Japan Reviving Startegy

Although people may have forgotten it, Prime Minister Shinzo Abe is still shooting the third arrow of Abenomics, which is growth strategy. Abe’s consultative organization, Industry Competitiveness Conference, released a draft of new growth policy called “Japan Reviving Strategy” on Tuesday. While it focused on taking advantage of women power and technology, it actually is a collection of favorite dishes for a leader with strong likes and dislikes.

To create favorable environment for women workers, the conference proposed enhancing capacity of nurseries for kids after school from 900 thousand to 1.2 million by 2019. It also reconsidered review of tax and social security system, mainly targeting traditional tax exemption for workers with jobless spouse. Reviewing labor time, transparency of employment rules and improving job training were included in their proposal.

As a deregulation in labor market, it raised a necessity of introducing foreign workers. The draft listed nursing care, car mechanic, forestry and food processing as possible areas of job training for foreign workers, in addition to construction. Training time would be extended from three years to five years. Penalty for deteriorated environment of foreign workers would be tightened with legislative supports.

It also included long-disputed issue in medical area, called mixed medical treatment. Because it broaden the recipient of medical treatment from the people with medical care to the people without it, pressure groups of medical doctors and industries have been lobbying not to introduce it. With a perspective of active economy, the administration is considering the reform of the system.

Having said that, there was nothing new in the menu. Due to narrow-mindedness of bureaucrats, who led the discussion of the draft, new policies are hardly bold steps to deregulation, but minor adjustment of existing policies. Lawmakers in Liberal Democratic Party tightly connected with old interests also put pressure against deregulation efforts. The menu revealed that LDP administration could not get rid of that traditional negative element.

It is highly unlikely that world market will show positive response to the strategy. Although Abe administration is delivering new “large-boned plan,” a policy package for economic rebuilding, it is expected that no effective breakthrough in closed Japanese market will be coming up. Reputation for Abe’s groundbreaking economic policy dubbed as Abenomics is still not solidified.