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Policy Proposals  Comprehensive Strategy Approaches to Current Issues ( May 2020 )

May 11, 2020

1. Current Conditions of and Outlook for the Japanese Economy

With the continuous spread of the novel coronavirus (COVID-19) pandemic and the efforts to stop it, economic activities both in Japan and overseas have contracted significantly. The Japanese economy is deteriorating rapidly and it is currently in a severe situation.

While prospects for the future will depend largely on the spread of COVID-19 from now on, it is highly possible that economic activities will resume only gradually until therapeutic drugs and vaccines become readily available. For now, the early execution of the supplementary budget, which includes the 100,000 yen payment to all residents, is essential. It will also be necessary to closely watch the impact of restrictions on economic activities on the people's livelihood, corporate cash-flow, and so forth and take additional measures responsively.

2. Responses to Novel Coronavirus

There is still no sign of an end to the global spread of the COVID-19 pandemic, and this has had a tremendous impact on the people's livelihood and the economic society around the world.

In Japan, it is necessary to control the spread of the disease as soon as possible under the state of emergency as well as to revitalize economic activities in stages.

Keidanren will take the lead in making efforts to fulfill the social mission of protecting the people's life and livelihood through such steps as strictly complying with the measures for preventing the spread of the disease, providing medical supplies, and formulating guidelines for each industrial sector. Furthermore, its Council on COVID-19 and all other committees will work closely together to study the necessary policies to overcome this crisis and step up its lobbying on the government and the ruling parties toward sustaining businesses—including the supply chains—and maintaining employment, as well as rehabilitating the economy.

3. Realizing Society 5.0 through the Acceleration of Digital Transformation

It has been proven in many countries that digital transformation is extremely effective for preventing the spread of COVID-19. We will promote thorough regulatory reforms, digitization, data sharing, and other relevant steps in the medical services, education, public administration, finance, industry, and other sectors in order to build a resilient economic society. In the middle- and long-term, we will solve various social problems through digital transformation in order to build a more humane and happy society, i.e. realize Society 5.0. Toward this end, Keidanren as a whole will deliberate on a concrete vision for Society 5.0 that will include industrial structural reforms, then study and implement the steps toward realizing this vision.

4. Energy and Environmental Issues

While paying close attention to developments relating to COVID-19, we will urge the government to create a stable supply of energy at prices that compare favorably from an international perspective and to establish an investment environment for this purpose, which will contribute to achieving decarbonization in the post-corona era. As part of these efforts, we will work towards steady progress in institutional reform aimed at creating an advanced and resilient electrical power system and making renewables into Japan's main sources of power. In addition, we will take steps to achieve a virtuous cycle that balances environmental considerations with growth through joint efforts by the government and the private sector, such as the promotion of climate change policies focused on innovation through "Challenge Zero" and other initiatives.

5. Reforming Working Styles and Promoting Diversity

In order to prevent the spread of COVID-19, we will call for the introduction and expansion of telework and the maintenance of employment, including taking full advantage of the government's support measures such as the Employment Adjustment Subsidy program. We will also call for the resubmission of the bill on expanding eligibility for the systems on discretionary working hours. Furthermore, we will publicize the law on employers' obligations to prevent harassment that will take effect in June. We will also respond to moves toward implementing the new system for accepting human resources from overseas. Additionally, we will act to promote diversity in the workplace through the heightened participation and advancement of women, younger and older people, foreign nationals, people with disabilities, and members of the LGBT community. In another initiative, we will pursue dialogue with universities about such issues as the attributes required of human resources from now on, medium- and long-term employment, and potential reforms for university education.

6. Economic Relations with Major Industrial Powers

We will promote cooperation with other countries to prevent the spread of COVID-19 and in the resumption of economic activities.

To make cooperative relations with the United States even stronger, we will take action at various levels to build closer communication with that country based on the US-Japan trade agreement. We will, moreover, monitor US policy trends relating to US-China relations and sensitive technologies. Meanwhile, we will extend and deepen our cooperative relationship with Europe through the Japan-EU EPA. In light of the UK's withdrawal from the EU, we will request action to realize without delay an UK-EU FTA and an EPA between Japan and the UK during the transition period. We will actively participate in materializing the eight-point cooperation plan with Russia and the Japan-Russia year of regional exchanges (2020-2021), as well as continuing to appeal for improvement of the business environment in Russia.

It is anticipated that India, the ASEAN economies, and other Asian countries will join China as driving forces in global economic growth. We will support efforts to develop and further strengthen close and mutually-beneficial relationships with these countries.

7. Sustaining and Reinforcing the Rule-based International Economic Order

We will resist protectionist moves that have arisen from the COVID-19 pandemic, strengthen international cooperation based on trust, and rebuild a free and open post-corona international economic order. As part of such efforts, Keidanren will call for expanded participation in the TPP11 as well as the early establishment of the 16-country RCEP and the Japan-China-South Korea Free Trade Agreement to aid in the development of rules for trade and investment in the Asia-Pacific region. Additionally, we will push for reforms to the WTO, which serves as the core of the multilateral system of free trade. Furthermore, to encourage expanded exports of quality infrastructure-related goods, we will engage in facilitating cooperative relations through policy dialogues with public- and private-sector leaders in Japan and other countries in the region.

8. Hosting Successful National Events

We will work in unison with the government and relevant organizations to ensure flawless preparations for the successful hosting of the Tokyo Olympics and Paralympics in summer 2021, and link these efforts to the revitalization of Japan's economy and its subsequent growth.

9. Disaster Prevention and Mitigation, and Building National Resilience

In light of the COVID-19 pandemic and major natural disasters that have occurred in recent years, Japan needs to do all it can to not only help the infected patients and those caught up in disasters and rehabilitate local regions, but also to prevent and mitigate disasters, build national resilience, and support and sustain businesses. Targeting further improvement in the resilience level of Japan and the Japanese society in order to ensure security and safety, we will urge the government to steadily execute the supplementary budget and its Fundamental Plan for National Resilience, and to promptly decide on the necessary measures, including measures to make better use of digital technologies and pursue innovation. At the same time, we will encourage companies to also take action.

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Comprehensive Strategy