Keidanren Growth Strategy 2011:
Accelerating Growth through Private-Sector Dynamism

Keidanren released a proposal titled Keidanren Growth Strategy 2011. Japan faces unprecedented danger of the hollowing-out of its industry following the earthquake in March, and the proposal summarizes economic measures aimed at achieving sustained economic growth exceeding 3 percent in nominal terms and 2 percent in real terms to go beyond disaster restoration and ensure prosperity for its citizens.

The key points are enabling Japanese companies to exercise their strengths and building international links. While positioning disaster restoration efforts as triggers for economic growth, the proposal sets out a scenario for accelerating growth through government policies in five areas that seek to enhance Japan's international competitive advantage as a business location, which will encourage freedom of corporate activity, combined with four corporate initiatives that utilize Japanese companies' strengths including world-leading energy and environmental technologies.

The five government policy areas that seek to enhance Japan's international competitive advantage as a business location are:

1. (1) Fundamentally revising energy and environmental policies
2. (2) Taking measures to combat deflation and stabilize exchange rates
3. (3) Reducing the burden on companies, including corporate tax and social security premium
4. (4) Participating in the Trans-Pacific Partnership (TPP) and promoting other high-level economic partnerships
5. (5) Developing employment policies based on a diverse labor market

The government needs to prioritize policies in these areas and implement them with a sense of urgency. In particular, it must make immediate efforts to stabilize electricity supply at economic prices, address the strength of the yen, lower the effective corporate tax rate, and participate in TPP.

At the same time, companies must address the following issues:

1. (1) Accelerating innovation, especially by carrying "Future City Model Projects" into effect
2. (2) Making our country more competitive by forming industrial clusters
3. (3) Energizing regional economies through the development of tourism and agriculture
4. (4) Integrating economies with growing Asia

These efforts will enable companies to drive economic growth by exercising their strengths to capture domestic and international demand.

To achieve sustained growth led by the private sector, the government will also need to take a leading role in the following initiatives which strengthen the foundations for economic growth:

1. (1) Undertaking comprehensive reform of social security, tax, and public finance
2. (2) Implementing reforms to establish a regional government system (doshu-sei) and promote regional autonomy
3. (3) Enhancing cities' competitiveness
4. (4) Reinforcing the functionalities of financial markets
5. (5) Fostering global-standard personnel and accepting foreign workers with a certain level of qualifications or skills