"Korea is already ahead of Japan...Economic Analysis of 'Double GDP Gap in 20 Years'

"Korea has already surpassed Japan in various indicators."

A Japanese economic scholar predicted that Korea's gross domestic product (GDP) will double that of Japan in 20 years, drawing keen attention.

Yukio Noguchi, an honorary professor at Hitotsubashi University, sent a contribution to Toyo Keizai, a Japanese economic magazine, on the 12th, criticizing his country's economic policies and making the claim.

"In the late 1990s, both Japan and Korea fell into an economic crisis, but in response, Japan lagged far behind Korea," Noguchi said. "Korea has strengthened education and improved competitiveness, but Japan has not."

Noguchi then presented various international indicators such as the average wage of the people, nominal GDP, and national competitiveness rankings as the basis.

First of all, Korea recorded $41,960 (about KRW 49.66 million) in average wages by country last year, while Japan recorded $38,515 (about KRW 45.59 million), and Japan was already behind Korea in real wages. Compared to 2000, Korea's nominal GDP per capita in 2020 increased by 285.2%, but Japan's only increased by 2.9%.

According to the 2021 global competitiveness ranking compiled by the International Institute for Management Development (IMD), Korea ranks 23rd and Japan ranks 31st. In digital technology, Korea is eighth and Japan is 27th. According to the e-government rankings released by the United Nations, Japan ranked 14th in 2020, while Korea ranked second in the world. In terms of various indicators, Korea is overtaking Japan.

Professor Noguchi said, "For this reason, Japan will be overtaken by Korea and the gap between the two countries will widen," adding, "Japan's per capita GDP will more than double that of Korea in 20 years."

He found this failure in Japan in a weak yen policy called "Abenomics." When the yen is weak, profits increase because yen-denominated sales increase even if local prices do not change. On the other hand, Korea kept the value of the won high and increased the quality of the product itself in order not to reduce the display sales. As a result, Korea's competitiveness has increased and exports have expanded despite the increase in currencies.

Professor Noguchi said, "For this reason, it is not only a fait accompli that Japan is overtaken by South Korea, but the gap between the two countries will widen over time." He predicted that if the trend so far is repeated the same, Japan's per capita GDP will almost double to $41,143 and Korea's $88,894 in 20 years later.

Professor Noguchi said, "What will Japan answer to the question that Asian representatives should be changed from Japan to Korea in the G7?" and urged, "Japan needs thorough reflection to not fall behind other advanced countries.

Date: 2021-12-22

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