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The gap between economic perception and reality in Japan

Kamimura

By Marina Kamimura
CNN Tokyo Bureau Chief

July 10, 1998
Web posted at: 1:13 p.m. EDT (1713 GMT)

In this story:

TOKYO (CNN) -- Japan's worsening economic plight is increasingly becoming the focus of global attention, and for good reason.

Simply put, weak or strong, Japan's economy is huge. By extension, so is its impact on the rest of the world. And this behemoth is officially in recession.

Still, I'm often asked by friends and colleagues who live elsewhere, "Is it really as bad as it's made out to be?"

Yes and no.

Show me the numbers

Ginza
Tokyo's upscale Ginza shopping district   

There's no denying the numbers, which show that the world's second-largest economy is not just slowing down but is in its worst recession since World War II.

Bankruptcies continue to soar. There's a human toll as well, with a record number of people out of work, underscored by a rising suicide rate.

But despite the gloomy scenario portrayed by a stream of bleak statistics, out on the street, it's hard to believe this country is in the midst of such deep economic problems.

We television journalists, in the business of storytelling through pictures, wring our hands as we try to figure out what images actually tell the story.

There are few visible symbols of the country's malaise.

There's none of the mass demonstrations or crowds of angry workers that viewers have become accustomed to seeing in other places experiencing difficult economic times, such as Indonesia or South Korea.

The economically motivated crowds you see here are the people that still flood the sidewalks of high-priced shopping areas such as Tokyo's Ginza district.

And moments such as last November's news conference where the head of the nation's oldest brokerage house, Yamaichi Securities, tearfully apologized to employees for the company's demise, are rare.

Hard times are relative

To see Japan's problems, one has to dig much deeper, since for the majority of people here, daily life hasn't changed much.

For many, the tough numbers mean they've been forced to cut back a bit -- holding off on buying a new car, perhaps, or taking one less trip abroad.

And many in Japan -- already a country of big savers -- express their worry by saving more than ever (which has many policy-makers wringing their hands, since they want consumers to spend to drive up the economy).

If anything, people now have a lifestyle others might consider normal.

It's important to remember that this is a country where, until recently, life was very good -- too good, in fact.

It wasn't hard at restaurants to find gold flakes in your food or sitting at the bottom of a cup of sake. The excess fueled other "abnormal" traits, too, such as vastly inflated property and stock prices.

Those extravagant days are largely over. Those inflated prices, which have since crashed, are behind the banking system's current bad loan problem and are being blamed for squeezing life out of the economy.

Still, thousands of Japanese didn't think twice about dropping several thousand dollars to fly to France for the World Cup, even though there were no tickets to games waiting at the other end.

Voter-pocketbook adage may not apply

campaign
Hashimoto (left) announced tax cuts and other relief measures ahead of Sunday's parliamentary election   

But while life may not be chaotic on the surface, there's no doubt the Japanese are concerned.

That's why the economy is the issue governing the parliamentary campaign leading up to Sunday's election for the Diet's Upper House.

That's also why Prime Minister Ryutaro Hashimoto promised a permanent tax cut, just days before the key vote, to try to persuade voters he and his party share their concerns and will take the drastic steps needed to turn the economy around.

While the timing appears political, this and other government initiatives, such as a bank rescue plan drummed up a week ago, are being tailored to those hurt most by the problem economy -- such as small businesses having trouble securing loans from banks themselves in need of help, and the shaky construction industry.

And despite public skepticism, the status quo appears likely to prevail in the election.

Analysts suggest that's because things simply haven't gotten bad enough for most Japanese, and voters have even less confidence in the alternatives offered by opposition to the ruling party.

The sky isn't falling

So, then, is the sky falling on Japan?

Put it this way: Countries do not become economic superpowers overnight, nor do they become economic basket cases overnight.

Japan's problems have been brewing for years. And if left unchecked, they will continue to stifle growth both here and abroad.

But for the most part, life goes on for the Japanese. While the boom times may be over, the vast majority are still far from wondering where their next meal will come from.

Still, the question remains whether reality will become as bad as the statistics make it out to be.

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