“It’s not easy for a country stuck in deflation for 15 years to get out.” That is what Japanese Prime Minister Shinzo Abe emphasized to the region’s business leaders at the CEO Summit, held at the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Bali, Indonesia. But Japan’s leader said he and his government will be pushing through with the economic reforms as part of his “Abenomics” strategy.
Japan has the distinction of having the biggest debt among the developed countries in the world, and it is something that Abe would like to extricate Japan out of. He told Asia’s top corporate executives on Monday that his three-arrowed strategy has been successful in “breaking through the mentality of economic stagnation that had been permeating Japan”. Next up for him is the much-debated consumption tax increase from 5% to 8% starting in April 2014. Alongside that is a 5 trillion yen (approx. US$51.7 billion) spending package that would help “soften the blow” of the tax increase, which most experts see as a big political gamble for Abe. His predecessors have often fallen due to the previous tax increases introduced during their administrations. But the tax increase is needed to lessen the huge national debt, and Abe has said they have measures to ensure that this will not stop the economic recovery the country is currently seeing.
In other issues, Abe admitted in an interview with the Financial Times the day before, that it would be difficult to come up and implement reforms to the country’s labor market because of the Japanese sensitivities when it comes to things like redundancies. He also told Japan’s neighbours not to worry over their efforts to upgrade the military, as it is not part of any return to militarization but rather, it is part of their efforts to become “a pro-active contributor to stability and security in the world.” He emphasized that they will be following international norms, probably in reference to China’s continued incursion into Japanese waters near the islands that are being disputed by the two Asian powerhouses.
[ via SCMP ]
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