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Finance minister defends Japan's stimulus plan

A JAPANESE minister defended his government's US$150 billion stimulus package yesterday against criticism it allocates too much money to wasteful pet projects meant to woo voters.

Minister of Finance Kaoru Yosano said the stimulus measures, which won legislative approval recently, would encourage gradual but basic structural changes to the economy to boost growth and steer it away from export dependence. But more time is needed, he said, to see the effects of the programs, ranging from helping solar-panel businesses to lowering road-toll fees.

"It's not going to happen overnight, but we must move toward an economy that is centered on domestic demand," Yosano said on a TV Asahi news show.

The package calls for nearly 15 trillion yen (US$150 billion) in government spending, including cash rebates for individuals that are meant to spur consumer spending.

Yosano said the government was determined to prevent the jobless rate from surging to record-high 5.5 percent levels, and stressed the stimulus package will create jobs.

Without such government assistance, Japan could have an additional 3 million people out of work, he said.

However, some suspect the package may be packed with pork-barrel spending designed to win over voters ahead of national elections scheduled for later this year.

The unemployment rate jumped in March to its highest in more than four years at 4.8 percent. Global demand has been plunging for products from some of the top Japanese manufacturers such as Toyota Motor Corp, Sony Corp and Toshiba Corp, which are cutting thousands of jobs.

But Yosano, one of the most powerful legislators in the ruling Liberal Democratic Party, expressed hope for a recovery later this year.

He said his most optimistic advisers were expecting the downturn to bottom out by the third quarter of this year amid some signs in recent months that production may be recovering.


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