[ Nippon Keidanren ] [ Policy ]

Building a New Foundation for Growth

FY 2005 General Assembly Resolutions

May 26, 2005

Nippon Keidanren
(Japan Business Federation)

Japan is pursuing structural reform while creating the foundation for stable and sustainable growth led by private sector initiatives. It is important for Japan to create an economic framework capable of responding to changes in global competition. Continuing structural reform efforts to adapt to the fluctuations in overseas economies and industries, exchange rates, and prices of crude oil and other natural resources are also important.

From this perspective, Nippon Keidanren believes the objectives listed below are essential, and is determined to work toward these objectives and step up its political activities. To promote policy-oriented politics, Nippon Keidanren is developing transparent relationships with political institutions and is encouraging political contributions as part of corporate contributions to society based on policy assessments.

Nippon Keidanren member companies should continuously monitor their compliance with Nippon Keidanren's Charter of Corporate Behavior, while at the same time, work to improve transparency and create effective internal control mechanisms and promote business ethics through the initiatives of top management. Member companies must also actively strive to fulfill their social responsibilities according to the needs of their stakeholders.


1. Elicit corporate capabilities

Economic globalization continues and competition among companies is more intense. Companies are responsible for helping people enjoy affluent lives by pursuing proactive business strategies, creating and increasing added value, and creating employment. The government should pursue policies that encourage these corporate capabilities.

(1) Reform corporate tax and legal systems

Implement sweeping reform of corporate taxation, corporate laws, and antimonopoly laws from the perspectives of enabling companies to pursue strategic business development and ensure consistency with global standards.

(2) Integrate tax, fiscal, and social security reform

Achieve stable economic growth while reducing and streamlining expenditures from the perspective of ensuring sustainable fiscal administration amid Japan's rapidly aging society and declining birthrate. In particular, seek integrated reform of the social security system including pensions, health care, nursing care, and employment insurance to curb the increase in social security related expenditures. Secure the revenues needed to achieve the foregoing by increasing the consumption tax.

(3) Reform administrations

Based on the policy of leaving to the private sector what the private sector is capable of, promote further regulatory reform and privatization and pursue greater administrative efficiency and reductions in administrative costs. To achieve these objectives, eliminate administrative duties and projects and pursue privatization by legalizing "market tests." Additionally, quickly reduce the number of public employees and implement salary reforms at national and local levels and undertake a sweeping reform of the national public employee system with the aim of eliminating the adverse effects of the vertical administrative structure. Further consider introducing a federal system in light of the progress in regional administrative reform.

2. Create new industries

The government should implement strategic initiatives from the perspective of maintaining and strengthening the international competitiveness of industry in the future by promoting scientific and technological creativity, intellectual property protection, trade, respect for the environment, and tourism. To best enhance regional revitalization and promote small and medium-sized enterprises, it is necessary to promote industry that enriches the spirit of the Japanese people.

(1) Expand R&D and create new industries

Aim to expand the government's R&D spending in the Third Science and Technology Basic Plan, based on the recognition that science and technology are vital to innovation. To ensure that the people of Japan benefit from R&D, the government should identify critical technologies that are essential for achieving national policy objectives, including environmental, manufacturing, space, and defense, and then pour in intensive investment and strategic development. In addition, foster a climate that encourages the creation and utilization of intellectual property.

Employ information communications technology to create one of the world's most advanced information societies based on international standards, and develop and expand new industries, including health care services and entertainment.

(2) Strengthen international cooperation

Strive to promote global trade by maintaining and strengthening the multilateral free trade system focused on the WTO and by strengthening bilateral and regional economic cooperation based on economic partnership agreements. Take an initiative in pursuing WTO negotiations and accelerate domestic structural reform in agricultural and other sectors. Expand ODA expenditures in order to develop infrastructure and to train human resources in developing countries. Establish a climate that encourages direct investment in Japan.

(3) Pursue environmental and energy policies

Steadily implement the Keidanren Voluntary Action Plan on the Environment to fulfill the commitments of the Kyoto Protocol and actively contribute to measures in the transportation, office and household sectors. Pursue environmental and economic measures simultaneously, including measures that rely on the voluntary initiative of companies, rather than through the imposition of environmental taxes and regulatory policies. Measures to modify the lifestyle of the Japanese people such as the introduction of daylight saving time, and measures to develop distribution infrastructure and increase efficiency are essential.

At the same time, diversify energy sources by developing and expanding the use of new energy while positioning nuclear power as the mainstay energy source, including the steady pursuit of nuclear fuel cycle technology. Additionally, aim to efficiently use energy through innovative energy conservation technology.

(4) Develop tourism strategy

Quickly develop a comprehensive tourism strategy with the aim of utilizing various tourism resources through broad regional cooperation, promoting urban revitalization, and creating beautiful cities. Additionally, in order to increase the number of foreign tourists visiting Japan, ease the requirements and simplify the procedures for issuing tourist and business visas, expand airport capacity, and make the transfer between international and domestic flights more convenient.

(5) Develop living climate

Establish a basic law on housing and urban development that enables the people of Japan to realize affluent lifestyles, while giving consideration to the diversification of values. Harness the ingenuity of the private sector, including information communications infrastructure, to develop comfortable, high-quality housing, as well as safe, secure, and beautiful cities.

3. Create a society that makes the most of its population

Japan will become gray as the baby boomers that supported high economic growth approach the age of mandatory retirement. Moreover, birthrates continue to decline due to an increase in the number of people not marrying or marrying at a later age, and in married couples who do not want children or that feel they must refrain from having children due to lack in infrastructure and inadequate social support for child-rearing. It is necessary for the public and private sectors to cooperate in promoting effective measures, in light of the increasing social participation by women and major changes in Japanese household structure.

(1) Promote a diverse work force, including the promotion of jobs for youths

Create stable employment, and update labor laws and labor market regulations in order to address the diverse employment needs of all citizens, and expand the framework for supporting the development of individual job skills. Households, local communities, schools, companies, and government should cooperate in helping individuals make a smooth transition from education to work, improve their job skills through internships at companies and government offices, and secure steady work. Companies should develop a fair and understanding human resources system that uses a diverse range of human resources including women and senior citizens, in addition to fresh graduates.

(2) Implement educational reforms

Implement educational reforms based on diversity, competition, and evaluation. To enhance basic scholastic ability, allow various entities to participate in establishing and managing schools and implement sweeping reform of educational budgeting.

(3) Pursue measures to counter the declining birthrate

The erapidly declining birthrate is causing a decrease in economic vitality in terms of both supply and demand and is affecting the social security system. Consequently, learn from the policies of other countries and quickly devise measures to counter this decline. To this end, restore the education of children as a basic element of society and improve childhood upbringing and education.

(4) Accept and employ foreigners

Develop comprehensive measures at the national and local levels to accept and employ foreigners from the perspectives of creating a multicultural society and enhancing the ability to create dded value.

In addition to the foregoing, the basic framework of Japan that has supported its economy and society in the postwar period needs restructuring. A new Japan should be created with the aims of earning the trust and respect of international society, achieving a prosperous economy and society complete with spiritual abundance, and creating a fair, just, safe, and secure nation.

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