Japan Sinks, Koizumi Soars
October 31, 2001
Summary
The Bank of Japan recently revised fiscal-year growth
expectations from 0.8 percent to -1.2 percent. For Japan
to achieve even that, its economy needs to perform far
better in the next six months than it did in the last. But
rather than focus on the economy, Prime Minister
Junichiro Koizumi is using the issue of remilitarization to
distract the public following the Sept. 11 attacks on
the United States.
Analysis
The Japanese government revealed Oct. 30 that
unemployment jumped from 5.0 percent to a record high of
5.3 percent in September, its sharpest one-month gain in
34 years. The rise highlights Japan's spreading
economic cancer and the government's impotence in
mitigating, much less treating, the problem.
Yet despite the situation, Japanese Prime Minister
Junichiro Koizumi is successfully using the events of Sept.
11, which are driving the economy from recession to
depression, to bolster his own popularity. Koizumi's
policy of delaying economic measures while focusing on
the country's remilitarization will continue. And
although Japan's neighbors will become even more
distrustful of its intentions, Koizumi will only be boosted
higher.
Heizo Takenaka, minister for economic and fiscal policy,
also this week confirmed the Bank of Japan's
previous call that the economy wouldn't see positive
growth for at least two years. The bank now forecasts the
economy will shrink 1.2 percent instead of growing 0.8
percent in the April 2001-to-March 2002 fiscal year.
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