Japan urged to tackle 'sky-high' government debt

The Organisation for Economic Cooperation and Development (OECD) on Thursday urged Japan to focus on its sky-high government debt if the world's third largest economy wants to ensure its future prosperity.

The latest OECD Economic Survey of Japan encourages reforms in order to increase labour force participation and create more "regular" jobs, especially for women, boost productivity and put public finances on a sustainable track, Xinhua news agency reported.

OECD Secretary-General Angel Gurria said in reference to the latest survey that Japan's demographic and fiscal challenges will require greater efforts and further reforms.

Such reforms are necessary "to notably raise productivity, which now lags behind the leading OECD economies", he said

"In the labour market, employment opportunities for women must be expanded. Achieving stronger and sustainable productivity gains should lead to more inclusive growth that distributes the dividends of increased prosperity fairly across society," said Gurria.

It is important that Japan remove "obstacles to female employment, notably by increasing the availability of affordable childcare" and "changing its culture of long working hours through a binding ceiling on overtime work which would improve work-life balance for all workers," the survey said.

It added that "breaking down dualism in the labour market -- the current segmentation between 'regular' and 'non-regular' workers, with differing levels of benefits, pay and employment protection -- is key to promoting inclusive growth."

It went on to say that an increase in welfare spending linked to the aging population would put "upward pressure" on government debt, which hit 219 per cent of GDP in 2016 and is the highest ever recorded in the OECD.

The report urged Japan to implement a "detailed and credible fiscal plan to put the debt ratio on a downward path".

--IANS

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