Crucial year for Japanese economy

[Ulhas Joglekar]

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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