This becomes even clearer when we examine the proposals that have come forward in the last several months, as the U.S. makes the transition to the new administration and Japan streamlines its governmental structure. These proposals come from people of the highest distinction - sitting cabinet members, former senior officials, and respected scholars. The number of prescriptions that recur among these reports and proposals is striking. In order to recover economically, Japan needs to increase its productivity. Japanese workers are the least productive in the G-7.
Japan needs to continue to reduce regulation and increase competition in the domestic economy.
With the work force shrinking at half a percent per year, substantial deregulation, which will allow businesses to become more efficient and to grow, will be critical to increasing the standard of living. Corporations need to become more efficient in their operations and in their governance. We are already seeing companies moving away from their traditional suppliers in favor of more competitive bidding, breaking up cross-shareholding, and making their operations more efficient. Companies are reconsidering how they govern themselves. This trend is being reinforced as the Ministry of Justice, MITI, and Keidanren begin a comprehensive review of principles of corporate governance.