Koizumi "reform" is to blame for recession -- Akahata editorial, December 9,
Japan's gross domestic product (GDP) for the July-September period
dropped by an annualized rate of 2.2 percent from the previous quarter. GDP
growth has been negative for two quarters in a row.
The Cabinet Office estimates that economic growth for the whole of 2001
will be negative. The International Monetary Fund (IMF) forecasts that in
2002 Japan's economy will face in a more serious slump.
Government must not shift responsibility
Japan's economy is on the threshold of the sharpest contraction since the
end of WWII. The general public, and small- and medium-sized businesses, in
particular, will be hardest hit.
The government has a responsibility to prevent such a situation from
taking place, but the Koizumi Cabinet is not fulfilling its responsibility.
In the midst of increasing public concern about the hardships the Koizumi
"reform" will impose on the people, Takenaka Heizo, minister in charge of
economic and fiscal policy, at a press conference on June 21 said that
further negative economic growth must be prevented by responsible government
action. At a press conference on July 18, Finance Minister Shiokawa Masajuro
stated that a negative growth rate must not be tolerated. But their
recommendations haven't been followed.
The Koizumi Cabinet has said that the slowdown of the U.S. economy and
the terrorist attacks are to blame for Japan's economic downturn. Such an
excuse is unacceptable.
Note that even the U.S. economy is expected to be continuing to grow at
an annual rate. Why is only Japan's economic slump so serious? It is because
the Koizumi Cabinet continues to pour cold water on the household economy
despite the economic recession going on?
The major cause of the negative GDP growth for the two consecutive
quarters is a sharp decrease in household spending which accounts for 60
percent of the GDP. It is very serious that the GDP dropped sharply by 6.7
percent in the July-September period at an annual rate.
Takenaka at a press conference on November 6 gave an irresponsible
analysis that sluggish personal consumption is acting as a brake on economic
growth. He should be ashamed of his ignorance.
What's more, the Koizumi government will force the people to endure even
more serious burdens as it carries out the disposal of non-performing loans,
encourages corporations to further their restructuring, and adversely
revises the medical insurance system.
The Bank of Japan warns that household spending will decline even further
as more and more companies cut jobs and wages.
How can such "reform" plans help reconstruct Japan's economy? What can
the people expect from the policy of forcing the people to endure the
"pains" of the "reform"? The Koizumi Cabinet hasn't given reasonable answers
to these questions.
The "White Paper on Economic and Fiscal Policy," which the government
touts as the rationale of the Koizumi Cabinet's structural reform is
severely criticized even by commercial newspapers which have supported the
Koizumi "reform." Nihon Keizai Shimbun, Japan's economic daily, on December
6 said that the white paper lacks a clear economic logic.
Recovery of personal consumption is necessary
Prime Minister Koizumi has said that the sharp increase in the
unemployment rate is inevitable and that corporate bankruptcies represent a
steady progress of structural reform. His statements only show how
cold-hearted he is, which provides no prospects for an improved economy and
living conditions in the future.
Unless household spending is recovered, Japan's economy can't get out of
the recession. And Japan's economic recovery can't start with hitting the
household economy hard. The government economic and fiscal policy must be
changed into one of supporting the household economy. (end)