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In a bid to reinvigorate the nation’s fragile rural economies, the government will review legal barriers that prevent the outsourcing of local administrative services to the private sector, economic and fiscal policy minister Heizo Takenaka said Friday.

“I will direct the Cabinet Office to examine as quickly as possible if there are any legally obstructing elements,” Takenaka said following a meeting of the Council on Economic and Fiscal Policy, the government’s key policy-setting panel.

Takenaka made the remark in response to a proposal issued earlier in the day by private sector council members who said administrative services provided by local governments should be opened up to the private sector.

Such a step would help stimulate rural economies and boost employment — one of the key priorities of the new Cabinet of Prime Minister Junichiro Koizumi, according to the members.

Last week, Koizumi promised to create 3 million new jobs in the next two years as part of the government’s efforts to prop up the nation’s nascent economic recovery.

The council members, including Toyota Motor Corp. Chairman Hiroshi Okuda, proposed a review of existing regulations and the establishment of new laws aimed at promoting the outsourcing of local administrative services.

Takenaka added that the government would discuss other proposals by the private-sector members — support for trunk industries in rural areas such as construction and agriculture to boost their competitiveness or help them diversify into new areas.

The government may also set up a new organization — staffed by officials from various ministries and agencies — to oversee rural economy revisions, Takenaka said.

During Friday’s meeting, the panel also launched debate on Koizumi’s plans to privatize mail delivery, postal savings and “kampo” life insurance services.

Takenaka said the panel will compile an interim report on the matter in spring 2004 and a final report in the fall.

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