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November 18, 2020


JAPAN: Suga balances public health and economy as third wave swells

BY Tobias Harris

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( 5 mins)
  • Japan is facing a third wave of Covid-19 as cases have reached new highs nationwide and in major population centers.
  • Fearful of the economic costs, the Suga administration is tinkering with existing regulations but is trying to avoid the wholesale withdrawal of travel and dining subsidies or another round of voluntary shutdowns.

Japan recorded a record number of new cases of Covid-19 on Wednesday, 18 November, for the first time exceeding 2,000 new cases with 2,201 nationwide. The new record included a record-high of 493 new cases in Tokyo. Four other prefectures recorded new daily records. Despite the surge in new cases, Prime Minister Yoshihide Suga’s administration has resisted calls to suspend its travel and dining-out subsidy programs or declare a new state of emergency that would enable governors to issue stronger business closure and stay-at-home requests in their prefectures. However, the government’s own advisory panel could step up pressure on the administration to change course. Appearing before a parliamentary committee Wednesday, Dr. Shigeru Omi, chairman of the expert panel, cited a rising positivity rate and a growing number of clusters to warn that: “There is a possibility that a stronger response will be required.”

The third wave has not only seen higher numbers of infections but also a higher rate of infection among older Japanese. Whereas the second wave was predominantly among younger Japanese – among the confirmed cases, 67% were in their 20s or 30s – nearly half of the cases in the new wave are among those aged 40 or over, with 17% among those 60 or over (compared with only 8% over 60 during the second wave). The upshot is that the risk of a spike in severe cases that strains the medical system is higher than before; nationwide, Japan has already recorded more severe cases (272 as of 17 November) than at the peak of the second wave.

Notwithstanding the concerns of medical experts, national and prefectural authorities have thus far been reluctant to reintroduce controls that would curtail economic activity. Thus far only Hokkaido, which has been at the vanguard of the third wave, has called upon the public to alter their behavior: on 17 November, the prefecture’s emergency headquarters called upon residents of the prefectural capital Sapporo to avoid leaving home for non-essential reasons and limit their travel around the prefecture for the next ten days. The Tokyo Metropolitan Government is prepared to raise its public alert to the highest level of four at a meeting on Thursday, 19 November. However, raising the alert does not automatically trigger new controls, and because of the increasing diversity of case clusters, it is unclear whether Tokyo’s government will reintroduce open-hour and other restrictions on nightlife facilities as it did over the summer.

For now, the Suga administration’s response has been limited to tinkering with public health measures. Senior officials have called for more vigorous testing of nursing homes and other high-risk locations; these measures and other measures to strengthen the detection of new clusters will be the focus of an advisory panel meeting on 20 November. Economic Revitalization Minister Yasutoshi Nishimura has suggested that restaurants could face new, stricter guidelines as the country heads into the year-end socializing season. For the moment, critical scrutiny has focused most on programs that subsidize domestic travel (“Go To Travel”) and dining out (“Go To Eat”). Opposition lawmakers have questioned whether the government should continue to subsidize these activities in light of the surge in new cases, but the administration insists that these programs have contributed little to the recent spread of Covid-19 and have touted their economic benefits, particularly in light of concerns that economic hardship could be fueling a rise in suicides. However, the government has made some concessions, announcing on Monday, 16 November, that it will encourage governors to withhold the use of “Go To Eat” subsidies for parties of five or more people and offer subsidies for restaurants to close earlier. Osaka, facing its own spike, has already said it will withhold dining subsidies from parties of five or more. The government may also be forced to consider requests from some governors to exclude their prefectures from the travel subsidy program.

If case numbers continue to climb, the Suga administration will face more pressure to suspend its “Go To” subsidies and perhaps even introduce a limited or nationwide state of emergency. The desire to balance between economic recovery and infection control will likely lead Suga to err on the side of delaying a decision on a state of emergency that would enable another round of “soft” (i.e. voluntary) shutdowns until absolutely necessary. It is unclear whether Suga would be able to avoid the reputational damage that former prime minister Shinzo Abe suffered when he appeared to wait too long to make a decision about a state of emergency.

Whether the government opts for a new state of emergency declaration, the third wave likely means that the third FY2020 supplemental budget – already being hammered out between the government and the Liberal Democratic Party (LDP) and Komeito – could be at the upper end of the suggested range for the budget’s size, perhaps as large as JPY 30-40tn (USD 288.9bn-385.2bn). The surge of new cases has thus far not altered the timeline for the new stimulus package, which is still expected to be submitted to the Diet at the start of the new ordinary session in early 2021. However, the budget’s passage could be delayed if recent rumors suggesting that Suga could dissolve the Diet in late January and call an early election for February come to pass.

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