Japan and policies toward post-pandemic growth
The Ministry of Economy, Trade and Industry has released a document titled, “Focus Areas of Economic and Industrial Policy,” which lays out measures for growth strategies after the end of the COVID-19 pandemic.
The document spells out how the ministry plans to upgrade Japan’s international competitiveness by carrying out an industrial policy that aims to achieve and secure economic growth and solve issues facing our society at the same time. This article outlines the priority policy areas METI will focus on and their aims.
The first focus under this theme is measures to address the COVID-19 pandemic.
The world situation has changed dramatically, and the time is ripe for changing our industrial policy to one that can ensure economic growth and solve the issues facing Japanese society. Environmental issues and digitalization are common themes that countries throughout the world are facing. The question for Japan is whether it can win the competition. METI must proceed with this policy with intense focus.
First and foremost, it aims to squarely address the immediate situation and steadily carry out measures to ensure businesses that have fallen into difficulty, including restaurants and tourism companies, can stay afloat. The ministry also aims to actively work on a business restructuring support program to help companies that are trying to start a new business or shift their business format in response to the pandemic. In addition, a business continuation support program and a business optimization program are in the works to prevent subcontractors from being victimized.
The second focus is on developing a growth strategy for the post-pandemic economy.
This aims to shift, once the pandemic is over, the country’s industrial structure into one that can generate new added value over the medium- to long-term using a mission-oriented approach and maintain growth. Specifically, the strategy targets the environment, economic security, distribution, health and digitalization as the key areas.
In the environmental domain, for example, METI aims to work out a budget, taxation system and regulations for a “green growth strategy” that will help make Japan carbon neutral and promote Japan’s strategic energy plan. The ministry will also work on developing certain aspects of carbon pricing — an economic system in which carbon is priced and the behaviors of those who emit it are transformed — that contribute to economic growth.
It is not possible to make the world carbon neutral without taking developing economies on board along with advanced nations. For that, the key is to reduce the costs of environmental technologies that can contribute to achieving carbon neutrality and help developing economies introduce them. As Japan has advanced technologies for power generation using hydrogen and ammonia, it is expected to play an important role in disseminating them to the rest of the world. Initiatives to introduce environmental technologies will include an industrial policy, an environmental policy and a growth strategy. Achieving carbon neutrality is not an easy challenge to overcome, but METI aims to lead the way by promoting a virtuous cycle combining the economy and the environment.
Now, how does the ministry plan to address the issue of ensuring Japan’s economic security?