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1 PublicAffairsAsia Special Report – September 2014 SPECIAL REPORT: Japan’s New Dynamic IN ACTION Reform and the new Abe Cabinet

arenas. Implementation of the Shinzo Abe unveiled his new first and second arrows of Abe- Cabinet on September 3 nomics – monetary and fiscal reforms – required a number of controversial and hard-won policy changes, including a shift in the goal of Japan’s monetary policy from price stability to 2% inflation; the introduction of a massive asset-buying program (quantitative and qualita- tive easing) which has since expanded the Bank of Japan’s balance sheet from ¥167 trillion to ¥277 trillion by September 2014, and a doubling of the monetary base, which has seen the yen fall, with remarkably little criticism from Japan’s trading partners, from ¥77.5 to the dollar in September 2012 to ¥107.5 today. Despite doubts about his abil- ity to deliver, and some predic- tions of disaster, it has to be said As Japan’s new Cabinet sets to that many key elements of Abe’s program have work ahead of the new Diet gone according to plan: a steady rise in infla- session, Philip Howard and tion, from minus 0.2% to plus 1.3% (temporarily plus 3.3% in July due to the consumption tax Natsumi Ishino profile the hike); a sustained rise in asset prices across the critical changes ahead board; substantial increases in profits and busi- ness confidence; and a huge net inflow of for- n 2013, PublicAffairsAsia named Prime eign investment. Since the advent of Abenom- Minister Shinzo Abe its Communicator ics, the Nikkei 225 has almost doubled, from of the Year, noting how he had “trans- 8,661 in November 2012 to just under 16,000 ABENOMICS IS formed the public mood in Japan from today. And Japan has virtually achieved the holy NOW ENTERING A Ian entrenched sense of decline to one of grail of full employment – with unemployment FAR“ MORE DIFFICULT optimism and vitality”. Abe’s economic pro- standing at just 3.8%. PHASE. WITH THE gram, first released while he was still leader of Taken together, these achievements have FIRST AND SECOND the opposition, struck a chord both at home been enough to keep Abe securely at the helm, ARROWS ALREADY and abroad because of its comprehensive with public support above 50% more than

FIRED, CRITICS vision for economic recovery. 18 months after he became prime minister –

INCREASINGLY Twenty months on, and with criticism quite a feat by itself given the recent record of QUESTION THE PACE“ of the pace of structural reforms, it is easy Japan’s prime ministers. OF THE THIRD – to forget that Abe has already implemented The same positive indicators have allowed STRUCTURAL many radical policy measures, including some Bank of Japan governor Haruhiko Kuroda to REFORM that had proved too much for his predeces- stand by his confident statements that Japan sors, especially in the monetary and fiscal is “on course” to achieve sustained inflation

2 PublicAffairsAsia Special Report – September 2014 ABENOMICS IN ACTION of around 2% by FY2015. The fact that appointment is also seen as a way to maintain the Cabinet inaugurated in December SOME WONDER a line of communication to Beijing despite the 2012 became the longest serving Cabinet WHETHER THE hawkish tinge of several new Cabinet members. in Japan’s post-war history – 617 days COUNTRY CAN BE The biggest surprise in the reshuffle was the – added to the unfamiliar but welcome “ appointment of rising star Yuko Obuchi as the WEANED OFF OF THE sense of political stability. COMFORTS OF new Minister of Economy, Trade and Indus-

However, Abenomics is now entering MONETARY AND try. Obuchi, a popular politician and political a far more difficult phase. With the first FISCAL STIMULUS. moderate, is tasked with making the case for and second arrows already fired, critics AND OTHERS FRET AT “ restarting some of Japan’s nuclear reactors, all of which are currently offline, and for see- increasingly question the pace of the third THE NATIONALISTIC – structural reform. Some wonder whether ing through fundamental reforms of electric the country can be weaned off of the com- ASPECT OF ABE’S power markets. With the Nuclear Regulation forts of monetary and fiscal stimulus. And AGENDA Authority having finally given its first approval others fret at the nationalistic aspect of for a nuclear reactor to restart, this is sure to Abe’s agenda fanning tensions abroad and be a politically challenging portfolio. distracting him from the urgent economic tasks at hand. Abe’s focus on empowering women, starting with the Abe also now has an economic record to be analyzed appointment of a record-equaling five women in the new and challenged. For all the positives, some of his prom- Cabinet, is in part an attempt to reconnect with grass- ises have clearly failed to materialize. Despite inflation, roots and women voters, especially ahead of regional rising profits and a tightening of the labor market, real elections next year. While practical policy measures have wages have continued to fall. And Kuroda himself has been limited to improvements in the provision of child- admitted his surprise at the lack of response from the care facilities, the message is welcome, and there are export sector to the falling yen. important but sensitive tax reforms under way to remove With Japan waiting nervously to learn the long-term Japan’s incentives on married women to stay at home. impact of April’s consumption tax rise, especially since a Another key appointment was that of Yasuhisa Shio- rash of disappointing data for Q2, Abe’s Cabinet reshuffle zaki as Minister of Health, Labor and Welfare. Shiozaki, a earlier this month presented him with a chance to Harvard graduate and former BOJ official, regarded as a re-vitalise his administration, and push Japan towards leading reformer, will oversee a shake-up of the Govern- more enduring change. ment Pension Investment Fund, the world’s largest pen- sion pot – designed to have the fund take more risks and Key appointments stress boost its lackluster returns. continued push for reform Shiozaki also takes responsibility for highly contentious Through his new Cabinet appointments, Prime Minister but crucial labor market reforms, including proposals >>> Abe has sought to address some of the previous Cabinet’s shortcomings, while at the same time stressing policy continuity, keeping six of his key ministers in place, including Minister of Finance and Deputy Prime Minister Taro Aso, Minister of Foreign Affairs , and the minister responsible for Trans-Pacific Partnership negotiations, Akira Amari. The reshuffle clearly had a party political dimension too. One important change was the appointment of (a former Minister of Defence seen as Abe’s main rival for leadership of the LDP). Moving Ishiba from LDP secretary-general into Cabinet as minister for regional revitalization was intended to undermine Ishiba’s ability to snipe from the sidelines in advance of a party leadership contest next year. Appointing former LDP president and Justice Minister Sadakazu Tanigaki in Ishiba’s stead was another canny move, designed to assuage Diet members from the LDP’s centrist factions frustrated at their exclusion from the policymaking process, which they see as being increasingly All smiles now? Bank of Japan Governor Haruhiko Kuroda concentrated in the Prime Minister’s Office. Tanigaki’s

3 PublicAffairsAsia Special Report – September 2014 SPECIAL REPORT: Japan’s New Dynamic ENERGY POLICY

>>> to modernize Japan’s stultifying rules ENGAGING NOW requirement to broaden the tax on over-time and severance pay. The IN DEBATE OVER base, by reviewing Japan’s surfeit World Economic Forum ranks Japan KEY SECTORAL of sector-specific tax breaks and

140th out of 148 countries for ease of “REFORMS OFFERS possibly introducing new taxes.

hiring and firing, but despite the urgent AN UNRIVALLED There is sure to be a heated dis- need for improvement, reform in this cussion as the debate within the OPPORTUNITY TO area is not something that can be “ LDP Tax Committee hones in on achieved without a fight. SHAPE JAPAN’S concrete proposals. The reshuffle thus sets the stage BUSINESS Closely linked to this is the for the next phase of Abenomics. If ENVIRONMENT FOR decision over whether to raise the successful, the new Cabinet will have YEARS TO COME consumption tax again in October a profound impact on Japan’s business 2015. Here the government faces environment. a dilemma: raising the tax will dampen economic activity, but any decision to delay New legislative agenda will cause international investors to question Japan’s The Extraordinary Diet session starting at the end commitment to fiscal discipline and the sustainabili- of September has a packed agenda. In addition ty of Japan’s public finances. Abe is expected to reach to labor market reforms and the next phase of his decision in November or December, despite it 140th restructuring of Japan’s electricity markets, the being too soon at this moment to fully understand Japan is ranked 140th session will consider draft legislation to improve the long-term effect of the first rise. shareholder rights and reform corporate govern- out of 148 countries ance. It will also see the modernization of Japan’s Integrated resorts on the way when it comes to rules on personal information protection and Another area to watch is the Basic Integrated restrictions on hiring cyber-security. In addition, there will be intense Resorts Promotion Bill, which promises to open and firing staff debate over reform of the healthcare system, Japan to legalized casinos for the first time at including changes to reimbursement pricing. a small number of yet-to-be-decided locations. Though expectations are that the bill will pass

Tax reform crucial Waste Management and during the upcoming DietFood Safety andsession, the full sched- Consumer Affairs Bureau Recycling Department Pharmaceutical and Committee on Organizations Food Safety Bureau Involved with Commerce, Industry European Affairs Bureau Corporate and and Medium and Small Enterprises IR Bureau External Organizations Committee Ministry of Agriculture, Forestry and Fisheries Policy Research Ministry of Health, Policy Research Committee of Council Ministry of Foreign Affairs Labour and Welfare Committee Standing Directors Ministry of Budget Finance Ministry of Internal Affairs Initial debate will focus on tax reform – including LDP Japan Tourism Bureau Ministry of the and Communications DPJ ule of the LDP CabinetHeadquarters AgencyAffairs Committee,Headquarters where Environment Headquarters Customs and Ministry of Land, Infrastructure, Tariffs Bureau Transport and Tourism Cabinet Of ce Women Diet Policy Committee Committee Agriculture and Forestry Division Civil Aviation Ministry of Defense Youth Ministry of Economy, Bureau Committee Agency for Natural Trade and Industry Resources and Energy Cabinet Legislation Integrated Planning Bureau Of ce lowering the rate of corporation tax and the crucial Ministry of Education, Culture, the bill will undergo formalSports, scrutiny,Science and Technology Diet Affairs means that Diet Affairs Economic and Committee Committee Industrial Policy Bureau Sports and Youth Bureau

European Affairs Bureau Youth Ministry of Justice Division Global ICT Strategy Bureau Health, Labor and Civil Affairs Bureau Economic Affairs Bureau Road Transport Welfare Division Bureau

decision on whether to raise the consumption Committee on Information and the timing will be very tight.Organizations Involved Communications Bureau with National Security tax again next year. It will also focus on nuclear In sum, we expect theGR Japan pace – Connecting of You reform to Japan’s leading team of dedicated government relations restarts, regional growth initiatives, and draft accelerate under the newand public affairs professionalsAbe cabinet. Engaging

Jakob Tomohiro Philip Atsushi Natsumi Daniela Dr. Llewelyn Yutaka legislation to establish integrated resorts, which Edberg Gogo Howard Tsuchida Ishino Dimitrova Hughes Iwahori now in debate over keyManaging sectoralDirector Director / Senior Public Policy Public reformsPolicy Research Public Policy offers an Director Co-founder Executive Manager Manager Director Manager Policy, trade and Former METI and Intelligence MLITT, METI and London School . University of Tokyo/ Former Policy politics. Japan’s MHLW official. and Strategy. MIC. Transport of Economics. Healthcare and MIT, Asia-Pacific. Secretary in House top government Inward Investment, Overseas clients and Tourism, Finance and Pharmaceuticals. Energy and of Representatives. relations adviser. International and Business Information Economic Policy. Environment, Policy-making, law Trade. Development. Communications Trade, Domestic and environment. would lift the current ban on casinos in Japan. With unrivalled opportunity to shapeand Technology. Japan’sPolitics. business Information, Insight, Infl uence

T: +81 3 6205 4205 ▪ E: [email protected] ▪ www.grjapan.com regard to taxation, a possible extension of the carry environment for yearsJuzen to Bldg. 301, 2-9-6 Nagatacho,come. Chiyoda-ku, Tokyo, 100-0014 forward period for net operating losses – a critical 140908 GR Japan Tube Map Advertisement JK006 [PUBLICAFFAIRSASIA VERSION].indd 1 08/09/2014 09:12:02 issue for long-term foreign investors in Japan – will Philip Howard is Director and Co-Founder and also be part of the debate. Natsumi Ishino is Public Policy Manager at GR Japan Japan’s powerful Ministry of Finance (MOF) has accepted the government’s plan to lower corpora- tion tax in Japan “to the 20s” in the next few years, Taro Aso: although the pace and final percentage are yet to be Combines role as settled. The price for this MOF “concession” was a Deputy Prime Minister and Finance Minister about GR Japan GR Japan is the leading government relations and public affairs firm in Japan. Its team of government relations professionals offers a full range of government relations services, ranging from policy and issue monitoring, stakeholder mapping and in-depth intelligence, to stakeholder outreach, advocacy and public affairs campaigns. For more information visit: www.grjapan.com 4 PublicAffairsAsia Special Report – September 2014 ENERGY POLICY Energy is vital: Japan needs to secure its future energy supplies to achieve lasting economic growth

Energizing Abenomics Assessing what impact Abenomics will have on Japan’s energy policy, Dr Llewelyn Hughes says a period of negotiation beckons as the government seeks to drive competitiveness through liberalised energy markets

he success of the third arrow of Abenomics new business opportunities. Resource companies is tightly bound to reform of Japan’s energy should also track how the demand for different fu- sector. Successful reform of the power els is being influenced by the regulatory changes Tmarket, in particular, promises to foster greater being put in place. competition and innovation. It might also help to limit increases in power bills that sap the competi- Japan’s once-in-a-generation reforms tiveness of Japanese industry. Japan’s energy sector is going through a once in a The Abe Administration has kept to its timeta- generation reform process. Changes began under ble for introducing greater competition into the the previous government in response to the triple energy sector. The power sector reform bill was disasters of 11 March 2011. Electricity market Taro Aso: passed into law last year, and full competition in reform now takes pride of place within the structural Combines role as the retail power sector will begin reforms of Abenomics – its comprehensive Deputy Prime Minister next year. Meanwhile, implementa- plan for revitalizing Japan’s economy. and Finance Minister tion of Japan’s feed-in-tariff scheme RESOURCE This focus on energy makes sense. The has already helped a large number of COMPANIES SHOULD natural disaster resulted in the turning off

firms enter the Japanese renewable ALSO TRACK HOW of all of Japan’s nuclear power plants, and

energy market. “ even if some of the reactors are restarted THE DEMAND FOR But many of the detailed rules DIFFERENT FUELS IS the share of nuclear power in Japan’s en- that will govern Japan’s changing “ ergy mix will inevitably fall. This makes it BEING INFLUENCED crucial to search for alternatives. energy landscape remain open to BY THE REGULATORY negotiation. Now is the time for In the short term, Japan’s power utilities potential entrants into the Japa- CHANGES BEING PUT have increased the share of oil, coal, and nese energy market to focus on IN PLACE natural gas used to produce electricity. >>>

5 PublicAffairsAsia Special Report – September 2014 SPECIAL REPORT: Japan’s New Dynamic ENERGY POLICY HEALTH REFORMS >>> This has increased Japan’s fuel import bills, a trend exacerbated by the falling yen. Indeed, the scale of that change alone has been sufficient to push Japan’s trade Remedies for the balance into the red. This gives the government an add- ed incentive to pursue structural reforms to the sector. Japan has engaged in a raft of policies designed to ensure secure supplies of energy resources, most Healthcare Sector notably supporting firms’ attempts to secure a role of the development and export of US shale gas. Junta Asai and Daniela Dimitrova examine Another key part of the government’s response is the Electricity System Reform Policy (ESRP), the next wave of healthcare reform in Japan approved by Cabinet on 2 April 2013. This sets out a program to ease the transmission of power be- ver the past year and a half, the has tween Japan’s regionalized power markets through tackled reforms in several key sectors of the economy. a new “Organization for Cross-regional Coordina- In the healthcare sector – particularly pharmaceuticals tion of Transmission Operators” (OCCTO). It also Oand medical devices – these policies have brought a welcome promises to introduce full competition to the resi- measure of substance to Abenomics’ third arrow. dential sector, and unbundle the transmission and Japan is the most prominent example amongst developed distribution of electric power from generation. countries of the combined effect of increased longevity and Taken together, the ESRP promises to loosen restric- declining birth rates. Since Japan has the fastest ageing tions on Japan’s regionally seg- population in the world, it is not surprising that healthcare has mented power sector on both become a policy priority for the government over the past dec- JAPAN’S POWER the supply side and demand ades. These demographic trends, and Japan’s response to them,

PRICES REMAIN TOO side as firms begin offering have already helped to make the country the second biggest

HIGH GLOBALLY. THE new energy services to resi- pharmaceuticals market globally, with a high and growing level “ dential and other customers. of foreign participation. But growing healthcare needs in the SHARE OF NUCLEAR POWER IN JAPAN’S “ These changes come on future will require further concerted efforts both from the pub- ENERGY MIX top of the already impressive lic and the private sector to ensure that the healthcare industry performance of Japan’s feed-in- ALSO REMAINS can meet the future challenges from Japan’s aging population. tariff (FIT) system. Modeled on Successive government policies have had a marked impact UNCERTAIN Germany, Japan’s FIT has led to on the healthcare sector, with Japan’s drug and medical an unprecedented amount of devices lag shrinking rapidly and a growing concentration of large-scale renewable genera- global activity in Japan, including R&D pipelines. tion capacity being added to Japan’s electricity mix. Many The sector has seen some exciting developments under Prime foreign firms have entered the market either by devel- Minister Abe. The medical industry was tagged as an area of oping projects themselves, or by supplying established particular interest in Abe’s June 2013 Economic Growth Strategy firms within the Japanese market. and featured even more prominently as an “engine of growth” in Yet there are challenges in the midst of this the revised strategy of June 2014. The government’s twin vision is progress. The FIT has faced teething problems, with a to spur innovation and growth of the domestic healthcare sector, number of projects cancelled due to lack of progress. while also improving the environment for foreign pharmaceutical Japan’s power prices remain too high globally, harm- companies and attracting more external investment. ing the country’s export competitiveness. The share In May the government approved the creation of a new

of nuclear power in Japan’s energyFood Safety and mixWaste Management and also remains Consumer Affairs Bureau Recycling Department Pharmaceutical and research promotion headquarters to coordinate the budget Committee on Organizations Food Safety Bureau Involved with Commerce, Industry European Affairs Bureau Corporate and and Medium and Small Enterprises IR Bureau External Organizations Committee Ministry of Agriculture, Forestry and Fisheries Policy Research Ministry of Health, Policy Research Committee of Council Ministry of Foreign Affairs Labour and Welfare Committee Standing Directors Ministry of Budget Finance Ministry of Internal Affairs LDP Japan Tourism Bureau Ministry of the and Communications DPJ Headquarters Agency Headquarters uncertain. And most importantly,Environment the detailedKomeito rules Headquarters for medical research funding, currently allocated separately Customs and Ministry of Land, Infrastructure, Tariffs Bureau Transport and Tourism Cabinet Of ce Women Diet Policy Committee Committee Agriculture and Forestry Division Civil Aviation Ministry of Defense Youth Ministry of Economy, Bureau Committee Agency for Natural Trade and Industry Resources and Energy Cabinet Legislation Integrated Planning Bureau Of ce Ministry of Education, Culture, Sports, Science and Technology Diet Affairs governing the new power marketDiet Affairs structure remain Economic and Committee Committee by the Ministry of Education (MEXT), the Ministry of Health, Industrial Policy Bureau Sports and Youth Bureau

European Affairs Bureau Youth Ministry of Justice Division Global ICT Strategy Bureau Health, Labor and Civil Affairs Bureau Economic Affairs Bureau Road Transport Welfare Division Bureau

Committee on Information and to be negotiated. This representsOrganizations Involved Communications Bureau a mix of opportuni- with National Security Labour and Welfare (MHLW) and the Ministry of Economy, ties and risks for investors GRand Japan – firmsConnecting You interested in Trade and Industry (METI). It also passed a bill to create a Japan’s leading team of dedicated government relations entering the Japanese market.and public affairs professionalsHow ongoing energy Japanese version of the US National Institutes of Health, to

Jakob Tomohiro Philip Atsushi Natsumi Daniela Dr. Llewelyn Yutaka Edberg Gogo Howard Tsuchida Ishino Dimitrova Hughes Iwahori market reform develops withinManaging Director Director / AbenomicsSenior Public Policy Public Policy Research Public Policy remains Director Co-founder Executive Manager Manager Director Manager improve the competitiveness of the domestic medical sector Policy, trade and Former METI and Intelligence MLITT, METI and London School University of Tokyo. University of Tokyo/ Former Policy politics. Japan’s MHLW official. and Strategy. MIC. Transport of Economics. Healthcare and MIT, Asia-Pacific. Secretary in House top government Inward Investment, Overseas clients and Tourism, Finance and Pharmaceuticals. Energy and of Representatives. relations adviser. International and Business Information Economic Policy. Environment, Policy-making, law Trade. Development. Communications Trade, Domestic and environment. crucially important to Japan’s economicand Technology. Politics. growth and through intense and integrated research. Information, Insight, Infl uence

T: +81 3 6205 4205 ▪ E: [email protected] ▪ www.grjapan.com the business opportunitiesJuzen Bldg.it 301, 2-9-6 Nagatacho,offers. Chiyoda-ku, Tokyo, 100-0014 Equally important, however, are the efforts of the Abe Cabi- Dr Llewelyn Hughes140908 GR Japan Tube Mapis Advertisement JK006Research [PUBLICAFFAIRSASIA VERSION].indd 1 Director08/09/2014 09:12:02 at GR Japan net to engage foreign pharmaceutical companies, accelerating and incentivizing the introduction of innovative medicines and Senior Lecturer at the Crawford School of Public Policy to Japan, and facilitating new market entry, with the aim of at the Australian National University focusing foreign investment on research and development. >>>

6 PublicAffairsAsia Special Report – September 2014 This report is published by PublicAffairsAsia in association with GR Japan. Unless otherwise stated all material is copyrighted by: Public Affairs Asia Ltd., Level 19, Two International Finance Centre, 8 Finance Street, Central, Hong Kong

>>> The two most important reforms in the sector – the introduction of the premium maintenance price system and the reform of the Pharmaceuticals and Medical Devices Agency (PMDA) – have been in place since 2010. The former aims to ensure predictability and high reimburse- ment prices for innovative and high-value medicines, encouraging pharmaceutical companies to continue investing in new drugs development. Typically, the level of reimbursement under the National Health Insurance (NHI) system is decided in a biennial price revision based on the market value of drugs, conducted by the Drug Pric- ing Committee of the Central Social Insur- ance Medical Council (CSIMC) or Chuikyo. The premium maintenance price system guarantees high-reimbursement prices for a fixed initial period, regardless of market Shinzo Abe: Implementation is now key for his government’s health reforms prices. Recognizing the importance of the system in providing stability and incentives for pharmaceutical companies, the Abe fund a planned reduction in corporation tax. At the same time however, Cabinet reapproved it in 2014. the government plans to offer even lower corporation tax for companies At the same time, the MHLW has worked that increase their R&D spending. This policy would have a double effect – hard to simplify the administrative require- encouraging investment in R&D and increasing overall capital spending. ments for new drugs’ application and speed While the Abe Cabinet continues to take Japan’s healthcare policy in the up the review process. Crucial for this purpose right direction, there is room for improvement. For one, the premium main- was restructuring the PMDA by increasing tenance price system for innovative drugs should be made permanent in examination personnel and accelerating ex- order to provide predictability and confidence to pharmaceutical companies amination procedures. In November last year, considering long-term investment in Japan. Another big question in recent the Cabinet also approved important changes months has been whether Chuikyo might return to the idea of annual drug to the Pharmaceutical Affairs Law (PAL), pro- price revisions (as opposed to the current biennial revision). viding for faster medical devices registration. This would be an unwelcome change for research and innovation centered industry players, increasing their administrative burden and diminishing Improving the business climate market stability and predictability. Furthermore, Japan still has work to do in Some of the other measures envisioned by streamlining the administrative process for turning preclinical research into the government to improve the business new drugs. The Cabinet has developed a strategy package calledSakigake climate for the medical sector are an expan- (meaning “pioneer” or “front-runner”) aiming for the swift introduction of in- sion of the over-the-counter (OTC) drugs novative drugs, medical devices and regenerative medicines, which can cure market and, notably, the introduction of the serious illnesses. However, the policy package is yet to be implemented. mixed billing system, allowing patients to Japan is aware that it is facing increasingly stiff competition in the region, use drugs and procedures not covered by as China, Singapore and other countries in Asia begin to encounter the same demographic challenges. As policies in those countries respond, they too the National Health Insurance in combina- Food Safety and Waste Management and Consumer Affairs Bureau Recycling Department Pharmaceutical and Committee on Organizations Food Safety Bureau Involved with Commerce, Industry European Affairs Bureau Corporate and and Medium and Small Enterprises IR Bureau External Organizations Committee Ministry of Agriculture, Forestry and Fisheries Policy Research Ministry of Health, Policy Research Committee of Council Ministry of Foreign Affairs Labour and Welfare Committee Standing Directors Ministry of Budget Finance Ministry of Internal Affairs become investment and market destinationsLDP Japan Tourism forBureau innovativeMinistry of the and Communications DPJ pharmaceutical tion with covered items. This last measure Headquarters Agency Headquarters Environment Komeito Headquarters Customs and Ministry of Land, Infrastructure, Tariffs Bureau Transport and Tourism Cabinet Of ce Women Diet Policy Committee Committee Agriculture and Forestry Division Civil Aviation Ministry of Defense Youth Ministry of Economy, Bureau Committee Agency for Natural Trade and Industry Resources and Energy Cabinet Legislation Integrated Planning Bureau Of ce companies. The Japanese government feels the pressureMinistry of Education, Culture, to keep its market in particular, would lessen the pressure for Sports, Science and Technology Diet Affairs Diet Affairs Economic and Committee Committee Industrial Policy Bureau Sports and Youth Bureau

European Affairs Bureau Youth Ministry of Justice Division Global ICT Strategy Bureau Health, Labor and Civil Affairs Bureau Economic Affairs Bureau Road Transport Welfare Division Bureau

attractive and seems genuinely determined to stayCommittee on Information and ahead of the pack. That some companies to secure reimbursement Organizations Involved Communications Bureau with National Security under the NHI and will improve the climate means providing for stability, predictability GRand Japan –a Connecting business-friendly You environ- Japan’s leading team of dedicated government relations for non-reimbursable drugs and devices. ment, as well as reforming the system to attractand public affairs professionals more investment, particularly

Jakob Tomohiro Philip Atsushi Natsumi Daniela Dr. Llewelyn Yutaka in the area of R&D. Structural reform in theEdberg healthcareGogo Howard Tsuchida Ishino Dimitrova HughessectorIwahori so far has been Recent discussions within the LDP to Managing Director Director / Senior Public Policy Public Policy Research Public Policy Director Co-founder Executive Manager Manager Director Manager Policy, trade and Former METI and Intelligence MLITT, METI and London School University of Tokyo. University of Tokyo/ Former Policy politics. Japan’s MHLW official. and Strategy. MIC. Transport of Economics. Healthcare and MIT, Asia-Pacific. Secretary in House top government Inward Investment, Overseas clients and Tourism, Finance and Pharmaceuticals. Energy and of Representatives. relations adviser. International and Business Information Economic Policy. Environment, Policy-making, law Trade. Development. Communications Trade, Domestic and environment. scale back tax deductions for corporate as much about substance as about speed, and theand Technology. newPolitics. regulatory environ- Information, Insight, Infl uence

T: +81 3 6205 4205 ▪ E: [email protected] ▪ www.grjapan.com R&D spending appear to contradict the ment provides many opportunities for marketJuzen Bldg. 301, 2-9-6 Nagatacho, entry. Chiyoda-ku, Tokyo, 100-0014 Abe Administration’s focus on innovation. 140908 GR Japan Tube Map Advertisement JK006 [PUBLICAFFAIRSASIA VERSION].indd 1 08/09/2014 09:12:02 >>> The move is being mooted as a way to Junta Asai is Associate Partner and Daniela Dimitrova is Public Policy Manager at GR Japan

7 PublicAffairsAsia Special Report – September 2014 Food Safety and Waste Management and Consumer Affairs Bureau Recycling Department Pharmaceutical and Committee on Organizations Food Safety Bureau Involved with Commerce, Industry European Affairs Bureau Corporate and and Medium and Small Enterprises IR Bureau External Organizations Committee Ministry of Agriculture, Forestry and Fisheries Policy Research Ministry of Health, Policy Research Committee of Council Ministry of Foreign Affairs Labour and Welfare Committee Standing Directors Ministry of Budget Finance Ministry of Internal Affairs LDP Japan Tourism Bureau Ministry of the and Communications DPJ Headquarters Agency Headquarters Environment Komeito Headquarters Customs and Ministry of Land, Infrastructure, Tariffs Bureau Transport and Tourism Cabinet Of ce Women Diet Policy Committee Committee Agriculture and Forestry Division Civil Aviation Ministry of Defense Youth Ministry of Economy, Bureau Committee Agency for Natural Trade and Industry Resources and Energy Cabinet Legislation Integrated Planning Bureau Of ce Ministry of Education, Culture, Sports, Science and Technology Diet Affairs Diet Affairs Economic and Committee Committee Industrial Policy Bureau Sports and Youth Bureau

European Affairs Bureau Youth Ministry of Justice Division Global ICT Strategy Bureau Health, Labor and Civil Affairs Bureau Economic Affairs Bureau Road Transport Welfare Division Bureau

Committee on Information and Organizations Involved Communications Bureau with National Security

GR Japan – Connecting You

Japan’s leading team of dedicated government relations and public affairs professionals

Jakob Tomohiro Philip Atsushi Natsumi Daniela Dr. Llewelyn Yutaka Edberg Gogo Howard Tsuchida Ishino Dimitrova Hughes Iwahori Managing Director Director / Senior Public Policy Public Policy Research Public Policy Director Co-founder Executive Manager Manager Director Manager Policy, trade and Former METI and Intelligence MLITT, METI and London School University of Tokyo. University of Tokyo/ Former Policy politics. Japan’s MHLW official. and Strategy. MIC. Transport of Economics. Healthcare and MIT, Asia-Pacific. Secretary in House top government Inward Investment, Overseas clients and Tourism, Finance and Pharmaceuticals. Energy and of Representatives. relations adviser. International and Business Information Economic Policy. Environment, Policy-making, law Trade. Development. Communications Trade, Domestic and environment. and Technology. Politics.

Information, Insight, Infl uence

T: +81 3 6205 4205 ▪ E: [email protected] ▪ www.grjapan.com Juzen Bldg. 301, 2-9-6 Nagatacho, Chiyoda-ku, Tokyo, 100-0014

8 PublicAffairsAsia Special Report – September 2014

140908 GR Japan Tube Map Advertisement JK006 [PUBLICAFFAIRSASIA VERSION].indd 1 08/09/2014 09:12:02