Business is picking up in Japan: private companies are enjoying good
performance and the stock prices are on the increase, the unemployment
rate is not critical level, the capital investment is growing and the consumer
price index has stayed more than 1% for almost 9 consecutive months. The
gradual improvement of employment situation means consumer spending is
coming back soon. The 2006 annual growth rate 2.5% is attainable.
Although there still exists difference in business performance among
regions in Japan, the local economy shows a sign of recovery. It is time to
make a choice on fundamental figure of the state. Should we stick to the
more than hundred year old super centralized social system or change the
current Tokyo-oriented nation into a union of some vigorous and glamorous
regions? The latter path should be paved with the introduction of quite a
new local autonomy framework based on regions larger than the current
prefectures.
The remedy is called "Doh-shu-sei" in Japanese and Keidanren stands for it.
The results show that Prime Minister Abe's basic stance on maintaining of the former cabinet reform line has won strong support from the public. The Prime Minister has gained the national trust through his determined action such as long-waited summit meetings with China and South Korea, and cooperation with the international community against the recent North Korea nuclear test.
It is not too late to start discussing the consumption tax hike in the end of next year assuming the de-facto deadline of the implementation is the year of 2009 when the coverage rate of basic pension funds by the National Treasury goes up from one third to one half.