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

November 9, 2020

1. Current Conditions of and Outlook for the Japanese Economy

The Japanese economy is currently in a severe situation due to significant contraction of economic activities both in Japan and overseas. However, the downturn bottomed out in May when the state of emergency was lifted, and a recovery is under way.

Looking ahead, continuation of this rally will depend largely on the spread of the novel coronavirus (COVID-19) in Japan and abroad from now on, and it is highly possible that the pace of recovery will slow and the economy will take a long time to normalize.

Rigorous measures to prevent infection and achievement of swift economic recovery and normalization remain pressing issues, and the government needs to responsively inject fiscal stimulus while closely watching people's livelihoods, corporate cash-flow, and so forth.

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 people's livelihoods, and the economic society.

Keidanren will take the lead in making efforts to prevent the spread of the disease. In addition, it will lobby the government and the ruling parties with the aim of revitalizing economic and social activity in an era of living with COVID-19 and seeking measures for expanding PCR testing capacity and easing immigration restrictions.

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 economy and 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 overcoming the COVID-19 pandemic through digital transformation and building Society 5.0 as a new social model for the post-COVID-19 era, then study and implement the steps toward realizing this vision. We will work on the digital agency which will be established to consider these agendas.

4. Energy and Environmental Issues

We will aim to establish a favorable investment environment and build advanced and resilient electrical power and energy systems with a view to creating a carbon-free society. While carefully monitoring government moves including revision of the Strategic Energy Plan, we will work towards introducing next-generation power transmission and distribution networks, making renewables into Japan's main sources of power, and re-starting nuclear power plants once safety has been assured. At the same time, 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. Work Style Reform and Human Resource Development

As well as continuing to urge companies to maintain employment, we will call upon the government to extend special measures for the employment adjustment subsidy introduced in response to the COVID-19 pandemic (which are due to expire on December 31) and boldly inject funds from general revenue sources.

We will also focus on improving employee engagement and promote the extension of work style reforms. As part of these efforts, we will examine personnel evaluation and labor management issues arising from telework to promote working methods not reliant on place and time, and aim to create new working hours systems suited to autonomous work styles, such as expansion of eligibility for the systems on discretionary working hours.

We will implement Action Plan 10 compiled by the Industry-Academia Council on the Future of Recruitment and University Education, including implementation of internships leading to job-based recruitment, summarizing of issues relating to online education, double-tracking of university entrance and graduation periods as well as diversification and double-tracking of corporate recruitment, and promotion of joint industry-university partnerships on an organization-to-organization basis. Through such initiatives, industry and universities will cooperate in developing human resources to support Society 5.0.

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, including movement of people across borders.

As well as monitoring confirmation of the outcome of the US presidential election, we will take action at various levels to build closer communication with the United States in the aim of further strengthening Japan-US relations under the next administration. We will call for the EPA between Japan and the UK signed last month and a UK-EU FTA to come into effect by January 1, 2021.

We will participate in materializing the eight-point cooperation plan with Russia, as well as continuing to appeal for improvement of the business environment in Russia.

We will strive to maintain and further develop economic relations with countries and regions including China, which is Japan's largest trading partner, India, where further growth is expected, and the ASEAN economies, which harbor diverse potential. In partnership with other countries, we will aim to achieve a free and open Indo-Pacific.

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

Through resistance of protectionist moves that have arisen from the COVID-19 pandemic and promotion of international cooperation based on trust, we will achieve free and open trade and investment while living with coronavirus. As part of such efforts, Keidanren will call for expanded participation in the CPTPP 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, we will cooperate with the government to re-start overseas infrastructure projects suspended or delayed by the impacts of COVID-19 and, 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. As a prerequisite to such efforts, we will collaborate with the government to ensure economic security.

8. Hosting Successful National Events

We will work in unison with the government and relevant organizations to aim 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 will 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.

In addition to steadily executing its Fundamental Plan for National Resilience, we will urge the government to promptly decide on the necessary measures, including measures to make better use of digital technologies and pursue innovation with the aim of further improving the resilience level of Japan and the Japanese society in order to ensure security and safety. At the same time, we will encourage companies to also take action.

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Comprehensive Strategy