Today I joined a professional luncheon at the Foreign Correspondents’ Club of Japan. Speaking at the press conference was Hiromasa Yonekura, Chairman of Nippon Keidanren, who read prepared remarks in English, followed by Q&A. In his remarks, Yonekura reiterated the Keidanren’s Growth Strategy, which includes comprehensive reform of the tax, public finance and social security systems. The Growth Strategy calls for an immediate increase in the consumption tax from 5% to 10% and eventually to 20%, with the increases targeted to support the social security system. The Keidanren supports reduction in the effective corporate tax rate to 30%.
Yonekura spoke of the critical need for Japan to join the TPP or be left behind, as well as of the importance of agricultural reform, in an industry where 60% of the farmers are older than 65, much farmland is abandoned, and small farm size limits economies of scale. He supports the liberalization of immigration policy and cited Singapore’s approach as a good model, encouraging the immigration of skilled labor and flexible to adjust to economic shifts.
None of this is new information. What did catch my ear was the Keidanren’s “Sunrise” initiative. Yonekura commented that the Keidanren has 22 projects on the drawing boards to promote innovation and capture the strength of Japan in technology and human capital. Among these projects are the so-called future cities, private sector initiatives aimed at stimulating technological innovation to strengthen Japan’s industrial competitiveness. The Keidanren targets completion of a concrete action plan next March for this project, in which businesses would invest in selected towns with populations between 200,000-300,000, shouldering the principal financial risk in cooperation with support from local governments. An investment that has been mentioned is development of technology to extract and recycle rare earth minerals from scrapped electric appliances and automobile equipment.
With his background as chairman of Sumitomo Chemical and his off-the-record candid remarks, Yonekura impressed me as a person of action. Let’s hope so.
All the best,
Warren J. Devalier
©2011 Warren J. Devalier