- Results of the House of Representatives Election
- Evaluation of Policies
- Economic Situation
- Revival of the Tohoku Region
- Premium Friday
- Japan-US Relations
- Constitutional Reform
- Corporate Scandals
Results of the House of Representatives Election
The large majority of seats in the House of Representatives secured by the ruling LDP/Komeito coalition ensures that Japan's stable political base will be maintained and strengthened, which will contribute to ongoing steady implementation of policies. The business community welcomes this outcome. The election results show that voters recognize the Abe administration's achievements to date, support its policy platform of accelerating Abenomics, creating a social security system that accommodates the needs of all generations, and addressing the North Korea issue, and expect the government to pursue these policies with even greater vigor.
In response to the hopes conveyed by the people of Japan in the election, I urge the Abe administration to continue exercising strong leadership to resolve important domestic and international policy issues. As well as cooperating with the administration in policy implementation, the business community will fulfill its own role in revitalizing the Japanese economy. We will devote even greater efforts to in-depth policy dialogue with the government and the ruling parties. TPP11 negotiations will reach their most crucial phase at the APEC leaders' meeting in Vietnam next month, and this evening I will visit Prime Minister Abe with the heads of other business organizations to communicate our high hopes for the swift conclusion of this agreement.
I also urge the Abe administration to use this stable political base to tackle painful reforms. I hope that the governing parties will display strong leadership in resolutely and boldly implementing the consumption tax increase according to plan and reforming social security systems.
Evaluation of Policies
We have compiled the 2017 versions of Keidanren's Views on Promoting Partnership between Business and Politics, and Evaluation of Major Parties' Policies. Overall, this year's policy evaluations highly commend the LDP-led ruling coalition for the results it has achieved and for its strong execution of policies in areas such as the economy and diplomacy. These policies include realizing the "Society 5.0" concept, reforming working styles, pursuing economic partnerships, and promoting infrastructure system exports with a view to ending deflation, revitalizing the economy, and achieving an economy with GDP of 600 trillion yen. They also include enhancing national security systems.
Each October we urge our member companies to make political donations. Properly maintaining a democratic political system entails considerable costs, and companies make political donations as part of their contributions to society. To achieve policy-based politics, develop sound parliamentary democracy, and improve the transparency of political funding, it is essential to expand the scope of clean private donations. Keidanren encourages its member companies to exercise independent judgment in making political donations to parties pursuing policies that will support the healthy development of enterprise in a liberal economy and lead to the revitalization of the Japanese economy.
Policies were implemented by the ruling LDP/Komeito coalition, not by opposition parties. Thus, assessment of results in the policy evaluations deal solely with the ruling parties. We evaluated the ruling parties' achievements in light of Keidanren's business policies and indicated remaining issues. Evaluation of opposition parties was limited to listing their key policies.
In a welcome trend, the Nikkei 225 Stock Average has set a new record by rising for 15 consecutive days. A general rally in the Japanese economy lies behind this increase. Overall, economic indicators such as exports, production, and capital investment are trending upward. The global economy is also improving, and the International Monetary Fund has revised upward its GDP growth rate forecasts for the world economy as a whole and for each country and region. With the United States likely to raise interest rates at the end of the year, the trend toward depreciation of the yen against the dollar is another factor behind rising stock prices.
However, although the economy has grown for 58 consecutive months, which exceeds the period of rapid economic growth Japan experienced in the late 1960s, there is no denying that people have no real sense of economic recovery. In the 1970s wages sometimes rose by 30% a year, but it is different this time. Nevertheless, nominal GDP languished around the 500 trillion-yen mark from 1992 to 2012, but now exceeds 540 trillion yen, and monthly remuneration including pay scale increases has risen each year by around 7,000 yen per month, while bonuses have also been high. Although this is hardly comparable to the 1960s and 70s, compared to the period up to 2012, economic indicators and the employment environment are undeniably improving.
The main reason for economic expansion unaccompanied by improving sentiment is the absence of growth in consumption. Money is being saved rather than spent, due to people's concerns about the future and the burden of education costs for those raising children. The business community will continue to build wage rise momentum through ongoing increases in remuneration. In conjunction with these efforts, I believe that consumption will grow and people will gain a better sense of economic recovery if their concerns about the future are dispelled through reform of social security systems.
Now is not the time to discuss exit strategies for the Bank of Japan's monetary policies. The most important issue is to pursue monetary policies aimed at ending deflation.
Revival of the Tohoku Region
Keidanren regards revival in the wake of the Great East Japan Earthquake as a vital policy issue, and will again organize events in November to support recovery in Tohoku. Some 30 events such as markets and other initiatives involving Keidanren member companies will include publicity campaigns aimed at stimulating consumption of Tohoku products and increasing tourism in the region. We will continue our efforts to speed up regeneration following the disaster in collaboration with other relevant parties.
Holding Premium Friday at the end of the month after monthly wages have been paid stimulates consumption, so from a service provider perspective it has been decided to leave the timing unchanged on the last Friday of the month. However, it has been suggested that rather than adhering strictly to the last Friday of the month, flexible implementation according to individual and company circumstances could enable more people to enjoy the benefits of Premium Friday. To encourage greater participation, the most important thing is to continue the initiative. I would also like the government to allocate funding. The business community will create an environment conducive to employees taking part in Premium Friday, considering its dual purposes of stimulating consumption and reforming working styles.
Keidanren will send a business mission to the United States on October 29. The mission will clearly communicate the economic and social contributions that Japanese businesses make in the US, in areas including investment, employment, exports, and R&D. Having come through a period of economic friction in the 1980s, Japan and the US have now built an amicable, win-win relationship based on mutual trust. Both parties will benefit by further developing this relationship. Over three consecutive years since 2015, Keidanren has sent business missions to many parts of America, visiting 14 states in total. The forthcoming mission will visit Ohio, where approximately 500 Japanese companies operate, the largest number after California. Discussions with Ohio Governor John Kasich will seek his cooperation in creating a business-friendly environment.
In the recent election the ruling parties secured two-thirds of seats in the House of Representatives, and including other members with a positive attitude to constitutional reform, this proportion climbs to around 80 percent. The constitution of Japan needs to be appropriate for the times, and greater discussion is required at all levels in every sector. Prime Minister Abe has announced that he will encourage discussion of constitutional reform, without being bound by a specific schedule. The business community regards constitutional discussion as an important matter, but remains steadfast in its fundamental position that the government should prioritize the economy.
The issues surrounding Kobe Steel, Ltd. and Nissan Motor Co., Ltd. are truly disappointing. They could damage international trust in Japanese manufacturing and the "Made in Japan" brand. I hope both companies will swiftly investigate the causes, prevent recurrence, and rebuild the confidence of their customers.
The Japanese manufacturing industry has formidable strengths in providing comprehensive services, characterized especially by high quality and cost effectiveness. We will clearly convey this message.