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Speeches and Statements by the Prime Minister

Speech on the Second Round of Policies under the Growth Strategy by Prime Minister Shinzo Abe at Japan Akademeia

Friday, May 17, 2013

[Provisional Translation]


1. Introduction

Good evening, everyone. I am Shinzo Abe.

Five months have passed since the inauguration of my administration.

This week, the budget for fiscal 2013 was enacted without incident. While the formulation of the budget that has been underway since the end of 2012 crossed into the new fiscal year, I believe that we succeeded in advancing politics that generates results by another step while minimizing the impact on the public.

The word "Abenomics" itself was at first spoken as if it were synonymous with prohibited techniques. Monetary easing of a nature altogether different from what has come before also met with considerable criticism.

However, once we transitioned into execution, we were able to gain understanding internationally as well, and I feel that things are now beginning to move in practice, including positive annualized GDP growth of 3.5 percent for the January-March quarter of 2013.

If we look back on the prolonged deflationary recession, we find that this is still only at the level of being a "sign" of a turnaround, but we will continue to do our utmost to place this movement onto a track for robust growth.

During Golden Week I initiated full-scale economic diplomacy, traveling to Russia and the Middle East.

I was accompanied by an economic mission of more than 100 businesspersons in all, representing not only major corporations but also small- and medium-sized enterprises. During this trip we sold Japan's strengths through a united front of the government working together with the private sector.

I also had the opportunity to interact with many of the people attending here today.

While we had a very heavy schedule with an itinerary that spanned 28,000 km in a week, both Russia and the Middle East are growth centers that are expanding rapidly. We set into motion projects in which Japanese companies are engaged across a broad range of fields, including systems for medical treatment, food culture, energy, and infrastructure. We received ample response to our efforts.

Actively taking on challenges, openness to other countries, and innovation will be key. In addition, I believe that "action" can rightfully be called the pivotal factor for all three of these, because no matter how magnificent a growth strategy may be, it means nothing if it exists only on paper.

Without action, there can be no growth. I would like to continue in the future to head out to various locations around the world to promote Japan as the top seller, to the extent that my schedule permits.

I will be visiting Myanmar in the near future.

Myanmar has been a friend of Japan for long time and is pro-Japan. I still remember that last year when I visited, children from around the city gathered along the route I traveled, welcoming me waving Hinomaru flags.

Japan will not spare any effort to use our strengths to provide all possible forms of cooperation to promote the development of Myanmar, which has overcome a great number of challenges. I intend for us to move forward through the public and private sectors working together.


2. A growth strategy that encourages private sector investment

This strategy of openness to other countries and proactive economic diplomacy is not my exclusive domain. Half a century ago, Japan had a prime minister who dramatically shifted the nation's course towards an open economy while selling Japan overseas. That was Prime Minister Hayato Ikeda.

One very well-known story from Prime Minister Ikeda's 1962 visit to Europe has him being described as "that transistor salesman" by then-President Charles de Gaulle of France.

Taking the opportunity of these transistor radios coming onto the scene, "Japan's electric industry" advanced rapidly to become "the world's electronics industry."

Japan manufacturing excellence, represented by electronics and automobiles, swept the world, leading Japan into its period of high economic growth. In 1968, Japan surpassed what was then West Germany to rise to the position of second-largest economy in the world, after the United States.

The driving force behind this was the tremendous appetite for investment within the manufacturing industry.

Since the 1960's, capital investment within the manufacturing industry underwent a transition at a level greatly exceeding the rate of depreciation, with factories being constructed one after another.

Productivity increased dramatically, resulting in incomes rising. This was truly the era of "income doubling."

However, when the economic bubble burst, corporate activity withered away against a backdrop of prolonged deflation while investment stayed within the scope of depreciation. This became common sense for managing a business.

Japan also suffered a series of defeats in international competition. The pride that came with being "made in Japan" entirely faded.

My job is to liberate Japan from the spell of prolonged deflation and a loss of self-confidence.


(Expanding from Japan to overseas markets)

One key to realizing this will be developing overseas the markets for the superior systems and technologies that Japan has produced.

Nowadays this is not limited to conventional infrastructure, extending instead also to medical treatment, food culture, space-related endeavors, disaster mitigation, and eco cities.

Overseas there is demand for the various systems that we Japanese have built up and of which we can be proud. This is a tremendous business opportunity.

We will establish a new "Strategy for Exporting Infrastructure Systems" with a view to expanding our current sales of 10 trillion yen to 30 trillion yen - a tripling of the current number - by 2020. As part of this Strategy, high-ranking members of this administration will work to expand the appeal of Japanese goods and services. We will also engage in strategic economic cooperation and take on international standards.


(Incorporating the strengths of the world into Japan)

Another key will be incorporating the world's technologies, human resources, and capital into Japan's growth.

We must arouse bold investment within Japan.

The main players in this will be corporations. A great many corporate managers have joined us here today, and I would like the businesspeople here to take up this challenge by all means. The government will of course also be working hard in this area.

The aim is for this investment to raise the productivity of workers, leading to increases in their take-home pay. People who exhibit motivation in their work must be rewarded.

Not long ago I made a request of business circles to increase remuneration for their workers. I feel that a large number of companies responded positively to this request during this year's spring labor offensive. Increased remuneration leads to expanded consumption and rising business activity, and therefore brings benefits for companies as well.

The government will also execute this Growth Strategy in a solid and thoroughgoing manner, including by fostering an environment in which it is easy to make investments. I would like corporate managers to make use of new hiring and remuneration to ensure that the fruits of these efforts reach the workers.

The main crux of Abenomics is really, "household prosperity through winning in the global market."


3. An "advanced nation for field testing" to stimulate innovation

Sony Corporation, which led the world through its development of the transistor radio, later came to be outdone by large corporations with superior capital.

It is said that in response to comments deriding Sony, calling it a "guinea pig" [testing out ideas that were later used by others], founder Masaru Ibuka inspired his employees saying, "We have to consider doing routine work in routine ways to be out of step with the times."

"If we skillfully make use of this 'guinea pig' mentality" of "developing continually novel ideas into products," "then any number of new jobs will emerge for us."

The role of the Abe Cabinet is to create great opportunities for companies having this "guinea pig mentality" of continually seeking new innovations.


(Regulatory and institutional reform leading to commercial viability)

Those of you here today are all from the world's preeminent companies.

However, we cannot know what the future holds. This is the same in the world of politics. I myself experienced this firsthand. When you stop moving forward, it's all over. Your competitors worldwide are moving at breakneck speed. They will overshadow you. It will devour you.

There is no alternative but to continue time and time again to put forth innovations that are a step ahead of your competitors.

I will support companies that resolutely take on the challenge of innovating new ideas. What will open the door to this is regulatory reform.

For example, fuel cell-powered vehicles are revolutionary vehicles that are environmentally friendly, emitting no carbon dioxide.

However, their hydrogen tanks are subject to both METI (Ministry of Economy, Trade and Industry) and MLIT (Ministry of Land, Infrastructure, Transport and Tourism) regulations. The hydrogen filling stations used for refueling are bound up in a mountain of regulations, being subject to not only METI regulations but also Ministry of Internal Affairs and Communications regulations governing firefighting and MLIT regulations dealing with town planning.

Even if you tackle each of these in turn as they appear one after the other, commercial viability always stays out of reach.

We will soon conduct a review to tackle this situation all at once.

We will also pursue what is known as "Big Data."

Every day, the world generates an enormous amount of data - as much as 2.5 quintillion bytes. This includes mobility information gathered through GPS technology, information on Internet transactions, and so on. It is a treasure trove that can generate new high-value-added services and businesses.

However, the ongoing dichotomy of "privacy" versus "data utilization" has led to this treasure trove being abandoned.

We will set about reworking this area as well.

We will make it possible for this data to be used proactively, while upholding privacy by making the data anonymous.

Using the method of a test for the most internationally reasonable regulation, the national government will first of all create guidelines, using examples from overseas as references. As the people attending today are well aware, sure enough, fuel cell-powered vehicles and "Big Data" have been subjects of discussion for several years already.

We have now had enough discussion. We will at any rate move into execution. The Abe Cabinet will continue to push forward without reservation regarding necessary regulatory reform in order to enable fresh innovation to bud.


(Testing cutting edge technologies - "zero regulations")

The era in which automobiles drive themselves automatically will soon be upon us. Grand experiments much like our dreams are making headway right now in the United States. The company Google submitted a special application, and driving tests have been approved.

Anything that can be done in the United States should also be able to be done in Japan. We will move forward on automatic driving field tests on public roads in Japan as well.

There are cases in which companies want to perform testing on first-in-the-world products but regulations hold them back, making it impossible. And yet, if such tests are not performed, then they will lose out to overseas competitors. I would like newly to establish systems that permit regulatory exceptions for such companies, provided that alternative measures are established.

Rather than wait for changes in regulations that apply to everyone, some companies want to be permitted to do something regardless, as they themselves will serve as guinea pigs. I would like to create great opportunities for companies that are brimming with that kind of "guinea pig mentality."

It is not a matter of Japanese companies alone. I also wish to bring to Japan from all around the world "future growth companies" that are hungry for innovation.

The Central Japan Railway Company, better known in Japan as JR Tokai, uses the catchphrase, "I know! Let's go to Kyoto!" I will aim to make Japan a world-class "advanced nation for field testing," about which companies say, "I know! Let's go to Japan!" when they want to try out something new.


4. Reforms to make Japanese universities winners in global competition

Unless we create a Japan in which human resources, capital, and all other elements come together, we will fail to be winners in global competition.

At present, how many young people in the world choose Japanese universities in the hopes of being active internationally?

There is a list known as the "World University Rankings 100." Regrettably, only two Japanese universities made it into that list.

We need to become "global universities," not "Japanese universities."

Japan's universities should aim much more at being global in nature. Under the university reforms that I envision, we will shed such narrow-minded thinking as, "the purpose of Japan's universities is to bring up Japanese."


(Collaboration between industry and academia in the truest sense)

The universities ranked first and second are the California Institute of Technology, or "Caltech," and Stanford University. I am sure that for some of you, something clicked in your mind when you heard that. That's right, they are both near Silicon Valley.

The universities themselves are deeply committed to business. When their graduates launch a venture, there are even mechanisms for investing in them with the schools' own funds.

People all around the world highly regard not only their graduates' research capabilities but also their high level of entrepreneurial spirit that makes them unafraid of risk.

The expression "the ivory tower" is no longer applicable. Japanese universities also need to start first of all from a point where individuals start their own businesses. I am confident that from there, collaboration between industry and academia in the truest sense will emerge.

We will move forward with regulatory reform to enable reforms to university governance and the investment of the school's own funds into businesses.


(Towards "global universities")

Tomorrow I will pay a visit to Ritsumeikan Asia Pacific University in Oita Prefecture. Here, roughly half of both the faculty and the students are foreign nationals. They are not only from Southeast Asian nations. Some come from countries in the Middle East while others are from Botswana, Uzbekistan, and elsewhere. They have come together from all around the world.

They are able to come into contact with other cultures around the world through their college life. What's more, after they graduate, their network of personal contacts will extend throughout the globe.

As the saying goes, "whoever suggests it should start." At eight national universities, we will replace approximately 1,500 people with researchers of excellence from around the world within the next three years. By doing so, we will double the number of non-Japanese faculty.

The state of university administration must be brought in line with global standards. We will also work to advance administrative reforms, including through the introduction of an annual salary system and preparing an environment in which the families of faculty are able to go about their daily lives using English.

We will also conduct a review of the distribution of the management expenses grants allocated from the national government to make it more "global" in nature and provide backing for universities' reform efforts.

We will enhance in both qualitative and quantitative terms universities that are making efforts to carry out globalization measures such as the assertive hiring of non-Japanese faculty, the acquisition of outstanding foreign exchange students, tie-ups with overseas universities, enhancing the degree programs through which students are able to graduate by taking only classes conducted in English, setting [minimum] TOEFL [scores] as graduation requirements, and so on. We will provide assistance that focuses on the institutional aspects as well as the budgetary aspects.

Over the next ten years, we will aim to have ten of our universities ranked within the World University Ranking top 100 schools. At the same times, we will create senior high schools capable of fostering global leaders.


(Providing all young people with the opportunity to study abroad)

I also want the young people of Japan to see the wide world with their own eyes and travel around it on their own feet.

I would like to realize study abroad opportunities for all of Japan's young people who have the desire and the capability. In order to do this, the public and private sectors will act in cooperation to create a new mechanism for reducing the economic burden on students who go abroad to study.

It is no exaggeration to say that in the world of business, national borders are now disappearing. In an era of this kind of international megacompetition, I wish to cultivate human resources that can be winners in global competition.


5. Expanding private sector investment

(A general mobilization of policies and measures within a period to promote investment in a concentrated manner)

Frankly speaking, with long-standing deflation, an excessively appreciated yen, belated economic partnerships, and high energy costs, basically Japan has not been the kind of country worth investing in these past few years.

In fiscal 2012 as well, private sector investment stayed at 63 trillion yen, an amount about ten percent lower than the level before the Lehman Shock.

Therefore, I began my efforts first of all by dramatically changing the atmosphere through bold monetary policy and flexible fiscal policy. Expectations that we will pull out of deflation are now mounting considerably.

I am also greatly accelerating our efforts related to the TPP and other economic partnerships. We will push forward with reforms to the electric power system while encouraging innovations in the electricity sector. Moreover, shale gas and other kinds of diversification within our fuel procurement will make it possible to lower our energy costs.

It seems that the atmosphere surrounding domestic investment has begun to change little by little.

One company related to pharmaceuticals had been in a quandary upon receiving invitations from Singapore and China to build a factory there. However, it recently decided to utilize the subsidies for capital investment made available through the supplementary budget in order to invest in Japan.

In the same way, a mold manufacturer that had received an enthusiastic invitation from the Republic of Korea also chose the path of investing in Japan.

It is finally time to launch the third prong, or "arrow" as I call it, of economic revival to stimulate an investment mindset within companies.

However, this mindset that withered away over almost twenty years is not something we can break free of overnight.

For that reason, we will set the next three years as a "period to promote investment in a concentrated manner" and mobilize an entire spectrum of policies and measures that will promote domestic investment, including the tax system, the budget, financial assistance, regulatory reform, and institutional preparation.

Factors that hinder domestic investment will be cleared away, whatever they may be.

By doing so, I wish to restore capital investment at a scale of 70 trillion yen annually, the level of private sector investment before the Lehman Shock.


(Providing a boost for bold investment)

What we should generate is investment that can produce winners in international megacompetition.

Japan's semiconductor industry is often mentioned as a representative example of an industry that has suffered defeat.

The fact is that in 2002, Japan's market share for semiconductors, our area of specialty since the 1980's, was overtaken by Samsung. The reason this happened was investment. A look at the three years beginning in 1999 shows that Samsung invested more than three times what Japanese companies did, resulting in Samsung overtaking Japan in one stroke.

However, it is actually Toshiba that is number one at present in production volume of the type of semiconductors used in memory cards and other such products. It sells semiconductors the world over from the city of Yokkaichi in Mie Prefecture.

We must not be swayed by the self-denigrating way of thinking peculiar to pundits, that "Japan is a 'has-been'."

Why has Toshiba been able to succeed? Here too, the answer lies in bold investment. Toshiba invested more than two trillion yen in its Yokkaichi plant over the decade of the 2000's.

State-of-the-art facilities and economies of scale enabled them to overtake Samsung.

In any field, companies boldly making investments win while companies going only halfway lose out. It is as simple as that. It is not that we lost because we are Japan; we lost because of atrophy and a loss of self-confidence.

We are now in an era in which only those who are first worldwide can survive the harsh competition. What we need is investment at a bold scale that surpasses the competition by a wide margin, totaling even hundreds of billions of yen in some cases.

This is true not only for the manufacturing industry. In good health and longevity, energy, and other new growth sectors as well, it is imperative that we resolutely push forward with investments into the most advanced facilities and equipment, including leading-edge medical equipment.

However, in actuality, it is extremely difficult for a company to ascertain with certainty that it can ensure an adequate utilization rate or get ample return on its investment.

It is necessary to have a mechanism that does away with this state of affairs and provides a boost as companies take on challenges.

To achieve this, we will for example introduce a new mechanism that makes use of leasing methods such as making leasing costs variable in proportion to the utilization rate of the equipment.

The national government will use these kinds of financial methods and other means to stimulate bold capital investment.


(Support for launching venture businesses)

Investing in venture businesses is also extremely important. While the scale of each of these businesses is small, they constitute a source of economic dynamism.

What is hindering Japan's desire to embark upon venture businesses?

It is the practice of "personal guarantees."

According to a survey on personal guarantees, among entrepreneurs operating small- and medium-sized enterprises and micro enterprises who have taken out loans, around 90 percent of their loans have personal guarantees attached. For business operators of small-scale firms, it is virtually certain that the loan will require a personal guarantee.

Of these, 70 percent were required to guarantee an amount equivalent to or greater than the value of their personal assets.

This means that should you fail once, you lose everything.

The result is that it is impossible to try your hand a second time. I think it is fair to say that it is a loss for the country as a whole when managerial experience and know-how are forfeited through a single failure.

In order to foster a Japan in which venture businesses emerge one after another and are brimming with investment, we must break away from the practice of placing undue emphasis on "personal guarantees."

While we must also prevent moral hazard, I plan to create a new framework for financing for entrepreneurs running SMEs and micro enterprises under which it is possible for them to obtain loans even without personal guarantees, provided the management is earnest, with the business administered properly and personal assets separated from corporate assets.

I hope that entrepreneurs are not discouraged by one or two failures and instead make use of that experience to launch new ventures proactively, carving out new business fields.


(Replacing the old with the new)

In order to improve productivity dramatically, we need to discard old facilities and equipment and go ahead with daringly replacing the old with the new.

The company Komatsu, whose Councilor Mr. Masahiro Sakane is here with us today, is now moving ahead with rebuilding its domestic factories constructed over 40 years ago.

It is quite difficult to pursue energy efficiency in old facilities. But I understand that replacing these with new facilities will make it possible to reduce electricity consumption by half while boosting productivity by as much as 30 percent.

I am greatly encouraged by the words of Mr. Sakane, who said that by going ahead with "replacing the old with the new" in this way, "high-quality manufacturing in Japan can still be successful."

Even within companies, there is a need to replace the old with the new by moving away from mature business fields into new lines of business. In industrial fields that structurally are either trapped by an excess supply structure or engaged in a war of attrition domestically, it will be necessary to push forward with reorganization to increase profitability.

In addition to providing support that will catalyze the replacement of old facilities and equipment with new, I intend to prepare policies and measures that will encourage bold management reform and business restructuring, with a view to improving earning capacity.

I will undertake a general mobilization of policies that rest on the three pillars of expanding private sector investment, opening up new markets, and promoting business restructuring.


6. Agriculture, forestry and fisheries on the offensive

The Japanese Food Fair that we held in Moscow was a tremendous success.

Even so, right up until the food fair finished, there was a long line of Russian attendees wanting to try the Ginza Kyubey sushi. It's clear that authenticity comes across beautifully regardless of national borders.

The rice used in "real" sushi has to be Japanese rice. And nothing goes better with sushi than Japanese sake. The entire lineup falls naturally into place. "Japanese food" is in fact a "system" that Japan has created.


(A strategy for doubling exports)

The market for food worldwide is expected to double in roughly a decade. This is an enormous opportunity.

The export value of Japanese farm and food products is a mere 450 billion yen or so within a total global market for food that is now 340 trillion yen in size. It certainly shouldn't be like this.

Considering how superbly Japanese beef and fruit are evaluated overseas, surely there must be ample room for expansion.

As for our marine products, our yellowtail and mackerel are very highly regarded. There is still plenty of room for cultivating demand in Southeast Asia, the EU, and elsewhere.

Moreover, there can be no doubt that exports of our rice and our processed-rice products such as sake to relatively wealthy areas around the world will expand.

By setting forth strategies specific to individual countries and types of products, I feel certain that it is quite possible for us to double our exports and attain a scale of 1 trillion yen.


(Increases in added value)

Next would be homemade taste. On Sunday after I planted rice in Sendai, I was given an omusubi rice ball. It was especially large and truly delicious. I understand that the person who made it used homegrown rice and has just started a shop specializing in omusubi rice balls this month.

Rather than sell agricultural products simply as is, more value can be added by investing even a small touch to them, whether it be as some side dish or what have you.

Linking directly to consumers not only eliminates the distribution margin but also enables the seller to get a better understanding of the consumers' needs, making it possible to develop products that will sell for more.

It is also possible to make even greater profits by linking up with various other industrial fields, such as the tourism industry or the medical and welfare industries.

Japan's agriculture has for the most part not been engaged in such kinds of endeavors. But that is exactly why unlimited potential stretches out before us.

I wish to expand "senary," or sixth-order industry, from its current market size of one trillion yen to ten trillion yen within a decade.

To achieve this, for producers working to establish new business models, we will provide management assistance through financing from a public fund. This will be a "fund to cultivate profitable agricultural endeavors," so to speak.


(Supply-side structural reforms)

We will not be able to move forward unless we also tackle supply-side structural reforms.

The situation surrounding agricultural farmers and agricultural villages there on the ground is becoming increasingly severe.

Over the past 20 years, agricultural production has decreased from 14 trillion yen to ten trillion yen. Against this backdrop, agricultural income produced was halved from six trillion to three trillion yen.

The average age of core persons mainly engaged in farming is currently 66. That is an increase of as much as 10 years over the past two decades. This means that young people have stopped pursuing new careers in agriculture.

Abandoned farmland has doubled over the last 20 years. Such farmland is now the same size as all of Shiga Prefecture.

While the rapid aging of the farming population appears at first glance to be a severe challenge, I believe that if we are able to hand off the baton to motivated young people, this will become an opportunity for us to vault ahead in structural reform.

On Sunday in Sendai I had the opportunity to talk with young people who have taken the plunge into agriculture. I found them to be truly promising. In fact, I really got quite a lift from that encounter.

Among them was a young woman who was fired with enthusiasm for her new work in farming. She spoke very powerfully, saying that she wanted to collect abandoned farming fields that were scattered here and there, turning them instead into a foundation for development. By this, she meant that since that area was a disaster-stricken area in the truest sense, she wanted to have the foundations of progress grounded in agriculture, moving towards reconstruction from the disaster area.

Was there ever a time when agriculture garnered as much attention as an industry as it does now?

I believe that agriculture is now attracting more attention in Japan than ever before.

This time, I will most certainly achieve structural reform in agriculture.

Most of all, we need to consolidate farmland. Without the consolidation of farmland there will be no improvement in productivity. In light of this, at the prefectural level we will establish intermediary institutions for acquiring farmland. These may be called "farmland consolidation banks."

This public framework will borrow agricultural land from various owners of farmland. We will create a scheme under which the institution undertakes necessary fundamental upgrades and then lends out this land in consolidated form to responsible entities, including private companies, that are highly motivated towards agriculture.

Furthermore, with regard to abandoned farmland as well, we will resolutely simplify the necessary legal procedures in order to encourage the use of farmland by responsible entities that are highly motivated.


(A goal of doubling the income of farmers and farming communities)

By mobilizing policies that place these as the main pillars, we should certainly be able to double the income of farmers and farming communities.

Today I would like to formally announce the "goal of doubling the income of farmers and farming communities."

The "income doubling plan" of years past that was drawn up under Prime Minister Ikeda was also a ten-year plan. I will formulate a strategy to double the income of farmers and of farming communities as a whole over the next ten years within the context of advancing a transition to senary industry and shift it into execution.

To ensure steady progress in this undertaking, at the Prime Minister's Office I will newly establish a "Headquarters on Creating Dynamism through Agriculture, Forestry and Fishery Industries and Local Communities," which I myself will head. This Headquarters will begin its mission immediately, starting next week.

"Everything depends on the effort we put in. I think that our income will increase in agriculture too if we give it our all."

One young person I met on Sunday said this with a twinkle in his eyes.

There is no doubt that if agriculture can become vibrant, then the local area will also become dynamic. I will not fail to create "robust agriculture" in which young people wish to work, full of hope.


(Preserving our beautiful hometowns)

The magnificence of agriculture is not merely a matter of it being a growth industry.

Rice terraces and other types of agriculture in hilly and mountainous areas serve various functions, including for example the mitigation of flood damage downstream by retaining water in rice paddies. In this way agriculture has great value that cannot be determined simply by the economics of what is produced.

Consequently, I consider it necessary to institute a new "direct payment system" that also evaluates this kind of multifunctionality.

We have breathtakingly beautiful rural landscapes. Japan also has a tradition of waking up early in the morning, working hard to cultivate the fields, sharing water and praying for a huge harvest for all.

This type of Japanese "national character" focused on agriculture is something of which we can be proud internationally. We should be resolute in preserving it.

If manufacturing is the industry that served as the foundation for Japan's high rate of economic growth, then I consider agriculture to be "the foundation of the nation" - that is, the foundation that gave us Japan's traditions and culture in which we can take pride internationally.


7. A "Cool Japan" Strategy

Recently I had the opportunity to enjoy a performance of Kanjincho, one of Japan's traditional kabuki plays regarded as the "18 best."

I recall that through the guidance of Chairman Ushio,  Kanjiincho was performed in Paris six years ago by the late Ichikawa Danjuro and it was tremendously well-received by the people of Paris.

People around the world still do not know about Japan. How shall we draw them to Japan and export Japanese culture? The Abe Cabinet will be going on the offensive in this area as well.


(A tourism-oriented country)

It is said that a large number of non-Japanese who visited Japan from the end of the Edo era into the early days of the Meiji era were uniformly moved at the beauty of Japan's rural landscapes and at the enriched national character.

Japan's history as a "tourism-oriented county" goes back a great many years indeed.

I am planning to stay at a hot spring inn in Beppu tomorrow night and I understand that a lot of non-Japanese guests come there as well.

Approximately eight million non-Japanese tourists visit Japan annually. In comparison, the Republic of Korea has roughly doubled the number of its foreign visitors during the past five years, to 11 million annually. The ROK rocketed past us.

While the difference in the exchange rate is also substantial, one of the more structural issues is the difference in our visa systems.

Travelers from Thailand or Malaysia need visas to visit Japan, but for the ROK no visa is necessary for stays of 90 days or less.

We will move forward in relaxing visa issuance requirements in a form fitting for a tourism-oriented country, aiming first to have the number of visitors to Japan reach 10 million, and then beyond that, as many as 20 million.

Until now tourists from China and the ROK have had a major presence. This year is the 40th Year of ASEAN-Japan Friendship and Cooperation. In light of that, we will review the visa system focusing on these kinds of countries in order to increase the number of tourists to Japan from ASEAN countries.


(Expanding broadcast content overseas)

The number of tourists from Taiwan visiting Hokkaido has increased fivefold over the past fifteen years - five times as many as before. What triggered this? The trigger was a TV program introducing Hokkaido that was broadcast in Taiwan.

I believe you know Kyary Pamyu Pamyu, although her name is a bit difficult to pronounce. The springboard for both this popular singer - I'll avoid trying to pronounce her name again - this singer's popularity and the doubling of Okayama's Momotaro Jeans overseas sales were a Japanese TV show broadcast in France.

What's more, Kyary Pamyu Pamyu's popularity had been sparked in France before she became famous in Japan.

In the ROK, using the springboard of exported content, "Korean Beauty" became a hot topic overseas as well, leading to the ROK eliminating its trade deficit in cosmetics and now becoming a cosmetics exporter.

Expanding broadcast content overseas carries a lot of weight just in itself. Japanese efforts in this area are completely inadequate. Our exports are less than half of the ROK's.

That figure is simply unbelievable, given the ability of Japan's culture industry. We will be expanding overseas extensively from now.

We will support the adaptation of broadcast content to local markets along with sales efforts there. In India, "Star of the Giants," the anime series about a pitcher in professional baseball, needs to be about cricket.

This year a new channel named "Hello JAPAN" that airs only Japanese shows began broadcasting in Singapore. It will also be important to secure overseas TV channels and broadcast slots. We will establish a "Cool Japan Promotional Organization," a public-private fund at a scale of 50 billion yen, and make contributions to it to provide support.

In order to broadcast overseas, it is necessary to make extremely complicated arrangements regarding rights for each of the performers as well as for the music and so on. This too is an issue that has been pointed out repeatedly but left unaddressed for a long time. My administration will absolutely get to work on this. We will prepare an agency that will serve as a "window" for administering in a unified way these complicated procedures for managing rights.

We will aim to achieve overseas sales of close to three times the current level by five years from now.

The ripple effect of this is expected to be 400 billion yen. I would like for our manufacturing industry and service industry also to expand overseas in an "all Japan" effort, with "Cool Japan" as the trigger.


8. Conclusion

Last month, I overviewed my first round of policies under the Growth Strategy, placing "active participation by women" at the core. Today, as my second round of policies, taking "winning in the global market" as the key phrase, I have talked about policies to escalate investment through regulatory reform and other efforts and agricultural policy on the offensive.

However, our efforts will not end there. We will move forward forcefully, continuously maintaining our will to reform.

As I end my remarks today I would like to close with the "allegory of the cave," as told by Plato, the father of "Akademeia."

In the depths of a cave, people who have been bound facing a wall of a cave ever since their childhood are convinced that the shadows projected onto the wall of the cave are themselves items of substance.

It is only when they are permitted to turn around that they first realize that what they had been looking at was nothing more than shadows. What's more, it is only upon being led outside the cave that they see the sun for the first time and become aware that the world in which they lived was nothing more than a fraction of all that exists.

This is an allegory Plato gave.

The policies I spoke of today, being of a nature altogether different than what has come before, were perhaps quite surprising to people who have until now only seen the wall of a cave.

However, when we consider them after seeing the outside world, I think we will recognize that they are entirely natural.

To bring about a Japan of robust growth in a world of glorious sunlight, we must rush out of the cave without hesitation.

Without action, there can be no growth.

Through your cooperation I very much hope to move this Growth Strategy forward together with you, the members of Japan Akademeia, who have already escaped Plato's cave.

We are at last coming up on the election for the Tokyo Metropolitan Assembly next month and then the House of Councillors election in July.

While we can say that the atmosphere in society has been changing little by little, our fight to "take Japan back" is still only halfway complete.

"We want you to restore a strong economy." That is what the Japanese people have been saying.

Diplomacy, security, and social security all depend on a strong economy. I will continue to be engaged in conducting policy, placing the emphasis on economic policy.

We must not forget reconstruction from the Great East Japan Earthquake.

I visited Miyagi Prefecture again on Sunday. Since taking office as Prime Minister, I have been going to the disaster areas every month.

I intend to accelerate reconstruction to bring it about as early as possible. Visiting the affected areas with that thought in mind and listening to the voices of the local people, I have steadily generated results one by one.

I will continue to visit the disaster area monthly and I will ensure that we take steady steps forward on the path to reconstruction.

We must provide stability to politics if we are to advance these types of policies firmly and generate results.

"Politics that can't decide" compromises the future of Japan. I believe that much of the Japanese public is exasperated with the divided Diet. The upcoming House of Councillors election will also be a fight to restore Japanese politics.

I hope to overcome this hot summer in a vigorous manner, working together with you.

Thank you very much for listening today.

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