Business leader Glen S. Fukushima reviewed “Japan’s Economy: Prospects and Pitfalls” in a Morning Forum of Los Altos presentation Feb. 18.
Fukushima is senior fellow at the Center for American Progress in Washington, D.C. His work focuses on U.S.-Japan relations, U.S. foreign policy in East Asia and international trade.
Fukushima noted the international attention paid to Japan since December 2012, owing to the return of Shinzo Abe as prime minister. Topics of interest include the aftermath of the 2011 earthquake, tsunami and the nuclear-reactor disaster; ongoing territorial disputes between Japan and China and between Japan and South Korea; and Abe’s focus on the economy, national security policy and history.
After 15-20 years of stagnation and deflation, there is a new mood of optimism in Japan about the economy, according to Fukushima. Public support for the government polls at approximately 50-60 percent, primarily because of hope that the economy will improve.
Leading U.S. economists such as Paul Krugman and Joseph Stiglitz have weighed in positively about “Abenomics,” Fukushima said. The “three arrows” of “Abenomics” include easing monetary policy and a 2 percent inflation target, fiscal policy to promote investments as a stimulus and structural reforms aimed at sustained economic growth. Structural reforms include promoting women in the workplace through such policies as building thousands of new day care centers.
Since Abe took office again, Fukushima reported that Japan’s stock market has risen 57 percent; the yen has dropped 20 percent, increasing exports; there have been four consecutive quarters of GDP growth; and the selection of Tokyo to host the 2020 Summer Olympics may boost infrastructure projects.
Fukushima cautioned, however, that government debt is still high, a consumption-tax increase in April may dampen spending and Japan’s energy policy remains uncertain because of public opposition to restarting nuclear power plants, which could result in expensive oil imports. He added that Japan has an aging society, a low birth rate and a shrinking population, all of which negatively impact the economy.
The Morning Forum of Los Altos is a members-only lecture series that meets at Los Altos United Methodist Church. For membership details and more information, visit morningforum.org.