Go To tourism drive ‘ill-timed’

JAPAN’S multibillion-dollar campaign aimed at reviving domestic tourism is ill-timed and not the best use of taxpayer money, said Yutaka Harada, a former central bank board member and vocal advocate of premier Shinzo Abe’s “Abenomics” policies.

Harada, who served on the Bank of Japan’s board until March, said that the central bank had taken sufficient steps to cushion the pandemic’s immediate blow to the economy, and that fiscal policy must now take a lead role in supporting growth.

“I’m not sure whether fiscal policy is doing the job right,” he said yesterday, criticising Abe’s $16 billion (R276bn) “Go To” tourism campaign to promote travel across the country.

“The purpose may have been to engineer a ‘V-shaped’ economic recovery once the pandemic is contained. By launching this campaign now, it risks causing a ‘V-shaped’ rebound, not just in the number of tourists but that of infections,” he said.

The campaign was launched to rescue Japan’s tourism industry, which has been hit hard as the coronavirus keeps foreign visitors at home.

Abe excluded Tokyo from the programme as record numbers of infections in the capital sparked concern it could spread to other areas.

If further monetary easing was needed, the central bank could ramp up bond buying or cut interest rates, including pushing short-term rates deeper into negative territory, Harada said.