Japanese prime ministers love to announce sweeping national growth plans, a habit that became unshakeable after Hayato Ikeda promised – and delivered – a doubling of household incomes in the 1960s, writes Jonathan Soble in Tokyo
But such centralised goal-setting has disappointed since the early 1970s, says Akihiko Suzuki, chief economist at MUFJ Research and Consulting. With the exception of the late 1980s bubble years, actual growth has fallen short of targets since the oil shocks.
The latest plan from Shinzo Abe is meant to lift Japan’s real economic growth rate to 3 per cent by 2020, from an average of less than 1 per cent in the two decades since the bubble burst. Here are some of the main initiatives and targets that have been flagged ahead of the full expected on June 14.
Trade: Mr Abe has committed Japan to joining talks on the Trans-Pacific Partnership trade bloc. Through that and other deals, he wants to increase the ratio of Japan’s international trade that falls under free trade agreements to 70 per cent, from 20 per cent now.
Power: In April, Mr Abe’s cabinet approved a proposal to split electric utilities’ generation and transmission businesses and open the monopoly-dominated residential electricity market to competition.
Women: Only a third of Japanese mothers with young children work, compared with 50-60 per cent in the US, the UK and Germany, and three-quarters in Sweden. Mr Abe wants to raise women’s participation rate, in part by creating 250,000 day care places. He has also issued a personal plea to companies to ensure they have at least one female executive, although no quotas or laws are planned to enforce it.
Universities: The government wants to have 10 Japanese universities in the global top 100 in a decade, up from two today. It plans to bring in more foreign faculty and make state funding dependent on performance.
Farms: In an echo of the Ikeda income plan, Mr Abe has set a goal of doubling agricultural incomes in a decade, through the promotion of exports and the consolidation of abandoned and underused rural land
Foreign tourists: A cheaper yen is already bringing in more visitors: 10m are expected to come this year, up from 8.4m last year. Mr Abe is targeting 20m in the medium term.
Foreign money: At less than 4 per cent of GDP, Japan’s inbound foreign direct investment is trifling compared with other countries’ – be it the 13 per cent taken in by South Korea or the more than 50 per cent received by the UK. Mr Abe wants to double Japan’s figure by 2020
Business investment: The government plans to use tax incentives to restore annual domestic private sector investment to its level before the global financial crisis, of around Y70bn, in three years.
Drugs: The prime minister wants to streamline the approval process for new medicines and hospital equipment by creating a Japanese version of the US National Institutes of Health, which would take over from multiple ministries with overlapping jurisdictions.
Infrastructure exports: In an initiative borrowed from the previous government, Mr Abe plans to help Japanese engineering companies sell more high-speed trains and nuclear power plants abroad, with a goal of tripling the value of transport and power-generation exports.
Deregulation zones: Another borrowed idea, this time from the 2001-2006 government of Junichiro Koizumi. Selected cities and regions, including Tokyo, would be allowed to experiment with deregulation measures not yet approved for the nation as a whole