A contradiction in the fact that the number of bankruptcies has fallen despite the Corona recession: Is it true that the Corona disaster is hurting small businesses?(Part 2 of 2)
1. The Liberal Democratic Party (LDP) government, led by Prime Minister Fumio Kishida, is planning to reduce the number of bankruptcies even in the face of the Corona recession, which has been hit by the sixth wave of the Omicron stock market. The political and economic contradictions that overly favor small, medium and micro businesses will lead to a terrible end for Japan.
2. The Omicron Corona disaster is supposed to be a bad business environment, but small and medium-sized companies have not gone bankrupt as much as expected. This inexplicable phenomenon suggests that the LDP government, led by Prime Minister Fumio Kishida, is determined not to let companies go under.
3. The LDP's measures to deal with Corona have been a series of laggards and afterthoughts, but surprisingly, the government has been reasonably quick to provide compensation to small and medium-sized enterprises. For example, there is an interest-free and virtually unsecured aid package. Financial institutions are naturally very willing to lend, as the state bears the risk.
4. Undoubtedly, the support measures will be continued in order to avoid an increase in the number of bankruptcies caused by the end of the support measures. In addition, the current government is expected to provide support for business restructuring. If this happens, it will be impossible to retain jobs.
5. The Japanese government, led by Prime Minister Fumio Kishida, has a tendency to maintain a political stance of protecting the livelihoods of individuals through businesses, and seems to have little interest in providing direct assistance to individuals.
6. According to the Ministry of Health, Labour and Welfare's FY 2020 Survey of Persons Receiving Public Assistance, the number of households receiving public assistance is 1,616,884 and the number of persons receiving public assistance is 2,026,730, a figure that has continued to decline slightly since 2015. The reason for this is not that support has been improved, but that (1) the hurdles to applying are both systemic and psychologically high, and (2) many people are reluctant to apply because of the negative image of welfare.
7. Because of this generous treatment of small, medium and micro enterprises (SMEs), corporate efforts to improve productivity will be put on the back burner, further contributing to Japan's low growth in recent years.
8. If the current situation of lukewarm treatment of micro, small and medium-sized enterprises (MSMEs) continues, Japan will fall further behind the rest of the world and become increasingly Galapagosised. Government support should be directed to individuals, not to small and medium-sized enterprises.
Dr. Kazusho Kamuro, Associate Professor of Physics, California Institute of Technology, USA
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