FOCUS: Japan Aiming to End 30 Years of Stagnation with New Capitalism

Politics

Tokyo, June 1 (Jiji Press)--The government of Japanese Prime Minister Fumio Kishida is resolved to revitalize the economy by boosting investment in human resources, which has not been given much weight so far, in order to help the country bring an end to "the lost 30 years."

A draft of the government's new basic economic and fiscal policy guidelines and a draft action plan for Kishida's signature policy of realizing a new form of capitalism, both unveiled Tuesday, call for regaining dynamism in the Japanese economy by allocating personnel and capital to growth areas.

Amid accelerating decarbonization and digitalization, the government believes that a structural change in Japanese industries is indispensable for promoting the entries by new companies to replace old ones and overcoming the 30 years of stagnation.

The Kishida administration is strongly concerned that Japan's international competitiveness has declined as a result of companies focusing on building up internal reserves while failing to actively invest in facilities and not being enthusiastic about raising wages.

Internal reserves at Japanese companies amounted to 484 trillion yen at the end of fiscal 2020. Meanwhile, the average annual wage in Japan came to 38,515 dollars per worker on a purchasing power parity basis in 2020, up only 4 pct compared with 30 years before, with the country ending up being overtaken by South Korea, according to data from the Organization for Economic Cooperation and Development.

[Copyright The Jiji Press, Ltd.]

Jiji Press