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On January 21, in the Committee on Budget in the House of Representatives, DPJ Diet member Banri Kaieda questioned ministers about the measures directed at small and medium sized enterprises (SMEs) in the “Emergency Economic Countermeasures for Future Growth and Security”, the amount of government bonds issued in fiscal 2009 and the conclusion of EPAs with a view toward the creation of an East Asian Community.
Kaieda said that the Japanese economy “had gradually started to make a recovery from last March while still under the previous administration, and though there had been a change of government the direction toward economic recovery had basically continued.” He asked METI Minister Masayuki Naoshima about the government’s proposed measures for SMEs saying, “SMEs and individuals however, have not yet warmed up. The role of this second supplementary budget is to find ways through which politics can invigorate and support these individuals and SMEs.”
Naoshima responded by introducing the following two policies intended to assist the financial situation of such SMEs: 1) employing the loan safety net system of the Japan Finance Corporation and others and the safety net guarantees of the National Federation of Credit Guarantee Corporations, and 2) as a emergency guarantee system responding to the economic climate, extending emergency loan guarantees until March of this year, thereby further expanding the guarantee system.
Furthermore, Naoshima stated that “avoiding chain reaction bankruptcies” was extremely important. He expressed the intention of submitting legislation that would raise the limits on loans made as assistance measures by the Organization for Small and Medium Enterprises and Regional Innovation as part of the mutual relief system for the prevention of bankruptcies of SMEs, as well as expanding the target for such loans. He added, “I am hoping to do as much as possible to assist SMEs.”
Following this, Kaieda questioned Minister of Finance Naoto Kan regarding the shortfall in tax revenues and the amount of government bonds to be issued, commenting that the huge issue of 53.455 trillion yens’ worth of government bonds for fiscal 2009 had been described as inevitable, but pointing out that “What is important is not to try to pin the blame [on either the current or previous administration] but to fully appreciate the weight of this 53.455 trillion yen.”
Finally, Kaieda pointed out that having incorporated Asia’s growth into Japan’s domestic demand at large, Japan needed to enhance ties with ASEAN plus three as well as with individual Asian countries, and asked Minister for Foreign Affairs Katsuya Okada about the current status of EPA negotiations with India, Australia and the Republic of Korea.
Okada expressed the opinion that Japan “is lagging a long way behind in the conclusion of EPAs” and pointed out that the reason for this was within government ministries “rather than thinking of the great merits that would accrue to the nation as a whole with the conclusion of EPAs, when it came to the level of the people responsible at the various ministries, they each felt that they had to protect the interests of their respective institutions.” He explained that an EPA/WTO cabinet committee had been established and regular meetings were being held, and added, “From now on we intend to proceed with political control, making clear what issues there are with the various negotiations, and I would like us to make efforts toward concluding EPAs as soon as possible.”
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