The first supplementary budget to fund reconstruction has been passed and services have been fully restored on the Tōhoku branch of the Shinkansen bullet train line. Former administrative vice-minister of finance Tango Yasutake says the signs are encouraging, and suggests that the Japanese economy is on the road to recovery.
On May 2, the government passed the first supplementary budget for fiscal 2011 (April 2011–March 2012), which will provide emergency funding for reconstruction following the Great East Japan Earthquake.
The amount of the budget was ¥4.015 trillion. Major items of expenditure include ¥1.2 trillion earmarked for rebuilding infrastructure such as roads, harbors, and airports; ¥400 billion for repairing schools, and other facilities; ¥360 billion for construction of over 100,000 temporary housing units; and ¥350 billion for clearance of rubble and debris. The budget will be financed by revising previously scheduled expenditure for the coming year, allowing the government to raise the necessary funds without issuing new bonds.
The budget was approved by both government and opposition parties after a debate in the Diet that lasted through Golden Week, Japan’s string of public holidays beginning at the end of April. Along with the supplementary budget, amendments were passed to provide tax relief to individuals and corporations affected by the disaster. Steps were also taken to enhance financing measures for small and medium-sized enterprises, with the Japan Finance Corporation providing long-term, low-interest loans to affected SMEs. The government has worked hard to push through this supplementary budget promptly and is devoting its efforts to providing support for the daily lives of disaster victims and rebuilding the affected areas.
Encouraging the Shoots of Recovery
The Tokyo Electric Power Company (TEPCO) recently published a roadmap for dealing with the nuclear crisis in Fukushima. I sincerely hope the situation will be brought under control soon and that the people who have had to evacuate because of the accident can return home as quickly as possible.
During the recent Golden Week holidays, large numbers of people traveled to Tōhoku to help out as volunteers. This is testimony to the remarkable sense of solidarity that has grown up among the Japanese people since the disaster. Full service has been restored on the Tōhoku branch of the Shinkansen bullet train line, and economic activities are beginning to return to normal. Now that the first supplementary budget has been passed, we can expect that the Japanese economy will start to recover. A degree of normality is returning to the markets.
Within the Office of the Prime Minister, the debate about concrete ways to rebuild the areas that bore the brunt of the disaster is already underway. Prioritizing the wishes of local people will be central to these plans. One possibility that will surely be considered is the idea of classifying Tōhoku as a “Special Area” in which tax laws and other regulations are relaxed while the region rebuilds. Other pressing matters on the agenda include thinking about new disaster-preparation measures, formulating more efficient electricity policies, and reconsidering the current concentration of so many government functions in Tokyo. On all these matters, the government needs to publish a clear timetable and come up with a response as a matter of priority.
Most of the foreign residents who left the country after the disaster have now returned, and overseas tourists are starting to visit Japan again. The people of Japan are extremely grateful for the support of the international community in our hour of need.
Japan will surely recover from this disaster. The first shoots of recovery are already starting to appear. We need to cultivate these budding shoots, and ensure that they grow taller every day. This will require a united effort that brings politicians, the bureaucracy, and the private sector together in one cooperative effort with the people of Japan. It is time to take the next step down our path to recovery. (Written on May 3.)
In This Series
Financing the Reconstruction Effort
Moving On to the Next Stage in Recovery (May 3)
Let’s Rebuild Japan Without New Borrowing (April 2)
Entered the Ministry of Finance in 1974. Served as budget examiner in the ministry’s Budget Bureau, secretary to Prime Minister Koizumi Jun’ichirō, director general of the Financial Bureau and Budget Bureau, and from 2009 as administrative vice-minister of finance. Since his retirement in 2010, he has been a special adviser to the ministry. Also serves as an auditor for the Yomiuri Group.