Japan Press Weekly

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2013 February 20 - 26 [ECONOMY]

Diet debate reveals ‘Abenomics’ is fraying

Diet discussions about the FY2012 supplementary budget have shed light on how Abe’s economic measures are not about to lift up the economy.

Regarding his stimulus package called “Abenomics”, Abe claims that a boost in money supply by the Bank of Japan will push up prices, provide more investment opportunities to corporations, and contribute to pay raises.

In both Houses of the Diet, the prime minister has been repeatedly questioned about when workers will receive higher wages.

In the February 13 Lower House Budget Committee meeting, Abe said, “It takes time for companies to bring themselves back on a recovery track and reflect the recovery in wage increase.” Five days later, he said at an Upper House Budget Committee meeting, “We have just stood at the entrance. It takes a while to be able to see a result.”

Printing more money, however, will be useless because large corporations will only amass more money without using it to increase workers’ wages if domestic demand remains very weak.

On February 18 at the Upper House Budget Committee meeting, Abe also said, “Japan’s economy will grow with a modest rise in prices.”

The high price of necessities such as gasoline and kerosene, which is caused by the recent sharp depreciation of the yen due to Abe’s easy money policy, has delivered a further blow to people’s livelihoods.

Japanese Communist Party member of the House of Councilor Daimon Mikishi on February 20 in the House meeting on the budget said, “An increase in the price of daily essentials without pay raises is the worst type of price hike.” He urged the government to work hard to implement higher wages.