Draft action plan for growth strategy published
The Council on Investments for the Future met for the 40th time at the Prime Minister’s Office on 3 July, when it published a draft action plan for the 2020 Growth Strategy. Cabinet ministers and experts on the Council have been discussing growth strategies and structural reforms to promote investments for future growth since September 2016.
Overall, the draft contained no particular surprises, as it consisted of a summary of discussions by the Council over the past year (Figure 1). Specifically, it had measures focused on people in the form of providing frameworks for side/multiple jobs and promoting so-called recurrent education, and measures focused on companies, such as promoting open innovation leveraging corporate assets, while also taking up the digitalization themes of cashless payments and 5G/beyond 5G mobile phone systems.
Guiding principles for future discussions factor in COVID-19
The 2020 draft action plan included comments referencing the COVID-19 pandemic. The draft action plan included the following four points as guiding principles for future discussions about Japanese society during and after the COVID-19 pandemic.
• New working practices, regional revitalization, digital transformation (DX), distributed housing
• Creating a tough and resilient society
• Ensuring companies have a long-term vision
• Creating a sustainable society, including going carbon zero
The plan also gave specific examples of measures based on these guiding principles, but many of these strike us as still underbaked (Figure 2). Indeed, sections (1) embedding new working practices and correcting excessive centralization and (5) revitalizing industries and rebuilding businesses basically matched the examples given elsewhere in the draft action plan.
Council on Investments for the Future slated to be expanded in late July, start deliberations on creating a new vision for Japan
The Japanese government is planning to expand the Council on Investments for the Future in late July, including adding new members, to create new visions for Japan and Japanese society for during and after the COVID-19 pandemic, and we expect this new expanded council to flesh out measures based on these four guiding principles.
Based on the actions of the Japanese government since the pandemic gained momentum, we think items (7) what central and local governments should be like and (8) responding to the international situation are likely to take shape earlier than other items. In recent years, it has become regular practice to carry out an interim review of the growth strategy at the end of the year. We note that the Japanese government could well adopt a new package of measures towards the end of the year that take the domestic political situation into account as well as keeping an eye on the outcome of the US presidential election in November.
Read our full report here for a breakdown.
Senior Economist, Japan
Chief Japan Economist
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