* Written by Eiji HARA, PPPC President
Among the so-called “three prongs” of the Abenomics, although the first arrow (monetary relaxation) and second arrow (fiscal policy) had certain positive effects on the economy since early 2013, the government has had difficulty with regard to the third arrow (growth strategy).
The Cabinet’s Japan Revival Plan announced in last June caused disappointments both domestically and internationally for its inadequate efforts toward regulatory and structural reforms.
At the time, there was an excuse that the ruling parties and Cabinet could not announce drastic reforms facing the July Upper House election. Nevertheless, unfortunately, there have been little moves toward accelerating reforms even after the Upper House election.
The extraordinary session of the Diet in autumn was phrased as “Diet to implement growth strategy,” but in fact the special intelligence protection bill became the biggest political focal point of the Diet and bills related to growth strategy were left behind.
There were scarce improvements on reforms of the so called bedrock regulations or tax reforms such as corporate tax reduction. Rather, there were enactments of such bills as regulations on internet sales of drugs and taxi businesses that actually enhanced regulations.
Under such a circumstance, one of the few accomplishments was the enactment of the National Strategic Special Zones Law.
Subsequently, in January of this year, Prime Minister Shinzo Abe announced at the World Economic Forum (Davos Convention) that “There(=in the Special Zones), over the next two years, no vested interests will remain immune from my drill.”
While this Davos Promise deserves great attentions, a question here is whether the Cabinet could really realize it.
So far, there have been no moves toward drilling through the vested interests in the ordinary Diet session at the beginning of the two years.
For more, it is yet seen what sort of bills are to be submitted during this Diet session in relation to the growth strategy. Further, preparations toward regulatory reforms are particularly slow.
From the viewpoint of growth strategy, of particular importance are the reforms of university governance and corporate governance.
Taking into consideration the low profitability of Japanese companies and low international reputation of Japanese universities, it is vital to introduce a new management regime that reflects external perspectives (e.g., external board members, reforms of presidential
elections in universities).
On these issues, while certain considerations have been given in the government (the Cabinet did propose a bill to reform the company act last autumn, indeed), the contents of the bill were not necessarily satisfactory; for example, the bill did not entail plans to make it compulsory to private companies to have external board-members. And reforms on university governance require further considerations.