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HOME  > Past issues  > 2009 February 4 - 10  > Self-sustaining growth?
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2009 February 4 - 10 [ECONOMY]

Self-sustaining growth?

February 5, 2009
Akahata ‘clear stream, muddy stream’column

The World Economic Forum has been an advocate of “globalism” through deregulation and the market economy, known as the “Washington Consensus”. But at its recent annual meeting in Davos, U.S. participants acknowledged their failure in the face of mounting criticism over U.S.-style capitalism, a clear advent of the end of an era.

Prime Minister Aso Taro spent three days to travel to Davos just to deliver a 30-minute speech at the World Economic Forum. He pledged that Japan will be the first nation to achieve economic recovery and strive to make this year a year of global economic recovery.

However, Japan’s is now experiencing a steeper economic downturn than the United States, which triggered the global economic crisis. The U.S. GDP for the October-December period last year dropped by 3.8 percent, the largest decrease in 27 years. Japan’s GDP in the same period is expected to mark more than a 10-percent decrease, suggesting that Japan is in a situation that is a far cry from “economic recovery.”

The International Monetary Fund has estimated that this year the U.S. GDP will drop by 1.6 percent while Japan will suffer a 2.6 percent decline. The blame should be placed on former Prime Minister Koizumi Jun’ichiro’s “structural reform” policies that made the Japanese economy more dependent on foreign demand rather than domestic demand.

Prime Minister Aso in Davos called for “dependence on external demand” to be shed and “internal demand” to be enhanced in order to “achieve self-sustaining growth.” He was selling a 75 trillion yen stimulus package, but stopped short of presenting concrete steps to change the direction of government policy to one of boosting domestic demand.

How is the government trying to achieve “self-sustaining growth” with its one-time cash handout plan?

Prime Minister Aso is poor not only at reading the public sentiment as well as Chinese characters but he is clueless regarding economic trends.
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