Japan PM sets targets in latest growth strategy tranche

Fri May 17, 2013 6:59am EDT
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By Kaori Kaneko

TOKYO (Reuters) - The latest tranche of Japan's growth strategy will aim to triple infrastructure exports and double farm exports by 2020, as well as boost private investment, Prime Minister Shinzo Abe said on Friday.

The government will set a target for domestic private-sector investment of 70 trillion yen ($687 billion) annually, Abe said in a speech to business executives and academics, the level before the 2008 financial crisis and up about 10 percent from the current figure.

Measures to promote growth constitute what Abe calls the "third arrow" in his policy quiver as Japan battles to end 15 years of deflation and generate sustainable economic growth. The first two arrows of "Abenomics" are massive monetary easing and a burst of government spending.

Abe has promised that structural reform including deregulation will be a key part of the package of steps, to be fully unveiled in June. But it also includes a significant role for government in generating investment and innovation in key sectors, a stance some critics see as outdated and ill-advised.

The monetary and fiscal stimulus already sparked Japan's fastest economic growth in a year in the first quarter, but corporate investment has yet to follow suit.

Promising to be a "top salesman" for Japanese infrastructure exports, Abe vowed to promote private-sector investment at home and asked corporate Japan to do its bit to pass on the benefits of "Abenomics".

"The government will broadly implement a growth strategy starting with making it easier to invest, and I would like you business executives to pass on the fruits of this to working people in the form of jobs and compensation," he said.

Politicians in Abe's Liberal Democratic Party (LDP) worry that, while share prices are up and the yen's value is down, boosting corporate profits, Japanese households have yet to see the benefits in the form of higher wages, although prices are starting to rise.   Continued...

Japan's Prime Minister Shinzo Abe delivers a speech to business leaders and scholars during a meeting hosted by Japan Akademeia in Tokyo May 17, 2013. REUTERS/Issei Kato