Sony chairman calls on Tokyo to stimulate economy
By Yukari Iwatani
SAN FRANCISCO, Nov 13 (Reuters) - Sony Chairman Norio Ohga, an influential voice in Japan's corporate world, called on Tokyo on Friday to overcome political differences and throw its economy into gear or risk sending the world into recession.
If the government does not act on a stimulus package quickly, Japan's negative spiral could trigger a global slowdown on the scale of the Great Depression of the 1930s, Ohga said in a speech to the Japan Society of Northern California.
With the world's second largest economy, Japan's impact on the global economy is growing stronger and the country's leaders must deal with the economy in a speedy manner or Japan will be left behind, Ohga said.
In improving its economy, speed and timing will be of utmost importance, he said.
The Japanese economy is in a negative spiral, with declines in corporate earnings and consumer spending. Unless both are stimulated, no amount of fiscal reform will save the economy, he said.
Questioning the effectiveness of one economic stimulus proposal that would distribute certificates worth $170 to some citizens, Ohga urged the government to use its resources more effectively and concentrate on realistic solutions such as tax cuts.
Specifically, Ohga proposed a cut of at least 15 percent in personal income taxes, a 5 percent reduction in corporate tax rates and continued deregulation efforts.
Pointing to the recession's negative effect on the consumer psyche, he said Japan must stimulate the economy by first benefiting the people.
Ohga strongly recommended that the government take a second look at its public works projects. Public works projects are being used as a political tool and include many wasteful rural projects, causing an imbalance between rural areas and cities, Ohga said.
Pointing to the heavily congested roads and cramped living situations of Japan's cities, Ohga proposed that the government focus on ways to improve quality of living for its citizens through infrastructure and housing investments.
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