Japan’s economic problems are critical and the plans announced to resuscitate the economy should be implemented as quickly as possible, regardless of Sunday’s election results, U.S. business leaders said Monday.

At the 35th Japan-U.S. Business Council, which began actual discussions Monday at a Tokyo hotel, nearly 100 business leaders from the United States and Japan gathered for a frank exchange of opinions on economic issues, including bilateral trade and investment issues, Asia’s economic crisis and electronic commerce.

The meeting is being cochaired by Minoru Makihara, chairman of Mitsubishi Corp., and Michael Jordan, chairman of CBS Corp.

Because the annual businesspeople’s meeting came a day after the ruling Liberal Democratic Party’s defeat in the Upper House election, the issue that topped the agenda at its plenary session was the poll results and Japan’s management of its economy, including the need to restore the health of Japan’s banking sector.

Responding to questions from the U.S. side over the political stability and the impact of the LDP’s setback on the proposed economic measures, Japanese participants said the LDP will have to cooperate with opposition parties to execute the measures.

Takashi Imai, chairman of the Japan Federation of Economic Organizations (Keidanren), described the election results as a clear indication of the Japanese people’s dissatisfaction over delayed economic measures. He urged the government to quickly start Diet debate on the measures regardless of Prime Minister Ryutaro Hashimoto’s fate.

“Even if the prime minister steps down, the government has to quickly open the extraordinary Diet session … and must pass the related bills by the end of next month by cooperating with opposition parties,” Imai said.

Hashimoto announced Monday afternoon that he will resign.

Shunji Yanai, vice foreign minister, who was also invited to the meeting, said the election results will not immediately affect the planned economic measures because the opposition parties also recognize the need to implement them to stabilize the nation’s financial system.

“But the LDP will have to seek cooperation from some parties that share similar views to get the necessary bills passed by the Diet,” Yanai said.

Jordan expressed concern over a possible delay of the economic measures as a result of the political turmoil in Japan. “Dissolving the Lower House and going through another election process will slow down the process of reform activities,” he said.

Reflecting the serious concerns of the U.S. over the Japanese economy, Henry Schacht, director and senior adviser of Lucent Technologies, Inc., also warned that the Japanese people must have a sense of urgency for the state of the economy.

Stressing that the failing economy is a concern throughout the world, Schacht urged the Japanese government to take quick and decisive action to resolve the problem, especially in its banking sector. “We understand the political difficulties that all of you face, but this is the most serious challenge to global economic stability in 50 years,” he said. “Take the deficit risk and stimulate the domestic demand,” he said, adding that an export-led policy will not work this time.

Business leaders attending the three-day meeting include Yotaro Kobayashi, chairman of Fuji Xerox Co.; Toru Hashimoto, chairman of Fuji Bank; Frank Cahouet, chairman and CEO of Mellon Bank; and Wayne Booker, vice chairman of Ford Motor Co.

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