NO. 12 -- March 28, 1997


Feature Article


Although the graying of the population is a phenomenon present in all industrial nations, nowhere else is it proceeding as fast as in Japan. The costs of providing pensions and health care to retirees have become major issues for both the public and the private sector, arguably to a greater degree than in the United States.

How questions relating to benefits for older people are resolved over the next five to 10 years could have some effect on the productivity of Japanese firms. More important, though, they could impact Japan's external imbalance and the value of the yen. As such, the issues surrounding an aging population in Japan are of interest not only because they offer comparisons with, and possibly lessons for, similar policy debates in this country, but also because they might affect the ability of American companies to sell their goods and services in the Japanese market.

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Weekly Review

Gore Reaffirms U.S. Commitment To Current Troop Levels In Japan by Barbara Wanner

Despite a rising chorus of demands from Okinawa prefectural officials and local activists for a reduction in the U.S. troop presence on Japan's southernmost island, Vice President Al Gore in March 23-24 meetings in Tokyo reaffirmed that the United States will continue to base 47,000 military personnel in Japan, including a majority on Okinawa. Previewing President Clinton's likely position when he meets Prime Minister Ryutaro Hashimoto in Washington in late April, Mr. Gore emphasized in his March 23 conversation with Foreign Minister Yukihiko Ikeda and talks the following day with the premier that now would be the "worst possible time" to reduce American troops on Okinawa in view of uncertainties about North Korea's behavior in the region.


Tokyo's ODA Program In State Of Flux by Christopher B. Johnstone

If Prime Minister Ryutaro Hashimoto is to be believed, Tokyo will leave no stone unturned in its quest to reverse the nation's worsening fiscal balance sheet. For the first time, the spending frugality long preached by Ministry of Finance budget drafters may extend to Japan's foreign aid program. Official development assistance traditionally has held a sacred place in budget discussions. Even as fiscal pressures have forced belt-tightening elsewhere in the government, the aid program has continued to grow &endash;&endash; albeit at a slower rate than in the past.


Japanese Personal Savings Growth Slowed In 1996 by Douglas Ostrom

Japanese households long have been among the world's most enthusiastic savers. Economists in Japan and elsewhere have given this proclivity toward thrift at least partial credit for the nation's remarkable postwar economic growth. Data released in March by the Management and Coordination Agency as well as the Bank of Japan suggest that Japanese households are slowing their savings. If true, this trend has implications for Japan's long-term growth and its external imbalances.

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