Japan Dodges The Bubble (rough draft)
It is 1980. In 6 years Japan will enter the Bubble, the tail end of a sustained period of economic growth from the 1960s to the present, accelerating from 1986 onwards in soaring stock and land prices. This will end badly.
For over thirty years the various factions of the Liberal Democratic Party (LDP)[1] have ruled the country fairly well, despite endemic corruption, and this practice looks set to continue (and will, for all but 1993).
The Japanese economic growth (miracle) has turned the world into an economically tri-polar system with the United States and Western Europe. Much thought has been given to the Japanese form of government intervention[2] as it regards economic growth.
The Japanese military remains one of the world's most formidable (after the superpowers) despite spending roughly a third as much per capita as the United Kingdom[2].
The Bubble will end in the middle of 1990. With it will come the lost decade, years over which the Japanese economy will stagnate and contract. Japanese firms will lose their global technological edge[4] and many will turn their sights towards home. Roughly 20 trillion USD will vanish with the collapse of the stock and real estate markets.
The underlying economic reasons for the Bubble Crash are reasonably well understood[5] but changing them is harder, especially due to government reluctance to acknowledge structural problems.
Even today with a reforming government Japan remains politically unable to conduct structural reforms needed to balance the budget and reduce massive government and corporate debt. Sales tax, deregulation, financial sector reform, privatization, and the like remain difficult and the government was forced to conduct an election so it could privatize the Post Office—which in fact can be considered the world's largest bank by assets (three trillion USD) and was a prime source of government corruption and pork-barreling, not to mention covering well over a trillion USD (one fifth) of government debt.
Government intervention (i.e. the Ministry of Finance, MITI, and others) is good policy for developing economies, it is bad policy for developed economies. The Japanese failed to realize this for various reasons including historically successful government intervention, and the nature of the electoral system which over-represented rural areas in the Diet (equivalent to a parliamentary House of Commons), and a suspicion of the free market.
Thus we need a POD well before the Bubble. Once the Bubble begins the government will be politically unable to change economic policy, and post-Bubble is arguably too late for anything more then a moderately faster recovery.
My POD is simple. In 1980 let's say Japanese banks suffer something along the lines of the US Savings and Loan scandal. i.e. they are revealed to have a great deal of non-preforming loans (NPL) which supports a large amount of corporate debt, and have covered this up via accountancy. Furthermore it's shown that this was supported by the Ministry of Finance.
A number of large Japanese corporations are badly hurt by this, and other corporations now become concerned about their debt levels. Furthermore banks will now move to a more normal system of loans.
Following the Lockheed scandal of 1976[6] this deals another major blow to the LDP's political fortunes, so we posit a reformer break of the LDP, advocating banking reform to prevent more scandals.
The Reformers bring down the government and we head into an election. The LDP vote drops lower, the clear Reformer option sucking the right of centre votes, while the various opposition parties get their usual votes on the left & urban side.
When the dust clears the Reformers hold the balance of power. They can ally with the opposition parties and form government, or they can ally with the LDP and form government.
Being ex-LDPers they prefer the LDP, but when the LDP fails to agree to their demands they go the left-wing parties. Obviously they generally disagree on policy, but can agree on the need for reform.
In return for banking and financial sector reform, the Reformers agree to the opposition parties pet reform: electoral.
In 1977 the Rainbow Coalition type government passes electoral and banking sector reform: the voting system will follow an Australian model. The Diet will be elected purely by Instant Run-Off[7] and the House of Councillors will be elected by Single-Transferable Vote[8]. Further all seats will be apportioned to be roughly equal, at a quarter million per electoral district—eliminating the massive urban disadvantage.
This will virtually eliminate the LDP's rural dominance, weaken the LDP faction system (which flourished because of the old electoral system), shift towards a two-party system in the Diet, and strengthen the House of Councillors as well as keeping proportional representation in the system.
The only other major legislation passed before the inevitable collapse of the Rainbow Coalition is financial sector reform. The Ministry of Finance is removed from the decision making loop, banks (and corporations) are required to have open accounting standards, banks must keep reserves to deal with bad loans, and thus debt and low-accountability loans are discouraged.
Furthermore the banks bad loans that prompted this are rapidly taken care by forcing asset sales and their merger into other banks, this will introduce a major (though somewhat unintended) shake-up of the keiretsu system—forcing the involved parties to re-evalute their current role.
With the collapse of the Rainbow Coalition the LDP regains power, but under the new electoral system is unable to sustain a majority in both houses, and faces defect by factions on some issues.
Over the next five years the Japanese economy will experience moderate disruptions and will not grow as fast as OTL.
This (relative) economic under-performance leads to a Big Bang type deregulation in 1985. Following on the American and British models the LDP (reborn into a more financially conservative party/socially liberal party to better win the newly enlarged urban vote) privatizes the Post Office (to make them look good on the corruption issue), deregulates the economy, introduces tighter inflation policies with a newly independent Bank of Japan, loosens general trade barriers to improve foreign relations (notably the United States), and conducts a (popular) reform of the healthcare system[9].
The healthcare reform isn't quite enough to save them from electoral defeat (the economic reforms are moderately unpopular as they haven't had an impact yet) and the Renewal Party of Japan takes office. The Renewal Party of Japan is the old Socialist Party gone more moderate and with a influx of new people from the electoral reform.
The Renewal Party has a very narrow majority mandate, and has problems getting stuff through the Upper House. This leads them to concentrate on public sector reform rather then changing economic policy (they can't get it through). The government and private sector are surgically separated (the left doesn't mind government owning stuff, it does minds the government colluding with business—since it can't nationalize stuff it goes for the second, also it hurts the LDP's party financing : ) and the Iron Triangle is weakened notably.
They also kick the Americans out of Japan, which leads to their electoral defeat.
The LDP resumes power with economic reforms now bearing fruit—low inflation is popular, increasing foreign direct investment brings other countries experience into Japan, increased competition via deregulation is also helping. One major difference against the American/British model is that the banks continue to guide "their" companies, and have a new-found intolerance for screwing up (they have a huge problem with government interference, since the last time fundamentally changed their previously comfortable life) and so banks exert a private sector influence on corporations to not do anything to invite government down on their heads. However with transparent accounting standards preventing financial sleight of hand and cheating this means corporations are forced to actually obey the law, not just by the government but also by the banks—whose support they need.
Think of it as deregulation with a conscious, Enron type incidents are going to be (as much as possible) slapped down by the banks.
The LDP continue their economic policies, balancing the budget most notably, and begin to pay down debt. This strengthens their hand in talking with corporations about debt levels and will prevent the massive debt ratios of OTL.
Although there has been no Bubble Japanese economic growth rates have remained good, and are once again increasing.
By 1988 the Japanese economy is roughly 12 trillion USD behind OTL Japan, however it's operating on a much much sounder base and will not be facing the Bubble.
Although the LDP regained power over the Renewal Party's kicking the Americans out they are still facing Communism and China and perhaps North Korea, and alliance with the USA or not they're worried about it.
They therefore purpose an absolute ceiling of 1.5% of GDP on the military (OTL 1%, but TTL has no more American bases to support the Japanese and the mutual defence pact between them is marginally less close) and reforms. Furthermore Japanese defence companies now face much loosened export restrictions—this will lower prices for a good chunk of Japanese military spending (unit costs for domestic Japanese equipment ranges from 3 to 10 times that of European/American equipment and Russian equipment is roughly 30% cheaper then American). Also note that paying for American bases consumed as much as 10% of the Defence budget. In real terms (counting for the smaller economy) the Japanese military will be roughly 30% better off in the short term and as much as 100% better off in the longer term. We're looking at 80 billion USD or more by 2006 compared to OTL 44 billion USD, and that money will buy 3-10 times more of the indigenous Japanese equipment.
Other reforms include elevating the Japanese Defense Agency to the Ministry of Defense (OTL, 2006), and stressing qualitative improvements (continuing on from 1976) that can now be somewhat supported by increased overall funding.
Constitutional talks about the following amendment are also begun (OTL 2005), and meet surprising approval ratings apparently prompted by the loss of American bases. "In order to secure peace and the independence of our country as well as the security of the state and the people, military forces for self-defense shall be maintained with the prime minister of the cabinet as the supreme commander."
Military, is the key word above as the Japanese Self-Defense Forces have never been referred to in those terms.
Close contact with the USA (fully supportive) and South Korea (mixed, but the countries are natural allies and face similar security concerns) is maintained throughout.
In return for unambiguous apologies (as viewed by other countries, not Japan's own people who believe they have atoned enough) South Korea withdraws their objections. Making the apologies, however, knock the LDP out of power again.
The Renewal Party is unable to form a government however, as it's members split into the Democratic Party of Japan and the (reborn) Socialist Party of Japan. The LDP offers a coalition to the DPJ and resumes government.
It is now 1991. In 1990 just before the Bubble collapsed in OTL the Japanese of TTL had an economy roughly 15 trillion USD behind OTL. In 1991 they are now 6 trillion USD ahead, and will not be facing the negative economic growth of OTL.
[1] A rural based, mildly right of centre political organization, rife with factions due to the nature of the electoral system.
[2] The Japanese Ministry of International Trade and Industry (MITI) practised a sophisticated form of economic intervention. Essentially it provided support services to industry, sheltered infant industries from being strangled on the competitive global market, and eased the transition from heavy industry (such as ship-building) into a more technological and services oriented economy.
[3] Strictly speaking the high price of indigenous Japanese military equipment makes the lower per capita military spending buy even less then it would if they bought more equipment from American or Europeans defence companies.
[4] For an OTL example, see Apple's iPhone. Japanese consumer electronic technology could have developed a similar product several years earlier (and current Japanese mobile technology is well in advance of the world) but were unable to translate that edge into software and disruptive hardware—choosing to focus on incremental hardware improvements. Only recently with the advent of mobile wallet and location services has major software innovations been made, and they have nothing to do with usability which is the iPhone forte.
[5] The Japapense banks overpaid to borrow money on the Euro-dollar markets, they lent vast amounts of money with little assurance of it being repaid if anything bad happened, they lent too much money on the peak of the American real estate boom (and when it collapsed, they lost most of it), the banks relied on the Ministry of Finance overmuch, and Japanese banks are not required to hold reserves to counter bad loans.
[6] (Wiki) In 1976, Lockheed was involved in a major scandal involving the Japanese Marubeni Corporation and several high ranking members of Japanese political, business and underworld circles. Lockheed had hired underworld figure Yoshio Kodama as a consultant in order to influence Japanese airlines, including the Japanese All Nippon Airways, to purchase the L-1011 aircraft instead of the DC-10.
It was revealed that Lockheed had paid approximately $3 million in bribes to the office of Japanese Prime Minister Kakuei Tanaka for aid in the matter. The resulting judicial process carried on for a decade, and led to the arrest of Tanaka (after his resignation due to another scandal), among others. In the United States, Lockheed chairman of the board Daniel Haughton resigned from his position.
[7] (Wiki) Instant runoff voting (IRV) is a voting system used for single winner elections in which voters rank candidates in order of preference. In an IRV election, if no candidate receives an overall majority of first preferences, the candidates with fewest votes are eliminated one by one, and their votes transferred according to their second and third preferences (and so on) and all votes retallied, until one candidate achieves a majority. The term 'instant runoff voting' is used because this process resembles a series of run-off elections.
[8] (Wiki) Single transferable vote (STV) is a preferential voting system designed to minimise wasted votes and provide proportional representation while ensuring that votes are explicitly for candidates rather than party lists. It achieves this by using multi-seat constituencies (districts) and by transferring votes that would otherwise be wasted. STV initially allocates an individual's vote to their most preferred candidate, and then subsequently transfers unneeded or unused votes after candidates are either elected or eliminated, according to the voter's stated preferences.
[9] The many insurers are merged to form a half-dozen large ones: creating much larger risk pools and reducing rates. Co-payment rates are increased to match income which allows for the creation of more doctors and more time spent per patient as well as reducing the amount of public funding share of the system. A gatekeeper system is introduced to balance the greater use of doctor time. Drug prescribing and dispensing is separated, and drug costs for people who can afford it are increased to the market rate—this will reduce over-reliance and high use of drugs. The reform is popular among people who don't usually vote for the LDP (urban poor, for example), strengthens their position among elderly people, and most additional costs are born by people who don't vote for the LDP anyway. Government spin emphasis is on more doctors/more time with doctors consulting which is uniformly popular.
---------------
While that's my economic/political part of the timeline to avoid the Bubble in Japan and place them on a better footing for the 90s and beyond. This should encourage a general technological speed-up in the world as well.
With a healthy Japan accepting foreign investment China will likely suffer a little. Likewise the economic weight of the region will remain more towards Japan/ASEAN instead of China.
This may (may, I say) avert the Asian Financial Crisis in 1997/8 as well. Avoiding that would also help avoid the 1998 global recession, the 1998 Russian Financial Crisis (and, perhaps, save them for real democracy).
I'm still working on it and do want to move beyond the political/economic focus so comments and hole-poking would be nice. I also owe a debt of gratitude to (the languishing unfinished) timeline Without an Eclipse: Higher Goes The Rising Sun for giving me the idea.
It is 1980. In 6 years Japan will enter the Bubble, the tail end of a sustained period of economic growth from the 1960s to the present, accelerating from 1986 onwards in soaring stock and land prices. This will end badly.
For over thirty years the various factions of the Liberal Democratic Party (LDP)[1] have ruled the country fairly well, despite endemic corruption, and this practice looks set to continue (and will, for all but 1993).
The Japanese economic growth (miracle) has turned the world into an economically tri-polar system with the United States and Western Europe. Much thought has been given to the Japanese form of government intervention[2] as it regards economic growth.
The Japanese military remains one of the world's most formidable (after the superpowers) despite spending roughly a third as much per capita as the United Kingdom[2].
The Bubble will end in the middle of 1990. With it will come the lost decade, years over which the Japanese economy will stagnate and contract. Japanese firms will lose their global technological edge[4] and many will turn their sights towards home. Roughly 20 trillion USD will vanish with the collapse of the stock and real estate markets.
The underlying economic reasons for the Bubble Crash are reasonably well understood[5] but changing them is harder, especially due to government reluctance to acknowledge structural problems.
Even today with a reforming government Japan remains politically unable to conduct structural reforms needed to balance the budget and reduce massive government and corporate debt. Sales tax, deregulation, financial sector reform, privatization, and the like remain difficult and the government was forced to conduct an election so it could privatize the Post Office—which in fact can be considered the world's largest bank by assets (three trillion USD) and was a prime source of government corruption and pork-barreling, not to mention covering well over a trillion USD (one fifth) of government debt.
Government intervention (i.e. the Ministry of Finance, MITI, and others) is good policy for developing economies, it is bad policy for developed economies. The Japanese failed to realize this for various reasons including historically successful government intervention, and the nature of the electoral system which over-represented rural areas in the Diet (equivalent to a parliamentary House of Commons), and a suspicion of the free market.
Thus we need a POD well before the Bubble. Once the Bubble begins the government will be politically unable to change economic policy, and post-Bubble is arguably too late for anything more then a moderately faster recovery.
My POD is simple. In 1980 let's say Japanese banks suffer something along the lines of the US Savings and Loan scandal. i.e. they are revealed to have a great deal of non-preforming loans (NPL) which supports a large amount of corporate debt, and have covered this up via accountancy. Furthermore it's shown that this was supported by the Ministry of Finance.
A number of large Japanese corporations are badly hurt by this, and other corporations now become concerned about their debt levels. Furthermore banks will now move to a more normal system of loans.
Following the Lockheed scandal of 1976[6] this deals another major blow to the LDP's political fortunes, so we posit a reformer break of the LDP, advocating banking reform to prevent more scandals.
The Reformers bring down the government and we head into an election. The LDP vote drops lower, the clear Reformer option sucking the right of centre votes, while the various opposition parties get their usual votes on the left & urban side.
When the dust clears the Reformers hold the balance of power. They can ally with the opposition parties and form government, or they can ally with the LDP and form government.
Being ex-LDPers they prefer the LDP, but when the LDP fails to agree to their demands they go the left-wing parties. Obviously they generally disagree on policy, but can agree on the need for reform.
In return for banking and financial sector reform, the Reformers agree to the opposition parties pet reform: electoral.
In 1977 the Rainbow Coalition type government passes electoral and banking sector reform: the voting system will follow an Australian model. The Diet will be elected purely by Instant Run-Off[7] and the House of Councillors will be elected by Single-Transferable Vote[8]. Further all seats will be apportioned to be roughly equal, at a quarter million per electoral district—eliminating the massive urban disadvantage.
This will virtually eliminate the LDP's rural dominance, weaken the LDP faction system (which flourished because of the old electoral system), shift towards a two-party system in the Diet, and strengthen the House of Councillors as well as keeping proportional representation in the system.
The only other major legislation passed before the inevitable collapse of the Rainbow Coalition is financial sector reform. The Ministry of Finance is removed from the decision making loop, banks (and corporations) are required to have open accounting standards, banks must keep reserves to deal with bad loans, and thus debt and low-accountability loans are discouraged.
Furthermore the banks bad loans that prompted this are rapidly taken care by forcing asset sales and their merger into other banks, this will introduce a major (though somewhat unintended) shake-up of the keiretsu system—forcing the involved parties to re-evalute their current role.
With the collapse of the Rainbow Coalition the LDP regains power, but under the new electoral system is unable to sustain a majority in both houses, and faces defect by factions on some issues.
Over the next five years the Japanese economy will experience moderate disruptions and will not grow as fast as OTL.
This (relative) economic under-performance leads to a Big Bang type deregulation in 1985. Following on the American and British models the LDP (reborn into a more financially conservative party/socially liberal party to better win the newly enlarged urban vote) privatizes the Post Office (to make them look good on the corruption issue), deregulates the economy, introduces tighter inflation policies with a newly independent Bank of Japan, loosens general trade barriers to improve foreign relations (notably the United States), and conducts a (popular) reform of the healthcare system[9].
The healthcare reform isn't quite enough to save them from electoral defeat (the economic reforms are moderately unpopular as they haven't had an impact yet) and the Renewal Party of Japan takes office. The Renewal Party of Japan is the old Socialist Party gone more moderate and with a influx of new people from the electoral reform.
The Renewal Party has a very narrow majority mandate, and has problems getting stuff through the Upper House. This leads them to concentrate on public sector reform rather then changing economic policy (they can't get it through). The government and private sector are surgically separated (the left doesn't mind government owning stuff, it does minds the government colluding with business—since it can't nationalize stuff it goes for the second, also it hurts the LDP's party financing : ) and the Iron Triangle is weakened notably.
They also kick the Americans out of Japan, which leads to their electoral defeat.
The LDP resumes power with economic reforms now bearing fruit—low inflation is popular, increasing foreign direct investment brings other countries experience into Japan, increased competition via deregulation is also helping. One major difference against the American/British model is that the banks continue to guide "their" companies, and have a new-found intolerance for screwing up (they have a huge problem with government interference, since the last time fundamentally changed their previously comfortable life) and so banks exert a private sector influence on corporations to not do anything to invite government down on their heads. However with transparent accounting standards preventing financial sleight of hand and cheating this means corporations are forced to actually obey the law, not just by the government but also by the banks—whose support they need.
Think of it as deregulation with a conscious, Enron type incidents are going to be (as much as possible) slapped down by the banks.
The LDP continue their economic policies, balancing the budget most notably, and begin to pay down debt. This strengthens their hand in talking with corporations about debt levels and will prevent the massive debt ratios of OTL.
Although there has been no Bubble Japanese economic growth rates have remained good, and are once again increasing.
By 1988 the Japanese economy is roughly 12 trillion USD behind OTL Japan, however it's operating on a much much sounder base and will not be facing the Bubble.
Although the LDP regained power over the Renewal Party's kicking the Americans out they are still facing Communism and China and perhaps North Korea, and alliance with the USA or not they're worried about it.
They therefore purpose an absolute ceiling of 1.5% of GDP on the military (OTL 1%, but TTL has no more American bases to support the Japanese and the mutual defence pact between them is marginally less close) and reforms. Furthermore Japanese defence companies now face much loosened export restrictions—this will lower prices for a good chunk of Japanese military spending (unit costs for domestic Japanese equipment ranges from 3 to 10 times that of European/American equipment and Russian equipment is roughly 30% cheaper then American). Also note that paying for American bases consumed as much as 10% of the Defence budget. In real terms (counting for the smaller economy) the Japanese military will be roughly 30% better off in the short term and as much as 100% better off in the longer term. We're looking at 80 billion USD or more by 2006 compared to OTL 44 billion USD, and that money will buy 3-10 times more of the indigenous Japanese equipment.
Other reforms include elevating the Japanese Defense Agency to the Ministry of Defense (OTL, 2006), and stressing qualitative improvements (continuing on from 1976) that can now be somewhat supported by increased overall funding.
Constitutional talks about the following amendment are also begun (OTL 2005), and meet surprising approval ratings apparently prompted by the loss of American bases. "In order to secure peace and the independence of our country as well as the security of the state and the people, military forces for self-defense shall be maintained with the prime minister of the cabinet as the supreme commander."
Military, is the key word above as the Japanese Self-Defense Forces have never been referred to in those terms.
Close contact with the USA (fully supportive) and South Korea (mixed, but the countries are natural allies and face similar security concerns) is maintained throughout.
In return for unambiguous apologies (as viewed by other countries, not Japan's own people who believe they have atoned enough) South Korea withdraws their objections. Making the apologies, however, knock the LDP out of power again.
The Renewal Party is unable to form a government however, as it's members split into the Democratic Party of Japan and the (reborn) Socialist Party of Japan. The LDP offers a coalition to the DPJ and resumes government.
It is now 1991. In 1990 just before the Bubble collapsed in OTL the Japanese of TTL had an economy roughly 15 trillion USD behind OTL. In 1991 they are now 6 trillion USD ahead, and will not be facing the negative economic growth of OTL.
[1] A rural based, mildly right of centre political organization, rife with factions due to the nature of the electoral system.
[2] The Japanese Ministry of International Trade and Industry (MITI) practised a sophisticated form of economic intervention. Essentially it provided support services to industry, sheltered infant industries from being strangled on the competitive global market, and eased the transition from heavy industry (such as ship-building) into a more technological and services oriented economy.
[3] Strictly speaking the high price of indigenous Japanese military equipment makes the lower per capita military spending buy even less then it would if they bought more equipment from American or Europeans defence companies.
[4] For an OTL example, see Apple's iPhone. Japanese consumer electronic technology could have developed a similar product several years earlier (and current Japanese mobile technology is well in advance of the world) but were unable to translate that edge into software and disruptive hardware—choosing to focus on incremental hardware improvements. Only recently with the advent of mobile wallet and location services has major software innovations been made, and they have nothing to do with usability which is the iPhone forte.
[5] The Japapense banks overpaid to borrow money on the Euro-dollar markets, they lent vast amounts of money with little assurance of it being repaid if anything bad happened, they lent too much money on the peak of the American real estate boom (and when it collapsed, they lost most of it), the banks relied on the Ministry of Finance overmuch, and Japanese banks are not required to hold reserves to counter bad loans.
[6] (Wiki) In 1976, Lockheed was involved in a major scandal involving the Japanese Marubeni Corporation and several high ranking members of Japanese political, business and underworld circles. Lockheed had hired underworld figure Yoshio Kodama as a consultant in order to influence Japanese airlines, including the Japanese All Nippon Airways, to purchase the L-1011 aircraft instead of the DC-10.
It was revealed that Lockheed had paid approximately $3 million in bribes to the office of Japanese Prime Minister Kakuei Tanaka for aid in the matter. The resulting judicial process carried on for a decade, and led to the arrest of Tanaka (after his resignation due to another scandal), among others. In the United States, Lockheed chairman of the board Daniel Haughton resigned from his position.
[7] (Wiki) Instant runoff voting (IRV) is a voting system used for single winner elections in which voters rank candidates in order of preference. In an IRV election, if no candidate receives an overall majority of first preferences, the candidates with fewest votes are eliminated one by one, and their votes transferred according to their second and third preferences (and so on) and all votes retallied, until one candidate achieves a majority. The term 'instant runoff voting' is used because this process resembles a series of run-off elections.
[8] (Wiki) Single transferable vote (STV) is a preferential voting system designed to minimise wasted votes and provide proportional representation while ensuring that votes are explicitly for candidates rather than party lists. It achieves this by using multi-seat constituencies (districts) and by transferring votes that would otherwise be wasted. STV initially allocates an individual's vote to their most preferred candidate, and then subsequently transfers unneeded or unused votes after candidates are either elected or eliminated, according to the voter's stated preferences.
[9] The many insurers are merged to form a half-dozen large ones: creating much larger risk pools and reducing rates. Co-payment rates are increased to match income which allows for the creation of more doctors and more time spent per patient as well as reducing the amount of public funding share of the system. A gatekeeper system is introduced to balance the greater use of doctor time. Drug prescribing and dispensing is separated, and drug costs for people who can afford it are increased to the market rate—this will reduce over-reliance and high use of drugs. The reform is popular among people who don't usually vote for the LDP (urban poor, for example), strengthens their position among elderly people, and most additional costs are born by people who don't vote for the LDP anyway. Government spin emphasis is on more doctors/more time with doctors consulting which is uniformly popular.
---------------
While that's my economic/political part of the timeline to avoid the Bubble in Japan and place them on a better footing for the 90s and beyond. This should encourage a general technological speed-up in the world as well.
With a healthy Japan accepting foreign investment China will likely suffer a little. Likewise the economic weight of the region will remain more towards Japan/ASEAN instead of China.
This may (may, I say) avert the Asian Financial Crisis in 1997/8 as well. Avoiding that would also help avoid the 1998 global recession, the 1998 Russian Financial Crisis (and, perhaps, save them for real democracy).
I'm still working on it and do want to move beyond the political/economic focus so comments and hole-poking would be nice. I also owe a debt of gratitude to (the languishing unfinished) timeline Without an Eclipse: Higher Goes The Rising Sun for giving me the idea.
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