Economics

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According to the table above, the highest real GDP growth rate of Japan was in 2010, which is 4.7% whereas Brunei’s was in year 1992, which is 4.8%. This showed that Japan real GDP growth is at peak in recent years, yet Brunei real GDP since 1993 until 2010 is low as compared to early 1990’s. Both Japan and Brunei have reached their lowest real GDP growth rate during the global financial crisis of 2008-2009. However, the growth rate of Japan reached in 2009, which is -5.5% showed that the global financial crisis brought a stronger impact to Japan’s economy as compared to Brunei, which its lowest real GDP growth rate was only -1.9% in 2008. The average GDP growth rate of Brunei is greater than Japan, which is 1.8 and 1.0 respectively. Therefore, Brunei’s real GDP growth was more stable and consistent than Japan’s GDP growth. Even though the lowest real GDP growth rate was in year 2009, the average real GDP growth of Japan was actually brought down by the economic recession during 1990s owing to the Japanese asset price bubble. In conclusion, the real GDP growth of Brunei is better than Japan for the period, year 1991 to 2010.

[pic 2]2.2 The comparison of Unemployment Rate between Japan and Brunei and its reasons.

Figure 2.2 Line graph of unemployment rate of Japan and Brunei between year 1991 to year 2010

By referring to Figure 2.2, the highest rate of the unemployment rate in Japan is at 2002 years which was cause by a downturn in consumer spending in private sector and it is decline of 4.9% that was higher rate than previous year. Also, the domestic demand fell 0.6% from the previous year which is 1.1% in 2001 due to a downturn in government spending in investment (in public works). The lowest unemployment rate is 2.1% in year 1991 as Japan was more emphasis on education which not encourage teenagers (High school Student) and adults (University or College Students) come out to work full-time or part-time. It may disturb or prolong their learning system in school. At least for those who is come from poverty family that was no choice to subsidize their parent’s responsibility. Therefore there was less of competition of job with aged between 15 until 21 year old in Japan. Besides that, most of women were no continue to work if they getting married that can pay full attention to their family. Its acting the traditional lifestyle that husband is responsibility for all the utility and wife as a household in home. This was the main concept of marry between a man and woman in Japan. Japan’s man will persuade their wife if they do not want to stop their job who is responsibility to give all the attention to their lovely house. The average unemployment rate for Japan around this twenty years was 4.0%.

In Brunei, the unemployment rate was at constant rate of 4.7 between year 1991-1994 but started to be inconstant since year 1995-2010. Brunei achieved the highest unemployment rate, 7.2% in year 2001 due to the foreign labor. The government regulates the immigration of foreign labor out of concern it might disrupt Brunei's society. Work permits for foreigners are issued only for short periods and must be continually renewed. Despite these restrictions, foreigners make up a significant portion of the work force. The government reported a total work force of 158,000 in 2001, with an official unemployment rate of 7.2% The lowest unemployment rate also found in Brunei in year 1998. It was only 0.7% due to the strong economic growth in year 1998. Oil and natural gas account for almost all exports. Since only a few products other than petroleum are produced locally, a wide variety of items must be imported. Brunei statistics show Singapore as the largest point of origin of imports, accounting for 28.5% in 1999. However, this figure includes some transshipment, since most of Brunei's imports transit Singapore. Japan and Malaysia were the second-largest suppliers. As in many other countries, Japanese products dominate local markets for motor vehicles, construction equipment, electronic goods, and household appliances. The United States was the third-largest supplier of imports to Brunei in 1998. The average unemployment rate for Brunei around this twenty years was 4.0%.

According to Figure 2.2, we can see that the average unemployment rate of both Japan and Brunei are the same rate, 4.0%. We can also observe that the unemployment rate in Japan was quiet stable in between year 1991 until 2010 compare to Brunei which has inconstant unemployment rate. By comparing the highest unemployment rate, Brunei has higher unemployment rate than Japan which is 7.2% and %.4 % respectively. The higher the unemployment rate, the greater for both consumer and business confidence and the hence the higher the rate of Gross Domestic Product (GDP). For the conclusion, Brunei has healthy of an economy which is very common measure by unemployment rate. As the unemployment rate is a key macroeconomics indicator.

[pic 3]2.3 The comparison of Inflation Rate (GDP Deflator) between Japan and Brunei and its reasons.

Figure 2.3 Line graph of inflation rate (GDP deflator) of Japan and Brunei between years 1991 to 2010

The line graph shows the major inflation indicators for Japan. This shows that Japan has faced declining prices since the mid-1990s. The stock index had plummeted to half its peak by the time of the fifth monetary tightening by Bank of Japan. This is because the asset price began to fall by late 1991, and asset prices officially collapsed in early 1992. The bubble's subsequent collapse lasted for more than a decade with plummeting asset prices resulting in a huge accumulation of non-performing assets loans (NPL) and consequently, difficulties to many financial institutions. The bursting of the Japanese asset price bubble contributed to what many call the Lost Decade. Japan had the lowest average inflation rate over this period, 1.18. In 1995, Japan experienced a mild deflation of about 0.1%. In 1998 real GDP fell by more than 2 percent, and with core inflation slightly negative by year’s end, even the rate of nominal GDP growth was negative for the year. In year 1999 after core inflation had become negative, the BOJ policy board, under Governor Masaru Hayami, lowered the policy interest rate effectively to zero. In 2001, the BOJ again lowered the nominal interest rate, effectively bringing back the ZIRP, and clarified that the ZIRP would be abandoned only after the rate of CPI inflation, excluding fresh food, was “stably” at a positive value.

Inflation, as measured by the Consumer Price Index (CPI), has been moderate throughout the last two decades in the line graph. However, in 2008,