BETWEEN current Zimbabwe and the postwar situation in Japan there are similarities.
, the runaway unemployment rate and galloping inflation are part of the situation that is prevailing in Zimbabwe.
After the devastation of the atomic bomb that saw Japan succumb to the allies in 1945, there were severe food shortages, rising inflation and rampant black marketeering.
Companies were shut down, domestic demand plunged and the business environment became hostile. This is the same situation prevailing in Zimbabwe today.
However, apart from the loose synergies the comparison ends there.
The rest are telling details on what the crisis-ridden country can learn from the rise of Japan after the Second World War.
Unlike the Zimbabwean government, which has set out to jettison the private sector, Japan harnessed the sector with impressive results.
Japan also utilised international support from the United States in the form of rehabilitation aid.
The rapid expansion of Japan’s economy from the late 1950s through the 1960s was powered by the vigorous investment of private industry in new plant and equipment.
The high level of savings of Japanese households provided banks and other financial institutions funds for investment in the private sector.
The upsurge in capital spending was associated with the introduction of new technology, often under licence from foreign companies.
Modernisation made Japanese industries more competitive on the world market, created new products, and brought Japanese enterprises the benefits of mass production and improved productivity per worker.
Another factor behind Japan’s economic growth during this period was the availability of an abundant highly educated labour force.
Large numbers of young people entered the labour force every year coupled with heavy migration of agricultural workers to manufacturing and service jobs.
About five years after the war the gross domestic product had returned to pre-war levels.
Exports were booming and the domestic demand growing owing to the rapid population growth.
Almost two decades after the war Japan became the second largest economy in the world after the United States.
Subsequently from 1955 to 1960 the economy was recording a double-digit growth rate.
Despite the trade conflict with the US in 1971 and the fuel shock two years later the economy continued on a growth path. It also withstood a negative growth rate recorded in 1970.
There was a bubble economy in the two decades to come with land prices ballooning. The financial sector rallied behind the property development firms and estate agency.
The bubble however burst in 1990 when house and land prices plunged leaving financial services companies exposed.
More banks folded and other merged to spread risk.
Now the economy is on the upward trend again buoyed by reforms.
On Monday Heizo Takenaka, Japan’s minister in charge of economic and financial services said the world’s second biggest economy would accelerate after expanding between 0,5% and 1% this year and in 2004.
“This is the time of adjustment,” Takenaka told a World Economic Forum meeting in Singapore. “After that, the pace of growth may rise to 2% or more.”
Japan’s exports, which accounted for a fifth of its 1% economic growth in the second quarter, have risen five straight months to August.
The unemployment rate fell to 5,1% in August from 5,3% in July.
Back home the economy of Zimbabwe is poised for further recession on the back of government interference in the private sector.
Government has gone on a massive drive to cow investors by imposing pricing controls.
The results have been a scale-down in business by key companies.
It is anticipated that manufacturing industry will slip by 35% this year while the economy will shed 7,2% in the same period.
About 500 companies are expected to have folded in the last three years condemning thousands to the informal market.
Millions also face starvation. President Robert Mugabe’s calls to turn to Asia could include learning from those countries instead of continuously begging them to bail Zimbabwe out of its current crisis.
Mugari was recently in Japan as a guest of the Japanese government.