Main Points of "Ideal Socioeconomy and Policies for Economic Rebirth"




Following direction from the Prime Minister in January 1999, the Economic Council has conducted a total of 53 deliberation sessions in the form of forums held by the Fundamental Concept Committee, Econometric Model Analysis Committee, Planning Committee, Structural Reform Promotion Committee, Citizens’ Life and Culture Committee, Globalization Committee, and Regional Economy and Social Infrastructure Committee. In addition, the Council has broadly solicited opinions internally and externally, through such channels as opinion-gathering via Internet and fax, monitor surveys, joint research with think-tanks, and regional public symposiums (held in nine places nationwide).

The results of the above were compiled in the report "Ideal Socioeconomy and Policies for Economic Rebirth." It was submitted to the Prime Minister at the July 5 General Meeting, and was eventually endorsed by the Cabinet on July 8.

Five Main Points

  • (1)Explain the change in concepts and do not call it "plan" as before (to the era of knowledge)
  • (2)Clearly state the establishment of individual independence, freedom, and consumer sovereignty
  • (3)Focus on preparations for declining population
  • (4)Submit policy vision encompassing the next decade
  • (5)Formulate policy guidelines that will develop into specific programs

Preface: To the Era of Knowledge

In the 1990s and beyond, the norm of the modern industrial society, which has supported Japan’s growth in modern times, is less suited to the trends of human civilization. Preconditions, objectives, concepts, and value perceptions of the "ideal" socioeconomy of the future are as follows.

  1. Preconditions for "ideal" socioeconomy: "Responsiveness to future change"

    It will be necessary to accommodate the following trends: (1) Knowledge based society (information society); (2) Low-birthrate and aging society (declining population); (3) Globalization; and (4) Environmental limitations.

  2. Objectives of "ideal" socioeconomy: "The Greatest Freedom and the Smallest Dissatisfaction"

    • Emphasizing freedom allowing each individual to choose according to his/her taste, and creation of concepts of "public norm" that are common social perceptions in the fundamentals of the society
    • Safety net and opportunities for new challenges for the losers, and maintenance of rights of the weak (optimum balance between building safety net and bearing cost)
    • Maintenance of overall economic growth rather than per-capita growth
  3. ncepts of "ideal" socioeconomy: "Diversity and creative innovation"

    • Independent individuals to form the foundation of the socioeconomy (from vertical society to horizontal society)
    • Shift from "single sense of belonging" (to family or workplace) to "multiple sense of belonging"
    • Shift to socioeconomy where each individual can better choose according to his/her taste (establishment of consumer sovereignty and limitted role of the government)
    • Corporations need creative innovation continuously in order to continue prospering
    • Diverse supplement of stimulation and function will be required, including an increase in entry of non-Japanese people
  4. Value perceptions as basis for economic selection: "Efficiency, equality, safety and freedom"

    • In addition to efficiency, equality, and safety, freedom will also become "justice", and innovations spurred by taste selection and competition will be strongly supported

1.Fundamental roles of "Ideal Socioeconomy and Policies for Economic Rebirth" and its implementation

* Fundamental roles

  • (1) Clarify direction of selection concerning "ideal" socioeconomy
  • (2) Determine basic direction of economic management, and clarify important policy objectives and policy measures
  • (3) Give guidelines for households and corporations

* In addition to smooth implementation of policies written in this document, the related ministries and agencies should swiftly examine policy issues among which only the rough direction of future policies are shown and declare the results in the form of understandable programs


Reforms in the fields of distribution and information/telecommunication

Addressing the issue of low birthrate

Creating socioeconomy with ecologically sound cycles

Financial reconstruction (after economic recovery)

Promotion of entry of foreign workers into specialized and technical fields

2. Ideal socioeconomy in the early 21st century

  1. Society of diverse knowledge

    • (1) Manifestation of diversity and creativity (consumer sovereignty);
    • (2) Individuals challenge their dreams (potential for another chance for challenge);
    • (3) Society irrelevance of gender;
    • (4) Individual’s multiple senses of belonging;
    • (5) National land of diversity (advanced characteristic functions and interaction of metropolis, local cities, hilly and mountainous areas, etc.)
    • (6) Information and telecommunication networks
  2. Preparing for the low-birthrate and aging society and declining population

    • (1) Unrestricted ideas concerning age;
    • (2) Consistence of work and family;
    • (3) Reliable, efficient social security system
  3. Harmony with the environment

    • (1) Create a socioeconomy with ecologically sound cycles;
    • (2) Address global environmental problems
  4. Position in the global community

    • (1) Japan that remains a major player in the global community (making rules, and future culture of Japanese-born);
    • (2) Role of economic development in Asia
  5. Role of government and new concept of "public norm"

    • (1) Role of government to focus exclusively on establishment of market rules, crisis management, creation of the safety net, and responses to changes in external (dis)economies;
    • (2) Each and every individual contributes to the society

3.Government Policies for Economic Rebirth (important policies)

  1. Formation of the society of diverse knowledge

    • Establish transparent and fair markets (principles of self-responsibility and consumer sovereignty)
    • Swiftly examine and implement comprehensive reformation policies in the fields of distribution and information/telecommunication under clear time-schedule.
    • Create internationally appealing work environment and "second chance" environment that facilitate establishment of companies
    • Create environment allowing individuals to freely choose and challenge
    • Repletion of education
    • Examine and promote comprehensive measures aimed at expanding opportunities for school selection.
    • Secure diversity and vitality by accepting foreign workers
    • Study and promote specific measures for actively facilitating the entry of foreign workers into specialized and technical fields
    • Promote manufacturing of goods and scientific technologies
    • Formulate fundamental plan for promoting technological foundation for goods manufacturing, in order to nurture and develop technologies and know-how accumulated to date.
    • Regional economies and social infrastructure (the "compact metropolis" (comfortable space and time), development of unique industries and cultures in the region through vitalization of central urban areas, vitalization of hilly and mountainous areas through the exhibition of multifaceted functions, and "SMART" infrastructures)
  2. Preparing for the low-birthrate and aging society and declining-population society

    • Reliable and efficient social security (public pensions, medical care and nursing care for the elderly)
    • Undertake comparative studies of prohibiting age discrimination with retirement system and promote employment of the elderly for the time being,(generalize and promote continuous-employment system where all the people aged up to 65 can remain employed if they wish)
    • Urban planning and social infrastructure suitable for low-birthrate and aging society (reduced transfer times, barrier-free, high-quality housing stock)
    • Address low-birthrate problem (diverse child-caring services)
    • Formulate basic policy stance for addressing the low-birthrate problem
  3. Harmony with environment

    • Firmly establish basic principles to maximize recycling of recyclable items, and institute and plenitude laws and other systems
    • Integrated "venous-arterial" industrial mechanism and technological foundation
    • Specify programs for creating a socioeconomy with ecologically sound cycles
    • Address global environmental problems
    • Social infrastructure that supports environmental friendly, safe and sustainable society
  4. Challenge toward global order

    • Appeal to next round of WTO negotiations
    • Make rules for international financial and capital markets
    • Promote interaction within Asian region
    • Formulate comprehensive program for worldwide information transmission (including cultural and academic information), taking into account studies of efficiency and necessity of various measures
    • Information education, foreign-language education
    • International economic cooperation
    • View of international economic cooperation in the 21st century
    • Swift formulation of Medium-Term ODA Policies (provisional)
  5. Role of government

    • Enhance government administrative efficiency (reassess organization and personnel management, swiftly develop PFI project)
    • Improve financial healthiness
    • Formulate specific program for financial reconstruction after the economy is on a recovery path
    • Promote government administrative to be transparent (introduce corporate accounting methods into government accounting)
    • Promote regional autonomy and wider cooperation of surrounding authorities.
    • Undertake medium- and long-term studies of ideal functions and appropriate scale of prefectures, as well as significance of "Do-Shu" System
  6. Policy issues for assuring recovery path

    • With appropriate governmental management, we can anticipate steady economic recovery
    • Even responses to critical and emergency situations must coincide with "ideal" medium- and long-term vision
    • Steadily implement measures above to spur a fundamental transformation of Japan’s economic system, so that economic recovery will not be limited to the short-run cycle

(Reference) Economic Outlook for 2010 (after the recovery to new growth path through 2010)

  • Economic growth rate (real growth of around 2%; nominal growth of 3% and a half)
  • Consumer price increases (around 2%)
  • Unemployment rate (between second half of 3% and first half of 4%)