[Provisional Translation]

1. Introduction

2. The extraordinary session of the Diet

a. Consultations between the ruling and opposition parties to amend legislation
b. The NSC and the Special Intelligence Protection Act

3. Diplomacy and security

a. A National Security Strategy
b. Proactive Contribution to Peace
c. Diplomacy between national leaders

4. The Growth Strategy

a. TPP negotiations
b. "Without action, there can be no growth."
c. A major transformation in agricultural policy
d. Drawing on untapped potential

i. Women
ii. Small- and medium-sized enterprises
iii. Local regions

5. An economic virtuous cycle

a. Reaching everywhere throughout the nation
b. The time to invest is now

6. Closing remarks 

1. Introduction

I'm very pleased to be back here today after quite some time.  In May of this year I delivered a speech on my Growth Strategy here at Japan Akademeia.
I believe it is quite rare for a sitting Prime Minister to appear at any particular gathering with this degree of frequency.
The number of days that the prime minister attends the parliament each year is 11 in Germany and 12 in France, and 36 even in the U.K.  In contrast, in Japan it is 127 days, far and away more than other countries.
Hearing these concrete numbers brings a tremendously different impact.  Thanks to this investigation you conducted, discussions on Diet reform have now started in earnest, and my participation here today reflects, among other things, my appreciation of Japan Akademeia's efforts.
I heard that yesterday, Japan Akademeia announced additional proposals to free the prime minister from being on standby to attend the Diet, and to limit the prime minister's attendance at committee meetings.  I must apologize for mentioning here only the things that caught by attention, but I very much look forward to Diet reform gaining further momentum, using your proposals as an opportunity.

2. The extraordinary session of the Diet

(Consultations between the ruling and opposition parties to amend legislation)
The recent extraordinary session of the Diet saw the passage of a number of pieces of important legislation over the course of its 55-day session.  I found it to be a highly intensive Diet session, which we have seen only rarely in recent years.
We enacted legislation on a program for future social security reforms.  We also passed the Industrial Competitiveness Enhancement Act as well as various bills related to the Growth Strategy, including bills to liberalize the electricity market, promote regenerative medicine, create farmland consolidation banks, and establish National Strategic Special Zones.
Although the Special Intelligence Protection Act dominated attention, I believe that this session can indeed be properly called the "Diet to Execute the Growth Strategy."
We were criticized as imposing "tyranny by force of numbers," but in fact this assertion is entirely unfounded.  During this Diet session we held very active consultations between the ruling and the opposition parties to amend the bills.
The Industrial Competitiveness Enhancement Act, the Act on National Strategic Special Zones, and the Farmland Consolidation Banks Act are all very important laws that were enacted after agreements were reached with the opposition parties through various amendments.
There are now many within the opposition parties as well who have experienced being in the ruling party.  Opposition parties want to bring about to the extent possible the policies that they promised to the public during the election.  I find this to be a very sincere attitude towards the public.
In the U.K. the opposition is called "Her Majesty's Opposition."  In other words, under this thinking, opposition parties also bear some responsibility for national administration.
It is not opposition parties merely "for the sake of opposition."  Instead, the opposition aims to bring policies to fruition as "responsible opposition parties."  I would like to continue to hold constructive discussions with such opposition parties in the spirit of mutual tolerance, aiming at better outcomes.
My grandfather, Nobusuke Kishi, often said, "Were I ever to become prime minister again, I would certainly do it much better."  My own failings during my first time in office are etched deeply into my heart.
"Without the trust of the people, there can be no government."  I have reflected upon my previous time in office.  Based on that, I now realize that it is important to continue to make efforts to gain understanding and agreement from as much of the public as possible, in a spirit of humbleness.

(The NSC and the Special Intelligence Protection Act)
In fact, we were able to reach agreement through consultations to amend legislation that we held with the opposition parties even in the cases of the legislation to establish the National Security Council - what is called the "Japanese version of a National Security Council (NSC)" - and the Special Intelligence Protection Act.
There has been harsh public opinion regarding the Special Intelligence Protection Act.  I believe that I must accept it sincerely, in a spirit of humbleness, as that is the voice of the people unreservedly pointing out our shortcomings.
I also have reflected that I myself should have explained the bill much more carefully, taking more time.  I intend for the government to continue to explain this thoroughly again and again as we go forward, in order to dispel the concerns of the public.
Various countries around the world have explicit rules for designating, revoking, and protecting state secrets.  Japan would be unable to receive information from other countries unless it establishes rules for managing such kinds of secret information.
Through this law we have successfully set forth explicit rules concerning the management of classified information.  By also ensuring transparency in the operation of the law, I believe that we will be able to gain the public's understanding of the fact that there will be no infringement whatsoever of the people's "right to know" or of "freedom of speech."
I believe that at long last, the NSC - the control tower for Japan's diplomatic and security policies - and the Special Intelligence Protection Act, which lays the rules that serve as the foundation for those activities, have come together, operating in tandem to advance our security policies.

3. Diplomacy and security

(A National Security Strategy)
This week we formulated our National Security Strategy, a first for Japan.  We received tremendous assistance from Professor Shinichi Kitaoka, who served as the Chair of the Advisory Panel.
We face nuclear and missile issues brought about by North Korea.  China has unilaterally established an Air Defense Identification Zone.  Intrusions into our territorial waters surrounding the Senkaku Islands have occurred one after the other.  Japan can under no circumstances accept any attempts to change the status quo through coercion.
It is imperative that we reinforce our defense posture in order to ensure the security of the vast waters surrounding Japan as well as our skies, notably in our southwestern region.  This week we also conducted a full-scale review of our National Defense Program Guidelines.
Against this backdrop, Japan must, on the basis of international cooperation, play an even more proactive role than ever before in maintaining world peace and stability.
This National Security Strategy clearly establishes that Japan has adopted the stance of "Proactive Contributor to Peace" as the fundamental thinking running through the entire Strategy.

(Proactive Contribution to Peace)
It was U.S. President Woodrow Wilson, advocate for the creation of the United Nations, who said, "The world must be made safe for democracy."  This was the moment at which the United States, which had until then been interested only in the continents of the Americas, renounced the "Monroe Doctrine."
This longstanding Doctrine was renounced in order to uphold democratic values and maintain world peace.  It was also rooted in the conviction that it would lead to peace for the United States.
A century has passed since then.  The world has become a much smaller place by far, with mutual dependence intensifying.  Without world peace and stability, Japan cannot safeguard its own peace and stability.
I believe that executives such as yourselves, importing resources and conducting trade with business partners around the globe through free and safe sea lanes, are deeply cognizant of this in your day to day operations.
Not only Japan's ships but also ships from around the world are counting on the activities of Japan's Self-Defense Forces in the Gulf of Aden, through which roughly 20 per cent of the world's shipping containers pass.  Today at the Prime Minister's Office I met with Commander Miller of the Combined Maritime Forces, with which Japan works together to combat piracy, and he conveyed to me that he holds Japan's activities in very high regard.
In the Philippines, Japan's neighbor across the sea, a medical team from Japan and approximately 1,200 members of the Self-Defense Forces provided emergency assistance in the areas that suffered damage from the horrific typhoon.
The English language version of the Facebook page of the Prime Minister's Office usually receives a few dozen "Likes" a day, but when we introduced these activities, we received more than 60,000 "Likes" and comments in a single night, primarily comments of gratitude from people in the Philippines.
In Cambodia, activities undertaken by Japanese women have reduced the infant mortality rate by half. Japanese style health care is making enormous contributions towards improving people's standards of living.
Japan is contributing to world peace and stability through various endeavors such as these.  Japan must not be inward-focused if it is to maintain its own peace and stability.
At last week's ASEAN-Japan Commemorative Summit, I proposed that, based on our multi-layered partnership in terms of improving living standards and enhancing economic prosperity, we hold a forum for consultations between the defense ministers of Japan and the ASEAN member countries, and we decided that we would move forward on this proposal.
I believe that this summit was highly congruous with Japan embarking on its Proactive Contribution to Peace.
Japan will continue to reinforce its partnerships with countries with which we share the values of freedom, democracy, fundamental human rights, and the rule of law, with the Japan-U.S. alliance as the cornerstone.

(Diplomacy between national leaders)
This year, I had a very busy schedule in which I made a number of overseas trips.  I began the year with a visit to Southeast Asia in January and ultimately I went on 13 overseas missions, traveling to 25 countries in all.
I also received a large number of heads of state and government here in Japan, notably at the Tokyo International Conference on African Development, or "TICAD."  In total I held more than 150 summit meetings.  Having also been summoned to the Diet on 127 days, this calculation shows that almost the entire year was taken up through those alone.
I visited Turkey twice this year.
During my visit in the spring, Prime Minister Erdogan and I promised each other that whichever city, Istanbul or Tokyo, was selected to host the 2020 Olympic and Paralympic Games, we would offer our best wishes to the other.
In Buenos Aires, immediately after Tokyo was selected to be the host city, Prime Minister Erdogan graciously came to me to congratulate me.  Certainly, it must have been a great shock to hear that his home country's candidate city was not selected, and yet he honored the promise we had made.
In the autumn, fulfilling a promise I had made with Prime Minister Erdogan, I attended the opening ceremony of the tunnel under the Bosphorus Strait, which had been realized through Japan's technological capabilities.  During that same visit, Prime Minister Erdogan and I held a summit meeting, where we finalized the decision for Japan to export nuclear technology to Turkey.
In my summit meeting with Prime Minister Harper of Canada, we concluded a decision on the export of shale gas to Japan.
President Putin of Russia and I agreed to launch regular consultations by our foreign and defense ministers in what are called "2+2" meetings, as well as to establish a forum for consultations at the senior officials level towards the conclusion of a peace treaty.
I am convinced that it is best to meet with other leaders directly and forge relationships of trust, and then move forward on one issue at a time.  This holds true in politics, in diplomacy, or in business, in my view.
Whatever issue we might face, things get moving remarkably when leaders talk directly, face to face.  This was a year in which I once more felt very acutely the importance of diplomacy between national leaders.
Mr. Yasuchika Hasegawa of Takeda Pharmaceutical, who is here today, announced the other day that Takeda had selected its first foreign national as the candidate to succeed him as president.
I consider this to be a very bold decision at a company with some 230 years of history.  However, in an era in which businesses are developed globally and international competitiveness determines a company's success or failure, we could also say that it was a very natural decision.
Unfortunately, foreign nationals are unable to assume the prime ministership, so there is no way forward other than for me myself to do the legwork.
If Japan's leaders are busy with the demands arising within a one-kilometer radius of Nagatacho, Japan cannot succeed at the global level.  Again next year I will turn my attention overseas and proactively develop our top-level diplomacy by visiting other countries.

4. The Growth Strategy

(TPP negotiations)
The TPP negotiations, now in their final stages, will also ultimately be set into motion by decisions taken by the nations' leaders.
We will eliminate national borders for corporate activities.  In order to do this, we must come to conclusions regarding an entire spectrum of ambitious issues, including intellectual property rights, investment, government procurement, state-run enterprises, environmental regulations, and the application of rules to local governments.
We will make the best decision in our national interests, looking at the entire picture rather than at individual issues.  This is something that only the nation's highest leader is able to do.  I said this at the summit meeting held in Bali and the other countries agreed with me on that point.
Tough negotiations are still underway with the United States in the areas of agriculture and automobiles.  Under the principle of pressing forward assertively in areas where we should while also protecting what must be protected, we will not compromise in a casual manner under any circumstances.
Countries sharing the values of freedom and democracy coming together and making a single economic bloc in the Asia-Pacific region, a growth center, is a "hundred year plan" that will lead to a new "Asia-Pacific century."
Japan and the United States-allies and also major economic powers-are taking this broad perspective as we lead the negotiations.  I consider the key to success to be whether or not it is possible to continue to have that awareness right through to the conclusion of the negotiations.
So, it is not a matter of "can we, or can't we?" but rather "will we, or won't we?"  That is how I regard these talks.  I myself will also stand at the forefront and work to bring about the early conclusion of negotiations.

("Without action, there can be no growth.")
In the speech I made in May, I said we would aim to achieve "household prosperity through winning in the global market."  Seven months have passed since then.  The policies that I overviewed at that time have already transitioned into the stage of execution.
For example, I stated that we will aim to "make Japan a world-class 'advanced nation for field testing'."  Under the Industrial Competitiveness Enhancement Act, we have also newly established the System for Granting Special Provisions to Companies for Field Testing. In every field, we will newly relax regulations in order to expand the opportunities available to companies who are working to succeed in "frontier" endeavors.
I very much hope that you make use of this system and use it to spawn innovations.
Also, in roughly March next year, we will be designating the specific areas that will become National Strategic Special Zones.  For many years we have failed to ease regulations on floor area ratios or the number of hospital beds, or set up charter schools.  We will also reduce taxes on investments and cut real estate taxes.
If, in the course of regulatory reform, additional needs become evident, then we will continue to expeditiously revise the law going forward.  We will create in a tangible way within Japan the easiest environment in the world to do business, in the form of continually evolving Strategic Special Zones that will rival even New York and Singapore.
These plans are not merely "under execution."  Results have already started to materialize as well.
In the speech I delivered in May, I said that we would review the visa system for tourists from ASEAN countries, with a view to becoming a "tourism-oriented county." For example, Japan now grants visa exemptions to tourists from Thailand, beginning this past summer.  Since then, the number of tourists has increased by 90 per cent over last year.
I understand that Mr. Ohashi's ANA immediately decided to increase the number of Bangkok flights.  It shows that companies that grow are highly sensitive to changes in the times.
It also appears nearly certain that we will reach the target I mentioned at that time of welcoming 10 million visitors to Japan annually.  We are likely to surpass the 10 millionth visitor tomorrow.  This will be the largest number ever, since until now we have had roughly 8 million visitors annually.
"You can do it if you try."  Beginning next year, aiming at our next target of 20 million visitors, we will further accelerate our efforts to make Japan a tourism-oriented country by thoroughly eliminating the inconvenient regulations and the obstacles that face non-Japanese travelers.
"Without action, there can be no growth."
Although we did pass laws in the extraordinary Diet session to promote the liberalization of the electricity market, to promote regenerative medicine, and so on, I will in any case continue to put all my efforts into executing the Growth Strategy.

(A major transformation in agricultural policy)
In my speech in May, I also spoke about a Growth Strategy for agriculture, with the aim of doubling the income of farmers and of farming communities as a whole.
In order to advance structural reforms in agriculture, the most important thing will be consolidating farmland.  Farmland Consolidation Banks designed for just that purpose will finally be set into action through the recent passage of the necessary legislation.
Furthermore, the Cabinet decided to conduct a review of the system of production adjustment for rice that has been in place for more than 40 years.  By this, I mean we will do away with the policy of reducing rice acreage that is known as the "gentan" system.
It has long been said that the field of agriculture is a kind of symbol of the old-style LDP.  Many have believed that abolishing the gentan system is something that the LDP could not possibly do.
However, with the kind assistance of Mr. Kanemaru and Mr. Niinami, we succeeded in conducting a major transformation of agricultural policy.
And there is still more to come.
The other day, "washoku," or traditional Japanese cuisine, was added to the world's intangible cultural heritage list.  It has been delicious and safe Japanese agricultural products that have fostered Japanese cuisine.  Japan's agriculture should most certainly be able to spread its wings globally as a growth industry.
In order to have the potential hidden within Japan's agriculture come fully into bloom, we will continue to push forward with reforms, with your cooperation.

(Drawing on untapped potential)
In his work The Book of Five Rings, Miyamoto Musashi writes, "When you sacrifice your life, you must make fullest use of your weaponry."
One often hears the pessimistic view that Japan is no longer able to grow.  What I fear the most is Japanese people losing confidence in themselves.  There are certainly things that we can still achieve.
At the same time, we cannot wish for too much.  If we were to engage in simple price competition with emerging countries, we would have no chance of succeeding.
There is no path forward other than for Japan to grow in a way that is fitting for Japan.  At Akademeia, Mr. Okamura and others have been discussing what is called "Nippon-ryoku," or "the power of Japan."  This is the only way forward for us.
We will draw out Japan's latent potential to the fullest in areas such as agriculture, medicine, and energy.  This is the Growth Strategy of the Abe Cabinet.

(Women)
One major pillar is the dynamic engagement of women.  When we examine Japan in worldwide comparison, we find a marked M-shaped curve in labor force participation.  However, taking a different perspective on this, it is there we find the potential for growth.
At the New York Stock Exchange, I introduced the quote, "If 'Lehman Brothers' was 'Lehman Brothers and Sisters,' they might still be around," which met with a tremendous response.
In fact, there is data from a survey conducted by the University of Leeds in the UK that says companies with female executive officers have a 20 per cent less chance of going bankrupt than companies without any female executives.
The Abe Cabinet has been actively appointing women.  The LDP has two women serving in its three executive posts.  Minister Masako Mori responded to questions at the Diet impressively during the deliberations on the Special Intelligence Protection Act.  And last month, I also appointed the first female secretary to the prime minister in the history of our constitutional government.
Incidentally, as I look around at the membership of Akademeia, I find that there are very few women, something I consider very regrettable.  I very much hope that you increase the number of female members in order to foster Akademeia's development still further.

(Small- and medium-sized enterprises)
Yesterday, I visited a plating factory in Sumida Ward in Tokyo.  It is a small-scale local factory with nine employees.  However, through improvements to its machines and other refinements, it has developed a technology that enables extremely thin plating which cannot be imitated by anyone.  This small local factory performs the plating on the speaker terminals in approximately 30 per cent of the world's cars.
I understand that in the near future this factory will make use of subsidies in the area of manufacturing to undertake 15 million yen of capital investments.  For a small local factory, this investment means staking it all, but I believe that it is exactly when such investments are backed by solid technological capabilities that it is possible to be so assertive.
This company satisfies large corporations' strict demands for thinner, yet more resilient plating through its highly sophisticated technological capabilities.  It is small-, medium-sized, and micro contracting firms such as these that serve as the backbone for Japan's innovation.
Under the DPJ-led administration, the yen remained excessively appreciated and a sweeping hollowing-out of Japanese industry was underway, with not only assembly processes shifting overseas but also parts being procured in those local areas with increasing frequency.  However, through the change in the administration, the national government also came to take on risks and the domestic business environment was completely transformed.
Japanese companies deliver on time, are highly flexible, and most importantly, have highly sophisticated technological capabilities.  When we consider this high degree of competitiveness of Japan's small-, medium-sized, and micro enterprises, it should by now be sufficiently cost-effective to procure parts in Japan.
Exclusive adherence to overseas procurement will not give rise to sustained innovation.  I consider the power of our domestic small-, medium-sized, and micro enterprises, which are overflowing with potential, to be indispensable.
This week, the Bank of Japan released the results of its December economic survey of Japanese enterprises known as the "Tankan" survey.  Business sentiment among small- and medium-sized enterprises turned positive.  Among manufacturers, this was the first positive result in six years.  For non-manufacturers, it was the first positive sentiment in 21 years and 10 months.
The range of Abenomics has most certainly begun to spread to SMEs as well.
However, future prospects remain delicate.  There are worries that job orders may decline.  Is it perhaps the case that large corporations are not trusted by SMEs?
If the fruits of business recovery by large corporations do not transfer over to our domestic SMEs and micro enterprises as well as to their employees, then Abenomics will have failed, in my view.

(Local regions)
Our local regions also hold untapped potential.  Under this way of thinking each local region will make use of the resources it enjoys.
Consider for example the female divers in the farthest north of Japan, who gained renown in the television drama series "Ama-chan," or Namie-style yakisoba noodles, which won the top prize in this year's B-1 Grand Prix competition for everyday tasty food, or Funassyi and other mascots from local areas.
These are reviving local areas by skillfully making use of each local area's particular characteristics, including each area's history and traditions.  Before abandoning hope in our local regions, we must identify other unique resources of which we can be proud and link those to revitalizing these areas.
The government also intends to support such efforts.

5. An economic virtuous cycle

(Reaching everywhere throughout the nation)
The end of the year is almost upon us.
Next year, our focus will naturally continue to be the economy.  There can be no doubt that restoring a vibrant economy is the administration's highest priority.
Although the consumption tax rate will rise from April, we will steadily revive the economy.  In order to do so, the other day the Cabinet took a decision on a supplementary budget at a scale of 5.5 trillion yen, which will serve as economic countermeasures.
We are aiming to bring about an economic virtuous cycle.
We will connect improvements in business performance to increases in workers' income, and bring about further improvements in business performance by expanding consumption.  Our goal will be to restore the growth mechanisms of a free economy, which had gotten rusty as a result of prolonged deflation.
At the plating factory that I mentioned earlier, with business conditions having improved so much this year, so many orders have arrived that parts awaiting plating are almost spilling out from the factory grounds.  That is why this factory was able to raise its employees' salaries as well.  I understand that as a result of that pay raise, one young employee in his 40's took out a loan and bought a house.
That is exactly what is meant by an economic virtuous cycle.  I intend to have this kind of tangible feeling reach people on a broad basis, everywhere throughout the nation.

(The time to invest is now)
Looking at this autumn's financial results for the first half of the fiscal year, we find that the average of the more than 1,300 companies used in calculating the TOPIX index showed a roughly 50 per cent gain in pretax profits year-on-year.  Improvements in business performance are already evident.
According to a survey conducted by RENGO, the Japanese Trade Union Confederation, whose President, Mr. Koga, is also here today, this year winter bonuses increased by an average of 39,000 yen compared with last year.
I also hear that in the year-end sales battle, items one rank higher in quality are being purchased for year-end gifts, traditional New Year's cuisine, and so on, compared to last year.
Together with the trend of economic recovery, this winter, an economic virtuous cycle is now faintly emerging.  The question remaining is whether wages will rise next spring.
"Buy my Abenomics!"
When I visited the New York Stock Exchange in September, I said to the people working on Wall Street that now is the time to invest in Japan.
 Today, I will be so bold as to say this here in Japan as well, particularly in light of this distinguished gathering of senior executives brimming with the spirit of taking on challenges:  now is the time to invest in human resources and facilities.
On Monday, I spoke with executives of SMEs and micro enterprises.  Some of them raised wages by as much as 3 or 4 per cent this year, which is higher than our inflation target.
Among these are companies at a scale of 20 or 30 employees.  The presidents of these companies are most likely extending personal guarantees on behalf of their companies.  Yet despite that, they resolved to raise their employees' wages.  In light of that, I think there is no reason why your companies would be unable to resolve to raise wages as well.
One company president said, "A company only develops as much as its people develop."  It is the power of people that generates profits.  Therefore, when profits are made, they should be returned to the employees.  That will lead to greater motivation and thereby yield further profits.
It's extremely simple to understand.  I believe that the mindset of companies that grow is essentially like this.
I very much hope that your companies also take the offensive now in order to ensure future growth.
I have no intention of having only you in the private sector take risks.  The government will also further reduce the tax rate on capital investment and enhance its tax measures to promote income growth.  Moreover, upon securing the financial resources necessary for reconstruction from the Great East Japan Earthquake, from fiscal 2014 we will eliminate the special corporate tax for reconstruction and decrease the effective corporate tax rate by 2.4%.
Next year, I intend to change our economic virtuous cycle into a powerful trend.

6. Closing remarks

Looking back, this past year I took on an entire range of issues in order to restore a strong Japan, placing emphasis on the economy in particular.
There are a multitude of issues to tackle besides the economy, including accelerating reconstruction, reviving education, and rebuilding our diplomatic and security policies.  It will also be important to deepen national discussions towards amending the Constitution.
However, creating a strong Japan will not be done by others; it will be we ourselves who create it.  There is no other way to carve out the future than for each individual to make his or her best efforts, each in his or her own capacity.
So how are things now compared to one year ago?  The mood in society, including the business climate, has changed dramatically, has it not?  The city to host the 2020 Olympic and Paralympic Games has also been decided.
"When we all give our best, our dreams come true." 
I feel that this year was a year when we could feel that very keenly in every aspect of life.
The movie "Eien no Zero" - literally, "The Eternal Zero" - will be released this weekend.  I would like to go see it myself.  And it seems that aeronautical engineering in Japan began exactly 103 years ago today.
It was December 19, 1910 that an airplane first flew in the skies of Japan, in Yoyogi Park.  It stayed aloft for four minutes at an altitude of only 70 meters.
It is said that some 100,000 spectators gathered, wanting to get a glimpse of the flight test, and let out an enormous thunder of applause at this small step.  "Someday, the age of the airplane will be upon us."  We can easily imagine how excited the people of that time must have been.
If we work hard, then next year will be even better than this year.  I would like to make this a year in which many of the Japanese people get excited, just like the people who were so thrilled at the first airplane flight 103 years ago.
We are almost at the end of 2013.  I would like to extend to all of you my heartfelt wishes for next year to be a magnificent year for all of you.
Thank you very much.