Reappointed Economy Minister Takeo Hiranuma said a comprehensive approach of combining the disposal of problem loans and assets, creating new businesses and implementing regulatory reforms is needed to revitalize the economy.
“One of the key issues is disposing of problem loans and assets in the financial and industrial sectors,” the 61-year-old minister of economy, trade and industry said. “It is also necessary to create new businesses and steadily implement an action plan (for regulatory reforms).”
He said the ministry will continue assisting the industrial sector to cope with problematic assets such as excessive facilities, while carrying out regulatory reforms to encourage new enterprises in fields such as information technology and medicine, Hiranuma said.
One proposal by Hiranuma was encouraging financial institutions to extend loans to entrepreneurs based on business ideas and technology rather than conventional collateral-based loans.
To facilitate economic structural reforms, Hiranuma stressed the importance of steadily forging ahead with the five-year action plan for regulatory reform that the ministry compiled in November.
“The new Cabinet under Prime Minister Koizumi gives top priority to structural reforms. We must make further efforts to abolish regulations that hinder the development of new businesses such as in IT,” Hiranuma said.
But he admitted structural reform will be a painful process that will involve bankruptcies and unemployment.
On the overall state of the economy, Hiranuma said Japan is facing declining prices and exports in the face of a decelerating U.S. economy.
Hiranuma, however, remains upbeat on the economy’s potential, saying there is no need to discuss a supplementary budget.
Speaking on recent calls from the farm and industrial sectors for import curbs against products from countries including China, Hiranuma said those moves are not a sign of protectionism.
Responding to calls from domestic farmers, Tokyo on Monday invoked 200-day import restrictions on stone leeks, fresh shiitake and rushes used for tatami.
The government is now investigating whether to invoke import curbs on towels after the Japan Towel Industrial Association asked the government to do so.
Domestic manufacturers of socks and neckties are also considering asking the government to launch an investigation for possible import curbs on those products.
“There is an opinion that regards those moves as protectionism. But they are not. As a country that has greatly benefited from free trade, Japan continues to take an initiative to promote free trade,” Hiranuma said.
When cheap imports seriously damage domestic producers, import curbs are allowed under World Trade Organization guidelines. Hiranuma said Japan handles requests for import curbs strictly based on WTO rules.
“When domestic industries that are facing difficulties request import curbs, we will judge (individual) cases strictly, neutrally and objectively. We also consider the interests of (domestic) users and consumers. Strictly playing by the rules is not protectionism,” Hiranuma said.
Hiranuma also reiterated a call for the early launch of a new round of global trade talks. A WTO ministerial meeting will be held in Qatar in November.
Toward that end, Hiranuma said Japan is striving to bridge the gap between developed and developing countries.
In a ministerial meeting in Seattle in 1999, WTO member countries failed to agree on the launch of the new round, partly because of a lack of common interests in the trade talks.
As head of the ministry overseeing the Agency of Natural Resources and Energy, Hiranuma faces various issues relating to energy, including the environment and nuclear energy.
In the field of nuclear energy, local opposition is growing to building nuclear plants and starting nuclear fuel recycling.
“Nuclear power is an important factor in the country’s energy policy. It accounts for nearly 40 percent of our energy supply. Besides, nuclear power generation does not emit carbon dioxide. We will make efforts to convince the public and promote understanding on the issue,” Hiranuma said.
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