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Recovery of Japanese economy
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Posted on Dec 08 2000
The Issue: Japan’s economy has shown sure signs of recovery this year, including increased investment, but….
Our View: We’re also optimistic but it’s an issue that requires extra caution in terms of real recovery.
We have been looking anxiously through the peep hole hoping that Japan, the world’s second strongest economic power, regains real economic recovery.
This week the Organization for Economic Cooperation and Development–an organization of wealthy nations–said in a report that Japan’s economy has shown recovery “although uncertainties remain”. OECD is a 29-member Paris-based group of rich countries, including Japan and the United States.
“The upturn can be seen in rising wages that should help encourage spending,” OECD’s report said. But it also acknowledged fears that a future downturn remained. “The risks are worse for 2001 and 2002 because layoffs and other restructuring efforts may prove disruptive” where certain industries are still entrenched in old ways of doing business”.
What does this guarded tidings mean for the Commonwealth of the Northern Mariana Islands? Caution on public sector expenditure at all cost. Otherwise, any downturn from the Land of the Rising could mean a further meltdown of the local economy.
Meanwhile, it is interesting how the administration has promulgated a somewhat vacuous austerity measure. While the governor preaches extra caution, the people down below don’t seem to hear his warnings. The hiring of over 700 employees in recent years is far from our perception of an austerity measure with substance.
We are far from real economic recovery although the vehicle to reboot the economy is now in place. It’s one thing to redefine policy, it’s another to see if investors really bite the bullet, and it’s quite another issue altogether whether fresh rounds of investments really pan out over the next decade. All these tell us to take a slow approach to expenditure of taxpayers money. Si Yuus Maase`!
