Japan PM unveils third plank of Abenomics strategy

TOKYO - Prime Minister Shinzo Abe has pledged to boost Japan's per capita gross national income (GNI) by over 3 per cent a year and to cut red tape in special economic zones to attract foreign investment and talent.

He announced them on Wednesday as part of a third set of measures that will make up the "third arrow" of his so-called "Abenomics" formula to pull Japan out of its prolonged deflation  and revitalise the economy.

Two earlier sets were announced, the first in April concerning medical care, employment and child-care, and the second in May focusing on boosting Japan's farm sector and expanding private investment.

All three sets will be incorporated into Mr Abe's economic growth strategy that is due to be unveiled later this month, ahead of the G8 Summit to be held in the United Kingdom.

On Wednesday, Mr Abe pledged to boost Japan's per capita GNI by over 1.5 million yen (S$18,780) in 10 years.

To increase the international competitiveness of Tokyo, Osaka and other major Japanese cities, special economic zones will be set up in these cities to attract investments, businesses and talent from overseas.

Reforms in these special zones are likely to include lower corporate taxes and a new system to allow foreign doctors practice medicine.

The measures announced include such deregulatory steps as allowing online sales of over 99 per cent of some 11,400 over-the-counter drugs available in Japan, with the government promising to take measures against any possible health risks as a result of the change.

The first two "arrows" of the Abenomics formula are hyper-easy monetary policy by the Bank of Japan and government spending on huge public works projects.