Even in Tokyo the impression of normality is misleading

Aécouter American, European and Chinese leaders, no one wants a similar to that of the Japan economic future. To justify the purchase of banks and massive stimulus programs, officials in the Western world have explained their constituents: "we are obliged to pass through here, or we will complete as the Japan, bogged down in the recession and deflation for ten years at least."

Chinese leaders like taking the Japan as a counterexample to not revalue their currency.

EH Yes, nobody wants to be instead of the Japan, the fallen angel from the status of Economics, the fastest in the world for thirty years in a sluggish economy in the past eighteen months. No one wants to live on a daily basis the trauma of the deflation that the Japan has experienced many times, or have a public debt far exceeding 100 of the GDP. No one wants to fall by world number one for the symbol of economic stagnation.

And yet, visiting Tokyo, the visitor sees prosperity everywhere. Shops and offices are full of activity. Restaurants are recipe, their clients are the rest better dressed than in New York or Paris. After all, even after almost twenty years of "recession", the per capita income in the Japan is greater than $ 40,000. The Japan is always the third world after the United States and China. Its unemployment rate does not exceed 5.

Then why First, in remote areas of Tokyo, the situation is harder, as in Hokkaido where, as the abandonment of major public works projects, employment declined.

Even in Tokyo, the impression of normality is misleading. Twenty years ago, Japanese employees expected to receive from enormous rewards of end of year, generally in the order of one third of their salary or more. So, they fell they eventually disappear. The purchasing power of more than 10. The notion of precarious employment is now even more widespread than before and often replaces "use life" of the past.

Even if the Japan is not (yet) in crisis, its budgetary situation is more alarming the day. To date, the Government has been able to finance its debt to 95 using private savings, despite puny interest rates. Likely the Japanese investors, perennial memories of the collapse of the stock market and the bursting of the housing bubble of the 1980s prefer bonds that he considered secure rather than of Resume inflation risks.

Unfortunately, even if the Japan is maintained up to now, great challenges await him. The first problem is its workforce which continues to decline, due to a very low rate of birth and a strong resistance to foreign immigration. The country also must find a way to improve its productivity.

Its ineffectiveness in agriculture, trade and administration is legendary. Even with world renowned Japanese companies, the reluctance to address the good old tradition of the network or "club" limited or prevented the removal of less profitable product lines - and the jobs.

As the population ages and decreases, more and more people retire and sell Japanese Treasury bonds. Arrives the moment where the Japan will cross his own Greek tragedy, when the market will impose more interest rates in stronger.

The Government will be forced to think about how to increase revenues. Randomly, I would say that the Japan will increase its tax on added value, which is today only 5, well below the European figures. But is it realistic to increase its fees for low continued growth

Investors who have bet against the Japan in the past have been mistaken, grossly underestimating the extraordinary Japanese resilience and flexibility. But budget road looks paved with obstacles in the future, the political consensus to plaudits in more recent years.

Ultimately, foreign heads of State have reason to frighten their nation with their stories on the Japan To be sure, hyperbole is exaggerated; the Chinese should especially consider itself lucky. But the acolytes of the deficits should not take the Japan example to stay calm before the excessive stimulus plans. The capacity of the Japan to walk right to the approach of a great danger is admirable, but the dangers of a future crisis are many more that the bond market has air to admit it.