The global crisis triggered a deep recession that is likely to be the most severe in Japan's post-war history. The contraction in world trade led to a sharp plunge in exports and business investment, while falling employment and wages have reduced private consumption, leading to a projected output decline of almost 7% in 2009.

The global economic crisis is affecting families and communities across the planet. With regions bearing the brunt of the crisis, affecting businesses, jobs and people generally, regional policies are very much part of the solution.

External shocks from the run-up in commodity prices and then international financial turbulence have brought Japan’s expansion to an end. Equity prices have plummeted and the yen has appreciated substantially. With falling exports, activity is projected to remain weak through 2009, pushing up unemployment and reducing headline inflation to near zero. A recovery in domestic demand is projected to lift output growth to around 1% during 2010, still short of the growth of potential.

Until 2002, Japan was mired in a prolonged period of stagnation–the “lost decade”–which saw its per capita income drop from the fifth highest in the OECD area in 1992 to only 19th in 2002. The miracle economy that mesmerised the world in the 1980s looked decidedly weak. Now, thanks to exports and business investment, Japan has achieved the longest expansion in its post-war history.

With the world economy today experiencing turbulence on a number of diverse fronts, OECD countries are preoccupied with meeting these challenges.

4 March -
Norio Hattori is the new OECD ambassador for Japan. He succeeds Shinichi Kitajima.

4 March -
Wolfgang Petritsch takes up his post as new ambassador for Austria succeeding Ulrich Stacher.

Climate change is a pressing challenge, requiring leadership and determined action. At the same time, people are concerned that policies do not put them at an economic disadvantage or unnecessarily undermine their welfare.

Can governments balance these concerns? The OECD’s Environment Policy Committee meets at ministerial level on 28-29 April 2008 under the theme of global competitiveness. Some non-OECD developing countries will also participate, as will stakeholders from business, labour and civil society.

The economic expansion–the longest in Japan’s post-war history–continues despite some deceleration in the pace of growth since early 2007. A further tightening of the labour market is projected to reverse the decline in wages, helping to sustain output growth of some 1.5-2% in 2008-09 and pushing inflation into positive territory.

Today, energy security is an indispensable subject even in general discussions about foreign policy. Securing needed energy resources is one of the prerequisites for ensuring sustainable economic growth. Dealing with the current rapid growth in demand for energy in Asia is a high priority on many agendas. As for Japan’s perspective on energy security co-operation, I would like to touch upon the following three points: security of supply, energy and the environment, and the importance in energy response of the International Energy Agency (IEA), a sister organisation of the OECD.