MITI and the Japanese miracle

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independence came into effect. On May 29, 1952, thanks to U.S. sponsorship, Japan was admitted to the International Monetary Fund and the International Bank for Reconstruction and Development (the "World Bank"); and on August 12, 1955, Japan joined the General Agreement on Tariffs and Trade (GATT). However, at the time both Japan's IMF and GATT memberships were in the special category reserved for poor countries. On September 15, 1953, Japan also concluded a basic commercial treaty with the United States. Some of these affiliations did not go down well in Japanparticularly Yoshida's plan to "introduce foreign capital" via loans from the World Bank, which irritated many nationalists and led to shouts of "national dishonor" in the Diet.

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Yoshida pushed the loan agreements through anyway; in the autumn of 1953 the World Bank made its first loan of $40.2 million to the Kansai, Chubu, and Kyushu Electric Power companies to build thermal generating plants. In later years the steel companies also borrowed from the World Bank. MITI was delighted with these loans, but it also saw in the political controversy surrounding them a potent reason to continue with its own approach to rapid economic development.

Once the occupation had ended, the Yoshida government ordered a general review of the executive branch and of all laws and ordinances inherited from the SCAP era. Among other things Yoshida himself wanted to abolish the Economic Stabilization Board as a symbol of the controlled economy, but MITI, which sent by far the largest number of officials to it, liked it. In order to save it, Hirai Tomisaburo* of MITI bypassed Yoshida to obtain the Liberal Party's agreement to transform the ESB into a smaller (only 399 officials) organ for economic analysis and forecasting.

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Thus, on August 1, 1952, the powerful ESB ("whose name alone would stop a child's crying") became the Economic Deliberation Agency (EDA; Keizai Shingi Cho*), a "think tank" with no operational duties at all. On July 20, 1955, after Yoshida had left the scene, its name was changed to Economic Planning Agency (EPA; Keizai Kikaku Cho).

MITI continued to regard the EDA/EPA as its own "branch store"it appointed the agency's vice-minister, the chief of its Coordination Bureau, and numerous other key posts. Moreover, in 1952 the substantive powers of the old ESB were all transferred to MITI. The International Trade Bureau (ITB) took over preparation and administration of the foreign exchange budget, and the Enterprises Bureau began to screen all foreign investment proposals. These developments transformed the ITB; its offices on the third floor of the old MITI office building became known as the "Toranomon Ginza" because of the