News / Asia

Japan's Big Spending 'Abenomics' Sparks Interest From Ailing Europe

Japan's Big Spending 'Abenomics' Sparks Interest From Ailing Europei
X
June 22, 2013 2:41 AM
Not many politicians can claim to have had economic theories named after them - but the Japanese prime minister is now one. Shinzo Abe's program of big spending and loose fiscal policy has been dubbed 'Abenomics' - and with Japan recently showing what looks like strong growth, there have been calls for ailing European economies to adopt a similar strategy. Henry Ridgwell reports from London.
Japan's Big Spending 'Abenomics' Sparks Interest From Ailing Europe
Henry Ridgwell
Not many politicians can claim to have had economic theories named after them, but the Japanese Prime Minister is now one. Shinzo Abe's program of big spending and loose fiscal policy has been dubbed 'Abenomics' - and with Japan recently showing economic growth, there have been calls for ailing European economies to adopt a similar strategy.

Laughing with his fellow leaders at the final photo opportunity in Lough Erne, Japanese Prime Minister Shinzo Abe appeared highly satisfied with the outcome of this week's G8 summit in Northern Ireland.  He spoke at a press conference Tuesday.

Abe said that in the global economic discussion as well as in the bilateral talks, a strong interest was shown in the Japanese fiscal and growth strategies.

Analysts say much of that interest has come from Europe - which is suffering from low or negative growth, much like Japan had for the last two decades.  

"The short term relief that these programs can bring is, of course, something that is very welcome, would be very welcome in large parts of the euro area," Tobias Blattner, European Economist at the Japanese firm Daiwa Capital Markets.

Shinzo Abe describes Abenomics as having three 'arrows': monetary policies, or keeping down the value of the yen currency; huge fiscal stimulus - essentially printing more money; and encouraging growth through deregulation and policies like getting more women into the workforce.
 
So far it appears to be having an effect.

The yen has tumbled by over 20 percent against the dollar since last year.  That helped Japanese exports soar at the fastest annual rate in May since 2010 - up 10 percent from the previous year.  In the first quarter of 2013, Japan's economy grew by an annualized rate of 4.1 percent.

So should Europe's ailing economies take a leaf out of the book of Abenomics?  Takuji Okubo, Chief Economist at Japan Macro Advisors urges caution.

"When you look into the contents of the growth, you do see that half of the growth is coming from public demand such as public works, government consumption and that is still concerning, and that says that Japan's economy is still not self-sustaining," Okubo said.

When French President Francois Hollande visited Tokyo earlier this month, some French and Japanese media suggested he was going there for a lesson in 'Abenomics.'  France's economy meanwhile fell back into recession last quarter.  Hollande had this response.

"We have very different situations.  France is in the eurozone, and together with our partners, working together. Japan has the sovereign right to decide on its monetary policy and conditions alone," he said.

Blattner says President Hollande is being realistic. "Implementing the kind of Abenomic policies would not even be possible in the current framework.  It would only be possible at an aggregate level and, of course, there we have the skepticism of the core member states, the northern European economies like Germany, the Netherlands," he said.
 
So while Shinzo Abe appears to be speeding Japan's economic recovery - it seems Abenomics might not be one of the country's many exports.

You May Like

Obama: Alaskans Feel Signs of Climate Change

Alaskans experiencing bigger storm surges as sea ice melts, more frequent and extensive wildfires, deteriorating glaciers, and swift shoreline erosion More

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries More

Magical Photo Slides Show Native Americans in Late 1800s

Walter McClintock spent 20 years photographing the Blackfoot Indians and their vanishing culture at the dawn of the modern age More

This forum has been closed.
Comment Sorting
Comments
     
by: Kitagawa keikoh from: Daikanyama, JPN
June 22, 2013 7:54 PM
Japan had experienced the WW II and atomic bombs, and after that we have been working very hard to become one of the world top economic countries.
That's why we are recovering from the economic crisis, not because such meaningless politic strategy as Abenomics.
In Response

by: Yoshi from: Sapporo
June 23, 2013 10:41 PM
I think EU couniries need not pay attention to Abenomics because it seems merely a tempolary economic recovery.
Actually yen is again getting weak to dollar and stock plices are also getting down recently only a few months after the first action of monetary loosing. Those who have enjoyed weak yen and high stock prices are limited in big exporting companies and stock players.

Economic investment of firms is not yet prompted because domestic demands are not increased as expected. Workers wages and employment rate are not improved in general. A raise of consumption tax is planned next spring.
In Response

by: Samurai from: Japan
June 23, 2013 8:15 AM
I don't think Abenomix is meaningless. Mr. Abe is now following the way USA took several years ago, i.e., a departure from deflation. Japan has been in the straits of deflation for more than two decades. The only way to depart from the deflation is to cause Japan's economy to inflate (in this case, "reflation").

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Colombians Flee Venezuela as Border Crisis Escalatesi
X
August 27, 2015 2:08 AM
Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Is China's Economic Data Accurate?

Some investors say China's wild stock market gyrations have been made worse by worries about the reliability of that nation's economic data. And some critics say the reports can mislead investors by painting an unrealistically-strong picture of the economy. A key China scholar says Beijing is not fudging ((manipulating)) the numbers, but that the economy is evolving quickly from smoke-stack industries to services, and the ways of tracking new economic activity are falling behind the change. V
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Shipping Containers Provide Experimental Housing

Housing prices around the San Francisco Bay area are out of reach for many people, so some young entrepreneurs, artists and tech industry workers are creating their own houses using converted shipping containers. But as VOA's Mike O’Sullivan reports from Oakland, the effort requires ingenuity and dealing with restrictive local laws.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video Technique May Eliminate Drill-and-Fill Dental Care

Many people dread visiting dentists because they're afraid of drills. Now, however, a technology developed by a British firm promises to eliminate the need for mechanical cleaning of dental cavities by speeding a natural process of tooth repair. VOA’s George Putic reports.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.
Video

Video French Experiment in Integrating Roma Under Threat

Plans to destroy France’s oldest slum have sparked an outcry on the part of its Roma residents. As Lisa Bryant reports from the Paris suburb of La Courneuve, rights groups argue the community is a fledgling experiment on integrating Roma who are often outcasts in many parts of Europe.
Video

Video Kenyans Turn to Agriculture for Business

Each year Kenyan universities continue to churn out graduates for the job market despite the already existing high rate of unemployment among youth in the country. Some of these young men and women have realized that agriculture can be as rewarding as any other business or job, and they are resorting to agribusiness in large numbers as a way of tackling unemployment. Rael Ombuor reports for VOA.
Video

Video First Women Graduate Elite Army Ranger School

Two women are making history for the U.S. Army by proving they are among the toughest of the tough. VOA's Carla Babb reports from Fort Benning, Georgia as 94 men and those two women rise as graduates of the difficult Ranger school.

VOA Blogs