Public Policy Planning & Consulting Co. (SEISAKU-KOUBOU) is a public policy consulting firm based in Tokyo, covering broad policy areas such as economic policy, fiscal policy, regulatory policy, administrative reform, international trade and investment, etc.
PPPC provides consulting and briefing services to the clients in the central/local governments, Diet, local assemblies and the private sector.

This blog is aimed at providing general information, latest updates and some of our analytical reports about Japan's public policy in English.
The contents include;
- updates on some important government councils, especially those in which our executive officers serve as the members,
- weekly reports on latest news in Nagata-cho, the political center in Japan, (partially).
- analytical reports and articles by our members and distinguished experts outside the firm,(partially).


Prospect of Abenomics in Ordinary Diet

* Written by Eiji HARA, PPPC President

 The ordinary session of the Diet has opened. Prime Minister Shinzo
Abe has called the session as “Diet to Realize Positive Cycle,” but
its substance is yet known so far.

 Although Abe’s economic policy called “Abenomics” made a splendid
rocket-start in early 2013, it has idled since sometime around
mid-last year.
 The “Japan Revitalization Strategy” released in June was criticized
as lacking concrete action plans. Subsequently after the Upper House
election in summer, although it was expected that the Cabinet would
start putting the growth strategy into practices, the progress therein
has not been smooth at all, unfortunately. While the Cabinet called
the extraordinary session in autumn as “Diet to Implement Growth
Strategy,” publicly it was dominated by the special intelligence
protection act alone. In relation with the growth strategy, the
Cabinet released a group of;
・Inadequate legislation: e.g., bill to revise corporation act with
  regard to outside board members (carried over to the ordinary
・Legislation adverse to reforms: ban on internet sales of medicines,
  reregulation on taxi business, etc.
 Also, with regard to the issue of civil service reform, though it is
not often regarded as part of the growth strategy but indeed forming a
basis of various structural and regulatory reforms, completely
inadequate plans or even adverse-reform bills were proposed to the
last extraordinary Diet session (carried over to the ordinary session).

 Under such circumstances, while the question is whether and how the
Cabinet will regain momentum for the growth strategy this time, there
seems to be no key legislation that can be trump card among which are
scheduled to be proposed for that aim.
 One of the very few hope is the National Strategic Special Zone
enacted in the last ordinary session; one of the few fruitful results
in the autumn Diet. Prime Minister Abe announced at Davos Convention
that he would drill through the country’s “bedrock” regulation with
the Special Zone in the coming two years; we might be able to rely on
this tool if Abe really means to tackle with such remaining “bedrocks”
within two years or so.
 Nevertheless, in spite of Abe’s boastful remark, there seems to be no
schedule of submitting additional bill with regard to the Special Zone
to the ordinary Diet session at this moment.
 It is far from worth calling as “Diet to Realize Positive Cycle.”


This Week’s “Nagata-cho” (21-28.Jan, 2014)

 The 186th ordinary session of the Diet was convened last week on
January 24. Prime Minister Shinzo Abe on the same day gave general
policy speech in both Houses of the Diet. While Abe stressed his
economic policy dubbed “Abenomics” as the top priority task, he also
mentioned his longstanding policies of reinterpreting the Constitution
as to lift the ban on the right to exercise collective self-defense
and others.

*The state of deliberations in both Houses and committees are
 available from the following websites.can be seen.
 House of Representatives Internet TV:
 Live broadcasts and video recordings of the deliberations in the
 House of Councillors (Japanese only):

 Regarding the ordinary session as “Diet to Realize a Positive Cycle,”
Prime Minister Abe stressed that he would connect corporate profits to
expansion of employment and increase in wages especially in the local
areas and small- and middle-sized enterprises (SMEs) so that everybody
in this country can feel the economic growth firsthand. As to the
concerns on negative economic effects of the consumption tax hike
scheduled in April this year, Abe emphasized that the Cabinet prepared
preventive measures in the 5.46 trillion yen of supplementary budget
submitted to the Diet on January 24 along with the initial budget for
FY 2014, and requested that the opposition parties cooperate with
passage of both the budgets during the ordinary Diet session. Taro Aso,
Deputy Prime Minister and Minister of Finance, also stated his view
that Japanese economy has firmly turned upward and that the Cabinet
will make efforts to alleviate impacts of the tax-hike.

 Abe stated that the Cabinet would further make efforts to support
companies pioneering new markets by advancing regulatory reforms and
tax reforms to expand investment or research and development. In
particular, Abe vowed that the selection of the National Strategic
Special Zone will be finalized by March and the abolishment of special
corporate tax reduction for reconstruction after the great disaster
which is one year earlier than originally scheduled. The Cabinet
officially approved the action plan in relation to the industrial
competitiveness on the same day to implement the growth strategy
within three years of the concentration period.
 Also, Abe announced promotion of women, for instance to increase the
ratio of newly recruited national public servants to 30% from 2015, as
well as establishment of a private-public infrastructure import
organization to developing countries and to support challenging R&D
projects that might change the country’s socioeconomic landscapes.

 In his speech, Abe emphasized “strategic top-diplomacy” and
“diplomacy with panoramic view on the globe” based on his diplomatic
experience of visiting 30 countries and held 150 meetings with foreign
leaders. Abe stressed significance of the concept of “proactive
contribution to peace,” and at the same time, appealed that Japan’s
door to dialogue is always open but not to concede with talks with
conditions particularly with China and South Korea with which Japan’s
relation has been tensing over the territorial or historical issues.

 With regard to national security, Abe announced to consider
reinterpretation of the pacifist Constitution based on reports to be
submitted by the Advisory Panel on Reconstruction of the Legal Basis
for Security in April. Regarding relocation of Futenma Air Station to
Henoko, based on approval by Okinawa governor on landfill application
to increase runway of the base, Abe vowed to swiftly advance the
procedures while mentioning that he would make efforts to reduce
burden on Okinawan people.
 Also on the Air Defense Identification Zone (ADIZ) issue raised by
China, Abe stressed that Japan would never accept such a unitary
coercive measure to change the status quo of the Asia Pacific region.

 On the energy issue including nuclear power, Abe stated that there is
no restarting of the nuclear reactors unless they meet the safety
standard of the Nuclear Regulatory Authority that is of the highest
strictness in the world, and to decrease Japan’s dependency on the
nuclear power as much as possible. It seems that Abe remained in a
cautious tone regarding the nuclear power issue as there awaits Diet
debates and discussions soon. Abe also stressed that the central
government will take initiatives in decommissioning the nuclear
reactors and countermeasures to the contaminated water, without
letting Tokyo Electric Power Co. handle the issues alone.

 The Diet Debate kicks off on January 28. The interpellation sessions
with party leaders will be held in the Lower House on January 28-29
and in the Upper House on January 30-31. The opposition Democratic
Party of Japan and Japan Communist Party will take confrontational
tactics especially over the special intelligence protection
legislation pushed through by the ruling camp in the extraordinary
session, as well as Abe’s visit to Yasukuni Shrine late last year, or
Abe’s view on employment, social security, nuclear issue, etc.


Significance of Local Elections

* Written by Yoichi TAKAHASHI, PPPC Chairman / Kaetsu University Professor 

 Local Elections will likely be the focus of great interests in 2014
as there is no major national-level election this year. The mayoral
election of Nago, Okinawa Prefecture, which was just held on January
19, as well as the February 9 Tokyo gubernatorial race and the
February 23 Yamaguchi gubernatorial election have attracted great
interests so far.

 In Nago, incumbent Susumu Inamine, who opposes the Japan-U.S. plan to
relocate the U.S. Marines Corps Air Station Futenma from Ginowan, also
in the prefecture, to Nago, was re-elected despite the central
governments support for another candidate.
 In Tokyo, former Prime Minister Morihiro Hosokawa announced candidacy
with support of another anti-nuclear former Prime Minister Junichiro
Koizumi. The Tokyo governors race will likely be between Hosokawa
and LDP-supported Yoichi Masuzoe, former health and labor minister. As
Masuzoe has voiced his no-nuclear stance in the past, the focal point
will be whether to suspend operation of the nuclear reactors
immediately, or in other words, the room for restarting the countrys
nuclear power plants.
 Similarly in the Yamaguchi gubernatorial election, it is also the
nuclear issue that will likely be the focal point of the race. This is
because Tetsunari Iida, the vanguard of no-nuke movements, will run
for the election, although a former bureaucrat Muraoka announced to
join the race as expert of local administration.

 However, both the policy issues that have been the focal point of
election are the realm of the central government and there is little
thing that local leaders can do about these policies.
 On relocation of the U.S. base, the authority to permit the landfill
application (to pave additional aircraft runways) is in hands of the
Okinawa prefectural governor, and it is in the central governments
responsibility that the actual work is to be implemented. The mayors
authority is no more than giving permission on usage of roads or
fishing ports, whose excessive application may cause criticisms as
misuse of mayoral power.
 Similarly, with regard to restarting of nuclear power plants, while
the applications for restarting 16 reactors in 9 plants have been
submitted by 7 power companies, it is the Nuclear Regulatory Authority
which examines the applications, and it is only afterward that there
is a process of obtaining consents of the relevant local governments.
While the applications include the ones for 6th and 7th reactors in
Niigata Kashiwazaki-Kariwa nuclear power plants of Tokyo Electric
Power Co., there is nothing that Tokyo governor can do but to pressure
Niigata prefectural governor not to agree with decisions to restart
these reactors. While it also includes reactor 2 of the Shimane
nuclear power plant, it is a matter of Shimane governor.

 Even if candidates get elected with campaign pledges irrelevant to
authority of the office, that influence is no more than that of a
critique and it is only up to the central government whether the
pledge is to be maintained. It is a bit pity that achievements of
campaign pledges to change policies finally depend on the central
government despite public supports in the local elections.

 It may be difficult to let local governments to decide such policy
issues as relocation of the U.S. base as it is the matter of national
security. However, since the electricity issue can be solved in a
regional level, there is a possibility that the nuclear power issue
can be debated in the local elections if there is an institution
equivalent with Doshusei (regional governments). Precisely the service
areas of each power company correspond with the areas that should be
covered by Doshu governments.

 In any case, there is a fact that backgrounds of 46 prefectural
governors excluding Tokyo are heavily balanced toward former
bureaucrats; perhaps a vivid reflection of the current state that
decentralization has not been accomplished in this country. Among the
46 governors, 25 are former central government officials, while 8 are
from the Diet members, 2 from local politics, 5 from local 
administration, 6 from academic or private sector.


This Week’s “Nagata-cho” (15-21.Jan, 2014)

 Last week on January 19, Prime Minister Shinzo Abe gave an address at
the ruling Liberal Democratic Partys convention held in Tokyo. Abe
speech spent most of the time on economic measures and stressed the
achievements of Abenomics, not mentioning his longstanding
policies of revising the pacifist Constitution and lifting Japans
self-imposing ban on the right to exercise collective self-defense.
Abe then emphasized his determination toward a strong economy.

 Since the consumption tax rate is going to be hiked to 8% from this
April, Abe would like to prevent possible negative impacts of the
tax-hike on the nascent Japanese economy. For that purpose, the 5.46
trillion yen of supplementary budget for this fiscal year to provide
financial backgrounds to the economic stimulus package will be
submitted to the ordinary Diet session convening on January 24, in
line with the 95.88 trillion yen of initial budget for FY 2014. The
Cabinet and ruling camp plan to enter discussions on the supplementary
budget in the Lower Houses Budget Committee as early as on January
31. The Cabinets scenario is to pass the initial FY 2014 budget by
March subsequently. Also, Abe will keep requesting the economic world
to raise wages.

 The meeting of the Industrial Competitiveness Council held on January
20 compiled basic guideline for revisions on the growth strategy
scheduled in June. Abe instructed that the Industrial Competitiveness
Council and the Council on Economic and Fiscal Policy will jointly
elaborate the policy by setting common thematic strategies in revising
the growth strategy.
 The basic guideline entails a corporate tax reduction that Abe has
insisted, as well as reforms on the agricultural cooperative
association and medical corporations. It also emphasized active
promotion of women, in particular, setting targets of female
executives and managing directors in private companies, providing
subsidies to corporations that fulfilled the targets, and eradication
of waiting lists for child-rearing nursery facilities. Furthermore,
the government will likely start considerations on expansion of
reception of foreign professional workers like nurses and extension of
their working terms, as well as revisions to tax-deduction and pension
systems, etc.

 Prime Minister Abe schedules to attend the annual meeting of the
World Economic Forum (Davos Convention) on January 21-23, and to give
an address at the opening session on 22 to explain basic ideas and
concrete plans on his growth strategy.



Policy Issues in Tokyo Gubernatorial Election

* Written by Eiji HARA, PPPC President

 The prospect of the Tokyo governor’s election has quickly become chaotic due to the sudden entry of former Prime Minister Morihiro Hosokawa supported by another former Prime Minister Junichiro Koizumi.
There are several policy issues.

 First, there is an issue of the nuclear power generation as raised by the Hosokawa-Koizumi duo. Conventionally, I would say that the issue of energy policy is not a theme to be attributed to the responsibility of the Tokyo governor alone so it should not be the focal point in the Tokyo gubernatorial election. This time, however, it seems the nuclear power issue has already become inevitable at this moment.
 Nevertheless, as long as the nuclear issue becomes the point of dispute in the election, the candidates should go beyond “one phrase”
slogan but
・Make clear what will be implemented in relation to the nuclear power
  plants as Tokyo governor
・And engage in meaningful discussions with specific plans

 For example, if Tokyo alone chooses not to use the electricity generated by the nuclear power plants while the country’s entire preparation for alternative energy sources is not fully launched, it will possibly cause Tokyo to lose competitive attractiveness as international center as it may skyrocket the energy cost excessively in Tokyo alone. The nuclear issue requires discussions with reasonable scenarios and rational measures.

 Second is the urban design of Tokyo in eye of the 2020 Tokyo Olympic Games. It goes without saying that a successful hosting of the Olympic Games itself is important, but the biggest challenge to the new governor of Tokyo is how to internationalize and upgrade Tokyo as the world’s most advanced global city. The plans and capabilities toward this goal should have been the biggest point of dispute to be competed among candidates in the Tokyo governor’s election, rather than the nuclear issue.
 The future vision of Tokyo, as well as total plans as means to realize the vision, including utilization of the National Strategic Special Zone, enhancement of transportation infrastructures like airports (including efficient improvement through PFI) must be presented.

 The third issue is improvement and rationalization of administrative management, or eradication of dark parts in other words, of the Tokyo metropolitan government.
 The issue of vested interests and amakudari of the Tokyo metropolitan government has often been pointed out as equally serious or even worse than in the central government, but there have been few attempts to make corrections on the issue.
 Breakthroughs toward such structural issues must be carried out all at once when the new governor is inaugurated, otherwise the structure will be maintained for another several years if the new governor misses the timing.
 Candidates should present concrete plans to have discussions on how and to what extent they can break into these issues (the current state of vested interests and amakudari issues of the Tokyo metropolitan government will be described some other time).


This Week’s “Nagata-cho” (8-15.Jan, 2014)

 On January 14, the Cabinet officially decided to convene the ordinary
session of the Diet on January 24. Last week on January 10, Chief
Cabinet Secretary Suga had attended the Rules and Administration
Committees in both Houses and had obtained consents on the schedule.
The session will be for 150 days until June 22. The ruling parties
plan to hold the four speeches including Prime Minister Shinzo Abes
general policy speech on the day of convening and interpellation
session by the party leaders on January 28-30.

 On January 7, Prime Minister Abe showed his determination to continue
efforts to get out of the deflation and to achieve fiscal soundness
simultaneously in the second year of his term. In light of the
scheduled consumption tax-hike in April this year, the Cabinet Office
seems to be having a concern that it may have negative impacts on the
economy, wiping out the influences of Abes economic policy dubbed
 It is scheduled that Prime Minister Abe gives a keynote speech in the
opening session of annual meeting of the World Economic Forum (Davos
Convention) to be held in Switzerland on January 21-23 for the first
time as Japanese leader. Abe will likely appeal the Abenomics and the
concept of proactive contribution to peace and his diplomatic
policy at the international summit to the world.

 Abe has regarded the ordinary session of the Diet to be convened on
January 24 as Diet to achieve positive cycle of the economy,
seeking passage of the 95.88 trillion yen of the initial budget FY2014
as well as the 5.46 trillion yen of supplementary budget for this year
to give backgrounds to the economic stimulus package to be submitted
on the same day. Also, Abe plans to revise the growth strategy by
mid-January to accelerate structural reforms in the field of
employment/labor, agriculture, medical care and nursery. Meanwhile,
the Cabinet held the first meeting of the National Strategic Special
Zone Advisory Council on January 7 and decided to finalize designation
of the zone by March.

 On the corporate tax reduction strongly requested by the economic
world, Abe has shown decisiveness to implement it from the next fiscal
year. Accordingly, the economic minister Akira Amari stated it will be
discussed in the Council on Economic and Fiscal Policy. Yet, the
finance minister and Deputy Prime Minister Taro Aso has thrown doubts
on economic impacts of the tax reduction by saying that it will have
nothing to do with 70% of the entire companies.



This Week’s “Nagata-cho” (1-8.Jan, 2014)

 On January 6, Prime Minister Shinzo Abe held the New Years Press
conference. In the address, Abe pledged to promote further his
economic policy dubbed Abenomics in light of the perception that
the economy has steadily turned upward from the critical situation
of one year ago, while reserving that it is still halfway of getting
away from the deflation. Also, given predictions of decreasing
consumption after the sales tax hike to 8% from April this year, Abe
vowed to deliver actual feeling of recovering economy to the people
firsthand by this spring. The idea is to let people throughout the
country feel the recovering economy by raising wages in mid- and
small-sized enterprises and revitalizing local economies in order to
achieve a positive cycle of economy and to regain the strong

 Abe has regarded the ordinary session of the Diet to be convened on
January 24 as Diet to achieve positive cycle of the economy. The
Cabinet has compiled the record largest 95.88 trillion yen of the
general account budget for FY 2014 in addition to the 5.46 trillion
yen of the supplementary budget for this fiscal year to finance the
economic measures to alleviate possible negative economic impacts of
the consumption tax hike in April.
 Furthermore, the Cabinet scheduled to revise the growth strategy by
middle of this year to promote structural reforms in the field of
employment, agriculture, medical care, etc., while implementing the
legislation of industrial competitiveness and special economic zones
steadily. Abe also mentioned decreasing of corporate tax rate by 2.4%.

 The government and ruling parties are willing to pass the
supplementary budget by early-February and the initial budget FY 2014
in March through the Diet. Yet, the opposition parties such as
Democratic Party of Japan have been repelled by the coercive tactic
taken by the ruling coalition in the year-end over the special
intelligence protection legislation, and there is likely a political
turmoil from the beginning of the ordinary Diet session.

 For more, Abe recognized the TPP as a long-term strategy to form a
framework to secure prosperity of the Asia-Pacific region and vowed
to carefully determine the final destination since it is a matter that
each countrys national interests confront each other. Over the
controversial 5 agricultural items, Abe sustained the conventional
recognition that the government has engaged in the negotiation while
holding both the aggressive and protective stances.

 Abe also emphasized his proactive contribution to peace stance in
the diplomatic aspect. In relation to South Korea and China, with
which Japans relationship has been worsened, Abe once again called
for summit meetings as the door is always opened for dialogue.
With regard to Abes visit to Yasukuni Shrine as well as Abes
determination toward reinterpretation of Constitution as to permit the
right to collective self-defense which have caused great concerns in
the neighboring countries, Abe said he would explain the intension
carefully to both the governments.



On Proceeding of National Strategic Special Zone(January 7, 2014)

 First meeting of the newly established National Strategic Special
Zone Advisory Council was held on January 7, and its five private
sector members, including Heizo Takenaka, jointly submitted a proposal
paper at the meeting.

On Proceeding of National Strategic Special Zone(January 7, 2014)

Reiko Akiike
Tatsuo Hatta
Ken Sakamura
Masahiro Sakane
Heizo Takenaka

1.Reaffirmation of the Aim of the National Strategic Special Zone

  The chief aim of institutional design of National Strategic Special
  Zones is to realize an economic growth by breaking through
  thebedrock regulations to which adequate reforms could not be
  accomplished by the past attempts of special zones for structural
  reforms or comprehensive special zones, as well as to achieve
  drastic tax reforms which is an equally challenging task through a
  manner initiated by the Prime Minister. The Special Zone will
  serve as a breakthrough for that purpose (it is expected that
  ambitious people, corporations, and local governments will play
  major role to realize advance models overcoming the bedrock
  regulations and initiate the economic growth while gaining returns

2.Principles of Operation of National Strategic Special Zone and
  Management of Special Zone Advisory Council Meetings

 ①thorough information disclosure
  sense of speed (close cooperation with Special Zone Working Group
    and regional committee, flexible management by utilizing of
    research committee by experts, etc.)
  promotion of competition among Special Zones (establishment of
    Plan-Do-Check-Act cycle, rescindment of Zones attaining inadequate

3.Issues to be Considered for the Moment

Short-term challenges
  I.Designation of Zones
    Toward designation of Zones in March, the Working Group should
    swiftly start selection process taking into consideration the
    following elements as basic rules for selection.
    i.Selection of regions having ripple effects that could
      eventually lead to growth of Japanese economy through
   ii.Selection of regions of actions that could undertake reforms
     of the bedrock regulations decisively and steadily with a sense
     of speed(premised on an appropriate evaluation of willingness
     and ability of regions)
  iii.Subject of designation should be either of the following 2 types
   ・“relatively broad designation based on prefectural or
    metropolitan scope
   ・designation of virtual zones in certain fields
    (zoning within certain field with explicit conditions)

 II.Launch of regional committee
  ・Following the designation of Zones in March, each zone should
   launch the regional committee as soon as in April
  ・Composition/membership should be as simple as to enable
   substantial discussions with the ministers (in addition to the
   minister-in-charge, the relevant ministers can participate the
   meetings). In particular, the membership requires high-rank
   delegate of private sector (well-known figure as promoter of the
   relevant special zones)

 III.Measures to be addressed in the next Diet session or thereafter
   (additional menu)
  ・The exceptional measures enacted in the last extraordinary Diet
   are no more than temporary initial menu, and it is predicted
   there will arise many challenges in implementing specific
   initiatives into practice in the future. Therefore, the Working
   Group should promptly review all the previous proposals and
   suggestions from the local governments and private companies and
   start advancing necessary coordination toward further
   legislative measures in the future Diet sessions including the
   next ordinary session with regard to the National Strategic
   Special Zone Act

 IV.Formulation of employment guideline
  ・The Working Group should immediately start discussions toward
   formulation of the employment guideline in March

Setting of mid-term target in eye of 2020
Discussions on mid-term targets should be taken place promptly in
  eye of 2020, including the Tokyo Olympic Games
For beginning, it should be arranged that ways to break through the
  remaining bedrock regulations should be opened at least in the
  special zone in the following 2 years as intensive period
Also, the special zone aims to conduct specific reforms within some
  boundaries of regional and business scope in a speedy manner, to
  review the result for further considerations, and to apply the
  achievements to national-level legislations. In this sense, the
  process and goal toward nationwide applications from the special
  zones should be clarified specifically
 (for example, a system to stimulate nationwide applications through
  competition of reforms among regions should be developed).