Despite two decades of stagnation, the Japanese economy has shown remarkable resilience in the face of COVID-19 and the global energy crisis. While US President-elect Donald Trump’s second administration poses the biggest challenge in decades, a stable democracy, rooted in a strong national identity, will see the country through.
TOKYO – I first visited Japan as a young member of the UK Parliament in the early 1980s. Yukio Satoh, an ambitious and forward-thinking diplomat who would later serve as Japan’s ambassador to the United Nations, had recently been posted to the country’s London embassy. Recognizing that the political dialogue between the United Kingdom and Japan was dominated by an older generation, Satoh sought to foster connections with a younger cohort of British politicians.
To this end, Satoh invited several newly elected MPs, including me, to visit Japan and engage with our Japanese counterparts. Our fortnight-long trip included a weekend in the constituency of a Diet (Japanese parliament) member. My host’s constituency was centered around the spa town of Hanamaki, famous for its noodles.
That visit sparked my longstanding enthusiasm for Japan, which led me to return dozens of times over the years, in various capacities: MP, cabinet minister, last British governor of Hong Kong, and European commissioner for external relations.
More recently, I visited Japan as an international adviser to the Praemium Imperiale, a prestigious award commemorating the centennial of the Japan Art Association’s founding. Established under the patronage of the Japanese Imperial family and supported by a generous commercial grant, it has been likened to a Nobel Prize for the arts.
The Praemium Imperiale is an essential component of Japan’s soft power. Over its 35-year history, it has been awarded to celebrated artists and architects from Japan and around the world.
Japan’s contributions to the visual arts, film, and architecture have left a lasting impression on me. But for many, the most impressive thing about the country is its extraordinary economic success.
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Japan’s postwar boom is often described as an “economic miracle.” While I am skeptical of this term, there is no denying that the country experienced a remarkable transformation between the late 1950s and 1990s. This can be attributed to several key factors: relative political stability, effective policymaking, and substantial investments in education, job training, and public health, as well as the ability to capitalize on opportunities created by increasingly globalized markets. I witnessed these dynamics firsthand during my tenure as governor of Hong Kong.
To be sure, the miracle did not last. After decades of rapid GDP growth, especially between 1973 and 1991, the country entered a prolonged period of economic stagnation and deflation, often referred to as the “lost decades.”
Japan’s post-1990 economic stagnation was triggered by efforts to cool an overheated property sector through interest-rate hikes and a strong-yen policy intended to address US trade concerns. These measures were largely a result of the 1985 Plaza Accord, which boosted the yen’s value and undermined the competitiveness of Japanese exports.
Given his antagonism toward America’s allies and his threats to launch a trade war, US President-elect Donald Trump’s second term poses the most serious challenge to Japan’s economic resilience in decades. One can only hope that Japanese policymakers confront Trump’s proposed protectionist tariffs with the same resolve their predecessors demonstrated in countering Ronald Reagan’s trade restrictions and currency manipulation.
Fortunately, Japan finds itself in a relatively strong position, with recent data underscoring its remarkable resilience in the face of the twin shocks of the COVID-19 pandemic and the global energy crisis. Admittedly, economic growth is slowing once again – the International Monetary Fund projects GDP to rise by just 0.3% in 2024, down from 1.7% in 2023 – and Japan has been overtaken by Germany as the world’s third-largest economy. But it remains a prosperous country with an exceptionally high life expectancy.
A visit to Japan reveals the source of its resilience: a strong democratic society firmly rooted in the rule of law. But what impresses me most is the country’s ability to navigate the tension between identity politics and globalization without succumbing to the divisiveness that currently plagues many other liberal democracies.
While Japan faces several daunting challenges – not least a rapidly aging and shrinking population – it retains a profound sense of national identity that seems to grow stronger, not weaker, in an increasingly interconnected world. Its self-assurance has endured the pressures of a globalized economy, which is why I am confident that it can weather whatever the future may hold.
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External factors surely contributed to the Syrian regime’s vulnerability in the face of a new rebel advance. But the primary cause of President Bashar al-Assad’s downfall is that he presided over a disintegrating social contract, enabling his enemies to forge new coalitions organized around meeting the everyday needs of Syria’s people.
explains why Bashar al-Assad’s government collapsed so quickly, placing most of the blame on Assad himself.
The Middle East’s geopolitical landscape has been transformed by the swift collapse of Syria’s al-Assad dynasty. While the Iranian-led “axis of resistance” now appears hollowed out, an Islamist regime in Damascus may prove deeply unsettling not only to Israel, but also to the region’s Arab states.
agrees with Iran’s former vice president that the Syrian regime’s collapse will transform the Middle East.
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TOKYO – I first visited Japan as a young member of the UK Parliament in the early 1980s. Yukio Satoh, an ambitious and forward-thinking diplomat who would later serve as Japan’s ambassador to the United Nations, had recently been posted to the country’s London embassy. Recognizing that the political dialogue between the United Kingdom and Japan was dominated by an older generation, Satoh sought to foster connections with a younger cohort of British politicians.
To this end, Satoh invited several newly elected MPs, including me, to visit Japan and engage with our Japanese counterparts. Our fortnight-long trip included a weekend in the constituency of a Diet (Japanese parliament) member. My host’s constituency was centered around the spa town of Hanamaki, famous for its noodles.
That visit sparked my longstanding enthusiasm for Japan, which led me to return dozens of times over the years, in various capacities: MP, cabinet minister, last British governor of Hong Kong, and European commissioner for external relations.
More recently, I visited Japan as an international adviser to the Praemium Imperiale, a prestigious award commemorating the centennial of the Japan Art Association’s founding. Established under the patronage of the Japanese Imperial family and supported by a generous commercial grant, it has been likened to a Nobel Prize for the arts.
The Praemium Imperiale is an essential component of Japan’s soft power. Over its 35-year history, it has been awarded to celebrated artists and architects from Japan and around the world.
Japan’s contributions to the visual arts, film, and architecture have left a lasting impression on me. But for many, the most impressive thing about the country is its extraordinary economic success.
Secure your copy of PS Quarterly: The Year Ahead 2025
Our annual flagship magazine, PS Quarterly: The Year Ahead 2025, is almost here. To gain digital access to all of the magazine’s content, and receive your print copy, subscribe to PS Premium now.
Subscribe Now
Japan’s postwar boom is often described as an “economic miracle.” While I am skeptical of this term, there is no denying that the country experienced a remarkable transformation between the late 1950s and 1990s. This can be attributed to several key factors: relative political stability, effective policymaking, and substantial investments in education, job training, and public health, as well as the ability to capitalize on opportunities created by increasingly globalized markets. I witnessed these dynamics firsthand during my tenure as governor of Hong Kong.
To be sure, the miracle did not last. After decades of rapid GDP growth, especially between 1973 and 1991, the country entered a prolonged period of economic stagnation and deflation, often referred to as the “lost decades.”
Japan’s post-1990 economic stagnation was triggered by efforts to cool an overheated property sector through interest-rate hikes and a strong-yen policy intended to address US trade concerns. These measures were largely a result of the 1985 Plaza Accord, which boosted the yen’s value and undermined the competitiveness of Japanese exports.
Given his antagonism toward America’s allies and his threats to launch a trade war, US President-elect Donald Trump’s second term poses the most serious challenge to Japan’s economic resilience in decades. One can only hope that Japanese policymakers confront Trump’s proposed protectionist tariffs with the same resolve their predecessors demonstrated in countering Ronald Reagan’s trade restrictions and currency manipulation.
Fortunately, Japan finds itself in a relatively strong position, with recent data underscoring its remarkable resilience in the face of the twin shocks of the COVID-19 pandemic and the global energy crisis. Admittedly, economic growth is slowing once again – the International Monetary Fund projects GDP to rise by just 0.3% in 2024, down from 1.7% in 2023 – and Japan has been overtaken by Germany as the world’s third-largest economy. But it remains a prosperous country with an exceptionally high life expectancy.
A visit to Japan reveals the source of its resilience: a strong democratic society firmly rooted in the rule of law. But what impresses me most is the country’s ability to navigate the tension between identity politics and globalization without succumbing to the divisiveness that currently plagues many other liberal democracies.
While Japan faces several daunting challenges – not least a rapidly aging and shrinking population – it retains a profound sense of national identity that seems to grow stronger, not weaker, in an increasingly interconnected world. Its self-assurance has endured the pressures of a globalized economy, which is why I am confident that it can weather whatever the future may hold.