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Press Conference by Prime Minister Junichiro Koizumi

January 4, 2006

PRIME MINISTER JUNICHIRO KOIZUMI: A Happy New Year to you all. This is the fifth New Year since my inauguration as Prime Minister. While we have faced various difficulties to date, I believe that this year many people are feeling that the Japanese economy has finally started to move back onto the recovery track. I believe it is my responsibility to make certain that the economy stays on a steady road to recovery.

Numerous discussions have taken place at the Diet sessions ever since I became Prime Minister over what is necessary for economic vitalization and the kind of measures essential for realizing economic recovery. In the beginning I received many criticisms such as, "it is misguided to pursue the policy of 'Without reform there will be no growth' at a time when Japan is experiencing an economic downturn," and "By advancing reform and disposing too many non-performing loans, the number of bankruptcies and those unemployed would actually rise, making Japan fall even deeper into the deflation spiral, instead of realizing the goal of economic recovery." The discussions were heavily focused on the policies of "without reform there will be no growth" aspired by the Koizumi Cabinet or "without growth there will be no reform." Heated debates were frequently conducted between views that "Economic recovery should be realized first before advancing reforms such as the disposal of non-performing loans," and "No, it is the non-performing loans that are dragging down the economy. Therefore, recovery may not be realized unless we advance the disposal of non-performing loans while we endure a certain amount of pain." When I reflect back on the past four years, it has certainly proven not to be the case of "without growth there will be no reform." The advancement of reforms indeed brings about growth. I believe that the developments in the past four years have demonstrated that the policy of "without reform there will be no growth" was the winner of this debate.

In fact, the disposal of non-performing loans, which was the biggest economic issue for Japan when I took office, is now back to normal achieving the set target. Companies are enjoying improved performance and showing confidence in their own improvement measures. I believe that regions are showing signs of recovery. I intend to continue pressing forward with the reforms and make certain that Japan will stay on a steady economic recovery track.

The number of bankruptcies is decreasing despite advancement in the disposal of non-performing loans. Likewise, the number of those unemployed has fallen while the number of those employed is increasing. The effective ratio of job offers to applicants is also increasing. When looking down the road, I believe the business world is starting its preparations for a new development to a level where I even wonder whether Japan will experience a labor shortage in the future. Considering how the individuals, companies and regions strengthen their positions through their creativity, ingenuity and enhance their skills, while advancing the structural reform track as much as possible, I believe that people are developing confidence to take on measures in a positive manner and a situation where people believe that, "if you do it, it will happen" is emerging. I am keenly aware that for individuals, companies or regions, a creation of an environment in which they themselves can put forth and utilize their creativity, ingenuity or motivation is the most important in politics.

A number of incidents occurred at the end of last year that still leave us all concerned. The Government intends to steadily deal with issues including the frequent occurrence of crimes, asbestos, and the falsification of the structural designs concerning the level of earthquake resistance of residential and other buildings. In particular, various regions have suffered damages caused by heavy snowfalls over the course of the end of last year to the New Year's holiday. I will see to it that the Government steadily prepares for disasters on a daily basis as part of disaster prevention measures, and thus, takes appropriate responses.

At the time of declining birthrate, we must now think about how to create an environment in which parents can enjoy bringing up their children. Children are treasures of the society and the nation. I believe we are now at a time where it is becoming increasingly vital for the society as a whole to create an environment in which children are brought up in a healthy and sound environment.

This year is the Year of the Dog in Chinese astrology. Dogs give birth to a lot of puppies. I heard that they also have an easy labor. Not that I am inspired by the example of dogs, but drawing on the wisdom of all of the people I intend to vigorously push forward the efforts to develop an environment where many people will feel that "raising children is rewarding" and "having children enriches one's life."

In conclusion, I here ask for the understanding and cooperation of the people of Japan as I will devote all my efforts to perform my responsibility as the Prime Minister of Japan for the remainder of my term this year.

[Q & A]

QUESTION 1: The presidential election of the Liberal Democratic Party (LDP) is coming up this year. There are calls from within the LDP to select a person with widespread popularity for the party to secure a victory in next year's House of Councillors election. Meanwhile, I imagine there are also calls to carefully select the President, taking into consideration party faction balance as well as generational balance. Please tell us your thoughts on these two views.

PRIME MINISTER KOIZUMI: Your question dives right to the topic of the presidential election. I think this is a matter in which political circles have the most interest this year. I believe it is extremely vital that the top leader gains the support of the people. At the same time, we have a parliamentary cabinet system, and therefore, any bill cannot be enacted without majority support from Diet members in the House of Representatives and House of Councillors. The President must gain the trust and cooperation of Diet members, and in particular, the ruling parties to enact a large number of bills. The cooperation and trust of Diet members are essential. I think it comes down to how this balance can be achieved. Time and again there have been calls to select a leader bearing in mind the balance of the Diet members, more than whether the leader has widespread popularity or support. However, I think we are now in an era where both are important. It is not the case that we can have one without the other. By giving thorough consideration to these issues, I believe LDP Diet members, party members and the people will all steer their interests towards the LDP presidential election. As for how and what sort of candidates will run in September, it is a little too early to comment at this stage.

This year, some one asked me an interesting question. The question was, "Since last year the term 'Post-Koizumi' has been all over the papers. Mr. Koizumi, did you change your name?" This shows how often the term "Post-Koizumi" is seen in print, and I understand that this is a matter of greatest interest to you all. As the current Prime Minister, I, Junichiro Koizumi, intend to do everything I can in carrying out the responsibilities of a Prime Minister. I am sure a wide range of opinions will be heard as the presidential election draws near. However, it is still too early to comment on how we will proceed with the election. When we get to that point, I would like to make a sound decision.

QUESTION 2: The mutual visits with the leaders of both China and the Republic of Korea (ROK) are at a standstill. During your remaining months in office does the Koizumi administration have any intention to endeavor to improve the relations with both countries? If you have any specific thoughts on what you can do as Prime Minister, would you please share them with us?

PRIME MINISTER KOIZUMI: Since taking office, I have stood behind the policy of handling diplomatic issues under the basic policy of Japan-US alliance and international coordination with a view to achieving development and prosperity of Japan in peace, as the basis of Japanese diplomacy and economy. There is no change in that policy. When President George W. Bush visited Japan last November, during my meeting with him in Kyoto, I said, "The stronger the Japan-US alliance is, the better the cooperative relations with other countries will be" and that "the view that a slight deterioration in Japan-US alliance and Japan-US relations, could be offset by improving relations with other countries should not taken." Based on my remarks above some in the media have indeed misunderstood or distorted what I said and wrote very biased reports as if I had said something like, as long as Japan has good relations with the US, we could not care less about the relations with other countries. That is not what I said. It is my intention to enhance Japan's cooperative relations with other countries. I am saying that Japan-US relations form the basis of our cooperative relations and we must strive to further strengthen the relations with the US. Compared to our relations with other countries, Japan-US relations have a particularly deep meaning. This is because without peace no measure or policy will make progress. On the peace and security fronts, Japan has concluded a security treaty with the US. It may not be noticeable in our daily lives but the treaty is most vital for Japan to peacefully advance domestic policies without being frightened by the threat or aggression posed by other countries. The US is the only nation in the world which says that an attack or aggression against Japan is an aggression or attack against their own country. There is no other nation that perceives an attack or aggression against Japan as an attack against itself. If you think about this and judge for yourself, I think you will understand how important Japan-US relations are. With Japan-US relations as the basis, I will advance our cooperative relations with China, the ROK, and other countries in Asia and the rest of the world.

I believe your question is on the summit exchanges with China and the ROK which are at an impasse due to the Yasukuni Shrine issue. However, my view is that the issue of my visits to Yasukuni Shrine should not be treated as a diplomatic issue. I still find it difficult to understand why some people of Japan criticize that it is "strange" or "wrong" for a prime minister of a country to visit Yasukuni Shrine as a politician and as a Japanese national, when my intention is to convey my condolences and offer my appreciation and respect to the war dead with the view that we should never engage in a war again. It is even more difficult to understand why foreign governments claim that "visits to Yasukuni Shrine are inexcusable," touching on a matter of the heart of a politician. Moreover, I find it inapprehensible that critics and intellectuals, who usually despise political involvement to the freedom of mind and a matter of one's heart, criticize my visits to Yasukuni Shrine. The approach foreign governments have taken to try to intervene in a matter of the heart and make the Yasukuni Shrine issue into a diplomatic issue also goes beyond my understanding. It is guaranteed under the Constitution that no one may infringe upon the freedom of mind and a matter of one's heart. Therefore, I still do not see the logic in not engaging in diplomatic negotiations or holding summit meetings just because our opinions differ on one issue.

I am an advocate of the friendship between Japan and China and between Japan and the ROK, promoting our friendly relations with both countries. In fact, since I assumed the position of Prime Minister, there are now more economic and people-to-people exchanges with China and the ROK than ever before. Our mutually interdependent relationship is ever deepening. I strongly wish to further develop this relationship, and have never closed the doors for negotiation with the Chinese side or the ROK side. I keep them open at all times, and believe it is important to advance talks on various issues in both a frank and friendly manner, while making efforts to overcome any problems that may arise due to difference or conflict of opinions on any single issue. I intend to continue to stand firm by this approach.

QUESTION 3: I think your answer may have been slightly out of step with the question. I was asking about whether you had any concrete measures in mind for improving Japan's relations with China and the ROK. If you would like to follow up your previous answer with any comments about this subject, please tell us. Another thing I would like to ask you is, as a condition of the next administration, do you think that a person who shares your attitude to diplomatic matters would make a suitable choice as your successor as Prime Minister? You have said that you will also vote. When you cast your vote, will you consider how the candidates evaluate your diplomatic attitude, including with respect to the Yasukuni Shrine issue in particular? Please give us your view concerning these two points.

PRIME MINISTER KOIZUMI: I believe I have already answered the foregoing part of the question on measures to improve the relations with China and the ROK. The fact that they do not come to the negotiating table because of my visits to Yasukuni Shrine is not a diplomatic issue. It should not be the case that because of this one issue, the Chinese or ROK sides close the channels of meetings and negotiations. Whether there are one, two or several issues, there are bound to be differences of opinion between one nation and another. They should not close their doors to negotiations on other matters because of a single issue. I think it would be better for nations to refrain from taking the attitude that a single issue overrides everything else. From this viewpoint, Japan is keeping its doors open by saying that we are prepared to talk with other nations, regardless of whether we have one or two differences of opinion. Beyond that it is up to the other party to decide. I have steadfastly maintained my willingness to hold dialogue, and I will continue to do so.

With regard to the diplomatic issues in the context of the upcoming LDP presidential election, I think that a person who can continue the current policy of the Japan-US alliance and international coordination into the future, meaning someone who understands very well the importance of maintaining the Japan-US alliance and international coordination, would be suitable as the next President of the LDP and the next Prime Minister of Japan. I will make my decision as to which candidate to vote for when we get closer to September when the candidates are decided. At this stage I think it would be better not to say more on this matter.

QUESTION 4: I would like to ask about how the ruling coalition should be. As for the relationship between the LDP and New Komeito, although the two parties cooperated closely in last year's election for the House of Representatives, since then arguments between the two have been conspicuous on individual policy subjects. Examples include the issues of the proposed memorial facility, Japan's relations with China and the ROK, the raising of the Defense Agency to Ministry status, the Fundamental Law of Education, and so on. Is it your intention to continue with a certain kind of "issue-by-issue basis" line within the ruling parties during the coming year? And on a related subject, if a part of the Democratic Party of Japan (DPJ) wishes to cooperate with the ruling parties, will you treat them in the same way, that is, on an "issue-by-issue basis"?

PRIME MINISTER KOIZUMI: With regard to the relationship within the ruling coalition between the LDP and New Komeito, judging from the experience to date, I think that our mutual trust has deepened. There has been no change in my stance that I would like to promote a variety of policies based on the stable coalition between the LDP and New Komeito.

As for the relationship between the LDP and the DPJ, naturally as political parties there are some points on which our opinions differ and others on which we are in agreement. In this sense the relationship is the same as the one that we have with New Komeito, with whom we form a coalition. Should we completely agree on every issue because we formed a coalition? Or should this coalition be dissolved if there is a difference or conflict of opinions over a single issue? That is not the point. By thinking in overall terms, we should talk about what is needed at any given time and about what kind of cooperation is required. When we have a difference of opinion, we should not let this develop into a confrontational relationship. We should talk to each other by thinking broadly, setting our differences of opinion and conflicts to one side, and talking things over at length. That is the point. Even in the past, there have been differences of opinion on a number of issues between the LDP and New Komeito. However, taking the overall view that a cooperative relationship is important, we formed a coalition that has lasted up until now. We cooperate with each other in the Diet and also in elections. I would like to treat this relationship with care. On that basis, with regard to our relationship with the DPJ, it has quite a similar stance to the LDP on security and constitutional amendment issues as well as on promoting reforms and aiming at a simple and efficient government. From this, I think that there are some fields in which the LDP and DPJ can cooperate, and if the DPJ were to cooperate with the LDP on such occasions, I would be grateful. Regardless of whether we are speaking about a political party or about individual Diet members, if they are willing to cooperate with us, then I would be very happy to cooperate with such forces.