Six months in office, is the Koizumi Cabinet telling people to endure pain
of 'reform'?-- Akahata editorial, October 27, 2001
Six months have passed since the Koizumi Cabinet came to office.
These months only showed that proceeding with the "Koizumi reform" as
scheduled would devastate the people's livelihoods, the economy and society.
The prime minister continues saying, "No growth without reform," and
described "structural reform" as conducive to economic recovery. He called
on the people to support his "reform," saying that a bright day will follow
Anachronistic economic theory
The "structural reform government" has proposed a reform policy outline
that includes write-off bad loans held by major banks which will increase
bankruptcy and unemployment, and the creation of competitive economic
systems such as giving encouragement to streamlining by major corporations.
Increasing people's financial burdens for medical services is what the
government proposed as one of the "fiscal structural reform" plans.
In short, this is a theory that moves resources from less cost-effective
sectors to more cost-effective sectors, so that the strong will be made
stronger, and the weak go broke. Takenaka Heizo, state minister in charge of
economic, fiscal and IT policy, says that this process will help increase
economic productivity, and allow the economy to grow and income to increase.
The "efficiency first" principle is another term for extreme market
principle. In the 20th century this principle caused monopoly, corruption,
and poverty, and was opposed by popular movements. The economic theory on
which the Koizumi "reform" takes its basis is a sheer anachronism.
The economic situation shows clearly that this theory is not viable.
Economic indicators, including the unemployment rate, household
consumption, plant investment, bankruptcy of small- and medium-sized
businesses, industrial production, and the economic growth rate, turned from
bad to worse. The economy is speeding downhill.
However, the Koizumi Cabinet is completely indifferent to the critical
conditions of the people's livelihoods. The prime minister said that the
record unemployment rate at 5 percent "can't be helped," and that we
shouldn't be concerned by every change of economic indicators.
Minister Takenaka Heizo has labeled the urgent call for boosting the
economy as unrealistic (on October 13).
These statements explain why the government can't break with its
anachronistic economic theory. Unless steps are taken to boost household
consumption which account for 60% of Japan's economy, things will get worse.
Past government steps have only led to slowing down Japan's economy. One
such example is the plan for the earliest possible disposal of bad loans,
which is the Koizumi Cabinet's policy priority.
Through the present economic depression, most bad loans have been
accumulated by small- and medium-sized companies. If the government still
ignores such a critical situation and pushes ahead with disposing of bad
loans, it will help increase the bad loan situation and worsen the economy.
The Financial Services Agency estimates that any effort to dispose of bad
loans will not decrease them for at least the next three years.
Bad loans disposal will certainly be followed by the bankruptcies of many
small- and medium-sized companies and millions of people losing their jobs.
Is 'structural reform' really necessary?
Despite the economic crisis continuing to deepen, Prime Minister Koizumi
still insists that now is the time to push ahead with the "structural
reform" policy. He insists that pursuing both reform programs and a
supplementary budget will not contradict his "reform" plans. All these
steps, however, will impose unbearable burdens on the people.
It's senseless for Koizumi to blame his failure in economic reform on the
recent terrorist attacks on the United States. The incident will add impetus
to the Japanese economy which has already been under a severe recession. All
the more because of this, it is necessary for the government to establish an
economic policy that would give priority to the defense of the people's
living conditions. (end)