Japan's new program to add steam to its domestic economy marks another attempt to blunt foreign criticism of its trade surpluses, while at the same time meeting home-grown concerns over the country's quality of life.
Officials here concede that because it contains no significant central government spending, its effects will be limited. It could increase imports by about $2 billion in the coming year, according to optimistic government estimates, hardly denting an overall surplus that hit $44 billion last year.
Officials here predict that the plunge of the dollar last month on world foreign exchange markets, if it holds, will have far greater effect on righting the trade statistics.
Still, the stimulation plan made public today is being welcomed by Americans here as a positive one. U.S. Ambassador Mike Mansfield tonight called the step "very important."
Herbert F. Hayde, president of the American Chamber of Commerce in Japan, welcomed the measures as a "good first start." But he said he wanted to wait to see "how the Japanese people feel about it."
Approved this morning at a joint meeting of the cabinet and leaders of the ruling Liberal Democratic Party, it seems to signal a shift, however cautious, away from the exports-first approach that has dominated post-war economic thinking in Japan.
Japan has built itself into the world's third-largest economy, after the United States and the Soviet Union, largely by consuming little and reinvesting heavily in new industry. Despite its affluence, it runs far behind the United States and Europe in basic social amenities, such as housing, sewage systems and park land.
For years now, the ruling circles in Japan have debated whether the time had come to ease off and enjoy some of the fruits. The catch-phrase of advocates became "increase domestic demand."
Things were brought to a head this year when the U.S. government and other angry trading partners seized on the idea as a partial solution to their own trade problems with Japan. Japan's proclivity to save, while admirable, had much to do with its troubles with its more spendthrift allies. If the Japanese would consume more at home, it was reasoned, there would be more demand for imports and less resources for exports. Balanced trade would be fostered. Earlier this year, a Japanese commission endorsed the idea, leading to today's program.
It is a typical piece of Japanese compromise. Priming the pump through government spending was out, because a centerpiece of Prime Minister Yasuhiro Nakasone's term of office has been to try to control the huge budget deficits that began in the mid-1970s.
The program consists primarily of incentives meant to get the private sector moving on housing and other big-ticket construction and local governments moving on sewers and other pieces of socially beneficial equipment, financed by local bonds.
It also contains the intriguing pledge that Japanese workers will be given within five years 10 more days off from work annually.
That is a major initiative for a country where the six-day week is still common for millions of people and success is judged largely by time spent in the office or factory. It gets to the heart of whether ordinary people will embrace the idea of investing less for the future.
Nakasone hopes that, together with an "action program" Japan enacted in July to reduce tariffs and other market barriers, the plan will stave off protectionist legislation in the United States, Japan's biggest foreign market.
"In the American government and Congress, there is still criticism against Japan that its trade is not only unbalanced but unfair," he was quoted as telling his cabinet today.
The major points of the new plan:
* Increased lending and slightly lowered interest rates by the state-owned Housing Loan Corp., a major source of housing finance. This is supposed to result in about $2.3 billion worth of new housing projects.
* About $5 billion in additional investment in electric power and gas facilities over the next three years, including the undergrounding of unsightly overhead wires, one of the great blights of urban Japan.
* About $3.7 billion in new investment by local governments in infrastructure projects such as sewage systems, financed by bond issues.
* Release of selected plots of government-owned land for commercial development. This would bring new development worth about $1.9 billion, it was estimated.
* Relaxation on rules governing consumer credit for purchases of such items as television sets and cars.
In the longer run, the government said, it will work on four major areas to stimulate demand. Many will require legislation, with laws to go before the Diet, or parliament, later this year.
* A general improvement in the legal and economic environment, including tax reform, for private capital to flow into public works projects. Foreign Ministry officials said the aim was to start projects such as a huge tunnel proposed to span Tokyo Bay.
* Further deregulation of various industries with the aim of stimlulating activity there.
Creation of 10 new days off for employes.
* Further private development of government lands.
Japanese officials say that the plan should result in new investment of about $14.4 billion in the next year, which would translate into a $19 billion expansion of gross national product, or about 1.3 percent higher than otherwise expected. GNP is the sum of all goods and services produced in a country in a year.
The steps come as the dollar remains relatively weak against the yen, hovering at about 215 yen as opposed to the 260 level it reached earlier this year.