Request for Deregulation

Introduction

Shoichiro Toyoda

Chairman, Keidanren
Japan Federation of Economic Organizations

Chairman, Keizai Koho Center
Japan Institute for Social and Economic Affairs

The Japan Federation of Economic Organizations (Keidanren) compiled this proposal "Request for Deregulation" (Referred to hereafter as the proposal) and presented it to the Japanese government on October 28, 1996. This is an English version of the outline of the proposal.

Let us begin by briefly explaining the current conditions concerning the progress of deregulation and administrative reform in Japan, and Keidanren's role and involvement in this.

Looking back at the history of administrative reform in Japan since World War II, we find two periods in which significant series of events took place.

One period was the early 1980s when, due to a rapid increase in financial deficits, financial rebuilding became the most urgent economic project. During this period, Japan underwent drastic measures such as the privatization of Japan National Railways and the liberalization of the telecommunications market. Moreover, the number of import-restricted items was reduced, the import inspection procedure was improved, and the functions of OTO (an office to handle complaints concerning market liberalization process) were enhanced during this period.

The other important period started in the early 1990s and is still continuing on today. With the rapid globalization of the economy and rapid advancement of aging society, Japan is faced with a serious need to reform traditional systems in the areas of administration, finance, and the economy to secure further economic development in harmony with the international community.

Such reformations has begun on limited scale since the early 1990s. In particular, the second Hashimoto administration formed in November 1996, declared its goal to place priority on reformation in five areas including administration, the economy and the financial system, and has begun working to create concrete programs for each area. In this process, the Hashimoto administration has been emphasizing improvements in accessibility to the Japanese market and the elimination of hurdles blocking foreigners' investment in Japan. This was a focal point of the Individual Action Plan declared by the Japanese Government during the APEC Manila conference in November, 1996; the plan is designed to achieve the promotion of a mutual approval system and for compliance with international standards. Realizing that deregulation has now become a major factor in these reformations, Prime Minister Hashimoto has declared that he will earnestly push for deregulation. We earnestly expect that deregulation measures will make further progress under the leadership of Prime Minister Hashimoto.

Today, the Japanese government has been implementing deregulation measures step by step in accordance with the "Deregulation Action Program (DAP)" established in 1995. This plan contains details and target dates of deregulation to be executed by March, 1998, and is revised every year in March.

Keidanren has been working with the government for the promotion of deregulation ever since we established a committee on administrative reform in 1962. We believe that our extended efforts have played a significant role in establishing DAP in 1995. Since then, Keidanren has been compiling concrete requests and has been submitting them to the government each year to improve and enhance the program. The proposal is intended to reflect our opinion in the planned revision of DAP in March 1997.

In the proposal, revision of DAP in March 1997, 886 requests covering 18 areas are compiled with emphasis on the following three points:

The first point is that we should have strategic approach in the process of deregulation. The Economic Planning Agency has disclosed, based on its preliminary computations, that the economic impacts of deregulation could reach 7.9 trillion yen per year. In order to achieve favorable economic results effectively, the proposal emphasizes that the deregulation should be promoted mainly in internationally less-productive industries and in areas new business and ventures are likely to be created.
The second point is the establishment of fair procedures in both the enactment and enforcement of regulations. In Japan, many rules tend to be implemented by discretion of the administrative institutions not only by laws enacted by the Diet. We therefore think immediate action is needed to organize and improve rule making procedures.
The third point is to create systems to promote deregulation on continuous basis. The current DAP will expire in March 1998, therefore we need to examine and study as to what type of system should be introduced thereafter.

Keidanren is determined to continue lobbying efforts on the government for the achievement of administrative reform, including deregulation from a view point of private institutions. In doing so, we are committed to listen to, and to incorporate opinions from abroad as much as possible. This is why we are distributing this proposal of Keidanren in English this time. We would therefore appreciate it very much if you could give us any opinions you may have on this document.

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