10 months have passed since the first case of COVID-19 in Japan was confirmed, and half a year has passed since the end of the 1st state of emergency. Under the circumstances where none knows how long it would take for the pandemic to be over, and burden on health care professionals has not been small as yet. Nevertheless, the state of turmoil in early stage of the pandemic has been subsiding, and the unknown characteristics of coronavirus have been gradually revealed. Economic measures also have started to be bearing fruit.

According to the “Principal Figures of Financial Institutions (Preliminary Figures for September 2020),” announced by Bank of Japan on October 12, 2020, the growth rate of the total of “Loans and Discounts” made by the “major, regional, and shinkin banks” in September was 6.2% compared with September 2019, and was slightly lower than August 2020 that was the highest ever. Moreover, according to the data released by Japan Federation of Credit Guarantee Corporations, their balance of debt guaranteed as of the end of August 2020 reached 35,072.3 billion yen, increased by 69.8% from the previous year. However, the number and amount of new guarantee acceptances have been decreasing from the peak in June 2020. Although the amount of guarantee acceptances that exceeded 800% year-on-year during the period between May and June still remains at a high level, it decreased to 496.5% in August. Since July, both the number and the amount of payments in subrogation also decreased from last year (according to the results of a survey conducted by Japan Federation of Credit Guarantee Corporations). Some repayments have been processed and it can be said that the trend of total demand of funds has generally peaked out although there are differences among various industries. According to the data offered by TOKYO SHOKO RESEARCH, LTD., the number of bankruptcies of companies who had debt amount of more than 10 million yen from April to September 2020 was 3,853, 9.3% decrease compared to last year. This number was the smallest in the past 30 years, and the total debt amount was the second smallest ever.

On the other hand, the number of employees on leave, who are called “a reserve army of the unemployed,” reached 5.97 million in April 2020, which has been decreasing since then, and it was 2.16 million as of the end of this August. Under this circumstance, the deadline of the exceptional measures of employment adjustment subsidy, which will be December 2020, is approaching. The number of completely unemployed persons is 2.06 million and had been increasing for 7 months in a row. The completely unemployment rate increased to 3.0%, up by 0.1 points from the previous month. Regarding the subsidy for supporting rent of companies, where funds of 2 trillion yen were secured under the second supplementary budget, the number of provisions of subsidies by October 12 was 300,000 out of the 580,000 applications. Decline in companies’ repayment capacity due to the prolonged pandemic is something to be concerned. The situation where people managing small-sized businesses are stuck at their management, or not a few managers of companies lost their desire to continue their businesses and have decided to stop or close down their businesses, has been becoming serious. Is the support for small/medium-sized companies and people doing private businesses really adequate?

On October 20, the Ministry of Land, Infrastructure, Transport and Tourism announced that the total number of users of “GO TO Travel” campaign from July 22 (the start date) to the end of September was 25.18 million, and the total discounted amount in the same period reached 109.9 billion yen. Although I do not mention about my opinion on this campaign now because it was stated in the post released on July 30, it is just natural that a direct use of tax is followed by the same amount of discounts, and evaluation of effectiveness of public project is not achieved here at all. Not only positive impacts on the overall economy but also negative aspects such as further spread of infection, inequality of benefits, consistency with other political measures, or inappropriateness of period of carrying out the campaign, have to be reconsidered.

Now, before this “winter,” when the real “second wave” of the pandemic is coming, we need to review whether or not the political measures in the last 10 months were appropriate from both viewpoints of medical treatment and economy. Since the COVID-19 is new infectious disease that the whole world has been experiencing for the first time, any mistakes or failures occurred can be repaired after finding out the true problems or causes of the mistakes or failures. In order to prepare to cope with the prolonged pandemic, the government should disclose the grounds for decision upon conducting measures and processes of decision-making, and review on the social impacts caused by each measure and integration of every kind of scientific knowledge. Only after the achievement of these things, the “prospect” of impacts of the measures will be shared by the whole country.

This Week’s Focus, October 23
Takashi Mizukoshi, the President