MITI and the Japanese miracle

Page 237

TABLE

18

Growth Rates, 19551965

(percent change over previous year)

Year

Real Gross

National Product

Civilian plant and equipment investment

1955

8.8

-3.2

1956

7.3

39.0

1957

7.4

25.1

1958

5.6

-4.7

1959

8.9

16.9

1960

13.4

40.9

1961

14.4

36.8

1962

7.0

3.4

1963

10.4

5.3

1964

13.2

20.0

1965

5.1

-6.4

SOURCE

: Arisawa Hiromi, ed.,

Showa

*

keizai shi

(Economic history of the Showa* era), Tokyo, 1976, p. 371.

vestment among the firms in the industryin this case, the "Petrochemical Cooperation Discussion Group," established by MITI on December 19, 1964.

⁸⁰

There could, of course, be variations on this pattern. Some new industries, such as electronics, were created under a new "temporary measures law"; and if the business was simply too risky or expensive for private enterprise to undertake, a joint public-private corporation might be createdfor example, the Japan Synthetic Rubber Corporation, established by law number 150 of June 1, 1957. During approximately the first half of the 1950's, MITI concentrated on steel, electric power, ship-building, and chemical fertilizers. It then fed into the economy, as it deemed them ready for commercialization, synthetic textiles (basic MITI policy adopted in April 1953), plastics (June 1955), petrochemicals (July 1955), automobiles (law of June 1956), electronics (law of June 1957), and so forth.

The results were impressive. The 1956 edition of the EPA's

Economic White Paper

included the famous line "We are no longer living in the days of postwar reconstruction," and the 1961 edition said, "Investment invites more investment."

⁸¹

Between the appearance of these two catch phrases, the Japanese economy experienced an average annual industrial investment rate of better than 25 percent, and of over 35 percent during three years (see Table 18). At the end of January 1961 the Enterprises Bureau estimated that the 1,500 "important"