Japan Press Weekly

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2011 July 20 - 26 [ECONOMY]

Economic white paper goes against recovery, calling for free trade

The FY 2011 White Paper on economy and finance calls, just as before, for freer trade and globalization in the interests of big businesses, going against reconstruction efforts from the March 11 disaster.

Amid the sluggish trend in consumption, production, and employment, not only in the disaster-stricken areas but nationwide, Minister of Financial and Economic Policies Yosano Kaoru on July 22 submitted to the Cabinet the white paper calling for economic growth through increased exports.

Even before the disaster, key industries such as agriculture and fisheries were troubled with difficulties arising from reduced production and reduced income. The disaster caused a heavy loss of workers, agricultural equipment and machines, and fishing vessels. Small- and mid-sized businesses are suffering from trying to pay interest on double and triple loans. They are, however, beginning to rise up to launch reconstruction efforts.

If tariffs are abandoned as a result of trade liberalization, cheap agricultural and fishery products will flow into Japan’s market in a large quantity, which will clearly be devastating Japanese agriculture and fisheries as well as to regional job markets.

Even though liberalization may somehow invigorate production at large corporations, it will not automatically enrich people’s livelihoods.

It has already been proven that the conventional policy based on the “trickle-down” theory is ineffective.

Export-oriented large corporations in the meantime succeeded in rapidly increasing their profits by incorporating the demands of China and other newly emerging countries. However, employees’ wages and personal consumption scarcely increased, and domestic demand has been chilled.

The urgent need is to stimulate personal consumption which accounts for nearly 60 percent of the gross domestic product (GDP).

In order to achieve this, large corporations which have amassed 200 trillion yen in capital reserves should use the money to raise wages and increase regular jobs. They also should increase unit prices paid to their subcontractors and should have a tax burden commensurate to their rate of profit.