How will Japan's economy develop from fiscal 2002 through 2006? The official answer, in a nutshell, is that it will stage a slow but steady recovery led by private demand. Under the circumstances, that is probably the most the government can hope for. The big question is whether this scenario will come true.
According to the "Midterm Outlook for Reform and for Economic and Fiscal Policy," prepared by the Cabinet Office and released late last month, the economy will emerge from its deflationary slump in fiscal 2003 and enter a period of moderate expansion at an annual rate of about 1.5 percent. In 2003, structural reforms will be carried out in a concentrated manner.
More specifically, the blueprint calls for preventing further declines in land prices through urban-renewal projects and clearing the mountain of bad bank debts. Beyond that, it aims for a society "rich in human resources" that puts a premium on individual ability and creativity -- an open and competitive society where losers can always have a second chance. With the population rapidly aging, it also envisions a social mechanism that allows elderly people, both male and female, to work as long as their health permits. Additionally, better child-care support will be provided for employed women so they can work with men on equal terms.