Recently, a lot of critical analysis about Japan has been made in news. China has already surpassed Japan as the 2nd largest economy after U.S. Moreover, India too is expected to cross Japan in this race by 2012 end to become the 3rd largest economy in World.
Tracing back to Japan's success, it was solely because of its hard working population & its Growth-oriented Economic strategies. Time & again, natural calamities have knocked Japan's door, creating havoc & loss of life, resources & properties. Still the nation continues to perform though with diminishing rates.
Japan's interest rates are near-zero. This means borrowing is not at all a costly affair. One can easily raise money there. Monetary softening of developed economies hasn't resulted in what they urgently need- Increased Aggregate Demand. People are still reluctant to buy, Savings ratio is high, Investments low. All this is a minor proposititon if we look at the bigger issue.
Japan's own indigenous population hasn't grew enough. Population of native people is very important to keep the species going on or else it will result in an extinction. Enough has been said about the need for increased Total Expenditure(Consumer+Investment). What is needed is to increase the population of pure Japanese people rather than depend upon the immigrants & non-Japanese population to run the economy, though they contribute widely & will continue so.However, there's nothing for China & India to be happy at this moment. We must understand that there's no need for Japan to run this rat race. If the State there can keep people satisfied, happy & entreprising, being the 2nd largest or even the largest economy makes no sense then.
India & China however, need this growth. Increased Growth in GDP leads to enhanced employment and subsequent purchasing power. This helps in reducing and eliminating the Social & Economic Exclusion-SEE(upon which more will be written here soon). Developing nations' need of the hour is increased performance on HDI parametres.
It is very satisfying to note that Governments of these nations is performing very well on these parametres. Add to it the efficient involvement of Private Sector in these areas. Indeed, certain exceptions may occur(as in India where some HDI parametres haven't performed well, but the net result is positive improvement).
Concluding, it would be necesarry to understand that we in India especially, need higher HDI performance along with increasing Growth rates. Being ahead of Japan is but very positive development. HDI, Higher PCI, PCL, etc. still hold utmost importance, maybe much more than Growth rate. Our nation has improved very well on all these parametres, future is definitely bright, we only need to be consistent in our efforts.
Bhagirath Baria
- Bhagirath Baria
- The Author of this blog has keen interest in understanding Economics and its implications on the Individual and the Economy as a whole. Has been writing articles and analysis of issues that may skip general observation, but exert deep influence on people's lives and their decisions. Discussions and Debates related to conventional as well as non-conventional Economics is done here. The author of this blog doesn't classify himself to any particular School of thought in Economics. He is tilted toward Mainstream Economics, though has keen interest in a few Heterodox schools too. Wishing all the readers a truly enriching experience.
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