World News

    Japan Rolls Out Controversial Tax Hike

    Japanese Prime Minister Shinzo Abe is going ahead with a controversial sales tax hike to help reduce the country's massive public debt.

    Mr. Abe on Tuesday announced the long-anticipated plan to raise the consumption tax from 5 percent to 8 percent by April of next year.



    "In order to maintain confidence in the country and pass sustainable social security to the next generation, I have decided to raise the tax of the central and local governments from 5 percent to 8 percent on April 1, 2014."



    The tax will raise an estimated $81 billion a year. It represents the first major effort since 1997 to reduce Japan's national debt, which at over $10 trillion is the largest in the industrial world.



    Masamichi Adachi, a senior economist at J.P. Morgan in Tokyo, tells VOA he views the tax increase as a necessary initial part of addressing Japan's fiscal woes.



    "This tax hike is definitely not enough to overcome the challenge that Japan faces with its huge government debt and deteriorating demographics in terms of aging population. However, this is a first step."



    The move comes after a quarterly survey by the Bank of Japan showed business confidence rose to a five-year high, in what was seen as another crucial indicator that Japan's economy is recovering from years of stagnation.

    Mr. Abe's economic strategy, known as Abenomics, has seen positive results since his December election. Stocks have surged and the economy posted the highest annualized growth rate among G7 nations in the first half of this year.



    But some worry the new tax will hurt consumer demand and damage Japan's fragile growth. To offset those concerns, Mr. Abe announced a stimulus package that includes tax breaks for low-income earners and corporate incentives to boost wages.

    More details of the stimulus package were expected to be unveiled later Tuesday. Tomohiko Taniguchi, an Abe advisor, declined to comment on the specifics of the stimulus during an interview with VOA.



    "The aim is to smooth out the downside risks pertaining to the rise of the rate for the consumption tax, because Japanese deflation has been sticky for so many years and we're not so clear as yet that we have succeeded in getting rid of deflation."



    The tax hike also represents a significant political risk for Mr. Abe. Two of his predecessors in recent decades were forced out of office shortly after raising the tax.

    But Taniguchi says this time is different, partly because of recent positive economic indicators, and also due to Mr. Abe's strong performance in upper house elections in June.



    "Prime Minister Abe has amassed such a large amount of political capital. I think the amount is probably among the biggest for recent prime ministers in Japan, so he is pretty confident that he can carry out these (plans)."



    Abenomics relies on boosting public spending in order to spur growth and aggressive monetary easing, or increasing the money supply, to help fight deflation.

    But the third so-called "arrow" of Mr. Abe's plan involves structural reforms to Japan's economy that could prove to be painful and more politically difficult.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movementi
    X
    July 22, 2016 11:49 AM
    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video In State of Emergency, Turkey’s Erdogan Focuses on Spiritual Movement

    The state of emergency that Turkish President Recep Tayyip Erdogan has declared is giving him even more power to expand a purge that has seen an estimated 60,000 people either arrested or suspended from their jobs. VOA Europe correspondent Luis Ramirez reports from Istanbul.
    Video

    Video Scientists in Poland Race to Save Honeybees

    Honeybees are in danger worldwide. Causes of what's known as colony collapse disorder range from pesticides and loss of habitat to infections. But scientists in Poland say they are on track to finding a cure for one of the diseases. VOA’s George Putic reports.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.

    Special Report

    Adrift The Invisible African Diaspora