Asia
What has Shinzo Abe’s signature ‘Abenomics’ achieved?
by Etienne BALMER
When Japan’s Shinzo Abe took office in 2012, he vowed to reinvigorate the country’s economy with a policy that came to be dubbed “Abenomics.” But what has the programme achieved?
As the prime minister announced Friday he will resign, here is a look at the key goals of the policy, and the extent to which they have been achieved:
Major monetary easing
On his return to power after a disastrous first term between 2006-2007, Abe cut a deal with the Bank of Japan that saw the central bank implement a policy of unprecedented monetary easing.
The goal was to reduce the cost of borrowing, stimulating business activity and personal consumption, and pushing inflation up to a two percent target to end the deflation that had haunted the Japanese economy since the 1990s.
The BoJ’s policy helped strengthen the competitiveness of Japanese exporters by weakening the yen, but the inflation target has remained stubbornly out of reach.
The Japanese economy has gradually recovered and prices have slowly increased, but are still far short of expectations.
The country even experienced deflation between 2015 and 2016, which made an unwelcome return this year with the global economic crisis caused by the coronavirus.
Government spending galore
The BoJ’s efforts were paired with stimulus in the form of massive government spending, the second of the “three arrows” of Abenomics.
Hundreds of billion of dollars was spent from 2013, particularly for the modernisation of infrastructure nationwide, some of it with an eye on the Tokyo 2020 Olympic Games.
The spending boosted revenue and investments for business, stimulated financial and real estate markets and helped support the country’s growth for several years.
But it didn’t stop the national economy from derailing several times: GDP contracted between 2014-2015 before recovering, and the country fell into recession again in 2020, even before the coronavirus crisis hit.
With an ageing population more inclined to save than spend, consumption has remained stubbornly low. And spending was hit further by two consumption tax hikes, in 2014 and 2019.
Economists warned both times that the increases would send the economy into reverse, but the government pushed ahead, spurred by its burgeoning obligations in a country with the world’s highest debt-to-GDP ratio.
With the coronavirus causing economic devastation, and domestically forcing the postponement of the Olympics and a nosedive in tourist revenue, the government has unleashed massive new stimulus.
But Japan’s growth potential is dropping because “the government lacks a green recovery vision and digital initiatives,” said Sayuri Shirai, a professor in Keio University’s faculty of policy management and former BoJ policy board member.
Structural reforms
The first two arrows of Abenomics could not work without the third pledged by the premier: structural reforms.
A chief target was Japan’s labour market, characterised by a post-war boom era model in which workers could expect life-long employment and extensive benefits in jobs at one of the country’s behemoth firms.
But attempts to overturn the calcified model and promote greater flexibility have moved too slowly, experts say.
“At first we thought the government was buying time by monetary easing and fiscal policy, to prepare for structural reforms which are painful,” said Masamichi Adachi, an economist with UBS.
“However this time was not used wisely for structural reforms,” he told AFP.
There have been some bright spots, including a rising number of women and older people in the workplace, and some loosening of the country’s strict immigration policy, which may help tackle chronic labour shortages.
But many of the reforms “have been not bold enough” to boost labour productivity,” Shirai said.
The pandemic, she added, revealed “not only Japan’s corporate sector vulnerability but also inadequate electronic public services” and the slow implementation of government policies.
— AFP
Asia
Up to 200 athletes tested for doping so far at Asian Games
Between 150 and 200 Asian Games athletes tested for doping, yielding no positive results. Anti-doping efforts emphasized for a clean event, focusing on record-breakers.
HANGZHOU, CHINA — Between 150 and 200 Asian Games athletes have already been tested for doping, the Olympic Council of Asia said on Monday, with no positive results so far.
Speaking at an anti-doping press conference on the second full day of the Games in the Chinese city of Hangzhou, the OCA said dope-testing was “gaining momentum” at the event.
Mani Jegathesan, an adviser to the OCA anti-doping committee, warned that drug cheats would be rooted out.
Up to 200 athletes have been tested so far, he said, but any positive results will take several days to come through.
“Every athlete participating in these Games must understand that they could be picked at any time,” Jegathesan warned.
“That is the best step to ensuring we have a clean event.”
There are about 12,000 athletes at the 19th Asian Games, more competitors than the Olympics, and Jegathesan admitted it would be impossible to test them all.
Instead, they will prioritise, including picking out those who break world or Asian records.
— AFP
Asia
Foodpanda’s restructuring amid sale speculations
Food delivery giant Foodpanda, a subsidiary of Delivery Hero, announces staff layoffs in the Asia-Pacific region, aiming for increased efficiency. This move coincides with ongoing talks about potentially selling parts of its 11-year-old business.
Foodpanda, a subsidiary of Delivery Hero, is initiating undisclosed staff reductions in the Asia-Pacific region, as discussions continue regarding the potential sale of a portion of its 11-year-old food delivery business.
In a memorandum circulated to employees on 21 September, Foodpanda CEO Jakob Angele conveyed the company’s intent to become more streamlined, efficient, and agile.
Although the exact number of affected employees was not disclosed, the emphasis was on enhancing operational efficiency for the future.
No mention was made in the memo regarding the reports of Foodpanda’s potential sale in Singapore and six other Southeast Asian markets, possibly to Grab or other interested buyers.
Foodpanda had previously conducted staff layoffs in February and September 2022. These actions come as the company faces mounting pressure to achieve profitability, particularly in challenging economic conditions.
The regulatory filings of Foodpanda’s Singapore entity for the fiscal year 2022, ending on 31 Dec, indicated a loss of S$42.7 million despite generating revenue of S$256.7 million.
Angele further explained that Foodpanda intends to review its organizational structure, including both regional and country teams, with some reporting lines being reassigned to different leaders. Additionally, certain functions will be consolidated into regional teams.
Expressing regret over the challenging decisions, Angele assured affected employees of a severance package, paid gardening leave, and extended medical insurance coverage where feasible.
Foodpanda will also forego the usual waiting period for long-term incentive plan grants, and vesting will continue until the last employment date. Employees will retain all vested shares as of their last day of employment.
Foodpanda, established in 2012 and headquartered in Singapore, became a part of Delivery Hero in 2016. The company operates in 11 markets across the Asia-Pacific region, excluding its exit from the Japanese market last year.
-
Comments1 week ago
Christopher Tan criticizes mrt breakdown following decade-long renewal program
-
Comments4 days ago
Netizens question Ho Ching’s praise for Chee Hong Tat’s return from overseas trip for EWL disruption
-
Current Affairs2 weeks ago
Chee Soon Juan questions Shanmugam’s $88 million property sale amid silence from Mainstream Media
-
Singapore1 week ago
SMRT updates on restoration progress for East-West Line; Power rail completion expected today
-
Singapore1 week ago
Chee Hong Tat: SMRT to replace 30+ rail segments on damaged EWL track with no clear timeline for completion
-
Singapore5 days ago
Train services between Jurong East and Buona Vista to remain disrupted until 1 Oct due to new cracks on East-West Line
-
Singapore5 days ago
Lee Hsien Yang pays S$619,335 to Ministers Shanmugam and Balakrishnan in defamation suit to protect family home
-
Singapore1 week ago
Major breakdown on East-West Line: SMRT faces third service disruption in a month