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Japan's recovery plan 'not good enough'

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    Japan's recovery plan 'not good enough'

    Japan has unveiled plans to restore the world's second-largest economy to health but financial analysts already say the measures do not go far enough.

    It is estimated Japan's banks are carrying as much as $1 trillion in loans that will never be repaid.

    That is one of the reasons why the world's second-largest economy is barely able to lift itself out of recession.

    Late last night, the Government finally revealed its plans for tackling the problem.

    At the centre of the package are changes in accounting practices that would force banks to calculate their capital more realistically.

    But there has been a muted response to the idea because the Government has caved in to pressure from the financial sector and not specified when the new rules will be implemented.

    While most countries around the world have to deal with inflation, Japan has been suffering from the opposite - deflation.

    Prices have been falling for several years now, sending companies broke at an alarming rate.

    A date for the introduction of the rules has not been set.

    In an attempt to soften the impact of the measures, the Prime Minister announced more than $10 billion in tax cuts.

    http://www.abc.net.au/news/justin/nat/newsnat-31oct2002-22.htm

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