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Monday, July 4, 2005

JAPANESE PERSPECTIVES

Ministries should seek corporate input when revamping statistics


There have been complaints that the economic statistics compiled by the government no longer reflect the developments of the times or the changing structure of the Japanese economy.

Many interested parties, including the Keidanren, have pointed out that the statistics are hard to read and use, and that the way they are posted on government Web sites is neither practical nor helpful.

But it looks like the government is finally ready to review its ways.

There are two key elements to the review.

The first is to scrap and rebuild the statistics in line with the changing structure of the economy.

Today, the agriculture, forestry and fisheries industries account for just over 1 percent of Japan's gross domestic product.

But roughly 29 percent of the government money spent on compiling economic statistics -- and about 78 percent of manpower devoted to statistical research -- goes to the Agriculture, Forestry and Fisheries Ministry.

On the other hand, there are very few official statistics being compiled on the services sector -- which is playing an increasing role in the economy and now accounts for about 65 percent of GDP. Because of this, it is often difficult to get a comprehensive picture of the service industries in Japan.

To correct the situation, the Council on Economic and Fiscal Policy, whose basic policy outline for 2005 was approved by the Cabinet on June 21, called for creating a position to oversee statistical reform and for the reallocation of manpower to improve services-related statistics.

It is the first time the government has made statistics a major issue since the late Prime Minister Keizo Obuchi ordered a review in 2000 of statistics related to consumer spending.

The second element is the use of up-to-date information technology to more efficiently gather relevant economic data and to improve the ways the results are released.

Today, most government ministries and agencies post their statistics on Web sites, but the people who access that information do not necessarily find it useful.

A Keidanren survey of member companies last year found that many of those firms saw room for improving the way the statistics are released.

Some complained that the data are hard to read because each of the ministries uses a different format. Others noted that the data posted on Web sites are insufficient.

After we disclosed the results of the survey, several ministries approached Keidanren and asked us how government statistics can be made more useful. Some of the ministries have opened dialogues with the parties who use their statistics. But while such moves are welcome, there are also points of concern.

For example, the Ministry of Economy, Trade and Industry and the Bank of Japan received positive appraisals of their statistics and are trying to make them even better. But reform efforts appear to be lacking at the ministries urged to improve.

Attention must also be paid to how the ministries are trying to heed their readers.

Many of those involved in the dialogues with the ministries are heavy users of statistics, such as think tank economists. However, the statistics compiled by the government are an important public property and should not be considered as serving the interests of economists alone.

Companies in general rely on government statistics to judge the market environment and devise business plans. Therefore, the ministries will need to listen to the opinions of a broader range of parties, including such companies, if they truly intend to give government statistics more relevance.

Yoshio Nakamura is an acting director general of the Japan Business Federation (Nippon Keidanren).


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