Cabinet Office, Government of Japan

English Home  >  Policies  >  Economic and Fiscal Policy  >  Outline of the Policy Measures for Economic Rebirth

Outline of the Policy Measures for Economic Rebirth(summary)

November 11, 1999
Economic Planning Agency

Introduction: Basic Principles of the Policy Measures

The aim of the policy measures for economic rebirth is to achieve a smooth transition from public-sector-led growth to private-sector-led growth, and to put the Japanese economy back on the path of full-fledged recovery at the earliest possible date. Additionally, the package aims to establish a new conceptual framework for 21st-century-type society and to consolidate a foundation for its realization.

In compiling the policy measures, the greatest consideration has been given to the reforms of institutional framework as well as to the nation's physical and social infrastructure in line with entirely new concepts and overt goals toward increased investment efficiency and user friendliness. Additionally, to ensure that the results and effects of the package are easily felt by the Japanese people, the utmost efforts will be made to explicitly stipulate the policy goals, overall picture, and target years.

Chapter 1: Basic Principles

  1. Understanding economic conditions

    The Japanese economy is on a gradual recovery path, as the effects of various policy measures permeate the economy. However, Japan has yet to reach a stage where private-demand supports autonomous economic recovery.

    Since the beginning of this year, various positive developments have been observed, say, in the reorganization of the financial industry and in the strengthening of industrial competitiveness. To tackle structural reform head on is an indispensable element in transforming the Japanese economy to the appropriate foundation for the knowledge-based age of the 21st century.

  2. Basic directions for policy measures: route to a full-fledged recovery

    (1)The policy measures for economic rebirth have, as the task, the following two principal pillars:

    • To generate new demand to facilitate the smooth transition from public-sector-led growth to private-sector-led growth, and to steer the economy toward a full-fledged recovery led by private demand.
    • To solidify the direction of Japan's socio-economic structural reform and to achieve economic rebirth.

    (2)Pursuant to these strategic intentions, overall projects totaling approximately 17 trillion yen (approximately 18 trillion yen inclusive of long-term care) will be promptly implemented through social infrastructure augmentation, financing of small and medium enterprises, housing financing measures, as well as employment measures.

  3. Roadmap of rebirth of the Japanese economy

    (1)The roadmap of economic recovery is outlined as follows:

    • Indications are that the government's initial Economic Outlook for approximately 0.5% real growth in FY 1999 is likely to be met.

    • Japan will aim to put the economy on a full-fledged recovery track in the second half of FY 2000. Necessary policy measures, including the new package, will be introduced and implemented in a vigorous and flexible fashion to boost private demand.

    • During FY 2001, Japan will aim to shift from private-demand-led autonomous recovery to a new growth trajectory, thereby steering the economy to ensure its long-term economic development.

    (2) In the area of structural reform, the policy measures contained in the new package will be implemented with an aim to complete the initial stages of structural reform and to place Japan on a sound and irreversible trajectory.


Chapter 2: Specific Policies

I.Measures to Elicit the Dynamism of the Japanese Economy

  1. Promotion of small and medium enterprises and venture firms

    (1) Developing policies for small and medium enterprises to create new industries and employment:

    • Basic philosophical aspects of policies for small and medium enterprises will be overhauled, by identifying them as a principal source of dynamism in the Japanese economy and promoting the healthy development of diverse enterprises.

    (2) Promoting business entrepreneurship and venture firms:

    • Access to sources of financing will be facilitated and diversified by increasing the modalities of direct financing.

    • Institutional revisions should be made in areas pertaining to human resources development and organizational aspects.

    (3)Facilitating access to management resources including personnel, technologies and information:

    • Establishment of accessible local support centers for providing needed and focused support, etc.

    (4)Facilitating appropriate response to dramatic changes in the financial and economic environment:

    • Extension and expansion (10 trillion yen) of modalities of the special guarantees scheme for stabilizing the financing of small and medium enterprises, etc.
  2. Promotion of strategic and prioritized technology development

    (1) Promotion of technology development in high priority fields through the Millennium Projects, among others: conducive to the advanced information society, the rapid aging society, and environmental considerations, etc.

    (2) Establishment of a foundation for creative research and development, and strengthening the partnership between industry, academia, and the government:

    • Upgrading of facilities and equipment which pave the way for dramatic advancement in research.

    • Review and early conclusion regarding restrictions on appointment of national university faculty members to part-time directorships in private corporations.

  3. Administrative deregulation and institutional reforms concerning growth sectors and foundations for basic business activities

    (1)Front-loading of the schedule of the Three-Year Program for Promoting Deregulation as Revised, etc.

    (2) Administrative deregulation and institutional reforms in growth sectors:

    • Promoting the introduction of low-priced, fixed-rate Internet access fees by setting-up new rules for interconnection with MDF (Main Distribution Facility) (within FY 2000).

    (3)Deregulation and institutional reforms pertaining to the foundation for business activities:

    • "Minji Saisei Hou" (Bill for new bankruptcy related law).
  4. Employment measures

    (1) Support measures conducive for the start-up of new small and medium enterprises for job creation and employment stability:

    • Establishment of "Special Subsidy System for Regional Employment Creation by Small and Medium Enterprises" (provisional title).
    • Establishment of "Subsidy System for Employment Creation in Designated Regions and Workers Dismissed by Sub-Contracting Enterprises" (provisional title).

    (2) Promotion of "21st Century Plan for Creation of Human Resource-Based Nation," etc.

    (3)Promotion of quicker re-employment and enhancement of the social safety net.

    (4)Realization of anxiety-free work environment and lifestyle for workers:

    • Prompt introduction of long-term holiday system, etc.
  5. Measures to address the smaller number of children per family and the rapidly aging society, and pension reforms

    (1) Measures targeted for long-term care:

    (2) Measures to address the smaller number of children per family and the rapidly aging society:

    • Large-scale survey and research for realization of socio-economic conditions that provide sufficient employment opportunities for the elderly in the workplace.
    • Upgrading of nursery schools and other facilities for better support for child rearing.

    (3) Pension reforms

II.Consolidating the New Foundations for Development in the 21st Century

To consolidate the new foundations for development in the 21st century that will revitalize the Japanese economy, the nation's life-related infrastructure and key network infrastructures must be upgraded on a strategic and prioritized manner. Moreover, social infrastructures should be augmented for regional revitalization, and appropriate prevention measures against natural calamities should be promoted.

In the area of public works, efficiency and transparency should be further improved through cost-benefit analysis and other measures. At the same time, active measures will be taken to promote PFI (Private Financial Initiative).

  1. Preparing and upgrading the life-related infrastructure for the 21st century

    (1)Reconstruction of urban and regional infrastructure:

    • Promoting the concept of "towns where one can get around on foot safe and sound."
    • Project for underground installation of 3,000 km of power lines; project for installation of 5,000 units of street lights.
    • Active remodeling and utilization of existing houses; development of green zones.

    (2) Comprehensive traffic congestion countermeasures:

    • Alleviating congestion in 100 traffic bottlenecks on a priority basis.

    (3) Improving urban amenities for the disabled:

    • Creating barrier-free public facilities and transportation facilities.
  2. Upgrading key network infrastructures

    (1) Upgrading highway networks and speeding up of the implementation of ETC (Electronic Toll Collection) targets:

    • Upgrading highway networks.
    • Adoption of a goal for installation of ETC at 900 sites nationwide by FY 2002.

    (2) Increasing the speed and expanding the absorptive capacity of the information-telecommunications network:

    • Outlining a vision for the future info-communications including ways and means of providing the status of info-communications networks.
    • Research pertaining to terra-bit and peta-bit network trunk lines; promoting nationwide development of subscription-based optical fiber network.

    (3)Upgrading the infrastructure and improving access to international gateways.

  3. Long stride leap in the adoption of information technologies

    (1)Adoption of information technologies in education:

    • Link all public elementary, junior high, and senior high schools to the Internet by FY 2001; gradually promote an environment for computerization which enables all public schools to use computers in all classes by FY 2005.

    (2)Adoption of information technologies in regional areas

    (3)Realization of an electronic government administration:

    • Develop a solid foundation for electronic government administration by FY 2003 which enables paperless administrative procedures between the public and the government, using the Internet.

      (4)Establish legal framework for electronic commerce.

  4. Creating environment-friendly socio-economic structures

    (1)Promotion of basic studies and research for the formation of a recycling society

    (2)Promotions of appropriate solid waste disposal and recycling, and dioxin-related countermeasures, etc.

  5. Measures for ensuring public safety

    (1)Creating safe cities and towns

    (2)Measures for improved safety of concrete structures

    (3)Nuclear power safety and disaster-prevention measures

  6. Assistance for Asian Countries
    • Consideration of expansion of country coverage and magnitude and scope eligible for Special Yen Loans.

III.Revitalization of the Financial Markets and Securitization of Real Estate

  1. Revitalization of the Financial Markets

    (1)Reform and revitalization of the securities markets

    (2)Reinforcement of the inspection and supervisory regimes

  2. Securitization of Real Estate, etc.

    (1)Securitization of real estate, etc.:

    • Revision of the SPC (Special Purpose Company) Law, etc.

    (2)Housing financing measures

    • Increasing lending-level ceiling of the Government Housing Loan Corporation; Securitization of loan assets, etc.
  3. Appropriate and flexible management of monetary policy by the Bank of Japan

IV.Others

  1. Tax system
    • Undertake studies and reach conclusions on measures supporting small and medium enterprises and venture firms, and measures promoting private investment.
  2. Diversification of government bond issuances
  3. Response to the year 2000 (Y2K) problem
  4. Events to mark the start of the new millennium
Cabinet Office, Government of Japan1-6-1 Nagata-cho, Chiyoda-ku, Tokyo 100-8914, Japan.
Tel: +81-3-5253-2111