The Journal The Authority on Global Business in Japan

Cabinet Office
First demand surplus in nine years boosts Abenomics

Japan saw a gap between supply and demand of 0.4 percent in 2017, leading the Cabinet Office to state that demand now exceeds supply. It is the first time this has occurred since the Lehman Shock of 2008.

Main factors in the recovery include a decline in the value of the yen, improved corporate revenues owing to increased exports, and investments in production facilities—all pegged as results of Prime Minister Shinzo Abe’s policies known as Abenomics.

The latest calculation was applied to the final quarter of 2017 and was incorpo­rated into the revised GDP figures for the entire year.

Based on these figures, the actual GDP for 2017 was ¥531 trillion and the latent GDP was ¥529 trillion. This shows a minus-0.3-percent gap between supply and demand in 2016. The year-on-year increase of seven-tenths of a percentage point resulted in a surplus of 0.4 percent for last year.

The impact of the Lehman Shock caused the supply–demand gap to plummet to minus 5.1 percent in 2009, and negative performance continued year after year. Following the start of the second Abe cabinet in December 2012, fiscal deregulation resulted in a decline in the value of the yen and an increase in stock market prices, spurring exports and helping business performance improve.

In the wake of these changes, individual consumption as well as investment in plant and equipment also improved. The gap continued to shrink and is seen as evidence that the Japanese economy has achieved recovery.

Nevertheless, the latent growth ratio has remained low, at about 1 percent, due to factors such as the low birthrate. As a result, the speed of economic expansion has slowed. Urgent measures will be needed to raise the latent growth ratio, supplementing population decline through such steps as reinforcing supply capabilities through growth strategies and workstyle reforms.

Ministry of Land, Infrastructure, Transport and Tourism
Port facilities to benefit from fishing tourism

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has clarified guidelines for the building of breakwaters, seawalls, and other fishing-related infrastructure. Fishing is a major form of leisure in Japan and abroad, and plans are in the works to improve docking facilities to attract more cruise ships to Japanese ports. The aim is to make the country more appealing to visitors interested in marine activities, including sport fishing.

Efforts to develop fishing as a tourist resource have been under way for some time on a regional basis, and port cities view the sport as a “second catch,” or added benefit, when cruise ships stop over.

As of June 2017, Japan had 933 sea­ports, but only 50 offered facilities for sport fishing. The small number is due in part to legal restrictions, such as laws banning ships from approaching seawalls for the purpose of fishing. Locally imposed safety restrictions to prevent accidents among fishers also have a limiting effect.

The Japanese government has set a target of 40 million inbound visitors per year by 2020, and—as 123 ports welcomed cruises from abroad during 2016—it has been determined that the improvement of fishing facilities at seaports will help the country reach this goal.

MLIT, in conjunction with the Japan Sportfishing Foundation, has erected fences to prevent accidental falls and has also installed ladders at Aomori and Akita Ports. By this summer, the ministry is also expected to make adjustments to open up breakwaters and seawalls to fishermen. Workshops and other fishing-related events are being planned at 35 ports around the nation for FY2018.

One example of the success this can bring is Atami Port in Shizuoka Prefecture. Following the erection of a safety fence in 2006, the port has collaborated with local eateries, hot springs, railways, and travel agencies to develop projects that include fishing activities. As a result, over a period of about a decade, the number of fisher­men utilizing the seawall has tripled and revenues at local businesses have risen by some 20 percent.

keizaikai magazine