Cold War Security Considerations Japan was seen as strategically valuable in the Asia-Pacific region to curb Soviet influence,

and thus necessary for its economy to viable to resist communist influence. - American aid in the amount of 22 billion in 7 years. - Tolerance of Japanese protectionism. - Granting of MFN status to Japan, and the resulting lowering of tariffs. - Creation of SCAP for administration, coordination and rebuilding. - Focus on establishing a liberal democracy with a strong base in the labour movement, to capitalize on the goodwill generated from economic growth. - American military procurement of Japanese goods for conflict and bases. Concern over communist aggression had also convinced the USA to accept Japans pacifism and assume responsibility of Japanese security, freeing resource for Japan to concentrate on economic development. - Signing of the Security Treaty of 1951. - Contribution of a mere 1% of GDP to defence, which had amounted to almost 5% of Japans GDP (the rest to be assumed by the USA). American interest to bolster regional stability from communist incursion also saw American brokering (and insistence) of trade ties with

Global trade environment The Bretton Woods System had also offered an advantageous environment for which the Japanese had thrived. - Currency stability and the artificially cheap yen that the USA had insisted the Japanese adopt. - Promotion of free trade and Japanese enjoyment of comparatively cheap production costs.

Domestic Government Policies State bureaucracy in the form of MITI to coordinate development of Japanese economy, with a focus in technology transfer, directed funding, and promotion of high savings rate. - The development of the steel industry as a suitable case study. Other sources of evidence can come from a discussion of the automobile industry, electronics and robotics. The post war environment also saw a demand - Also consider state directing of for commodity and goods that suited Japans funding to construction, shipbuilding new economic structure. and manufacturing industries. - Global demand for oil and Japanese - Do cite specific data. expertise in oil tanker construction. Protectionist policies that saw the growth of Japanese keireitsu and zaibatsu. These conglomerates and large firms were able to dominate the domestic economy through access to funding, raw materials, manufacturing, distribution and marketing, with little to no competition. - Building on these strong foundations, these firms were able to grow their export business and foreign investment expotentially. - Do cite specific data. Promotion of labour policies that reward productivity and employer loyalty, and in turn getting workers to work longer hours. Encourage of a strong educational system

neighbouring states. - In the aftermath of the Korean War and boycott of China by the USA, Taiwan and Korean trade was encouraged, resulting in Japanese investment in these economies, as well as purchasing of goods and services. - Later, in the context of the Vietnam War, this was expanded to Southeast Asia as well.

emphasizing on technical knowledge and skills, as well as work ethic to create a dedicated work force.