On last Saturday, the Japanese government finally publicized its intention to reduce the number of new national civil servants by 56% compared to 2009. The total number of the new hire is now estimated around 3,700. The estimated cut of government spending is ¥10 billion (about $120 million). The Cabinet will make the final decision on Tuesday, April 3rd.
There has been quite a winding road. A new administrative reform body was formed within the Cabinet Office on January 31st, 2012. The purpose of the body is often seen as the current administration’s effort to show their commitment to reform the bureaucratic structure as it attempts to raise the consumption tax.
Since 2009, the Democratic Party of Japan (DPJ) has reduced the number of national civil servants by 37% for the fiscal year of 2011 and by 26% for 2012. In the meeting of the newly formed body on March 6th, Deputy Prime Minister Katsuya Okada announced his intention to radically reduced the number for 2013 without offering a detail. He later revealed his intention to reduce the number by 70%. This bold suggestion of course caused serious backlashes from a number of senior officials and Ministries. They finally settled for the 56% reduction.
The paradox of this picture is its focus on the new hire. While reducing the number of the new hire, the government intends to raise the retirement age for the national civil servants to 65 from 60. Setting the generational inequality aside, the greater problem is that the current approach only hides the real issue. The truth of the matter is that the number of the Japanese national civil servants per capita is one of the smallest among OECD countries. In other words, the reduction of the number of civil servants would not impact the fiscal and debt reduction at all. The real issue is how the government spends money, not how many civil servants it is comprised of.
I have personally met a number of young, talented, and motivated Japanese bureaucrats. Their contribution is inevitable if the Japanese government intends to fix its structural and fiscal issues. The current administration is indeed making a fatal mistake by cutting the number of the new hire.
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