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Ministry of Land, Infrastructure, Transport and Tourism

Experts hold first meeting on infrastructure of integrated resorts (IR)

In early April, a conference was held at which experts discussed the infrastructure for IRs, which will incorporate casinos and other facilities. Serious deliberation has begun on the adoption of measures to address issues such as gambling addiction. The government is pondering the introduction to the Diet by this fall of a bill to legalize IRs. The group of experts should complete its recommendations sometime in summer.

The group seeks the creation of appealing Japanese-style IRs, including “clean” casinos. In addition to measures designed to prevent money laundering, systems will be put into place to designate IR areas, set up gaming commissions for oversight, and consider the means by which the national and local governments will collect revenue.

Through the study of various overseas examples, the aim will be to develop IRs that will be different from the dark, exclusionist image of casinos that has existed up to now.

Prime Minister Shinzo Abe set up a promotional center comprising people at the various ministries involved, with instructions to strive for developments that will present Japan’s traditions, culture, and arts so that families can enjoy visiting together.

Nevertheless, it may not be easy to dispel concerns about gambling addiction, money laundering, and other problems. But if the government can structure a business model that is different from the traditional casino, it will be in a more favorable position to alleviate the various matters of concern.

Cabinet Office

Fifty-one straight months of economic expansion recalls the 1980s

The economic indices released by the Cabinet office on April 7 show a rise of 0.4 points over the previous month to 115.5 (pegged to 2010 = 100), the first correction in three months. This marks 51 straight months of economic expansion since the start of the third Abe cabinet in December 2012, equivalent to the Bubble Economy of the mid-1980s. It is the third-longest period of sustained growth in Japan’s postwar history.

Nevertheless, domestic demand, which is centered on individual consumption, has been weak. Geopolitical risk has increased following the US missile strike in Syria, and with it the possibility of a slackening of economic recovery for Japan.

The main factor contributing to the correction of indices for February was the rise in automotive-related production. Bolstered by the Cabinet Office’s criteria, this 51-month period of economic expansion matches the duration of the period from December 1986 to February 1994, the so-called Bubble Economy.

When the Cabinet Office determines positive or negative growth, it convenes a study group and sets the indicators of economic trends that appear on charts as mountains or valleys. At the study group’s last meeting, in July 2015, it established a valley for the month of November 2012. From the following month, the economy has continued to expand.

The tailwinds that have made growth possible include a weaker yen stemming from large-scale financial deregulation, greater corporate profits, and improvements in employment. Another factor was conspicuous foreign demand through growth in exports to the United States and China.

However, individual consumption—a pillar of domestic demand—was sorely lacking. A survey of household expenditure in February noted a year-on-year decline in household outlays for the twelfth consecutive month. The corrected value of the actual GDP for the October–December 2016 quarter was nearly stagnant at 0.04 percent over the previous quarter. Weak domestic demand alone poses a possible blow to Japan’s economy.

At a press conference on April 7, Nobuteru Ishihara, the minister in charge of economic revitalization, remarked that concerns over external factors have led the government to watch developments closely, adding that “it will be vital to create an environment in which many people will be able to live while holding hopes for the future.”

But with Japan’s latent economic growth stagnating at 0.8 percent, it will be important to hammer out more reforms to reinforce mid- to long-term growth.

Keizaikai magazine