The Single Arrow in the “Abenomics” Quiver
SHIBUSAWA Ken / President, Japan Center for International Exchange
March 4, 2013
The yen has weakened in recent months on high expectations for "Abenomics" (Prime Minister Abe's economic policies aimed at revitalizing Japan), and the subsequent rise in the stock market has started a virtuous cycle of even greater expectations for Abenomics. Yet, we should realize that the quiver of Abenomics does not contain three arrows, as often cited, but actually only one arrow that leads to sustainable benefits for the Japanese people.
The ultimate target for policy for the any administration should be sustainable economic development for Japan, and the only arrow that can score a direct hit is "growth strategy." The other two arrows - "monetary policy" and "fiscal spending" – are for buying time. Unless the trajectories of the monetary and fiscal policies are monitored closely, the Japanese people could be knocked out from behind as if by a returning boomerang, rather than a straight flying arrow.
Many people in Japan do not seem to realize that Increasing supply of money through aggressive monetary policy means reducing the value of their money in the bank. Under these conditions, economically and rationally correct behavior for people would be lowering their excess cash holdings in yen and convert it into other financial assets such as stock, foreign currency, real estate or gold. But, for most households in Japan, this has not been the case. Therefore, the government should send a clear message that inflationary monetary policy means that those who hold on to cash, in order to avoid risk, is, in fact, inviting risk of deteriorating household assets because the value of their cash holdings will decrease. The Abenomics message is simple - rational behavior for the household is either to reallocate their assets out of cash to other investments (other than domestic bonds) or to increase spending.
Furthermore, even though the government has made a policy decision to set the inflation target at 2%, it is not clear which "price" will be used to determine that target. Normally, economists judge the level of inflation based on the "core" consumer price index that excludes food and energy, because of higher price fluctuations, which are not statistically suitable. However, for ordinary citizens, food and energy represent the most important expenditures in their livelihood. Whether the 2% target applies to "prices" that is statistically more pleasing for economists or the actual living costs of the people is an issue that requires further discussion.
"Flexible" fiscal policy is important and indeed welcome. It is imperative that the government readdress the safety of public infrastructure that was constructed during the period of Japan's rapid growth nearly fifty years ago. This urgency was symbolically demonstrated in a recent highway tunnel accident in which the ceiling collapsed, leading to loss of lives. The possibility of a major epicentral earthquake in the metropolitan area must not be neglected as "unthinkiable" such was the case of the destruction caused by the earthquake and tsunami in March 2011.
The government's fiscal policy must be "flexible" in order that bold public investments can be implemented for economic and social sustainability for the future of Japan. However, if such policy is limited to maintaining the status quo, it may serve the "vested interests" of those of us living in the present, but it will not provide benefits for those of the next generation, but rather, just debt. Therefore, it is clear that there is only one arrow – "growth strategy" – which is capable of serving the interests of all people, present and future.
Moreover, there are only two fundamental elements in this growth strategy. One is deregulation, which is necessary to raise the economic metabolism of the Japanese society. The other is to assure that global economic growth is incorporated into the Japanese society. Yet, regulations are tied to vested interests, and vested interests are protected by politically influential organizations. On the other hand, incorporating global growth is no easy task either, due to diverse geopolitical risk factors. Last year, diplomatic issues with China caused damage throughout the Japanese business sector. And last month’s tragic terrorist incident in Algeria has led to observations that Japanese companies may review their plans to enter the African market, which is expected to show the greatest increase in population and high economic growth during this century.
In that sense, we should recognize that ensuring human security of the world is essential for sustainable economic growth for Japan. Definition of national security for post-war Japan was about protecting the borders in order to ensure the security of the “homeland.” However, in this new era, the definition of security must encompass the security of the Japanese "people." Japan has entered a new stage where it can no longer avoid a serious discussion on this issue. In the previous century, the "great war" for protecting interests of the homeland wrought immeasurable damage on the interests of the Japanese people. Japanese today are still burdened by the negative effects. It is easy to paint an ideal image of peace. But, in areas of conflict that involve Japan's allies and interests, if Japan continue to look the other way or keep hands tied behind its backs, how can Japan ensure trust among their friends, which so essential to maintain the peace and prosperity.
On the other hand, sustainable economic growth is also a necessary aspect of ensuring security. Japan prospered peacefully in the postwar era because it was able to circulate the wealth created by rapid economic growth throughout its society. As an advanced nation that managed to develop peacefully, Japan should be an attractive model for many developing countries of the world. Therefore, Japan should make a conscious effort to engage even more proactively in the development around the world. While it is naturally important to consider development aid and global health from the standpoint of humanitarian assistance, Japanese society should realize that these development activities are also essential investments in the future for sustaining Japan's own economic prosperity.
Ken Shibusawa is also Chairman of Commons Asset Management, Inc.
The ultimate target for policy for the any administration should be sustainable economic development for Japan, and the only arrow that can score a direct hit is "growth strategy." The other two arrows - "monetary policy" and "fiscal spending" – are for buying time. Unless the trajectories of the monetary and fiscal policies are monitored closely, the Japanese people could be knocked out from behind as if by a returning boomerang, rather than a straight flying arrow.
Many people in Japan do not seem to realize that Increasing supply of money through aggressive monetary policy means reducing the value of their money in the bank. Under these conditions, economically and rationally correct behavior for people would be lowering their excess cash holdings in yen and convert it into other financial assets such as stock, foreign currency, real estate or gold. But, for most households in Japan, this has not been the case. Therefore, the government should send a clear message that inflationary monetary policy means that those who hold on to cash, in order to avoid risk, is, in fact, inviting risk of deteriorating household assets because the value of their cash holdings will decrease. The Abenomics message is simple - rational behavior for the household is either to reallocate their assets out of cash to other investments (other than domestic bonds) or to increase spending.
Furthermore, even though the government has made a policy decision to set the inflation target at 2%, it is not clear which "price" will be used to determine that target. Normally, economists judge the level of inflation based on the "core" consumer price index that excludes food and energy, because of higher price fluctuations, which are not statistically suitable. However, for ordinary citizens, food and energy represent the most important expenditures in their livelihood. Whether the 2% target applies to "prices" that is statistically more pleasing for economists or the actual living costs of the people is an issue that requires further discussion.
"Flexible" fiscal policy is important and indeed welcome. It is imperative that the government readdress the safety of public infrastructure that was constructed during the period of Japan's rapid growth nearly fifty years ago. This urgency was symbolically demonstrated in a recent highway tunnel accident in which the ceiling collapsed, leading to loss of lives. The possibility of a major epicentral earthquake in the metropolitan area must not be neglected as "unthinkiable" such was the case of the destruction caused by the earthquake and tsunami in March 2011.
The government's fiscal policy must be "flexible" in order that bold public investments can be implemented for economic and social sustainability for the future of Japan. However, if such policy is limited to maintaining the status quo, it may serve the "vested interests" of those of us living in the present, but it will not provide benefits for those of the next generation, but rather, just debt. Therefore, it is clear that there is only one arrow – "growth strategy" – which is capable of serving the interests of all people, present and future.
Moreover, there are only two fundamental elements in this growth strategy. One is deregulation, which is necessary to raise the economic metabolism of the Japanese society. The other is to assure that global economic growth is incorporated into the Japanese society. Yet, regulations are tied to vested interests, and vested interests are protected by politically influential organizations. On the other hand, incorporating global growth is no easy task either, due to diverse geopolitical risk factors. Last year, diplomatic issues with China caused damage throughout the Japanese business sector. And last month’s tragic terrorist incident in Algeria has led to observations that Japanese companies may review their plans to enter the African market, which is expected to show the greatest increase in population and high economic growth during this century.
In that sense, we should recognize that ensuring human security of the world is essential for sustainable economic growth for Japan. Definition of national security for post-war Japan was about protecting the borders in order to ensure the security of the “homeland.” However, in this new era, the definition of security must encompass the security of the Japanese "people." Japan has entered a new stage where it can no longer avoid a serious discussion on this issue. In the previous century, the "great war" for protecting interests of the homeland wrought immeasurable damage on the interests of the Japanese people. Japanese today are still burdened by the negative effects. It is easy to paint an ideal image of peace. But, in areas of conflict that involve Japan's allies and interests, if Japan continue to look the other way or keep hands tied behind its backs, how can Japan ensure trust among their friends, which so essential to maintain the peace and prosperity.
On the other hand, sustainable economic growth is also a necessary aspect of ensuring security. Japan prospered peacefully in the postwar era because it was able to circulate the wealth created by rapid economic growth throughout its society. As an advanced nation that managed to develop peacefully, Japan should be an attractive model for many developing countries of the world. Therefore, Japan should make a conscious effort to engage even more proactively in the development around the world. While it is naturally important to consider development aid and global health from the standpoint of humanitarian assistance, Japanese society should realize that these development activities are also essential investments in the future for sustaining Japan's own economic prosperity.
Ken Shibusawa is also Chairman of Commons Asset Management, Inc.
The English-Speaking Union of Japan
アベノミクスの矢筒にあるのは一つの矢
渋澤 健 / 日本国際交流センター 理事長
2013年 3月 4日
アベノミクスへの期待で円安が進み、株式市場の値上がりによって更にアベノミクスへの期待が高まるという循環が働き始めている。ただ、国民の益に持続性があるかという側面では、アベノミクスの矢筒には三つの矢ではなく、ひとつしか入っていないという認識が必要である。
日本の持続的な経済発展を射止める矢とは「民間投資を喚起する成長戦略」であり、「大胆な金融政策」と「機動的な財政政策」は時間稼ぎに過ぎない。放った金融政策と財政政策の行方をきちんと見留めないとブーメランのように背後からノックアウトされてしまう可能性もある。
大胆な金融政策によってお金の量を増やすことは、そのお金の価値を下げる（物価を上げる）ことだ。安倍政権が誘導した金融政策の状況下で経済的そして合理的に正しい国民の行動とは、金融資産で過剰に保有している円現金の比率を下げて、株式、外貨、不動産、金など、その他の金融資産に入れ替えることである。未来が不安でリスクを回避するために現金を手元にそのままに置いた場合、大胆な金融政策の実施によって、合理的に行動しない国民は貧乏くじを引くリスク（可能性）が高まるというメッセージも政府は明確に伝えなければならない。
「物価目標２％」が政策決定されたが、そもそも何を「物価」の目標にしているかということも明確にする必要がある。通常、経済学者は食料及びエネルギーを除く「コア」の消費者物価指数を用い、物価水準の判断をする。しかし、生活者にとって最も重要なコストは食料やエネルギーである。目標２％としている「物価」とは、経済学的な数値なのか、国民の生活のコストなのか、議論を深めるべきである。
また財政政策については、これが機動的であることは重要で大歓迎である。トンネルの天井が落下する事故が象徴するように、５０年程前の高度成長時代に急速に整備された交通インフラの安全性の見直しは急務である。都市圏に直下型大震災が襲うことを「想定外」にしない財政出費は直ちに検討して実施すべきだと思う。
財政政策を通じて、大胆な未来投資で日本の経済社会の持続性が実現すれば、国民の益につながる。しかし、財政政策が社会の現状維持に留まるようでは、今の時代に生きるという私たちの「既得権益」にはつながるが、次世代の国民の益にはつながらず、逆に負を残してしまう。未来にわくわくする国民の益を射止める矢は「民間投資を喚起する成長戦略」しかない。
そして、この成長戦略には根源的にふたつの要素しかない。規制緩和によって国内社会の新陳代謝を高めること、そして、海外の成長を国内社会に取り込むことである。しかし、規制の存在は既得権益につながり、政治が既得権益に対抗することは特に選挙を控えている時期には難しい。一方、海外の成長は様々な地政学的なリスク要因があるために容易ではない。去年の中国との外交問題では被害が経済界に広まった。そして、先月のアルジェリアのテロ事件の悲劇によって、日本企業が今世紀に最も人口が増えて高度成長が期待できるアフリカへの進出を見直すという観測もある。
そういう意味で、経済が持続的に成長するためには人間の安全の保障が不可欠である。民主主義において政府の役目とは「国土」を守る安全保障に留まらず、「国民」を守る安全保障であるという議論を深めることが避けられない時代に日本は入った。前世紀の大戦争では国土を守るという大義のために計り知れないほど日本国民の益が損なわれた。その弊害を未だに、現在の日本人が引き継いでいる。また、平和が国民の益につながるという絵も描きやすい。ただ、手を後ろに自ら縛った状態で知らないふりをすることが日本国の信用を高める平和につながるとは思えない。
一方、安全保障が実現するには経済の持続的な成長という側面も必要である。戦後日本が平和主義で発展できたのは、高度成長がもたらした富を社会全体に循環させることができたからである。その平和的に発展した先進国である日本が、世界の途上国の良識的な市民の発展を支えることによって、彼らの関心と信用を日本に引き寄せるということは、極めて重要な外交安全保障戦略である。途上国の発展を支える開発援助やグローバルヘルス（世界保健）は人道支援という観点はもちろん重要だが、日本の持続的な経済的繁栄のために重要な未来投資であるという認識を日本社会で高めることが大切である。
（筆者は日本国際交流センター理事長、コモンズ投信株式会社会長。）
日本の持続的な経済発展を射止める矢とは「民間投資を喚起する成長戦略」であり、「大胆な金融政策」と「機動的な財政政策」は時間稼ぎに過ぎない。放った金融政策と財政政策の行方をきちんと見留めないとブーメランのように背後からノックアウトされてしまう可能性もある。
大胆な金融政策によってお金の量を増やすことは、そのお金の価値を下げる（物価を上げる）ことだ。安倍政権が誘導した金融政策の状況下で経済的そして合理的に正しい国民の行動とは、金融資産で過剰に保有している円現金の比率を下げて、株式、外貨、不動産、金など、その他の金融資産に入れ替えることである。未来が不安でリスクを回避するために現金を手元にそのままに置いた場合、大胆な金融政策の実施によって、合理的に行動しない国民は貧乏くじを引くリスク（可能性）が高まるというメッセージも政府は明確に伝えなければならない。
「物価目標２％」が政策決定されたが、そもそも何を「物価」の目標にしているかということも明確にする必要がある。通常、経済学者は食料及びエネルギーを除く「コア」の消費者物価指数を用い、物価水準の判断をする。しかし、生活者にとって最も重要なコストは食料やエネルギーである。目標２％としている「物価」とは、経済学的な数値なのか、国民の生活のコストなのか、議論を深めるべきである。
また財政政策については、これが機動的であることは重要で大歓迎である。トンネルの天井が落下する事故が象徴するように、５０年程前の高度成長時代に急速に整備された交通インフラの安全性の見直しは急務である。都市圏に直下型大震災が襲うことを「想定外」にしない財政出費は直ちに検討して実施すべきだと思う。
財政政策を通じて、大胆な未来投資で日本の経済社会の持続性が実現すれば、国民の益につながる。しかし、財政政策が社会の現状維持に留まるようでは、今の時代に生きるという私たちの「既得権益」にはつながるが、次世代の国民の益にはつながらず、逆に負を残してしまう。未来にわくわくする国民の益を射止める矢は「民間投資を喚起する成長戦略」しかない。
そして、この成長戦略には根源的にふたつの要素しかない。規制緩和によって国内社会の新陳代謝を高めること、そして、海外の成長を国内社会に取り込むことである。しかし、規制の存在は既得権益につながり、政治が既得権益に対抗することは特に選挙を控えている時期には難しい。一方、海外の成長は様々な地政学的なリスク要因があるために容易ではない。去年の中国との外交問題では被害が経済界に広まった。そして、先月のアルジェリアのテロ事件の悲劇によって、日本企業が今世紀に最も人口が増えて高度成長が期待できるアフリカへの進出を見直すという観測もある。
そういう意味で、経済が持続的に成長するためには人間の安全の保障が不可欠である。民主主義において政府の役目とは「国土」を守る安全保障に留まらず、「国民」を守る安全保障であるという議論を深めることが避けられない時代に日本は入った。前世紀の大戦争では国土を守るという大義のために計り知れないほど日本国民の益が損なわれた。その弊害を未だに、現在の日本人が引き継いでいる。また、平和が国民の益につながるという絵も描きやすい。ただ、手を後ろに自ら縛った状態で知らないふりをすることが日本国の信用を高める平和につながるとは思えない。
一方、安全保障が実現するには経済の持続的な成長という側面も必要である。戦後日本が平和主義で発展できたのは、高度成長がもたらした富を社会全体に循環させることができたからである。その平和的に発展した先進国である日本が、世界の途上国の良識的な市民の発展を支えることによって、彼らの関心と信用を日本に引き寄せるということは、極めて重要な外交安全保障戦略である。途上国の発展を支える開発援助やグローバルヘルス（世界保健）は人道支援という観点はもちろん重要だが、日本の持続的な経済的繁栄のために重要な未来投資であるという認識を日本社会で高めることが大切である。
（筆者は日本国際交流センター理事長、コモンズ投信株式会社会長。）
一般社団法人 日本英語交流連盟