Health and Retirement

Mar 2

Realizing a social security system for all generations

The novel coronavirus pandemic has illuminated several challenges facing the sustainability of Japan’s social security system. With the aging of the population continuing to accelerate, our human and material resources for healthcare and retirement have been insufficient. In addition, during this crisis, significant financial stimulus needs to be mobilized on the back of Japan’s stagnating economy. But as most of this money derives from the issuance of government bonds, it is impossible for the government to spend as much as it desires. Much of Japan’s social security system was established in a post-war period where priorities were predominantly infectious diseases and acute illnesses. Over time, the system has evolved to address the treatment of chronic illnesses and Japan’s aging demographics, but discussions on securing the necessary resources for this fundamental evolution have been insufficient.

*Click image to download the white paper.*

On a positive note, as we continue to evolve as a data-based society, we have begun to grasp the impact of Covid-19 in real time with the active cooperation of civil society. While this is an encouraging sign that bodes well for the future of Japanese society, the state of Japan’s infrastructure has been inadequate when compared to other countries. For example, in evaluating the Government’s uniform provision of ¥100,000 per person, clearly there is an unrealized opportunity to take a needs-based approach predicated on the integration and application of data.

Amid this pandemic, there have been two fundamental ways of thinking about social distancing policies. One is for society to confer the government with vast authority to monitor the social and economic activities of each individual. The other is for the government

to proactively disclose and share information, so that civil society can understand the situation and how it may evolve in an accurate and thorough manner, before proceeding with the active cooperation of civil society. Although some temporary measures may be unavoidable in emergency situations, Japan must pursue the latter option in the medium to long term. Only by doing so can we remain the society that our predecessors have created, where our people can freely and actively deter- mine our own future.

This is not merely a matter of theoretical reflection but a very real choice that is facing us. The novel coronavirus is a major crisis for mankind, but, even more importantly, the real danger lies in making the wrong choice for our future. In order to ensure that we make the right choice, we must take this opportunity to reform outmoded systems and ways of thinking that have been overly tailored for a society in the past and are no longer relevant for our future.

The white paper Post Covid-19: Recommendations to Realize a Social Security System for All Generations, jointly publish in December 2020 by the Institute for New Era Strategy and the American Chamber of Commerce in Japan, presents a set of recommendations to realize a social security system for all generations by focusing on three specific areas of extreme importance:

Active utilization of data technology
Shifting financial resources towards healthcare and retirement needs
Raising the health and financial literacy of society

With Japan’s fiscal strains exacerbated by the novel coronavirus, now is the time for Japan to tackle these challenges. Strong political will and leadership are required to share a vision for the future with the public, face reality, and make the right choices for a better future.