tical opposition to thwart government plans through its control of the upper house of the Diet (Brooks, 2001b).
Some people tend to think that the central government in Japan has a debt problem. In fact, the debt of the central government in Japan is both absolutely and proportionately less than that in the United States. The debt of the Japanese central government of Ñ240 trillion, or US$1.8 trillion, compares to a central government debt approximating US$6.1 trillion in the United States (World Bank, 2001). Proportionately, central government debt in Japan is 38 percent of the nation's annual GDP, while proportionately central government debt in the United States is 62 percent of the nation's annual GDP. Thus, central government debt is not the major problem in the Japanese economy (Brooks, 2001a).
A far more important problem related to debt is the massive level of problem loans held by the entities within the Japanese banking system. These problem loans threaten the stability of the country's banking system (Brooks, 2001a).
The issues that now must be faced are (1) what policies the Japanese central government are likely to implement to deal with the near economic crisis, and (2) the implications of these policies for the Japanese economy and other East Asian economies. There currently are no definitive answers to these questions (Belson, 2001).
Table 1 (on the following page) presents macroeconomic measures for Japan as of November 2001. The real gross domestic product (GDP) indicated in Table 1 reflects a 0.1 percent decline over the past year. The consumer price index (CPI) inflation indicated in the table reflects a deflationary environment in the Japanese economy.
Table 1: Macroeconomic Measures for Japan 2001
áSources: Central Intelligence Agency, 2001 (all except Exchange Rate); "Currencies," 2001 (Exchange Rate)
The value of Japan's total exports over the past year was US$450 billion. The ...