成長と財政再建 G20で首相が負った重い宿題

The Yomiuri Shimbun (Jul. 1, 2010)
G-20 meet leaves Kan with a difficult task
成長と財政再建 G20で首相が負った重い宿題(6月30日付・読売社説)

Industrialized countries and emerging economies alike have been shouldered with the two difficult tasks of maintaining economic growth while steadily promoting fiscal reconstruction.

The key point of the joint declaration adopted by leaders of the Group of 20 major developed and emerging countries in their meeting in Toronto was their agreement on carrying out "growth-friendly fiscal consolidation."

At the meeting, Prime Minister Naoto Kan explained Japan's new economic growth and fiscal management strategies, which were worked out shortly before the summit meeting, effectively making the strategies international pledges.

This means that Japan will have to simultaneously pursue two goals--playing a leading role in the world economy by achieving sustainable growth and realizing fiscal reconstruction that will be recognized by the market.

Starting now, Kan's competence in economic management will be put to the test.

The global economy at present is poised to leave behind the worldwide recession that began with the financial crisis sparked by the collapse of U.S. investment bank Lehman Brothers. However, the fiscal turmoil in Greece is slowing down a weakened Europe, leaving the global economy's future prospects uncertain.

The G-20 statement was correct in pointing out the need to "follow through on fiscal stimulus plans," based on such assessments.


Calls for debt reduction

The statement, on the other hand, stressed the need for countries burdened with heavy public debts to accelerate efforts to shore up their fiscal condition.

It was particularly significant that the statement presented numerical targets, saying "advanced economies have committed to at least halve deficits by 2013." However, the leaders took the extraordinary step of agreeing to treat Japan, which has by far the largest outstanding debt among industrialized countries, as an exception.

The G-20 meeting witnessed a sharp rift between European countries, which put priority on fiscal reconstruction, and the United States, which attaches importance to economic growth.

However, if countries adopt belt-tightening policies all at once, the risk of an economic slowdown will increase. For this reason, European nations and the United States are believed to have reached a compromise, saying "measures need to be put into action at the national level and tailored to individual countries' conditions" to restore their public finances.


A tight spot for Japan

But the decision has put Japan in a bind. Japan was left out of the fiscal reconstruction goals for Europe and the United States while at the same time it was subjected to calls to further expand its domestic demand as an economy with a current account surplus.

The upcoming House of Councillors election will be followed by discussions for the compilation of the fiscal 2011 budget. The government must expedite efforts to flesh out the so-called Kan strategy, which aims at realizing growth and tax hikes at the same time.

The revaluation of the Chinese yuan was another key item on the G-20 agenda. Though the declaration did not single out the yuan by name and simply called for greater exchange rate flexibility in some emerging markets, China is certain to be asked to approve the yuan's rise against other currencies.

The G-20 summit meeting once again exposed the difficulty of putting together opinions on themes about which participating countries have sharply conflicting interests.

Japan should draw up clear strategies on how to make effective use of the Group of Eight and the G-20 meetings.

(From The Yomiuri Shimbun, June 30, 2010)
(2010年6月30日01時57分 読売新聞)

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