Growth Strategy needs to promote new endeavors by private sector

The Yomiuri ShimbunAmid a declining population, how can the nation’s economy be developed? It is necessary to boldly emphasize relevant policies in order to resolve the thorny issues that Japan is facing.

The government approved at a Cabinet meeting an action plan to implement this year’s Growth Strategy. This is one of the government’s four plans centered on the Basic Policy on Economic and Fiscal Management and Reform, also known as the “big-boned policy.”

The Growth Strategy is aimed at drawing out the vitality of the private sector through technological innovation and improving productivity. It is the third arrow of the Abenomics economic policy package, after the financial and fiscal policies, but has born little fruit.

The nation’s potential growth rate, which reflects its real economic capacity, remains at a low level, hovering around 1 percent.

Of the 152 policies that the government came up with in last year’s Growth Strategy, only one-third managed to show signs that their goals will likely be achieved. It is hoped that the government will discover the reason and swiftly implement the policies.

This time, the government established measures to deal with regional areas as a pillar of its Growth Strategy. These measures promote the merger and joint management of regional banks and fixed-route bus companies. Both of these are infrastructure that supports life in regional areas. It is a reasonable course of action to aim at strengthening their management foundations through realignment.

Under the current circumstances, such a move could increase market share within the region, and the Fair Trade Commission will call a halt to the envisaged integration if it concludes that it constitutes a regional monopoly.

Taking this into account, the government has decided to set up a special case law that will exempt cases that meet certain criteria from the Antimonopoly Law.

Return to starting point

However, these measures will only serve as a means of stopping regional economies from declining. It is indispensable to implement such fundamental policies as securing human resources responsible for regional economies, bolstering tourism strategies and nurturing new industries.

The Growth Strategy also stresses employment reforms. It incorporates securing job opportunities for workers until they are 70, expanding an employment quota for mid-career workers and promoting the work style of having side jobs.

It will probably take time to change the awareness of companies and workers. A persistent approach is required.

What is concerning is the lack of originality in the policies on the utilization of big data and the 5G next-generation communications standard. These are the fields that should have been treated as the main pillars of the Growth Strategy.

Improving the rules of the digital market was deemed a major issue to be tackled. The government came up with a plan to establish an expert organization that will monitor developments, keeping in mind the so-called GAFA of U.S. IT giants including Google LLC.

However, a clear vision has yet to be drawn up as to how Japanese companies will tackle the situation. The global competition to lead the 5G field is getting fierce. The government’s policies for supporting the development and spread of technologies lacked further steps to be taken.

A foray into a new field should be supported. It is desirable to go back to the starting point of the Growth Strategy.

The government’s four plans have many duplicate elements, and how roles should be divided up remains unclear. The priority of the policies should be rearranged.

(From The Yomiuri Shimbun, June 23, 2019)Speech


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