• Summer Forum Round-up
• Fiscal Restructuring and Economic Revitalization
• Addressing Disparities
• The Political Situation
• Constitutional Issues

Summer Forum Round-up

This year's Keidanren Summer Forum was the fourth since I was appointed as Chairman of Keidanren in 2014, and discussion focused on two issues: innovation and globalization, which are important elements of Keidanren's Vision. The 2014 Forum held in Tokyo soon after my appointment was attended by Prime Minister Abe, and I then accompanied the Prime Minister on a visit to Latin America. Since that time, business and politics have both acted as driving forces, each pushing ahead with their own initiatives to achieve the shared goals of ending deflation and revitalizing the economy. As a result of these efforts, a series of economic indicators including growth rates, wages, and employment have improved, and the Japanese economy has reached the point where we can finally anticipate an end to deflation.

We are now at a crucial juncture in the process of restoring Japan's economy to a growth path, and numerous issues must be addressed. Recognizing this, the central themes for discussion at this year's Summer Forum were dramatic changes in the international situation and measures to energize the Japanese economy. On the first day, participants discussed topics such as Japan-US relations amid sudden shifts in international circumstances with Dr. John J. Hamre, President and CEO of the Center for Strategic & International Studies (CSIS) and Dr. Michael J. Green, Senior Vice President for Asia and Japan Chair at CSIS. Dr. Masaru Kitsuregawa, Director General of the National Institute of Informatics, spoke about utilizing big data to achieve Society 5.0, which is positioned at the core of Japan's growth strategy, and his address was followed by dialogue on this topic. Discussion on the second day dealt with constitutional matters, which are a fundamental issue for Japan, and breakout sessions considered energy, trade, and rectification of disparities. Deputy Prime Minister and Minister of Finance Taro Aso also delivered an address followed by a discussion. The Summer Forum has steadily strengthened its political ties, having been attended by Prime Minister Abe and Akira Amari, Minister in Charge of Economic Revitalization, in 2014, Shigeru Ishiba, Minister in Charge of Overcoming Population Decline and Vitalizing Local Economy in Japan, in 2015, and Tomomi Inada, Liberal Democratic Party Policy Research Council Chairperson, in 2016.

Fiscal Restructuring and Economic Revitalization

As Chair of the Fiscal System Council, I recently made a proposal to Minister of Finance Aso regarding measures to place Japan on a sound fiscal footing, and today the Minister made a statement taking into account this proposal, which included mention of the need to achieve a budget surplus in the primary balance by fiscal 2020. In speaking about economic revitalization, the Minister has often stated his wish for the business community to actively invest in plant, equipment, and R&D, and to reduce internal reserves. To invigorate the economy, it is vital for us to boost proactive investment in product development, plant and equipment, R&D, human resources, and M&A. I realize that the business community is a key player in economic revitalization as the Minister has again urged us to play our part.

Addressing Disparities

The business community needs to fully recognize current disparities and address them. Although some economic indicators are trending upward, stark differentials exist in Japan. These are creating social distortions and hampering economic growth.

Education policy offers one avenue for resolving disparities. The background to this problem lies in a correlation between household income and educational level. Given that some children cannot receive higher education for economic reasons, education is a potent solution for resolving disparities. The government regards education as a crucial issue, and the business community will also make firm efforts in this sphere. Employment measures are another way of rectifying disparities. Specifically, non-regular workers who find themselves in that situation unwillingly should be moved to regular positions wherever possible if they have ambition and skills. The business community will work to resolve disparities from the dual standpoints of education and employment.

The Political Situation

Turning to the current political situation, the results of the recent Tokyo Metropolitan Assembly elections and falling approval ratings and rising levels of disapproval for the Abe administration are grave issues. I hope the government will give serious and earnest consideration to present circumstances. I urge it to reflect on shortcomings, recall its intentions at the beginning of the second Abe administration, govern with the economy as the top priority, and rebuild the strength of the LDP.

The recent decline in approval ratings stems from Diet members' inappropriate words and actions. However, the business community supports the Abe administration's policies in fields including the economy, diplomacy, social security, and national security, and I believe the Japanese people also support these policies. Since criticism is not directed at actual policies, I would like the government to show confidence in proceeding with policy implementation. If the government prioritizes the economy and unswervingly forges ahead with its policies to successfully end deflation and revitalize the economy, it is sure to regain the support of the Japanese people.

Constitutional Issues

At the Summer Forum, Keidanren executives engaged in a free exchange of views on various points pertaining to constitutional issues. Keidanren will continue to examine these matters in more depth, but the most pressing concerns for the nation at present are ending deflation and revitalizing the economy, and I would like the government to address these priorities first. Constitutional reform is a very important issue, and needs to be discussed, but it requires the understanding and support of the people. If policies aimed at economic and social stability can be implemented, I believe they will create an environment conducive to debate over constitutional reform. The business community considers that the government should focus on economic revitalization at this point in time.

In my press conference in early May, I said that Keidanren aimed to summarize its views by the end of the year, but following discussion at the Summer Forum, I intend to encourage further in-depth discussion of the issues and our timeframe for examining them.