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  1. 1. By group no. 4<br />Japan: Deficits, Demography, and Deflation<br />1<br />
  2. 2. Road map<br />Introduction : by Manish<br />Fruits of the miracle ,Nixon and oil shocks <br />by: Manish<br />Enduka and The Bursting Bubble and globalization : by Mayank<br />Hashimoto’s legacy : by Saket<br />Japan’s demographic crisis : by Saket<br />Japan’s Pension System and Problem : By Sunil<br />2<br />
  3. 3. Cont……<br />The Koizumi Reforms : By Prateek<br />BOJ quantitative easing policy, Banks and bank lending : By Prateek<br />Pension reform, fiscal reform : By Ashish<br />Privatization of postal services<br />Takenaka’s challenges<br />Graphic<br />Conclusion<br />3<br />
  4. 4. Introduction <br />4<br />
  5. 5. Fruits of the miracle ,Nixon and oil shocks<br />In 1971 to 1991 Japan’s average annual GDP growth rate was 4.4%<br />After 1991 its average annual GDP growth rate was less than 2% <br />Richard Nixon ended the Bretton Woods system of fixed exchange rates<br />In 1973 , the first oil shock hit the world economy<br />5<br />
  6. 6. Enduka and The Bursting Bubble and globalization<br />After oil shocks, exchange rate effect, Japan’s aggressively reinvest in modern plant and equipment <br />Japanese invested in their stock market, foreign equities, real estate, and foreign debt<br />After Enduka, Bursting Bubble happened in Japan’s and price of land fell by 85%<br />6<br />
  7. 7. Hashimoto’s legacy<br />Hashimoto head of the LDP’s, continue play a role in effecting the structural reforms of his 1996 agenda <br />In January 2001, the number of ministries was consolidated from 21 to 11<br />7<br />
  8. 8. Japan’s demographic crisis <br />Japan’s child birth, fertility rate decline<br />Mortality rate increase <br />Japan’s labor force shrink<br />Japanese worried about maintaining the sort of skilled workforce that Japan needed or advanced manufacturing and services <br />8<br />
  9. 9. Japan’s Pension System and Health care System<br />The basic pension system was financed by a fixed amount of insurance premiums<br />There were two types of supplemental corporate pension plans<br />Employees pension fund<br />Defined-benefits corporate pension<br />In health care programs, private employees, public employees, teacher, farmers, and self-employed people, virtually all Japanese were insured<br />9<br />
  10. 10. Problem<br />10<br />Increase in the rate of retirement<br />Not fully funded<br />Needed periodic adjustments<br />
  11. 11. The Koizumi Reforms<br />Four part of economic <br />Privatization <br />To write off the banks <br />Structural reforms<br />Issuing governments bond<br />11<br />
  12. 12. BOJ quantitative easing policy, Banks and bank lending<br />Non performing loans<br />Fully utilize the council on economic and fiscal policy<br />New century restoration<br />Banks and bank lending<br />12<br />
  13. 13. Pension reform, fiscal reform<br />Koizumi increase government contribution in retired people pension fund<br />Government increase monthly contribution from Yen 13,300 to 16,900<br />Japan have serious deficit problem<br />Government holding spending constant and raising taxes, to balance fiscal deficit<br />13<br />
  14. 14. Privatization of postal services<br />Japan’s government privatizing Japan post in 2007, because postal service make more profitable for public<br />Postal service break into four part<br />Post office management<br />Mail delivery <br />Bank<br />Insurance<br />Post office and mail delivery control by government and bank or insurance will open to private sector<br />14<br />
  15. 15. Takenaka’s challenges<br />Takenaka’s worried about budget deficits, public debt, the consequences of japans current surplus and the exchange rate of Yen<br />15<br />
  16. 16. Graphic<br />16<br />
  17. 17. Conclusion<br />17<br />
  18. 18. 18<br />