The Japanese Finance Minister, Kiichi Miyazawa, has admitted that his country is near to economic collapse. “The nation’s finances are now abnormal, in a condition that is rather close to collapse…We need fundamental restructuring to rebuild our finances. It will be necessary to introduce measures to reduce debt, as well as dealing with taxes, local government finances and social security”, he told the Japanese Parliament yesterday. It should be pointed out that the Japanese currency, the Yen, is currently at its lowest point for a year and a half, at 120 Yen to the USD. This economic crisis has been foreseen for a long time, even in the late 1980s, there were rumours of an impending disaster as the world’s second largest economy started to overheat. The option taken by the Japanese governments over the years was to spend, spend, spend, hoping to create a climate of economic confidence, create jobs and prosperity and therefore “trick” their way out of the economic reality which descended like a fog over the rest of the Far East and South-East Asia in the 1990s. Economic growth rates in recent years have been extremely low, around 1% and the country’s public debt is forecast currently at 3.9 thousand billion dollars (128% of GDP). Domestic and foreign demand for Japanese goods is declining, namely 11.8% in the first month of this year. Internal household spending is also starting to recess, down 0.5% in the same month. No doubt the resourceful and highly educated Japanese people will be able to find solutions for this crisis but the truth is today that a cloud darkens their horizons.
TIMOFEI BYELO PRAVDA.RU