[talk] Assessment of Basic Policies for Economic and Fiscal Policy Management and Structural Reform 2002 and Tax Reform.

Robert Alan Feldman: Chief Economist, Morgan Stanley Japan

Robert Alan Feldman is Morgan Stanley's chief economist for Japan. He previously worked at the Federal Reserve Bank of New York and for the International Monetary Fund. His published works include Nihon no Suijaku (The Weakening of Japan) and Nihon no Saiki (Starting Over). Institutional Investor Magazine ranked him as the top Japan investor in their All-Asia Research Team Poll in 2001. He graduated from Yale University and received a Ph.D. in economics from the Massachusetts Institute of Technology.

Jesper Koll: Chief Economist at Merrill Lynch Japan
Japan Securities

Jesper Koll is a Chief Economist of Merrill Lynch Japan Securities, his work includes Nihon Keizai korekara Ougonkihe. Graduated from Johns Hopkins University.

Susumu Takahashi: Head of the Economics Department of the Japan Research Institute, Limited

Susumu Takahashi heads the Economics Department of the Japan Research Institute. He currently holds positions at the Advisory Group for the Ministry of Finance, the Financial Research Conference of the Japan Fair Trade Commission and the Immigration Control Policy Conference of the Ministry of Justice. He appears on the Television Tokyo program, World Business Satellite. He graduated from the Faculty of Economics at Hitotsubashi University.

Yasuyoshi Masuda: Professor for the Economics Department at Toyo University

Yasuyoshi Masuda is professor at the Economic Depertment of Tokyo University. His major published works include Kinyu Kaikoku (Opening of Japan in the Area of Finance) and Global Money. He is a graduate from the Department of Economics at Kyoto University.

The Koizumi administration has adopted the Basic Policies for Economic and Fiscal Policy Management and Structural Reform 2002, the second package following the first package decided on in June last year. Does the second package include any progress from the first one? Answers are divided into two groups. Feldman and Koll roughly welcome the second package as achieving great progress, while Takahashi and Masuda view it as making no progress or retreating from the first one.
Feldman and Koll praise the second package for including the basic philosophy of reform, specifying measures for the implementation and combining tax and spending reforms. But they point to two shortcomings the failure in specifying spending cuts and tax increases to improve the primary budget balance, and the failure in providing the whole picture of the political process to put policies into practice.

Takahashi and Masuda appreciate the second package for specifying alternatives by touching on taboos like the size-based corporate tax and for offering very reasonable details as qualitative guidelines. But they are concerned that the second package fails to shed light on a medium-term and long-term policy implementation schedule and on how to reconcile short-term economic stimuli to long-term public finance reconstruction.

The four agree that the ruling Liberal Democratic Party's anti-reform group, which calls for short-term economic stimuli and rejects spending cuts, will become a great obstacle to the tax reform, the revitalization of the economy and the public finance reconstruction. They are interested in how Prime Minister Koizumi would demonstrate his leadership and regain the people's support to strengthen his political base, in a fight against the anti-reform LDP group that is geared up for enhancing their movements toward the fiscal 2003 budget formation starting in autumn. The four economists share the view that the fate of reforms depends on Prime Minister Koizumi's political tactics..?