Specific plan for growth, distribution crucial to Kishida's economic policy
In order to expand the middle class, the direction of promoting growth in tandem with distribution is appropriate. Prime Minister Fumio Kishida needs to articulate concrete measures crucial for realizing this goal, and start working toward its realization.
Kishida delivered his first policy speech as prime minister to plenary sessions of the House of Representatives and House of Councillors.
He listed the response to the COVID-19 pandemic as his top priority, saying, "I will always assume the worst." He said he would strengthen the system for COVID-19 treatment and testing, and aim to put an oral drug into practical use by the end of this year.
In order to normalize economic activities, it is essential to prevent the next surge of infections. Signs of a new wave must not be overlooked and preemptive actions must be taken.
The prime minister has expressed that the government will provide handouts to businesses affected by the COVID-19 pandemic, regardless of region or industry. He also announced support for non-regular employees and families raising children.
It is necessary to consider appropriate measures to ensure that support reaches struggling regional industries and people in need.
The prime minister explained about the "new capitalism" he has proposed in which "all necessary policies will be implemented to realize both growth and distribution." He said he will establish a council for the realization of this concept and put plans together.
Kishida must have recognized that regulatory reform policies -- seen as neoliberalism -- implemented by the administration of former Prime Minister Junichiro Koizumi and successive governments have widened the income gap and divided the people.
It can be said Kishida has made clear that he will focus more on distribution while basically continuing the Abenomics policy package, which emphasizes economic growth. It is understandable that the prime minister has expressed his intention to increase workers' incomes to lead to increased consumption and investment.
The Cabinet of former Prime Minister Shinzo Abe also set forth a "virtuous cycle of growth and distribution," but the growth strategy was unsuccessful and distribution ended up being half-baked. Since this is a pillar of the economic policy, it is important for Kishida to specify effective measures and produce visible results.
Unless the Kishida administration supports emerging companies and strongly nurtures growth areas such as digital technology, its emphasis on distribution may become nothing more than a measure to expand spending. The prime minister must put together a strategy that will lead to a virtuous cycle.
In his speech, the prime minister emphasized "diplomacy and security to thoroughly protect the people," and announced that he would revise the National Security Strategy compiled in 2013 and work to strengthen defense capabilities.
With a host of new issues such as the outflow of advanced technologies and cyberdefense, Japan must urgently strengthen its economic security and protect its national interests. The Kishida administration should deal with such issues strategically in cooperation with the United States and other countries that share the same values.
The ruling and opposition parties are in top gear preparing for the House of Representatives election, but disasters do not choose convenient times to strike, as was seen in the case of the earthquake in the greater Tokyo area with an intensity of upper 5 on the Japanese seismic intensity scale of 7. The prime minister should consider living in the prime minister's official residence to be able to immediately initiate crisis management.
-- The original Japanese article appeared in The Yomiuri Shimbun on Oct. 9, 2021.
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