U.S. economist Thurow calls for more stimulus measures in Japan+

TOKYO, June 25 Kyodo -
Prominent U.S. economist Lester Thurow urged Japan on Friday to focus more on
economic stimulus measures although discussions on a consumption tax hike are
gathering steam in the country ahead of the House of Councillors election next
month.
While assuring that the global economy is on a recovery, he was skeptical of
the significance of the upcoming meeting between the leaders of the Group of 20
major economies in Canada to discuss economic issues.
Speaking in an interview with Kyodo News in Tokyo, Thurow, 72, professor
emeritus at the Massachusetts Institute of Technology Sloan School of
Management, said he would recommend that Japan ''stimulate, stimulate,
stimulate'' and ''print all the money you can print'' to engineer its economy
to a recovery.
''If you raise taxes and cut spending, your recession would get worse,'' he added.
As part of efforts to tackle Japan's massive debts, Prime Minister Naoto Kan
has floated the idea of doubling the sales tax rate to around 10 percent ahead
of the upper house election on July 11.
Thurow also blasted the Japanese government for ''being stupid'' for failing to
bring the country out of its sluggishness for a long time, noting that it did
not stimulate the economy in a ''sensible way.''
''Japan needs a lot of infrastructure...in the urban areas,'' he said,
referring to the fact that Narita International Airport is 60 kilometers from
Tokyo's city center as an example of the lack of infrastructure in city areas
in Japan.
On the two-day G-20 summit meeting to start from Saturday, during which fiscal
consolidation, and sustainable and balanced growth are expected to be among the
issues to be discussed, Thurow said it is ''not a decision-making event.''
''Big numbers mean you can't decide anything...no important decisions would be
made,'' he said.
He also speculated that the ''real'' intention behind the Chinese central
bank's recent announcement to ensure greater flexibility in the yuan's exchange
rate was to get the Chinese currency issue off the agenda of the G-20 meeting.
''Nobody wants to be the subject of conversation to G-20,'' he said.
As for the rate, Thurow said that ''It's got to be a lot higher'' than it is
from now.
The yuan rose to a five-year high against the U.S. dollar in Shanghai on Friday
for the third straight day of advance.
Meanwhile, when asked about Japan's intention to rely on China to fuel its own
growth, Thurow hinted that Tokyo's first step should be ''apologizing'' to
China over its wartime atrocities.
''Think about Germany and France. You wouldn't have the European Union if the
Germans hadn't've apologized to the French for invading them,'' he said.
Thurow was visiting Japan to deliver a speech for an event related to the MIT
Sloan School of Management.
==Kyodo
2010-06-25 21:28:22


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