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Economy of Germany
Germany has a developed social market economy that is ranked the world's fourth largest economy in USD exchange-rate terms, and the largest economy in Europe. The German economy is heavily export-oriented; as of 2008, Germany is the world's leading exporter of merchandise, and exports account for more than one-third of national output. As a result, exports traditionally have been a key element in German macroeconomic expansion. Germany is a strong advocate of closer European economic and political integration, and its economic and commercial policies are increasingly determined by agreements among European Union (EU) members and EU single market legislation. Germany uses the common European currency, the euro, and its monetary policy is set by the European Central Bank in Frankfurt, Germany. Most foreign and German experts agree that there are/were domestic structural problems to be addressed. Beginning in 2003, the government gradually deregulated the labour market to tackle formerly high unemployment, and employment levels have been increasing. As of October 2008, the overall unemployment rate, as measured by the German authorities, was 7.2 percent (6.0 percent in West Germany, and 11.8 percent in East Germany). As of September 2008, as measured by ILO standards the German unemployment rate was 6.2 percent (compared with 7.4 percent as measured by German standards). Further issues, which are being addressed by governmental policies, are high non-wage labour costs and bureaucratic regulations that burden businesses and the process of starting new businesses.

Nevertheless, the export oriented economy is doing extremely well. Export growth in 2007 is estimated to be 9%, underscoring Germany's role as the world's biggest exporter. GDP growth in 2006 was 2.9% and in 2007 was 2.5%. However in 2008 GDP slowed down to a growth of 1.3%, because of the Economic crisis of 2008. A problem can be seen in the weak domestic market, most likely stemming from stagnating wages over more than a decade. Germany finances its reunification to a large extent by social insurance contributions, forcing up 2 non-wage labour costs. To conserve the competitiveness of German workers, unions have abandoned high wage demands since the mid-1990s. According to the Federal Statistical Office of Germany, the average net income after deduction of consumer price rises declined by 2% between 1991 and 2005. However, in 2007 collective bargaining sessions, unions' wage demands were strongly up compared with averages of the last decade. Primary sectors In 2004 agriculture, forestry, and mining accounted for only 1.1% of Germanys gross domestic product (GDP) and employed only 2.2% of the population, down from 4% in 1991. Much of the reduction in employment occurred in the eastern states, where the number of agricultural workers declined by as much as 75% following reunification. However, agriculture is extremely productive, and Germany is able to cover 90% of its nutritional needs with domestic production. In fact, Germany is the third largest agricultural producer in the European Union (EU) after France and Italy. Germanys principal agricultural products are potatoes, wheat, barley, sugar beets, fruit, and cabbages. Despite Germanys high level of industrialization, roughly one-third of its territory is covered by forest. The forestry industry

provides for about two-thirds of domestic consumption of wood and wood products, so Germany is a net importer of these items. Mining and minerals Coal is Germanys most important energy resource, although government policy is to reduce subsidies for coal extraction. Coal production has declined since 1989 as a result of environmental policy and the closing of inefficient mines in the former East Germany. The two main grades of coal in Germany are hard coal and lignite, which is also called brown coal. Despite its considerable reserves, the strong demand and high cost of domestic coal production turned Germany into a net importer of coal. Also as of January 2004, proven natural gas reserves were 10.8 trillion cubic feet (310 km3 ,( the third largest in the EU. Nearly 90% of Germanys natural gas production takes place in the state of Lower Saxony. In 2002 Germany imported 2.4 trillion cubic feet (68 km3 ) of natural gas, or 75% of its requirements. The most important source of natural gas imports is Russia, with a 40.8% share, followed by Norway at 31.5%, and the Netherlands at 22.3%. Energy In 2002 Germany was the worlds fifth largest consumer of energy, behind the United States, China, India and Japan with two-thirds of its primary energy being imported. In the same year, Germany was Europes largest 3 consumer of electricity; electricity consumption that year totalled 512.9 billion kilowatt-hours. Government policy emphasizes conservation and the development of renewable energy sources, such as solar, wind, biomass, hydro, and

geothermal. As a result of energy-saving measures, energy efficiency (the amount of energy required to produce a unit of gross domestic product) has been improving since the beginning of the 1970s. The government has set the goal of meeting half the countrys energy demands from renewable sources by 2050. In 2000 the government and the German nuclear power industry agreed to phase out all nuclear power plants by 2021. However, renewables currently play a more modest role in energy consumption. In 2002 energy consumption was met by the following sources: oil (40%), coal (23%), natural gas (22%), nuclear (11%), hydro (2%), and other renewables (2%). Industry

Industry and construction accounted for 29% of gross domestic product (GDP) in 2003, a comparatively large share even without taking into account related services. The sector employed 26.4% of the workforce. Germany excels in the production of automobiles, machine tools, and chemicals. With the manufacture of 5.5 million vehicles in 2003, Germany was the worlds third largest producer of automobiles after the United States and Japan, although the People's Republic of China was threatening to displace Germany in the world rankings as early as 2005. In 2004 Germany enjoyed the largest world market share in machine tools (19.3%). German-based multinationals such as Adidas, Continental AG, Daimler, BMW, Bosch, BASF, Bayer, Siemens, Miele, and Volkswagen are brand names throughout the world. Of vital importance is the role of small- to medium-sized manufacturing firms, which specialize in niche products and often are owned by management. These firms employ two-thirds of the German workforce.

Service sector In 2002 services constituted 70% of gross domestic product (GDP), and the sector employed 71.3% of the workforce. The subcomponents of services are financial, renting, and business activities (30.5%); trade, hotels and restaurants, and transport (18%); and other service activities (21.7%). Tourism Domestic and international tourism generates about 8% of gross domestic product (GDP) and 2.8 million jobs. Following commerce, tourism is the 4 second largest component of the services sector. In 2004 Germany registered 45 million overnight stays by international tourists, 4% higher than in the previous year and an all-time record. Two-thirds of all major trade fairs are held in Germany, and each year they attract 9 to 10 million business travellers, about 20% of whom are foreigners. The four most important trade fairs take place in Hanover, Frankfurt, Cologne, and Dsseldorf. Germanys hosting of the FIFA World Cup in 2006 presented an opportunity for the tourism sector. Financial Services By tradition, Germanys financial system is bank-oriented rather than stock market-oriented. The process of disintermediation, whereby businesses and individuals arrange financing by directly accessing the financial markets versus seeking loans from banks acting as intermediaries, has not fully taken hold in Germany. One of the reasons that banks are so important in German finance is that they have never been subject to a legal separation of commercial and investment banking. Instead, under a system known as universal banking, banks have offered a wide range of services from lending to securities trading to insurance. Another reason for the strong influence of

banks is that there is no prohibition of interlocking ownership between banks and their client companies. However, in January 2002 the government moved to discourage this practice and promote more rational capital allocation by eliminating the capital gains tax on the sale of corporate holdings from one company to another. At the end of 2000, 2,713 out of 2,931 German financial institutions (92.6%) were universal banks, including 354 commercial banks, 1,798 credit cooperatives, and 561 savings banks. The non-universal banks specialized in such activities as mortgage banking and investments. The list of the six largest German banks illustrates the diversity of bank structure and ownership. Of the top six banks, ranked by total assets as of year-end 2002, four are private, but the fifth largest is public, and the sixth largest is a cooperative. Despite the central role of banks in finance, stock markets are competing for influence. The Deutsche Brse (German stock exchange), a private corporation, is responsible for managing Germanys eight stock markets, by far the largest of which is the Frankfurt Stock Exchange, which handles 90% of all securities trading in Germany. The leading stock index on the Frankfurt exchange is the DAX, which, like the New York Stock Exchanges Dow Jones Industrial Average, is composed of 30 blue-chip companies. The other German stock exchanges are located in Berlin, Bremen, Dsseldorf, Hamburg, Hanover, Munich, and Stuttgart. Xetra is Germanys electronic 5 trading platform. As of the end of 2004, the total market capitalization of the German stock markets was nearly US$1.1 trillion, representing about 45% of gross domestic product (GDP). The shares of some 684 companies trade on the exchanges.

Trade In 2003 Germany conducted slightly more than half of its trade within the then 15-member EU, followed by, in order of volume, developing countries, Eastern Europe (including countries like Poland that subsequently joined the EU), the United States and Canada, non-EU Europe (Switzerland, Norway, Liechtenstein, and Iceland), and Japan. Increasing emphasis is being placed on trade with Russia and the People's Republic of China. The 2005 Hanover trade fair devoted much of its attention to Germanys growing economic and trade ties to Russia, particularly in the area of energy. Germany is Russias top trade partner. In 2002, the People's Republic of China overtook Japan as Germanys top trade partner in Asia, and Germany is investing heavily in that rapidly rising economic power. German trade is consistent with the policy of the European Union (EU) to expand trade among the 25 member states and also with the goal of global trade liberalization through the latest Doha Round of the World Trade Organization (WTO). Germany uses its position as the worlds leading merchandise exporter a fact that partially reflects the strength of the euro to compensate for subdued domestic demand. German companies derive one-third of their revenues from foreign trade. Therefore, Germany is committed to reducing trade restrictions, whether involving tariffs or nontariff barriers, and improving the transparency of foreign markets, including access to public works projects. The United States is Germany's second-largest trading partner after France. Two-way trade in goods totalled $88 billion in 2000. German exports to the USA totalled $58.7 billion while US imports to Germany were $29.2 billion. Germany's main exports to the USA include motor vehicles, machinery,

chemicals, and heavy electrical equipment, while imports from the USA included aircraft, electrical, telecommunications and data processing equipment, and motor vehicles and parts. Exports and imports In 2003 Germany imported US $ 601.4 billion of merchandise, while imports of goods and services totalled US$773.4 billion. Principal merchandise imports were motor vehicles (US$64.4 billion), chemical products (US$63.2 billion), machinery (US$41.8 billion), oil and gas (US$39.9 billion), and 6 computers (US$30.5 billion). Germanys main import partners were France (9.0%), the Netherlands (7.8%), the United States (7.3%), Italy (6.1%), the United Kingdom (6.1%), Belgium (4.9%), China (3.8%), and Austria (3.8%). In 2003 Germany exported US$748.4 billion of merchandise, while exports of goods and services totalled US$873.3 billion. Principal merchandise exports were motor vehicles (US$145.5 billion), machinery (US$103.0 billion), electrical goods (US$210 billion), chemical products (US$181.5 billion), and telecommunications technology (US$35.1 billion). Germanys main export partners were France (10.6%), the United States (9.3%), the United Kingdom (8.4%), Italy (7.4%), the Netherlands (6.2%), Austria (5.3%), Belgium (5.0%), and Spain (4.9%). Investments Germany follows a liberal policy toward foreign investment. During the period 1998-99, France was the largest source of direct investment, followed by the United Kingdom and the United States (18%). From 1995 to 1999, annual average flows of U.S. direct investment in Germany were $3.4 billion, while those of German investors in the United States reached $21 billion. In terms of cumulative position (historical cost basis), German investment in

the United States was valued at $111 billion in 1999, having more than doubled since 1995, while U.S. investment in Germany was worth just under $50 billion, having grown 12% since 1995. Despite persistence of structural rigidities in the labour market and extensive government regulation, the economy remains strong and internationally competitive, not least because of its highly skilled work force. Although production costs are high, Germany is still an export powerhouse. Additionally, Germany is strategically placed to take advantage of the rapidly growing central European countries. The current government has addressed some of the country's structural problems, with important tax, social security, and financial-sector reforms. In the future, Germany faces further fundamental (and perhaps even more sweeping) economic adjustments to boost growth and job creation. Labour force The distribution of Germanys workforce by sector is very similar to the relative output of each sector. In 2004 the workforce was distributed as follows: agriculture, 2.2%; industry, 26.4%; and services, 71.3%. Participants in the workforce totalled 38.87 million. In summer 2007, Germanys seasonally adjusted national unemployment rate decreased to 7 9%, or nearly 38 million people. While as recently as December 2007 there was an even further decline to 8.4 percent. These statistics represented post-war records. Unemployment approached 20% in some states in the East, where high wages are not matched by productivity. However, by September 2005 overall unemployment had declined to 11.2%, or 4.65 million people. Germany's national unemployment rate is only partially comparable to unemployment rates in the United Kingdom or United States,

because it includes a significant share of part-timers, who work less than 15 hours a week. Everyone working less than 15 hours a week, who is seeking and available for a job with full social security insurance (normally full-time job or part-time above 15 hours a week), can be registered as unemployed. Around one quarter of Germany's national unemployment is underemployed part-timers. As a labour market performance index and for the current situation on the German labour market, the German job index BA-X has been established in early 2007. At the start of 2005, the seasonally adjusted number of registered unemployed persons initially showed another sharp increase, reaching a rate of 12.6%, with more than 5.2 million Germans out of work. The considerable rise in the unemployment figures is largely due to the fact that former recipients of income support who now receive the new class-II unemployment benefit are registered as unemployed. This means that people who used to be numbered among the latent manpower reserve are now shown as registered unemployed persons. In particular, the labourmarket statistics now include more unemployed young, older and low-skilled people. A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 2400000 dollar millionaires in Germany.

Economy of France
France is the fifth largest economy in the world, by measurement of GDP (nominal), behind the United States, Japan, China and Germany. On May 15, 2009, the INSEE announced that France has officially entered a recession after its GDP decreased by 1.2% of Q1 in 2009. Sectors of the economy Industry France, as with many modern industrialised nations, has a large and diverse industrial base. Leading industrial sectors in France are telecommunications (including communication satellites), aerospace and defense, ship building (naval and specialist ships), pharmaceuticals, construction and civil engineering, chemicals, and automobile production (3.5 m units in 2005). Research and development spending is also high in France at 2.3% of GDP, the third highest in the OECD. Energy With no domestic oil production, France has relied heavily on the development of nuclear power, which now accounts for about 78% of the country's electricity production, up from only 8% in 1973, 24% in 1980, and 75% in 1990. Nuclear waste is stored on site at reprocessing facilities. In 2006 the net production of electricity in France amounted to 548.8 TWh, of which: 428.7 TWh (78.1%) was produced by nuclear power generation. 60.9 TWh (11.1%) was produced by hydroelectric power generation. 52.4 TWh (9.5%) was produced by fossil fuel power generation. 21.6 TWh (3.9%) by coal power.

 20.9 TWh (3.8%) by natural gas power. 9.9 TWh (1.8%) by other fossil fuel generation (fuel oil and gases byproducts of industry such as blast furnace gases). 2 6.9 TWh (1.3%) was produced by other types of power generation (essentially waste-to-energy and wind turbines). The electricity produced by wind turbines increased from 0.596 TWh in 2004, to 0.963 TWh in 2005, and 2.15 TWh in 2006, but this still accounts only for 0.4% of the total production of electricity (as of 2006). Privatisation of EDF In November 2004, EDF (which stands for Electricit de France), the largest electricity provider in France, was floated on the French stock market, with the French State keeping more than 70% of the capital. EDF is not the only electricity provider in France. Other electricity providers include CNR (Compagnie nationale du Rhne) and Endesa (through SNET). Agriculture France is the European Union's leading agricultural producer, accounting for about one-third of all agricultural land within the EU. Northern France is characterized by large wheat farms. Dairy products, pork, poultry, and apple production are concentrated in the western region. Beef production is located in central France, while the production of fruits, vegetables, and wine ranges from central to southern France. France is a large producer of many agricultural products and is currently expanding its forestry and fishery industries. The implementation of the Common Agricultural Policy (CAP) and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) have resulted in reforms in the agricultural sector of the economy.

France is the world's sixth-largest agricultural producer and the secondlargest agricultural exporter, after the United States. However, the destinations of 70% of its exports are other EU member states and many poor African countries (including its former colonies) which face serious food shortage. Wheat, beef, pork, poultry, and dairy products are the principal exports. The United States, although the second-largest exporter to France, faces stiff competition from domestic production, other EU member states, and third world countries. U.S. agricultural exports to France, totalling some $600 million annually, consist primarily of soybeans and products, feeds and fodders, seafood, and consumer oriented products, especially snack foods and nuts. French exports to the United States are mainly cheese, processed products and wine. The French agricultural sector is heavily dependent upon subsidies from the European Union, which account for 11 billion. France is the main country in the EU that is against the reduction of subsidies. Subsidies have given France a competitive advantage which also demotes the concept of free 3 trade. Specific government policies, such as the infamous reclassification of French wine as a 'health food' to avoid VAT, also goes a long way to create a thriving domestic sector. Tourism France is the most visited country in the world with over 75 million visitors a year. As of 2004, the most recent statistics compiled by the World Tourism Organization; see World Tourism rankings. Tourism is a significant contributor to the French Economy. In the 1960s the government heavily promoted the development of skiing in the French Alps through the development of new high level resorts including some of the world's most

extensive ski trails. Weapons industry France is the third largest weapons supplier in the world. The French arms industry's main customer, for whom they mainly build warships, guns, nuclear weapons and equipment, is the French Government. Furthermore, record high defense expenditure (currently at 35 billion), which was considerably increased under the government of Prime Minister Jean-Pierre Raffarin, have contributed to the success of the French arms industries. In addition, external demand plays a big part in the growth of this sector: for example, France exports great quantities of weaponry to the United Arab Emirates, Greece, India, Pakistan, Taiwan, Singapore and many others. External trade France is the second-largest trading nation in Europe (after Germany). Its foreign trade balance for goods had been in surplus from 1992 until 2001, reaching $25.4 billion in 1998; however, the French balance of trade was hit by the economic downturn, and went into the red in 2000, reaching US$15bn in deficit in 2003. Total trade for 1998 amounted to $730 billion, or 50% of GDPimports plus exports of goods and services. Trade with European Union countries accounts for 60% of French trade. In 1998, U.S.-France trade totalled about $47 billiongoods only. According to French trade data, U.S. exports accounted for 8.7%--about $25 billionof France's total imports. U.S. industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising are particularly attractive to French importers. 4

The principal French exports to the United States are aircraft and engines, beverages, electrical equipment, chemicals, cosmetics, luxury products and perfume. France is the ninth-largest trading partner of the US. Departements economy and cities Some Departements in France are very rich compared to others. Paris, Hauts-de-Seine (GDP per capita: 67 000 in 2000) and Rhne, for example, concentrate a lot of company headquarters. The Yvelines is the second richest dpartement in France according to the income of inhabitants. In Hauts-de-Seine the wages are on average 28 000 per capita, in Yvelines 27 900, and in Paris 25 000 against 15 000 in France (data 2004 INSEE). Finally, in France like in other countries, a lot of cities are extremely rich in much of Regions, so the richest is Marnes-la-Coquette in Hauts-de-Seine with 81 750 per household (according to INSEE, data 2004) A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 3,000,000 dollar millionaires in France.

Economy of India
The economy of India is the twelfth largest economy in the world by market exchange rates and the fourth largest by purchasing power parity (PPP) basis. India was under socialist-based policies for an entire generation from the 1950s until the 1980s. The economy was characterised by extensive regulation, protectionism, and public ownership, leading to pervasive

corruption and slow growth. Since 1991, continuing economic liberalisation has moved the economy towards a market-based system. India's large service industry accounts for 54% of the country's GDP while the industrial and agricultural sector contribute 29% and 17% respectively. Agriculture is the predominant occupation in India, accounting for about 60% of employment. The service sector makes up a further 28% and industrial sector around 12%. The labor force totals half a billion workers. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and fish. Major industries include textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, information technology enabled services and software. India's per capita income (nominal) is $1016, ranked 142 nd in the world, while it's per capita (PPP) of US$2762 is ranked 129 th Previously a closed . economy, India's trade has grown fast. India currently accounts for 1.5% of World trade as of 2007 according to the WTO. According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's trade has reached a still relatively moderate share

24% of GDP in 2006, up from 6% in 1985. Despite robust economic growth, India continues to face several major problems. The recent economic development has widened the economic inequality across the country. Despite sustained high economic growth rate, approximately 80% of its population lives on less than $2 a day (PPP), more 2 than double the same poverty rate in China. Even though the arrival of Green Revolution brought end to famines in India, 40% of children under the age of three are underweight and a third of all men and women suffer from chronic energy deficiency While the credit rating of India was hit by its nuclear tests in 1998, it has been raised to investment level in 2007 by S&P and Moody's. In 2003, Goldman Sachs predicted that India's GDP in current prices will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035, it was projected to be the third largest economy of the world, behind US and China. Sectors India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 16.6% of the GDP in 2007, employed 60% of the total workforce and despite a steady decline of its share in the GDP, is still the largest economic sector and plays a significant role in the overall socio-economic development of India. Yields per unit area of all crops have grown since 1950, due to the special emphasis placed on agriculture in the five-year plans and steady improvements in irrigation, technology, application of modern agricultural practices and provision of agricultural credit and subsidies since Green revolution in India. However, international comparisons reveal that the average yield in India is generally

30% to 50% of the highest average yield in the world. India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest cattle population (193 million). It is the second largest producer of wheat, rice, sugar, groundnut and inland fish. It is the third largest producer of tobacco. India accounts for 10% of the world fruit production with first rank in the production of bananas, sapotas and mangoes. Industry and services Industry accounts for 27.6% of the GDP and employ 17% of the total workforce. However, about one-third of the industrial labour force is engaged in simple household manufacturing only. In absolute terms, India is 16 th in the world in terms of nominal factory output. India's small industry makes up 5% of carbon dioxide emissions in the world. Economic reforms brought foreign competition, led to privatisation of certain public sector industries, opened up sectors hitherto reserved for the public sector and led to an expansion in the production of fast-moving consumer 3 goods. Post-liberalisation, the Indian private sector, which was usually run by oligopolies of old family firms and required political connections to prosper was faced with foreign competition, including the threat of cheaper Chinese imports. It has since handled the change by squeezing costs, revamping management, focusing on designing new products and relying on low labour costs and technology. Textile manufacturing is the second largest source for employment after agriculture and accounts for 26% of manufacturing output. Tirupur has

gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. Dharavi slum in Mumbai has gained fame for leather products. Tata Motors' Nano attempts to be the world's cheapest car. India is fifteenth in services output. It provides employment to 23% of work force, and it is growing fast, growth rate 7.5% in 19912000 up from 4.5% in 195180. It has the largest share in the GDP, accounting for 55% in 2007 up from 15% in 1950. Business services (information technology, information technology enabled services, business process outsourcing) are among the fastest growing sectors contributing to one third of the total output of services in 2000. The growth in the IT sector is attributed to increased specialization, and an availability of a large pool of low cost, but highly skilled, educated and fluent English-speaking workers, on the supply side, matched on the demand side by an increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of India's IT industry to the country's GDP increased from 4.8% in 2005-06 to 7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world. In March 2009, annual revenues from outsourcing operations in India amounted to US$60 billion and this is expected to increase to US $225 billion by 2020. Most Indian shopping takes place in open markets and millions of independent grocery shops called kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008. Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations such as "signboard licences" and "anti-hoarding measures" may have to be complied

before a store can open doors. There are taxes for moving goods to states, from states, and even within states. Tourism in India is relatively undeveloped, but growing at double digits. Some hospitals woo medical tourism. 4 Banking and finance The Indian money market is classified into: the organised sector (comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks); and the unorganised sector (comprising individual or family owned indigenous bankers or money lenders and non-banking financial companies (NBFCs)). The unorganised sector and microcredit are still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans. Prime Minister Indira Gandhi nationalised 14 banks in 1969, followed by six others in 1980, and made it mandatory for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale industry, retail trade, small businesses, etc. to ensure that the banks fulfill their social and developmental goals. Since then, the number of bank branches has increased from 10120 in 1969 to 98910 in 2003 and the population covered by a branch decreased from 63800 to 15000 during the same period. The total deposits increased 32.6 times between 1971 to 1991 compared to 7 times between 1951 to 1971. Despite an increase of rural branches, from 1860 or 22% of the total number of branches in 1969 to 32,270 or 48%, only 32270 out of 5 lakh (500,000) villages are covered by a scheduled bank. The public sector banks hold over 75% of total assets of the banking

industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks (like encouraging mergers, reducing government interference and increasing profitability and competitiveness), other reforms have opened up the banking and insurance sectors to private and foreign players. Since liberalisation, the government has approved significant banking reforms. While some of these relate to nationalised banks (like encouraging mergers, reducing government interference and increasing profitability and competitiveness), other reforms have opened up the banking and insurance sectors to private and foreign players. More than half of personal savings are invested in physical assets such as land, houses, cattle, and gold. Natural resources India's total cultivable area is 1,269,219 km (56.78% of total land area), which is decreasing due to constant pressure from an ever growing 5 population and increased urbanisation. India has a total water surface area of 314,400 km and receives an average annual rainfall of 1,100 mm. Irrigation accounts for 92% of the water utilisation, and comprised 380 km in 1974, and is expected to rise to 1,050 km by 2025, with the balance accounted for by industrial and domestic consumers. India's inland water resources comprising rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean and other gulfs and bays provide employment to nearly 6 million people in the fisheries sector. In 2008, India had the world's third largest fishing industry.

India's major mineral resources include coal, iron, manganese, mica, bauxite, titanium, chromite, limestone and thorium. India meets most of its domestic energy demand through its 92 billion tonnes of coal reserves (about 10% of world's coal reserves). India's oil reserves, found in Bombay High off the coast of Maharashtra, Gujarat, Rajasthan and in eastern Assam meet 25% of the country's domestic oil demand. India's total proven oil reserves stand at 11 billion barrels, of which Bombay High is believed to hold 6.1 billion barrels and Mangala Area in Rajasthan, an additional 3.6 billion barrels. India's huge thorium reserves about 25% of world's reserves is expected to fuel the country's ambitious nuclear energy program in the long-run. India's dwindling uranium reserves stagnated the growth of nuclear energy in the country for many years. However, the Indo-US nuclear deal has paved the way for India to import uranium from other countries. India is also believed to be rich in certain renewable sources of energy with significant future potential such as solar, wind and biofuels (jatropha, sugarcane). External trade and investment Until the liberalisation of 1991, India was largely and intentionally isolated from the world markets, to protect its fledging economy and to achieve selfreliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. In 2006-07, major export commodities included engineering goods, petroleum products, chemicals and pharmaceuticals, gems and jewellery,

textiles and garments, agricultural products, iron ore and other minerals. Major import commodities included crude oil and related products, 6 machinery, electronic goods, gold and silver. Global trade relations According to World Trade Organization (WTO), India accounted for 1.2% of the global trade in 2006. Until the liberalization of 1991, India was largely and intentionally isolated from the world markets, to protect its economy and to achieve self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions, while foreign direct investment (FDI) was restricted by upper-limit equity participation, restrictions on technology transfer, export obligations and government approvals; these approvals were needed for nearly 60% of new FDI in the industrial sector. The restrictions ensured that FDI averaged only around US$200 million annually between 1985 and 1991; a large percentage of the capital flows consisted of foreign aid, commercial borrowing and deposits of non-resident Indians. India's exports were stagnant for the first 15 years after independence, due to the predominance of tea, jute and cotton manufactures, demand for which was generally inelastic. Imports in the same period consisted predominantly of machinery, equipment and raw materials, due to nascent industrialization. Since liberalization, the value of India's international trade has become more broad-based and has risen to Rs. 63080109 crores in 200304 from Rs.1250 crores in 195051. India's major trading partners are China, the US, the UAE, the UK, Japan and the EU. The exports during April 2007 were $12.31 billion up by 16% and import were $17.68 billion with an increase of 18.06% over the previous year. India is a founding-member of General Agreement on Tariffs and Trade

(GATT) since 1947 and its successor, the WTO. While participating actively in its general council meetings, India has been crucial in voicing the concerns of the developing world. For instance, India has continued its opposition to the inclusion of such matters as labour and environment issues and other nontariff barriers into the WTO policies. Balance of payments

Cumulative Current Account Balance 1980-2008 based on the IMF data since independence, India's balance of payments on its current account has been negative. Since liberalisation in the 1990s (precipitated by a balance of payment crisis), India's exports have been consistently rising, covering 80.3% of its imports in 200203, up from 66.2% in 199091. India's growing oil import bill is seen as the main driver behind the large current account deficit. In 2007-08, India imported 120.1 million tonnes of crude oil, more than 3/4th of the domestic demand, at a cost of $61.72 billion. 7 Although India is still a net importer, since 199697, its overall balance of payments (i.e., including the capital account balance), has been positive, largely on account of increased foreign direct investment and deposits from non-resident Indians; until this time, the overall balance was only occasionally positive on account of external assistance and commercial borrowings. As a result, India's foreign currency reserves stood at $285 billion in 2008, which could be used in infrastructural development of the country if used effectively. Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2% respectively in June 2009. Since the decline in imports was much sharper compared to the decline in exports, India's trade

deficit reduced to $252.5 billion. India's reliance on external assistance and commercial borrowings has decreased since 199192, and since 200203, it has gradually been repaying these debts. Declining interest rates and reduced borrowings decreased India's debt service ratio to 4.5% in 2007. In India, External Commercial Borrowings (ECBs) are being permitted by the Government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates these borrowings (ECBs) through ECB policy guidelines. Foreign direct investment in India As the fourth-largest economy in the world in PPP terms, India is a preferred destination for foreign direct investments (FDI); India has strengths in information technology and other significant areas such as auto components, chemicals, apparels, pharmaceuticals, and jewellery. Despite a surge in foreign investments, rigid FDI policies resulted in a significant hindrance. However, due to some positive economic reforms aimed at deregulating the economy and stimulating foreign investment, India has positioned itself as one of the front-runners of the rapidly growing Asia Pacific Region. India has a large pool of skilled managerial and technical expertise. The size of the middle-class population stands at 50 million and represents a growing consumer market. 8 Share of top five investing countries in FDI inflows. (20002007) Rank Country Inflows (Million USD) Inflows (%)

1 Mauritius 85,178 44.24% 2 United States 18,040 9.37% 3 United Kingdom 15,363 7.98% 4 Netherlands 11,177 5.81% 5 Singapore 9,742 5.06% India's recently liberalized FDI policy (2005) allows up to a 100% FDI stake in ventures. Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and foreign direct investment FDI. The upward moving growth curve of the real-estate sector owes some credit to a booming economy and liberalized FDI regime. In March 2005, the government amended the rules to allow 100 per cent FDI in the construction business. This automatic route has been permitted in townships, housing, built-up infrastructure and construction development projects including housing, commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, and city- and regional-level infrastructure. While market observers lament the arrival of the global recession on India's doorsteps, the obverse has also been true. Business magnates such as the expatriate Indian NRI's including Lakshmi Mittal of UK - Chairman ArcelorMittal and Arvind Sanmugam of Canada- Chairman World Police Academy, Chairman and CEO of Chez Leeloo Canada, Chairman of Chez Leeloo India, Director of Chez Leeloo Philippines, President of Canadian Peacemakers Corporation and Director of Tan Theta Entertainment and others have been building and interweaving their corporations with local business and government. Thus the NRI created employment opportunities are creating their own revenue source and revenue distribution within the

nation. 9 A number of changes were approved on the FDI policy to remove the caps in most sectors. Fields which require relaxation in FDI restrictions include civil aviation, construction development, industrial parks, petroleum and natural gas, commodity exchanges, credit-information services and mining. But this still leaves an unfinished agenda of permitting greater foreign investment in politically sensitive areas such as insurance and retailing. FDI inflows into India reached a record US$19.5 bn in fiscal year 2006/07 (April-March), according to the government's Secretariat for Industrial Assistance. This was more than double the total of US$7.8 bn in the previous fiscal year. The FDI inflow for 2007-08 has been reported as $24 bn and for 2008-09; it is expected to be above $35 billion. A critical factor in determining India's continued economic growth and realizing the potential to be an economic superpower is going to depend on how the government can create incentives for FDI flow across a large number of sectors in India. Infrastructure Development of infrastructure was completely in the hands of the public sector and was plagued by corruption, bureaucratic inefficiencies, urban-bias and an inability to scale investment. India's low spending on power, construction, transportation, telecommunications and real estate, at $31 billion or 6% of GDP in 2002 had prevented India from sustaining higher growth rates. This has prompted the government to partially open up infrastructure to the private sector allowing foreign investment which has helped in a sustained growth rate of close to 9% for the past six quarters. Some 600 million Indians have no mains electricity at all. While 80% of Indian villages have at least an electricity line, just 44% of rural households

have access to electricity. According to a sample of 97,882 households in 2002, electricity was the main source of lighting for 53% of rural households compared to 36% in 1993. Some half of the electricity is stolen, compared with 3% in China. The stolen electricity amounts to 1.5% of GDP. Almost all of the electricity in India is produced by the public sector. Power outages are common. Many buy their own power generators to ensure electricity supply. As of 2005 the electricity production was at 661.6 billion kWh with oil production standing at 785,000 bbl/day. In 2007, electricity demand exceeded supply by 15%.Multi Commodity Exchange has tried to get a permit to offer electricity future markets. Indian Road Network is developing. Trucking goods from Gurgaon to the port in Mumbai can take up to 10 days. India has the world's second largest road network. Container traffic is growing at 15% a year. Some 60% of Indias container traffic is handled by the Jawaharlal Nehru Port Trust in Mumbai. 10 Internet use is rare; there were only 2.1 million broadband lines in India in January 2007. Most urban cities have good water supply water 24 hours a day, while some smaller cities face water shortages in summer season. A World Bank report says it is an institutional problem in water agencies, or "how the agency is embedded in the relationships between politics and the citizens who are the consumers." Economic disparities One of the critical problems facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of per capita income, poverty, availability of infrastructure and socio-economic development. Seven low-income states - Bihar, Chhattisgarh, Jharkhand,

Madhya Pradesh, Orissa, Rajasthan, and Uttar Pradesh - are home to more than half of India's population. Between 1999 and 2008, the annualized growth rates for Gujarat (8.8%), Haryana (8.7%), or Delhi (7.4%) were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%). Poverty rates in rural Orissa (43%) and rural Bihar (40%) are some of the worst in the world. On the other hand, rural Haryana (5.7%) and rural Punjab (2.4%) compare well with middle-income countries. The five-year plans have attempted to reduce regional disparities by encouraging industrial development in the interior regions, but industries still tend to concentrate around urban areas and port cities. After liberalization, the more advanced states are better placed to benefit from them, with infrastructure like well developed ports, urbanisation and an educated and skilled workforce which attract manufacturing and service sectors. The union and state governments of backward regions are trying to reduce the disparities by offering tax holidays, cheap land, etc., and focusing more on sectors like tourism, which although being geographically and historically determined, can become a source of growth and is faster to develop than other sectors.

1 Economy of the United Kingdom

The United Kingdom is a major developed capitalist economy. It is the world's sixth largest by nominal GDP and the seventh largest by purchasing power parity. It is the third largest economy in Europe after Germany's and France's in nominal terms, and the third largest after Germany's and Russia's in terms of purchasing power parity. Its GDP PPP per capita is the 18th highest in the world. The United Kingdom is also a member of the G8, the Commonwealth of Nations, the Organisation for Economic Cooperation and Development, the World Trade Organisation, and the European Union. The UK was the first country in the world to industrialise in the 18th and 19th centuries, and for much of the 19 th century possessed a predominant role in the global economy. However, by the late 19 th century, the Second Industrial Revolution in the United States meant the US had begun to challenge Britain's role as the leader of the global economy. The extensive war efforts of both World Wars in the 20th century and the dismantlement of the British Empire also weakened the UK economy in global terms, and by that time Britain had been superseded by the United States as the chief player in the global economy. At the start of the 21st century however, the UK still possesses a significant role in the global economy, due to its large Gross Domestic Product and the financial importance that its capital, London, possesses in the world. The United Kingdom is one of the world's most globalised countries. The capital, London, is a major financial centre for international business and

commerce and is one of three "command centres" for the global economy (along with New York City and Tokyo). The British economy is made up (in descending order of size) of the economies of England, Scotland, Wales and Northern Ireland. In 1973, the UK acceded to the European Economic Community which is now known as the European Union after the ratification of the Treaty of Maastricht in 1993. The UK entered a recession in Q3 of 2008. As of June 2009, the economy had shrunk by 5.6% compared to the year before. In July 2009, the UK appeared to have seen the worst of the global recession of 2009, with latest Office of National Statistics figures for Q2 of 2009 showing that the economy shrank by 0.8%, an improvement compared to the previous quarter. Some2 forecasts expect the UK to enter growth in Q3 as the first economy to do so in the EU's big three (Germany, UK, France) and also the first out of the G8. Recent economic performance Gross Domestic Product (GDP) decreased by 0.8 per cent in the second quarter of 2009, compared with a decrease of 2.4 per cent in the first quarter, according to the first provisional estimate of the Office for National Statistics (ONS). The first quarter figure (2009) has been revised down from a decrease of 1.9%. There was a decrease of 1.8 per cent in the fourth quarter of 2008. With a 0.6% decline in the third quarter, the latest figures take the annual rate of decline to 5.6%, the biggest fall since records began in 1955, the BBC reported. In October 2007, the IMF had forecast British GDP to grow by 3.1% in 2007 and 2.3% in 2008. However, GDP growth slowed to 0.1% by the AprilJune quarter of 2008 (revised from zero). However, in September 2008, the OECD forecast contraction for at least two quarters for the UK economy, possibly

severe, placing its predicted performance last in the G7 of leading economies. It has been argued that heavy government borrowing over the past cycle has led to a severe structural deficit, reminiscent of previous crises, which will inevitably exacerbate the situation and place the UK economy in an unfavourable position compared to its OECD partners as attempts are made to stimulate recovery, other OECD nations having allowed greater room for manoeuvre thanks to contrasting policies of relatively tighter fiscal control prior to the global downturn. In May 2009 the European Commission (EC) stated: "The UK economy is now clearly experiencing one of its worst recessions in recent history." The EC expected GDP to decline 3.8% in 2009 and projected that growth will remain negative for the first three quarters of 2009. It predicted two quarters of "virtual stagnation" in late 2009early 2010, followed by a gradual return to "slight positive growth by late 2010". Agriculture, hunting, forestry, and fishing Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with less than 2% of the labour force (477,000 out of a total workforce of 31,598,000, 3 rd quarter of 2007). It contributes around 2% of GDP. Around twothirds of the production is devoted to livestock, onethird to arable crops. The main crops that are grown are wheat, barley, oats, oilseed rape, maize for animal feeds,3 potatoes and sugar beet. New crops are also emerging, such as linseed for oil and hemp for fibre production. The main livestock which are raised are

cattle, chickens (the UK is the second largest poultry producer in Europe after France) and sheep. Agriculture is subsidised by the European Union's Common Agricultural Policy. The UK retains a significant, although vastly reduced, fishing industry. Its fleets, based in towns such as Kingston upon Hull, Grimsby, Fleetwood, Great Yarmouth, Peterhead, Fraserburgh, and Lowestoft, bring home fish ranging from sole to herring. The Blue Book 2006 reports that the "Agriculture hunting, forestry and fishing" added gross value of 10,323 million (at 2006 prices) to the UK economy in 2004. Mining and quarrying The Blue Book 2006 reports that this sector added gross value of 21,876 million to the UK economy in 2004. Manufacturing In 2003, manufacturing industry accounted for 16% of national output in the UK and for 13% of employment, according to the Office for National Statistics. This is a continuation of the steady decline in the importance of this sector to the British economy since the 1960s, although the sector is still important for overseas trade, accounting for 83% of exports in 2003. The regions with the highest proportion of employees in manufacturing were the East Midlands and West Midlands (at 19 and 18% respectively). London had the lowest at 6%. Although the manufacturing sector's share of both employment and the UK's GDP has steadily fallen since the 1960s, data from the OECD shows that manufacturing output in terms of both production and value has steadily increased since 1945. This is a trend common in many mature Western

economies. Heavy industry, employing many thousands of people and producing large volumes of lowvalue goods (such as steelmaking) has either become highly efficient (producing the same amount of output from fewer manufacturing sites employing fewer people for example, productivity in the UK's steel industry increased by a factor of 8 between 1978 and 2006) or has been replaced by smaller industrial units producing highvalue goods (such as the aerospace and electronics industries).4 Engineering and allied industries comprise the single largest sector, contributing 30.8% of total Gross Value Added in manufacturing in 2003. Within this sector, transport equipment was the largest contributor, with 8 global car manufacturers being present in the UK BMW (MINI, Rolls Royce), Tata (JaguarLand Rover), General Motors (Vauxhall Motors), Honda, Nissan, Toyota and Volkswagen (Bentley) with a number of smaller, specialist manufacturers (including Lotus and Morgan) and commercial vehicle manufacturers (including Leyland Trucks, LDV, Alexander Dennis, JCB, the main global manufacturing plant for the Ford Transit, Manganese Bronze and CaseNew Holland) also being present. The British motor industry also comprises numerous components for the sector, such as Ford's diesel engine plant in Dagenham, which produces half of Ford's diesel engines globally. A range of companies like Brush Traction and Hunslet manufacture railway locomotives and other related components. Associated with this sector are the aerospace and defence equipment industries. The UK manufactures a broad range of equipment, with the sector being dominated by BAE Systems, which manufactures civil and defence aerospace, land and marine equipment VT Group, one of the world's largest builders of warships and

GKN and Rolls Royce, who manufacture aerospace engines and power generation systems. Commercial shipbuilders include Harland and Wolff, Cammell Laird, Abels, Barclay Curle and Appledore. Companies such as Fairline Boats and Sunseeker are major builders of private motor yachts. Another important component of Engineering and allied industries is electronics, audio and optical equipment, with the UK having a broad base of domestic firms, alongside a number of foreign firms manufacturing a wide range of TV, radio and communications products, scientific and optical instruments, electrical machinery and office machinery and computers. Chemicals and chemicalbased products are another important contributor to the UK's manufacturing base. Within this sector, the pharmaceutical industry is particularly successful, with the world's second and third largest pharmaceutical firms (GlaxoSmithKline and AstraZeneca respectively) being based in the UK and having major research and development and manufacturing facilities there. Other important sectors of the manufacturing industry include food, drink, tobacco, paper, printing, publishing and textiles. The UK is also home to three of the world's biggest brewing companies: Diageo, SABMiller and Scottish and Newcastle, other major manufacturing companies such as Unilever, Cadbury, Tate & Lyle, British American Tobacco, Imperial Tobacco, EMAP, HarperCollins, Reed Elsevier, Ben Sherman, Burberry, French5 Connection, Reebok, Pentland Group and Umbro being amongst the largest present. The Blue Book 2006 reports that this sector added gross value of 147,469 million to the UK economy in 2004. Manufacturing is an important sector of the modern British economy and

there is a considerable amount of published research on the subject of the factors affecting its growth and performance. Of late, such things as increases in taxation and regulation have tended to diminish the favorableness of the politicallegal environment for UK industry. Within manufacturing, British firms and industries have often lagged behind their overseas competitors in terms of productivity and various other key performance measures. However, Britain the birthplace of the Industrial Revolution continues to be one of the most attractive countries in the world for direct foreign industrial investment

Economy of Japan
The economy of Japan is the second largest economy in the world, after the United States at around US$4.5 trillion in terms of nominal GDP and third after the United States and People's Republic of China when adjusted for purchasing power parity. The workers of Japan rank 18th in the world in GDP per hour worked as of 2006. The Big Mac Index shows that the wages in Tokyo is the highest among principal cities in the world. Japan's economy is highly efficient, highly diversified, and very competitive, being ranked 19th among 111 countries on productivity. Japan has a well educated work force and high levels of savings and investment rates. For three decades, Japan's overall real economic growth had been spectacular: a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s.

Sliding stock and real estate prices marked the end of the "Japanese asset price bubble" of the late 1980s, and ushered in a decade of stagnant economic growth. These problems may have been exacerbated by domestic policies intended to wring speculative excesses from the stock and real estate markets. Real GDP in Japan grew at an average of roughly 1.5% yearly between 19911999, compared to growth in the 1980s of about 4% per year. Growth in Japan throughout the 1990s was slower than growth in other major industrial nations, and the same as in France and Germany. Government efforts to revive economic growth have met with little success and were further hampered in 2000 to 2001 by the slowing of the global economy. However, GDP per worker has increased steadily even through the nineties, growing at 2.0% per year in 2003 and 2004, and 2.8 percent in 2005. Unlike previous recovery trends, domestic consumption has been the dominant factor in leading the growth. As predicted, the economic recovery continued in 2006 and 2007. Infrastructure As of 2005, one half of energy in Japan is produced from petroleum, a fifth from coal, and 14% from natural gas. Nuclear power in Japan makes a quarter of electricity production and Japan would like to double it in the next decades.2 Japan's road spending has been large. The 1.2 million kilometers of paved road are the main means of transportation. Japan has lefthand traffic. A single network of highspeed, divided, limitedaccess toll roads connects major cities and are operated by tollcollecting enterprises. New and used cars are inexpensive. Car ownership fees and fuel levies are used to promote energyefficiency.

Dozens of Japanese railway companies compete in regional and local passenger transportation markets; for instance, 7 JR enterprises, Kintetsu Corporation, Seibu Railway, and Keio Corporation. Often, strategies of these enterprises contain real estate or department stores next to stations. Some 250 highspeed Shinkansen trains connect major cities. All trains are known for punctuality. There are 176 airports and flying is a popular way to travel between cities. The largest domestic airport, Haneda Airport, is Asia's busiest airport. The largest international gateways are Narita International Airport (Tokyo area), Kansai International Airport (Osaka/Kobe/Kyoto area), and Chbu Centrair International Airport (Nagoya area). The largest ports include Nagoya Port. Given its heavy dependence on imported energy, Japan has aimed to diversify its sources. Since the oil shocks of the 1970s, Japan has reduced dependence on petroleum as a source of energy from more than 75% in 1973 to about 57% at present. Other important energy sources are coal, liquefied natural gas, nuclear power, and hydropower. Demand for oil is also dampened by higher government taxes on automobile engines over 2000 cc, as well as on gasoline itself, currently 54 yen per liter sold retail. Kerosene is also used extensively for home heating in portable heaters, especially farther north. Many taxi companies run their fleets on liquefied gas with tanks in the car trunks. A recent success towards greater fuel economy was the introduction of massproduced Hybrid vehicles. Former Prime Minister Shinzo Abe, who was working on Japan's economic revival, signed a treaty with Saudi Arabia and UAE about the rising prices of oil. Services Japan Airlines is one of the largest airlines in the world. Japan's service

sector accounts for about threequarters of its total economic output. Banking, insurance, real estate, retailing, transportation, and telecommunications are all major industries such as Mitsubishi UFJ, Mizuho, NTT, TEPCO, Nomura, Mitsubishi Estate, Tokio Marine, JR East, Seven & I, and Japan Airlines counting as one of the largest companies in the world. The Koizumi government set Japan Post, one of the country's largest3 providers of savings and insurance services for privatization by 2014. The six major keiretsus are the Mitsubishi, Sumitomo, Fuyo, Mitsui, DaiIchi Kangyo and Sanwa Groups. Japan is home to 326 companies from the Forbes Global 2000 or 16.3% (as of 2006). Industry Japanese manufacturing is much diversified, with a variety of advanced industries that are highly successful. Industry is concentrated in several regions, in the following order of importance: the Kant region surrounding Tokyo, especially the prefectures of Chiba, Kanagawa, Saitama and Tokyo (the Keihin industrial region); the Tkai region , including Aichi, Gifu, Mie, and Shizuoka prefectures (the ChukyoTokai industrial region); Kinki (Kansai), including Osaka, Kyoto, Kobe, ( the Hanshin industrial region); the southwestern part of Honsh and northern Shikoku around the Inland Sea (the Setouchi industrial region); and the northern part of Kysh (Kitakysh). In addition, a long narrow belt of industrial centers is found between Tokyo and Fukuoka, established by particular industries that have developed as mill towns. The fields in which Japan enjoys relatively high technological development include consumer electronics, automobile manufacturing, semiconductor manufacturing, optical fibers, optoelectronics, optical media, facsimile and

copy machines, and fermentation processes in food and biochemistry. Agriculture Only 12% of Japan's land is suitable for cultivation. Due to this lack of arable land, a system of terraces is used to farm in small areas. This results in one of the world's highest levels of crop yields per unit area, with an overall agricultural selfsufficiency rate of about 50% on fewer than 56,000 km (14 million acres) cultivated. Japan's small agricultural sector, however, is also highly subsidized and protected, with government regulations that favor smallscale cultivation instead of largescale agriculture as practiced in North America. Imported rice, the most protected crop, is subject to tariffs of 490% and was restricted to a quota of only 7.2% of average rice consumption from 1968 to 1988. Imports beyond the quota are unrestricted in legal terms, but subject to a 341 yen per kilogram tariff. This tariff is now estimated at 490%, but the rate will soar to a massive 778% under new calculation rules to be introduced as part of the Doha Round.4 Although Japan is usually selfsufficient in rice (except for its use in making rice crackers and processed foods) and wheat, the country must import about 50% of its requirements of other grain and fodder crops and relies on imports for most of its supply of meat. Japan imports large quantities of wheat, sorghum, and soybeans, primarily from the United States. Japan is the largest market for EU agricultural exports. Apples are also grown, mostly in Tohoku and Hokkaid; Pears and Oranges are mainly grown in Shikoku and in Kysh. Pears and oranges were first introduced by Dutch traders, in Nagasaki in the late 18th century. Fishery

Japan ranked second in the world behind the People's Republic of China in tonnage of fish caught11.9 million tons in 1989, up slightly from 11.1 million tons in 1980. After the 1973 energy crisis, deepsea fishing in Japan declined, with the annual catch in the 1980s averaging 2 million tons. Offshore fisheries accounted for an average of 50 % of the nation's total fish catches in the late 1980s although they experienced repeated ups and downs during that period Coastal fishing by small boats, set nets, or breeding techniques accounts for about one third of the industry's total production, while offshore fishing by mediumsized boats makes up for more than half the total production. Deep sea fishing from larger vessels makes up the rest. Among the many species of seafood caught are sardines, skipjack tuna, crab, shrimp, salmon, pollock, squid, clams, mackerel, sea bream, saury, tuna and Japanese amberjack. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch, prompting some claims that Japan's fishing is leading to depletion in fish stocks such as tuna. Japan has also sparked controversy by supporting quasicommercial whaling. Labor force In 2008, Japan's labour force consisted of some 66 million workers40% of whom were womenand was rapidly shrinking. Labour union membership is about 12 million. The unemployment rate for June 2009 is 5.2% (5.4% male (up 0.1% from May 2009), 4.9% female (up 0.3% from May 2009)). In 1989, the predominantly public sector union confederation, SOHYO (General Council of Trade Unions of Japan), merged with RENGO (Japanese Private Sector Trade Union Confederation) to form the Japanese Trade Union Confederation.5

One major longterm concern for the Japanese labour force is a low birthrate. In the first half of 2005, the number of deaths in Japan exceeded the number of births, indicating that the decline in population, initially predicted to start in 2007, had already started. While one countermeasure for a declining birthrate would be to remove barriers to immigration, the Japanese government has been reluctant to do so. In July 2006, the unemployment rate in Japan was 4.1%, according to the OECD. At the end of February 2009, it stood at 4.4% this seemingly modest rate however understates the situation. According to The Economist, the ratio of job offers to number of applicants has declined to just 0.59, from almost 1 at the start of 2008, while average work hours also declined. Average wages also went down by 2.9% over the 12 months ending in February. Current economic issues The Koizumi administration, which held office until 2006, enacted or attempted to pass (sometimes with failure) major privatization and foreign investment laws intended to help stimulate Japan's dormant economy. Although the effectiveness of these laws is still ambiguous, the economy has begun to respond, but Japan's aging population is expected to place further strain on growth in the near future. Keynesians tend to claim that Japan's economy is far stronger than generally believed. Some mainstream economists acknowledge that Japan, which unlike most Western countries has maintained its industrial base, and has vast capital reserves, currently has a strong economic outlook. The privatization of Japan Post, the Japanese postal system which also runs insurance and deposittaking businesses, is a major issue. A political battle

over privatization caused a political stalemate in August, 2005, and ultimately led to the dissolution of the Japanese House of Representatives. The Postal Savings deposits, which have until now been used to fund public works projects, many of which have had questionable economic value, stands in excess of 1.9 trillion U.S. dollars, and could be a major force in energizing the private sector. The Japanese monetary authorities' continued desire to depress the price of yen relative to other key specific currencies to protect domestic business from imports may no longer be feasible. The most recent record intervention in 2003 amounted to over 17 trillion yen, more than one third of one trillion US dollars at the time and nearly 3% of Japan's 2003 GDP, being sold in favor of other nonyen denominated assets. However, since 2005, Japan has6 not directly intervened to buy currency, as yen carry trade has effectively carried out the same task. Interestingly, international trade has expanded by 60% from 91.4 trillion yen to 142.6 trillion yen from 2001 to 2006. However, taking in account the economic participation rate, Japan's GDP per worker has increased steadily. The Organization for Economic Cooperation and Development downgraded its economic forecasts on March 20, 2008 for the Japan for the first half of 2008. Japan does not have room to ease fiscal or monetary policy, the 30 nation group warned. For Japan, the OECD said the pace of underlying growth appears to be softening despite support from buoyant neighboring Asian economies. The organization expects firstquarter GDP to be up 0.3 percent and predicts a rise of 0.2 in the second quarter. On November 17, 2008, Japanese government officials announced that the economy was in a recession. It was reported that Japan's economy

contracted at an annual pace of 1.8% in the third quarter of 2008. It is forecasted to have shrunk 0.8% through the fiscal year that ends March 2009.