Japan owes it to world to revive economy - Koizumi
By Yoko Nishikawa
Japanese Prime Minister Junichiro Koizumi expressed determination to press ahead with his economic reforms on Thursday, saying Japan owed it to the world to revive its economy, particularly after attacks on the United States.
But Koizumi said he would remain flexible in implementing his plans and would take economic conditions into account.
"Revitalising the Japanese economy is our nation's responsibility for the world," Koizumi said in a policy speech to parliament, which began an extraordinary session on Thursday.
"Let's regard this severe situation as a chance for new growth and pioneer a new era under our spirit of 'no growth without reform."'
Koizumi reiterated his promise to compile an extra budget for the current fiscal year to next March, focusing on steps to promote reforms while keeping new government bond issuance below 30 trillion yen ($254.5 billion).
Bond market participants in Tokyo have been on alert for any increased issuance of Japanese government bonds, which could disrupt market stability by pushing up interest rates.
Koizumi, just back from talks with U.S. President George W. Bush, said Japan would work with other countries to stabilise the world financial system and currencies after the attacks raised concerns about the outlook for the global economy.
For Japan, he said what was needed most now was a strong will to push reforms.
"The real action begins now," he said. "I will press ahead with reforms with strong determination to bring back a bright future to Japan."
Koizumi repeated his policy mantra that "depending on economic conditions, we will be bold and flexible."
ON VERGE OF RECESSION
Japan's economy contracted 0.8 percent in April-June from the previous quarter. Many economists expect it to shrink again in the current quarter, making two consecutive quarters of negative growth -- the common definition of a recession.
For Japan, it would be the fourth recession in a decade.
Fresh data on Thursday provided yet more evidence that the world's second-biggest economy is headed for recession.
The government said retail sales fell 3.5 percent in August, down for the fifth straight month on a year-on-year basis, while sales at larger stores, which are more sensitive to changes in consumer spending, dropped for the 40th straight month.
The International Monetary Fund said on Wednesday that it expected the Japanese economy to contract by 0.5 percent this year, but could post growth of 0.2 percent in 2002.
But the IMF's semi-annual World Economic Outlook did not take into account the attacks on New York and Washington.
Koizumi also pledged to promote the disposal of the banking system's non-performing loans, which many analysts and overseas authorities say is key to Japan's long-term economic revival.
Koizumi said the bad-loan problems would be "normalised" in three years.
source: excite.com, September 27, 2001