Japan Economy—overview: Government-industry cooperation a strong work ethic mastery of high technology and a comparatively small defense allocation (roughly 1% of GDP) have helped Japan advance with extraordinary rapidity to the rank of second most powerful economy in the world. One notable characteristic of the economy is the working together of manufacturers suppliers and distributors in closely knit groups called keiretsu. A second basic feature has been the guarantee of lifetime employment for a substantial portion of the urban labor force; this guarantee is eroding. Industry the most important sector of the economy is heavily dependent on imported raw materials and fuels. The much smaller agricultural sector is highly subsidized and protected with crop yields among the highest in the world. Usually self-sufficient in rice Japan must import about 50% of its requirements of other grain and fodder crops. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades overall real economic growth had been spectacular: a 10% average in the 1960s a 5% average in the 1970s and a 4% average in the 1980s. Growth slowed markedly in 1992-95 largely because of the aftereffects of overinvestment during the late 1980s and contractionary domestic policies intended to wring speculative excesses from the stock and real estate markets. Growth picked up to 3.9% in 1996 largely a reflection of stimulative fiscal and monetary policies as well as low rates of inflation. But in 1997 growth fell back to 1%. As a result of the expansionary fiscal policies and declining tax revenues due to the recession Japan has one of the largest budget deficits as a percent of GDP among the industrialized countries. The crowding of habitable land area and the aging of the population are two other major long-run problems. GDP: purchasing power parity—$3.08 trillion (1997 est.) GDP—real growth rate: 0.9% (1997 est.) GDP—per capita: purchasing power parity—$24 500 (1997 est.) GDP—composition by sector: agriculture: 2% industry: 41.5% services: 56.5% (1995) Inflation rate—consumer price index: 1.7% (1997) Labor force: total: 67.23 million (March 1997) by occupation: trade and services 50% manufacturing mining and construction 33% utilities and communication 7% agriculture forestry and fishing 6% government 3% (1994) Unemployment rate: 3.4% (1997) Budget: revenues: $497 billion expenditures: $621 billion including capital expenditures (public works only) of about $72 billion (FY98/99 est.) Industries: among world's largest and technologically advanced producers of steel and nonferrous metallurgy heavy electrical equipment construction and mining equipment motor vehicles and parts electronic and telecommunication equipment machine tools automated production systems locomotives and railroad rolling stock ships chemicals; textiles processed foods Industrial production growth rate: 4.3% (1997) Electricity—capacity: 199.878 million kW (1995) Electricity—production: 930.55 billion kWh (1995) Electricity—consumption per capita: 7 414 kWh (1995) Agriculture—products: rice sugar beets vegetables fruit; pork poultry dairy products eggs; world's largest fish catch of 10 million metric tons in 1991 Exports: total value: $421 billion (f.o.b. 1997) commodities: manufactures 96% (including machinery 50% motor vehicles 19% consumer electronics 3%) partners: US 27% Southeast Asia 17% EU 15% China 5% Imports: total value: $339 billion (c.i.f. 1997) commodities: manufactures 54% foodstuffs and raw materials 28% fossil fuels 16% partners: US 22% Southeast Asia 15% EU 14% China 12% Debt—external: $NA Economic aid: donor: ODA $8.3 billion (1998 est.) note: ODA and OOF commitments (1970-94) $174 billion Currency: yen (¥) Exchange rates: yen (¥) per US$1—129.45 (January 1998) 120.99 (1997) 108.78 (1996) 94.06 (1995) 102.21 (1994) 111.20 (1993) Fiscal year: 1 April—31 March
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