Monday, July 25, 2016

The Top College in Greater Noida Speaks on Abenomics


The top college in Greater Noida, Ishan  has been at the forefront of incorporating contemporary issues of business and economics into its curriculum. While the last few weeks have focused on BREXIT, in today’s piece we turn towards Asia. Japan forms the centre piece of our analysis. It makes enormous good sense to assert that the Japanese economy is in the midst of string recessionary currents and there are no signs of the Japanese PM Shinzo Abe being successful in navigating the ship of the Japanese economy. The point that makes the entire episode so bizarre is that Abenomics that is essentially an extension of the Keynesian policy of pump priming has failed to produce the desired results in the case of the Japanese economy. The stimulus packages offered by the Shinzo Abe led government in Japan has incorporated pump priming but to no avail. At the top college in Greater Noida, Ishan, we believe that the curious case of Mr. Shinzo Abe and consequently the Japanese economy presents a case for rethinking on the viability of Keynesian pump priming policies. The devil in the data shows that Japan is slowly but unfortunately walking the path of fiscal profligacy that if not addresses with concurrent measures like taxation to reinforce inter-temporal equilibrium may lead to far worse consequences.

The Top College in Greater Noida on Abenomics: Devil is in The Data
At the top  college in Greater Noida we believe that the failure of stimulus packages to lift the drowning animal spirits of capitalism in Japan require an analysis into the budgeting technique being used in Japan along with an inquiry into possible leakages that may exist. To begin with here is some interesting data on the Japanese economy:
·        Investment levels are still below pre-crisis levels.  Investment for Q1, 2016 stands at 72 trillion Yen vis-a-vis 77 trillion Yen for Q1, 2007.
·        Japan is yet to overcome deflation. The inflation level for 2015 was at 0% against -0.2% in the year 1998.
·        Japan cannot leverage the demographic dividend. It has 26.3% of its population above 65 years of age.
·        Japan has one of the lowest population growth rates. It has a fertility rate of 1.4% against the global median of 4%
·        Japan is not receptive enough to immigration. The immigration percentage stands at 1.6% against a global median of 45%.
·        Japan has an incredibly high debt to GDP ratio of 246.6% against the global median of 82.2%.
Probably this set of data offers a possible explanation for the continued crisis in Japan and the failure of the stimulus packages. For the Japanese economy to be analysed in economic terms, the academicians of the top PGDM college in Greater Noida, Ishan Institute of Management & Technology have translated these statistical measures into cultural and administrative insights. Take a look.
Remedy
Obstacle
Expand the workforce by including women and allowing old people to keep jobs longer
Cultural workforce traditions and seniority systems in corporations
Counteract negative demographics by allowing immigration
Deep aversion to immigration from policy makers and the local population
Hike taxes to lower government debt
Political compulsions from people and corporations against tax hikes
Institute industrial and labour market reforms
Resistance from labour unions, industries and lack of political will

Japan has done more than enough to foster economic ties with the world in the aftermath of the Second World War. To this extent Japan has aggressively promoted foreign direct investment by other companies in Japan and vice versa. Japan has a very strong export sector that has proven competencies in the verticals of automobile, software, heavy engineering, infrastructure and logistics. Yet Japan somewhere represents the face of a society that is yet to come to terms with the latest and the most advanced level of globalization i.e. immigration and cultural exchanges. Hidden behind the sophisticated bullet trains, total quality management revolutions and fast cars of Honda, Suzuki and Nissan are the age old orthodoxies of a culture that is steeped in tradition, seniority, rigid social strata that is by and large immobile and does not allow too much scope for interaction of foreigners with Japanese. Under such circumstances Japan is left to lick its wounds while leading a sequestered lifestyle.
At Ishan  one of the top  colleges in Greater Noida we wish to engage in greater data collection on the economic plight of Japan with a belief that the issue with Japan has larger ramifications and roots that extend beyond the obvious mathematical economics of pump priming and need to be seen in the broader context of the CAGE framework of Dr.Pankaj Ghemawat, IESE School, Barcelona by incorporating cultural and government factors to the stereotyped mathematical modelling preferred by macroeconomics experts.