[paper] Gist of the Koizumi Cabinet's Structural Reform

Haruo Shimada: Professor, Keio University, Economics Department and the member of experts study group of The Council on Economic and Fiscal Policy

Professor, Keio University, Economics Department and the member of experts study group of The Council on Economic and Fiscal Policy. Current Employment and Position: Professor, Keio University, Economics Department and the member of the special committee of The Council on Economic and Fiscal Policy. Year of Birth: 1943. Education: 1967 MA in Economics, Graduate School, Keio University 1974 Ph.D. in Industrial Relation, University of Wisconsin. Publication:Scenario of a New Japan(Sinsei Nihon No Sinario), "Consumert Industries Will Save Japan(Seikatutyokketusangyo Ga Nihon Wo Sukuu)", "Japan's Re-emergence Plan(NIhonsaihujyo No Kousou)" and many other books. He has a great influence over the Koizumi cabinet's economic policies as a member of the special committee of the Council on Economic and Fiscal Policy. Recently he visited the US as a special envoy for the Prime Minister to prepare for the latest Japan-US summit talk.

There is some possibility that if the disposal of non-performing loans and other negative structural reforms alone are implemented, it may impose a threat of deflation on the Japanese economy, cool down consumer confidence and cause a downward economic cycle. To stave off these negative impacts, positive structural reforms must be implemented as a means to create employment.

In order to bring about these positive structural reforms, it will be necessary to do something that has not been done for thirty years, restructure the labor market and reform the regulations pertaining to it. If that restructuring succeeds, the Japanese way of working and living will change dramatically. The significance of the Koizumi cabinet's reforms is that they will both improve our daily lives in the short term and solve fundamental, long-term problems.

Currently, movement toward the reforms is gaining momentum. During our national debate concerning how our history had changed, a man appeared saying, "I will change history", and announced the guidelines for his economic strategies. Japan has been in a position in which the postwar economic system has ended, but without a new system to replace it. The structural reforms of the Koizumi administration will bring about those necessary, full-scale changes to the economic structures that are so badly needed. The objectives of the reforms are to make Japan into a country with a government and economy that are suitable for a developed country, and to ensure that people can enjoy a sense of security and affluence in real terms. This is what the Koizumi cabinet's structural reforms are all about.