Reconstruction of the Global Economic Chain Needed in the World Economy

Koji MIYAHARA Vice Chairman of the Board of Councillors, Nippon Keidanren Chairman, Nippon Yusen Kaisha (NYK Line)

What is happening around the globe? During the past six months or so, both production and consumption have plunged sharply in all parts of the world, while distribution and transport activities, which support production and consumption, have also contracted markedly. With the loss of the lifeline called "finance," the global economic chain has become paralyzed, bringing about a situation that has never before been experienced.

In retrospect, the world enjoyed a continuous prosperity, which may well be described as extraordinary, over the past several years. An economic chain linking developed and developing countries appeared unquestionably solid and strong, but now it is threatened of being crumbled to pieces as a result of the financial crisis originating in the United States.

Since the crisis began in September of last year, all countries around the globe have come up with diverse policies to prevent the collapse of their economies, such as large-scale fiscal measures to generate demand and the stabilization of finance through the injection of public funds into financial institutions. These policies indicate that governments are primarily aiming to save the economies of their own countries.

In fact, countries with vast domestic markets, such as China and the United States, have embarked on the reconstruction of their economies and the creation of jobs, while showing their people clear-cut vision through, for example, investment in infrastructure, including transport networks and public facilities, bold assistance for the development of alternative energies, and investment related to environmental protection.

The problem is that such moves are apt to proceed toward inward-looking protectionism. It goes without saying that once protectionism prevails and the world economy is divided into blocs, nations relying on external trade, like Japan, will be plunged into a predicament. We must forestall such a situation by all means.

To that end, what is urgently needed, first of all, is a promotion of dialogue and cooperation with principal countries. I consider it important not only to repeat dialogue through such forums as the Group of Eight and the Group of 20, and find solutions based on international cooperation, but also to accelerate the Doha Round negotiations of the World Trade Organization, as well as talks for the conclusion of free trade agreements and economic partnership agreements so as to expand the movement of manpower, goods, money, and information across national borders, a movement that has started to shrink.

I believe that now is the time for our country to take the lead in stepping up such international cooperation and make every possible effort to reconstruct the global economic chain that is vital for the survival of our country.