The cabinet of Japanese Prime Minister Shinzo Abe has approved economic reforms aimed at making companies more competitive. The move follows huge fiscal stimulus by Tokyo to overcome two decades of sluggish growth.
The reform blueprint adopted by the cabinet of Prime Minister Shinzo Abe was aimed at restoring strength in the world’s third largest economy after years of sluggish growth and crippling deflation, the government in Tokyo announced Friday.
“I pledge to increase the per-capita gross national income by no less than 1.5 million yen (11,000 euros, $16,000) over the next ten years,” the premier said in a video message posted on his official website.
Abe’s reforms include tax cuts for companies that restructure or that invest in factories or equipment. The aim is to halt the downward trend in capital investment and boost such spending to 70 trillion yen annually over the next three years.
Other priorities include subsidies to encourage more hiring and the establishment of special economic zones to promote deregulation and globalization of businesses, services and education. In addition, Abe promised to press ahead with agricultural reform and an export strategy for the sector, which was aimed at doubling farmers’ income over the next decade.
Moreover, the government seeks to boost female participation in the workforce by eliminating childcare waiting lists and by promoting three-year childcare leave.
The reforms are part of a program of measures dubbed “Abenomics”. The first two strands, or arrows as the government calls them, came in the form of massive public spending and aggressive monetary easing by the central bank.
These two measures alone drove down the yen and boosted Japan’s exports in the first months of this year. In addition, the economy grew by 4.1 percent year-on-year in the first quarter.