University of Dhaka

Assignment on
Implications of Abenomics: Learnings for Bangladesh

Course Title: Modernization and Economic Development of

Japan
Course Code: JS- 302

Prepared for:
Wasik Sajid Khan
Lecturer
Dept. of Japanese Studies
University of
Dhaka

Prepared by:
Md. Shorifur Rahman
Roll: 026
6th Batch

Date of Submission: May 06, 2025

Department of Japanese Studies

Faculty of Social Sciences
University of Dhaka
“Implications of Abenomics:
Learnings for Bangladesh”
Introduction

In the early 2010s, Japan introduced a bold and experimental economic strategy under the leadership
of Prime Minister Shinzo Abe. This strategy, commonly known as "Abenomics," aimed to revive the
stagnant Japanese economy through a mix of aggressive monetary easing, flexible fiscal policy, and
structural reforms. While it generated global discourse due to Japan's economic stature, its
implications go far beyond its borders, offering important lessons for developing economies like
Bangladesh. With an ambition to transform itself into a middle-income country with sustainable
economic growth, Bangladesh can draw key insights from the successes and shortcomings of
Abenomics. This assignment critically examines the impact of Abenomics on Japan's economy and
explores its relevance and applicability to Bangladesh’s developmental context.
 Section 1: Overview of Abenomics
Abenomics was introduced in December 2012 when Shinzo Abe returned to office as Japan’s Prime
Minister. The strategy focused on combating deflation and stimulating economic growth in a country
that had faced two "lost decades" following the burst of its asset price bubble in the early 1990s.
The three main pillars of Abenomics were:
1. Aggressive Monetary Easing: Led by the Bank of Japan (BoJ), this policy included increasing
the money supply through quantitative easing and targeting a 2% inflation rate.

2. Flexible Fiscal Policy: This involved government stimulus spending to boost demand, followed
by fiscal consolidation over the medium term.

3. Structural Reforms: Aimed at increasing productivity and competitiveness by liberalizing labor

markets, promoting female participation, encouraging immigration, and deregulating certain
industries.

These three arrows were designed to work in synergy to break the deflationary cycle and revive
economic dynamism in Japan.

Section 2: Macroeconomic Outcomes of Abenomics

The outcomes of Abenomics have been mixed:
1. Growth: Japan experienced moderate GDP growth during the early years of Abenomics.
GDP growth averaged 1.2% between 2013 and 2019, better than the pre-2012 stagnation, but
still below targets.

2. Inflation: Despite massive quantitative easing, inflation remained stubbornly low. The 2%
target was never sustainably achieved, with inflation averaging around 1%.

3. Employment: Abenomics led to a notable improvement in employment. Japan's

unemployment rate dropped below 3%, and female labor participation reached record highs.

4. Exchange Rates and Exports: The yen depreciated significantly due to monetary easing,
which boosted Japan’s exports and corporate earnings, particularly in manufacturing.

5. Public Debt: Japan’s already-high public debt continued to increase, reaching over 230% of
GDP by 2022, raising concerns over fiscal sustainability.

6. Wage Growth: Wage growth did not keep pace with inflation and productivity gains, which
limited improvements in living standards.

7. Stock Market: The Nikkei 225 index rose significantly, doubling in value from 2012 to
2020, signaling investor confidence

Section 3: Structural Reforms and Their Effectiveness

Structural reforms were the most challenging and slow-moving component of Abenomics. Key
initiatives included:
• Corporate Governance Reform: Japan implemented policies to improve corporate
transparency and accountability, such as the Corporate Governance Code.

• Female Labor Participation: Known as "Womenomics," policies included childcare

support, parental leave reforms, and incentives for companies hiring women.

• Labor Market Flexibility: Although efforts were made to reduce duality between regular
and non-regular workers, significant rigidities remained.
 • Immigration Reform: Modest steps were taken to allow more foreign workers, especially in
caregiving and construction sectors.

• Innovation and Productivity: Policies to promote innovation, including investments in R&D

and digital infrastructure, were rolled out.

Despite these reforms, Japan’s deep-rooted demographic and institutional issues limited the
effectiveness of structural changes.

Section 4: Lessons from Abenomics for Bangladesh

Bangladesh, with its growing economy, strategic location, and large youth population, can draw
multiple lessons from Abenomics:
1. Monetary Policy Management: Bangladesh must be cautious in deploying aggressive
monetary policies without inflationary control mechanisms. While quantitative easing helped
Japan, its effectiveness in a developing context with inflationary pressures like Bangladesh
might be risky.

2. Flexible Fiscal Approach: Bangladesh should adopt counter-cyclical fiscal policies—

stimulus during downturns and consolidation during booms. Investments in infrastructure,
health, and education can serve as catalysts for long-term growth.

3. Structural Reforms: Bangladesh can benefit greatly from reforms in labor markets,
governance, and regulatory frameworks. Simplifying business processes and encouraging
innovation is key.

4. Female Workforce Participation: Like Japan’s "Womenomics," increasing female

participation can unlock massive growth potential. Bangladesh has already made progress but
still faces cultural and infrastructural barriers.

5. Digital Transformation: Investment in digital economy infrastructure—e-governance,

fintech, automation—will help Bangladesh improve productivity and competitiveness.

6. Export Diversification: Learning from Japan’s export-led model, Bangladesh should reduce
over-dependence on garments and diversify into electronics, pharmaceuticals, IT, etc.

Section 5: Key Differences Between Japan and Bangladesh

While lessons are valuable, it is crucial to contextualize:
• Demographics: Japan faces a declining and aging population, while Bangladesh has a
demographic dividend with a young, growing labor force.

• Institutional Capacity: Japan’s institutional frameworks are more robust. Bangladesh needs
significant reforms in public institutions.

• Financial Markets: Japan has deep, mature capital markets. Bangladesh’s financial sector is
underdeveloped, limiting the transmission of monetary policies.

• Technological Readiness: Japan is a technology leader. Bangladesh needs to improve tech

access and education.
 Section 6: Bangladesh’s Current Economic Trajectory
Bangladesh has been experiencing steady GDP growth, exceeding 6% annually over the past decade
(except during the COVID-19 pandemic). Other developments include:
• Poverty Reduction: Poverty rate declined from over 40% in 2000 to around 20% by 2020.

• Remittances: A major source of foreign exchange, contributing over $20 billion annually.

• RMG Sector: Over 80% of export earnings, but vulnerable to global shocks.

• Infrastructure Investments: Megaprojects like Padma Bridge, Metro Rail, etc., indicate
progress.

• Digital Bangladesh Vision: Focused on ICT-based development, but gaps in implementation

remain.

Despite progress, challenges such as corruption, banking sector weakness, climate vulnerability, and
political uncertainty persist.

Section 7: Policy Recommendations for Bangladesh

Based on Abenomics’ outcomes and Bangladesh’s needs:
1. Balanced Macroeconomic Policy Mix: Avoid over-reliance on any one policy tool. Ensure
coordination among fiscal, monetary, and trade policies.

2. Human Capital Investment: Increase spending on health, education, and skills training.

3. Private Sector Empowerment: Simplify regulations, ensure fair competition, and improve
contract enforcement.

4. Governance Reform: Increase transparency, digitize public services, and reduce corruption.

5. Climate Resilience: Integrate climate adaptation in national planning.

6. Smart Urbanization: Invest in sustainable cities, transport, and housing.

7. Export Diversification: Strengthen logistics, improve port facilities, and support emerging
industries.

Section 8: Conclusion
Abenomics represents a significant experiment in modern economic policymaking. While not all its
goals were fully achieved, the strategy brought Japan out of deep stagnation and introduced several
forward-looking reforms. For Bangladesh, the experience of Abenomics offers valuable insights into
policy innovation, macroeconomic management, and structural transformation. However, any lesson
must be adapted to the local context. Bangladesh’s demographic strengths, development stage, and
economic structure are different, demanding a tailored approach. By learning from both the
achievements and shortcomings of Abenomics, Bangladesh can design a robust development roadmap
that ensures sustainable and inclusive growth for decades to come.
 References
• Feldman, R. (2015). "Abenomics: Why It Works, Why It Matters." Tokyo: Morgan Stanley.

• Hausman, J. K., & Wieland, J. (2014). "Abenomics: Preliminary Analysis and Outlook."
Brookings Papers on Economic Activity.

• IMF (2020). "Japan: 2020 Article IV Consultation-Press Release; Staff Report." Washington:
International Monetary Fund.

• Kuroda, H. (2016). "The Bank of Japan's Quantitative and Qualitative Monetary Easing."
Speech at the Foreign Correspondents’ Club of Japan.

• World Bank (2023). "Bangladesh Development Update." Washington: World Bank.

• Ministry of Finance, Japan (2021). "Annual Report on the Japanese Economy and Public
Finance."

• Rahman, M. (2022). "Structural Transformation in Bangladesh: Opportunities and

Challenges." Centre for Policy Dialogue.

• JICA (2019). "Womenomics in Japan: Impacts and Implementation."

• OECD (2020). "Economic Survey of Japan."

• ADB (2023). "Bangladesh: Building Resilience for Inclusive Growth."