雅思阅读材料：Banks Exposures

Whose lost decade?

Japan’s economy works better than pessimists think—at least for theelderly.

THE Japanese say they suffer from an economic disease called "structuralpessimism". Overseas too, there is a tendency to see Japan as a harbinger of allthat is doomed in the economies of the euro zone and America—even though figuresreleased on November 14th show its economy grew by an annualised 6% in the thirdquarter, rebounding quickly from the March tsunami and nuclear disaster.

Look dispassionately at Japan’s economic performance over the past tenyears, though, and "the second lost decade", if not the first, is a misnomer.Much of what tarnishes Japan’s image is the result of demography—more than halfits population is over 45—as well as its poor policy in dealing with it. Evenso, most Japanese have grown richer over the decade.

In aggregate, Japan’s economy grew at half the pace of America’s between2001 and 2010. Yet if judged by growth in GDP per person over the same period,then Japan has outperformed America and the euro zone (see chart 1). In partthis is because its population has shrunk whereas America’s population hasincreased.

Though growth in labour productivity fell slightly short of America’s from2000 to 2008, total factor productivity, a measure of how a country uses capitaland labour, grew faster, according to the Tokyo-based Asian ProductivityOrganisation. Japan’s unemployment rate is higher than in 2000, yet it remainsabout half the level of America and Europe (see chart 2).

Besides supposed stagnation, the two other curses of the Japanese economyare debt and deflation. Yet these also partly reflect demography and can beoverstated. People often think of Japan as an indebted country. In fact, it isthe world’s biggest creditor nation, boasting ¥253 trillion ($3.3 trillion) innet foreign assets.

To be sure, its government is a large debtor; its net debt as a share ofGDP is one of the highest in the OECD. However, the public debt has been accruednot primarily through wasteful spending or "bridges to nowhere", but because ofageing, says the IMF. Social-security expenditure doubled as a share of GDPbetween 1990 and 2010 to pay rising pensions and health-care costs. Over thesame period tax revenues have shrunk.

Falling tax revenues are a problem. The flip side, though, is that Japanhas the lowest tax take of any country in the OECD, at just 17% of GDP. Thatgives it plenty of room to manoeuvre. Takatoshi Ito, an economist at theUniversity of Tokyo, says increasing the consumption tax by 20 percentage pointsfrom its current 5%—putting it at the level of a high-tax European country—wouldraise ¥50 trillion and immediately wipe out Japan’s fiscal deficit.