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No. 35 — September 17, 1999

Feature Article

STATISTICAL PROFILE: INTERNATIONAL TRANSACTION OF JAPAN IN 1998

-Table of Contents

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Weekly Review

JAPAN'S ECONOMIC GROWTH SURPRISES AGAIN by Douglas Ostrom

After Japan's economy stunned virtually everyone with its 8.1 percent annualized surge in quarter-to-quarter seasonally and price-adjusted gross domestic product for the first three months of this year, analysts were a little gun-shy about making predictions for the April-June period. Nonetheless, most were willing to say that the economy might well give back some of its astonishing first-quarter gains, a view endorsed by Economic Planning Agency Director General Taichi Sakaiya in a September 2 television interview. Even the Ministry of International Trade and Industry weighed in with an alternative measure of aggregate economic activity that pointed to the same conclusion (see JEI Report No. 34B September 3, 1999).

 

TOKYO DRAWS STIMULATIVE FISCAL ROAD MAP by Jon Choy

The economy recorded a second straight quarter of unexpectedly strong growth (see previous article), but Prime Minister Keizo Obuchi and other members of the ruling Liberal Democratic Party still argue that Tokyo must sustain the current flow of government spending to keep the economy on track. To this end, the Obuchi cabinet not only plans to keep spending steady in its initial budget for FY 2000 but will submit a second supplemental spending bill for FY 1999 as well. Having set aside for the moment concerns about the rising national debt, political leaders are debating exactly how much spending is needed to keep the economic ball rolling.

 

LDP PRESIDENTIAL CONTENDERS SPAR OVER TRIPARTY UNION by Barbara Wanner

The conventional wisdom in Tokyo is that Prime Minister Keizo Obuchi has all but locked up his reelection as the Liberal Democratic Party president in the ruling party's September 21 leadership race, having lined up support from more than two-thirds of the LDP's 371 Diet lawmakers (see Table 1). Nevertheless, at the September 9 official campaign kickoff at LDP headquarters in Tokyo, Mr. Obuchi's two challengers — former LDP Secretary General Koichi Kato and past LDP policy affairs chief Taku Yamasaki — made clear their intention to give the incumbent a run for his money.

 

APEC SUMMIT OVERSHADOWED BY CONFLICT IN EAST TIMOR by Marc Castellano

Leaders from 21 Asian Pacific nations gathered in Auckland, New Zealand with an agenda of common economic issues, but concern over the unfolding situation in Indonesia focused discussion on the continuing violence in East Timor. Thus, although the September 12-13 Asia Pacific Economic Cooperation summit yielded a late-breaking agreement to send a multinational peacekeeping force to the troubled Indonesian province, little progress was made on important matters of global trade and finance.

 

NOTES

Two weeks of escalating violence in the Indonesian province of East Timor have followed a 78.5 percent vote for independence in a United Nations-sponsored referendum (see JEI Report No. 34B, September 3, 1999). Japanese personnel who were part of the U.N. Assistance Mission to East Timor were evacuated shortly after the September 4 announcement of the results of the referendum. The Japanese ambassador in Jakarta reportedly warned President B.J. Habibie in a September 8 meeting that "for the current situation to continue would not be in the interests of Indonesia." Japan joined other nations in Auckland, New Zealand for the September 12-13 meeting of the Asia Pacific Economic Cooperation (see article this issue) in urging the Indonesian government to fulfill its responsibility to provide security in East Timor.

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