Archive

Reuters blog archive

from Anatole Kaletsky:

Learning budget lessons from Japan and Britain

While the world is transfixed by the U.S. budget paralysis, fiscal policies have been moving in several other countries, most notably in Japan and Britain, with lessons for Washington and for other governments all over the world.

Let's start with the bad news: Shinzo Abe’s decision to increase consumption taxes from 5 to 8 percent next April. This massive tax hike, to be followed by another increase in 2015, threatens to strangle Japan’s consumer-led growth from next year onwards, since Abe looks unlikely to offset this massive fiscal tightening with stimulative measures that would maintain consumers’ spending power. Even if Abe delivers on his vague promise to compensate with business tax reductions, these will only aggravate the over-investment and corporate cash hoarding that have long distorted the Japanese economy. Meanwhile, the government’s willingness to risk economic recovery in the cause of fiscal discipline implies that those of us who believed Abe was making an unconditional commitment to do whatever it takes to achieve economic recovery were simply wrong. Now that the forces of budgetary austerity have reasserted themselves, Japan’s probability of ending its decades of stagnation is much reduced.

Now for the good news: a change of attitude to debt and borrowing is transforming Britain from the second-weakest G7 economy (after Italy) into a world champion of growth. As recently as last April, the British government was attacked by the International Monetary Fund’s chief economist for “playing with fire” by trying too hard to reduce its budget deficits. This week the IMF World Economic Outlook praised Britain’s rapidly improving economy and upgraded 2013 growth projections by 0.5 percentage points, to 1.4 percent. That may not sound like much, but this improvement comes when almost every economy is being downgraded -- and compared with last year’s miserable 0.2 percent growth rate, it feels almost like a boom.

Does this experience prove that David Cameron was right to persist with his unprecedented program of spending cuts, tax hikes and fiscal austerity? The answer is no, for two reasons.

from Breakingviews:

Three taboo-breaking deals offer hope for Japan

By Peter Thal Larsen
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Japan Inc is breaking some deep-rooted taboos. The country’s corporate establishment has long frowned on companies that succumb to foreign takeovers, offload non-core businesses, or leverage up for acquisitions. Three recent M&A deals suggest these strictures are no longer so tight. A freer form of capitalism may be taking hold in the land of the rising sun.

from Environment Forum:

Disasterology 4: Disaster Candy in Japan


For survivors of Superstorm Sandy in the U.S. Northeast, the Sendai tsunami in Japan and the massive earthquake in Chengdu, China, the scars of disaster are still palpable. I’m part of a group of journalists brought together by the East-West Center in Hawaii to see how the people and environments hit by these catastrophes are faring, one year,  two years and five years later. We began our tour on Sept. 29. Here are the other posts in the series:

A fair featuring cartoon frogs and rhinos, baskets of toys to trade and hands-on crafts might sound like the answer to a parent’s prayer on a rainy weekend. But this was a fair with a difference: the annual Bo-Sai Expo in Tokyo, an event meant to prepare young families for disaster.

from Environment Forum:

Disasterology 3: Learning to shout after the Fukushima disaster

For survivors of Superstorm Sandy in the U.S. Northeast, the Sendai tsunami in Japan and the massive earthquake in Chengdu, China, the scars of disaster are still palpable. I’m part of a group of journalists brought together by the East-West Center in Hawaii to see how the people and environments hit by these catastrophes are faring, one year,  two years and five years later. We began our tour on Sept. 29. Here are the other posts in the series:

On the afternoon of March 3, 2011, Japan’s public television network NHK was broadcasting a session of parliament live when warning chimes and a bulletin flashed across screens: “This is an earthquake early warning,” an announcer said. “Beware of a strong earthquake … The Tokyo studio is shaking right now.” When the picture switched to the studio, the announcer continued to speak in a calm voice. This was common practice, meant to avoid causing panic.

from Photographers' Blog:

The samurai and survivors of Fukushima

Fukushima, Japan

By Damir Sagolj

Shortly after the mandatory evacuation was announced on television, Fumio Okubo put on his best clothes and his daughter-in-law served up his favorite dinner. By morning, the 102-year-old was dead. He had hanged himself before dawn.

GALLERY: BROKEN LIVES OF FUKUSHIMA

A rope knitted from plastic bags is certainly not a tanto knife. Nor was his death a dramatic one, with the public in attendance and blood all around but what an old farmer did that morning recalls the act of a samurai in ancient times - to die with honor. Okubo, who was born and lived his entire life between Iitate's rice fields and cedar trees, wanted to die in his beautiful village, here and nowhere else.

from Full Focus:

Broken lives of Fukushima

Damir Sagolj, who covered the impact of the 2011 Sendai tsunami and the following Fukushima disaster returned to the region to document the lives of people who were impacted by the tragedy. Read Damir's personal account of what he witnessed inside the evacuation zone here.

from Breakingviews:

Tokyo Electron takeover is no template for Japan

By Una Galani
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Foreign acquirers have long-struggled to make headway in Japan. That makes Applied Material’s recent takeover of Tokyo Electron an interesting case study. The U.S. tech firm wooed its smaller rival with an all-stock merger and the promise of shared governance. However, the model may not work so easily elsewhere.

from Breakingviews:

An Abenomics lesson on politics for Uncle Sam

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Two years ago, there was no gloomier place than Japan. The country was recovering from the horrific devastation of the Fukushima earthquake and tsunami. Fearful of radiation poisoning, Tokyoites were purchasing Geiger counters and eschewing vegetables. The government was a thicket of finger-pointing, evasion and paralysis.

from Breakingviews:

Bond-buying helps Japan’s banks more than economy

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Bank of Japan’s bond-buying is proving to be more of a blessing for the country’s lenders than for the deflation-stricken economy. The central bank’s spending spree has allowed lenders to offload 12 percent of their holdings of government debt this year.

from Breakingviews:

M&A diplomacy features in $29 bln tech deal

By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Applied Materials and Tokyo Electron have showcased M&A diplomacy in their $29 billion deal. The U.S.-based producer of semiconductor-making equipment heeded local sensitivities and ceded governance duties in the proposed acquisition of its Japanese rival. At the same time, most of the financial benefits will accrue to its own shareholders. The merger is a delicate inauguration of Abenomics-style corporate reform.

  •