MITI projects economic windfall from deregulation

Drastic deregulation in five key service sectors would generate 39 trillion yen in fresh investment and boost the nation’s economy by 6 percent in the six years between 1995 and 2001, the Ministry of International Trade and Industry said in a report released May 21.

Shinji Sato, minister for international trade and industry, will explain the figures cited in the report in the upcoming ministerial meeting of the Organization for Economic Cooperation and Development, to be held in Paris next week, according to a ministry official. The estimate has been reached based comparisons of the actual growth in 1995 on the premise that a range of deregulatory measures in the five service sectors — transportation, energy, telecommunication, financial services and distribution — would generate their intended results by 2001, according to the ministry.

For instance, supply-demand adjustment practices are to be abolished in truck, railroad and sea transportation, while energy costs are to be reduced to the level of those in Germany. It is also assumed that Japan will provide telecommunication services as cheap and diverse as those in the United States and offer a financial market as efficient as those in New York and London.

Of the 6 percent real growth in gross domestic product, a 2.6 percent increase is attributable to fresh investment worth 39 trillion yen, it says. Meanwhile, the report points out that the deregulatory measures, while generating jobs in new growth businesses, will also cause substantial unemployment in such areas as wholesale and financial services.