Several policymakers of the Liberal Democratic Party said at a meeting Thursday that private finance initiatives should be deployed to improve the nation’s infrastructure and boost the ailing economy.
“Structural reform and economic recovery should be implemented at the same time,” remarked Taro Aso, chairman of the LDP Policy Research Council.
Aso called for economic stimulus ideas, including measures that could feature in a proposed supplementary budget for fiscal 2001.
The meeting focused on ways of propping up the economy without hindering the structural reform programs pursued by Prime Minister Junichiro Koizumi.
Specifically, participants discussed measures such as PFI projects, a further easing of the Bank of Japan’s monetary policy, revision of the consumption tax system and investment toward the establishment of a job safety net.
Referring to the fiscal 2002 budget request ceiling, which will be set by the government later this month, Fumio Kyuma, the council’s acting chairman, said he expects to see 87 trillion yen in expenditures and revenues of 84 trillion yen.
The latter includes tax revenues of 50.4 trillion yen.
Kyuma said the budget ceiling must be based on Koizumi’s aim to cap new government bond issuance at 30 trillion yen and the government’s basic policy of prioritizing allocations to seven key areas, including the environment and information technology.
Given the government’s plan to cut public works, some speakers suggested that each city, town and village should devise a PFI project.
They cited the huge residual effects of PFI projects, mainly in urban areas such as Tokyo, Osaka and Nagoya.
Beware false dawns
The economy will probably remain weak despite a modest increase in some indicators pointing to future economic activity, according to data released Thursday by an influential U.S. business research group.
The New York-based Conference Board, a nonprofit research organization comprising more than 3,000 corporate and other members in 67 countries, said its leading index for Japan, a barometer of future growth, rose 0.1 percent in May from April to 89.6 against the base of 100 for 1990.
Its coincident index for Japan, a key gauge of the current state of the economy, held steady in May from April at 103.
“Taken together, the two composite indexes point to continued weakness in the Japanese economy,” the group said in a statement.
The group said the leading index is now almost 5 percent below its most-recent high last August, indicating that significant weakness remains in the economy.
Six of the 12 components that make up the leading index increased in May. The positive contributors to the index were hours worked in all industries, stock prices, new orders for machinery and construction, changes in consumer credit, real money supply and housing starts.
Four of the six components making up the coincident index rose in May. The positive contributors were real wholesale sales, real manufacturing sales, wage and salary income, and real retail sales.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.