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Article

10 Aug 2013

Author:
Economist

Zoning out (Japan)

Japan...has...used special zones to test ideas too radical for the rest of the country. Shinzo Abe, the prime minister, has now put them at the heart of his plan for economic revival...Slightly lower taxation, somewhat easier immigration rules and looser building laws are among the draws...The zones’ second goal is to be a showcase for deregulation...Big companies...want to have more freedom to fire full-time workers, which is almost impossible in Japan. But politicians fear this would lift unemployment and increase inequality...Testing such reforms in special zones is politically easier...Recent reports suggest that the reforms to be tried could indeed be far-reaching, and even include measures letting firms fire workers with severance pay. [refers to Nomura, Morgan Stanley]