A draft plan to boost Japanese growth promises to overhaul corporate governance, promote technology and attract private investment, but it leaves many of the toughest questions unanswered as the country seeks to claw its way out of a crippling cycle of deflation.
The 60-page draft outline of Prime Minister Shinzo Abe’s growth strategy has not been made public, but it has been reviewed by journalists.
It gives no details of how and whether the government would cut the corporate tax rate.
Nor does it detail plans to overhaul the nation’s public pension fund, known as GPIF, another of the most closely watched policy measures for investors in Japan’s stock market.
Other unanswered questions include whether corporations will be allowed to own farmland and whether the government will back easier visa access for some domestic workers — both controversial issues are marked as “pending” in the still-evolving policy draft.
The document also does not mention whether Abe’s government will push for legalizing casino gambling in Japan, a step that proponents say could drive up tourism and tax revenues in Tokyo and elsewhere.
The draft plan was compiled by government ministries and will form the basis of Abe’s “third arrow” reform update due to be announced later this month.
Abe’s growth plan is aimed at lifting the potential output of an economy that has been mired in deflation since the late 1990s, coupled with an aggressive program of quantitative easing by the Bank of Japan.
But it also has a more immediate target: lifting investor sentiment at a time when confidence in the so-called “Abenomics” reform program has been fading and the Nikkei stock average is down 8 percent since the start of the year.
The Abe policy draft, entitled “Japan Industrial Revival Plan,” paints a vision of an innovative Japanese economy that would also be more transparent, more open to women in the workplace and friendlier to foreign investors.
Most of the policy commitments are broad and lack detail on funding or related legislation, however.
The draft growth plan offers a range of “key performance indicators” to measure whether the plan is succeeding in lifting Japan’s potential growth rate, but many are set for 2020 or beyond. The next general election is due by December 2016.