Friday will see Japan’s new government, under the recently elected Prime Minister Shinzo Abe, announce a new stimulus budget worth a massive 20 trillion yen (approx. $227 billion) with the goal rapidly turning around the struggling world’s third-largest economy. Abe is said to announce additional details later this morning, but it is known that among the key target areas are spending on spending on Japan’s infrastructure industries, and increasing the strength of the nation’s military forces.
Abe’s Liberal Democratic Party (LDP) was re-elected in December after a three-year loss of power after pledging to reverse Japan’s exports-reliant economy, and take a tougher stand on diplomatic issues, most importantly the territorial dispute with China. The $227 billion stimulus will be to cover the fiscal 2012 year through March, with a little over half being paid by Tokyo, and the rest carried by local governments and the private sector. Reports say that 5 trillion yen ($56.2 billion) is to be earmarked for public works projects, while 1.6 trillion yen ($18 billion) is to go towards reconstruction of the March 2011 earthquake and tsunami disaster-hit region.
While the Tokyo budget is to be heavily financed by borrowing, included on the list of things to spend on are aging infrastructure, upgrading hospitals and schools to be more earthquake resistant, and funding for Japan’s social security program. 180.5 billion yen ($2 billion) will be spent on military and defense forces, including new weapons, fighter jets, and other equipment. This is prompted by the increasingly heated dispute with China, which regularly sees Chinese patrol ships entering Japanese waters around the Senkaku/Diaoyu Islands, as well as repeated long-range missile test from North Korea.[via The West]