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2008年9月20日 (土)


(Mainichi Japan) September 19, 2008
Japan needs to rethink emergency economic measures in wake of U.S. financial crisis
社説:米国発金融危機 日本は緊急施策の見直しを

The U.S. financial crisis, which has triggered the collapse of major financial institutions and prompted government bailouts, will have harmful consequences for the Japanese economy.

Japan's real GDP shrank in the second quarter (April to June) at an annualized rate of 3 percent compared with the previous quarter, and there are no signs that a recovery is underway in the third quarter, which ends on Sep. 30. If the financial crisis sends the U.S. economy into a deep recession, not only will Japan's exports fall off but also private-sector facilities investment will dry up. And if corporate performance deteriorates, workers' wages will stagnate, and personal consumption will decline.

While these developments could set off a global depression, the Liberal Democratic Party, which is in the midst of a presidential election, and politicians on the whole have been oblivious to them.

On Wednesday, the government convened an economic and fiscal consultative meeting, the first such meeting since it adopted a comprehensive economic stimulus package on Aug. 29. The intent of the economic stimulus package is to jumpstart the Japanese economy, which is facing a global downturn triggered by the U.S. subprime crisis and high oil prices. The most urgent measures in the package are supposed to be implemented right away.

But during the three weeks that have passed since the end of last month, the global economy has been jarred by upheaval. Hence, the implications of recent developments for the Japanese economy have also changed. The recent upheaval notwithstanding, Japan's politicians have yet to muster a response. And Wednesday's economic and fiscal consultative meeting did not go beyond analyzing the current situation.

The more urgent the policy, the greater the caution that will need to be exercised to implement measures to carry it out. At one time, the price of oil had soared to 140 dollars a barrel, but has since fallen to 90 dollars a barrel. It is only natural, then, that the measures in the emergency stimulus package that address high oil prices be given a second look.

If the U.S. financial crisis grows more severe, Japanese financial institutions may be compelled to screen borrowers more strictly and be more apt to restrict lending. But small and medium-sized firms would bear the brunt of such changes. That is why measures that aim to give a shot in the arm to the finance sector or to prevent cutbacks in lending will become even more important.

Furthermore, if exports languish for a long period of time, and the value of the yen continues to climb in foreign exchange markets, companies will try to restore their competitiveness by squeezing their subcontractors to extract lower prices from them. The government will then have to respond by beefing up its measures to protect subcontractors.

Though a political vacuum exists today, any attempt by the current administration to slack off and postpone economic management and policy decisions will not be tolerated. As has been the case in the U.S. financial crisis, conditions in Japan can change drastically in a flash. Prime Minister Yasuo Fukuda's Cabinet must shoulder the responsibility of managing the economy until the next prime minister is designated in the extraordinary Diet session. Since the government has already adopted a stimulus package, it must, while assessing events as they unfold, conduct a review of its emergency economic measures and seek to give them concrete shape.

It is still not clear when the supplementary budget to fund additional fiscal measures will be compiled and deliberated in the Diet. Though the general elections are looming, it is absurd that the LDP has still not determined its own policy on this issue.

Since the global economy is changing from moment to moment, the proper way to manage the Japanese economy would be to assess new developments accurately and then devise the necessary remedies.

毎日新聞 2008年9月18日 0時19分


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