Crucial year for Japanese economy

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Mon Jan 10 16:19:44 PST 2000


6 January 2000 Crucial year for Japanese economy TOKYO: Further reforms are needed to sustain the momentum of recovery this year, which will make or break Japan's long-term economic prospects, Japanese business leaders said Wednesday. An unwillingness to make painful changes will only send the economy downhill once again, the chairmen of Japan's four biggest economic organizations told reporters in Tokyo. "The key this year is not so much achieving growth targets but whether structural reform and deregulation will succeed," said Yotaro Kobayashi, head of the Japan Association of Corporate Executives. ``This is the crucial year.'' The leaders urged the government to help Japanese companies survive the era of globalization by changing laws that stifle competition and a tax system that inhibits investment. The business chiefs expressed cautious optimism that Japan will post modest growth in 2000. The telecommunications sector is expected to develop rapidly as use of the Internet takes off. But the officials warned of potential pitfalls that could hamper recovery. In particular, they cited the persistently strong yen, which hurts export-reliant corporations, and fears of a worldwide rise in interest rates that could choke investment. The business leaders also said many Japanese have become so accustomed to being glum about the economy that they are unwilling to buy more. ``Consumption must rise for investment to rise,'' said Hiroshi Okuda, chairman of the Japan Federation of Employers Association. "Why won't consumption go up? People remain scared." (AP) For reprint rights: Times Syndication Service
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