politics

Critics question economic impact of Abe's maglev decision

45 Comments
By Ami Miyazaki, Izumi Nakagawa and Kiyoshi Takenaka

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45 Comments
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if It's about spending the public's money, Abe is your man

17 ( +19 / -2 )

will spark growth in an economy still fragile after three years of an Abenomics mix of hyper-easy monetary policy, spending and promised structural reforms.

Still fragile? Right.......and where are the "promised reforms?" Anything Abe talks about regarding the economy should be taken with a grain of salt.

12 ( +13 / -1 )

Profligate vanity project. Nothing more.

10 ( +11 / -1 )

Abe, who is close to JR Tokai Chairman emeritus Yoshiyuki Kasai

And this tells us much of what we need to know. I could think of a hundred things to spend money on in Japan before this basically high speed subway train but what do I know?

10 ( +12 / -2 )

One way or another, Abe is going to spend until the yen crashes. It's the only way to address the debt. At least with a maglev, Japan will have something useful to show for it afterwards. Which is more than can be said for many government projects.

5 ( +5 / -0 )

He'd prefer to spend it on weapons that will never be used. But lots needs to be wasted on ANYTHING except on the Japanese people.

10 ( +10 / -0 )

how about spending on social welfare? improve the lives of the elderly and the young unemployed?

12 ( +16 / -4 )

To put these technological speed advances into persepective, I actually have an old Japanese postcard that was mailed in Kobe on Sep 9 1891 and postmarked in Yokohama the very next day. That seems fast enough, even 125 years later.

7 ( +8 / -1 )

It's been mentioned many times before, but a result of making travel easier between Osaka and Tokyo will be making the two areas (and Nagoya) even more important economically, meaning population increases. Why the government wants to continue to focus on developing these already overcrowded areas while paying scant attention to the rest of the country beyond throwing them a tourism related bone now and then makes no sense. The people who will benefit the most from this are those who own land in one of the metropoles.

Tokyo and Osaka are saturated and nearing tipping point. The maglev project will spur growth which will spawn more infrastructure projects to try to deal with the problems of more growth, and the cycle will continue.

10 ( +12 / -2 )

Just as a responsible parent would not allow a two year old to play with a box of matches and a bottle of lighter fuel, Abe should be kept completely away from anything connected to finance. Or anything connected with politics come to that.

Just get rid of him before he does any more damage.

9 ( +14 / -5 )

Great.. so while millions schlep to Tokyo on overcapacity trains for 70 minutes, a select few will be breezing in from Osaka in less time. Or best case scenario, this train alleviates the urban sprawl and with nature taking its course on the aging populace dignity will be restored to the daily commute.

0 ( +1 / -1 )

@Ronald Hassem: Bad idea as there is no monetary returns on spending public funds on social welfare unlike the maglev project.

1 ( +4 / -3 )

Obscene waste of money.

3 ( +5 / -2 )

One of the original route plans for this maglev line was a huge, out of the way loop passing through various LDP constituencies. That plan was rightly abandoned, but I'm sure with Abe sticking his nose in it will suddenly be re-adopted as the "best" option. The result: the public pays more for a slower service.

9 ( +9 / -0 )

Where is the objectivity? Everybody here's cognitions are so clouted by their dogmatic hate of Abe.

Why do people here ignore the fact that the Japanese economy is actually in better shape now than it was during DPJ? How can this be true if Abenomics is a total farce? Does anyone actually look into this stuff? I don't mean anti-abe commentator written articles but actual numbers.

People talk about how Japan's debt problem is out of control but it owns nearly 1200 billion USD in US treasury securities alone. The J-government hasn't even attempted selling off any of its government assets, which is the first thing governments do when they are in financial trouble. Mind you there are still many levers that can be pulled to offset the current debt.

Tax revenues went up, stocks are still double. I don't by any means believe that the "trickle down effect" is a real thing but even with that aside, Abe/Kuroda-nomics is still doing better than DPJ/Shirakawa-nomics.

How is this move a waste of money? I'd wager some of the critics here praise FDR's new deal, but if its done by a Japanese politician it has to be wrong by default. racists...

-9 ( +5 / -14 )

I have mixed feelings on this. I am always for technological development and as an engineer would love to see this thing get built and run, but the fiscal realities are a different issue. @Scrote - Do you have a source for your post? (This is not meant to be argumentative - I am curious what the original route plan was)

Living in Tokyo, what I find even stranger and more wasteful is the monstrosity that is being constructed between JR Shinagawa and JR Tamachi stations.

https://www.jreast.co.jp/e/press/2014/pdf/20140602.pdf

3 ( +3 / -0 )

"The government is looking to lend 3 trillion yen ($28 billion) over three years at 0.3% interest, to be paid back over 20 or 30 years...."

Now ain't that nice? 0.3% interest rate and can be paid back in 20 or 30 years or maybe on St. Never's Day?

Of course it is all our money again that will be wasted for another "Abe-prestige-object".

7 ( +7 / -0 )

The sorrow lies in the fact the average person is essentially being neglected, forgotten. Special interests are getting the money and attention. Put out fires as they come. No plan. Pure nationalist agenda, as if it were going to give lasting fruits or make peoples' lives better. The problem lies beyond one man's memory and honoring of his grandfather. It's a nation lost. Can't figure out how to get back to old glory, while tackling conflicting problems at home. Get back old glory! Blame our lessened dignity on a foreign power who designed our constitution against our will. That's the backdrop of a has-been nation fighting to get back an image while allowing its people / society to rot in wealth, consumerism, irresponsibility toward the future. People have always expected the government to lead and take responsibility. The government was never interested in leading nor taking responsibility. They care for a few special interests. All others are burnt out, dead fodder.

10 ( +11 / -1 )

First off the Tokaido Shinkansen is the most lucrative line on the planet and it is goose that lays the golden egg for JR Tokai. It is also maxed out in potential ridership in which it will not be able to add additional slots with train leaving the platform every 5~10 minutes. It is also more then 60 years old requiring various upgrades and repairs but at the moment it cannot stop operation since it is the main artery of Japan's economy.

Basically if you don't construct a second artery the entire system has a potential to fail if something goes wrong. I am more concerned with the connection of the Hokuriku Shinkansen. Why in the world would they even consider a route to extend it to Obama or Tsuruga then to Osaka? Both would need to go through mountainous terrain while the route to Maibara is completely flat .

3 ( +3 / -0 )

Use magleve for airport ground transportation., ex. Shinjuku to Haneda, KIX to Umeda, etc., which the Chinese have wisely done.

The timeframe is so long that hydrogen fuels will probably be invented by then, rendering the intercity project a waste of money.

1 ( +3 / -2 )

with nature taking its course on the aging populace dignity will be restored to the daily commute

Dream on. They'll just reduce the number of trains, as they do off-peak.

4 ( +4 / -0 )

Three words: pork barrel, boondoggle. The bottom line is that there truely isn't a need for this. Investing in alternative energy would have a greater ROI.

5 ( +6 / -1 )

Will not help the exporting of Japanese goods to the World. Only a local jobs creation and is needed but will not show any gains but more debt of the Japanese that only a handful will benefit from. Big rail is a major influence on the Govt. and in their own pockets. Its states that JR would fund it themselves and should be kept at that. The money is needed to fix the many problems and to pay the Japanese debt that is at least 2X of its GNP. The benefits are few for the people but lots for the JR bunch. These are issues that in a democratic society the people would have the Vote and sayso on this. But its not and the Big Money run Japan as its a prevalent problem world wide as the NEW WORLD ORDER (Big Banks and Big Corporations) will not help anyone but the Big Money interests. How far will people be pushed before a Revolt happens. The sooner the better as its already out of control as the Govt. will push police and military to attack teh regular people all in the name of BIG MONEY!

0 ( +0 / -0 )

This is the worst thing ever, how is something going to benefit the economy that is finished in 2045!? Most of these guys will be dead by then. This doesn't help anyone but the construction companies.

Abe, do some real work and invest in startups, software, R&D and tech companies!

5 ( +5 / -0 )

Let it proceed on its merits. I, for one, would love to use the service. BUT, I can't condone 'fast-tracking' science. That's when disaster happens.

-1 ( +0 / -1 )

meh, the public voted him in again. maybe when he's finished spending the last of the old folk's pension money on this ridiculous project they'll start to regret that choice.

how many high speed trains are really necessary? you can already go anywhere in japan in under 2 1/2 hours via train or rail.

5 ( +5 / -0 )

how about spending on social welfare? improve the lives of the elderly and the young unemployed?

Are you intending to be sarcastic here? If that is the intent ok, if not, then you really need to take a look at just where a HUGE percentage of the social welfare funding already goes.

The young unemployed dont want the jobs that are out there, and not all, but many are spoiled and unwilling to work. They want high paying jobs, but are unwilling to get the training and or education required. They have little initiative and live off of Mom and Dad.

-1 ( +2 / -3 )

if It's about spending the public's money, Abe is your man

If it's about spending the public's money, any politician is your man (or woman). The DPJ went on a vast shopping spree during it's short stint in power, and even now, the only thing they promise to do different than the LDP is to spend even more money.

how about spending on social welfare? improve the lives of the elderly and the young unemployed? The elderly get the lion's share of public spending in Japan. When you pay 7 times as much for rice, 4 times as much for meat and dairy products, and extra costs for other food goods, the elderly are the main beneficiaries of the subsidies created by these tariffs. This is how the LDP has managed to bribe the elderly to keep the LDP in power for so long.

As for the young unemployed, they have no votes and no voice. If they were smart, they would jump ship and move to Canada or America, where they would have a real economic future.

I disagree entirely with using public funding to build the new train lines, because if they were as profitable as JR seems to think, they should have no trouble recouping the costs with ticket sales, and private lenders would be falling over themselves to provide the money. That this is not the case, and the taxpayers are the last resort, it can only mean that they expect to lose money on the projects. And since it is a money-losing project, where the taxpayers will receive one yen in value for every three yen they have to pay for the project, you can entirely expect the government to back the project enthusiastically.

3 ( +4 / -1 )

@talaraedokko

The problem lies beyond one man's memory and honoring of his grandfather. It's a nation lost. Can't figure out how to get back to old glory, while tackling conflicting problems at home. Get back old glory! Blame our lessened dignity on a foreign power who designed our constitution against our will. That's the backdrop of a has-been nation fighting to get back an image while allowing its people / society to rot in wealth, consumerism, irresponsibility toward the future. People have always expected the government to lead and take responsibility. The government was never interested in leading nor taking responsibility. They care for a few special interests.

Wow. I don't think I've ever seen anyone on here put it so simply, yet effectively. My sentiments exactly. I'm leaving the country in four weeks (after almost 10 years here) and this is part of the reason. I've really seen the place on the downward spiral for years - only getting worse!

3 ( +3 / -0 )

This will sound dumb maybe but the shin kansen does the job just fine, maybe cos china got a new fast train set now Abe needs to show he can have one as well.

1 ( +2 / -1 )

@F4HA604

where is the objectivity?

Exactly, there's not much of a business case for this line compared to the original shinkansen line. With the original shinkansen line it became possible for people in Osaka to make full-day business or tourist trips to Tokyo which they might not otherwise have taken, a big economic boost. This line doesn't really change anything that significantly, people can just have slightly more time in Tokyo on a day trip. That's unlikely to provide much of an economic boost. Wealthy people might be able to commute from further away, as far away as Nagoya. That might provide a bit of a boost to Nagoya, but that's the only benefit I can see.

2 ( +2 / -0 )

It's a loan not a government investment so the money is going to be paid back by JR Tokai. The banks had already provided loans based on due diligence for the first phase.

-2 ( +0 / -2 )

Another ill-conceived, collossal waste of taxpayer money in a country whose govt is already more than a year's GNP in the red. How long does the govt project it will take to recoup the amount invested? to turn a profit?

3 ( +3 / -0 )

Would it not be better to spend that money on sola panels? when I meen spend , give every house XX amount panels so that they can start generating electricity thus saving Japan having to import fossil fuel. this way it will help on the trade balance figures and just be greener and healthier. and by doing this Japan can move away from the nuclear power station.

5 ( +5 / -0 )

Why do people here ignore the fact that the Japanese economy is actually in better shape now than it was during DPJ?

Really? I moved to Japan in 2008 and DPJ Govt started in 2009, right after the Big Economic Shock and later March 11, yet they tried to provide some benefits to the ordinary people like reducing tolls on highways and providing Child allowances for families with kids, Whereas LDP has been ruling Japan since the war ended, so today's economic problems are actually created by LDP and their similar stupid mega projects.

But what most of people are trying to say here is, why Japan Govt needs to spend 3 trillion on a project that a private company will benefit from? How much economic activity one train line generate? IF (a big IF) fiscal spending is the only option to revive economy there are plenty of other important things that are currently underfunded for instance Child Cares for working mothers.

3 ( +3 / -0 )

How is this move a waste of money?

The current Tokaido Shinkansen gets the bulk of its revenue from business travellers. The age cohort that now uses the Tokaido Shinkansen will be much smaller than it is now when the maglev is scheduled for completion. Already commuter lines in Kanto and Kansai are starting to feel the hurt from a shrinking customer base. The money would be better spend on taking bottlenecks out of the existing system.

This will sound dumb maybe but the shin kansen does the job just fine, maybe cos china got a new fast train set now Abe needs to show he can have one as well.

There is certainly a pissing contest element to this but Abe is a minor player. This project has been decades in the making and Abe should be long gone by the time this thing is operating. These boondoggles are not the work of one man. Equally irrational projects in California ("the train to nowhere") and the London-Birmingham boondoggle demonstrate demonstrate this.

-1 ( +2 / -3 )

Tokyo-Engr: You can search "maglev route" and find some pictures of the original proposed routes.

0 ( +0 / -0 )

f4ha64 - comparing Abe's / ldp's performance to the dp's is hardly worth noting. The dp (as weak as it was in parts)was in power for a brief time, whose term took in the worst natural disaster in living memory. Pretty easy to criticize an entity in those circumstances. The failures of ldp in comparison - think pension fiasco for one - are nothing short of scandalous and have cost the citizens of this country dearly.

What we have with Abe-inc, is close to 3 generations of power, with much of the last generation (20+ years) riddled with collusion, ineptness, boondoggles and incestuousness all for the benefit of the power-mongers. Fawning to elements of the electorate to garner their votes with billions spent on white-elephants and grandiose constructions, that were hardly needed in the least.

Maglev is just one more - only this time it's another big shot in the arm of industry to ensure their continuing hold on the ropes of control.

Uplifting Abenomics by comparing it to dp's minor short influence, misses all the key elements of the dangers of monopolized power and woes it has and is still creating.

Hellbent on Maglev benefits whom?

2 ( +2 / -0 )

I have purely selfish reasons to want the 'Chuo Shinkansen' to proceed. One of the stations along the line will be located 5 minutes from my house. I'm hoping it will help improve this 'one-horse' city - redefining it as a 'one-horse, a dog, a cat and 2 goats' city . That aside, I perfectly understand the skepticism surrounding this project (but pretty please let it go ahead?!)

2 ( +2 / -0 )

Maglev train systems throw out so much electromagnetic waves that China no longer consider it safe to build any more lines...

Japan should be careful of their effects on the population.

0 ( +1 / -1 )

What, another high speed train?? Why not take a plane?

0 ( +1 / -1 )

The media needs something to remind the people to be proud .

1 ( +1 / -0 )

It's a loan not a government investment so the money is going to be paid back by JR Tokai. The banks had already provided loans based on due diligence for the first phase.

I will tell you about "due diligence" in Japan. In Japan, due diligence has little to do with the economic viability of the project. In Japan due diligence means that a banker's son, nephew, or nieces, will be guaranteed a posh job at JR in exchange for the loan. If there is difficulty repaying the loan, it will be rolled over, the terms changed, or whatever else is necessary to prevent default. The bank may lose any profit in the deal, but the jobs given to the banker's family members or friends will be safe.

As for the government "loan", this is a tricky thing. The rules which are normally applied to private investors do not apply when the government is involved. If you hire a contractor to build your house, and that house ends up costing 3 times what you agreed to pay, and takes 5 times as long to build, you can sue the contractor for not keeping his part of the contract, or you can fire him. If the government is financing a project, and it takes 5 times as long to build, and costs 3 times as much, the government will almost certainly pay. And, like the banker, the politician or bureaucrat who approved the loan is guaranteed at least an executive position in the company, if not made a member of the board. The reason infrastructure around the world is collapsing is that the cost of corruption in the process has made in nearly unaffordable

2 ( +3 / -1 )

TOM@What, another high speed train?? Why not take a plane? what about the fossil fuel thats used? the damage to the environment? noise? yes it cheaper in the short term, but we all must think long term, as crude oil is not infinite.

-1 ( +0 / -1 )

Their money will run out as fast as this train goes.

0 ( +1 / -1 )

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