Although Japan knows it should carry out structural reforms and stimulate domestic demand to get out of its protracted economic slump, it is still waiting for someone to take the initiative and actually do something.
This was the dominant view among participants at an international conference held earlier this week in Okinawa, according to Itochu Corp. Chairman Minoru Murofushi, who jointly chaired the talks.
Most participants believed Japan, the world’s second-largest economy, will stage a comeback if its corporate managers and political leaders hurry up and introduce structural reforms and stimulate domestic demand, Murofushi told The Japan Times.
“A view shared by most (of the participants) was that at issue was who will do it and how to do it. I think that the direction Japan is taking has their support,” Murofushi said. The 29th Williamsburg Conference was held Sunday and Monday at Bankoku Shinryokan in Okinawa, the venue of last July’s Group of Eight summit.
Some 51 business leaders, government officials and scholars from 17 countries in the Asia-Pacific region exchanged views and opinions on a range of issues, including politics, security and economics.
Participants included Carla Hills, a former U.S. Trade Representative, Tommy Koh, Singapore’s ambassador at large, and Nicholas Platt, president of the Asia Society — all of whom jointly chaired the conference. The conference, first held in 1971 in Williamsburg, Virginia, provides a venue for academics and political and business leaders to exchange views behind closed doors. It is sponsored by the Asia Society.
Takeo Hiranuma, economy, trade and industry minister, delivered a keynote address, in which he elaborated on Japan’s foreign and economic policies. His speech included references to Japan’s structural reform plan, which Murofushi said served as the basis for the discussions.
According to Murofushi, many participants were concerned about the future of Japan’s economy, pointing out the vast nonperforming loans held by financial institutions and stock prices that just last week slumped to their lowest levels since 1984.
Added to Japan’s economic woes is the political uncertainty. Murofushi said worries were expressed on whether a strong political leader, able to tackle these problems, would ever emerge.
According to Murofushi, participants agreed that the government and private sectors should combine forces to carry out the emergency economic package announced by the ruling coalition earlier this month and work together to speed up structural reforms, including the disposal of bad loans.
Opinions were divided over Japan’s efforts to date, the chairman said.
Some Asian participants urged Japan to do something about its financial problems, hoping its experience could be used to help other Asian countries mired in similar financial woes, he said.
Meanwhile, Japan’s recent attempt to become a leader in the field of information technology won support from conference participants, with many expressing their belief in Japan’s ability to achieve that goal.
Although participants said the slowdown in the U.S. economy was much faster than they had anticipated, many of them expect the U.S. economy to pick up steam again as early as in the middle of this year, Murofushi said.
Concern was raised about Japan’s relations with the Association of Southeast Asian Nations, with participants pointing out that Tokyo’s policy toward the region is unclear. Positive marks were awarded to Japan, however, for its assistance to ASEAN members during the financial and economic crisis that broke out in the region in 1997, Murofushi said.
Through the course of the two-day discussion, Murofushi was continually struck by Japan’s need to change itself swiftly in both economic and political terms.
Murofushi said he wrapped up the Okinawa conference by saying: “Toyota’s ‘just in time’ system served as a model in the global auto industry 10 years ago. What Japan needs now is ‘just in time for the economy’ and ‘just in time for politics.’ “
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