Striving for Further Reform and New Vision

Dr. Shoichiro Toyoda

Keidanren
Japan Federation of Economic Organizations
January 3, 1996

Keidanren celebrates its 50th anniversary this August. That makes 1996 a very special year for us. I want to see that commemorative time as one where we make further progress in laying the groundwork for a brighter economic future for Japan in the 21st century.

Deregulation is Keidanren's biggest policy objective. And we are at last beginning to see the concrete results of years of effort. A business environment that is conducive to new industries, new ventures and a new generation of creative human resources is taking shape.

Keidanren itself is also evolving in international communications. It has diversified from traditional bilateral dialogues with counterparts in other nations to multilateral communication. We have progressed beyond our traditional approach of just getting to know each other. We are pursuing real solutions to important issues.

The private sector as a whole is starting to change. Economic groups and nongovernmental organizations are taking on more responsibility for Japan's future. They are learning to work on their own initiative without relying on government instruction.

Keidanren is committed to working for an early restructuring of the Japanese economy. And shortly we will release a detailed explanation of that vision -- Rebuilding Japan to Ensure a Vibrant Future. The blueprint proposes that Keidanren take more initiative to changing Japan. Keidanren must act as the spokesman for Japan's economic community in matters of politics, public administration, and foreign relations, among others.

With that in mind, Keidanren will take on many issues in 1996. The following are some of the major issues we are working on.

Promote Effective Regulatory Reform

Keidanren will work with in cooperation with all sectors of Japanese society to promote further regulatory reform. On our side, we will ask our affiliate associations and companies to reexamine existing regulations and to take full advantage of deregulation measures. We will also urge the national and local governments to implement comprehensive administrative reform and to decentralize.

Relocate the Capital & Expand the Social Infrastructure

We advocate that the central government relocate the capital out of Tokyo at the earliest possible opportunity. That will serve as an excellent symbol of the government's commitment to reshaping Japan. The government must come up soon with a concrete plan for the relocation that includes a finalized location and a timetable.

The country needs to create a more vibrant economic society. But to do that we will need to make improvements to the social infrastructure. That includes the construction of an international hub airport. We also need to upgrade telecommunications infrastructure and promote research and development.

Create a Healthy Economy Through Fiscal and Tax Reform

The government has to implement key policy decisions to build the healthy socioeconomic system necessary to support Japan's aging society. It must undertake a thorough investigation of the fiscal system to identify points for reform in the national budget. Reformers need to pay particular attention to public investment and social welfare. We at Keidanren also advocate instituting reforms in the fiscal loan and investment program.

Taxation and government spending is also in desperate need for reform. The budget must maintain a balance between income, consumption, and property taxes. Keidanren will keep pushing for tax reforms that achieve that balance between direct and indirect taxation. We will continue fighting for a reduction of income and corporate taxes. But for any of that to come to pass, the government needs to eliminate unnecessary spending.

Strengthen Private Sector Interaction & Ties With the International Community

Keidanren will continue its efforts to strengthen ties and relations with other nations. One of those will be a large-scale economic mission to China. We will also continue supporting Japanese interaction within multinational organizations such as the World Trade Organization and the Organization for Economic Cooperation and Development. Increasing policy dialog with business associates in the United States and Europe will be an important part of organizing that support.

Keidanren is committed to improving the international business climate. We will make concrete proposals for discussion at the APEC Conference in Manilla. And we will promote personal exchanges with the World Bank and other international organizations. That will help us to gain further insight in activities such as economic cooperation and environmental protection.

Achieve Comprehensive Political Reform

Restoring confidence in Japanese political leadership at home and abroad and revitalizing the political system will be critical challenges for us. Keidanren will establish an organization of corporate executives to serve as a catalyst to revitalize Japanese politics. That group will concentrate its efforts on improving communications between politicians and businessmen.

Keidanren will also encourage political leaders to act on their own initiative to improve relationships with their international counterparts. That way they will be better able to meet the demands of our rapidly changing world.