Nakasone Backs Economic Reform Plan
Prime Minister Yasuhiro Nakasone said Monday that he agrees completely with a report submitted by a blue-ribbon panel calling for an overhaul of Japan’s export-oriented economy, but spokesmen for political and commercial organizations attacked it.
The panel, headed by Haruo Maekawa, a former governor of the Bank of Japan, recommended a series of reforms to reduce the “crisis level” of current account surpluses by curbing individual savings, shifting manufacturing offshore, increasing domestic consumption, raising workers’ incomes and reducing working hours.
Masaharu Gotoda, the chief Cabinet secretary, said the report, which will be submitted to the Cabinet today, “will be promoted as government policy.” He added that the prime minister will issue a statement pledging to “honor (it) to the greatest degree possible.”
The panel’s proposals amount to virtually complete acceptance, in principle, of Reagan Administration recommendations for the structural reform of Japan’s economy. U.S. Ambassador Mike Mansfield said in February that such reform was “the most crucial action item on Japan’s economic agenda.”
However, the Maekawa panel’s report failed to spell out any specific goals or any deadlines for its proposals.
Outside the government, the report was greeted by nearly unanimous criticism. All of the opposition parties except the Communist Party condemned it for failing to spell out immediate policies to cope with an economic downturn that many fear lies ahead this year as a result of a setback in export profits brought on by a steep appreciation in the value of the yen. The Communists scored the report for yielding to U.S. demands for fundamental reform of Japan’s economy.
Yoshihiko Inayama, chairman of the Federation of Economic Organizations, expressed fear that the report might encourage the government to treat lightly the importance of savings and to “mistakenly beautify consumption.”
Noboru Goto, chairman of the Japan Chamber of Commerce, warned that drastic reformation of Japan’s industrial structure would imperil small enterprises.
Bunpei Otsuki, head of the Federation of Employers Assns., criticized the report’s recommendations for shorter working hours and extended vacations.
The prime minister has said the report by the Advisory Commission for Economic Structural Adjustment for International Harmony is proof that Japan intends to reduce its trade surpluses. He said he will cite the report to President Reagan when he meets with him Sunday and Monday in the United States and to the other leaders of the advanced industrial nations who are to meet here May 4-6 for an economic summit conference.
Maekawa told foreign correspondents here that what is needed most urgently is implementation of a government policy to enlarge domestic demand to pull in more imports. He cited housing and urban redevelopment as the keys to bolstering economic growth not led by exports.
Last year, Japan recorded a $49.3-billion surplus in its global current account, the sum of trade and non-trade transactions, including shipping and insurance costs and spending by tourists.