The new Japanese government has the mission of eradicating the economic and financial problems that it inherited from previous governments, however there are many expectations with the measures that are being carried out by Shinzo Abe. Fiscal and monetary policies will have to have a very positive effect so that the weaknesses that the Japanese economy presents today can be overcome.
One of the most serious problems that the Japanese country maintains today is precisely its exorbitant public debt, the highest in an industrialized country and more than double its gross domestic product (GDP). The priority of the Government is to stop this debt by increasing taxes and controlling public spending, fundamentally social security, given the rapid aging of the population.
The economic and financial measures carried out by the new Shinzo Abe government have been called "Abenomics", consisting of a combination of a smart monetary policy, flexible fiscal policy and a medium and long-term growth strategy.
The Government anticipates a progressive increase in two stages of the country's value added tax from the current 5 percent to 8 percent in 2014 and 10 percent in 2015. The Organization for Economic Cooperation and Development (OECD) reported that It was a "priority" for Japan to "end 15 years of deflation", for which he recommended maintaining the aggressive measures recently approved by the Bank of Japan in its inflation target of 2 percent, a goal that it hopes to meet "as soon as possible."
Shinzo Abe managed to reactivate growth at the beginning of 2013. According to the data provided by the Japanese Executive, between January and March the GDP advanced 0.9% compared to the final months of 2012. The advance of the third largest economy in the world It was driven by the improvement in domestic consumption and an increase in exports.
An important factor in the growth of exports has been the current weakening of the yen, which is helping to boost exports and encouraging companies to increase their production also due to the ambitious program of monetary and fiscal stimuli promoted by the prime minister of Japan.
Another objective to improve the economy is to achieve an inflation of 2% in an estimated period of two years. To do this, he announced a strategy based on expanding the country's monetary base by doubling the purchase of Japanese public debt and higher risk financial assets.
The Japanese economic model:
The post-war model had combined strong employee protection, dynamic quality and continuous improvement, horizontal coordination teams, and finally worker empowerment and participation in decisions.
Consequently, corporate governance favored long-term relationships between partners, including banks, the family integration of subcontractors, and the growth of the company in its short-term results. However, in the 1990s an adaptation of this model became necessary as it threatened to become too slow and too rigid to cope with globalization.
The neoliberal reforms implemented by Japan from former Prime Minister Junishiro Koizumi, led to significant impacts on society and the labor market, especially "the sharp increase in inequality, which reflects a questioning of postwar social commitment."
In general, these policies have created a new heterogeneity between companies, in terms of organization and employment management, however, the fear of many Japanese is that the old model will disappear with the program of the new government of Shinzo Abe and with them the labor guarantees they enjoy. While they are aware of the current stalemate, they are more concerned about a change in direction that will lead to greater individualization of wages and less protection for employees. (Jean Marc Le Gall)
Abe's government plan is to increase Japan's gross domestic product, one of the so-called "three arrows" of his economic policy, dubbed "Abenomics."
Among the main challenges, he considered it essential to promote innovation in the health field, especially in the regenerative medicine sector, a field in which Japan is a leader, according to Abe.
Another challenge on which Abe emphasized is to promote the incorporation of women into the labor market to boost its economy and achieve human capital that allows the country to be a "global competitor."
In this sense, the prime minister has proposed to achieve by 2020 that 30 percent of positions of responsibility in the country are held by women, a challenge given that at present only 11 percent of parliamentarians are women and that 98 out of 100 private sector managers are men.
To do this, Abe assured that the Executive has initiated a program to create 20,000 new places in public and private nurseries and tackle the current shortage of space, the main reason, according to him, why women leave the job in Japan after giving birth.
Japan continues to face the same weaknesses as in previous years, the Japanese Government will have a very difficult task, but one of those that it predicts to eradicate in 3 years is deflation, in addition to achieving stable and autonomous growth of the economy.
However, the economy is advancing little by little and it is expected that this recovery will be gradually supported by the improvement in confidence, the improvement in export conditions and the effect of the monetary policy package.
Abe took office again in December 2012, after a landslide victory for his party, the Liberal Democratic Party (right).
But what was paradoxical about Abe in his first term was that he was going to follow the main lines of Junichiro Koizumi, with some restrictive neoliberal measures, however at present, this is no longer the case, it is essential to reactivate the economy through "Abenomics" It has several expansion strategies, including a very expansionary monetary policy to put an end to the deflation that has hampered the country for fifteen years.
It is well known that this is the second chance in the top government post of Prime Minister of Japan Shinzo Abe, on September 26, 2006, he had been elected as Prime Minister of Japan at 52 years of age, coming to power as president of the Liberal Democratic Party.
He was the first head of government born after the Second World War, and the youngest of the entire postwar period. This change of government took place in a favorable economic situation thanks to the strength of exports and domestic demand in those years.
Abe represents a generation alien to the direct experiences of the war and, on the other hand, the maturation of a process of refusal of the Japanese political system and of nationalist tendencies.
He received the support of his predecessor Junichiro Koizumi to replace him in 2006 and had declared himself a continuation of the structural reform agenda initiated by him, however there were elements that differentiated them and that will distinguish the course and destiny of the new head of government.
Although it was proposed to give continuity to the main lines of structural economic reform defended by Koizumi, it sought to correct its social consequences, such as the growing differences between rich and poor. An example of this is his much-publicized project to establish a system that channels the granting of a “second chance” to those who had failed in a certain job or at the head of a company.
It should be noted that after assuming power, the new Japanese Prime Minister Shinzo Abe faces many difficult issues to resolve that remained of his predecessor Junichiro Koizumi.
In his inaugural speech to Parliament on September 29, 2006, Abe spelled out the fundamental priorities his government would focus on:
- Give high priority to cutting public spending to rebuild state finances before considering tax hikes. Set a cap on government bond issuance of no more than 30 trillion yen by fiscal year 2007. • Implement plans to revitalize local economies and provide "second chances" to disadvantaged people with the aim of minimizing the gap between rich and poor. Obtain the approval of an educational reform that allows the teaching of "patriotism" in schools. Relive the traditional virtues of Japan and family values. Make Japan a "beautiful nation" filled with confidence and pride. Improve relations with China and South Korea. Increase budget spending by 30.5 percent for missile technology spending.
However, many of these reforms could not materialize since his mandate lasted only one year, due to his resignation on September 12, 2007, after he lost popularity due to scandals and corruption in his government. Due to these same negative factors, the Japanese political system has shown the world a fragility not seen in many years. After Shinzo Abe, in a very short period of time, the following prime ministers were in power: Yasuo Fukuda (2007-2008), and Taro Aso (2008-2009), of the PLD. Yukio Hatoyama (2009-2010), Naoto Kan (2010-2011) and Yoshihido Noda (August 2011), from the PDJ.
Abe in his second season
Abe took office again in December 2012, after a landslide victory for his party, the Liberal Democratic Party (right).
But the paradox of Abe in his first term was that he was going to follow the main lines of Junichiro Koizumi, with some restrictive neoliberal measures, however at present, this is no longer the case, it is essential to reactivate the economy through "Abenomics" It has several expansion strategies, among them a very expansionary monetary policy to put an end to the deflation that has hampered the country for fifteen years.
The unprecedented monetary expansion promoted by the Bank of Japan is working to overcome deflation, and the authorities will push enough to reach the inflation target of 2 percent
According to the Bank of Japan president, the combination of Japan's rapid growth, rising inflation expectations, and falling long-term interest rates indicated that the economy "is steadily moving toward overcoming deflation.". (Reuters. 10-10-13.)
The government has also increasingly shown the mistake of reducing public spending on works. But this time, Shinzo Abe, announced on October 1, 2013, a new stimulus package of 40 million euros, based on the construction industry.
Abe's economic reform plan, which the media has dubbed "Abenonims," also includes an aggressive bond buying program carried out by the Bank of Japan since April and a significant increase in public spending.
Creation of special economic zones
Perhaps the creation of special zones is one of the most important measures within the set of structural reforms that Shinzo Abe wants to implement.
The Special Zones Bill22 was approved in December 2002 and entered into force in April 2003. By the end of 2003 the government had approved a total of 236 zones, including special education zones in which the private organizations could run schools and universities; special agricultural zones, in which private corporations worked in agriculture and special zones of international exchange in which the requirements to acquire a visa for foreign researchers were reduced.
In these areas, various regulations are expected to be relaxed to promote urban development and also the establishment of agricultural production companies.
Among the proposals that will be approved is that of allowing private companies to manage private hospitals here in order to achieve greater increases in the number of beds and also to expand the presence of non-Japanese medical personnel.
The administration of Prime Minister Shinzo Abe plans to designate between three and five of these special zones early next year (2014), aimed at attracting population and investment both domestically and internationally through more lax regulations and tax incentives.
Brief conclusions
- Abe is largely returning to post-war Keynesian economic policies, despite in some respects following the line of former Prime Minister Junichiro Koizumi with neoliberal measures. Abe's great challenge is whether he will be able to recover the Japanese economy in a good way. permanent and whether it will be able to maintain its popularity and reputation amid so many difficulties to overcome.
References
- lemonde.fr.News Japan.
