Abe running out of levers as pandemic resurges

TOKYO – Japan’s Shinzo Abe just did what no leader with a 32% approval rating can afford to do – he angered millions in his nation’s biggest city.

It all stemmed from one of the prime minister’s more ambitious ideas to shore up gross domestic product (GDP) as Covid-19 slammed consumer demand. At first sight, his US$16 billion “Go To Travel” campaign seemed a not-so-irrational plan to drive domestic tourism via government subsidies.

Under the scheme, the government was to foot 50% of the bill of citizens’ domestic holidays. All travelers needed to do was book a holiday with agencies affiliated with the program, in person or online. Most major tour operators were involved.

All good. But then Abe issued a shocking addendum to the plan, Tokyoites had their invitations withdrawn.

The change reflected concerns about a resurgence in coronavirus infections in the capital. The trouble is, residents of Japan’s business center pay by far the biggest share of income taxes.

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