Kozo Yamamoto Progress Update, 2017 Winter Edition
– Tackling the New Year as Minister –
I would like to use this occasion to express my genuine appreciation and gratitude, and to wish a healthy and prosperous New Year to everyone who has supported me over the years. As a state minister in the Second Reshuffled Third Abe Cabinet, is has been my privilege to be entrusted with so many duties including regional revitalization and regulatory reform. The past six months since assuming the ministerial office has been a blur, yet also a truly exciting time.
With the convening of the 193rd Ordinary Diet Session on January 20th, the 150 day battle until June 18th has already begun. As we make progress in deliberations for the FY2017 National Budget, which sways all of our future economic policies, I can only hope that you forgive my lack of presence in Fukuoka while I fulfill my Cabinet Office responsibilities. Through my visits to 126 different institutions in 54 cities, towns, and villages thus far, I have personally witnessed numerous innovative ideas and genuine efforts of self-help that Japanese people from around the country are undertaking in the name of regional revitalization.
This year marks the third in our five year plan for the Act on Overcoming Population Decline and Vitalizing Local Economy in Japan. As we continue to make our policy dreams into realities, and I devote myself entirely to my duties, I humbly ask for your continued support and best wishes.
Member of the Lower House
Minister of State
Research Trip to France and Switzerland
Shortly after New Year’s Day, I hopped on a plane for a research trip to France and Switzerland that would last from January 5th to the 19th. After a spectacular visit to the National Library and the Pierrefitte-sur-Seine in Paris, the vice mayor of Barbizon and I had a fruitful discussion on methods of vitalizing rural areas that take advantage of local uniqueness and tourism attractions while also employing preservation strategies. Following that was a look through the public archives, which hosts – with the utmost care and security – among other things, artifacts dating back to 632AD, the original Constitution of France with the signature of Charles de Gaulle, and the Mètre des Archives, tucked away behind heavy steel doors.
I then had the pleasure of a candid discussion with the French Secretary of State for Industry, Christophe Sirugue, on the topics of stimulating regional economies, the environmental and digital revolutions, nuclear energy, and Brexit.
Among these issues, one that especially piqued my curiosity was the notion of an independent regulation that mandates an appropriate amount of financial responsibility for a business to give back to the community when moving out of a locality. We touched bases after my return to exchange more information and further the discourse.
↑ In Switzerland, I had the honor of contributing to the World Economic Forum in Davos as the Japanese State Minister in charge of City, People, and Job-creation, and exchanged ideas with world renowned experts, offering my views on our country’s efforts, policies, and experiences. I mainly participated in two programs in Davos – Reexamining Modern Capitalism and China’s Growing Middle Class. Perhaps my most memorable moment was commenting on Western style business priorities of profits excessively serving shareholders’ financial interests in recent years, thus exacerbating income inequality and the decline of rural areas. Citing Max Weber’s “The Protestant Ethic and the Spirit of Capitalism,” I pointed out how capitalism lacking ethics can be problematic in the long run. I moved on to the Japanese model of corporations, which also caters to public interests, and must consider striving for not only short term shareholder profits, but also justly contributing to its employees, business partners, its local region, and global society in general. Without this kind of forethought, I expressed that income gaps will widen further and capital will never abundantly flow through regional municipalities. As a panelist, I mentioned how Toray Industries successfully developed carbon fiber through 40 years in the red; a rather inconceivable notion for a company like Du Pont. I finished my claim with the thought that business models that do not serve only short term stockholder interests, but rather mid and long term global needs, may be an essential aspect of capitalism necessary for moving forward.
Rustic Visits – The Kozo Travelogue for Regional Revitalization
Mie Prefecture – Toba City, Ise City
Visited Mikimoto Pearl Island, where employees boasted their diving skills and taught pearl oyster cultivation techniques (Toba); witnessed the Kokuragiondaiko festival in Okageyokocho; offered prayers at Ise Shrine (Ise).
Akita Prefecture – Senboku City
Test-rode the first autonomous bus of Japan on public roads around the shores of Lake Tazawa; visited an old samurai residence in Kakunodate transformed into a dry-ham curing factory in Senboku’s special economic zone.
November 19th, 20th
Hyogo Prefecture – Asago City, Yabu City, Toyooka City, Kami City, Shinonsen City
Learned about Hyogo Nakabayashi Co., a book-making company that also takes advantage of its downtime to restore abandoned farmland and grow garlic (Yabu), a new local business – “Toyooka Bags” – which utilizes the shopping district’s closed down stores (Toyooka), and a Kimoto style sake brewery that uses natural yeast and no mashing (Kami).
November 26th, 27th
Fukuoka Prefecture – Kitakyushu City
Witnessed caretaker robots in action and work drones that inspect public infrastructure; visited Kokura Castle, the former Yasukawa Family’s residence.
Yamanashi Prefecture – Hokuto City, Minami-alps City, Nirasaki City
Observed formerly abandoned rice fields, recently cultivated by residences now living directly on the land; also partook in the agriculture (Minami-alps). Visited the house where Nobel Prize winner Dr. Satoshi Oomura was born, which is now utilized as a “rural life experience” hotspot (Nirasaki); finally, did hands-on winemaking in a land where the daylight hours are long and the grapes enjoy extreme temperature changes (Hokuto).
Kumamoto Prefecture – Amakusa City
Studied “Ama-biZ,” which strives for “100 employments for 100 local businesses,” offers free consultation for entrepreneurs, assists with moving for new residents, and has thus far generated 180 new jobs.
January 28th, 29th
Kagoshima Prefecture – Nagashima City, Akune City, Satsumasendai City, Ichikikushikino City, Kagoshima City
Learned about the Sugimoto Brewery, where employees pursue artistic passions while simultaneously brewing Shochu; the Azumacho-gyokyo, which exports high quality farmed yellowtail to 29 countries (Nagashima); the Akune Station, which was remodeled to host open markets and interdisciplinary and industry events (Akune); and the Primaham Factory that succeeded in raising its output and sanitation levels, which created local jobs (Ichikikushikino).
February 11th, 12th
Hokkaido – Sapporo, Toubetsu City, Ebetsu City, Kitahiroshima City
Had a firsthand look to study what attracts 2.5 million visitors ever year to the Snow Festival (Sapporo); inspected a revamped brick factory which now serves as a commerce facility (Ebetsu), a remodeled school used today as an inclusive care-center, and other elderly care facilities (Kitahiroshima).
Tackling Revolving Door Issues of the Ministry of Education, Culture, Sports, Science, and Technology (MEXT) as Minister in Charge
I was mandated to perform a thorough investigation of all ministries and government offices by Prime Minister Abe to assuage both our and citizens’ concerns arising from dubious employments of ex MEXT officials. Within the Cabinet Bureau of Personnel Affairs, we have recently configured a Reemployment Surveillance Commission, which is comprised of members from the Cabinet Secretariat, outside specialists, and three lawyers, totaling to a force of 30 experts who will swiftly and effectively take action according to our findings in order to create an egalitarian playing field with no social losses for high rank reemployment.
The Policy Change That All of Tokyo is Watching – The Formation of a New Advisory Council (on Youth Employment and Promoting Local Universities)
It’s an issue on which Tokyoites’ eyes are fixated. Excess migration to Tokyo has continued every year since 2012, with the metropolis taking in 120,000 more residents in 2015. Although the number somewhat lowered in 2016, the amount of students and youth seeking employment (ages 15~24) within these numbers has risen.
In November of last year, the National Governor’s Association took note of the situation and called for the curtailment of expansion of universities within Tokyo, controlling these universities’ intakes, and enhancing regional universities and/or ensuring employment for young adults in the countryside. We as the national government would like to go forward with policies in line with gubernatorial concerns; this involves an array of policies including 1) altering the tax system in favor of rural companies and industries, 2) relocating relevant government institutions to the countryside, 3) promoting the employment of professional and skilled workers in rural areas, 4) implementing student loan forgiveness programs for those who find employment in their hometowns, 5) making lifelong livable cities a reality, and 6) establishing various youth programs such as regional revitalization internships. Also, with accordance to the cabinet decision in December of last year, the 2016 version of the Act on Overcoming Population Decline and Vitalizing Local Economy in Japan, we will ensure that regional universities receive the tools necessary to rejuvenate their respective areas and ensure quality employment, which in turn will save universities within Tokyo from further burdens and help keep a balanced population within the country. In order to swiftly and effectively address these issues, I have formed an advisory council on youth employment and the promotion of regional universities, which had its first meeting on February 6th. We plan on holding hearings for various university affiliated organizations, local government bodies, and economic organizations, forming our priorities and releasing our interim report in mid-May.
Seminars on Regional Revitalization – The Spirit of Self Help
As of January, the Cabinet Office and secretariat started holding seminars on regional revitalization for municipalities nationwide, starting in Fukuoka (1/10), Osaka (1/12), and Tokyo (1/13). In 2016, we visited 126 institutions in 54 cities, towns, and villages, establishing Evidence Based Policy-Making (EBPM) for 2017 derived from our studies of what strategies succeeded. Within this, along with the spirit of self-help, we wish to emphasize the support we offer in information, human resources, and finances that we laid out in the City, People, and Job Creation Comprehensive Plan. We would like to continue these efforts that bases action off of the information, data, and hard evidence that we have collected from the past.
Our most recent seminar (Tokyo, 1/13) as of February entailed a direct conversation with mayors of various municipalities in regard to FY2017’s national draft budget, modifications to the government’s comprehensive strategy, and how regional revitalization will be propelled further. Other topics in the seminar included the cabinet secretariat’s advice on how to effectively utilize the Regional Economy Society Analyzing System (RESAS), an overview of the City, People, and Job Creation Comprehensive Plan, and regional revitalization grants. We will also be hosting “Regional Revitalization Challenge Meetings” starting in February in Fukuoka, Miyagi, and Aichi Prefectures, where anybody with an interest is highly encouraged to participate (for further details, please visit the official City, People, and Job Creation secretariat website).
Reforming Economic Statistics as Minister in Charge of Administrative Reform
Coordinating and Adjusting the Government’s Economic Statistics
During a press conference in August of last year following my ministership appointments, I announced that I will coordinate and improve the government’s economic statistics as one of my duties as Minister of Administrative Reform. I’ve always had an interest in tackling problems with government statistics, and I’d like to engage these issues by implementing Evidence Based Policy-Making (EBPM), a system that utilizes statistics and other social science tools to base and evaluate public policy measures. The problem with this desire is that in Japan, each ministry and government office carries out and applies their own set of statistics with no coordination, adjustment, or cohesive criteria. On top of this, there exist issues with bias and lack of statisticians and tests, all of which lead to not being able to keep pace with modern trends such as e-commerce consumption data. Our current methods are struggling to match modern economic activity, which may have negative effects on investment and production. Academic, government, and political party circles have all wished to address these concerns, and if we do not act now, we may be stranded far behind internationally as well. With these fears and future opportunities in mind, I am determined to reform our government’s economic statistics.
Long before my Cabinet Office appointment, I have held numerous discussions and debates in private study groups on the various issues revolving around implementing EBPM. Continuing the discourse as Minister, as of October of last year, I started holding meetings for the Research Seminar on Economic Statistics and Various EBPM Needs with Professor Yoshiro Miwa as the chairman. Currently in its tenth round, experts debate and offer erudite advice on industrial structures, measurements of productivity in statistics, policymakers’ needs moving forward, mechanisms of economic statistics reform, how to establish an EBPM system, and other key issues.
Establishing the Council for the Promotion of Fundamental Reform of Economic Statistics
At the tail end of last year on December 21st, I was honored to have the Council on Economic and Fiscal Policy (chaired by PM Shinzo Abe) heed my humble advice and include within the Basic Policy for the Fundamental Reform of Economic Statistics, the creation of the Council for the Promotion of Fundamental Reform of Economic Statistics. The council will thoroughly deliberate and provide precise guidelines on: 1) how to prepare for the implementation of an EBPM system which appropriately utilizes sophisticated statistics; 2) reevaluating and expanding the criteria of how industries and goods are categorized in a manner that places production at the center of GDP statistics; 3) improving methods of economic statistics and the accuracy of GDP statistics; 4) reconstructing a user-friendly statistics system; and 5) how to tackle structural issues such as analyzing budget and personnel needs, the obtaining and training of personnel, and streamlining operations. Through these, we are confident in finding concrete reform measures that can create one unified statistics system in our country. So that the government can push for this in solidarity, we drew upon experts including the president of the Bank of Japan, university professors, and cabinet ministers such as myself, all led by Chief Cabinet Secretary Suga as the chairman. Although this is the first time a large scale cabinet meeting has been arranged for reforming statistics, we successfully held our first gathering on February 3rd. As we work towards raising trust levels in government statistics and laying out the framework of our policies by summer, I look forward to continuing my efforts with vested ministers and policy experts.
Economic Growth through Regulatory Reform and
National Strategic Special Zones
By tapping into dormant demand, regulatory reform will be a pillar of economic growth, safely restructuring our economic system as one of the first key steps in reviving Japan. Starting in August with my ministerial appointment, I have placed Professor Hiroko Ota (from the National Graduate Institute for Policy Studies) as the chair of the Regulatory Reform Promotion Council, and sparked open debates in working groups with divisions including medical treatment and caregiving, investment, agriculture, and human resources. In order to fulfill the Implementation Plan for Regulatory Reform cabinet decision of June 2016 and implement further required reforms, I would like to give my all to these projects.
As for the national strategic special zones, we are well on the road to testing the six main pillars of regulatory reform by FY2018 during this designated “intensive period,” and studying which other areas could benefit from precise reforms in the twelve strategic regions.
In November of last year, I had the privilege of test-riding the first autonomous bus on a public road in Senboku City of Akita Prefecture. I proudly witnessed in Imabari City, Aichi Prefecture, private businesses taking on the construction of roadside stations, and for the first time in 52 years in Japan (and the first in Shikoku Province), the founding of a Department of Veterinary Medicine. I beheld a new business approval of land ownership in the special agricultural economic zone in Yabu City of Hyogo Prefecture. There are countless thrilling and innovative new saplings of hope that we must encourage and nurture in this country. As the first minister in charge of both regulatory reform and national strategic special zones, I hope to push these as two wheels of an axle to the best of my abilities. One will lead to investors from around the world noticing the new regulatory changes, praising Japan as an environment amiable to international business, while the other in synthesis corroborates the achievements of Abenomic policies around the country. If Japan, and especially the bountiful rural areas of our country, are to not only survive but prosper in this new era, it is imperative that we improve production and raise income levels in the countryside – I believe that our endeavors such as regulatory reform are crucial components of these undertakings. There may be opposition from entrenched factions, but I will rise to this challenge with everything I have.