A closer look reveals many of the so-called reforms are actually schemes to pass more of the burden of funding government spending onto the people. A genuine reform worthy of the name should offer a brighter future and a sense of security to the people.

Over the past dozen years or so, a broad slate of reforms has been carried out in Japan, including political, administrative, fiscal, financial and social security reforms. But the people don't find themselves better off today than they were before those reforms. Nor does the future of the nation look any brighter.

Even if postponements and compromises have somewhat weakened the effects of the reforms, we should still think it strange that there is no sense of improvement among the people.

After nearly four years since Prime Minister Junichiro Koizumi started governing the nation, stock prices are still languishing way below where they were when he came to office, symbolically testifying that his reforms have failed to improve the economic outlook of Japan. Nobody doubts the need for changes. That may be why people have so readily placed excessive faith in what has been billed as reform.

The various problems revealed by the government's pension reform fiasco last year showed that what was called reform was actually a far cry from genuine change. But public fury was directed only at the Social Insurance Agency, and it did not lead to any serious questioning of the credibility of the reform.

The Japanese public has accepted raises in public pension premiums and cuts in benefits because they believed the government's claim that these changes were absolutely necessary for funding the retirement of an aging population amid a deteriorating financial foundation of the state pension program. In fact, however, it is not clear whether the pension program is really as seriously underfunded as the government claims it to be.

The government fanned anxiety among the people about their retirement by warning about the possible exhaustion of pension reserve funds. But the size of Japan's massive reserve funds is many times larger than the standard among other industrial countries. It should be enough to keep financing retirement payouts in this aging society without increasing the public burden. If the system were really in a funding crisis as the government asserts, how could it have been possible for the agency to divert so much money to other purposes?

A closer look reveals many of the so-called reforms are actually schemes to pass more of the burden of funding government spending onto the people. The health insurance and pension reforms are typical examples.

The scheduled end to full protection of deposits and the reintroduction of a deposit insurance ceiling, which has been promoted as part of a sweeping financial services reform, is in fact a step to force depositors-instead of the government-to pay the price of failed financial policies. Despite different labels of reform, all these initiatives are simply designed to clean up the government's fiscal mess.

People have mostly resigned themselves to accepting these measures, regarding them as inevitable in the current fiscal crisis. But this crisis has not been examined carefully. The sharp decline in tax revenues in recent years has contributed far more to the current fiscal crunch than any problem with the government's spending.

The contraction of tax revenues was due to the economic downturn, which has lasted for so long because the government has failed to take the steps any other country would have taken in the same situation.

No country has ever succeeded in fiscal reconstruction amid a recession through tax hikes and fiscal tightening. In every case of successful fiscal reconstruction in the past, the primary contributor was, without exception, an increase in tax revenue due to an economic upturn. But the Finance Ministry is now moving toward an even more aggressive fiscal tightening through a combination of tax hikes and spending cuts.

But public funds are money contributed by people for their own benefits, not for the interests of government fiscal officials, who control the nation through their control on the budget.

A misguided reform designed to restore fiscal health even at the expense of the quality of people's lives has further aggravated the nation's fiscal conditions. A genuine reform worthy of the name should offer a brighter future and a sense of security to the people.

Real fiscal health can only be achieved when people's lives actually improve.

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The author, an economist and stock market analyst, now heads an association of women to learn about the economy and asset management. She contributed this comment to The Asahi Shimbun.(IHT/Asahi: March 11,2005)