AGENCIES, Tokyo: Japanese Prime Minister Shinzo Abe’s government is under tremendous pressure to find a lasting economic strategy for his country that is has also taken a beating from the coronavirus pandemic. Although the number of infections and deaths are minuscule when compared to that of China or US, with some 3,500 cases and 85 deaths all told as of Monday, but the rate of new infections has been increasing, particularly in Tokyo itself that is causing sleepless nights for Abe’s government .
Abe has pledged to reboot the country’s sagging economy with an “unprecedented” stimulus package which would exceed the size of one compiled in the wake of the 2009 financial crisis totalling 56 trillion yen ($514 billion) in size, with fiscal spending of 15 trillion yen.
The draft package features direct payments to households and financial backstops to companies, highlighting extensive damage from the virus, which has fuelled fears of a recession, while the government looks set to declare a state of emergency.
The spending plan includes subsidies for households with children, cash payouts to small and mid-sized firms to help them continue business operations, and arrangements to allow them to borrow at zero interest and without collateral from private financial institutions.
To fund the package, the government would issue deficit-covering bonds, adding further strain to the industrial world’s heaviest public debt at more than twice the size of its $5 trillion economy.
The revival document refers to the pandemic as the “biggest crisis” the global economy has faced since the World War Two.
At ground level, Tokyo officials have been scrambling to secure 4,000 beds for coronavirus patients, asking hospitals to free up space in ordinary wards and even offering financial incentives. Recently, Japan came under fire for the way it handled infected patients on the cruise ship Diamond Princess.
Media reports on Monday indicated that Shinzo Abe could declare a state of emergency as early as Tuesday in Tokyo and six other prefectures