South Korea on Brink of Joining Exclusive '5040 Club' Amid Japan's Economic Slump
South Korea is on the verge of joining the exclusive '5040 Club', which comprises countries with a population of 50 million and a per capita income of $40,000. Japan, once the first Asian country to reach this milestone in the mid-1990s, has fallen behind due to its depreciating yen.
The Plaza Accord, an international policy coordination agreed upon by five nations in 1985, initially led to a surge in the value of the Japanese yen. However, following the 'Reverse Plaza Accord' launched by the G7 in April 1995, the yen's value plummeted.
Japan's per capita national income dropped from $43,580 in 1995 to $35,530 in 1998 and hovered between $30,000 and $40,000 for several years. In 2012, it briefly reached $50,540 due to the sale of foreign currency assets by Japanese companies following the Great East Japan Earthquake.
However, former Prime Minister Shinzo Abe's Abenomics policies led to a decline in the yen's value and Japan's per capita national income dropped from $40,740 in 2023 to $37,170 in 2024. Some analysts suggest that structural factors such as low growth, stagnant productivity, and wage growth contributed to Japan's departure from the 5040 Club.