Following is the gist of remarks made by Mr. Hiroshi Okuda, Chairman of Nippon Keidanren, at a scheduled joint press conference on 6 January 2003. Translation is rush and tentative, and sequence of the gist may not necessarily coincide with words delivered.
(On prospect of the Japanese economy)
Japan's economic growth rate of the year 2003 is expected to be between zero and one percent only if international climate is free from political and/or military turmoil.
(On stock prices and yen-US$ exchange rate)
Those figures are naturally unpredictable. Considering the political situation in Korean peninsula and Middle East, it would be even more difficult to try to forecast them.
(On disposal of non-performing loans)
Disposal of bad loans by financial institutions and write off of heavy dept by private companies are two different things. The former could be completed within two or three years. The latter means strict judgment of companies' dead or alive and it would be a real hard job. Working force that will engage in this task should have banking industry background. Only they have know-how on choosing excellent companies beyond the limit of accuracy and credibility of figures on enterprise performance.
(On anti-deflation measures)
It has to be closely observed if we are now in vicious deflation or deflationary spiral before saying or doing something about counter-deflation actions. Prices keep falling in the world stage mainly due to China's integration in market economy with competitive labor cost, and also IT revolution and its attribution to cost reduction in the process of R&D and manufacturing. There are even opinions that the economic management should be maintained as it is.
(On the so-called inflation targeting policy)
It seems that the so-called inflation targeting policy is unrealistic and would not work. In a sense, the current easy-money policy of the bank of Japan could be interpreted as one of such measures. If it is, I am not against it.
(On consumption tax)
Public expenditures on social security are on the increase by volume of 1-2 trillion yen annually basis and the government would go bankrupt if new sauces of revenue were not found. Consumption tax raise is one of the thinkable cashboxes. The raise can be introduced in various patterns. The simulation shown by us, Nippon Keidanren consists of two models. One is 18% up at once and the other is raising every 1% per year up to 16%, although the latter case seems to be a more moderate choice. Tax rate should be differed, making luxury goods with heavier tax and commodities with lighter burdens.
(On next governor of BOJ)
It is ideal to choose among persons with a vast knowledge, experience and capability on banking industry, financial policy, and monetary policy.
(On corporate donation)
It is only natural that the core of political donation should be composed of personal donation, public funding for political parties and legally admitted corporate donation. Although expansion of individual donation through reforming of the tax system is desirable, it would take time to have it soundly settled in Japanese society. This is the reason why corporation's complementary involvement in political donation is indispensable for a moment.