'Has Abenomics failed?' Asked the BBC World News Singapore office yesterday morning(15 February), referring to the economic policies of PM Abe Shinzo. It had just been announced that Japan's GDP registered 0.4% decrease during 4th Quarter of October to December, 2015.
Without denying that it has failed, their Tokyo correspondent said that the domestic consumption did not pick up as Abe had expected, and the export did not go up. That is to say, the economy went into a blind alley both ways. He added further that the demographics was also a major contributor, as the population is aging, and it would decrease by 600, 000 a year by 2020.
Broadly he is right. But I would have thought why is it that the domestic consumption, the most important sector of GDP, has come down? Is it the direct result of the demographics? No. It is because in the past two decades or so the economy has become very skew and the disparities have become wider. The big business is shouldering less and less of income tax, thus earning more and more profit. But are they investing, thereby creating permanent, instead of low-paid part-time, jobs? Not at all. Their profit has just been accumulating, as if in a tax-haven. Thus the real wages have gone down, the social benefit has been cut, education and health have become costly, leaving no silver lining conducive to the consumers buying more in the market.
Even then the PM talks of the economic fundamentals being firm and the general economic situation slowly improving. This was after the release of the GDP figures. He just doesn't see things. A dangerous dreamer!
Without denying that it has failed, their Tokyo correspondent said that the domestic consumption did not pick up as Abe had expected, and the export did not go up. That is to say, the economy went into a blind alley both ways. He added further that the demographics was also a major contributor, as the population is aging, and it would decrease by 600, 000 a year by 2020.
Broadly he is right. But I would have thought why is it that the domestic consumption, the most important sector of GDP, has come down? Is it the direct result of the demographics? No. It is because in the past two decades or so the economy has become very skew and the disparities have become wider. The big business is shouldering less and less of income tax, thus earning more and more profit. But are they investing, thereby creating permanent, instead of low-paid part-time, jobs? Not at all. Their profit has just been accumulating, as if in a tax-haven. Thus the real wages have gone down, the social benefit has been cut, education and health have become costly, leaving no silver lining conducive to the consumers buying more in the market.
Even then the PM talks of the economic fundamentals being firm and the general economic situation slowly improving. This was after the release of the GDP figures. He just doesn't see things. A dangerous dreamer!
