Reaching out to foreign business in Japan
The timing of Meet the Ministers was either perfect or highly unfortunate. Organised by 15 of the foreign chambers in Japan including the EBC, it took place the same day beleaguered prime minister Yukio Hatoyama abruptly announced his resignation.
Despite the political turmoil, government speakers at the Canadian Embassy were eager to explain the DPJ’s plans, and the audience equally keen to learn how foreign business would be affected. As the Canadian ambassador, Jonathan T. Fried, put it in his introduction: “A good hockey player looks where the puck is, a great hockey player where the puck is going to be.”
Harufumi Mochizuki, a senior bureaucrat at the Ministry of Economy, Trade and Industry (METI) filled in at short notice for Minister Masayuki Naoshima. He acknowledged the economic “crisis” facing Japan, and offered METI’s Industrial Structure Vision released a day before as “a proposal for a way out.”
The document identifies five strategic sectors for Japan: infrastructure (such as nuclear energy and rail); environment (smart grid, next-generation vehicles etc.); medical, nursing, healthcare and childcare; cultural industries (fashion, tourism, etc.); and frontier fields (robots, space, etc.). Japan has the same fundamental challenges as many other developed nations, including an ageing society and climate change. Addressing them would make Japan a “problem-solving nation” and provide a basis for future growth, said Mochizuki.
Mochizuki also touched on foreign direct investment, admitting that Japan is being passed up. He noted a 15% gap in corporate tax rates between Japan and Europe that METI wants narrowed. But there is no consensus in the government on the issue at present, he said.
Despite Japan’s shrinking population, growth in Asia should be leveraged to help Japan, Mochizuki said. Also, Japan should position itself to provide the technology to deal with the environmental problems accompanying the region’s growth. Japan’s clean coal technology is one example.
A memorable day
“Today is truly a memorable day,” said the next speaker, Masaharu Nakagawa, senior vice-minister of education, culture, sports, science and technology. “In just four days I will be fired.”
His speech quickly took a more serious turn, however, as he attempted to allay concerns that budgetary constraints would hit government spending on science and technology. He gave detailed information on world-leading scientific research projects, and stressed the importance of environmental technology and the life sciences for future growth.
How can Japan’s universities attract scientific talent from abroad, asked a member of the audience? Nakagawa noted that university remuneration structures need more flexibility. And he acknowledged that regrettably Japan has become “inward-looking”.
Regulatory reform
Minister of state for government revitalisation Yukio Edano apologised for arriving late – saying he’d been busy helping choose Japan’s next prime minister. (Six days after the event new prime minister Naoto Kan appointed Edano to the powerful post of DPJ secretary-general.)
Regulatory reform is essential for Japanese growth, he said, stressing that the DPJ is as keen to enact reform as former prime minister Junichiro Koizumi. But he added that the DPJ would focus on consumers rather than the business and supply side.
Special areas for regulatory reform have “not been fully utilised”, although a comprehensive special zone system is being further discussed. Edano reiterated the DPJ’s determination to attract foreigners for business, as tourists, and also to have them take advantage of Japan’s high level of medical care.
Lastly – in a speech that most agreed was the most impressive of the night – he argued that Japan’s prosperity has long been based on trade and its relations with other nations. There is no reason that high-value products and services in Japan cannot also be provided by foreign companies, he said.