Japan should weigh safety net for pandemic-hit organizations, says Suga aide
06 December, 2020
Japan should think about creating a safety net for companies that might need help surviving the reach from the coronavirus pandemic, such as airlines and transportation organizations, said Heizo Takenaka, a good close aide to premier Yoshihide Suga.
THE LENDER of Japan (BOJ) also might need to support financial institutions if indeed they suffer huge losses from big bailouts, said Takenaka, who as monetary minister battled Japan's domestic banking crisis in the past due 1990s.
But he was wary of the theory, floated by some analysts, that the BOJ should directly inject capital into such ailing organizations, arguing the central lender is already dealing with private risk by investing in massive levels of exchange-traded funds (ETF).
"The key reason why we haven't seen a sharp rise in corporate bankruptcies and work losses is that steps taken by the BOJ and the federal government have proved effective in mitigating the instant destruction," Takenaka told Reuter.
"But we can not continue these methods forever," Takenaka said. "There should be discussion on creating a framework like the Industrial Revitalization Company of Japan."
The Industrial Revitalisation Corporation of Japan was a semi-government investment fund that invested in troubled companies between 2003 and 2007. Takenaka dished up as overall economy minister at that time when the fund was proven.
Takenaka, a member of a panel overseeing the government's growth approach, explained Japan must create rules so that decisions which corporations to rescue are not political or arbitrary.
"It really is hard to pull a line which companies are thought as infrastructure firms," he said, on cell phone calls from some lawmakers for the government to rescue organizations involved in infrastructure that's key to society.
"Major transportation corporations could be thought as such. But it's hard to pull such a brand for manufacturers."
Airlines have already been among industries hit hardest by the coronavirus pandemic. Some lawmakers possess floated the thought of merging Japan's two most important airlines - ANA Holdings and Japan Airlines Co Ltd (JAL).
Takaneka said intensifying global competition has recently forced many airlines to consolidate but that merging Japan's two key airlines was not a straightforward matter since competition was first essential for domestic routes.
"For example, it'll be desirable for JAL to covers household flights and international flights to neighboring areas such as for example to Seoul and Taipei, while ANA to go over long-distance international flights."
Takenaka also serves seeing that a good chairman of staffing agency Pasona Group Inc, which is a founding member of an exclusive non-profit called Service Design whose role in a good troubled roll-out of coronavirus subsidies came under scrutiny found in the summer.
Lawmakers and critics questioned how taxpayer cash was spent under a good complex subcontracting scheme, and whether a little non-profit was a entrance that could protect its founder corporations, which also include powerful advertising agency Dentsu Inc, from general public scrutiny.
In response to the outcry, both Dentsu, which is part of Dentsu Group Inc, and the Ministry of Economy, Trade and Industry (METI) introduced internal review articles of their procurement practices.
Source: japantoday.com
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