• Total prison population: 67,255 prisoners
• Crime trend: Up 12% in 2001

Crime rates

Japan has one of the Western world's lowest crime rates, despite petty crime levels being at a 50-year high. Cities are safe, with police kiosks at frequent intervals on street corners. However, crime is involving more young people, and narcotics abuse is increasing.

Crime problems include fraud, human trafficking, and the activities of the kumi, organized Mafia-style syndicates. The authorities have been reluctant to challenge these groups, seeking to contain rather than halt their activities. Kumi are suspected of having connections with the political extreme right.

• Annual defense budget: $37.1bn

JAPANESE ARMED FORCES

• Army: 1020 main battle tanks (780 Type-74, 240 Type-90) (148,200 personnel)
• Navy: 16 submarines, 45 destroyers, 9 frigates, 7 patrol boats (44,400 personnel)
• Air force: 270 combat aircraft (F-1, F-2, F-4EJ, F-15J) (45,600 personnel)
• Nuclear capability: None

The Japanese Self-Defense Forces (SDF) are among the best-funded in the world, but the constitution renounces war, and any military activity arouses fierce debate. Main concerns are North Korea and the threat of terrorism. Since 1999, force has been used to deter intrusions by North Korean vessels. The construction of a missile defense system was agreed in 2003. The deployment of an SDF contingent in Iraq in a humanitarian role in 2004, under legislation allowing noncombat assistance to the "war on terrorism," was the first time Japanese forces had entered an overseas combat zone since 1945.

• Gross National Product (GNP): $4324bn

Score card

• World GNP ranking: 2nd
• GNP per capita: $34,010
• Balance of payments: $136bn
• Inflation: –0.3%
• Unemployment: 5%

Exports

Imports

Economic performance indicator

Strengths

Established market leader in high-tech products and cars. Commitment to long-term research. Talent for capitalizing on imported ideas. Manufacturing plants already established in the West. Domestic economy heavily protected from outside competition.

Weaknesses

Recent recession. Dependence on oil imports. Secretive and debt-ridden financial system. Falling industrial production, high-profile bankruptcies, and record unemployment levels. Lack of openness to foreign trade. Aging population and costly public pension scheme.

Profile

Once among the world's strongest performing economies, Japan's strengths have been overshadowed for a decade by growing weaknesses.

The 1990 crash of the Tokyo stock market marked the end of a period of remarkable growth. The government managed to spend its way out of disaster, effectively delaying the full impact of the downturn. Japan entered a brief recession for the second time in five years in 2001.

Bilateral trade has been promoted and Japan entered its first free trade agreement – with Singapore from April 2002. In an attempt to appease Western discontent over a huge trade surplus, the government encouraged a move away from a dependence on export revenues through stimulation of the domestic economy. However, the expanding economies of China and other Asian countries stimulated export-led growth again in 2004.

The financial sector remains in need of reform. The prominent corporate collapses of 1997 were repeated in 2001, with record losses reported across the high-tech industries in particular. Koizumi has promised radical change, rejecting the standard increase in government spending in favor of basic structural reform. Banks' bad loans have been cleared and the system of privileged "special public institutions" has been overhauled. Despite these measures, traditional economic power brokers have put a brake on the pace of reform and the overall economy continues to underachieve. In 2004 Koizumi renewed his pledge to stimulate the recovering economy by pushing ahead with structural reforms, and plans were approved to open the country's public road corporations to private investment.