Reviewed By Hitoshi URABE
As is with many of the articles in the Economist magazine, this is a very apt and compact analysis of Japan's standing.
The article explains how Mr Koizumi, as the Prime Minister, was cheered when he took office in 2001, for the hope that he would finally scrap and rebuild Japan's economy along with the political system that had become obsolete, only to disappoint people after two years, for delivering very little, if at all.
The report then blames Mr Hayami, the Governor of Bank of Japan, for being stubborn and not having adopted effective measures, such as setting an inflation target, to pull Japan out of deflation. Mr Hayami's term ends next month and the article expresses a hope for someone who could really change the direction of the central bank to take over, mentioning also that the exercise of choosing the new Governor itself would be a good test for the Government of its will to reform.
After listing these current trends, the article then calls attention to the fiscal problem of Japan, that the balance of public debt is reaching 150% of GDP and still rising fast. It points out that most of the measures thus far taken in an effort to revive Japan's economy despite the dreadful fiscal situation have been public-sector construction projects, which have been ineffective and wasteful.
The article goes on to say, "Co-ordinated reform seems beyond the current political establishment" and a bit of hope is hinted in the LDP leadership election due in September where someone other than Mr Koizumi might be elected.
It must be pointed out, however, that according to the analyses of the polls, the largest reason among the supporters of Mr Koizumi for doing so is because he seems to be a better choice than any other candidate rumored for the job, which indicates he is not necessarily liked by people but is only less disliked. The misery is the inability for Japan's system to introduce new qualified candidates for the leadership. So long as the leadership is considered as a position to be rotated among the old guards, there could be not much hope, especially at times like this.
It leads to the title of the article. Are we going anywhere?