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

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus 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.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid