GENERAL SURVEY

Vol.34-No.09 September 1,1995

An Interim Report by the Free and Vital Economy Committee of the Economic Council

The Free and Vital Economy Committee attached to the Economic Council, which advises the prime minister, compiled a five-chapter interim report, the pillar of which is an action plan. The action plan sets out concrete goals for deregulation in 10 fields, such as finance and public works, with the objective of rectifying the high-cost structure of the Japanese economy. This report will form the core of the interim report of a new Five-Year Plan for 1995-2000 to be compiled at a general meeting of the Economic Council. Under the new economic plan, the government will project the nature of the nation's future economic society and will offer fundamental and underlying policy and priority-based measures and policies. The present Five-Year Plan for Achieving a Better Quality of Life (1992-96) sets out a variety of goals with emphasis placed on people.

Chapter 1 provides an overview of the basic direction in which Japan will proceed in years to come, and points out the following. In recent years, people have raised doubts about the traditional system against the background of the speculation-driven "bubble economy," and the second longest recession in the post WW II period that followed. This, in turn, produced fears of the hollowing-out of industry and employment. Furthermore, people have expressed a growing dissatisfaction that they do not feel a sense of affluence. This is observable in the delay in nurturing new business fields and the gap between prices at home and abroad which increase industry's costs. To deal with these problems, Japan must undertake drastic structural reform of society, moving away from the traditional relationship of mutually-dependency toward one in which businesses and individuals freely engage in activity on their own initiative and responsibility.

In Chapter 2, the report proposes that, the government implement measures to create a free and invigorated economic society, through deregulation, fostering of new business opportunities, encouragement of technological development, fostering of human resources development, furthering of sophisticated information telecommunications, creation of jobs and consolidation of the labor market, building of industry and society in harmony with the environment, and publication of information and improved financial disclosure.

Chapter 3 calls for the development of vital industries and necessary policies. To consolidate an environment which will stimulate dynamic corporate activity, the government will review laws and systems involving businesses as promptly as possible and will encourage foreign countries to boost direct investment in to Japan. Specifically, it will simplify procedures for M&As in the Commercial Code, consolidate provisions for division of corporations and examine corporate taxation on the basis of fairness and neutrality, with the basic aim of lowering the tax rate, while expanding the taxation base, in view of changes in industrial structure.

Chapter 4 refers to the development of vital regional communities and necessary policies. The report sets out measures and policies for the development of a balanced natural land, reduction of the excessive concentration in Tokyo, characteristic development of the regional economy and reinvigorated rural, forestry and fishing villages.

Chapter 5 describes building of an economic-social system which responds adequately to emergencies such as disasters.

New Minister of Labour

Prime Minister Tomiichi Murayama, who is chairman of the Social Democratic Party of Japan (SDPJ), prior to reshuffling his 13-month-old Cabinet on August 8, urged his two key coalition allies to remain in their ministerial posts. With the inauguration of the new Murayama Cabinet, Mr. Aoki, a SDPJ member, was appointed Minister of Labour, his first Cabinet portfolio.

Mr. Aoki, who was born in Shizuoka Prefecture in 1926, devoted himself to labor union activities before becoming a Diet member. He joined the former Japanese National Railways (now Japan Railway) in 1942, became head of the Shizuoka Prefectural General Council of Labor Unions in 1967. He was chairman of the SDPJ Shizuoka Prefectural Headquarters Committee.

Mr. Aoki has worked in the political world since 1974, and became chairman of the Upper House Special Committee on Land Problems in 1992. He served as a member of the Upper House Communications Committee as well as the Upper House Construction Committee. He admires Mr. Asanuma, who was a former chairman of SDPJ, and his motto is "with the people" which reflects Asanuma's political spirit.


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