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The Ministry of International Trade and Industry (Tsūsho-sangyo-sho or
MITI) was the single most powerful agency in the Japanese government during
the 1950s and 1960s. At the height of its influence, it ran Japan as a
centrally-managed economy, funding research and directing investment.
MITI was created with the split of the Ministry of Commerce and Industry
in May of 1949 and given the mission for coordinating international trade
policy with other groups, such as the Bank of Japan, the Economic Planning
Agency, and the various commerce-related cabinet ministries. At the time it
was created, Japan was still recovering from the economic disaster of World
War II. With inflation rising and productivity failing to keep up, the
government sought a better mechanism for reviving the Japanese economy.
As late as the 1980s, prime ministers were expected to serve a tenure as
MITI minister before taking over the government. MITI worked closely with
Japanese business interests, and was largely responsible for keeping the
domestic market closed to most foreign companies.
Important MITI agencies include:
- Japan External Trade Organization (JETRO)
- Japanese Patent Office (JPO)
- Agency of Industrial Science and Technology (AIST)
MITI lost influence when the switch was made to a floating exchange rate
between the dollar and yen in 1971. Before that point, MITI had been able to
keep the exchange rate artificially high, which benefited Japan's exporters.
Later, intense lobbying from other countries, particularly the United
States, pushed Japan to introduce more liberal trade laws that further
lessened MITI's grip over the Japanese economy. By the mid-1980s, the
ministry was helping foreign corporations set up operations in Japan.
The declining significance of MITI to Japanese companies made it a less
powerful agency within the bureaucracy, and by the end of the 20th century,
it was folded into a larger body. In 2001, it was reorganized into the
Ministry of Economy, Trade, and Industry (METI).
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