Digital transformation minister wants ‘important but bloody reform’ for Japan

TOKYO. Minister for Digital Transformation and member of Japan’s Liberal Democratic Party (LDP), Tarō Kōno, has called for austerity in the labor market amid challenging inflation. The politician’s potential move into the role of Prime Minister at the end of this month spotlights his controversial plan to close “inefficient” businesses.

Digital Transformation Minister and political “maverick” Taro Kono has called for the closure of unprofitable Japanese businesses in an interview aired live on Sunday, Sept. 1 (JST) with ABEMA News Show.

Political journalist Kazuhiro Aoyama challenged the Prime Ministerial hopeful Kono in the interview, emphasizing: “This is a big reform for the Liberal Democratic Party, which has always focused on protecting small and medium-sized businesses. I imagine there will be strong opposition from within the party, but are you prepared for it?”

Kono argues for closure of ‘inefficient’ Japanese companies

Kono noted that due to Japan’s inflationary problems, fiscal discipline is critical, and “ineffective projects currently being carried out under the budget” must be discontinued.

It is unclear exactly what Kono’s plans could entail — whether the state would merely remove financial support, or take more drastic action to force small businesses to close. The LDP politician told Aoyama that inefficient companies will be ended, and workers will need to be given new skills while “ensuring their livelihood with a safety net.”

“This is an important reform for Japan, which is said to have low productivity, but it’s a bloody reform,” Aoyama remarked.

Some Japanese social media users took issue with the ostensible “liberalization” of the labor market, hinting that the plan is just centralized control in disguise. One X user commented (translated by Google):

‘”Ending companies that are not improving their efficiency’ is the role of private companies competing with each other, not something that politics should decide. If we follow this logic, then surely Diet members who have kept the Japanese economy inefficient for 30 years should be the ones to be ended. This person’s confusion between macro and micro is so severe that he is not fit to be prime minister”

Kono, who recently declared Japan’s victory in the “war” on floppy disks, and referenced cathode ray televisions in the ABEMA interview, declared: “Some company managers are providing personal compensation, making it difficult for them to go under. We’ll also do things like quickly removing those personal guarantees.”