Recently shocking news regarding the fraud in Japan’s growth rate came into flash. The scandal was cast at a very large scale. Around 40% of the total economic data reported by the Japan Govt. were found to be fake. This storm is going to affect investors and businesses who were on a different page investing in the country on the basis of fake data.
It’s not a recent fault, it has been there for so long:
Those who are confused that this scam was being performed for only the recent years and reports, the truth is, it is not a recent fault. It has been there for so long. As per reports, around 40% of 56 economic policies of Japan has errors. Thus, the country has been producing and analysis over the years on erroneous policies. These economic policies have their basis on fraudulent data.
Thus, not only the recent reports, rather over the years, this scam has been continuing.
Erroneous Methods:
It seems that the knowledgeable economic policymakers were not aware of the glitch in their policies for such a long time. It is quite surprising. Let us talk about a recent survey. Recently, around 500 employees were collaborated to work on a model related to the growth of Japan. These employees were paid more than the regular same designation workers to focus on the survey with more interest.
The employee reported that the erroneous methods have affected around 20 million people. The monetary amount that Japan has incurred is around $490 million. If we add the additional cost like monitoring, it would sum up to around $759 million!
The prime minister of Japan, Shinzo Abe is very upset and annoyed with these results. This loss would certainly affect the financial condition of Japan. In related to it, the Prime Minister has announced a paltry of $5.9 million from the next year’s budget to make up this loss. Also, around 22 officials which were found to be guilty in this scam are suspended and actions are being taken against them. This list also includes the Labour Minister of Japan, Takumi Nemoto
Bank of Japan has been assigned the work for calculations:
The impact of this scam is huge that the estimated growth rate of Japan that was supposed to around 3.3 % has been declined to 2.8% with the modified policies.
The bank of Japan is considering to do all the calculation once again to measure the final loss. It is waiting for the results of the investigations made by the Japan Govt. before starting its recalculation.
The Bank of Japan has been dependent on labor ministry for so long and it would be interesting to see how the BoJ manages to recalculate this loss.
No to crypto- Bank of Japan:
Amidst this shocking news, the BoJ has continued to have a negative view about crypto space. The rumors were strong regarding some approval of crypto in perspective of hosting of Olympics next year. But BoJ has clarified and warned people for crypto-payments. However, if we look, on the other hand, crypto could have helped the BoJ during this loss. Since the bank is looking for some better alternatives, the blockchain technology would have provided that credibility to BoJ. But this idea would not be supported by sophisticated officials as it would allow the bank to see each person’s wallet through a third party app which may concern about security and privacy. But for now, the bank of Japan has neglected all its views on using cryptocurrencies.
This news is going to adverse the economic and financial conditions of Japan. Many of the investors and businessmen are thinking as if they have been frauded by the growth rate and other erroneous reports produced by the government. They might think of taking a U-turn from their investments in Japan. Also, the loss incurred is so high. The Japan government is going to face a lot of difficulties such as calculating the exact loss, the change in policies or come with new policies etc. They ould also have to prove the investors that the new policies are not fraudulent and it maintains the accuracy.
