Japan

Abstract

ecause ecause it is a resource-poor country, has geared its economy toward the export of manufactured goods. Nevertheless, as the secondrichest capitalist country, it is up against international pressure to increase domestic demand. While focusing on its own economy, has depended upon the United States for protection in security matters. As a backlash from the whirlwind of military activities before and during World War II, and ever-conscious of its weakness in natural resources, has opted to stay clear of the political front. Perhaps this will also change as world circumstances alter. Moreover, can also concern itself with the lessdeveloped countries (LDCs) and the political and economic matters associated with them, the so-called North-South issues. At one time, there was talk of a possible recession in the Japanese economic machine. Although the economic climate now appears brighter, what prompted the turn of events was the rapid rise of the yen (over 60 percent from 1985 to 1987, the period during which this paper was written).' The enormous surplus is accumulating has brought harsh criticism from the United States and Europe, among others, with references to a war and Japan bashing. Since the oil crisis in the early 1980s, exports drove the Japanese trade surplus to over 80 billion dollars (in 1986), although this is now decreasing.2 In the fall of 1985, the leading industrialized countries had finally decided to allow the yen to measure up. In 1986, the U.S. trade deficit was 170 billion dollars, of which one-third was with (58 billion dollars).3 The success of Japan's economy has caused sharp fric-