Word: koizumis
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...JAPAN'S REFORM FAILS--AGAIN The country is in its second decade of economic paralysis. Consumers aren't buying much. Bankers aren't lending much. The government is deep in hock. The only hope of escaping this mess is represented by Japan's newest Prime Minister, Junichiro Koizumi, who is determined to administer economic shock therapy. Koizumi promised he would slash government spending, compel major banks to speed up disposal of bad loans--estimated at nearly $1 trillion--allow unprofitable companies to go bankrupt and restructure the economy to make it more market oriented...
...Still, Koizumi's critics and supporters both agree on one thing: to lurch out of its coma, Japan needs to tackle its irretrievable bank loans. Estimates vary wildly on just how much is at stake: of $3.8 trillion in total loans, banks may have to kiss goodbye to anything from $250 billion to $1.2 trillion. "To wipe out the debt," Koizumi said recently, "we must be firm...
...With bankruptcies come unemployment, a much dreaded prospect in Japan, where being jobless is regarded as profoundly shameful. Experts say that with Koizumi's reforms, joblessness could soar to double its current rate in no time. Heizo Takenaka?the academic Koizumi appointed to head up economic policy?is well aware that his boss's political life may hinge on unemployment figures: jobless people make angry voters. That is why, he recently told TIME, reforms must not take longer than two to three years; that is how long his administration figures people are willing to endure the suffering. Takenaka says...
...Getting that sort of rise out of the market?or from Japanese consumers?today would take a little magic. What's certain is that Koizumi cannot depend on the smoke and mirrors favored by his predecessors. For most of the past decade, Japan has stuck like rust to its failed formula for growth, shoveling public funds into ludicrous projects like unneeded dams and highways to nowhere. Not only did the government tap tax revenues for these projects, but also pensions and the $10 trillion in personal savings kept in accounts at the post office. Japanese have had enough of that...
...Just how much are Japanese willing to suffer? Yukinobu Karasawa, a 27-year-old salaryman, mulls over the question as he shops for Koizumi goods?posters, T-shirts, cell-phone straps?at the Tokyo LDP headquarters. "I support his reforms," he says, "but if they begin to hurt me, I might have to reconsider." Then it will be the Prime Minister who feels the pain...