Facing Job Losses, Japan Sets Out to Reform Economy
TOKYO (AP) _ Trying to improve conditions for Japanese business before more jobs are lost to low-cost areas overseas, the government announced plans Tuesday to initiate radical reforms relatively quickly.
It was the second daily announcement of reforms urged by Prime Minister Ryutaro Hashimoto, re-elected to his post last week on promises to reinvigorate Japan’s lagging economy.
``We must make all-out efforts to reform the economy,″ Trade minister Shinji Sato said in quoting the prime minister.
U.S. Treasury Secretary Robert Rubin, briefed by the Japanese finance minister, said the United States supports ``the broad objectives of deregulation and transparency in Japan’s financial market.″
On Monday, the government promised to reduce bureaucratic regulations to make the finance industry more ``free, fair and global″ while repositioning Tokyo as a premier financial center early in the next century.
Sato said details of the industrial restructuring plan announced Tuesday would be worked out by mid-December for submission to Parliament next year.
The government hopes to encourage industrial research and improved technology to better serve Japan’s businesses at a time the government acknowledges that job losses in manufacturing are ``quite severe.″
``We must be aware of the dangers″ of Japanese companies moving factories abroad to escape Japan’s high costs, Sato said.
The economy has been struggling since the end of the late 1980s when easy credit fueled rampant land and stock speculation, leading the Japanese to expect endless growth.
Meanwhile, a government-sponsored panel submitted a final proposal on ways to make Japan’s central bank more independent, including ending the government’s right to direct the Bank of Japan’s monetary policy.
The panel also said the government should not be able to dismiss the bank’s governor for views on monetary policy contrary to the government’s.
But, the panel added, the bank should not be completely independent of democratically elected officials; for instance, the panel wants the government to continue appointing the bank’s governor and senior officials.
But to gain the confidence of increasingly globalized financial markets, the bank must make its monetary policy clear, the panel also said.
Kimio Yamaguchi, director of the Finance Ministry’s banking bureau, said the prime minister and the newly named finance minister, Hiroshi Mitsuzuka, hope to turn the proposals into law next year.