All along, the third was the payoff for the first. But the payoff is missing. Japan has been in a long-term economic malaise since the early 1990s. Despite economic forecasts to the contrary, Japanese government officials have admitted that when figures for the last quarter of 1999 quarter are published, they will show a sharp drop in Japan s gross domestic product. This follows a one percent contraction in the previous quarter.
Japan remains mired in recession.
Some view this with comfort. But the fact that economic output remains flat while consumption declines is even more frightening, indicating a backlog of supply, even if consumption picks up. With the foundations of its grand strategy shattered and its economic miracle at an end, Japan s must revise its institutions at home and its strategic relationships abroad. This development will cut two ways. At home, the success of Japan s post-war generation is now in question.