"It will be nice if this blog helps lead to these outcomes..." Japanese Prime Minister Naoto Kan said at the end of his e-mail Q & A to local and foreign bloggers who e-mailed him a question each a month ago.
Blogs (the constructive ones) are getting recognition from his Cabinet as they provide good inputs to the government in administering the country and in improving diplomatic relations.
Excerpts of the Q and A:
Q: Your supplementary budget is entering its final phase. What is the main thrust of it?
A: Economic Growth Policies Will Not Be Put Off. Employment will be a decisive key factor for the Japanese economy, particularly to break free from the current deflation. That's how I basically see it.
Q: You have placed employment measures for economic growth at the top of your policy agenda leading up to the formulation of next fiscal year's budget. How do you attend to it?
A: The first is the dispatched workers' village. Two years ago, in Hibiya Park, I met people there who told me they had absolutely no prospects. As I listened to them, I felt once again how disconnected people have become. I thought, we need to have a society that can somehow lend a helping hand to them. That was one of the things that ignited my passion.
Q: From this emerged the following slogan "1. Employment, 2. Employment, 3. Employment!" Please elaborate.
A: Some people interpreted my call for more employment as a call for a public works program to absorb the unemployed. They imagined a lot of money would have to be poured in. This is not at
all what I have in mind.
Q: You are saying creating employment by pouring money into public works programs is outdated?
A: Even after basic infrastructures were in place, a lot of money was used for public works programs to flow money into businesses, which became the goal in and of itself. Sure, this led to employment and to income while money was flowing in the short-term. But once the program was finished, only bears and boars were walking on the completed road. I call this the "First Way".
Q: The "First Way" trod by bears and boars. Who then chose the "Second Way"?
A: Mr. Koizumi and Mr. Takenaka wanted to make the economy stronger, to streamline. What happened, simply put, is corporate restructuring. But this causes the unemployment rate to
increase and disparities to widen. Then people with little income cannot get married and also hardly spend any money. In other words, what may be good for each individual company is, on the whole, really bad for the entire country.
Q: These two approaches are both outdated today. What should Japan do then?
A: What is needed is the "Third Way." We must focus on areas where there is demand, generate employment in these areas, and increase production including services. That is what we have to
be thinking right now.
Q: The Government should target areas where there is demand and support them with policies. For example...
A: Look at nursing care, or child care, or medical care, they all generate a useful service, i.e., the
caring of people. Caregivers can feel happiness and joy. This in and of itself is a positive thing in terms of how a society ought to be, and will prompt nursing care to grow as a new industry. In
Japan, there are still many more areas with such possibilities.
Q: However, to increase employment, the companies must be willing to employ new people. The Prime Minister explained how difficult this was based on real life experience.
A: It costs a small-to-medium sized company quite a lot to recruit people. And, as you know, it is quite difficult to know which person is the right match from just one interview. There is a lot of risk involved.
Q: You say it is difficult to hire one person at a small business. Is this also how you felt back when you ran your own patent office?
A: Of course.
Q: In your younger days, you were a certified patent attorney, actually ran a microenterprise, Kan Patent Office, which had only one other staff member. In light of your experience, how do you discuss the equation from employment measures to economic growth?
A: There are people who work as or want to be caregivers, but due to the low salary, they tend not to stay in this work very long. For example, if public finances are used to help increase the salary, this will generate service, i.e. production. Then the unemployment rate will go down, which will help wages go up. Such a model can also be a path to break free from deflation. Further still, GDP will increase, in other words, the economy will grow. At the same time, if people who are not working start to work and earn a salary, they will be paying taxes.
Q: The agency in charge of the theoretical work to support this policy is the Economic and Social Research Institute of the Cabinet Office. Its president and economist, Dr. Yoshiyasu Ono, directs the work.
A: Once a convincing model is developed, I want to incorporate it into one of the mainstream approaches to the budget formulation.
Q: On the first day of the current extraordinary session of the Diet, the Prime Minister vowed to take on this challenge.
A: I said, we will bolster the creation of demand and employment! This Cabinet will not hand down the major issues which have been put off for the past 20 years to the next generation. I said this Cabinet will tackle these issues, that it will stay true to its word... (and) it will be nice if this blog helps lead to these outcomes. Thank you.