Around this time in 2019 we partnered with a local wholesaler and began an initiative to help establish their alcoholic beverage import/export capabilities. Looking at the genesis of that project, I can recall being excited to get started and hoping to see some of my ideas become reality. Well, at least that was the dream, anyway. Unfortunately, however, COVID-19 had other plans. In 2020, the global pandemic hit us with a hard, “Nope! Not today, fam.”
And before we knew it, days became weeks, and weeks became months. If we weren’t working from home, we were at the office completing tasks under varied limitations. To this day, as we begin 2021, the pandemic lingers and forces us to continue to take precautions. However, at least we now have better ways to cope. For this post, let’s take a look at Japan’s export data. This will help us to review background information as we go about planning for the future.
The Show Must Go On
As the saying goes, the show must go on and to that end, we are able to proceed with our mission to increase exports. We do so cautiously, while doing our best to follow mask-up and social distancing protocols.
For instance, we have attended several events via the internet, such as online exhibitions or virtual seminars. For these opportunities, we are grateful to the Japan External Trade Organization (JETRO). Their efforts help to make such events possible. Indeed, there is good reason for the government to step in to help revitalize export growth. As it turns out,
…between September 2019 and September 2020 the exports of Japan have decreased by ¥-315B (-4.94%) from ¥6.37T to ¥6.05T, while imports decreased by ¥-1.13T (-17.4%) from ¥6.5T to ¥5.37T.
After reviewing the data, we are particularly interested in the increase that began in May 2020. During that month, export growth was well below -25% but it rose 20 percentage points to -5% by September 2020. We know how badly the COVID-19 pandemic impacted global markets. However, seeing the data to support Japan’s rebound is encouraging. Continuing to look at Japan’s export data, what are some of the specific programs or instances that led to the significant increase? On the whole, there are several government support initiatives that helped to drive the resurgence in global trade.
Regional Complexity Indexes
Still, the disparity between imports and exports can be felt in nearly every prefecture of Japan. This is particularly concerning for Japan’s southernmost prefecture of Okinawa, a chain of islands located about 530 miles from Kyushu.
Okinawa has an Economic Complexity Index (ECI) of -0.23. This places the island prefecture at 38 of 41 when ranked among other prefectures of Japan. Interestingly, Japan overall is currently ranked number one among nations, with a 2.31 ECI score. Therefore, when looking at Okinawa in relation to other prefectures, we must consider areas where local businesses can improve the ECI ranking.
While it may be obvious, we suggest that the ECI can be improved by boosting exports overall. More specifically, by including new product categories that have little or no representation, Okinawa could go a long way toward improving the ECI. With that, not only would the quantity of exports improve, but the types of products available to send abroad would also increase.
However, with limited manufacturing in Okinawa, it appears as though we are in for a long haul. Nevertheless, our goal is to help change the ECI outlook by working to improve export strategies that are specific to our industry. Awamori exporting is a great place to start because there is a lot of support in that area. 2020 was jacked up, but 2021 is the year we make things happen.