Japan: Jobs bank, shipbuilding, deregulation targets of policy third arrow

The government’s new growth strategy, to be unveiled later this month, will seek to set up a human resources bank to help revitalize local economies in Japan, a draft of the strategy showed.

The bank will help ease smaller local businesses’ difficulties in securing qualified workers amid a labor shift to larger cities.

The draft of the new growth strategy, known as the “third arrow” of Prime Minister Shinzo Abe’s pro-growth policy mix, follows massive monetary easing and fiscal spending. It was to be presented at a meeting of the government’s Industrial Competitiveness Council on Monday for Cabinet approval on June 27.

As a specific measure to boost local economies, the draft sets out a plan to allow foreign trainees to work for up to five years in the shipbuilding sector.

The measure will extend the current three-year limit under on-the-job training programs for foreign workers at shipyards. Shipbuilders will also be allowed to call back former foreign trainees who have returned home.

The planned deregulation for shipbuilders is an extension of the government’s decision in April to allow foreign trainees in the construction sector to stay in the country for up to five years from fiscal 2015. The measure is intended to address growing labor demand for reconstruction work in areas hit by the March 2011 disaster and for building facilities for the 2020 Tokyo Olympics.

The growth strategy also encourages bank lending based on the evaluation of business viability, rather than collateral and loan guarantees. In addition, it aims to make it easier for young and female entrepreneurs to start businesses.

Among other priorities, the draft strategy lists deregulation measures in the medical, employment and farm sectors.

Proposed reforms in the medical sector include an expanded system of medical treatment combining insured and uninsured services that gives patients more choice in where and how they are treated.

Employment-related deregulation focuses on promotion of a merit-based pay system under the so-called white collar exemption so that specialists receiving annual pay of ¥10 million or more will be paid not for how long they work but for what they achieve.

In the farm sector, the strategy calls for an overhaul of the Central Union of Agricultural Cooperatives, the umbrella organization for agricultural cooperatives around the country, known as JA-Zenchu, and the easing of restrictions on private companies’ ownership in agricultural corporations.

The strategy also aims to implement corporate tax cuts from fiscal 2015 starting next April, as pledged by Abe, setting a goal of attracting ¥35 trillion of foreign direct investment in 2020, twice the current level.
Source: Japan Times