Recovery: Very, Very Slow

Road signs tell us what’s ahead: an incredibly dangerous curve, legal speed limit, pedestrian crossing, school zone, road merging, men and equipment working, deep excavations, historic places, etc. We pay attention to their simple messages in order to avoid fatal accidents or watch for the safety of others. It is the responsible thing to do as the person behind the wheel.

In economic parlance, we look at “indicators” from without (Japan and Asia) to determine how would we fare in that everything that happens in the Land of the Rising Sun eventually trickles down to our tiny archipelago. Lest we forget, we’ve placed our lives on the lap of Japan Inc. in tourism which mushroomed in unprecedented fashion during the Bubble Years. The bubble has since burst bringing the local tourism sector to its knees.

Now, a recent report from the Japan Central Bank says that while “Japan’s economy has stopped deteriorating for now…it is not expected to recover quickly from years of stagnation”. It further says that a “quick comeback is unlikely because corporate restructuring efforts will weigh on fixed investment and hurt consumer spending as employment and wage conditions deteriorate”. Unemployment rate in Japan is at a record high of 4.9 percent.

This brings up the question of what must local government undertake to ensure that further economic contraction is staved-off so to prevent any further business closures some 2,000 of which have shut their doors and gone home over the last two years? It is obvious that any further closure of businesses, large and small, would translate to zero wealth and jobs creation. What can we do collectively to grant them a fair chance of muddling through these difficult times?

The administration needs to retain proactive economists and seasoned financial experts to guide its work in this area. It needs to do immediate studies on a number of issues: Rewriting or reinventing arcane tax laws that have contributed to stifling economic growth in these isles, review tax breaks to grant businesses some breathing space in the interim, i.e., doing away (temporarily) with taxes on basic commodities; repeal of protectionist laws that have done more harm than good; and resolve, once and for all, the most unstabling influence inherent under a proposed federalization of the NMI.

None of these tasks is an easy feat to put together so they are thoroughly reviewed by all pertinent sectors of this community. But the least that we can do at this juncture is to engage in proactive measures to help ourselves before bankruptcy or total economic meltdown turns into a daily breakfast, lunch, dinner and miriendas. Si Yuus `!Maase.