Unemployment is at 4.9 percent, a record. There are too many fuel factories, car companies, too many people in the wrong services, transport, retail, wholesale. Managers have no real incentive to operate efficiently. Some Japan watchers suggest top executives need stock-driven pay packages, instead of cash. That would tie performance to the profitability of the companies they run.
Many analysts believe the current coalition has moved in the right direction with proposed reforms.
But they also say Japan needs a strong government that encourages deregulation and competition. Kinmont noted the current coalition is too unpopular and divided to lead that drive. Even if Mori does step down, he and other observers say it will make little difference. Past reformers have still seen their efforts curbed by a lack of political support in the government they lead. Reformists say it will take a power shift to bring true change.