Aso unveils growth strategy to lift GDP by 120 tril. yen by 2020

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TOKYO, April 9 Kyodo -
Prime Minister Taro Aso unveiled on Thursday a new growth strategy for Japan
through 2020, pledging to lift the nation's real gross domestic product by 120
trillion yen and add 4 million jobs compared with current levels.
Aso said the strategy will draw on three main pillars -- a revolution to
achieve a low-carbon economy, a society friendly to the elderly and a
reinforcement of the nation's strength in soft power -- and vowed to spur new
demand of 40 trillion to 60 trillion yen and create 1.4 million to 2 million
jobs in the coming three years.
''When the world economy is compelled to go through an adjustment period, it's
not realistic for Japan to return to the same old growth path dependent on
exports,'' the premier said at a news conference at the Japan National Press
Club.
Presenting the three main pillars for ''a new growth model,'' Aso said he will
conduct drastic reforms to realize intensive investment by the public and
private sectors in these areas.
The key government economic panel is set to endorse the strategy next week.
Steps included in the growth plan will also be part of an additional stimulus
package to be finalized by the government and the ruling parties on Friday,
aides to Aso said.
In the run-up to the final approval, the ruling Liberal Democratic Party gave a
green light earlier in the day to a fresh economy-boosting plan which will
involve 15.4 trillion yen in actual spending.
The government is scheduled to submit a fiscal 2009 extra budget to the Diet
later this month to finance the stimulus, which will be the largest-ever
spending in a single supplementary budget in Japan, political sources said.
In his speech to the press club, Aso laid down concrete goals for Japan in such
key areas as solar power generation, environmentally friendly vehicles, nursing
care services, tourism and 'soft power'-related businesses.
Specifically, Aso said Japan aims to regain the world's No. 1 position in terms
of solar power output capacity by boosting production levels by 20-fold by
2020.
He also said Tokyo will strive to achieve the fastest eco-car introduction in
the world by launching mass production and sales of electric cars in three
years' time, and making one in two new vehicles environmentally friendly by
2020.
Aso added that Japan will aim to double the ratio of renewable energy in total
energy consumption to the world's highest level of 20 percent in 2020. In the
sector, Tokyo will newly create a market worth 50 trillion yen and generate job
opportunities for 1.4 million people, he said.
To cope with the nation's rapidly aging society, the premier said the
government will increase the number of nursing care service providers by
300,000 over the next three years from the current 1.3 million, aiming to have
2.2 million such workers in 2020.
By cashing in on the overseas popularity of Japanese ''anime,'' comics and
fashion, Aso set a target of drawing 20 million foreign visitors to Japan in
2020, more than double the present level of 8 million, and create a 20 trillion
to 30 trillion yen market and generate 500,000 new jobs in the industry related
to ''soft power.''
Aso tried to brush aside concerns about Japan's fiscal position, which is
already the worst among rich countries and expected to deteriorate further due
to the planned massive bond issuance to raise funds for the envisioned
stimulus.
He reiterated his policy of boosting the consumption tax from the current 5
percent once the economy recovers, and using increased tax revenues to finance
social security costs, which are expected to rise sharply in a graying society.
''We will focus on economy-boosting measures for three years (to achieve
recovery) and try steadfastly to reconstruct public finances over the
medium-term,'' Aso said. ''Otherwise, the credibility of money in Japan will be
lost.''
In a related move, the LDP and its coalition partner the New Komeito party
continued Thursday to examine a new economy-boosting plan to pull the world's
second-largest economy out of recession and bring it back on a recovery path in
the latter half of fiscal 2010 through March 2011 or later.
The fresh economic package, which will be compiled on top of already
implemented stimulus measures worth 75 trillion yen in total since last
October, will reach 56.8 trillion yen in size.
The total size will include credit guarantees to struggling businesses and tax
cuts amounting to about 100 billion yen, coalition sources said.
The new plan will also include child-rearing allowances of 36,000 yen per year
for households with preschool children over the three years, and government
guarantees of 50 trillion yen for planned direct stock purchases with public
funds to buoy the sagging stock market.
On sales tax, a senior LDP official suggested Thursday the party will seek to
use revenues secured through the future tax hike not only to cover social
security costs, but also to trim Japan's fiscal deficits.
==Kyodo