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To: kemble s. matter who wrote (113048)	3/28/1999 9:01:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 176387

<Economy-Japan> Finally back on track??? Hi Kemble: Japanese economy seems to be coming back to life after stagnating during the past couple of three years (negative GDP growth),at least according to this report.It couldn't hurt Dell if this is so. =================== Japan Said to be back on Economic Track By Martin Fackler Associated Press Writer Friday, March 26, 1999; 10:45 a.m. EST TOKYO (AP) -- A top Japanese economic advisor said Friday that reforms are showing the first signs of success and will be enough to return Japan to growth this year. Hirotaro Higuchi, chairman of the newly created Economic Strategy Council, said the current combination of massive government spending and deregulation have already begun to turn the economy around. ''The results are finally appearing,'' said Higuchi, who is also honorary chairman of Asahi Breweries Ltd. He pointed to a 34 percent drop in corporate bankruptcies in January from a year before and rising sales of new condominiums. He said the council's projections show gross domestic product barely growing this year but expanding at more than 2 percent next year. ''We want to avoid if all possible three years of negative growth,'' he told reporters at a luncheon. Japan's economy is mired in its longest recession since the end of World War II, having shrunk the last two years. The Economic Strategy Council was created when Prime Minister Keizo Obuchi took office last summer with promises to restore economic growth. Obuchi moved with a speed that was uncharacteristic of Japan's usually cautious policy makers, rushing through a series of spending measures worth an unprecedented $737 billion. Of that, $508 billion was earmarked to bail out the debt-plagued banking system and $229 billion was in public works and other stimulus. Higuchi said the infusion of money into the economy was sufficient to restore growth in the short term. But he added that more far-reaching reforms to the legal system and deregulation were still needed to end Japan's economic malaise. ''The cold is about to go away, but the basic system that led to the cold has not been addressed,'' he said. The biggest problem, according to Higuchi: a powerful central bureaucracy that protected inefficient industries and stifled innovation. Among the steps his council recommended last month to the prime minister are: --Increasing the number of lawyers to strengthen oversight of the bureaucracy by the courts; --Cutting the number of bureaucrats by up to a quarter over the next decade; --Creating a new over-the-counter stock market to bankroll venture capitalists.