The word "Corona-ka (coronavirus crisis)" that has become very familiar by now began to be used in mid-February last year. People say that the word originally came from sports newspapers and tabloid evening newspapers. Around that time, the first meeting of the "Expert panel" was held on February 16, followed by Tokyo governor’s request of cancellation of any large-scale events on February 21. In fact, it was about time to realize that the spread of infection could not be ignored anymore as a "fire on the opposite bank.” By the way, I’m quite uncomfortable with the nuance of the word "Corona-ka." I don't want to take this word because it is too undefined and sounds too much like someone else’s affair. Nevertheless, the word is often used to imply you yourself are involved in the crisis. Obviously, it is a convenient word, a catchy compound that collectively refers to the social crisis and economic loss caused by the pandemic. As a matter of fact, every one of the companies and individuals is struggling all the time with "crisis" in their businesses and everyday lives. In short, discomfort I have felt from this word may be derived from my distaste for being lumped together under the heading of "crisis".

Leaving that aside, the long-lasting “coronavirus crisis” is beginning to erode the foundation of Japanese economy across all industries. The number of companies that closed down/suspended operation reached a record high of some 50,000 in 2020 (Tokyo Shoko Research Ltd.). As of November 2020, the number of self-employed workers who temporarily closed their business was 260,000, showing an increasing trend again from 230,000 in the previous month (Ministry of Internal Affairs and Communications). I’m concerned about the difficulty for them to restart their business under the ongoing state of emergency. On the contrary, large companies are getting to be deprived of their basic strength. A report says that a total number of voluntary retirement offers made by listed companies exceeded 20,000. Besides, the new finance approvals under the Special Credit Guarantee Program remained at a high level of some 90,000 cases in November, which was 167% over the previous year. Also, outstanding guaranteed liabilities rose to 39 trillion yen (189% year-on-year)  (Japan Federation of Credit Guarantee Corporations).

Essential logistics, as the lifeblood for businesses confronting the “coronavirus crisis,” include funds for investment to facilitate structural reforms, bridge finance to get out of the current hardship and a safety net as a life security until full recovery. Immediate actions need to be taken by simplifying and expanding these supportive measures systematically, and I hope at the same time that the government discloses a grand vision to bring the pandemic to an end. If the overall idea of medical policies as well as various supportive measures are presented on a timeline chart for the purpose of termination of infection, we can focus on our “present” standpoint about how long the request for the business-hour shortening needs to last; when the voluntary ban on outings is lifted; and how much longer we should be patient with the hardship. If the anxiety for future uncertainty is cleared away, which is our most fundamental hope, we can gain enough strength to survive.

Japan’s national and local debt balance has reached 1,200 trillion yen, which is twice the size of the GDP. The PB (primary balance) deficit is projected to drastically increase to 69.4 trillion yen in FY2020 from 14.6 trillion yen in the previous year. Evidently, Japan is in the midst of financial difficulties. Well then, think back on the unusualness of the recent US presidential election. Things went something like this; some people who feel themselves being left out of the wealth or left behind by the society band together generating a certain power, and coincidentally an authoritative leader shows up and manipulates conspiracy theories and fake news. Subsequently, what we saw was the fragile democracy that would easily fall into crisis all of a sudden. Although it may have been hard sometimes to imagine the wartime atmosphere in Germany in the 1930s, we can now feel the reality of the era when we witnessed the U.S. election turmoil almost in a simultaneous manner.

A small matter will lead to a big loss. This means “Suffer a great loss as a result of a small matter" and we should keep this caution in mind. Needless to say, financial discipline is not a "small" matter, however, if the base of a free society collapsed, it would bring nothing but a total loss. I can say that termination of infection, livelihood support, and economic reconstruction are inextricably linked together. That’s why coherent and definitive policies are eagerly wanted. We will continue making efforts to overcome the "coronavirus crisis" with confidence that we can achieve a dramatic recovery when the pandemic disaster came to a close.

This Week’s Focus, January 29

Takashi Mizukoshi, the President