2000: A Year for Decisive Structural Reforms and Laying the Groundwork for 21st Century Growth

New Year Message by Chairman Takashi Imai

Japan's economy has finally bottomed-out, but this is no reason to be complacent about the future. There is a pressing need to implement structural reforms with the goal of achieving a full-fledged, private demand-driven recovery. With this in mind, the year 2000 should be viewed as the year in which the groundwork for growth in the 21st century is laid. It will be necessary to channel our efforts to address the challenges such as drastic tax and legal reforms, bold regulatory reforms and the establishment of sustainable social security systems while attempting to strengthen industrial competitiveness. The functions of the labor market need to be strengthened and a safety net for the unemployed implemented to alleviate the tensions that accompany structural reform and to dispel the anxiety that exists among people. In addition, we must move away from economic management which has been heavily dependent on fiscal measures, and consider strategies that take into account the rebuilding of public finances.

To achieve these tasks, strong political leadership needs to be exerted while utilizing new mechanisms for parliamentary operations. Companies must also take this opportunity to carry out drastic structural reforms to improve their balance sheets, and exhibit entrepreneurship to foster opportunities for new businesses and employment. Moreover, companies must increase their accountability through disclosing company-related information as they strive to restore public confidence by ensuring rigorous corporate ethics.

With the preceding in mind, Keidanren believes that the speedy adoption of the policies outlined below will ensure a free, fair, and transparent system of market economy under self-accountability. We will also explain our position on corporate governance tailored to the corporate activities of a new era. Finally, we will continue to cooperate with local business circles to further develop their economies, and, inter alia, Okinawa's efforts to make its economy more independent from military bases.

Promoting drastic tax and legal reforms

1. Rapid adoption of a consolidated tax payment system, preparation to launch legal and tax systems for corporate spin-offs
2. Rectification of the direct-indirect tax ratio and reform of the individual income tax system
3. Reform of local corporate taxes
4. Diversification of fund procurement and deployment methods
5. Promotion of reform of the judicial system

Implementation of bold regulatory reforms and promotion of administrative and fiscal reforms

1. Broad reform of the regulatory framework
2. Promotion of national and local administrative and fiscal reforms
3. Promotion of treasury investment and loan reforms
4. Rectification of high-cost structures

Establishing sustainable social security systems

1. Reorganization of public pension, medical care, and nursing care systems
2. Review of corporate pension programs (introduction of defined contribution plans, return of the delegated responsibility for the public pension portion of the employees' welfare pension fund)

Achievement of stable financial system and establishment of efficient capital markets

1. Establishment of safety nets toward a small deposit insurance system
2. Early enactment of the Financial Services Act
3. Expansion of capital markets infrastructure
4. Promotion of exchange rate stability and promotion of the yen as an international currency

Employment and labor sector reforms

1. Strengthening of labor market functions to place the right man for the right job
2. Improvement of individual vocational abilities through the use of voucher system and other programs
3. Expansion of employment opportunities for women and older people

Comprehensive, systematic strengthening of foundations for development of science and technology

1. Efficient promotion of the "Millennium Projects" (responding to emerging needs in the areas of the information society, aging society, environment)
2. Expeditious, timely development of strategic industrial technology policies, nurturing of leading industries
3. Educational reform to train personnel for the scientific and industrial technologies of the 21st century

Strategic, efficient provision of social capital

1. Prioritized development of transportation and distribution infrastructures (belt highways in major urban centers, hub airports, etc.)
2. Improvement of living and residential areas, business and commercial areas, and disaster preparedness sites

Laying the basis for an advanced information society

1. Greater use of information technology in the public sector, including government, schools, etc. (realizing "on-line government", for example)
2. Enhancement of telecommunications services, preparing the groundwork for electronic commerce

Promoting economic and environmental coexistence in society

1. Promotion of a resource recycling society, focusing on appropriate disposal of waste products, and promotion of global warming prevention for worldwide environmental protection
2. Promotion of corporate activities with minimal environmental impact and creation of "environmental businesses" through technological development

Contributing to the stable development of the world economy

1. Positive contributions aimed at the launching of the WTO new round of multilateral negotiations
2. Work toward the sustained growth of Asian economies