Prime Minister Junichiro Koizumi urged his Cabinet on Tuesday to consider the hundreds of proposals by local municipalities nationwide seeking to create special deregulated zones.

Koizumi’s deregulation drive is in line with a law enacted in December to create special zones to promote rapid decontrols in specific regions and stimulate community-level economic activities.

“Give them a try and don’t be afraid of failures. I want you to negotiate by considering what needs to be done to realize the proposals,” he told his ministers.

Koizumi has repeatedly asked the Cabinet to step up efforts to boost the administration’s deregulation drive, following complaints from municipalities that bureaucrats are slowing the progress of their proposed projects.

Proposals by local governments as well as the private sector range from allowing private stock companies to operate hospitals to setting up schools where classes are taught only in English.

As for the contentious proposal to allow stock companies to run hospitals, Chikara Sakaguchi, minister of health, labor and welfare, reiterated his opposition in a news conference.

Referring to Koizumi’s remarks about not being afraid of failures, Sakaguchi said, “There is no need to try doing things that are certain to fail.”

Sakaguchi, a licensed medical doctor, said that if stock companies ran hospitals, they would pay dividends to shareholders and engage in other related businesses, which would rock “the foundation of medical services.”

Another controversial proposal concerning planned medical deregulation zones would allow temporary staffing agencies to dispatch nurses and doctors to hospitals.

Sakaguchi said the dispatch of medical workers, if introduced, should initially be limited to that of nurses.

In a separate news conference, education minister Atsuko Toyama said her ministry “has been responding in an extremely flexible way” to the deregulation proposals.

She was referring to the ministry’s recent deregulation-related decisions, including one to allow stock companies to run schools, dropping its previous opposition to the proposal.

However, Toyama remained cautious toward a proposal to allow nonprofit organizations to run schools.

“We have to study it very carefully,” she said.

The government plans to hold hearings on the proposals in March. It will then accept applications for special zones for two weeks beginning April 1.

It will announce the first group of approved projects by the end of April, the officials said.

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