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Speeches and Statements by the Prime Minister

Speech by Prime Minister Shinzo Abe at the CEO Council Dinner Program Hosted by the Wall Street Journal

Tuesday, May 16, 2017

[Provisional Translation]

Good evening ladies and gentlemen and thank you for inviting me to this event. I am Shinzo Abe. I am delighted to see so many people from the United States and various countries in Asia. I very much hope that you will enjoy your stay in Japan.

More than four years have passed since we retook the reins of government. Prior to that, under the administration of the Democratic Party of Japan, this country was enveloped by a sense of resignation and pessimism. The economy was in a deflationary spiral. Japan was unable to make its presence felt in the international arena.

Growth is no longer possible as the population is shrinking. Japan is already in its twilight years. These were the laments we heard and the wall of hopelessness that we faced. Back then, the stock market index was at the 8,000 yen level, less than half of its current level. I stood up to the challenge of breaking down this wall. My goal was to "take Japan back."

So what results have we achieved? Over the past four years, through our economic policies nominal GDP has grown 9.5 percent, increasing by 47 trillion yen to reach an all-time high. Employment, which had shrunk by 290,000 jobs under the previous administration, has increased by 1.85 million jobs over the past four years, despite the decreasing population. What is more, 82 percent of these new jobs are filled by women. Unemployment stands at 2.8 percent, meaning that we have achieved almost full employment. In the past two years the number of regular employees has also increased by 790,000. Just so you know, prior to my administration the number of regular employees had fallen by 550,000.

The number of inbound visitors to Japan has also surged. Prior to my administration, Japan received 8 million foreign visitors annually, but by last year this figure had increased three-fold to stand at 24 million visitors a year. Immediately after the start of this administration we boldly introduced implement waivers or relaxation of visa conditions and also improved the duty-free system. Momentum among the Japanese people to provide omotenashi, or hospitality, is also growing. By the time of the 2020 Tokyo Olympic and Paralympic Games, we aim to welcome 40 million visitors a year to Japan.

In terms of tax revenues too, national tax revenues have increased by 15 trillion yen since the change of government and local tax revenues have seen growth in all 47 prefectures of Japan.

Speaking of all prefectures, the ratio of jobs to applicants is above 1.0, or in other words, there are more jobs available than there are people seeking employment. Now, this is the case in all prefectures. It is the first time in the history of Japan.

If this situation continues it will also lead to increases in wage levels and bring us closer to our goal of exiting deflation.

In the Diet, deliberations on the national budget for fiscal 2017 proceeded according to schedule and the draft budget was approved without any amendment. With the approval of the fiscal 2017 budget, since April we have had lower employment insurance premiums, thereby further increasing disposable income for workers. A new scholarship system was also introduced and initiatives were implemented to achieve zero children on waiting lists in order to enhance opportunities for university students and children, respectively, among other measures.

Furthermore, we have submitted eight draft bills on agricultural policy reforms. If all of these bills are passed they will result in agricultural policy reforms on an unprecedented scale. A final proposal for work-style reform has also been compiled and draft bills will be presented to the Diet.
 
In order to enable the younger generation to balance work and child rearing, we will also be using the new FY budget to accelerate the increase in the number of childcare facilities and the improvement of the employment conditions of childcare workers. We are also working to develop nursing care facilities and secure sufficient nursing care workers, so that people who wish to work do not have to give up their jobs to care for elderly parents.
 
If we take a look at the situation for companies, in the four years since the inauguration of my administration corporate earnings have grown by 22 trillion yen. These earnings should not be retained inside companies as it would put the brakes on further growth.

I will continue to make every effort to ensure that the fruits of growth are circulated  nationwide, through calling for increased wages to boost the purchasing power of employees, as well as for appropriate business practices between large companies and small- and medium-sized enterprises (SMEs).

Factoring in the redistribution of income through the payment of taxes and social insurance premiums and the receipt of benefits, the Gini coefficient is also turning downward.

Moreover, we are creating a conducive environment for profits to be reinvested in the future. This will lead to an increase in consumption and improved productivity.

Looking ahead, there is absolutely no change to my policy of putting the economy first and exiting deflation, by continuing to shoot the three arrows of monetary policy, fiscal policy, and structural reform.

Economic growth for Japan and stability in people's livelihoods cannot be realized without working closely and collaborating with the global economy. Ensuring peace and security is the foundation in this regard. To that end my consistent fundamentals for running the administration are to strengthen the Japan-U.S. Alliance and further broaden the scope of diplomacy with countries in the Asia-Pacific region.

As a nation lacking natural resources and surrounded by oceans, Japan has long engaged proactively in activities overseas.

Japanese companies of all sizes, from large companies to SMEs, have expanded their businesses while assisting in nation-building in the countries of Asia and contributing to local employment creation in Europe and North America. Just two weeks ago Japan announced the contribution of US$40 million to a new fund of the Asian Development Bank (ADB). This fund is an initiative to advance the introduction of advanced technologies in the areas of environment and transportation infrastructure. In order to develop quality infrastructure, the US$200 billion in funding provision that has already been announced will be at full-throttle by the end of this year.
 
I am the Prime Minister of Japan and therefore, for me, it's "Japan first." But please listen carefully. This Japan that I speak of is one that advances side by side with global prosperity and peace.

Since last year a series of general elections and national referendums in many countries have made new leaders emerge. In the G7 alone, this has been the case in the United Kingdom, the United States, Italy, and France. Last week there was also a change of leadership in our neighbor the Republic of Korea. It has been a year in which the eyes and ears of the world have been focused on the choices made by the people of these countries.

Among the issues that have attracted attention in those processes are skepticism about free trade and concerns about the structure of society.

General elections are also scheduled in the United Kingdom and Germany this year. In the autumn a top leadership personnel placement is expected in China and in the spring of next year there will be a presidential election in Russia.

I have consistently emphasized the importance of free trade. This is because when individual creativity and innovation are fully harnessed, and the results of such creativity and innovation go beyond national borders, we can expect the development of prosperous societies promoted around the world.

In addition, especially at the present time, when the entire world faces various difficult challenges, including global warming and the imminent aging of society, exchanges of various knowledge and experiences among people that transcend national borders hold the key to solving the issues we face.

National governments must reduce the barriers that negatively impact the activities of people, and strengthen mechanisms that will fairly and justly protect the outcomes of innovation.

In order to steadily advance free trade, appropriate transition periods will be given in advancing reforms in the industries and sectors that will be affected. Furthermore, we are also engaged in efforts to promote the activities of Japanese SMEs overseas and create markets for Japanese food products overseas. If many countries harmonize their rules, customs clearance and shipment costs will be expected to be reduced.

I would like to note that we must not consider trade in zero-sum terms, whereby if one side gains, the other side loses.

Since the start of this century many emerging and developing countries have acceded to the World Trade Organization (WTO). However, in some countries there is still insufficient enforcement of WTO rules, including forced demands for the technology transfer to receiving states, a lack of discipline in state-owned enterprises, and non-compliance even when rules are in place.

Rules to protect intellectual property rights also need to be further strengthened, precisely because the world today is in vital need of innovation.

The Trans-Pacific Partnership (TPP) Agreement was formulated to respond to such concerns.

Therefore, I remain firmly convinced that the TPP is essential for the Asia-Pacific region, which is the growth center for the global economy. This weekend a ministerial meeting of 11 signatory nations to the TPP will be convened.

I look forward to advances in discussions in that meeting.

Last month Vice President Pence and Deputy Prime Minister Aso held the first Japan-U.S. Economic Dialogue, in which they confirmed that our two countries will discuss common strategies relating to rules and issues on trade and investment in the dialogue.

Not only do we seek to accelerate and reinforce the flows of trade and investment between Japan and the United States, we also seek to disseminate high-level and fair rules throughout the Asia-Pacific region, with Japan and the United States at the forefront of such efforts.

Finally, I would like to say a few words about the future. You may be concerned about Japan's future growth, given the declining population due to a falling birthrate and aging population.

Although previously it was taboo to set targets for improving the birthrate, my administration is aiming to achieve the desired birthrate of 1.8 by the early 2020s and we are currently engaged in various measures, including enhancement of childcare services.

I am also focusing on investment in human resources. By promoting the introduction of robotics and artificial intelligence (AI), we aim to fully equip people to harness their productivity and achieve even greater results.

We are also accepting foreign workers in Japan, particularly those with specialist skills. Last year the number of foreign workers in Japan exceeded one million for the first time.

I am aiming to achieve a society with the dynamic engagement of all citizens, a society in which every person can fully harness their skills. This is a concept for inclusive society à la japonaise, where each and every person can shine. The active role of women is the key to growing the Japanese economy.

The vast experience and high levels of education of women still remain dormant. We seek to not only increase the total number of women in employment, but also promote women to positions of greater responsibility and leadership in the workplace. This year, with the cooperation of Harvard Business School, we have also initiated a program for the training of women with the potential to become managers.

I believe that innovation is advanced through the interaction of diverse values and the experiences of individuals, and that this will lead to the creation of products and services with new value, and promote the development of new social systems.

Meanwhile, we cannot allow ourselves to become less cautious. Despite strong warnings from the international community, two days ago North Korea conducted yet another ballistic missile launch.

The threat posed by North Korea has become even greater. Terrorism is also spreading around the world and ISIL's maneuverings continue. We must maintain an unprecedented sense of vigilance and strengthen international cooperation in the face of such issues.

Without peace and stability there can be no growth and prosperity. Not only does North Korea pose a threat, unilateral attempts to change the status quo by force in the East China Sea and South China Sea are continuing.

The rule of law has been infringed upon and freedom of navigation is also under threat. It is against this backdrop that Japan is strengthening the bonds of its alliance with the United States more than ever before and is working closely at every level from the summit level through to defense cooperation on the ground.

We are deepening our maritime security cooperation with the Association of Southeast Asian Nations, including assistance to build capacity in the area of maritime security.

The weekend after next the G7 Summit is scheduled to be held under the Presidency of Prime Minister Gentiloni of Italy, and attended for the first time by President Trump, President Macron, and Prime Minister May.

At the summit we will strengthen the solidarity among leaders who share universal values and set out a path that the world should take.

I intend to contribute to the summit meeting, both as the chair of last year's G7 Ise-Shima Summit, and also based on my experience of Summit meetings to date.

Thank you for your kind attention.

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