As the new millennium begins, we face a host of challenges such as the declining birthrate and aging population and the global problems of food, the environment and energy.
This year also calls for finishing the work undertaken in the 20th century. The task is to chart a clear roadmap for structural reform to overcome the outstanding issues; we have no time to lose in building groundwork that makes it possible to keep a vibrant Japanese economy for the next century. Obviously, the heavy dependence on public finance at present cannot continue indefinitely. In the United States, the transformation of the industrial structure is already complete, while Europe moves ahead with bold reforms spurred by the birth of the euro zone.
Particularly urgent in this country are reforms in three areas. These are the work of adjusting to globally practiced standards in tax and legal systems, putting in place a strategic program for industrial technology development and conducting a fundamental review of the social security system.
Last year, discussions at the Industrial Competitiveness Council led to the coming into effect of the Law on Special Measures for Industrial Revitalization. This brought progress in improving the relevant tax and legal systems in line with global practices. In addition to this, steps must be taken soon to improve the legal system on the splitting of corporations and introduce the consolidated taxation system.
Technological innovation holds the key to sustainable growth in the future when the demographic change in progress inevitably brings with it a reduction in savings. The Obuchi Cabinet is taking up as the "millennium projects" research and development in the fields of information technology, population aging, and the environment. Achieving tangible results within the planned periods would require good teamwork by industry, the government and the academia.
Another task of policy hardly to be set aside is the fundamental reform of the social security system if we are to wipe out the people's anxieties about the future and develop a society where they can live with a better sense of security. For a new system to go into force at an early date, a decision needs to be reached soon over the problem of raising the needed revenue through either tax or insurance premium and that of finding a sustainable level of benefits.
Obviously, as the economy's ultimate engine private businesses must implement structural reforms within themselves and grapple with the task of repairing deteriorated balance sheets. At the same time, they are counted on to opening up new business and employment opportunities by demonstrating creativity and entrepreneurship.
It is earnestly hoped that the Japanese nation will show courage and push forward with structural reforms this year to open a bright outlook for the 21st century.