© Reuters file photo: Former Japanese Prime Minister Shinzo Abe is embroiled in a lawsuit against his secretary over alleged political funding, Japan held a press conference in Tokyo, Japan in December 2020.
By Leica Kihar
TOKYO (Reuters) – Japan’s vast wealth gap has emerged as a key factor in the ruling party’s leadership race that will determine who will be the next prime minister, forcing candidates to re-evaluate the legacy of former prime minister Shinzo Abe’s “abenomics” policy.
Under Abenomics, the 201 expansion has mixed Abe’s broader monetary and fiscal policies and growth strategies, boosting share prices and corporate profits, but a government survey released earlier this year found that households have benefited very little.
Keeping in mind the shortcomings of Abenomics, the Liberal Democratic Party’s leader in the race – Vaccine Minister Taro Koo and former Foreign Minister Fumio Kishida – has promised to focus more on increasing family wealth.
“It is important to extend the benefits of economic growth to a larger population,” Kishida said Thursday. “We must create a virtual cycle of growth and distribution.”
But candidates are thin on the details of how this can be done through years of massive financial and monetary stimulus through Japan’s economic policy tool-kit.
Calling for rewarding companies to raise wages by reducing any corporate taxes, while Kishida seeks to expand by targeting the Japanese middle class in low-income families.
The parliamentary party is sure to become the next prime minister of Japan due to its parliamentary majority in the September 2 LDP-led vote. Two women – internal 0-year-old former Home Minister Sanai Takaichi and gender 1-year-old Gender Equality Minister.
Parliament will be called in October to vote on Prime Minister Yoshihide Sugar’s successor, who announced his resignation less than a year after taking office from Abe.
A government survey, conducted every five years and published in February, drew growing attention to the trend of inequality during Abe’s time.
Shigeto Nagai, head of Japan economics at Oxford Economics, said the survey found “Abenomics’ utter failure to increase household wealth through rising asset prices.”
The survey, conducted once every five years, found that the average wealth in the household decreased by .5% from 201 among 201 to 201 and only the top 10% increased wealth.
Traditional thematic animosity towards the risk of Japanese households means they have not benefited from the stock market rally, the balance of their financial assets has decreased from 2014.1% in 2014 to five years from 2014, the survey found.
“We think we need to consider the failures of the new prime minister’s abnomics and acknowledge the myth that reflection policies based on aggressive financial relaxation will not solve all of Japan’s problems without addressing local structural problems,” Nagai said.
Bank of Japan Governor Haruhiko Kuroda defended the abnomics, saying it was not the slowdown in wage growth, but the epidemic that was largely responsible for lazy use.
“Unlike the United States and Europe, Japanese companies retain jobs even after an epidemic strikes,” Kuroda said when asked why the trickle-down to the family has been weak.
“Wage growth has been fairly moderate, but it’s not the main reason that costs are weak,” he said in a briefing on Wednesday. “Once the epidemic subsides, use will probably be stronger.”