Since the start of the Crisis, many policymakers have chosen to look backwards rather than forwards.
Yet in the end, demographics drive demand. 29% of the Western population is now in the 55+ age bracket. And China’s ‘one child policy’ since 1978 means it has 400m fewer people now available to join the wealth-creating 25 – 54 age group.
But as Japan’s example shows, politicians find it hard to admit they have been heading in the wrong direction. Instead, they invent ever-stranger ways to try and turn back the clock. The use of tsumani restoration funds to support whale-hunting is thus a metaphor for our times.
These funds were set up after March’s tragic disaster. They were meant to fund rebuilding work, and support those living in the devastated area.
Instead, Bloomberg’s William Pesek has revealed $30m has been spent to support whale hunting. Apparently, the government believes that “a successful hunt will revitalise coastal communities”. But as Pesek notes:
“You know what would help more? Some fresh thinking. The devastation from March 11 required new ways of viewing and addressing Japan’s creaky economic model, aging population and waning competitiveness. It necessitated a reboot of politics, the government’s role in the economy and Japan’s change-resistant, consensus-obsessed mindset. What we’re seeing instead is an inability to adapt on a national level.”
The same could be said of many politicians in the East and the West. As we argue in ‘Boom, Gloom and the New Normal’, there are plenty of promising new opportunities which could take the world economy forward. But too many politicans instead seem fixated on their own versions of whale-hunt subsidies.
This mind-set needs to change, and to become more forward-looking. Otherwise, it is hard to see how the global economy itself can recapture momentum.