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The Japan Federation of Economic Organizations (Keidanren) and the Japan Federation of Employers’ Associations (Nikkeiren) merged Tuesday to become the Japan Business Federation, hoping the more powerful business lobby can wield greater influence over government policies.

The merger, creating Japan’s largest economic bloc with some 1,600 corporate and organizational members, marks the first postwar integration of major business groups.

The new group, dubbed Nippon Keidanren, aims to create an environment to revitalize corporate activities and help companies cope with a rapidly changing society, said Toyota Motor Corp. Chairman Hiroshi Okuda, who was formally named the group’s head at its inaugural meeting in Tokyo the same day. He is expected to serve in the post for two years.

“The era of using the United States and Europe as models has ended,” Okuda said in an interview with The Japan Times. “We as a new economic organization must carry out various activities in a powerful manner and forge our own way.”

The inaugural meeting also endorsed 15 corporate executives, including Fujio Mitarai, president of Canon Inc., and Masaharu Shibata, president of NGK Insulators Ltd., as vice chairmen.

Keidanren Chairman Takashi Imai, who also serves as chairman of Nippon Steel Corp., was appointed honorary chairman of the new Nippon Keidanren.

Okuda, who headed Nikkeiren for the past three years, said Nippon Keidanren will work on a wide range of social and economic tasks that were carried out by Keidanren and Nikkeiren.

Keidanren, founded in 1946, mainly lobbied the government for the sake of business interests, including tax and corporate law matters. Nikkeiren, established in 1948, primarily dealt with labor-management issues, including setting guidelines for the annual “shunto” spring wage negotiations and establishing working conditions with labor unions.

Okuda said it is important that the new organization establishes “a new relationship with politicians,” Okuda said.

Keidanren exerted tremendous influence over politics, coordinating political donations among member firms and associations and channeling them mainly to the ruling Liberal Democratic Party. Because of this, its chairman was often called the “zaikai sori,” meaning prime minister of the business world.

Keidanren stopped the practice in 1994, a year after the LDP lost the government helm for the first time in 38 years. Some say the business circle’s influence has weakened since then.

“I don’t think (Nippon Keidanren) as a group should coordinate political donations, considering recent scandals” involving politicians and businesses, Okuda said.

But he added that the new group should consider and propose tax reforms within the next two years to motivate individuals and companies to donate to politicians.

“My stance is that (the business community) should have an influence (on politics), and at the same time, provide money,” he said.

Internationally, Okuda said major considerations on Nippon Keidanren’s agenda include how to cope with China and its fast-growing economy, and promoting free-trade agreements between Japan and other countries.

Other issues include how to:

Create new businesses to revitalize the economy.

Alleviate the current high unemployment rate.

Lure more foreign workers who can help balance problems caused by Japan’s rapidly aging society and dwindling birthrate.

Industrial responses to environmental problems will also be discussed, he said.

Besides urgent economic issues, the new group also must restructure its secretariat.

The merger was spelled out about two years ago. Calls to reorganize business lobbies had been mounting since the early 1990s, when many firms and government agencies began to streamline their operations and improve efficiency amid the prolonged economic slump.

Keidanren and Nikkeiren member firms initially expected the merger to reduce their financial burdens by streamlining overlapping activities, but they are being asked to pay combined membership fees for the merged entity during the first year of operation.

Although the Keidanren and Nikkeiren management and operating structures basically remain intact, Okuda said a restructuring plan, including the membership issue, will be mapped out within one year to fulfill members’ expectations.

While Nippon Keidanren is expected to represent major corporations, two other key economic groups have different roles. The Japan Chamber of Commerce and Industry represents small and midsize companies, while the Japan Association of Corporate Executives (Keizai Doyukai) provides opportunities for member executives to express their opinions more freely.

Some analysts expect Nippon Keidanren to expand its social role by, among other means, serving as a think tank to influence government policies on businesses.

“Chances are increasing as the policymaking functions of Nagata-cho and government agencies are deteriorating,” said Keijiro Koyama, a management professor at Mejiro University and a former Keidanren senior managing director.

Haruhito Takeda, an economics professor at the University of Tokyo, said the new organization should be more than a mere pressure group targeting the government for its own interests but should also contribute to the development of society.

“By making detailed proposals on business matters, such as deregulation, and reflecting on government policies, the new group can appeal to its member companies,” he said, saying Nippon Keidanren’s major task is to show a mid- and long-term vision for industries and companies.

The business organization should also take stricter measures against member firms involved in scandals as part of its social responsibility, he added.

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