Accessibility links

Japanese PM Calls For Dramatic Cuts in Government Construction Spending - 2002-07-19

Japanese Prime Minister Junichiro Koizumi is calling for dramatic cuts in government spending on unnecessary construction projects. The move is part of his plans to reform Japan's economy and reduce the government's massive debt load.

Prime Minister Junichiro Koizumi ordered his Cabinet ministers to come up with reform ideas that are, in his words, beyond mere ambitions. He told his ministers to find practical ways to cut their budgets for next year and halt unnecessary public works programs. Spending on pork-barrel projects has been widely used in Japan to create jobs, spur economic activity and satisfy political supporters.

But the strategy has been largely unsuccessful, with projects to build unnecessary roads and bridges draining public coffers.

Prime Minister Koizumi is trying to stop the practice as part of his economic reform plan for the nation, which recently emerged from a deep recession. He faces heavy opposition from others in his Liberal Democratic Party.

Finance Minister Masajuro Shiokawa said the government wants to reduce the volume of public works spending as much as possible, and will take a hard look at expenditures to save costs.

The influential economic Nihon Keizai newspaper reports that Mr. Koizumi hopes to cancel or scale down up to nine large projects, including new highways and airports. Mr. Koizumi also wants a review of farm subsidies, including $2.5 billion spent annually to maintain rice prices.

Spending on such subsidies and on pointless public works has burdened Japan with a debt that will reach almost six-trillion dollars this year. That equals 140 percent of gross domestic product, the highest of any industrialized nation in the world.

On Friday, Parliament moved toward closing an unprofitable public company, another key plank of Mr. Koizumi's reform agenda. It enacted bills to break up the state-run Japan National Oil Corporation, which will eventually be disbanded and privatized.