Japanese reforms well on track

Mr Ryuichiro Yamazaki, press secretary of Japan's Ministry of Foreign Affairs.

Japan is dead serious about its structural reform. Prime Minister Keizo Obuchi and his Cabinet have been absolutely committed to its effective implementation.

Under such commitment, deregulation in finance, telecommunications, distribution and other areas have proceeded apace, and opportunities for new entry into these markets have greatly increased for foreign capital as well.

Instead of propping up uncompetitive sectors, we are facilitating highly motivated small- and medium-size enterprises and venture businesses. Further, in the upcoming fiscal-year 2000 draft budget, the government is considering prioritizing future-oriented infrastructures such as those for information.

These bold measures are reflected in the number of striking changes in Japan's socio-economy. Firstly, corporate structural reforms have been proceeding at an unprecedented pace. Integration of major banks across the domain of keiretsu, and the temporary nationalization and subsequent selling-off of the two failed major banks to foreign capital and other institutions also have taken place. At the same time, deep personnel cuts have been implemented both at NTT and Nissan Motor Corp., the latter already under the umbrella of Renault. Secondly, venture businesses in the field of information technology (IT) have met with remarkable success. Salient examples are the remarkable growth of Softbank Corp. and Hikari Tsushin Inc.

According to one estimate, the Japanese IT industry is growing at an annual rate of 12%, with productivity rising at 7%. The recent surge of Japanese stock purchases by foreign investors reflects the confidence in those start-up venture businesses with immense potential.

While Japan did post a negative real gross-domestic-product growth rate for the last October-December quarter, the annual growth rate for 1999 was 0.3%, as compared to -2.5% for 1998. The economy is expected to start on a full-fledged, self-sustaining recovery track from the second half of Japan's fiscal year 2000 (i.e. October), due mainly to the substantial increase of capital investment.

Steadily nurturing these seeds of recovery, Japan hopes to contribute, in its own way, to the future of the world economy.

This article was written in response to "Opinion" in "USA Today" March 16, 2000