NO. 16 -- April 25


Feature Article


With domestic economic growth seemingly on a steady -- if weak -- upward path, Japanese politicians and bureaucrats have turned their attention to assuring the long-term health of the government's finances and restructuring the role of public-sector spending in the economy. Faced with zooming demands for social welfare spending from a rapidly aging population and a shrinking tax base of working people in the future, budget planners are searching for ways to move the budget toward balance while continuing to improve the nation's social infrastructure. The consensus among government and business analysts that massive stimulative spending, Tokyo's traditional prescription for sluggish growth, no longer works both could facilitate and frustrate achievement of these divergent goals. At the same time the maturing and the restructuring of the economy has made some features, institutions and structures of the government seem increasingly out of place. Taking their cue from the new attitudes of Japanese corporate executives and consumers toward the nation's changing economy, politicians and bureaucrats are starting to rethink the role of government and public spending in the economy.

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Weekly Review

Japan's Trade Surplus Still Falling -- For Now by Douglas Ostrom

Just this once, policymakers on either side of the Pacific might be well advised to ignore the numbers and concentrate on the hoopla. Japan's customs-clearance trade statistics for the first three months of 1997 showed a 17.4 percent drop in its still huge surplus compared to the same period of last year. That result directly contradicts the widespread view that Japan's trade imbalance once again is on the rise. As such, the latest quarterly data would appear to suggest the inappropriateness of the expected late April conversation in Washington between President Clinton and Prime Minister Ryutaro Hashimoto regarding the upward trend in Japan's surplus. Other evidence indicates, however, that the excess of exports over imports, in fact, is increasing.


Explosive Fire Blasts Japan's Nuclear Power Plans by Jon Choy

The Japanese government's long-running drive to increase nuclear power generation has hit a major obstacle: a fire and subsequent explosion at a spent nuclear fuel reprocessing facility in Tokai, Ibaraki prefecture. Although the explosion released only small amounts of radioactive substances into the environment, 37 workers at the reprocessing plant were exposed to above-normal radiation. Coming a year after a leak in the secondary cooling system of a key government-run prototype reactor, the Tokaimura reprocessing plant blast and its aftermath have cast a very dark shadow on Japan's nuclear power development plans.


Tokyo Resists Food Aid To North Korea by Christopher B. Johnstone

The veil of secrecy that surrounds North Korea's reclusive regime produces sharply divided assessments of Pyongyang's intentions -- a fact that, in turn, sparks disagreement abroad over the appropriate policy response. On one issue, however, analysts appear unified: millions of North Koreans, particularly in the remote northeastern provinces, are at risk of starvation in the coming months as parts of the country descend into famine-like conditions. In recent weeks the United Nations World Food Program has pressed the international community to contribute more than $95 million in food aid to North Korea, and estimates of the country's needs balloon with every visiting international delegation.


Okinawa Base Lease Renewal Bill Clears Diet by Barbara Wanner

Despite the protests of antibase activists in the Diet gallery, the upper house soundly passed legislation April 17 revising a 1952 law to allow the U.S. military's continued legal use of land on Okinawa on which leases expire May 14. Approximately 80 percent of the 252 members of the House of Councillors stood up to indicate their support for the bill, an action that obviated the need for a formal casting of ballots. Coming just six days after the lower house's approval of the legislation, the upper chamber's imprimatur no doubt helped to set a positive tone for the April 25 summit in Washington between Prime Minister Ryutaro Hashimoto and President Clinton. That, anyway, was Mr. Hashimoto's chief goal in striking a deal on the base lease renewal bill with Shinshinto, the largest opposition party. This eyebrow-raising agreement ensured that the ruling Liberal Democratic Party, which does not hold a majority of Diet seats, easily had enough votes to enact the bill.



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