The Japanese economy was once considered a model for Asia and a marvel by any standard. But after the collapse of its real estate and stock market bubbles in the early 1990s and the agonizing process of financial deleveraging that followed, the economy's fundamental weaknesses became more apparent. Japan's inefficient capital markets, overdependence on exports, rapidly aging labor force and massive public debt had already led many to conclude that the economy's best days are over. Then the earthquake, tsunami and nuclear crisis struck in a devastating cascade of events, creating what the prime minister called the nation's worst crisis since World War II. The resulting economic and logistical challenges are monumental. But the pessimists ignore Japan's strengths: its disciplined labor force, social cohesion, high savings rate and sophisticated technological infrastructure. Can the nation rally these resources to tackle the formidable task of rebuilding?
Chief Investment Officer, Special Situations, Abu Dhabi Investment Council
Professor of Economics, University of Southern California
Founder and Chairman, STS forum; former Minister of Finance, Japan
Former Senator and Parliamentary Secretary for Economic and Fiscal Policy, Japan;
Senior Fellow, Yale University; and Research Associate, Harvard University