Abe to set up economic recovery war room

December 19, 2012

THE ASAHI SHIMBUN

Shinzo Abe, who will become prime minister next week, has decided on the framework for a new unit to coordinate public policy as Japan seeks economic "rebirth."

The new prime minister will place this headquarters together with a revived Council on Economic and Fiscal Policy in a joint council answerable to the Cabinet, a structure which he hopes will help make it possible to implement stimulus spending, fiscal adjustments and social security reforms in a coordinated manner.

The Liberal Democratic Party won a landslide victory in the Dec. 16 Lower House election, ousting the government of the Democratic Party of Japan.

Abe aims to sign off on creating the new unit at the first Cabinet meeting following his swearing-in as prime minister on Dec. 26. The team will comprise all Cabinet ministers, and Abe will appoint one minister to be in charge of the unit and he himself will oversee it.

The governor of the Bank of Japan, the policy chiefs of all ruling parties, and four outside experts will sit on the joint council of the new headquarters and the Council on Economic and Fiscal Policy.

The joint council will be defined as a central command for macroeconomic policy. Its early tasks will be to draft the outline of an emergency budget for the remainder of fiscal 2012, the main budget for fiscal 2013, and tax reforms.

Separately, Abe plans to set up a council on industrial competitiveness, which will function as a central command for microeconomic policy. This body will be required to draft a plan for the renaissance of Japanese industry by stimulating the manufacturing sector and creating new value-added service industries.

Abe also plans to create mechanisms linking discussions in the joint council and in the council on industrial competitiveness with social security reforms, energy policy and foreign-affairs strategy.

To achieve that, he plans to put both the National Council on Social Security System Reform, set up in November following a tripartite agreement by the DPJ, the LDP and its partner, New Komeito, and an advisory committee for energy, reporting to the industry minister, under the umbrella of the rebirth headquarters.

THE ASAHI SHIMBUN
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