International Policy Forum - 2 April 2020

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International Policy Forum - 2 April 2020
International Policy Forum
2 April 2020
International Policy Forum - 2 April 2020
COVID-19 in Japan

 Cumulative number of confirmed                                                                                    Number of confirmed deaths                                                                                       Number of confirmed cases per
 cases (as of 10:30am 1 April)                                                                                     (as of 10:30 am 1 April) excluding                                                                               day (as of 10:30 am 1 April)
 excluding the Diamond Princess                                                                                    the Diamond Princess)

                                                                         2233                                                                                                                                     66                                                                                                       234
         Cumulative number of confirmed
                                                                                                                             Cumulative number of deaths                                                                                       Number of confirmed cases per
               cases and deaths
                                                                                                                                (as of 10:30am 1 April)                                                                                           day (as of 10:30 1 April)
               (as of 10:30 April)
2500                                                                                                          200                                                                                                                   300

                                                                                                              180
                                                                                                                                                                                                                                    250
2000                                                                                                          160

                                                                                                              140
                                                                                                                                                                                                                                    200
1500                                                                                                          120

                                                                                                              100                                                                                                                   150

1000                                                                                                               80
                                                                                                                                                                                                                                    100
                                                                                                                   60

500                                                                                                                40
                                                                                                                                                                                                                                    50
                                                                                                                   20

  0                                                                                                                 0                                                                                                                0

                                                                                                                                                                                                                                          06-Feb
                                                                                                                                                                                                                                                   11-Feb
                                                                                                                                                                                                                                                            16-Feb
                                                                                                                                                                                                                                                                     21-Feb
                                                                                                                                                                                                                                                                              26-Feb

                                                                                                                                                                                                                                                                                                                                             01-Apr
                                                                                                          01-Apr
       06-Feb
                11-Feb
                         16-Feb
                                  21-Feb
                                           26-Feb

                                                                                                                                                                                                                                                                                       02-Mar
                                                                                                                                                                                                                                                                                                07-Mar
                                                                                                                                                                                                                                                                                                         12-Mar
                                                                                                                                                                                                                                                                                                                  17-Mar
                                                                                                                                                                                                                                                                                                                           22-Mar
                                                                                                                                                                                                                                                                                                                                    27-Mar
                                                    02-Mar
                                                             07-Mar
                                                                      12-Mar
                                                                               17-Mar
                                                                                        22-Mar
                                                                                                 27-Mar

                                                                                                                                                                                                                           01-Apr
                                                                                                                        06-Feb
                                                                                                                                 11-Feb
                                                                                                                                          16-Feb
                                                                                                                                                   21-Feb
                                                                                                                                                            26-Feb
                                                                                                                                                                     02-Mar
                                                                                                                                                                              07-Mar
                                                                                                                                                                                       12-Mar
                                                                                                                                                                                                17-Mar
                                                                                                                                                                                                         22-Mar
                                                                                                                                                                                                                  27-Mar

                                       Deaths                 Cases
International Policy Forum - 2 April 2020
Confirmed cases by prefecture
                            (as of 10:30am 1 April)

                                                         The cumulative number of confirmed
                                                                 cases by prefecture
                                                              (top 10) (as of 10:30 1 April)

101-                                                  Tokyo

51-100
                                                      Osaka
41-50
31-40
                                                       Aichi
21-30
11-20                                            Hokkaido
1-10
No reported cases                                     Chiba

                                                      Hyogo

                                               Kanagawa

                                                 Saitama

                                                      Kyoto

                                                 Fukuoka

                                                               0   100   200   300   400   500   600
International Policy Forum - 2 April 2020
Government’s response to COVID-19 outbreak
Jan   16 Jan      Index case confirmed in Japan
      27 Jan      COVID-19 categorised as designated infectious disease
      29 Jan      First government charter flight from Wuhan to Tokyo
      30 Jan      Novel Coronavirus Response Headquarters established in PM’s Office

Feb   5 Feb       Diamond Princess put under quarantine in Yokohama using Quarantine Act
      13 Feb      First emergency economic package unveiled
                  First death from COVID-19 confirmed
      24 Feb      Government Expert Panel “next 2 weeks critically important”
      26 Feb      Calls on event organisers to cancel, postpone or downsize events
      27 Feb      Request schools to shut down (end of spring recess in April)
      29 Feb      PM Abe’s first press conference on COVID-19 outbreak

Mar   9 Mar       Quarantine requested of visitors from mainland China and South Korea
      10 Mar      Second emergency economic package unveiled
      13 Mar      Diet approves law granting PM power to declare state of emergency
      19 Mar      Expert Panel says policies having an effect and schools can be re-opened
      24 Mar      PM agrees with IOC to postpone 2020 Tokyo Olympics
      25 Mar      Tokyo Governor Koike: “Tokyo in critical phase entering explosion in infections”
      27 Mar      Imposes entry ban on 21 European countries and Iran
      28 Mar      Government agrees Basic Action Guidelines on COVID-19 countermeasures
      28-29 Mar   Greater Tokyo Area, Osaka and Fukuoka governors ask residents to stay home for 2 days
      31 March     LDP’s policy proposal on economic measures
Economic stimulus measures
First Package (13 February): ¥15.3 billion

   •   Strengthening border controls to minimise spread of the virus

   •   Development of vaccines and virus test kits

   •   Support for returnees from Wuhan

   •   ¥500 billion of low-interest loans for SMEs impacted by the virus

Second Package (10 March): ¥430 billion + ¥1.6 trillion low-interest loans for SMEs

   •   Subsidies for working parents who had to miss work to care for their children

   •   Small emergency loans to individuals facing income decline due to the virus

   •   Subsidies for the self-employed

   •   Interest-free loans for SMEs whose sales declined, (at least 15-20%);

   •   Cash flow support for businesses in the tourism industry
Upcoming third economic stimulus package

• Projected to be worth around ¥60 trillion (>10% of Japan’s GDP), including ¥20 trillion in
  fiscal measures

• Expected to be approved by the LDP on 6 April and the Cabinet on 7 April – possible
  passage by the Diet before the Golden Week holiday in early May

• More than ¥10 trillion (equivalent to a 5-percentage point cut in the consumption tax rate)
  to be handed out as a combination of cash, subsidies and vouchers:

    o Includes cash handouts for households facing a sharp loss of income and for small
       businesses and sole proprietors whose sales have plummeted

    o Expands scope of a 12-month grace period for corporate tax payments by SMEs
       affected by fallout from the pandemic

    o Large number of financial support measures for SMEs suffering from or expecting to
       suffer from COVID-19

    o Each ministry collecting and negotiating measures with the Ministry of Finance

    o LDP also putting forward recommendations of measures to be taken for each sector
Content of third emergency response package
  Examples of measures suggested by the LDP

• Secure screening and systems for medical provision
• International cooperation to enhance vaccine development and therapeutic disciplines
• Promote crisis management using artificial intelligence and data infrastructure – e-
  government solutions, individual number cards, telecommuting and remote education

• Expand broadcasting content globally via cooperation with foreign broadcasters to
  increase awareness of Japan’s response and promote Japan as a tourist destination

• Launch a one-stop web platform service to summarise and proactively disseminate
  information to the international community about Japan’s response

• Issue food vouchers to promote local produce and travel vouchers for post-crisis travel
• Support for the entertainment industry by subsidising large-scale live and sporting events
• Subsidies and/or tax relief to liqueur manufactures
• Etc. etc.
If government declares state of emergency…

                   Main measures governors will be able to execute

  Request residents to refrain from going out         Expropriate or request the sale of specified
  other than when urgent and unavoidable                 goods with the owners’ prior consent

 Request or issue instructions on restrictions on     Request or issue instructions on designated
the use of school buildings, childcare facilities,     sellers of medical products to distribute
  entertainment establishments, events, etc.              medical products and equipment

                                                     Conduct surveys and surveillance to prevent
 Use land or buildings to open temporary             rise in prices of daily necessities. Request that
medical facilities to ensure medical provision       relevant business associations stabilise prices
                                                                     of daily necessities

                                                     Extend end-dates on administrative rights and
Request/instruct designated transport business
                                                        interests. Secure finance for emergency
  operators to transport emergency supplies
                                                       situations from public financial institutions
Political implications of the crisis
The public response
    47% now believe the government is handling it well                          90% are strongly or somewhat concerned about the impact
    (as of 27-29 March)                                                         of COVID-19 on Japan’s economy (as of 10 March)
           Public response to the government’s handling of the crisis             Concerns regarding the impact of the coronavirus on
                              (as of 27-29 March)                                           Japanese economy (10 March)
                                                                                         4%
                                                                                    1%
    21-23                                                                                                                   Strongly concerned
     Feb                     40                        50                                      5%
                                                                                                                            Concerned to some
                                                                                                                            degree

                                                                                                                            Not concerned very
                                                                                      30%                                   much
    27-29
     Mar                      47                         44
                                                                                                               60%          Not concerned at all

               0           20           40          60           80       100                                               Other
                         Believe the government is handling well
                         Do not believe the government is handling well

                    Residents in Tokyo, Kanagawa, Chiba,                           Views on priority economic countermeasures
                   Saitama, and Yamanashi (27-29 March)
                                                                                                                             Support for households
                                                                                                    5%
February                 43                       56                                        14%                              Management of
                                                                                                                34%          employment stability

                                                                                                                             Support for financing of
                                                                                                                             companies
  March                            83                         15
                                                                                         19%
                                                                                                                             Consumption stimulus

           0            20         40        60         80         100    120
                                                                                                                             Other
                       Refraining from going outside homes than usual
                                                                                                      28%
                       Going outside homes as usual
0
                  10
                       20
                                           30
                                                40
                                                     50
                                                                60
                                                                              70
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
                                                                 Favourable

                            Unfavourable
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
                                                                                                                                                       Abe Cabinet approval ratings

Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
                                                                                   Increasing favourable ratings and decreasing unfavourable ratings

Jan-19
Apr-19
             17

Jul-19
                                                             March 2020

Oct-19
                                                           Favourable: 43%
                                                          Unfavourable: 41%

Jan-20
Apr-20
10
                                                                         15
                                                                              20
                                                                                   25
                                                                                        30
                                                                                             35
                                                                                                  40
                                                                                                       45
                                                                                                               50

                                                            0
                                                                5
                                                  Jan-13
                                                  Apr-13
                                                   Jul-13

                                        LDP

SDP
                                                  Oct-13

                              Komeito
                                                  Jan-14
                                                  Apr-14
                                                   Jul-14
                                                  Oct-14
                                                  Jan-15
                                                  Apr-15
                                                   Jul-15
                                                  Oct-15

                              JCP
                                                  Jan-16
                                                                                                                    Political party support rates

                                                  Apr-16

                                        DP→DPFP
                                                   Jul-16
                                                  Oct-16

Reiwa Shinsengumi
                                                  Jan-17
                                                  Apr-17
                                                   Jul-17
                                                  Oct-17
                              JIP

                                                  Jan-18
                                        CDP

                                                  Apr-18
                                                   Jul-18
                                                  Oct-18
                                                  Jan-19
                                                  Apr-19
                                                                                                         36.5%

                                                   Jul-19
                                                                                                       March 2020

Guard the national from NHK

                                                  Oct-19
                                                  Jan-20
11

                                                  Apr-20
Upcoming political schedule
          7 Apr            Cabinet to decide FY2020 supplementary budget
 2020
          26 Apr           Shizuoka 4 constituency by-election (House of Reps)
          By Golden Week   FY2020 supplementary budget to be approved by Diet
    ?
          10-12 Jun        G7 Summit (by videoconference)
          Mid-Jun          Government to decide 2020 “Honebuto”
          17 Jun           Current Diet Session Ends – possible extension
          5 Jul            Tokyo Gubernatorial Election
    ?                      Extraordinary Diet Session
          1 Nov            Second referendum on Osaka Metropolis Plan
          3 Nov            US Presidential Election
          21-22 Nov        G20 Summit @ Riyadh, Saudi Arabia
    ?
          End of Dec       Cabinet Decides FY2021 Budget Bill

 2021     Jan-Jun          Ordinary Diet Session
          23 Jul-5 Sep     Games of the XXXII Olympiad and XVI Paralympics
          30 Sep           End of Current LDP Presidency Term
          17 Oct           Latest Date to Conduct General Election
Impact on deliberations in the Diet
 New legislation
   • Digital platforms law
        o Setting rules on the practices of digital platforms companies
        o Bill submitted to the Diet on 18 February but schedule of deliberations sliding
   • Super City Initiative
        o Creating cities that use AI, big data and other advanced technologies.
        o Bill submitted on 13 March but schedule of deliberations sliding
   • 5G promotion
        o Promoting supply and development of 5G along with cyber security and providing
          support for the adoption of 5G
        o Bill submitted on 18 February
 Law revisions
   • Act on Procedure of Constitutional Referendum
        o Bill submitted to the House of Representatives Commission on the Constitution on 20
          January, but prospects for deliberation unclear
   • Energy supply resilience bill
        o Measures including a new scheme to help businesses introduce renewable energy
        o Bill submitted on 25 February
   • Road Traffic Act
        o Allows instalment of road infrastructure for automated vehicles
        o Bill submitted on 3 March
                                                                                            13
                                                                                             17

   • Copyright Act
        o   Enforcing stricter piracy penalties
        o   Bill submitted on 10 March
Conclusion
• Although policy resources have shifted to deal with the coronavirus crisis, other policy
  discussions are still progressing too – digital transformation, healthcare reform, constitutional
  amendment, energy supply, etc.

• Massive economic stimulus from the government is leading to new initiatives that will have to
  be launched and funded in a very short period of time.

• Postponing the Olympics is creating a new political dynamic, including the prospect of
  elections earlier than previously expected, once the most acute period of crisis is over. LDP
  endorsing Koike for Tokyo gubernatorial election in July feeds into the new dynamic.

• Possibility of Ordinary Diet session extension has increased with the postponement of the
  Olympics.

• Despite early criticism of Abe’s handling of the crisis, support for him and his Cabinet has
  risen because of the measures taken and has, somehow, strengthened his position. Even so,
  a prolonged economic slump could pose unpresented political challenges.

• Opposition remains split and weak – prospects of elections and extended Diet session may
  provide new incentives to try to align but attempts so far have largely failed.
The GR Group

   GR Japan                             GR Group Asia (Washington D.C.)
   Juzen Building 101                   1440 G Street NW
   Nagatacho 2-9-6,                     Washington
   Chiyoda-ku,                          D.C. 20005
   Tokyo                                USA
   100-0014, Japan

   GR Japan Osaka Office                GR Group (London Office)
   Hilton Plaza West Office Tower 18F   Kensington Pavilion
   Umeda 2-2-2                          96 Kensington High Street
   Kita-ku                              London W14 4SG
   Osaka 530-0001                       UK

   GR Korea                             Tel: +81 (0)3 6205 4205
   Samseong Building 16F                Fax: +81 (0)3 6205 4206
   Teheran-ro 623                       Mail: info@gr-group.com
   Gangnam-gu,
   Seoul 06173
   Republic of Korea
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