Japan: Policies for PromotingEconomic DevelopmentChanging Patterns over Time

Policy Design and Formulation in Developing Countries

Three Historical Cases1. Meiji Japan – Flexible politics with many leaders

When feudal Japan was forced open by the West, facing the risk of colonization, it had to define new national goals, and decide how to achieve them and who would do it. Political reform, industrialization and military buildup were pursued under a flexible form of politics.

2. MITI’s industrial policy (late 1950s to 1960s) – Bottom-upThe national goal was clear—recover from war damage and catch up with the West. MITI was given sufficient mandate and policy tools to achieve this. MITI took initiative in formulating various strategies; networking with private businesses, other ministries and key politicians; generating national consensus; and preparing the draft law.

3. Abe Shinzo and Abenomics (2013- ) – Top-downPM Abe has taken away policy authority from bureaucrats, creates policies by himself (with his advisors), and uses appointing authority of high officials to subjugate ministries. Abenomics informs budget items favored by PM Office. Officials are fearful of PM and PM advisors. Sontaku (pleasing the boss by reading his mind & bending rules) has led to many political scandals.

Second Arrival of the West and End of Bakufu US Commodore Perry and his “Black Ships” entered Edo Bay and

used military threat to open up feudal Japan (1853-54), resulting in Treaties of Amity with the US and European powers (1854).

Trade with the West began under “unequal” commercial treaties of 1858, in which Japan had no tariff right or right to judge foreign criminals. Trade brought significant social and economic changes.

Fights over pro- vs. anti-foreigners, and pro- vs. anti-Bakufu began, eventually toppling Bakufu in 1867-68 and establishing the Meiji government which pursued open trade and technology import.

M.C. Perry (1794-1858)

Black Ships

Odaiba No.3 (Bakufu’s fortified island)

SupportBakufu(佐幕)

Support Emperor(尊王)

Anti-foreigner(攘夷) Satsuma Han

Choshu Han

Open door(開国)

Meiji Gov’t

1862

1865

1866

X

French support British support

Initial Shock, Transition, Implementation1853 to 1858 Western shock and panic

– Feudal Japan governed by samurai was pried open by the threat of the Black Ships (American battleships).

– Japan was forced to sign unequal commercial treaties with the West (no tariff right, no right to judge foreign criminals).

1858 to 1881 Transition Period (deciding what to do)– Little change in players or political pattern (except the Tokugawa Family

which was expelled).– National goals and roadmaps are debated, contested and decided.

1880s to 1890s Implementation Period (executing the plan)– Meiji Constitution under strong emperor (1889), first election and

parliament (1890), fierce budget debate starts in parliament– “Company booms” (late 1880s-); industrial revolution (1890s).– Japan overtakes UK in cotton product export (early 20th century).– Japan wins wars against China (1894-95) and Russia (1904-05).

Han as the Critical Unit and Incubator for Producing Meiji Leaders and Policy Coalitions The Tokugawa shogun ruled from the center (Bakufu in Edo) while

local lords (daimyo) were given han (domain or province) to rule in exchange for absolute obedience to Bakufu.

There were about 300 hans at the end of the Edo period. In dynamic hans, han lord and samurais worked together for reform

and influence (especially Satsuma). Under daimyo’s instruction, han samurais worked to absorb new

knowledge, contact foreigners, cooperate with other hans and selected Bakufu officials, and engage in foreign trade to enrich hanto purchase Western weapons.

©NHK 2018

Mito

Meiji revolution was driven by samurais in dynamic hans in Western Japan. These hans had1/ Trade profits2/ Imported military systems & technology3/ Negotiating & networking skills with Bakufu, other hans & foreigners

From late Edo to early Meiji, the same political mechanism operated with basically the same leaders, who were many (except Tokugawa family that was expelled).

Emperor Meiji, who just turned 15 years old when Meiji government was established, was not the true leader (especially in early years).

Yamagata

Ito

Kido

Itagaki Sakamoto

Goto

SaigoOkuboGodaiMatsukata

Okuma

Kuroda

Green box: four prominent leaders of Meiji revolution

Flexible Structure of Meiji Politics(Banno & Ohno Hypothesis, 2010)

Three dimensions of flexibility: 1858-1881(1) Evolution of goals

- Late Edo: 2 goals of Fukoku Kyohei (rich & strong han)& Kogi Yoron (feudal assembly)- Early Meiji: 4 goals of Fukoku (industrialization), Kyohei (foreign campaign), Constitution and Parliament

(2) Flexibility in coalition building- Groups continued to form and re-form as situations changed. No group monopolized power for long.

(3) Flexibility of leaders and leading groups- Policy priority of each leader evolved and solidified over time.- Leading group was able to embrace multiple goals and adjust policy

Meiji politics was fundamentally different from East Asia’s Post-WW2 developmental dictatorship (Korea, Taiwan…) which featured one strong long-serving leader, political rigidity, and pursuit of economic growth at the cost of democracy.

Evolution of National Goals over TimeKogi Yoron (公議輿論 government by public deliberation)

Deliberation among 4 or 5 wise daimyos

Feudal assembly by 303 hans and bakufu

Upper House by daimyos & Lower House by lower samurais

Western style Constitution

VS

Western style Parliament

British style multiple party democracy

VS

German style constitutional monarchy

Fukoku Kyohei (富国強兵 enrich country, strengthen military)

Each han:Trading house(Export traditional products for profit)

Import weapons(Buy cannons, guns, battleships from West)

Edo Meiji

- Mercantilism- Bargaining power against other hans and Bakufu

Edo Meiji

State-led industrializationwith Western machines and technology (Okubo)

VS

Military expedition to rest of Asia (unhappy samurais)

-Developmentalism

-Budget conflict between 2 goals

Evolution of Industrialization StrategyAround 1870s Building modern factories and infrastructure by

turnkey projects commissioned to Westerners (railroad, shipyards, lighthouses, mines, national mint, telegraph, etc.)

1871-74 High-level Iwakura Mission to US & Europe: learning and choosing Western models

1876-80 Okubo’s initiative to create military and state-owned manufacturing enterprises with latest technology, technical support centers; promote trade faires & import substitution.

1881- Privatization of state-owned enterprises to Zaibatsu, which expanded business scope and turned losses to profitability.

1890s- Macroeconomic stabilization and preparation of the financial system stimulated multiple waves of joint stock company creation; private dynamism led to the Industrial Revolution in light manufacturing (esp. cotton spinning).

Flexibility in Coalition BuildingIndustrialization

Constitution

Parliament

ForeignexpeditionOkubo (Satsuma)

1830-1878

Kido (Choshu)1833-1877

Saigo (Satsuma)1827-1877

Itagaki (Tosa)1837-1919

Fukoku Kyohei(rich country, strong military)

Kogi Yoron(democratization)

Source: Banno (2007), edited by presenter.

Naichi Yusen(internal reforms first)

Seikanron(Korean expedition plan)

C

I

P

C

I

Kido

Okubo

IwakuraMission 1871-73

Saigo

Itagaki

I

C

P

Split

I I

Korean Campaign Proposal

1873

Osaka Conference

1875

Rise of Industrializer 1876

Budget crisis 1880

M

C

I

SaigoRebellion

1877

P

Okubo assassinated

OkumaRadical

Conservative

Ousting of Okuma 1881

ItagakiOutside Gov’t

Ito, Inoue

State enterprises!

Privatization!Kuroda

Factions-- C: constitution P: parliament I: industrialization M: military

Meijibegins1868

Yamagata M

Flexible Politics: How Various Factions Joined and Separated

Features of flexible coalition forming No single group dominated; each had to form coalition with 1 or 2

other groups to pursue policy. As situations changed, coalitions were re-formed every few years. No

coalition lasted for very long. Trust and goodwill existed among leaders up to final confrontation

(Saigo’s rebellion, ousting of Okuma, Itagaki’s attack on government).

Despite rivalry and friction, political flexibility permitted attainment of multiple goals in the long run without extreme swings or mutual destruction.

Comparison of Influential Hans

• Saga (Hizen) leaders (Okuma, Eto, Oki, Soejima)—they lacked han-based training for coalition building; could not participate in the flexible politics of early Meiji.

• Fukui (Echizen) leaders—split sharply between fukoku kyohei (Nakane, Yuri) vs. austerity (Shungaku); could not build military capability and left out in Meiji Revolution.

Ability to pursue multiple goals

Coalition building capability

Stability and flexibility of leaders

Satsuma High High High

Choshu Low Moderate High

Tosa Moderate High Moderate

Saga Low Low Moderate

Fukui Moderate High LowSource: Banno & Ohno (2009).

Note: “Stability and flexibility of leaders” means the ability of the same leader group to manage internal disputes and embrace new policies as circumstances changed, rather than creating extreme policy swings between two split groups.

Winning Hans and Losing HansAll hans experienced internal disputes between Sonno Joi (respect emperor, expel foreigners) and Kaikoku (open country and trade).

The keys to success were (i) how quickly to adopt Kaikoku policy; and (ii) strong teamwork of han leader and samurais for promoting Fukoku Kyohei (enrich han, strengthen military).

Satsuma

Choshu

Tosa

Saga

Fukui

1858 18671862

Commercial treaties signed End of Bakufu

18651861

18651862

Problem: no cooperation with other hans

Dominant Policy of Each Han over TimeBrown: Sonno Joi, Green: Kaikoku

1863 1866

Perfect teamwork after 1862

New leaders emerged

Too late

Alliance 1866 Alliance 1867

Policy shift embraced

MITI’s Industrial Policy, late 1950s-60s The Ministry of International Trade and Industry (MITI) was created in

1949 by merging three bodies. In 2001, it was renamed to the Ministry of Economy, Trade and Industry (METI).

Foreign scholars depicted MITI as the command post of Japanese industries (Johnson 1982, Okimoto 1991). MITI officials often deny this view; MITI was only supplementing the market mechanism.

Econometrics and case studies do not produce a conclusive answer. In the car industry, for example, removal of tariff protection was carried out in steps combined with successful promotion of component suppliers. However, MITI’s attempt to merge Japanese carmakers to cope with American giants was rejected by producers.

Many of industrial measures were not unique to Japan—tax privileges, subsidies, low-interest policy loans, support for technology import and R&D, small business promotion, regulating entry and investment, infrastructure, industrial zones, regional planning, etc. But MITI implemented them more effectively than other countries.

1960s:Income Doubling Plan Japan in the 1950s was highly politicized. The nation was split between

pro-US capitalism and pro-labor socialism. Confrontation culminated in 1960 with the Miike Coal Mine Strike and the Renewal of the Japan-US Security Treaty. In both, the capitalist side won.

PM Ikeda Hayato (in office 1960-1964) turned to economics as a new national focus. He proposed to double people’s income within ten years.

Shimomura Osamu, economic advisor to PM Ikeda, offered arguments for the feasibility of Income Doubling Plan.

The Ministry of Finance (MOF), the Ministry of International Trade and Industry (MITI) and the Economic Planning Agency (EPA) were 3 key organizations to execute this plan. Receiving general policy mandate from the top, they could propose and execute details.

In reality, per capita real income rose 2.44 times between 1960 and 1970 (average annual increase of 9.3%). The plan was over-achieved.

Shimomura Osamu Ikeda Hayato

MITI: Key Features and Instruments MITI targeted specific sectors. It had many formal and informal

channels to talk to the private sector, and collected vital information for designing and implementing policies. MITI was neither captured by special interests nor detached from industrial reality (arms’ length; Embodied Autonomy). MITI and firms “picked the winner” together.

Deliberation councils were a popular decision making mechanism at central and local governments as well as ministries. MITI used, and still uses, deliberation councils actively to draft policies inviting businesses, academia, media, consumers and NPOs.

The Small and Medium Enterprise (SME) Agency, created in 1948 under MITI, offers many programs including management, finance, accounting, tax, marketing, location- and sector-specific support, consultation and inquiry. SME support is also available from many regional and specialized agencies. Shindan (診断 enterprise diagnostics and advice) is provided to SMEs by MITI-certified experts. Kosetsushi(公設試) is set up in every prefecture to provide technical support.

Special laws for enhancing machine and electronic part suppliers were enacted in 1956 and 1957 and extended with good results.

MITI

Main Bureaus Attached Organizationsand External Bureaus

Deliberation Councils

Minister’s Secretariat (incl. Research & Statistics)

Int’l Trade Policy Bureau

Int’l Trade Admin. Bureau

Industrial Policy Bureau

Industrial Location & Environment Protection Bureau

Basic Industries Bureau

Machinery & Information IndustriesBureau

Consumer Goods Industries Bureau

Agency of National Resources＆Energy

Patent Office

SME Enterprise Agency

Agency of Industrial Science & Technology

Trade & Investment Training

Other

Industrial Structure Int’l Trade TransactionExport Insurance Industrial Location & WaterTextile Product Safety & Household Goods Quality IndicationPetroleum Aircraft & Machinery IndustryElectrical Works Traditional Crafts Industry......... ..........

Minister

Politically appointed VM

Administrative VM

Deputy VMs

Special assistants

Source: adapted from Okimoto (1989), p.117.

Organization Chart

MITI junior staffstudy group

Hearings:Learned individualsInterested partiesOverseas employeesLocal representativesOthers

MITI research group(subcommittee)

Deliberation council

Conduct survey,compile data

Public relations:PublicationsExplanatory meetingsLecturesOthers

Briefings, subcommittee reports

Prepare draft

Final report

Feedback

Outside lecturers

Source: Ono (1992).

MITI’s Policy Making Was Bottom-up

Young officials in their 30s actively gathered information and interacted with businesses, thus having substantive influence on final result—unlike in most other countries where young officials only take orders from above and do what was assigned.

Industrial Policy in JapanSummarized from Prof. Akira Suehiro’s 2006 lecture

Japan’s industrial policy helped to develop the market rather than distort it. The Fiscal Investment and Loan Program (FILP) mobilized a huge pool

of official funds outside annual budget (postal saving deposits, pension contributions, etc.) to industrial and infrastructure development. The Japan Development Bank (JDB) and Exim Bank dispensed such fund.

JDB and Exim Bank loans were relatively small, but they had a signaling effect and catalyzed private commercial bank loans.

JDB loans for business investment were combined with management support of JDB and technical support of MITI. Rejected firms were allowed to apply many times. JDB and MITI coached them until they succeeded (“return match game”).

MITI’s deliberation councils formulated policies for targeted sectors and strategic issues. Junior officials drafted plans which were discussed within MITI, across ministries, by businesses and other stakeholders.

Integrated SME Support

Ministry of International Trade and Industry (MITI)

Ministry of Finance (MoF)

Individual SMEs

MITI Deliberation Council for specific sector

Members: business associations, government officials, industrial experts, academicians, etc.

< Policy level >

< Implementation >Instruct

Fiscal Fund Bureau of MoF

Technical advice Managerial advice& Investment loans

Source: Prof. Akira Suehiro’s 2006 lecture in Vietnam, redrawn by author.

Japan Development Bank (JDB)

Heavy Industry Bureau of MITI

Deterioration of Politics: 2006-2012

Between Koizumi and Abe2, there were 6 prime ministers in 6 years. LDP (Abe1, Fukuda, Aso: 2006-09) was unpopular leading to the

change of government to DPJ in August 2009. DPJ (Hatoyama, Kan, Noda: 2009-2012) proved even worse than LDP;

they practiced random policies and amateur politics. DPJ’s response to the Fukushima nuclear disaster was ineffectual.

Some hoped for a transition from “1955 Regime” (LDP’s political dominance) to two-party competition, but this was not realized due to DPJ’s incompetence.

In his second term starting in December 2012, Abe re-emerged as a powerful and very active PM both domestically and internationally.

Liberal Democratic Party (LDP) 1955-2009, 2012-(except 1993-96)

Democratic Party of Japan (DPJ) 2009-2012

Koizumi 2001-2006 LDP Abe No.2 2012-

Second Government of Abe Shinzo The First Abe Cabinet (Sep.2006-Sep.2007) was unsuccessful partly

due to his illness. The Second Abe Cabinet (Dec.2012-) has the following features:

• Active, quick, and vigorous (compared with past PMs).• PM Office initiates policies and appoints high ministerial officials,

thereby subjugating all ministries as implementing agencies.• Politically conservative, pursuing business interests, nationalism and

active defense stance.• Trying to broaden and amend Article 9 of the Constitution.• Diplomatically active—top salesman for Japanese businesses, coping

with China, North Korea and Trump, etc. (final impact unknown) His Liberal Democratic Party (LDP), in coalition with the Komeito

Party, has an absolute majority in both houses. Oppositions are too weak and fragmented. PM Abe can pass any law after nominally debating it. Oppositions can delay it only for a few days.

But his dominance has produced political scandals—bureaucrats trying to please Abe by bending rules (Moritomo, Kake, Sakura Incidents…)

Dominance of LDP-Komei CoalitionRuling party coalition has majority in both Houses due to weak and fragmented opposition parties (which often merge, split and change names); LDP-Komei can force any law after debating it formally and superficially in the parliament.

The term of The House of Representatives is four years; last election took place in Oct. 2017.

The term of The House of Councillors is six years with half elected every three years; last election took place in July 2016.

Lower House (465)

LDP61.1%

Komei6.2%

CPJ11.8%

Hope10.8%

Communist2.6%

Upper House (242)

LDP50.0%

Komei10.3%

DPJ20.2%

Communist5.8%

Osaka Ishin5.0%

PM Abe’s Domestic Policy Initiatives Abenomics (revitalizing the Japanese economy) Mobilizing women in labor market Reversing Shoshika (few children) Revitalizing rural economies Supporting SMEs (including investment abroad) Supporting irregular and part-time workers to achieve higher

income, better working conditions and transition to regular workers Work-life balance—less overtime, elimination of karoshi (death or

suicide due to overwork) Importing more foreign labor to overcome labor shortage Coping with COVID-19 with digital promotion

However, many of these policies were drafted hastily without deep consultation with key stakeholders. Implementation is haphazard and ineffective.

Abe Ikkyo (Abe Dominance)

PM Abe

Chief Cabinet Secretary Suga& appointed PM advisors

(seconded from ministries)

Kantei (PM Office)

MOF METI MOFA … …

- Policy orders- Budget allocation- Authority to appoint high

ministerial officials

Ministries Subjugated as mere implementer,

no longer policy initiator

PM Abe changed policy style from ministerial bottom-up to Kantei top-down. Power to appoint key ministerial officials is a new and powerful tool.

However, this mechanism does not work if Kanteiadvisors lack policy experience & knowledge. Their policies are often hasty & ineffective.

Abe dominance may be ending as of mid-2020 (corona & scandals) though his term is up to Sep. 2021.

LDP (ruling party): ignored

Three Arrows of Abenomics

1. Aggressive monetary policy (“New Dimension”)- PM Abe appointed BOJ Governor Kuroda Haruhiko (Mar. 2013)- Dispel deflation mindset—inflation target of 2 percent within 2 years- Monetary easing with new asset purchases (REIT, etc.), doubling

monetary base and BOJ’s government bond holding within 2 years- Correction of high yen (done)

2. Flexible (active) fiscal policy- Revive economy first, consolidate budget later- Increase infrastructure investment

3. New growth strategy (cabinet decision in June 2013; after this, a new cabinet decision is issued every June to expand or revise the strategy)- Japanese Economy Revitalization Headquarters formed; under it,

Industrial Competitiveness Conference- Three roadmaps and three plans (12 pillars, 37 items, 56 sub-items)

proposed in 2013; revisions and additions every subsequent year.

On June 14, 2013, Prime Minister Abe issued a message upon the formulation of “Japan Revitalization Strategy.”

Source: Japan Revitalization Headquarters, PM Office, June 2013.

Abenomics after Seven Years Abe’s strategy seems to have been, first secure a good economic recovery

(which everyone would welcome), achieve high approval, then push through his conservative agenda related to national defense and constitutional reform.

Abenomics renewed fiscal and monetary stimuli, together with growth strategies, to end deflation mindset. These were Three Arrows of Abenomics which were presented in flashy slogans but, in essence, they were not so different from policies adopted by past administrations.

Aggressive monetary policy initially succeeded in lifting business and consumer psychology, boosting the stock market and lowering the yen. But these short-term effects did not lead to long-term growth. The 2% inflation target was declared by the Bank of Japan in 2013 but was not achieved.

Large fiscal stimuli and active public investment were pursued. A rise in corporate income tax receipt temporarily supported fiscal activism. Fiscal consolidation and public debt reduction were put on the back burner.

The growth strategy was the most crucial yet weakest Arrow of Abenomics. Many measures were introduced under catchy phrases every year but meaningful results were few despite the government’s claim to the contrary.

Two-percent Inflation Target to Be Missed

A large jump observed from 2014 to 2015 was generated artificially by an increase of the general consumption tax from 5 to 8 percent in April 2014. If this effect is removed, consumer inflation continued to remain well below 2 percent during the entire Abenomics years. While BOJ is obsessed with attaining 2-percent inflation, recent price movement hovers near zero. BOJ blames this on globally weak energy prices. However, there is doubt over the desirability of achieving inflation through a weak yen and/or high imported prices—or even inflation targeting itself.

Consumer Price Inflation (change over previous year)

Source: Ministry of Finance Statistics page (downloaded on May 18, 2018).

BOJ’s initial timeline for achieving 2% inflation was “within 2 years.” This deadline was postponed six times, then finally abandoned in May 2018.

Budget Improves as Revenues Rise In recent years, strong profits pushed up corporate income tax receipt—partly

thanks to the initial impact of Abenomics. Consumption tax was raised from 5% to 8% (April 2014). The proposed

subsequent increase to 10% was delayed twice for political (election) considerations but is expected to be implemented in 2019.

Trillion yen

General budget expenditure

General revenue

Gov. bond issue- Construction bonds- Deficit bonds

20182000 201019901980

The Growth Arrow of AbenomicsExpanding and Revising Every Year without Achieving Results?

Under Abenomics, it became customary for the Cabinet to approve a new growth package every June with catchy phrases. However, it is difficult to produce real-sector results quickly. Targets are too many and random without proper execution or monitoring. The annually revised Growth Arrow can be regarded as a shifting wish list which serves as a guideline for ministries to receive additional budget allocation.

In 2014, the “New” Growth Strategy proposed “Recovering an earning power,” “Producing workforce,” “Reform rock-solid regulations,” “Energy” and “Tourism.” Abenomics was declared to be in an implementation stage.

In 2015, “Revised Japan Revitalization Strategy 2015” was publicized, and “Abenomics Stage 2” was declared. The new phrases included “Productivity revolution through investment for future,” “Local Abenomics” and “Reform 2020: PPP projects for growth.” Small businesses and rural areas, which were left behind so far, were now targeted.

The Growth Arrow (cont.) In 2016, the slogan, “100 Million Total Success” was launched. Nominal

GDP was to targeted to increase from 500 to 600 trillion yen by FY2021. The following items were added to the Growth Arrow: Fourth Industrial Revolution, higher birth rate, keeping jobs while taking care of old parents, promoting inbound FDI and Japan Brand, and new market creation for Tokyo Olympics 2020.

In 2017, “Future Investment Strategy 2017: Reforms toward Society 5.0” was adopted. Its pillars included healthy longevity, mobility revolution, next generation of supply chains and FinTech.

In 2018, five pillars are added: (i) Human Power Revolution, (ii) Productivity Revolution, (iii) working style reform, (iv) receiving new foreign labor, and (v) economic & fiscal policy with postponement of budget consolidation.

In 2019, Society 5.0, Human Revolution, Work Revolution, etc.

By this time, public attention to Abenomics seems to have waned, and criticism for not producing actual results instead of just new phrases is mounting. Some (many?) regard Abenomics as total or partial failure.

Labor shortage in Japan is severe and structural. It will get worse in the future. Japan has long refused to import foreign labor (except skilled professionals), but now it must change this policy to alleviate the labor shortage problem.

Gino Jisshusei (technical interns) and foreign students (incl. Japanese language students) working part-time within hour limits are the main sources of foreign labor. There are also illegal foreign workers.

Gino Jisshusei aims at technology transfer by improving the skills of young foreign workers in Japan for three years before going home. But it is often viewed as a source of cheap unskilled labor. This system, when poorly managed, increases crime, worker disappearance, unpaid wage or overtime, illegal work assignment and other human rights violations.

In 2017, the government revised this system to deal with these problems and also to receive a greater number of Jisshusei. A new category of Specified Skills workers was additionally introduced in 2019.

Instead of adjusting existing systems little by little, Japan needs to reconsider its immigration policy more fundamentally to cope with its long-term labor problems. This should include, among other things, how to welcome and integrate foreigners as part of the extended Japanese society.

Importing Foreign Labor

Source: Japan International Training Cooperation Organization.

Foreign Technical Interns in Japan

Abe Changes Gino Jisshusei Policy (2017-)

Coping with emerging problems A new organization （Gino Jisshu Organization）shall approve

training plans and monitor the performance of Supervisory Organizations and receiving firms in Japan.

Importing more foreign labor (for organizations and firms with good record only) The training period in Japan is extended from three to five years. Maximum foreign labor share at a company is expanded from 5% to

10% of regular workforce. Eligible sectors are expanded: agriculture, fishery, construction, food

processing, textile and garment, metal and machinery, elderly care, etc. Target sectors may be further added or revised over time.

New labor category, Specified Skills, was added in April 2019 (free to change firms, right to bring family, etc.)