Japan’s Premier Shinzo Abe has declared an impressive blueprint for bringing back on track the sluggish economy of the country. The new reform plans to employ more women into the workforce, encourage innovation at industrial level and to encourage those corporations, which are just bundling cash, to invest.
The new developments in the strategies announced by Abe are the third most powerful point of his “Abenomics” platform. Till now, the strategies of Abe were largely pointed towards two main points which he calls “two arrows”: loosening monetary policy and increasing public spending.
Shinzo Abe’s New measures
Shinzo Abe has mainly tried to bring in the structural reform in order to strengthen growth in the long term because the population in Japan is getting older.
“Now is the time for Japan to be an engine for world economic recovery,” he said. “Japanese business, what is being asked is that you speed up. Do not fear risk, be determined and use your capacity for action.”
Today in his speech, Abe said that the income in Japan will increase 3 percent to safeguard the purchasing power of the consumers on account of government meeting the target of increasing the inflation to 2 percent within two years.
Abe also took a vow to increase the per capita gross national income of Japan over $14,970 in the next 10 years. At present, the figure is $45,000 per year.
Abe also plans to up private investment in roads and create “strategic economic zones” allowing private companies to use public facilities such as airports. He is also looking forward to increasing the quality of English language instructions and giving some relaxation in the labor regulations.
According to the economists, Abenomics can provide some gains in the economy only in the short run and not permanently unless the reorganization of bureaucracy, industry, agriculture, industrial and labor policy is done. The economists said that Abenomics is left with no other option and these steps will even increase the public debt burden of the country.
However, all the experts are strong head on the fact that Japan needs to come out of deflation, and slow growth after the bubble economy of the country faltered 20 years ago.
Investors not impressed.
The shareholders and investors did not seem to be interested in this new reform point, and the Nikkei Index declined 0.3 percent in the morning before the speech of Abe. The index was down 1.1 percent afterwards. Since November, there has been an upward trend in Nikkei of almost 70 percent as investors are expecting the Shinzo Abe government to come up with a plan that will increase the corporate profits, encourage growth. However, over the past few weeks the index has lost around 20 percent over increasing instability in the implementation of the plan.