"Golden Sixties" and Shift To Export Trade
The period of rapid economic growth between 1955 and 1961 paved the way for the "Golden Sixties," the second decade that is generally associated with the Japanese economic miracle. In 1965, Japan's nominal GDP was estimated at just over $91 billion. Fifteen years later, in 1980, the nominal GDP had soared to a record $1.065 trillion.
Under the leadership of Prime Minister Ikeda, former minister of MITI, the Japanese government undertook an ambitious "income-doubling plan." Ikeda lowered interest rates and taxes to private players to motivate spending. In addition, due to the financial flexibility afforded by the FILP, Ikeda’s government rapidly expanded government investment in Japan’s infrastructure: building highways, high-speed railways, subways, airports, port facilities, and dams. Ikeda's government also expanded government investment in the communications sector of the Japanese economy previously neglected. Each of these acts continued the Japanese trend towards managed economy that epitomizes the mixed economic model.
Besides Ikeda's adherence to government intervention and regulation of the economy his government pushed trade liberalization. By April 1960, trade imports had been 41 percent liberalized (compared to 22 percent in 1956). Ikeda planned to liberalize trade to 80 percent within three years. His plans however met severe opposition from both industries who had thrived on over-loaning and the nationalist public who feared foreign enterprise takeovers. The Japanese press likened liberalization to "the second coming of the black ships," "the defenselessness of the Japanese islands in the face of attack from huge foreign capitalist powers," and "the readying of the Japanese economy for a bloodstained battle between national capital and foreign capital." Ikeda's income-doubling plan was largely a response to this growing opposition and widespread panic over liberalization, adopted to quell public protests. Ikeda's motivations were purely pragmatic and foreign policy based however. He moved toward liberalization of trade only after securing a protected market through internal regulations that favored Japanese products and firms.
Ikeda also set up numerous allied foreign aid distribution agencies to demonstrate Japan’s willingness to participate in the international order and to promote exports. The creation of these agencies not only acted as a small concession to international organizations, but also dissipated some public fears about liberalization of trade. Ikeda furthered Japan’s global economic integration by joining the GATT in 1963, the IMF, and the OECD in 1964. By the time Ikeda left office, the GNP was growing at a phenomenal rate of 13.9 percent.
In 1962, Kaname Akamatsu published his famous article introducing the Flying Geese Paradigm. It postulated that Asian nations will catch up with the West as a part of a regional hierarchy where the production of commoditized goods would continuously move from the more advanced countries to the less advanced ones. The paradigm was named this way due to Akamatsu's envisioning this pattern as geese flying in unison with Japan being an obvious leader.
Read more about this topic: Japanese Post-war Economic Miracle
Famous quotes containing the words golden, sixties, shift, export and/or trade:
“He, that holds fast the golden mean,
And lives contentedly between
The little and the great,
Feels not the wants that pinch the poor,
Nor plagues that haunt the rich man’s door,
Imbitt’ring all his state.”
—Horace [Quintus Horatius Flaccus] (65–8)
“I want a revamped feminism. Putting the vamp back means the lady must be a tramp. My generation of the Sixties rebels wanted to smash the bourgeois codes that had become authoritarian totems of the Fifties.... Thirty years later, we’re still stuck with the [”nice” girl].”
—Camille Paglia (b. 1947)
“The shift from the perception of the child as innocent to the perception of the child as competent has greatly increased the demands on contemporary children for maturity, for participating in competitive sports, for early academic achievement, and for protecting themselves against adults who might do them harm. While children might be able to cope with any one of those demands taken singly, taken together they often exceed children’s adaptive capacity.”
—David Elkind (20th century)
“The rumor of a great city goes out beyond its borders, to all the latitudes of the known earth. The city becomes an emblem in remote minds; apart from the tangible export of goods and men, it exerts its cultural instrumentality in a thousand phases.”
—In New York City, U.S. public relief program (1935-1943)
“The glory of the farmer is that, in the division of labors, it is his part to create. All trade rests at last on his primitive activity.”
—Ralph Waldo Emerson (1803–1882)