Japan to set up ¥500 billion 'vaccine fund' under economic package

The government plans to set up a ¥500 billion fund aimed at supporting firms developing vaccines for infectious diseases and new drugs, under the first economic package to be drawn up since Prime Minister Fumio Kishida took office last week, official sources have said.

Kishida has vowed to strengthen the government’s coronavirus response, as well as Japan’s science and technology. The idea for the fund comes after companies in the nation lagged behind foreign rivals in the development of COVID-19 vaccines, with the country having had to rely on foreign doses.

Japan will “establish the world’s top-class research and development base for vaccines,” a draft plan said.

During a Diet debate on Wednesday, Kishida said the government will also actively back research and development of Japan-made oral COVID-19 treatments. The prime minister said he will ask relevant ministries by the end of this week to present an overall outline of the government’s coronavirus measures.

Under the new economic package, to be compiled after an Oct. 31 Lower House election, the government will also expand what is known as a “university fund” by ¥600 billion in a bid to enhance research activities and make Japan a nation of science and technology, according to the sources.

The fund, worth ¥4.5 trillion, is scheduled to be launched by March to help Japanese universities invest in future research. Kishida is seeking to expand it eventually to around ¥10 trillion.

Kishida, who became prime minister on Oct. 4, has said the government will put together an economic package worth “tens of trillions of yen” to bolster measures against the coronavirus and ensure a steady growth recovery.

His administration has estimated that ¥2.3 trillion will be necessary to invest in the fields of science and technology as well as innovation.

In addition to the amount, the draft calls for “several trillion yen” to take steps against climate change, while ¥350 billion may be used to step up manufacturing and research of semiconductors.

These are essential for Japan’s auto and high-tech industries, and the new government has placed importance on boosting economic security in the face of a global crunch of the key components.

If the ruling coalition led by the Liberal Democratic Party wins the election of the House of Representatives, the sources said Kishida plans to decide on a set of economic measures in mid-November and secure Diet approval for a supplementary budget to finance them by the end of the year.

As for his proposal to establish a new government agency for health crisis management, however, no concrete plans have been presented since he became prime minister. Kishida proposed the new agency as one of his signature policies during his campaign for the LDP leadership election late last month.

The proposal came after the resurgence of COVID-19 cases earlier this year strained the country’s medical system, leading to a spate of fatal cases among patients staying at home. A lack of cooperation among the central and local governments as well as medical institutions was partly blamed for those cases.

Kishida apparently assumed that the new agency would have a minister who would oversee measures to fight infectious diseases across the country.

But creating the new agency is likely to be a difficult task, requiring the consolidation of various functions currently held by existing ministries and agencies. The LDP has stopped short of including the establishment of the new agency in its policy platform for the upcoming election.

Although the number of new COVID-19 cases confirmed each day has dropped significantly across the nation, there are persisting concerns that the virus could spread again in winter.

“We’re working for the time being to brace for a sixth infection wave, including securing hospital beds in advance,” a senior government official said. “We may, as well, take time for discussions on organizational matters.”