Shopping Stamps for poor in Japan's economic recovery plan FWD

Tom Boland (wgcp@earthlink.net)
Sun, 21 Feb 1999 09:16:20 -0800 (PST)


http://news.bbc.co.uk/hi/english/world/asia-pacific/newsid_282000/282340.stm
FWD  BBC News [World: Asia-Pacific] - Friday, February 19, 1999

     JAPAN's BIG SPENDER BUDGET

     [Photo: Japan's economic downturn has seen record homelessness]

Japan has begun its first hand-out of shopping coupons, part of a
government effort to stimulate the ailing economy.

Parliament at the same time approved a budget which will pump a further
$700bn into the economy.

On Friday, needy people in a district of Tokyo were the first to receive
the new shopping coupons, which will eventually be distributed to 35m
people across the country.

Families with children under 15, and poor or bedridden people over 65, each
received 20,000 yen ($175).

The coupons were approved last November as part of a deal between the
governing Liberal Democratic Party and the second largest opposition party.

The coupons are valid for six months and must be used in the neighbourhood
where they were issued.

Most people will use their coupons for buying ordinary goods, but the
vouchers will also be accepted in some red light districts.

Government to spend more

The hand-out began as the Lower House of the Japanese Parliament approved a
5% increase in spending, intended to cover public works projects such as
retraining unemployed workers.

The $682bn spending plan, which now goes to the upper house for a vote, is
packaged with $75bn in tax cuts.

It comes at a time when the weak economy has already diminished the
government coffers.

Prime Minister Keizo Obuchi expressed relief that the budget had been
passed so swiftly.

The plan now goes to the Upper House for a vote, but the Japanese
constitution allows it eventually to become law even if the Upper House
does not endorse it.

Sceptical reaction

Economists are sceptical about Japan's spending plans, which are likely to
increase its already heavy national debt.

"It doesn't address any of the structural problems in the economy. In fact,
it does exactly the opposite," said Ron Bevacqua, an economist at Merrill
Lynch in Tokyo.

"It allows them to support the economy and avoid structural change."

Experts have also expressed doubts about the effectiveness of the coupons plan.

END FORWARD

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