Recreating Economy for New Century

Takashi Imai Chairman, Keidanren

At the beginning of the second term as Keidanren chairman, let me share with you some of my thoughts on the nation's economy.

Now at last the Japanese economy is starting on a course of autonomous recovery. The most important responsibility to be shouldered by us in private industry is to carry on with the work of recreating the economy.

Private businesses are the engine of the market economy. They must play their central role by powerfully driving it. Their challenge is to bring entrepreneurship into action not just in reorganizing and rationalizing operations but opening up new business frontiers, while charting accurately on where the IT revolution and other currents of the new economy are heading.

In the area of public policy as well, it is important that Japan adopt measures that help create new growth opportunities for the national economy.

One of such measures is to develop and follow through on a strategically oriented science and technology policy. Another is an educational reform that focuses on nurturing young people with creative talent and abilities to operate effectively in various fields of international activities. This is indispensable for this country to keep a leadership position in the global community. It is also hoped that the government take up a serious review of immigration policy soon, with a view to securing adequate manpower in new growth sectors to prepare for an inevitable decline in Japan's population in the coming decades.

Next, Japan needs infrastructure improvement if it is to make continued economic growth possible in the 21^st century. With the government providing strong leadership, action should start at the earliest possible date.

Major demographic changes in the form of falling birthrates and population aging are inexorably in progress, while Japan's public indebtedness has reached a height unparalleled in the other industrialized economies. This makes it most urgent to devise a grand design for public finance reform addressing the tax, social security and local government finance.

In obvious need of reform is the public pension system that feels the strain of the increasing retiree population. So is the whole range of social security schemes including those for health, nursing care for elderly people with disabilities and welfare assistance. There must be a fundamental and systemic review of the entire architecture if we are to restore public confidence in the future. Mindful of fairly distributing the costs and benefits of social security both within the same generation and among different ones, we must put in place a redesigned and financially sustainable system at the earliest possible date.

Using the opportunity of next year's reorganization of the central government ministries and agencies, I will strongly seek a fundamental review regarding the so-called special-status corporations, local government administration and finance and the existing public works system.

In closing, I ask members' understanding and cooperation for Keidanren's future activities so that we will be able to have a hopeful outlook for Japan in the 21^st century.