The Council on Economic and Fiscal Policy, an advisory panel to Prime Minister Junichiro Koizumi, last week announced a set of policy guidelines aimed at reviving Japan's moribund economy. The comprehensive program, titled "Basic Policies Concerning Economic and Fiscal Management and Structural Reform," points in the right direction.
The question is whether it is feasible. The answer depends on the administration's resolve to live up to its commitments. But making that resolve stick will require the cooperation of everyone concerned, including the bureaucracy, which is not always receptive to change. On this score, Economic Minister Heizo Takenaka, the chief architect of the program, does not appear to be as confident as he once was. For one thing, he no longer calls it "big-boned," meaning hard-hitting.
The program gives top priority to bad-debt writeoffs in the banking sector. Cleaning up the debt mess is essential to leave the "decade of stagnation" behind us and enter a new decade of vitality. The package also calls for reform in seven selected areas, including the privatization of inefficient public corporations, an overhauling of the social security system, the streamlining of central-government grants to local governments, a reduction of the mountainous public debt, and the development of human and physical infrastructures in growth sectors like information technology.