Victory for Abenomics as Japan's maverick PM gets his pick of governor

Haruhiko Kuroda is expected to be the new governor of the Bank of Japan.

The financial press is reporting that Japan's prime minister Shinzo Abe is expected to nominate former finance-ministry official Haruhiko Kuroda as governor of the Bank of Japan. If Kuroda's nomination goes ahead, it will be a victory for Abe's desire to pursue aggressive unconventional monetary policy in order to boost Japan's economic fortunes.

Abe has been engaged in a low-level squabble with his finance minster, former Prime Minister Taro Aso, over the extent of Japan's efforts to boost growth and weaken the yen. Aso, who favours more conventional economic policy, most recently squashed the prime minister's suggestion that Japan might buy foreign bonds as a general policy.

That rift is arguably one of the most important in economic policy today. Just as Britain has been the site of the most rigorous experiment on the effects of voluntary austerity on growth (spoiler: results were negative), Japan is pushing some of the most aggressively expansionary monetary policy ever — and has ideas to go even further. Abe's government has already eroded central bank independence, forcing the Bank of Japan to actively push for growth and inflation; it has "nationalised" capital stock, allowing the state to pay for nominally private sector investment; and it has set explicit targets for the Nikkei, the country's premier stock index, of over 17 per cent growth in one month.

The tussle between Aso and Abe over the foreign bonds purchase was widely seen as a proxy fight for the right to award the governorship, and with the apparent selection of Kuroda, Abe has taken the lead. The governor-to-be has long been a critic of the BoJ's lack of stimulus and will likely encourage it to follow the government's suit in further aggressive, unorthodox measures to hit the new 2 per cent inflation target.

But Reuters' Leika Kihara and Yuko Yoshikawa inject a note of caution to their reporting:

Abe must go through political maneuvering to close the deal, as the nomination must be approved by both houses of parliament including the upper house, where his ruling coalition lacks a majority.

The government hopes to garner support from either the main opposition Democratic Party of Japan (DPJ) or a group of smaller parties to pass the nomination.

There's likely to be an even bigger fight on Abe's hands with one of his two desired deputy governors, Kazumasa Iwata. Iwata is an academic who has called for Japan to print money to fight deflation; his appointment would suggest large scale monetary expansion is on the cards. He was widely reported to be Abe's first choice as governor, before Kuroda was picked as the compromise candidate.

With an ageing population, and flunked recovery from a financial crisis, Britain's experience over the next decade may be scarily similar to Japan's over the last. If Abenomics lifts the country out of its hole, we should all be hoping Mark Carney and the rest of the Bank of England are paying close attention, and preparing to follow suit in case the worst happens.

Haruhiko Kuroda. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Collaboration is the key to coalfields regeneration

When the last shift ended at Kellingley Colliery, North Yorkshire, in December 2015, it marked the end of deep coal mining in Britain. Since the early 1980s, over 250,000 jobs were lost in the industry and whilst regeneration efforts over the last 30 years have reclaimed sites, creating new housing and the infrastructure for new businesses and jobs, the scale of these losses was huge, and deep-seated social and economic problems remain.

The Coalfields Regeneration Trust was established in 1999. When we launched our first grant programme we were overwhelmed by the demand, however, this was simply a reflection of the need out there in the coalfields. Our name resonated with people who were incredibly proud of their communities and the contribution made by the coal industry to Britain’s prosperity.

Our independence meant we could be more flexible and responsive, and this helped us direct resources into communities where other funders struggled. Over the last 17 years our programmes have evolved and we have achieved some fantastic results for the 2,000,000 people who have benefited from our support. We have also gained a better understanding of the underlying issues that still impact on the quality of life in the coalfields. There are 5,500,000 million people living in Britain’s former mining communities and many do not enjoy the opportunities afforded in non-coalfield communities. While this inequity exists, we still have a job to do.

The key challenges

The greatest challenge is the fact that there are only 50 jobs per 100 workingage people in the coalfields. when you compare this figure to London (79), and the South-East (68), it doesn’t take much to recognise that there is a major problem here. The key factor is the number of businesses; the coalfields have significantly fewer businesses than non-coalfield communities. Unless this fundamental problem is addressed at scale, we will continue to see high levels of unemployment in our communities.

We also need to raise skill levels, or at least align skills to the local labour market. There are significant numbers of people who don’t have a qualification or are low skilled and this is a major barrier to competing for jobs. If new jobs are created we want our communities to be able to access them. For many people, it means an introduction to learning again and to do this they need to be engaged. It takes time to develop these relationships and build this confidence in people and the resources to make this happen are often lacking.

We also have a real issue with health in our communities. We have significant numbers of people experiencing long-term health problems that limit their day-to-day lives. It’s a major barrier for some people in accessing a training course or attending a job club but there are often low-cost solutions, such as ‘social prescribing’, that can make a real difference to the health of a person.

What the Trust can offer the coalfields

Right now we’re delivering an ambitious range of activities across England, Scotland and Wales. Everything from safeguarding community assets, developing community plans, engaging people through sport, helping people into work, supporting community organisations and creating new industrial space. I can’t remember a more exciting time in terms of how we want to work with our communities and we’ve got some fantastic partnerships with the private, public and voluntary sectors in the mix to help us. All our future activities will be geared to address our strategic themes of employment, skills and health and we will continue to collaborate to leverage additional resources into the coalfields.

We know we could do more and welcome the continued support of the Scottish and Welsh governments. We do, however, have a new and compelling proposition. Our aim is to create a £40 million investment fund for the coalfields, and we are inviting the English government to become a partner with us and contribute £30 million to match our commitment of £10 million. This will enable us to build 400,000 square feet of new industrial and commercial space, creating 1,000 jobs. Over 25 years this will generate £50 million in income, which we will invest in social impact projects generating £500 million in wellbeing value. We see this as a real legacy project for a generation to come.

We know this might seem an ambitious proposition in the current climate, but it’s a truly enterprising approach. Collaboration is at the heart of this and is the essential ingredient for all our future work. Without it we will not achieve the results we want for our communities.

About The Coalfields Regeneration Trust

The Coalfields Regeneration Trust is dedicated to supporting and improving the quality of life for the 5.5 million people living in the former mining communities of Britain. We have worked at the heart of many of these communities since 1999 and have a track record of delivering targeted programmes that have reached over two million people helping many thousands; back into work; to develop new skills and participate in activities that have improved their health.

There is compelling evidence that recognises the significant challenges that still remain and shows how coalfield communities lag behind national averages on multiple indices of deprivation. Our enterprising and innovative responses will address these challenges but we need the support of government and regional stakeholders to help us achieve the scale of impact required.

Employment
The employment rate in the largest UK coalfields is consistently lower than the rest of the country. On average, 14 per cent of adults in the coalfields are out of work on benefits, which is 40 per cent higher than the national average and double that of south-east England. The Coalfields Regeneration Trust has helped more than 25,500 people into work and created or safeguarded more than 5,500 jobs.

Skills

The proportion of the working-age population with low or no qualifications in the English coalfields is roughly 60 per cent higher than in London and 40 per cent higher than in south-east England. Thanks to the programmes The Coalfields Regeneration Trust has
supported, 1.3m people are now more highly skilled.

Health

A worrying 11.7 per cent of people living in the coalfields report long-term health problems, compared to 8.6 per cent nationally. Incapacity benefit is claimed by 8.4 per cent of adults of working age in the coalfields, which is 35 per cent higher than the national average and almost double south-east England. The Coalfields Regeneration Trust has invested in projects that have improved the health of over 250,000 people

The proportion of
the working-age
population with low or
no qualifications in the
English coalfields is roughly 60 per
Employment
The employment rate
in the largest UK
coalfields is consistently
lower than the rest of
the country.
On average, 14 per cent of adults
in the coalfields are out of work on
benefits, which is 40 per cent higher
than the national average and double
that of south-east England.
The Coalfields Regeneration Trust has
helped more than 25,500 people into
work and created or safeguarded more
than 5,500 jobs.

For more information, visit www.coalfields-regen.org.uk