'Pains' for Japanese people, and benefit to the U.S. -- Akahata editorial, July 3, 2001

In the recent summit in Washington, Japanese Prime Minister Koizumi Jun'ichiro promised U.S. President George W. Bush to carry out the "Structural Reform in the Japanese Economy" plan, which includes an early disposal of non-performing loans. Koizumi and Bush agreed to establish a structure for cooperation and engagement on economic and trade issues, allowing the U.S. to interfere in and monitor Japan's "Structural Reform."

Prime Minister Koizumi at a news conference after the summit talks expressed his determination to carry out the "reform" plan without hesitation.

Unbearable "burden"

The Koizumi Cabinet's "reform" plan will not be carried out without heavy burdens on the people because it will cause massive bankruptcies of hundreds of thousands of small- and medium-sized businesses, leave about one million people unemployed, impose adverse revisions of social security programs, and increase the consumption tax rate.

Many letters of protest against the prime minister's logic justifying the "reform" causing burdens are printed in newspapers. "We've already have enough pain. We won't be able to live if we have to endure more pain" (Tokyo Shimbun on June 29). "Remember that there are many people who are already in pain" (Asahi Shimbun on June 29).

It has become clearer that the Koizumi Cabinet's "reform" plans will impose greater burdens on small- and medium-sized business owners, ordinary citizens, and pensioners."

Sawa Takamitsu, professor at Kyoto University, in his article in the monthly magazine "Gendai" July issue warns that the Koizumi Cabinet's "reform" plan will impose considerably heavier burdens on the weak in society.

The "reform" plan, on the other hand, provides major banks with many generous benefits.

Prime Minister Koizumi at the news conference said that preventive measures against a financial panic have been in place since April. This means that 70 trillion yen of taxpayer money reserved in the fiscal 2001 national budget will be used to help major banks which temporarily fall short of funds due to losses caused by the write-offs of bad loans.

A stock-buying body to be newly established is another example of how major banks are being pampered, as it will be protected with public money to make up for losses the organization might make on stocks it bought.

In the summit talks, U.S. President Bush stressed that it is important for Japan to promote foreign direct investment, saying that U.S. direct investment will increase if Japan's assets are assessed at market price.

What are the aims of the U.S. president's proposal? The disposal of the former Long-Term Credit Bank of Japan was a concrete example. A U.S. investment company bought the LTCB at only 1 billion yen (8 million dollars), and now the company received more than 90 billion yen (726 million dollars) in profit in fiscal 2000. The failed Miyazaki Sea Gaia resort complex, on which 200 billion yen (1.6 billion dollars) had been used, was sold to the same U.S. investment company at 16 billion yen (129 million dollars).

The transparent U.S. aim is to secure business opportunities for U.S. corporations to profiteer from Japanese corporations whose share prices fall due to the write off of bad loans.

Japanese assets help to prop up the debt-ridden U.S. economy which is run at a current deficit of 400 billion dollars (approx. 50 trillion yen). About 25 percent of overseas holdings of U.S. national bonds is Japan's. The U.S. government wants to see the financial capacity of Japan's major banks to be increased by writing off non-performing loans so that they can buy more U.S. bonds and stocks.

Extraordinary relations must end

Prime Minister Koizumi said that he will accept U.S. government proposals not as outside pressure but as advice. The U.S. government's real intention is that it wants the write-offs of non-performing loans held by banks to be carried out, "the sooner the better," as presidential aide Lawrence Lindsey put it (Nikkei Shimbun, June 21).

U.S. President Bush outspokenly said that Japan's economic prosperity is in U.S. interests.

It is extraordinary for a government to promise a foreign government that it will carry out policies which will force its people to endure greater burdens. It is time for Japan to end its role as a vassal to the U.S. which call on the Japanese people to endure more burdens in order to secure U.S. interests. (end)