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Prime Minister Junichiro Koizumi said Friday urban renewal is key to economic structural reform and reviving Japan.

“The (economic) power of urban areas in Tokyo and Osaka has been declining compared with other urban areas in the world since the 1990s,” Koizumi said at the first meeting of the government’s city revitalization panel, which he heads.

“Harnessing private-sector energy for cities is the key to economic and structural reform and revitalizing all of Japan,” he said

Land Minister Chikage Ogi, deputy chief of the panel, said, “We should work to combine our wisdom to create a Japan that can compete internationally.”

The panel is tasked with crafting an urban renewal plan as part of the government’s economic stimulus measures. It will examine such issues as the construction of waste disposal and recycling plants, international airports and disaster refuge areas, as well as projects aimed at the utilization of vacant lots.

The panel, with its headquarters based in the Cabinet Secretariat, consists of ministers with jobs related to the issues.

The committee, which has already heard opinions from the Land, Infrastructure and Transport Ministry on the matter, plans to hear from officials of municipalities around Tokyo and Osaka, as well as the Japan Federation of Economic Organizations (Keidanren), which represents big businesses.

It will later compile a report on ideas for revitalization projects and select those to proceed by the end of June.

Road funds review

Finance Minister Masajuro Shiokawa said Friday the use of special road-building revenues should be expanded to include urban infrastructure improvements and to promote environmentally friendly vehicles.

Shiokawa’s remarks followed his agreement the day before with Prime Minister Junichiro Koizumi that the government will begin a comprehensive review of the use of special purpose tax revenues, which will be reflected in compiling the fiscal 2002 budget.

For the current fiscal year, such revenues amount to some 7 trillion yen, about 5.8 trillion yen of which has been designated for road construction.

“Although a portion of the fund designated for roads has already been used for projects to update urban infrastructure, more funds should be channeled to this area,” Shiokawa told a news conference after a Cabinet meeting. “Similar steps should also be taken to promote the introduction of environmentally friendly vehicles.”

The fund comes from sources including gasoline and petroleum gas taxes.

Shiokawa has also said he will review how to utilize other special purpose tax revenues, gathered from levies on aircraft fuel and other areas. Turning to a budget-making blueprint for the next fiscal year that the Council on Economic and Fiscal Policy plans to draw up next month, Shiokawa said it should carry “bold” changes in the current budget shares, not just a 3 percent to 5 percent spending increase for weighed areas.

Reforming the current rigid budget allocation is part of Koizumi’s “structural reform without sanctuaries.”

Resistance to modifying the use of special purpose revenues remains strong among bureaucrats and legislators with vested interests.

Budget talks to begin

Prime Minister Junichiro Koizumi and members of his economic advisory panel reaffirmed a deadline of late June by which to draft a fiscal 2002 budget blueprint that will “strongly reflect” the prime minister’s promise to implement reform and leave no sanctuaries.

Friday’s meeting of the Economy and Fiscal Policy Council was the first since Koizumi took office April 26.

At the beginning of the meeting, Koizumi stressed his resolve.

Heizo Takenaka, minister of economic and fiscal policy, said after the meeting that he put forward some points in need of extensive discussion before the blueprint is compiled.

These included steps to increase the competitiveness of the economy by reviewing the role of the public and private sectors and reviews on special road-building revenue from gasoline and petroleum taxes, he said.

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