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The government pledged Wednesday to take the lead in beefing up private-sector investment and rebuilding business operations with the aim of ending nearly two decades of deflationary recession in Japan, designating the coming five years as an "emergency structural reform period."
In a draft of its economic growth strategy, presented at a meeting of the industrial competitiveness council, Prime Minister Shinzo Abe's administration also set several numerical targets, such as augmenting the total amount of business investment by 10 percent during the next three years to bring it up to around 70 trillion yen.
The government said that by implementing the strategy, it will aim for an average nominal economic growth rate of 3 percent per year or a real rate of 2 percent in the coming decade.
The strategy is the last of the "three arrows" of Abe's policies, dubbed "Abenomics," along with massive public spending in an extra budget for fiscal 2012 ended March and aggressive monetary easing by the Bank of Japan.
But most of the policy proposals in the strategy appear insufficient to break fresh ground, and skepticism is growing about whether the world's third-largest economy can really put them into practice, some analysts said.
As the premier has said he will continue to push through reforms to jack up the economy, he would be urged to move ahead with further deregulation and carry out more effective steps to invigorate business activities, including drastic corporate tax cuts, with dogged persistence from specific industrial groups, they added.
With the outlook for "Abenomics" becoming more cloudy amid the recent volatility in financial markets, Abe is likely to struggle to maintain hopes for his economic policies in the run-up to the key House of Councillors election this summer, political pundits said.
In his speech at a Tokyo hotel to announce the last elements of the strategy earlier Wednesday, Abe said his government aims to boost Japan's per-capita gross national income by more than 1.5 million yen in 10 years under the upcoming economic growth strategy.
Abe also committed to allowing online sales of over-the-counter drugs in Japan and setting up special economic zones in which deregulation can be promoted, emphasizing that an "explosion of the vigor in the private sector" is vital for growth.
Japan's GNI stood at about 3.84 million yen per person in fiscal 2012, according to the latest data released by the Cabinet Office. With the stimulus, it would eventually grow over 3 percent per annum and can realize an over 1.5 million yen increase in 10 years, Abe said.
Expansion of business through the Internet will enhance "convenience in national life," Abe said, adding the government will "lift the ban on (online) sales of nonprescription drugs under appropriate rules, while ensuring the safety of consumers."
Abe also expressed his eagerness to establish special economic zones in the country in an attempt to spur the economy by bolstering investment and attracting businesses and human resources from overseas.
In addition to deregulation to prop up investment, the government will create a new system that would permit foreign doctors to practice medicine in the special zones and ease the current requirements to set up international schools, the premier said.
To promote reform in the country's power utility sector, which is required following the 2011 Fukushima nuclear crisis, Abe said his administration will help increase electricity-related investment over the next decade to 30 trillion yen, one and half times as large as that in the past 10 years.
"We'll invest in and shore up all energy technologies at home and develop them worldwide. This is the only way for resource-poor Japan to survive," Abe said.
Abe, meanwhile, clarified that his government will aim to triple Japan's infrastructure-related exports to 30 trillion yen by 2020 and double the scale of the nation's crop and food exports to 1 trillion yen by the same year.
In the draft, Abe's administration said it decided to position the coming three years as an "intensive investment prompting period."
For the exploitation of new markets, the government vowed to implement measures to foster human resources capable of operating effectively overseas and creating better working conditions for women.
It also promised to boost the percentage of Japan's trade with countries with which it has signed free trade agreements to 70 percent by 2018, up from the current 19 percent, as well as take steps to help increase exports of "anime," music and other popular culture under the theme of "Cool Japan."
The draft said the government will support research that would promote the practical use of regenerative medical techniques, including utilization of induced pluripotent stem cells, or iPS cells.
The Cabinet is scheduled to endorse the growth strategy on June 14. Abe plans to explain the strategy to his Group of Eight counterparts during their summit in Northern Ireland slated for June 17 to 18.