Details of Japan’s open “Shopping coupon giveaway” policy nearly 25 years ago have resurfaced in light of comparisons made with the current 10,000 baht digital wallet policy in Thailand. The research from Japan suggests that such policies have limited impact on stimulating the purchase of goods and services. The policy in question is the “shopping coupon policy” implemented by Japan in 1999 to revive its stagnant economy. The tweet by Ms. Sirikanya Tansakul, Deputy Leader of the Progressive Party, revealed this research and called for an investigation into the 10,000 baht digital wallet policy.
The shopping coupon policy was introduced in response to Japan’s economic recession in the 1990s, caused by the bursting of the bubble economy. The government tried to stimulate the economy by announcing tax reduction policies, but people chose to save rather than spend. To address this issue, Prime Minister Obuchi Kezo proposed a shopping coupon project, which was accepted by the Liberal Democratic Party (LDP). The aim was to stimulate small businesses and create real expenditure. Under the policy, coupons worth 20,000 yen (approximately 6,100 baht at the time) were distributed to households with children under 15 and elderly individuals over 65. The coupons could only be used in the recipient’s local community and had a six-month expiration date. The total budget for the program was 100 billion yen (approximately 190 billion baht at the time).
However, economists and some people at the time were skeptical about the effectiveness of the shopping coupon policy. It was believed that the coupons would not significantly increase expenditure, as users might save the same amount. Critics referred to the policy as a “Strange Effort.” Some economists estimated that the policy would only contribute to a maximum increase of 0.06% in GDP. Instead, they suggested using the money to strengthen the social safety net and support institutional restructuring. Despite the doubts, there were supporters of the policy who believed that it would promote local businesses and be more effective than previous tax cuts.
The implementation of the shopping coupon program faced logistical challenges and was costly to manage. Coupons were tied to specific areas and could only be used in nearby towns or villages. Each city and municipality had its own printing press, dyeing specialists, and paper makers to produce the coupons, resulting in a variety of colors. Some areas allowed coupons to be used in inappropriate venues like brothels and gambling parlors, while others restricted spending to certain types of businesses. The overall impact of the shopping coupon program was considered limited, leading to another similar program launched in 2009.
Research conducted by the University of Chicago and Japanese government institutions on the 1999 coupon program indicated that it only had a slight effect in stimulating public spending. The study showed that the coupon program had a small impact on consumption of semi-durable goods but had little effect on non-durable products and services.
Given the mixed results of Japan’s shopping coupon policy, questions have been raised about the potential impact of Thailand’s 10,000 baht digital wallet policy. While some believe that the context and situation of Japan at that time may differ, further analysis and evaluation are needed to assess the effectiveness of such policies.
Details of Japan’s open “Shopping coupon giveaway” policy almost 25 years ago after comparisons were made with the 10,000 baht digital wallet policy.
Settha government’s 10,000 baht digital wallet issue It is still a hot topic that is talked about every day. Especially yesterday (October 19) where a trend arose from the case. Ms. Sirikanya Tansakul, Deputy Leader of the Progressive Party The tweet revealed that Found research from Japan. That is the origin of digital wallets and it indicates that this type of policy does little to stimulate the purchase of goods and services.
The research talks about the “shopping coupon policy” that Japan implemented in 1999 in the hope of stimulating a very stagnant economy.
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The previous story was that Japan in the 1990s encountered the problem of a bubble bursting. In mid-1992, the stock market value plunged by more than 60% The following years, land prices began to fall, until the economy experienced an unprecedented recession in 1998, as private consumption and investment in the Business sectors fell. Until it was known as the worst economic period since the Second World War.
One problem is that the general public is so worried about the future that they choose to save yen rather than spend it. The government has tried to announce tax reduction policies. But people often choose to save money too.
From this situation, Obuchi Kezo, Prime Minister of the Liberal Democratic Party (LDP) at the time, did not know what to do. Even the New Komei Party, which is a Buddhist coalition government party A shopping coupon project has been proposed. It will be open to households with children under 15 or older people over 65 living in the household to receive coupons to buy products and services.
The LDP accepted the idea. In part, they want to appease the new KOME Party as an important ally. Another part sees that Such a policy should be a way of helping small businesses. which is an important base of support for the LDP and will create real expenditure. Because people can’t exchange coupons for cash to keep them, and they also have expiration dates.
Going through the approval process The decision has been completed. This makes it possible for a total of 3,255 cities and towns in Japan to issue coupons. This coupon can only be used in your area. Users can use coupons to buy anything. From clothes, beer, or going to the barber shop. Or some states state that it can be used in love hotels as well.
for Japan’s 1999 shopping coupon program looked like this::
Distribution of shopping coupons worth 20,000 yen, which at the time was worth about 6,100 baht.. Distributed to all families with children under 15 years of age, voucher per child 1. Distributed to the elderly population who eligible for the rights, that is, without those receiving welfare pensions for the elderly Basic disability pension Basic pension Mother and child pension Pension of a deceased child Child family allowance Welfare for disabled children Welfare support or residents of social welfare institutions, or 2) over 65 years of age and had no tax liability in 1997-1998. All of them accounted for 56% of Japan’s elderly population at the time, for a total of 31 million people distributed to a total of 6.2 million people. 100 billion yen (about 190 billion baht at the time) The coupon must be used only in the recipient’s local community. Expires within 6 months (distribution begins March 1999, ends September 1999)
When comparing, you will see that There are some similarities with the cryptocurrency wallet project 10.,000 Thai baht, which looks like this:
Giving away 10,000 baht of digital money through the Super App Distributed to people aged 16 and over. In total, about 50 million people will receive rights The total budget is 540 billion baht. It can be used in an area of 4 km (but considering expanding the area). It also has a useful life of 6 months from the project start date
However, economists and some people at the time I do not have much confidence in this shopping coupon policy. Few believed that the plan would be a huge success. Some people said The user uses the coupon and saves the same amount. This means it does not incur any expenditure. Some people even refer to this as a “Strange Effort”
Peter J. Morgan, senior economist at HSBC James Capel Japan, said in 1999 that the amount involved in the scheme was equivalent to just 0.13% of gross domestic product (GDP). Is there any effect even after the coupon expires?”
Meanwhile, the Nikko Research Center estimates that the project will increase GDP by a maximum of only 0.06%.
Kathy Matsui, chief strategist at Goldman Sachs Japan, said that instead of taking short-term measures, Japan should use the money to add to its weak social safety net at a time when companies increasingly need to cut wages. “Japan should implement a project to support institutional restructuring.”
But of course, when people oppose it, there must be people who support it. For example, Kitasato Toshiaki, director of policy planning at Japan’s Ministry of the Interior, sees that shopping coupons create various discount activities and promotion at local merchants. to promote this project. “This kind of thing probably won’t happen with other measures like tax cuts… in our opinion. This policy is more effective than previous tax reductions. where people tend to save.”
Furthermore, the plan is a logistical nightmare. and it is expensive to manage The government also chooses to tie coupons to areas. It can only be used in nearby towns or villages.
Increasing local business The government also gave every city and municipality a printing press. Dyeing specialist and its own paper makers to produce their own local coupons So some coupons are pink. Some are blue some are white Some are cream.
Districts can also set their own rules based on the guidelines. Therefore, some coupons can be used in brothels and night clubs. Or gambling at pachinko parlors and mahjong tables. But some areas can only be used in places that the authorities consider appropriate, such as shops and restaurants.
In some areas, authorities have tried to help small businesses by forcing people to wait 40 days to use coupons at large department stores. Meanwhile, some have color-coded coupons that limit spending to half off at big box stores to guarantee that. The other half will be spent in retail stores.
The coupon program was widely seen as having little success in stimulating spending, so in 2009, 10 years later, Japan launched a similar program. This time, it is offering 12,000 yen worth of coupons to all citizens regardless of age or income, and an additional 8,000 yen to anyone under 18 or over 65, even Taiwan itself. Coupons worth about $120 were distributed to all citizens in February 2009.
But one research team believes that Japan’s coupon distribution program “There is nothing special about it,” and a study of the 1999 coupon program was conducted to show that such projects can only slightly stimulate public spending.
By Chang Taixia of the University of Chicago, Shimizutani Satoshi of the Institute for International Policy Studies, and Hori Masahiro of the Cabinet Office. Japanese government Conducted a research project called “Did Japan’s shopping coupon program increase spending?” Published in 2010, Miss Sirikanya Posted yesterday.
The results of the study show that From household level data it is shown that the coupon program can stimulate consumption of semi-durable goods (fashion, small appliances, sports equipment) 0.1-0.2 times and is effective only in the first months after receiving the coupon.
As for non-durable products (Daily consumer products in use, such as food, beverages, fuel, etc.) and service groups (restaurants, barber shops, medical treatment, transportation, etc.) were found to have very little stimulus from the coupon distribution project, almost invisible. result
This makes some people question: What about digital wallet policies that will happen next year? Will the same effect occur in Japan? But some people think that the context and situation of Japan at that time and Thailand at this time are different. they cannot be compared to each other
Ms Sirikanya replied on the matter that “As I said. You don’t have to trust the research. This study looked at things that happened in 1999, but they studied things in 2009. Of course, the contexts are different.”
Ms. Sirikanya said that “It was interesting to me because a week ago Mr. Paophum Rojanasakul, deputy general secretary of the Thai Pheu Party, objected that this project is not similar to other projects where the IMF studies fiscal multipliers. Therefore, they cannot be compared. When I found out there was one that was exactly the same. Including the usage time, the usage radius, so we show it to you You don’t have to believe it. So what research do you have to back it up? He brought it out for us to see. There is no arguing that the context is different.”
Ms Sirikanya also said that “Some people may say that they only gave away 31 million people, we gave away all of them. But the results of the study show that clearly He was only looking at the people who received it. How to spend money We didn’t interpret anything beyond that to mean that the economy couldn’t be stimulated, the GDP wouldn’t grow, we didn’t talk about those things at all.”
Compiled from Bloomberg / New York Times / Research “Did Japan’s shopping coupon program increase spending?”
Photo by Reuters
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