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2020 March 11 - 17 TOP3 [ECONOMY]

JCP makes urgent proposal on economic crisis pertaining to coronavirus outbreak

Japanese Communist Party Chair Shii Kazuo on March 12 held a press conference in the Diet building and announced an urgent proposal on measures to cope with the looming economic crisis aggravated by the new coronavirus outbreak and the consumption tax rate that was raised to 10% in October 2019.

Shii said that Japan’s GDP already showed a negative growth of 7.1% on an annualized basis in the October-December quarter of 2019 before the COVID-19 outbreak delivered a blow to the Japanese economy. He pointed out, “As clearly shown by various economic indicators, the nation’s economy is further slowing down in the first quarter of this year.” Shii also noted that the spread of the new coronavirus has created a turmoil in the world economy.

Shii demanded that the Abe government take every possible measure to minimize the coronavirus’ negative economic impact on people’s lives. He also insisted that support measures should be used to boost domestic demand rather than exports and should focus on providing assistance to households and small- and medium-sized enterprises. Shii stressed that based on these two points, the government should implement bold economic measures.

Shii then explained the JCP proposal. Regarding the coronavirus, he said that it is necessary to offer interest-free loans to SMEs and to take measures to prevent employers from using the virus as excuse to dismiss workers. Shii insisted that as efforts to stimulate domestic demand and household economies, the government should consider lowering the consumption tax rate and require large corporations to use their internal reserves to offer pay raises. As funds to implement these measures, Shii urged the government to drastically revise the 2020 draft budget now under Diet deliberation.

A reporter asked Shii how much money he thinks the government should use to protect the economy from the COVID-19 crisis. Shii replied that the government needs to allocate 20 trillion yen to this effect and in addition offer interest-free unsecured loans to SMEs by setting commitment lines of credit for a total of 20 trillion yen.