Japan pursues a policy In the late 1980s and 1990s Japan spent 2.89 trillion yen to build 15 major bridges between the islands of Honshu and Shikoku, and the project was intended to stimulate the faltering economy, but fees from low-use bridges were lower than the interest bill on construction debt.
Japan pursues a policy
Although the “Honshu and Shikoku” project is far from the worst abuses of that era, it symbolizes the construction of bridges by Japan, which left a legacy of public debt.
The Financial Times reported that such mega projects are outdated, but when Prime Minister Shinzo Abe launched another fiscal stimulus last week, 7 years after pledging to revive the economy and avoid deflation, public business began to return again.
This highlights a challenge for countries like Japan that want to take advantage of extremely low interest rates to boost their economy through easy borrowing and finding good ways to spend money.
This comes at a time when Japanese growth is already slowing down due to the trade war between the United States and China and the recent rise in consumption tax, but Abe advisors fear that these measures will stop completely after the “Tokyo Olympics 2020”.
With the Bank of Japan unable to act fundamentally, the government’s only resort is the fiscal stimulus, with an asset package of 13.2 trillion yen, which is equivalent to $ 121 billion, in reconstruction (SE: 4220) disasters, infrastructure and scientific research.
The newspaper pointed out that the stimulus measures will boost the economy’s growth by 1.4 percentage points.
The measures come in light of increasing awareness around the world about the need for more government assistance to maintain the growth of economies in light of the global slowdown.
The government launched similar-sized incentives after the country’s slowdown in 2016 and there are smaller supplementary budgets issued each year.
However, all of this comes at a time when growth has been relatively strong as additional channels of public spending have become a standard tool for managing the economy.
Harumi Taguchi, an economist at IHMarket in Tokyo, said that with domestic demand stagnating, the government felt obliged to intervene.
Also noteworthy is the revival of the Abe government, for the so-called financial investment program and loans that were the administrative engine that built the original bridges in the past.
Bridges were created in the early years of Japan’s industrialization and the government collected deposits from the banking system and reserves from the National Retirement Fund, to provide loans at low-interest rates to finance public works.
In 2001, the government-funded the loan program through the issuance of regular government bonds, but it has now declined from a peak of more than 40 trillion yen in mid-1990 to about 10 trillion yen today.
From the point of view of politicians, the advantage of the loan program is that it allows spending without taxing because it funds projects such as bridges that theoretically can earn money to pay off debts.
The importance of the feasibility study report
The importance of the feasibility study report, if you have some experience with feasibility studies, you may know that this report is very important
It greatly helps to get the most professionalism and success in the project that you are thinking of,
It is also often the responsibility of the project manager to control the writing of the report and it is comprehensive for all aspects of the project.
The importance of writing the report is to provide legal and technical evidence of project vitality, sustainability, cost-effectiveness, and project success
And obtaining profits, it also allows the process of preparing reports for higher management
In order to obtain the necessary information needed to make major decisions regarding budget preparation and investment planning,
Therefore, we will provide you with some important information on the importance of the feasibility study report.