Strategies for Reviving the Japanese Economy

Strategies for Reviving
the Japanese Economy

(Report to Prime Minister Obuchi)

The Economic Strategy Council of Japan

February 26,1999

The fourteenth meeting of the Council has unanimously adopted this report, and submitted it to Prime Minister Keizo Obuchi.

Recommendations were reported to the Cabinet meeting on March 2, 1999.

The Economic Strategy Council, established on August 24, 1998, has discussed visions for reviving the Japanese economy and for building a prosperous economic society in the 21st century upon the request by the prime minister. The Council consists of 10 members, chaired by Hirotaro Higuchi.

This is the provisional translation of the final report of the Council. The interim report was published on December 23, 1998.

Strategies for Reviving the Japanese Economy

-----Contents-----

Introduction: 1. Assessment of the Current Economy
2. Strategies for Reviving the Economy
3. Toward a New Growth Era
4. Steady Implementation of Recommendations
Chapter 1 Scenarios for Economic Recovery and a Road Map for the Sustainable Fiscal Balance: 1. Scenarios for Economic Recovery
2. Government Fiscal Balances in the Medium and Long Run: a Road Map for Sustainability
Chapter 2 Building"A Competitive Society with Soundness and Creativity"and Preparing Safety nets
I. Building"A Competitive Society with Soundness and Creativity": 1. Initiatives for"Small Government"
2. Establishment of Stronger Local Sovereignty
3. Tax Reform for a Fairer and More Rewarding System
4. Educational Reform to Build Creative Manpower
II. Providing Safety Nets to Warrant Security: 1. Policies to Enhance Employability and to Ensure Job Security
2. Judicial Reform Matching an Ex-post Rule-Governed Society
3. Building a Sustainable, Confidence-based Social Security System
Chapter 3 Setting the Bubble Economy in Real Terms and Establishing Financial System Designed for the 21st Century: 1. Establishing a Scheme to Promote Disposal of Non-Performing Claims in Real Terms
2. Promotion of Liquidation and Securitization of Performing Real Estate
3. Establishing a New Financial Intermediary Route to Supplement Indirect Financial System
4. Consolidating a Financial Infrastructure Suitable for the 21st Century
5. Drastic Reform of the Public Finance and the Fiscal Investment and Loan Program and Financial Administration for the 21st Century
Chapter 4 Reviving Vigorous and Competitive Industries: 1. A Framework Toward Industrial Revitalization
2. Assisting Establishment of New Businesses and Strategic Technological Development
3. Considering Human Resource Infrastructure
4. Consolidating Intellectual Infrastructure
5. Creation of Leading Industries for the 21st Century
Chapter 5 Strategic Infrastructure Investment Toward the 21st Century and Revival of Local Economies
I . The Basic Strategy of Developing Future Infrastructure: 1. Cross-ministry Infrastructure Development Plan and Regional Revival Plans
2. Reforming Local Governments to Increase the Efficiency of Public Works
3. Active Introduction of Private-Sector Dynamism
II . Strategic Projects: 1. Improvement of Urban Lives and Raising Global Competitiveness of Japanese Cities
2. Strategic Information Infrastructure Focusing on the Internet
3. Creating Environment Businesses and Building Recycling Society
4. Public-Private Collaboration Frameworks and Fostering New Talent
5. Creating Towns to Prepare for Rapid Population Aging
6. Initiating New Housing Policy
7. Developing Attractive Spots in Japan and Sending Messages to the World
Conclusion
References: Reference 1 The List of Laws Relevant to Recommendations
Reference 2 How to Understand Policies for Reviving the Japanese Economy
Notes: Note 1 Surveys on Economic and Fiscal Visions over the Medium-term
Note 2 On the Potential Growth Rate of the Japanese Economy
Note 3 On the Macroeconomic Model
Appendixes: Appendix 1 The Members of the Economic Strategy Council
Appendix 2 Records of Official Meetings
Appendix 3 Records of Working Group Activities

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