Message from the Chairman
NAKAJIMA Atsushi was appointed Chairman of RIETI in April 2011.
The year 2011 turned out to be very challenging for both the Japanese and global economies. The Great East Japan Earthquake that struck on March 11 was not only a major humanitarian disaster but also dealt a tremendous blow to the companies in the affected areas. Moreover, businesses across a large area had to deal with further difficulties imposed by the restrictions on the use of electricity in the wake of the nuclear power plant accident. The resulting breakdown in supply chains had repercussions for the production of automobiles in Japan and in the United States. Although the impact of the nuclear power plant accident is gradually being alleviated, the number of overseas visitors to Japan has yet to recover fully. Fortunately, given the impact of up to three economic stimulus packages for restoration and reconstruction taken by the government, the real economic growth rate for the third quarter of the current year rose 1.4% from the previous quarter (or 5.4% year-on-year), representing a sharp recovery from the previous contractions. Still, there are many issues to address, including a grand theme of how to achieve reconstruction of the afflicted areas while ensuring local growth and employment.
Meanwhile, the global economy in 2011 witnessed ever increasing concerns over sovereign debt in the developed countries. In particular, debt problems in certain European countries have posed serious concerns for the global financial markets, even undermining the stability of the entire eurozone. Although European nations have been trying to improve their financial situations and eliminate market anxieties, it is indeed a difficult task to control expenditures while increasing public contribution in the face of the severe economic environment. Moreover, regaining fiscal strength will not guarantee economic revitalization. It is imperative to bolster corporate activities to support wages and employment in the future, while acting to restore fiscal soundness. In fact, the most recent period of sustained growth in the major developed countries was often attributed to a growing economic imbalance. These countries need to develop an innovation-driven economy in which economic growth is achieved through vigorous corporate activities, and not by the expansion of economic imbalances.
With both the Japanese and global economies facing many critical issues, research institutions have a responsibility to identify urgently these issues and propose improvements. These responsibilities are even clearer for an institution like RIETI, which was established as a policy think tank for the economy and industries. In April 2011, the 11th anniversary of its founding, RIETI launched a third five-year medium-term plan, establishing a number of research programs covering nine fields. It has also committed to seeking actively ways to address significant short-term economic issues.
For example, through its research and symposiums, RIETI analyzed the Great East Japan Earthquake through the experience of the Great Hanshin- Awaji Earthquake that occurred in 1995, and identified a number of facts, for instance: 1) the rate of bankruptcies of companies in the affected areas that had business relationships with financial institutions in the affected areas increased; and 2) the rate of relocation was higher among companies that were located in high corporate agglomeration areas before the disaster. RIETI has also proposed theories to support post-disaster revival, finding that while long-term economic growth is often accelerated after major wars or disasters, it is essential to reform comprehensively the frameworks of regulations and industry to truly revitalize the economy. Meanwhile, RIETI has also been analyzing corporate vitality and other issues. It is now developing a Japan Industrial Productivity (JIP) database related to corporate productivity and a Japanese Study of Aging and Retirement (JSTAR) database that stores panel data related to the lifestyles and health of elderly people. It is important to measure accurately corporate productivity and seek to raise it, mainly by improving exports and urban density. This will be a key factor that will determine economic growth in many countries going forward. We must also seek to understand better the health and lifestyles of people and their economic relationships, and compare the situation in Japan with that of other major countries so that Japan can take appropriate and effective measures amid severe fiscal restraints.
The latest RIETI Highlight will introduce research and symposiums related to the Great East Japan Earthquake and the databases developed by RIETI. I hope that this special edition will provide useful viewpoints to our readers in addressing the critical short-term economic issues.
Profile
2011-Present 2004-2011 2001-2011 2000 1999 1975
Selected Publications
Nihon no Toppako (Japan's Breakthrough), Toyo Keizai Inc., 2011
Sekaikeizai: Rensasuru Kiki (Global Economy: Chain-reaction Crisis), Toyo Keizai Inc., 2009 Chugoku Jinmingen no Chosen (Challenge of China's Yuan), Toyo Keizai Inc., 2004
Nihon Keizai no Risuku Sinario (Risk Scenarios for the Japanese Economy), Nihon Keizai Shimbun, Inc., 2004 Chairman, RIETI
Senior Managing Executive Officer & Chief Economist, Mizuho Research Institute, Ltd.
Regular Commentator of World Business Satellite (TV Tokyo)
Chief Economist & General Manager, Research Department, Head Office, IBJ President, Banque IBJ (France) S.A.
Joined Industrial Bank of Japan, Ltd. (IBJ)
RIETI Highlight 2011 Special Edition 2