fuel: 56.68% hydro: 8.99% nuclear: 31.93% other: 2.4% (1998)

Electricity - consumption: 926.263 billion kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: rice, sugar beets, vegetables, fruit; pork, poultry, dairy products, eggs; fish

Exports: $413 billion (f.o.b., 1999 est.)

Exports - commodities: motor vehicles, semiconductors, office machinery, chemicals

Exports - partners: US 31%, Taiwan 7%, China 5.5%, South Korea 5.4%, Hong Kong 5.2% (1999)

Imports: $306 billion (c.i.f., 1999 est.)

Imports - commodities: fuels, foodstuffs, chemicals, textiles, office machinery

Imports - partners: US 22%, China 14%, South Korea 5.1%, Australia 4.2%, Taiwan 4.1% (1999)

Debt - external: $NA

Economic aid - donor: ODA, $9.1 billion (1999)

Currency: yen

Exchange rates: yen per US$1 - 105.16 (January 2000), 113.91 (1999), 130.91 (1998), 120.99 (1997), 108.78 (1996), 94.06 (1995)

Fiscal year: 1 April - 31 March