These days life is good in Tokyo. The annual cherry blossom season is at

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its best. The sun is shining, and after a cold and rainy winter, spring has arrived. Finally, there is a pleasant surprise in the mail — a bonus of 12,000 Japanese yen (some Rs 6,000) issued by the local authority. Every legal resident in Japan will be receiving this sum from the state. Earlier in the year, the government of prime minister Taro Aso had decided to reward every person in Japan with a cash present. If you are less than 18 years old or if you are an old age pensioner, the cheque you receive is even more — 20,000 yen.

Normally the letters you get from your government office contain requests for tax returns and bills to be paid for national and local taxes. In general, however, one is not reluctant to pay taxes in Japan, as you receive public services of a quality that is unmatched anywhere else in the world.

Japan has the safest and cleanest roads in the world. The Japanese police is amongst the most polite and efficient. Public health service is excellent, as can be seen from the fact that when it comes to average life expectancy, the Japanese are at the top of the world league. Finally, where else do you have such a fine public service? When you go to the local administration to get some bureaucratic matter settled, polite and diligent officers serve you.

Procedures are simple and straight-forward. In no other country have I seen government servants move so briskly, when they fetch a form for you. Government buildings are spic and span and corruption affecting the general public is unknown in Japan.

The total bill for the bonus, which is being given to every man, woman and child living in Japan, will come to some

2 trillion yen (some Rs 1 trillion). Even for the world’s second biggest economy, this is a lot of money.

When the government presented the proposal of a cash gift to Parliament, there was a lot of criticism. Economists said that it might be more beneficial for the Japanese economy if the money were used for major projects and not frittered away in small portions. Many Japanese friends said that they did not need the money. The opposition, of course, sees the whole exercise as a “fiscal bribe” by the government. Indeed, by September this year, the Japanese Lower House will have to be dissolved. The present government is highly unpopular and it looks as if for only the second time during the past 54 years, the ruling Liberal Democratic Party will lose and move into opposition.

But what is behind this costly nationwide bonus? The current crisis has hit Japan very hard. Originally, when the financial crisis started in the United States, it looked as if Japan would not be affected. Unlike many big banks in Europe, Japanese financial institutions were not much affected by the troubles of Wall Street. However, when the crisis in the US reached Main Street, Japan began

to suffer.

Latest reviews of the economy point to the worst economic crisis since World War II. Today, Japan is suffering from its over-dependence on the export industry and it appears that in the current year, the Japanese GDP is going to register substantial losses. Important markets in the US and in Europe have shrunk or even collapsed. And following the serious difficulties Chinese export producers are facing, Japanese exports to China have suffered, too.

The long-held theory of the globalists Asia’s economic fortunes had been finally “decoupled” from economic developments in the industrialised countries of the West, has been debunked by the events of the past half year.

Like China, South Korea and other Asian “tigers”, Japan is suffering from over-dependence on the export industry. Because of their quality and price competitiveness, Japanese products are very popular overseas. Last year, Toyota finally managed to replace General Motors as the world’s number one car company. However, in a

global crisis, it is problematic to rely too much on world markets.

Japan has to stimulate domestic consumption, and by issuing the general bonus to the Japanese public, the government is trying to achieve this.

While in China it is the lack of purchasing power that severely hampers the expansion of domestic markets, in Japan it is the rapidly ageing population and the increasing reluctance of the young to marry and start a family that causes domestic markets to shrink. The elderly have all the mod cons, own a car and are unlikely to establish a new household. Furthermore, they are thrifty and might just put that unexpected bonus of 20,000 yen in their bank account, too.

The writer is the Far East correspondent of Swiss daily Neue Zurcher Zeitung