Japan's GDP slumps nearly 13 percent

Japan's GDP slumps nearly 13 percent

TOKYO, Japan (CNN) -- Japan's gross domestic product slumped 12.7 percent for the fourth quarter in 2008, according to government data released Monday.
The news comes after the world's second largest economy reported a steep drop in industrial production in December, falling 9.6 percent from the previous month.
The Japan Automobile Manufacturers Association announced that Japan's output of cars, trucks and buses plunged 25.2 percent in December from a year earlier, down for the third straight month and posting the largest year-on-year fall since 1967.
December was the third month that Japan's production had decreased. Production was expected to fall further in January and February, according to a Ministry of Economy, Trade and Industry report.
The drop offs in production come as factories announced layoffs, including 20,000 job losses at computer firm NEC Corporation and 7,000 at electronics company Hitachi.

COMMENT
It has been called the lost 10 years to Japan since the Asian Financial Crisis in 1997. Japan is an export-oriented country and the 2nd large amount of foreign exchange reserve in the world. The 1st country is China. Because Japan has much reserve, it did not have many problems. However, the GDP growth is gradually decreasing.
In my opinion, there are two reasons to explain the recession. First, the Japanese government is a bureaucratic system and the governors often come from the same families which have politic background. Second, there is not a good economic team which helps make the economic policy. Most Japanese people become apathy to politic and their democratic government. Plus, most Japanese do not like to learn foreign language and culture. Therefore, one could conclude that Japan did not well-developed in this 10 year.