Kyodo News: Deregulate disaster-hit zones, says Keidanren.

The regions devastated by the March 11 earthquake and tsunami should be deregulated so they can be rebuilt into safer places, the head of the Japan Business Federation (Nippon Keidanren) recommended.

Hiromasa Yonekura

Reconstruction in such a fully deregulated environment "can attract creative ideas and knowhow from the private sector" while helping local economies gain competitiveness, Hiromasa Yonekura said recently.

Yonekura proposed that the government designate the disaster areas as "special zones for reconstruction" and exempt residents there from income and property taxes for three years.

To help revitalize businesses and industries, it is important that "as much rebuilding of infrastructure as possible is carried out by local contractors," he said.

It makes sense to establish new medical facilities for the elderly in the devastated areas where the population is aging, Yonekura said, proposing use of sophisticated telecommunication technologies to provide medical services from remote locations.

Speedy reconstruction is critical, especially for companies in industries in which they account for a large share of the global market, such as auto parts manufacturers, said Yonekura, citing the bitter experience following the Great Hanshin Earthquake, which struck Kobe and surrounding areas in 1995.

Kobe lost its role as a key Asian harbor to Busan, South Korea, as it struggled to reopen its port facilities in the aftermath of the temblor that resulted in the loss of more than 6,000 lives.

Despite a call by the Hyogo Prefectural Government in 1995 for a special zone, it did not materialize due to the central government's reluctance.

But the government of Prime Minister Naoto Kan is eyeing designating the quake-hit areas as special zones. These will have more deregulation and tax breaks than regular economic zones aimed at revitalizing local economies, government sources said recently.

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