TOKYO – As the coronavirus jolts Japan, the government’s huge stimulus package has come under fire from hard-hit restaurant owners for channelling funds for items like wagyu beef, melons and tourism rather than accelerating help for firms with burning cash needs.
The restaurant industry’s struggles highlight a larger problem in Japan’s revival plan, which at US$2.2 trillion (S$3.1 trillion) is the size of Italy’s economy but is still falling short of sufficient support to an important segment – small businesses which employ 70 per cent of the nation’s workforce.
That puts at risk Japan’s recovery from the worst postwar recession it is now facing. The US$232 billion restaurant industry is crucial to boosting growth as it, together with lodging, creates about 1.3 million new jobs a year, or roughly 17 per cent of all the new employment.
More than 190 small businesses including 30 restaurant operators have gone bust during the current health crisis.
Yet, the government’s slow response in pushing through billions of dollars stuck in paperwork is threatening the same fate for many more firms in urgent need of cash to pay salaries and rents.