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The current global economic downturn is deepening as the twice-yearly World Economic Outlook of the International Monetary Fund indicates. While it predicts that the world economy will grow by 0.5 percent in 2009, down from the 2.2 percent forecast earlier, the outlook for developed countries is bleaker. Their economies as a whole will shrink by 2 percent, worse than the 0.3 percent shrinkage forecast earlier and the first negative growth of the post-World War II years.

The IMF says growth in the United States and Japan will be minus 1.6 percent and minus 2.6 percent, respectively, compared with previous estimates of minus 0.7 percent and minus 2 percent. The euro-zone economy will contract by 2.0 percent, compared with the 0.5 percent contraction estimated earlier.

The Bank of Japan predicts that Japan’s economic growth in fiscal 2008 and 2009 will be minus 1.8 percent and minus 2.0 percent, respectively — worse than the postwar low of minus 1.5 percent in fiscal 1998. BOJ Gov. Masaaki Shirakawa said it’s as though the world economy was falling off a cliff.

The economic crisis is taking a serious toll on employment in Japan. A recent survey by the labor ministry shows that 124,800 irregularly working employees have lost or will lose jobs from October to March, an increase of about 50 percent more than figures from a similar survey taken in December. Regularly employed workers are also losing jobs. The unemployment rate in December stood at 4.4 percent, up 0.5 points from November.

Although the government and the BOJ are taking supportive measures, enterprises also need to make efforts to overcome this crisis by seizing opportunities to expand new businesses. One area which entrepreneurs should contemplate is the development of environmentally friendly technologies such as renewable energy sources and electric cars.

Japan once led the world in solar panels; however, Germany now holds that honor. The government needs to develop a strategy as soon as possible for nurturing green technologies that will enable the private sector to help stimulate economic activity while contributing to a better environment.

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