Thursday, 20th December 2012
In Events In Japan,
Abe looks to revive flagging economy through more spending
When Shinzo Abe officially takes up office as the next prime minister of Japan later this month, one of the main priorities for him and the newly re-energised Liberal Democrat Party will be to breathe life back into the economy. And if his pre-election promises are anything to go by, then that will involve plenty of public spending.
Like countries around the world which have gone through general elections in the past year, there is a sense that most members of the public have had enough of the austerity measures that have bound them since the extent of the damage caused by the global credit crunch was first grasped.
Japan was also beset by catastrophe in 2011 when an earthquake set off a major tsunami that devastated much of the country's coastal regions and also compromised the safety of the Fukushima Daiichi nuclear power plant, causing the region to be evacuated after radiation leaked out.
However, the new government hopes to start a new chapter increasing public spending in the hope of boosting the economy and breathing new life into the export market, which has struggled somewhat as a result of the relative strength of the yen compared to the euro and the dollar.
In fact, senior government officials went as far this week as announcing their intention to remove the previous government's debt caps in order to increase spending on major public works projects - despite the fact that the country already has the world's biggest debt burden, owing in essence twice the value of the entire economy to its creditors.
But while investors may wince at the prospect of taking on more debt to spur the economy, Mr Abe will hope that it will provide enough of a catalyst to kick-start the world's fourth-largest exporter, while also encouraging the public and overseas visitors to spend more within its cities, towns and villages.
Written by Mark Smith
Related news stories:
Japan's ruling coalition takes victory in upper house election (11th July 2016)
New Cabinet sworn in as Abe pledges to end economic slump (27th December 2012)