[talk] What is the Ultimate Goal of the Revitalization of Industry?

Shinji Fukukawa: Adviser to the Dentsu Inc.

Born in 1932, he graduated in 1955 from the Law Department, the University of Tokyo. In 1955 he entered the Ministry of International Trade and Industry (currently the Ministry of Economy, Trade and Industry) and became the administrative vice-minister. In the meantime, he served as a Private Secretary to the Prime Minister. In 1988 he left MITI and in 1994 took the present position via Vice President and Vice-Chairman of Kobe Steel Co, Ltd. Concurrently, served as together with the adviser to the Dentsu Inc. Currently, he is a member of the Research Committee of Resources and Energy (the Ministry of Economy, Trade and Industry) and a member of the govemment's deliberative council. His works include 21 Century: Japan's Choice and Age of Information Technology: Idea of Successes.

Motoshige Itoh: Professor, Faculty of Economics, The University of Tokyo

After graduating from a faculty of Economics, The University of Tokyo in 1974, received his PhD in Economics from the University of Rochester in 1979. He has worked as a member of various Government Committees; Ministry of International Trade and Industry, Ministry of Finance, Economic planning Agency, Fair trade Commission, etc. His published works include “Makuro Keizai Gaku (Macroeconomics)” and “Nihon no Shokuryo Mondai wo Kangaeru (On food Industry in Japan)”.

The Japanese economy will not be reborn only by handling the problem of non-performing loans. Real revitalization needs the recovery of industrial strength. … Such voices are heard from various sectors recently. Professor Motoshige Ito of Tokyo University and Shinji Fukukawa, a consulting director of Dentsu and former MITI Vice Minister held a dialogue on what should be done to handle past negative inheritances while simultaneously implementing positive policies.

Both gentlemen likened the Japanese economy to a sick person and they agreed that there was no room for doubt that the illness called non-performing loans must be cured and that it was necessary to set up a fund to help firms revitalize.

They also emphasized that not only for government funds represented by administrative investment banks but also funds led by the private sector including foreign capital should be able to respond to various needs, such as funds to revitalize favorable projects and funds which would finance funds when there was a restructuring within an industry.

In addition, Professor Ito stated that both fiscal and financial policies were required for tackle against deflation. Furthermore, Professor Ito pointed out the situation of the distribution industry, which was one of the three problematic sectors from the view of an expert in distribution theory. According to this, he stated that for firms who had already applied the Private Sector Revitalization Law and the Corporate Bankruptcy Laws in a smooth manner were starting to recover, and for those regions in which even just one of the firms closed or combined excess shops, excess supply was eliminated and there was an increase in revenues for the other firm. The safety nets is required to be build for small and medium sized wholesale sectors which are expected to experience chain reaction bankruptcies along with structural reforms.

On the other hand, Mr. Fukukawa who has experience on the field of the restructuring of structurally depressed industries such as coal and textiles stated that there should be “accountability and visions” from the government and the administration, methods to minimize social friction, and the development of policies which lead to the revitalization of industry. Also, concerning the non-performing loans of banks, he criticizes the debates that there should be infusions of public funds from the beginning. He points out that responsibilities between politics, the administration and the management of banks in the past should be clarified. In addition, taking up the example that the Chinese threat was not considered significant in South Korea which placed importance on IT, Mr. Fukukawa claimed that Japan must also make clear which industries will be important for Japan in the future.