2009 February 11 - 17 TOP3 [
ECONOMY]
Radical change is required to get out of Japan’s minus growth of 12.7%
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February 17, 2009
The government should immediately stop the business community from arrogantly throwing people’s livelihoods and the country’s economy into a vicious circle. The need is for the government to thoroughly amend the worn-out policy of making money from exports or foreign demand at the expense of the household economy.
Akahata editorial (excerpts)
Japan’s real GDP growth rate fell at an annual rate of 12.7 percent in the 4th quarter of 2008. Its total exports fell at the sharpest pace on record. Capital investment and personal consumption also declined.
Meanwhile, real U.S. growth has shrunk 3.8 percent. The EU also experienced a minus growth of 5.7 percent. Japan’s falling economic growth is far worse than that of the U.S. and the E.U.
An economist said, “The current policy of boosting the economy by expanding exports at the expense of domestic demand is causing a rapid economic downturn.”
The so-called “structural reform” policy promoted by the LDP -Komei government has destroyed the foundations of people’s livelihoods and deregulated a series of labor laws in conformity with the financial circles’ strategy of increasing unstable employment throughout Japan. To further ease the corporate share of public burdens, the government has forced the public to pay an extra 13 trillion yen a year in taxes and to accept cutbacks in social welfare programs.
However, that is not to say that Japan’s business circles had confidence in what the “structural reform” policy would bring about. Several years ago, Okuda Hiroshi, then chairman of the Japan Business Federation (Nippon Keidanren) and Toyota Motor Corp, confessed that “(if domestic demand falls), the kind of talk of an ‘export-oriented nation’ will appear again, but the business world has been doing a lot of thinking about it.”
Although the U.S. financial situation had begun showing ominous signs last summer, Present Chairman of Nippon Keidanren and President of Canon Inc Mitarai Fujio said, “Continuing with the ‘export-oriented nation’ path is the only way.”
However, the “export-oriented nation” argument collapsed easily in the wake of the rapid downturn in the U.S. and the E.U. economies. With such leading companies of Japan’s business sector as Canon Inc and Toyota Motor Corp in the lead, Japanese large exporting companies are dismissing temporary and fixed-term contract workers at an accelerated pace and shifting their losses onto sub- or sub-sub contractors. The business world that had forced ordinary people to bear the pain of its failures is putting further burdens on the public.
The government should immediately stop the business community from arrogantly throwing people’s livelihoods and the country’s economy into a vicious circle. The need is for the government to thoroughly amend the worn-out policy of making money from exports or foreign demand at the expense of the household economy.
