Japan is mondo rich

Somebody, somewhere, somehow, will someday write a case study of how the Commonwealth managed to remain totally economically backward while the world’s second largest economy was a just a few hours of jetliner time away.

And such a case study will note that some of the Commonwealth’s luminaries don’t even know that Japan is, indeed, the world’s second largest economy. Not coincidentally, Japan is also the Commonwealth’s most promising tourism market, but nobody will believe that so I’m not going to bother explaining it; go ahead and troll for tourists in Vladivostok and Arizona, we’ll let Guam capture all the Japanese visitors…oh, that’s already happened. Well, let’s just kick back and collect the food stamps while we tally just how big, and rich, and important Japan really is.

Japan’s economy has a gross domestic product of $5 trillion, second only to mighty Uncle Sam, who stands at a towering $13 trillion. In fact, this year Japan and the U.S. will jointly account for (are you ready for this?) about 40 percent of the entire world’s economic production.

Wow, 40 percent, and all that from two nations that comprise only 6.5 percent of the world’s population! Uncle Sam and Japan are awesome, dude. Sure, most of the world lives in filth, stupidity, and corruption, but the U.S. and Japan have shown just how far advanced societies can go if they put their minds to it. It really is something to behold.

Of course these days, what with annual growth rates clocking in at astounding numbers like 10 percent a year, the Chinese economy has the world all abuzz. And, yes, that’s for good reason, but a lot of wrong numbers are floating around out there about the Chinese economy.

You can’t blindly trust the global press (or Saipan’s econocrats); they frequently parrot things they don’t understand, such as “PPP” gross domestic product estimates. PPP means Purchasing Power Parity, which is sort of a cost of living adjustment thing; that’s all well and good, but only in very certain contexts. When comparing economic muscle, PPP is not a good measure. Normal ol’ GDP (without PPP perversions) is the way to go. I mention this because bizarro PPP numbers can make China’s economy look over 400 percent bigger than it really is.

Which means, as in all things economic…you gotta’ know your data, ‘cause data is more dangerous than a Hollywood trophy bride.

Now, I have a lot of respect for China, have written about it often, and believe that China will play an increasingly important role in the CNMI’s fortunes. But the fact remains that for now, Japan’s economy is over twice as large as China’s.

Yes, twice as large. True… hey, sexy hunk that I am, I might pinch your fiancee’s butt when you’re not looking, but I would never lie to you.

And, yes, contrary to what you may also hear, Japan’s economy is growing, lately at almost three percent a year. OK, I doubt that growth figure is sustainable, after all, Japan’s government is in fiscal kamikaze mode…but that’s their worry, not mine, and truth be told I am flirting with the idea of buying some serious yen if the yen hits the 120-to-$1 level.

Meanwhile, it’s likely that Japan will receive renewed international attention when Toyota overtakes General Motors as the world’s numero uno producer of cars. They’re neck and neck right now, and GM is looking like a rusty, financially inefficient old hulk, which is funny, because most its cars look the same way.

So, old man Japan just might get a few more minutes of fame in the near future. We’ll soon see a cover on Fortune magazine, “Japan is back,” or some such title.

Fame or not, Japan is mondo rich, and its per-capita GDP of $38,390 is among the world’s highest, their travelers, among the world’s most enthusiastic, their tourism industry, among the world’s most evolved and efficient…

But don’t take my word for it. Ask any Japanese tourist. They’re easy to find, just head south and go to an island called “Guam.”

(Ed Stephens Jr. is an economist and columnist for the Saipan Tribune. E-mail him at Ed@SaipanEconomist.com.)