Japan's Economic Woes Not Insurmountable, Business Leader Contends

ByJohn S. McClenahen With the right mix of good policy and determined leadership, Japan can overcome its economic problems, contends Thomas J. Duesterberg, president and CEO of Manufacturers Alliance/MAPI, an Arlington, Va.-based business research group. The world's second largest economy is just now showing signs of coming out of its second recession in three years. "In the short- to medium-term, Japan must exit from the counterproductive cycle of deflation, growing fiscal imbalance and growth of the public sector," says Duesterberg. "It needs to return to entrepreneurial, private sector-led growth and market allocation of its vast capital resources." "In the longer run, it must address its demographic and structural issues in a forthright and determined way," he says. Among the specific steps Duesterberg urges are lowering taxes to stimulate the Japanese economy; deregulation of state-owned corporations, construction, finance and telecommunications; fundamental trade liberalization; and opening Japan to immigration. Duesterberg's views are contained in a new Japanese-language book "The Reemerging Japanese Superstate in the 21st Century" (Tokuma Shoten, 2002).