The energy cost conditions business activities. Relatively high electricity prices in Japan have increased by 30% for industry use and by 20% for household use since the 2011 catastrophe showing no sigh to stop.
Keidanren's latest survey shows that about 40% of manufacturers would reduce domestic investment and around 30% of our members would expand overseas investment if the current electricity price level remained unchanged. Without a stable energy supply at a reasonable cost, domestic business will not flourish.
The government needs to take immediate action to change the situation. More precisely, the political leaders are required to show the national energy mix including the power coming from reactivation of nuclear power stations under the big premise of ensuring their safety. The Administration should also expedite the process of restarting the nuclear facilities and review the feed-in tariff system.
Tokyo has been a center of activities in various fields in the Japanese society, but it is currently too excessive to bring out high potentials of regions all over the country. It must change to further vitalize local economies. It is therefore important for companies to decentralize business locations. It is also necessary for the central government to assign a range of administrative tasks such as the delegation of authorization to local authorities as well as introduce more tax credit and other economic incentives.
More and more companies have begun giving serious consideration to domestic investment as the extreme yen appreciation has been corrected. It is important to nurture regional industries which can make the best use of their own local advantages so that the benefits of Abenomics can spread throughout Japan. Industrial clusters such as carbon fiber production in the Hokuriku region and paper manufacturing in Shikoku have been growing. It deserves our attention.
Regional revitalization is the top priority of the nation. The Japanese economy never revive without it.