Political Infighting Is Damaging Japan’s Massive Reconstruction Plan Just Like In 1923

Kanto Earthquake

[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Shimbashi_Station_after_Great_Kanto_earthquake.JPG”]

Political infighting in Japan is preventing progress on the design and funding of the country’s massive reconstruction strategy, in a situation eerily reminiscent of the 1923 Great Kanto quake, according to Deutsche Bank.Right now, Japan’s Prime Minister, Naoto Kan, is struggling to make progress on his rebuilding scheme. His political rivals don’t want to join in his plan, for fears they’ll be just seen as part of a coalition government. His own party members don’t want to be involved, because they still question his response to the disaster. And his own government is now acting out, with members making policy announcements without party approval.

Deutsche Bank analysts point to 1923 and the Great Kanto quake, where similar infighting stopped the progress of a rebuilding plan for Tokyo, and limited government spending.

From Deutsche Bank:

Unfortunately Goto’s grand scheme was gradually scaled back as time passed. One factor was disagreements between Goto, who was not closely affiliated with a political party, and active politicians (Diet members), political doyens (such as former prime ministers) and the Reconstruction Agency. He also faced widespread scrutiny, including from the public, concerning funding for the plan.


Moreover, the budget had to pass the Diet for the reconstruction plan to take concrete shape, and budgeting for the plan meant dealing with the Ministry of Finance (MoF). MoF’s top priority was to ensure that there was sufficient funding, so the size of the reconstruction scheme again had to be slashed.

The model plan presented by Goto at the Reconstruction Agency’s first meeting on 9 September was a vast ¥4.4bn, equivalent to 29.5% of nominal GDP. By the time of the final plan on 19 December, that figure had shriveled to ¥400m. Goto initially considered resigning as agency chief, but he stayed on and worked to do what he could within an inadequate budget. In the end, the final plan proved insufficient to buy land in affected areas or realise town demarcation.

Without political support, Kan could turn out like Goto, with his ambitious plan cut down in the face of debt concerns.

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