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Once the marvel of the global economy, Japan has slipped behind China by resisting change in a way Italians know all too well

Tokyo subway (David Dennis)

It may not qualify as the freshest news, but it's worth taking a second look at the formal announcement last summer that China overtook Japan in gross domestic product to become the world's second most powerful economy. The first image conjured up was that of a new giant now weighing on the world's economy, with a real impact on international affairs and our own individual lives. But few have asked what happened to Japan, how this former marvel of the global economy has fallen into its relative decline. It's particularly worth our thought in Italy, because there are aspects of this question that may look familiar to Italians.

Let's start with the politics. Avoiding the stale comparisons between the Japanese Liberal Democratic Party, which ruled for decades with thousands of alliances, and our old Christian Democrats, there is no doubt that politics in Japan today lives more in terms of opposition and personal ties than that of our programmed debate. In broad strokes, we can say the electorate is divided mainly between the center-right Liberal Democratic Party and center-left Democratic Party. After a years in opposition, the Democrats came to power in 2009 with a good majority, but already two prime ministers have come and gone, and the party is divided into various factions and weakened by scandals.

The current Prime Minister, Naoto Kan, has managed to stay in the saddle, but calls for his resignation, and the usual pleas to bring stability and fresh leadership to the country, continue. The opposition does not enjoy much better health — lacking a clear leader and wracked by internal strife. It is increasingly clear that in recent years, real power has been exercised by the bureaucracy and the business community, rather than the democratic institutions.

The Japanese, like the Italians, are living longer. Indeed they are at the top of the world's charts for longevity. This is obviously a good thing although it weighs on pension expenditure and the budget, and in general does not increase turnover and social mobility. Even though the birth rate is low, the shortfall in the number of young workers is not replaced by foreign labor due to Japan's historical resistance to immigrants.

In economic terms, public debt has reached record levels and could reach 250% of GDP in 2015, according to an estimate by the International Monetary Fund. After decades of prodigious growth in the post-war decades, the economy slowed in the 1990s. There was a revival in the early years of this decade but the crisis has weakened the country again — unlike other Asian countries — and in 2008 growth was just 1.1% and the following year just slightly higher.

There is also a growing tendency among many Japanese companies, many of which are export-oriented, to relocate production activities abroad where labor costs are lower and worker flexibility higher. The result has been a sharp rise in unemployment especially among the middle aged.

Add to this a level of domestic taxation in Japan among the highest in the world, and you will have an image of a country that struggles to maintain the comfort levels of the past, where the business classes seems to lack the courage to go down new roads, with a political class stuck on the very same old roads composed of a majority and opposition that look exactly alike.

It would be arbitrary to go further with these comparisons to Italy. These are two very different countries, measured by size, history and culture. But they are also two great nations, two democracies that have reached important goals and can be infinitely pleasant places to live. But what both seem to share most of all is a reluctance to abandon ingrained habits to deal with a rapidly changing world.

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Economy

Abenomics Revisited: Why Japan Hasn't Attacked The Wealth Divide

Japanese Prime Minister Fumio Kishida promised to tackle wealth inequality and help struggling workers. But a year after he came to power, financial traders are once again the winners.

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-Analysis-

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