[Grandpa's Watching!] Part 1: I took a look at the 1st Japan Growth Strategy Headquarters (Cabinet Meeting)!

I'm Grandpa, the supporter of Gen Z and the future generation!

Well, this time, let's take a look at the first cabinet meeting of the Japan Growth Strategy Headquarters, which was established immediately after Prime Minister Takaichi took office, with her serving as the head.

The catchphrase of the long-term administration of former Prime Minister Abe, whom Prime Minister Takaichi respects deeply,Abenomics' "Three Arrows"consisted of (1) bold monetary policy (monetary easing), (2) flexible fiscal policy (fiscal stimulus), and (3) a growth strategy to stimulate private investment. Among these, Takaichi is trying to steer policy based on the reflection that (2) and (3) did not go well.

That is why she started the"Japan Growth Strategy Headquarters."Let's take a detailed look at the first headquarters meeting (cabinet meeting) in two parts, front and back.

1️⃣ Takaichi's Aim

It can be seen that Takaichi has analyzed and reflected well on the fact that under Abenomics, even though money was supplied to the market through monetary easing, the Ministry of Finance was so obsessed with achieving a primary balance surplus (a single-year surplus in the basic fiscal balance: a surplus after subtracting expenditures <policy expenses> excluding interest payments on government bonds, etc., from government revenue <tax revenue and non-tax revenue>) that it tightened government spending (aiming for a small government), and the crucialprivate investmentwas not in the regulation-heavy domestic market, but ratherconcentrated on overseas investment.

Therefore, to steer from austerity to active fiscal policy (big government), she is trying to break the spell of the Ministry of Finance by replacing the primary balance surplus with theDomar condition, rephrasing it as "responsible active fiscal policy," and appointing Satsuki Katayama as Minister of Finance.

And by increasing government spending and having the government actively engage in"long-term" oriented "growth" investment to sow seeds for the future,the intention is to induce domestic investment by private companies, but I don't think it will be that easy.

After all, large companies do not take risks domestically.
Although there was ingenuity in aiming for long-term subsidies by utilizing special accounts for GX investment, which aimed for a different scheme than before,there was no resolve or core from the Prime Minister (the top), and in the end, large companies could not take risks.

Deregulation and rule-making were slow, subsidy expenditure areas were diverse, small and medium-sized enterprises aiming for subsidies appeared in swarms, and likerenewable energy investment (large-scale offshore wind power investment saw large companies withdraw), which became a collection of mediocre investments,they hesitated to issue government bonds, and because they prioritized the primary balance, they rushed to recover investments and could not trigger active domestic investment by large companies due to rule-making that was more focused on regulation than deregulation.

So that large companies can properly take risks, I hope for policy-making that will boost domestic investment by large companies by not hesitating to issue government bonds under responsible active fiscal policy, utilizing special accounts, and this time, carrying out deregulation through legislative measuresand showing the direction for the future.

Otherwise, real estate investment by foreigners and foreign corporations is overheating in response to the rise in inbound demand, and voices calling for stricter regulations are growing, and there is a possibility thatreal estate, the only sector where investment was booming in the domestic market, will also slow down (it may deteriorate rapidly since the Chinese government itself is telling people not to go to Japan).

Industrial policy and policies to revitalize the manufacturing industry are awaited.
I think the "Japan Growth Strategy Headquarters" is there to compile proposals for that.

2️⃣ Document 1: Regarding the Establishment of the Japan Growth Strategy Headquarters

Takaichi recognizes that the current challenges in Japan are not something that can be solved by one ministry or agency working hard, but arecross-ministerial challenges.

You can understand this well by looking at the headquarters members.

Furthermore, the supplementary provisions state that the"Headquarters for the Realization of New Capitalism" established by the Kishida Cabinet will be abolished.(It was carried over in the Ishiba Cabinet.)

They took down the 'wage-hike first' sign of the 'New Capitalism' that was called degrowth, which said 'no growth without distribution',and returned to the policy of'no distribution without growth'.policy.

3️⃣ Document 2: Japan Growth Strategy Headquarters Operational Guidelines

Since these are operational guidelines, there is nothing of great importance written in them.
More than such guidelines, it is about the 'people'. Do you know the Minister in charge of the Japan Growth Strategy Headquarters?


It is House of Representatives member 'Minoru Kiuchi'.

This person is a former foreign ministry official who graduated from the University of Tokyo, and not only does he have experience working at the Japanese Embassy in Germany and is fluent in German, but he also has experience serving as a German interpreter for the Emperor and the Prime Minister in 1997.

It seems he is not only connected to Prime Minister Takaichi through former Prime Minister Abe, but is also a politician with a strong sense of purpose and his own core values.

In the 43rd House of Representatives election in November 2003, he ran as an independent from Shizuoka District 7, firmly refusing an offer to run solely on the proportional representation list from the LDP, and won his first election by defeating the ruling party-endorsed candidate Kumagai and the Democratic Party candidate Higuchi in the district election.

However, after being elected, while belonging to the Mori faction of the LDP, he was the only one in the Mori faction to cast a dissenting vote in the 2005 Postal Diet, and in the 2005 44th House of Representatives election, he was denied the LDP nomination and lost the election after Satsuki Katayama was sent as an assassin candidate against him.

In the 45th House of Representatives election in 2009, he defeated that candidate Satsuki Katayama and Democratic Party candidate Saiki to return to national politics.

He is a politician who has endured hardships, only returning to the LDP in 2011 under the Democratic Party administration.
After returning to the party, he must have become close to Prime Minister Takaichi as a supporter of Shinzo Abe.

He must be a figure like Minister Akazawa of the Ishiba Cabinet.
Let's keep an eye on him as the key person for the 'Growth Strategy', which is Prime Minister Takaichi's signature policy.

The first part was devoted to explaining the background of the Growth Strategy Headquarters. Let's look at the specific details in the second part.

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