CEFP GIVES PM ASO'S ECONOMIC POLICY ADVISORY

UNCLAS TOKYO 000764

SENSITIVE
SIPDIS

STATE FOR EEB/IFD AND EAP/J
NSC FOR DANNY RUSSELL AND JIM LOI
USTR FOR MICHAEL BEEMAN

E.O. 12958: N/A
TAGS: ECON EFIN PGOV JA
SUBJECT: CEFP GIVES PM ASO'S ECONOMIC POLICY ADVISORY
COMMITTEE HIGH MARKS


1. (SBU) Summary: Prime Minister Aso's decision to form an
economic policy advisory committee was influenced by
President Obama's use of similar non-government economic
advisory bodies, according to Hiroshi Tawa, Counselor,
Council on Economic and Fiscal Policy (CEFP),Cabinet Office.
Aso decided to seek outside opinions from leaders without
vested interests in order to stimulate policy debate within
the cabinet. In the end, the 84 economic and financial
experts produced over 100 recommendations, which the CEFP
will review the week of April 6, with the aim of selecting
measures from the recommendation for the first economic
stimulus package due by early May. End Summary.


2. (SBU) CEFP Councilor Hiroshi Tawa positively reviewed the
results of Prime Minister Aso's first economic policy
advisory committee with Econoff on March 30, noting the 84
members (list e-mailed to EAP/J) who volunteered their time
and energies to the process put forward over 100 well
considered and detailed proposals to reinvigorate the
Japanese economy. The advisory group members were assigned
to 7-8 smaller sector specific groups that met over the
course of a week to discuss policies that could stimulate
Japan's economy. Tawa described the sectoral presentations
as very detailed and unlike normal Japanese bureaucratic
slide shows. The advisors normally stuck to their
presentation time limits (3-5 minutes),Tawa reported.
However, he also noted the local government officials always
ran long and did not provide the same detail or level of
analysis.


3. (SBU) The CEFP is reviewing the 100-plus proposals from
the advisory committee members. Some proposals are supported
by a majority of the 84 members, while others are deemed less
vital, according to Tawa. The CEFP, however, will make
recommendations on what is "possible" versus "not possible"
when it meets the week of April 6. Tawa expressed some
surprise that some advisory committee proposals reflected
policy views similar to proposal in the opposition Democratic
Party of Japan's election manifesto. Other recommendations
he considered innovative urged the GOJ to stop certain
measures that restrict economic activity.


4. (SBU) The advisory committee members, not all of whom are
Japanese, based their recommendations on perceptions of
Japan's national interests, according to Tawa. The
discussions within the sectoral sub-groups were not
confrontational, but included elements, such as, urging the
government to return to reform policies along the lines
former PM Koizumi that are now controversial within the LDP.
Tawa said service sector liberalization, particularly
medical, welfare and other social services, were "heatedly"
discussed by some committee members.


5. (SBU) Aso will convene the CEFP the week of April 6 to
review the 100 plus recommendations from the advisory
committee members to discuss which recommendations should be
incorporated into the first supplementary budget for FY2009.
The full report, inclusive of the recommendations, should be
published on the Cabinet Office web site sometime in
mid-April. The advisory members hoped the publication of
their ideas would spark greater debate on what policy
measures Japan should introduce to stimulate and reform its
economy, Tawa added.
ZUMWALT