Hosei University Prof. Kazumasa Oguro, who specializes in public economics, shared his thoughts with The Yomiuri Shimbun about how the government and businesses should strive to deal with the novel coronavirus crisis, now and in the future. Below is his response.
The government secured a sufficient budget for its emergency economic package in response to the spread of the new coronavirus. Only the government can mitigate the economic impact when sales are vanishing and demand is shrinking rapidly due to restrictions on going out and self-restraint in business operations. It is important to provide a certain amount of money to individuals and businesses who need it. It is significant that the Yomiuri Shimbun Proposal called for large-scale injections of capital into businesses to help them escape the recession.
However, the money is slow in reaching the public and businesses. The problem is that the government failed to digitize administrative systems to prepare for emergencies.
The 100,000 yen cash payments across the board were decided in April, but they have not yet been distributed to all households. The government failed to provide the payments in April and May, a time when many people were having particular difficulty financially. Countries like the United States and South Korea made such payments in a swift manner.
This nation could be hit not only by an infectious disease but also disasters such as an earthquake with its focus just below the surface of the Tokyo metropolitan area. The government should immediately implement measures to link the My Number system to deposit or savings accounts in advance, to ensure swift payments in times of emergency.
Digitization is more than the simple computerization of procedures. The main purpose of digitization is to improve the quality of administrative services. Ascertaining data can lead to what is called a "push-type administration," which automatically provides necessary administrative services without people going through procedures.
Japanese companies have also been slow to digitize, as shown by their emphasis on face-to-face meetings. This time, however, they were forced in a way to introduce remote work, and likely came to realize that digitization is also related to happiness in life. It used to be the norm that people had to travel to the office via a long train ride, but many people apparently realized that they can do high-quality work even at home.
Of course, this doesn't mean the appeal of seeing people in person will disappear. How to find the optimum combination of online and offline activities will be a future issue for society.
If businesses are once again forced to practice "self-restraint" in a second wave of coronavirus infections, many will go under. It is necessary to expand and improve PCR testing and other measures to prevent the spread of infections, partly to ensure healthy economic activity. The tests should be used not only to fight infectious diseases, but also to identify people who are not infected and help us conduct economic activity with a sense of security.
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