Saturday, October 18, 2014

Shadow of Abenomics

Though I am not sure about actual atmosphere in Japan, Abe administration seems to be suffering.

Yuko Obuchi, Minister of Economy, Trade and Industry, is going to resign in accordance with a financial scandal. She is accused in a diet about the statement of accounts of a related group, as she is suspected to violate electoral and political funding laws. She looks considering it is difficult to extinguish the burning criticism.

FX Street: Japan’s economy minister intends to resign

Obuchi is a daughter of Keizo Obuchi, an ex-Prime Minister deceased due to cerebral infarction emerged during the term of office. She was deemed as a symbol of successful women in Japan.

I feel sympathy for her. Electoral law and political funding law are extremely complicated to adhere to entirely. Even delivering of folding fans to supporters can be deemed to a violation. Many talented politicians have been exiled by these laws, in spite of tiny errors of them.

Meanwhile, Abenomics, the fiscal policies of Abe administration is facing to a peril. The government is planning to raise the consumption tax from 8% to 10% in October 2015. However, the decline of internal consumption due to raising tax in this April is serious than expected. Not only opposite parties but also some politicians in ruling Liberal Democratic Party is warning about the harsh influence of raising tax on Japan economy.

The Economist: Japan’s economy Consumptive

Stock piles are also fluctuating. Since Abenomics had started, Yen were considerably weakening, led to growth of export. However, it does not have a decisive effect on recovery of Japan, because Japan is no longer an export-driven economy, according to Financial Times. Indeed, many huge companies had invested, moving resources to foreign countries. Weakened Yen has not caused increased wage, in general.

Financial Times: A weak yen is no panacea but Shinzo Abe needs it all the same

After all, manipulating fiscal standards is not able to change the whole figure of Japan at all. Growth strategy, which is necessary to improve the situation, is still in mist. Many factors are concerned to this matter, such as decreasing population, cultural background, peripheral governorship, and so on.

My past entry: Abenomics and consumption tax

In my opinion, Abe administration is too conservative. Nowadays, it is quite hard for the government to take an initiative on public growth. To let entrepreneurs make challenges, relaxation of irrational regulations is necessary. The government should concentrate exclusively on the issues regarding social security and welfare.


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