In "Overcoming Crisis, Opening a Path from Asia to Global Economic Growth" (October 20, 2009), Nippon Keidanren proposed seven action plans for sustainable growth. Below we describe these plans in more detail, examining the roles to be played by regional governments, the Japanese government, international organs, and the private sector.
In order to advance regional economic integration, we must expand the coverage of and improve the economic network formed by accumulated comprehensive EPAs and FTAs that cover not just trade in goods, but services trade, investment, and the movement of natural persons.
The governments of the region's nations ("national governments") will aim to realize the ASEAN+6 scheme and the FTAAP, a scheme including the USA on the scale of APEC. Gaps will be filled for the time being through the prompt conclusion of EPAs between Japan and Korea, India, and Australia. Furthermore, steady progress will be made in negotiations on a Japan-China-Korea FTA, and consideration given to new talks on a Japan-China FTA.
National governments will consider liberalization of certain high-tariff products and will look at the possibility of accelerating the schedule for phased reduction or abolition of tariffs.
In services trade and investment, national governments will relax or abolish restrictions on investment and transfer of foreign capital in areas including distribution, finance, construction, ICT, and maintenance.
With respect to the movement of natural persons, national governments will as much as possible eliminate such obstacles as restrictions on the number of intracorporate transferees and on board member nationality, so that foreign corporations with local presences can provide services smoothly. To let human resources from other Asian nations take part in the economy, the Japanese government will as needed relax regulations on foreign workers' status of residence.
Currency stabilization is a prerequisite condition for enabling foreign corporations to smoothly deploy their operations in Asian countries. Efforts will be made to prevent another financial crisis and to stabilize currencies.
Steps will be taken to create markets for the issuance and distribution of bonds and other securities, to train and expand the pool of issuers and investors in the markets, and to foster finance specialists. This will enable the circulation of the massive private savings in the Asian region as investments and meet the funding needs of regionwide infrastructure projects.
National governments will look into expanding target countries in line with the multilateralization of the Chiang Mai Initiative, a network of bilateral currency-swap arrangements, and increasing the flexibility of its use.
National governments will make use of the Asian Bond Market Initiative (ABMI), at the same time enhancing systems in corporate bond and securities markets, maintaining fair trading in stock exchanges, improving transparency of trading and corporate data, and providing financial instruments that meet investor needs.
To deploy international production networks, steps will be taken to create region-wide distribution infrastructure, lower transaction costs, and promote the creation of industrial zones in late-starter nations through horizontal distribution in manufacturing industries, thereby helping to do away with intraregional gaps in economic performance.
National governments will cooperate actively in creating a master plan for broad regional infrastructure projects led by the Economic Research Institute for ASEAN and East Asia (ERIA), the ADB, and so on.
Packages will be created in which national governments create basic infrastructure with ODA and other public funding while private industry handles the tasks it can on a commercial basis.
The Japanese government will use not just ODA, but its full range of development financing measures, including the investment capacity of Nippon Export and Investment Insurance (NEXI), the Japan International Cooperation Agency (JICA), and the Japan Bank for International Cooperation (JBIC).
Improvements will be made to legal and other systems in order to attract private investment, facilitate technology transfer, and smoothly implement projects based on public-private partnership (PPP).
So that the Asian region can grow as a center for research and development, as well as production and consumption, each nation will create environments from which to deliver high-value-added products and new business models to the world through innovation.
National governments will enhance and harmonize their basic civil law and other legal frameworks (tax, corporate, competition, and labor law), establish schemes to protect intellectual property rights, and otherwise provide needed "soft" infrastructure. The Japanese government will take part in capacity building, using both ODA and private-sector technical assistance.
National governments will create an environment in which talented individuals of all nationalities can move freely within the region and concentrate resources to boost research and development and to foster the region's human resources.
Rapid economic growth in Asian nations is bringing about steep rises in their wealthy and middle-class populations. Recent economic stimulus measures have also boosted domestic demand, and these nations are increasingly taking on the role of end consumer markets. Asian internal demand must be expanded to achieve domestic-demand-led growth in these economies.
National governments will create incentives to direct their vast household savings into consumption by bolstering social security systems, such as by creating unemployment insurance and pension schemes.
National governments will improve people's quality of life by ensuring widespread education and raising incomes among low-earning "base of pyramid" (BOP) populations. The Japanese government will use its ODA in support of these efforts.
To prompt the transfer of high-quality services within or from outside the region, national governments will take such steps as relaxing foreign-capital restrictions on finance, advertising, distribution, retail, and other service industries.
By promoting such measures as energy conservation, Asian nations will tackle global warming and other environmental issues in a way that balances these concerns with economic growth.
Each nation will take active part in efforts to reduce energy use and spread the use of eco-friendly products.
National governments including those of China, the world's top emitter of greenhouse gases, and India, fourth on the list, will make international commitments on intensity-based or aggregate emission reduction targets, and carry out energy conservation and other efforts to meet them. Japan will use public-private cooperation to provide technical assistance to those nations dedicated to tackling this challenge.
National governments will lower tariffs on environmental goods and take other steps to help spread the use of eco-friendly products.
To achieve the above action plans, Japan will undertake fundamental reforms of its ODA, its OOF, and the formation of its public-private frameworks.
The Japanese government will act to slow the decline in the ODA portion of the general account budget that has continued since spending peaked in 1997.
In addition to speeding up the execution of yen loans, Japan will expand the scale of its grant assistance.
The system for Japanese public investment will be made more accessible to the private sector, such as by not requiring guarantees or collateral securities when issuing overseas investment financing.
From the perspective of improving the effectiveness of Japan's OOF, JICA and JBIC will take concrete steps to reinforce their cooperation, such as by crafting project packages on a mutually complementary basis.