Dear Members and Friends,
When assessing the major events of 2011, it seems a foregone conclusion that this was one of the more challenging years in recent history for the world in general and for Japan in particular. And yet we dare to paint an optimistic picture for the coming years.
There can not be any doubt that the desastrous events that occured in Japan on March 11, 2011 represent a negative milestone and set back for the country. The significance of the tripple catastrophy (earthquake/tsunami/radiation), against the backdrop of the disappointing and sluggish growth years following the collaps of the real estate and stock market bubble of 1990 and the repercussions of the financial markets crises of 2008, seem like a culmination in the accumulation of serious problems confronting Japan.
Can it get worse? To judge this let us comment on the two major challenges of Japan, namely the aging of the population and the extent of the government debt. All developed and mature countries without immigration eventually face the problem of relatively low growth. This will happen to China, too, in the coming 10 to 20 years. Until now Japan is an example on how well this process can be managed. As to the government debt, this is totally financed domestically with no refinancing difficulties in sight. The debt situation could be improved absolutely easily by lifting the at present very low consumer tax by some 3 – 5 percent. Japan, very much like Switzerland, owns a reliable domestic capital market and and very hard currency. In spite of the fact that a strong currency creates major problems for exports, it is a sign of strength: one currency with one identity and with one strong people backing it. This in sharp contrast to the Euro. Naturally, there are external factors – not to speak of natural desasters – such as world wide social, economic and financial developments which have significant impacts on all of us.
After a recent visit to Singapore, Hanoi, Hong Kong, Shanghai, Seoul and Tokyo I come to the conclusion that Tokyo remains the benchmark in manyfold aspects for all of Asia. Clearly, growth is much stronger in non Japan Asia. However, in terms of achievements, quality, stability and reliability Japan remains a leading example.
As this year draws to a close, I, together with my colleagues of the board of the SJCC, would like to thank all members and friends for their support and extend our best wishes for a prosperous 2012.