Misfire

GREAT expectations at home and abroad surrounded the announcement on June 5th of the “third arrow” of Abenomics, the plan of Shinzo Abe, Japan’s prime minister, to pull the country out of its long slump. The first arrow had come in the form of a monetary revolution at the Bank of Japan on April 4th, when the bank’s new governor, Haruhiko Kuroda, pledged to end deflation by pumping vast quantities of money into the economy. The second arrow was a similarly dramatic fiscal stimulus package worth {Yen}10.3 trillion ($116 billion). But the keenly awaited growth strategy is the most important of the three arrows, since it seeks to boost Japan’s long-term economic performance. When it came, however, the announcement left many disappointed by its timidity. Coming after a series of stockmarket falls, it suggested that Abenomics was already fizzling out.

To help design the strategy, Mr Abe had convened a series of reform committees, most notably the Headquarters for Japan’s Economic Revitalisation inside his own Liberal Democratic Party (LDP), and the Industrial Competitiveness Council (ICC). He invited onto them private-sector businesspeople, economists and proponents of reform, including Heizo Takenaka, the former right-hand man of Junichiro Koizumi, who as prime minister between 2001 and 2006 fought against fierce opposition to privatise the postal system.