INTRODUCTION
D. Attending the Court Hearing
XI. CONCLUSIONS
The success of Japanese exports in the 1950s and the 1960s was mainly based on price advantages. In 1960, Japanese exports accounted for $40.8 billion and
increased to $144.6 billion in 1980. In 1985, Japan had a huge trade surplus, almost $47 billion, with its partners. The Japanese trade surplus was increasing continuously until the beginning of the 1990s. It reached $103 billion in 1991 and increased to $144 billion in 1994. However, due to the depreciation of the yen during the second half of 1995, after the peak value of 79 yen per dollar in April, the total Japanese trade surplus for 1995 ended up with $132 billion.
Japanese economic policy represented an outward-looking strategy concen- trating on exports and economic growth from the 1950s until the middle of the 1970s. During that time, the Japanese export sector used methods of mass produc- tion to better compete on the international market. Since 1975 the Japanese gov- ernment has attempted to adapt its economic policy to changes in the international economy, and reached a stable economic growth rate in the 1980s.
The main goals of the Japanese technology policy are the promotion of development for creative technologies, the refinement of industrial structure, the securing of sufficient supplies of energy and raw materials, and the promotion of regional economic structures. Additionally, this policy demands an improve- ment of general living conditions in cities and in the industry. As a further goal, it promotes the transfer of science and technology to developing countries and strengthens Japan’s cooperation with industrialized countries in the achievement of scientific and technological progresses.
Following a late industrialization based on state intervention, foreign loans, borrowed technologies, etc., South Korea has become one of the major economic powers in the Asia-Pacific region. Its economic development is regarded as a miracle of East Asia and a model for other developing nations. In the rapid eco- nomic growth period, the government chose strategic industrial sectors, which contributed to improving national competitivenesses on the world market. This government-led economic development strategy resulted in strong ties between government and industry, which enabled them to form Chaebols.
A Chaebol-oriented economic structure contributed to the rapid economic growth and at the same time faced severe trade barriers from EU and NAFTA due to its mass production system. Furthermore, domestic production costs have continuously increased because of well-organized labor unions and rocketing land prices. These negative factors pushed the industries to reorganize their structures.
South Korea struggles on the technological upgrading of the industry and foreign direct investment in the region as well as in the advanced industrialized countries.
In addition, the technological upgrading of the industry and regional development will make the South Korean economy grow further.
Overall, industrial policy and regional development in Japan seem to be cooperative and efficient to implement because of its matured economic level, while the regional development in Korea is regarded as a showcase for the techno- logical upgrading in specific areas.
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7
Deregulation for Whom?
Reexamining the Retail Deregulation in Japan
Yoichiro Sato
University of Auckland, Auckland, New Zealand
I. INTRODUCTION
Small store owners and farmers in Japan were well protected throughout the post–World War II period. Johnson sees this protection as a payoff for the mainte- nance of the Liberal Democratic Party’s (LDP) rule.1 Dramatic social changes in Japan during postwar economic development lessened the LDP’s reliance on these two groups. Nevertheless, they still exercise a significant influence both through individual LDP members and the bureaucracy, resisting and delaying necessary policy changes in the retail sector. Jurisdictional battles within Japan’s central bureaucracy, and between central and local governments, further make a meaningful policy change difficult.
This study of the amendment and the eventual abolition of Japan’s Large- Scale Retail Store Law (LSRSL) will reveal a strong influence of small retailers and the MITI’s dilemma in implementing a major retail policy change. A broad consensus on retail rationalisation has been stalled by bureaucratic and intergov- ernmental disagreements, thereby inviting external pressure. Despite changes in the law and MITI’s administrative guidance, informal sabotage by the local status quo interests watered down policy changes.
While the strict government regulation has failed to reverse the lack of successors for mom-and-pop stores, blind deregulation is not the answer. The recent deregulation has increased the total number of department stores and super- markets, and their stronger bargaining power has resulted in a sharp drop on 131
wholesale prices. However, the simultaneously expected drop in consumer prices has so far been limited to certain durable products, and this suggests that the drop is largely due to the prolonged recession of the 1990s, not the retail liberal- ization. As many observers have optimistically equated the retail liberalization of the 1990s with the realization of consumer interests, little attention has been paid to the increasing oligopolistic tendency in Japan’s retail industry.
This chapter will review the history of the large-scale retail regulations in Japan. Political processes which led to policy changes at different stages will be analyzed. The amendment of the Large-Scale Retail Store Law in 1991, the changes in its implementation since 1994, and the new decentralized regulation to be effective in the year 2000 will be analyzed in relation to wholesale prices, retail prices, and the structure of the retail industry. Finally, based on the preced- ing analysis, the paper will seek a possible direction of the future reforms for Japan’s retail regulations.