(Provisional Translation)

Policy Speech by Prime Minister Junichiro Koizumi to the 154th Session of the Diet

Monday, 4 February 2002

(Opening) Since assuming office, I have engaged in state affairs based on the belief that for our country to return to a path of sustainable economic growth, we need immediate and decisive action for structural reforms in the economic and fiscal, as well as administrative and social sectors. This structural reform will be in full bloom this year. I will now set forth the basic policies of how my Cabinet will manage state affairs: how it will pursue the reforms, and in what way Japan will fulfill its responsibility in the international community. On December 1, 2001, the people of Japan shared a long-awaited moment of joy with the birth of Her Imperial Highness Princess Aiko. Together with the people, I would like to once again express our joy on the birth and our prayers for the health of Her Imperial Highness Princess Aiko. We began last year with the hope that the 21st Century would finally be a century of peace. And yet, the terrorist attacks in the United States, the citing of unidentified armed vessels in the waters around Japan and other events forced us to undertake the tasks of maintaining peace and managing crises Japan has clearly expressed its resolve to meet these challenges through concrete actions. I would like to express my respect and gratitude to those who take part in the valuable missions of maintaining the peace in the international community and ensuring the security of our nation, including the members of the Self-Defense Forces (SDF), currently engaged in activities in the Indian Ocean. In order to ensure peace and stability, it is foremost important that we act on our own initiative in accordance with the principle of international cooperation. I intend to remain vigilant and carry forward to do what must be done. This year, the 2002 FIFA World Cup Korea/Japan will be held. During the World Cup season, the attention of the world will be focused on this region and many people will visit our country. This is a singularly unique opportunity to increase interest in Japan and to deepen the understanding towards our nation among the people of the world. I will make efforts to seize this opportunity to introduce our country's cultural traditions and rich tourism resources to the entire world and increase the number of travelers who visit Japan, and thereby restore vitality to the local areas throughout our country I strongly expect that the World Cup and its ripple effect will be an opportunity for our nation and people to rekindle their spirits. Structural reform is making strides forward steadily. Various reforms have been initiated, including reform of special public institutions and regulatory reform. We have formulated the necessary budgets. Indeed, this year will be "the year of reform in full bloom"; we will launch the reforms that have begun into a firm orbit, one by one, in order to create an even greater trend. Furthermore, we must make this year "the year to lay a foundation for economic revival." I will aim to steer us through this crucial period so that we can clearly see the results of reform from FY2003 and so that we will realize steady private-sector-led growth from FY2004 onwards. When I assumed the office of the Prime Minister of Japan last year, many people thought that it would be difficult to implement the various reforms that I proposed. In fact, however, we have advanced reform in many sectors. The time has come to bid farewell to the systems and practices with which we have become familiar and to flexibly accept the needs and requirements of this new age we live in. Even at a time when the economic climate has grown increasingly severe and many people face difficulties, the policy of my Cabinet, "no gain without reform," has won the support of many people. I will advance reform with firm resolve, listening seriously to the voices of the people.

(Basic Posture on Economic and Fiscal Management and Measures for Financial Stability) I have christened the FY2002 budget "the Budget for Resolute Reform." Under the policy of "reducing expenditures by 5 trillion yen while allocating 2 trillion yen to priority areas," we reduced the allocations for public investments and Official Development Assistance (ODA) by 10 percent. We also made a thorough revision of the medical care system. While improving the efficiency in expenditures by ceasing the use of the existing expenditure level as a benchmark, we have boldly made allocations to priority areas such as measures to respond to the declining birth rate and the aging society, the promotion of science and technology, education and information technologies (IT). As for the fiscal expenditures for special public institutions, we have reduced them by more than a total of 1.1 trillion yen combining the general and special account expenditures, through a thorough review of their operations. Through these efforts to reduce expenditures and by securing non-tax based revenues, we have stood by our pledge to "keep new government bond issuance under 30 trillion yen." I managed to improve our systems and practices so as to avoid wasting tax revenues, and have taken the first step towards preventing any future fiscal collapse. From now on, we will continue to review expenditures and study the desirable relationship between benefits and burdens, and thereby transform our fiscal structure into an efficient and sustainable one. The economic outlook for FY2002 continues to be severe. We will implement the FY2002 budget and the Second Supplemental FY2001 budget ceaselessly, paying full attention in order to ensure that we avoid falling into a deflationary spiral, while at the same time ensuring that reforms are carried out. The Government of Japan, cooperating closely with the Bank of Japan, is firmly resolved to prevent deflation. In FY2004, the issue of non-performing loans will be normalized. We will actively tackle the issues of disposing of non-performing loans and rebuilding corporations, through strengthened inspections of major banks, as well as the non-performing loan market-value share-purchasing scheme of the Resolution and Collection Corporation. We will pay full attention to the financial situation and take all measures to prevent a financial crisis. To ensure sound management of financial institutions, limits will be placed on cross-shareholding. The Bank Equity Purchasing Corporation was recently established in order to facilitate the necessary purchasing of shares. With a view to smooth implementation of the Pay-Off System, we will take all necessary measures to stabilize the financial system through inspections and supervision of financial institutions, while making efforts to increase awareness and understanding by the people. Compared to one year ago, there has been a reduction of 370,000 workers in the manufacturing sector and 210,000 workers in the construction sector. However, even amidst the negative growth of the past year, the services sector has recorded an increase of 500,000 workers. We will continue to advance measures to foster new markets and new industries that will create jobs, to eliminate mismatching in the labor market and to strengthen safety nets. Making use of the First Supplemental Budget of FY 2001, I will aim for job creation in ways that maximize the distinct ingenuity of each region, such as teacher assistants at schools and forestry workers. I will also focus on promoting the facilitation of reemployment for middle aged and older unemployed persons. Consideration will also be given to the introduction of work-sharing schemes, with a view towards distributing opportunities for employment, and at the same time, study will be made for reviewing systems that govern employment periods and working hours in order to allow people to choose from among more flexible modes of employment. I will strongly support small and medium enterprises (SMEs), which sustain the vitality of the Japanese economy and the local regions of our nation. Maximum efforts will made to strengthen the safety net by expanding the loan guarantee and lending systems for SMEs, and by taking finely-tuned responses to fit into the individual circumstances facing SMEs. In various sectors such as die assembly, IT and medical-related areas, some Japanese SMEs have elevated themselves to global standing by overcoming adverse challenges and adapting to change. It is vital that energetic SMEs rich in creativity and strategic flexibility should actively contribute to their respective local communities in all regions of our country and in various industrial sectors. Aiming to double the number of entrepreneurial activities and newly-established companies over the coming five years, and in order to advance management innovations through expansion into new industrial sectors, we will provide assistance across a broad spectrum encompassing human resource development, technology development and capital procurement.

(Basic Posture on Ceaseless Structural Reform) "The Reform Schedule" announced last year stipulated more than 500 specific measures and implementation schedules. Recently, we have compiled "the Structural Reform and Medium-term Economic and Fiscal Perspectives" showing goals for the future profile of Japan's economy and society. In the days to come, I will boldly implement the measures necessary for achieving the "Five Goals of the Koizumi Structural Reform," which I announced in my previous policy speech. Even for those reforms that would require time, we will make broad and specific reviews, and formulate a long-term reform schedule. Reforms that have an orientation with a clear direction will stimulate demand, create business opportunities and nurture growth. I believe that it is indeed the role of the Government to create such an environment. Already, through the structural reforms that have been achieved, the latent potential of the Japanese economy has begun to stir. After announcement of a policy under which more than 7,000 general official vehicles used by the Government would be replaced with low-emission vehicles over a period of three years, we have seen acceleration in the development of low-emission vehicles by private-sector companies. After announcement that the Government Housing Loan Corporation would be abolished, banks began to develop services more attractive than the offerings of the Government Housing Loan Corporation. Furthermore, after I indicated a policy of allowing the private sector to enter the operations of the postal businesses, private sector companies launched plans to consider capital investments and explore means of securing the necessary personnel. Government and corporations are not the only ones that will change as a result of reform. What will change the most will be the lives of each and every individual in the country. In the time to come, I intend to show how our daily lives will be changed from the perspective of "Lifestyle Reform."

(A Society That Rewards Efforts and Offers a Second Chance at Success) I aim to realize "A Society That Rewards Efforts and Offers a Second Chance at Success," a society equipped with a mechanism by which people, who should take precedence in our economy and society, can realize their potential, exert their individuality and achieve all that they strive for. The modalities of our tax system hold the key to laying a firm foundation for economic revival. Under the FY2002 Tax System Reform, the Government will establish a consolidated tax system and take necessary measures on the tax systems for SMEs as well as financial and securities tax systems. In order to afford the maximum leeway to individuals and corporations so that they can freely decide upon the economic activities they undertake, and realize a society in which effort is rewarded, we must rebuild our tax system. To achieve that, we must address diverse issues, such as how to support economic revitalization; how to respond to structural transformation of our economy and society; how to realize a neutral, simple and fair tax system; and how to determine modalities for taxation burden levels and appropriate local tax systems befitting the policy of decentralization. A comprehensive approach to these matters will be pursued in the Council on Economic and Fiscal Policy (CEFP) and the Government Tax Commission. At the same time, I look forward to widespread national debate on these matters, including deliberations within the ruling parties. We will aim to announce basic policies sometime around June. For those matters that need to be addressed at this juncture, we will formulate policies by the end of the year for implementation as of FY2003. To realize "A Society That Rewards Efforts and Offers a Second Chance at Success" and revitalize the Japanese economy and industry, we must create an environment in which the people and corporations can freely take on the challenges they choose. By thoroughly advancing regulatory reforms across various sectors, we will simultaneously achieve an energetic economy and society as a result of expanded employment and growing markets as well as a lifestyle under which our people can enjoy affordable goods and services of high quality. Aiming to create a "nation built on the platform of scientific and technological creativity" at the highest global standards, we will focus on most advanced strategic research areas such as the application of information about the human genome to medical care and the development of new materials in extremely minute scales. In addition, we will advance industry, university and government collaboration, and encourage regional development of science and technology. Japan already possesses some of the best patents and other intellectual properties in the world. I will set as one of our national goals that the results of research activities and creative endeavors are translated into intellectual properties that are strategically protected and utilized so that we can enhance the international competitiveness of Japanese industries. With that in mind, I will establish the Strategic Council on Intellectual Properties, and powerfully advance the relevant necessary policies. During the past one year, the number of subscribers to high speed and broadband Internet services has grown explosively from 640,000 to 2.8 million. In order to further accelerate the pace of the IT revolution, I will promote regulatory reform aiming to encourage the improvement of networking infrastructure and promote the utilization of unused optical fibers, advance the cultivation of human resources, enhance rules on electronic commerce and measures to strengthen information security and protect the privacy of personal information. I will also work to promote the use of information appliances so that people can truly sense the convenience of information technology. These measures will make Japan into a globally advanced IT nation in which through the Internet all of our people can freely and safely exchange diverse information and knowledge. In addition, I intend to create e-government and e-municipalities so that in principle, it will be possible to conduct administrative procedures online, such as applying for the issuance of certificates of residence and passports. "A Society That Rewards Efforts and Offers a Second Chance at Success," is a post facto check and relief society based firmly on clear rules and the principle of self-responsibility. In order to create a judicial system appropriate for such a new society and make the judicial system something that the people can relate to, we will promptly compile a plan to promote reform of the judicial system, and steadily advance reform. While creating systems to further accelerate the judicial process and establishing a system to nurture the legal profession with a core of post-graduate law faculties, we will take measures to increase the number of lawyers, and other legal professionals would be increased. We will also newly introduce a system through which individuals can be involved in criminal procedures together with judges. To realize a society where the human rights of each and every person are respected, I will submit to this session of the Diet a bill which aims to provide for the establishment of a highly independent Human Rights Committee, and create a new Human Rights Redress System that will ensure effective redress for those whose rights have been violated. Aiming to create a society in which together men and women can fully realize their potential and express their individuality, we will work on measures to support women as they undertake challenges in diverse sectors, so that we can capitalize on innovative ideas and diverse capacities of women.

(A Society in which Wisdom in the Private Sector and in the Regional Communities Bring About Vitality and Prosperity) Based on the principle that "all that can be done by the private sector should be left in its hands, and all that can be done in the regional communities should be left in their hands," I will advance administrative structural reform to achieve "A Society in which Wisdom in the Private Sector and in the Regional Communities Bring About Vitality and Prosperity." In order to reform our bloated and rigid governmental organizations and bring about a simple and efficient government, we must advance even more forcefully the recently launched reform of our special public institutions. After a thorough revision of all 163 special public institutions and authorized corporations, in December 2001 the "Reorganization and Rationalization Plan for Special Public Institutions" was formulated and its measures were reflected in the FY2002 budget. As soon as possible, we will take the necessary measures beginning with legislative measures to provide for specific steps to implement the plan, such as abolishing 17 institutions including the Japan National Oil Corporation, Urban Development Corporation and Government Housing Loan Corporation, as well as the privatization of 45 institutions, including the four highway-related public corporations. At the same time, to propel this reform onwards, we will continue carrying out assessments and inspections. The Council on Economic and Fiscal Policy will deliberate on a review of government-related financial institutions and reach a conclusion by the end of this year. For an administrative structure that truly focuses on the people, I will steadily promote specific reform measures in accordance with the Guidelines for Reform of the Public Servant System compiled in December 2001. Responding sincerely to the severe criticism against the practice of reemployment of civil servants by special public institutions and other organizations, decisions to reduce retirement benefits and salaries for directors will be taken by the end of March. By the end of March this year, a review will be made towards reducing as much as possible the involvement of government in public service corporations, and a thorough reform will be initiated in the public service corporation system. Regarding postal businesses, I will submit to this session of the Diet a bill that will provide for the establishment of a new state-run public corporation within FY2003. The bill will also make it possible for private-sector service providers to enter markets of postal businesses in full scale, while securing the availability of services fair to all parts of the country. On modalities for the three postal businesses from there on, the Advisory Council to Consider Modalities of the Three Postal Business will meet for further considerations and I have instructed them to draft concrete proposals by this summer. On the system for a direct election of the Prime Minister, a group of learned individuals is undertaking considerations through many meetings from broad perspectives. I am aiming for a specific proposal to be compiled by the summer. To make Japan a country of affluence and vitality in the 21st Century, it is essential that regional communities capitalize on their uniqueness and charm and achieve true self-reliance. More than 2,000 municipalities are now considering amalgamation, and while encouraging this trend, I will further advance decentralization through measures such as reviewing the respective roles of the national and local governments and the allocation of tax resources.

(A Caring Society in which People Can Live Safely in Peace) It is the responsibility of politics to address the various concerns of the people and create "A Caring Society in which People Can Live Safely in Peace." Our country has established one of the best social welfare systems in the world that provides "universal pension coverage and universal health insurance coverage." This century, as we face an unprecedented situation with fewer children and an aging population, we must firmly maintain our excellent systems and further build on them so that they can appropriately meet the needs of a country with long living people. In particular, under the prevailing severe fiscal circumstances of the medical insurance system, we must lose no time in reforming our medical care system into a sustainable one. Under the policy of Sanpo Ichiryozon (Sharing the Pain Among Three Parties), in which the pain is divided among patients, policy holders who pay health insurance premiums and medical institutions, we have decided to implement bold reform with no sanctuaries, beginning with lowering medical treatment fees, which has never happened before, and reviewing benefits and burdens including medical treatment for the elderly. While promptly realizing this, with the aim of creating medical treatment systems that put the patients first, we will advance regulatory reform with a view to enhancing disclosure of treatment information and medical institution information. Furthermore, I will powerfully advance comprehensive health measures, with emphasis on advanced scientific research, and preventive and supportive measures for our people to stay in good health. At the same time, we aim to greatly improve the recovery rate for cancer patients. I will also submit to this session of the Diet a bill to provide for the creation of the means to promote the health of our people to achieve the goal of greatly reducing the number of elderly people who need nursing care and patients afflicted with lifestyle-related diseases such as myocardial infarction and cerebral apoplexy, so that more people can enjoy healthy and active lives as they grow older. In order to address concerns about pension, I aim to implement the next systemic revision by FY2004 so that it will be possible for the public pension system to soundly fulfill its role, and will initiate a drastic review to that end. Bovine Spongiform Encephalopathy (BSE) is a matter that has raised concerns among the people about the food they eat. We have already conducted inspections covering all cattle that are to be processed for consumption, and all meat that is currently on the market is safe. I will continue to devote my utmost efforts to identifying the route of infection. I will do my best to ensure the safety of food, beginning with meat, and thereby ensure that the people can rest assured in the knowledge that the food they eat is safe. In order to secure the confidence of consumers, the Government will serve as a bridge between producers and consumers, and advance integration between food and agriculture while pushing ahead with structural reform of the agricultural, forestry and fishery industries. In order to enhance international competitiveness, we must quickly cultivate production areas capable of stably supplying safe agricultural products that consumers can place their confidence in, as well as proactive agricultural management entities with high skills and management strategies. By focusing on measures such as expanding the scale of operations and promoting incorporation to "the management entities that are highly motivated and capable," and thus advancing domestic high value-added production. We will implement structural reform across the full spectrum, from production to distribution. I will continue to promote measures to advance togetherness and exchange between cities and agricultural, mountainous and fishing communities, and cultivate new potential for agricultural, mountainous and fishing communities. Last year, the number of fatalities from traffic accidents was less than 9,000, for the first time in twenty years. However, on the other hand, many crimes continue to occur and many of the people are concerned about the deteriorating condition of public safety. In the coming fiscal year efforts will be made to enhance overall public safety measures, such as an additional hiring of 4,500 police officers and strengthening the immigration control structure by increasing the number of personnel and enhancing investigation equipment. Moreover, fire fighting and disaster prevention measures will be taken, and when disasters do occur, I will exert maximum efforts to assist the victims and to ensure a full recovery and restoration. By doing so, we plan to re-establish our nation as the safest country in the world.

(A Society that is Enveloped by a Beautiful Environment that Allows for a Comfortable Lifestyle) We must address the issue of global warming and achieve urban renaissance in order to firmly hand over to future generations "A Society that is Enveloped by a Beautiful Environment that Allows for a Comfortable Lifestyle." Regarding the issue of global warming which requires urgent action, I request the Diet to approve the Kyoto Protocol and to make necessary arrangements of the relevant laws during this Session. I will continue my maximum efforts in seeking constructive response from the United States, and in formulating international rules with the participation of developing countries. At the World Summit on Sustainable Development to be held in September, I will call for the achievement of both environmental protection and development. It will be no easy task to achieve the goals of the Kyoto Protocol. The Government;, local public bodies, enterprises and the general public must unite and work together in this endeavor. We must aim to create a scheme in which a balance can be achieved between the environment and the economy, so that our efforts to achieve these goals may result in a revitalization of our economy and the creation of employment, using technological innovation and the creative ingenuity of the business community. At the same time, we will actively promote the growth and preservation of healthy forests to absorb carbon dioxide emissions. Approximately 90 percent of greenhouse gases come from carbon dioxide emissions resulting from energy consumption. That is why we will powerfully advance measures to conserve energy and measures to promote new energy sources while, premised on ensuring safety, we will also steadily advance nuclear power generation, which emits no carbon dioxide. The fuel cell is the key to opening the doors to an era in which hydrogen will be used as source of energy. We will aim to achieve its practical use as a power source for automobiles and a source of electric power for households within three years. In addition, we will promote the introduction of new energy sources by electrical power suppliers. In order to reduce the amount of energy that we unwittingly use in our every daily lives, I want to call on each and every person to re-examine the way he or she lives, such as by making utmost use of energy saving products. As for the Government, we have implemented reforms of our own, such as deciding to replace all general official vehicles with low emission vehicles and introducing a recycling system in which leftover food is collected and provided to farmers for use as fertilizer and livestock feed. This year, the number of solar power generation devices installed in central government ministries will be increased by approximately five-fold and a 50 percent increase will be made to the number of environment-friendly devices purchased by the Government as we promote green procurement. In order to accelerate the creation of a recycling society we will establish a scheme for continually recycling the more than 5 million used automobiles that are disposed of each year. Furthermore, efforts will be made to promptly launch businesses that can be quickly implemented from those included in the Zero Waste City Project. Another urgent issue is the creation of comfortable urban areas. Using the power of the private sector to the fullest extent in the advancement of urban development projects is extremely important not only for urban renaissance, but also for resolving the issue of non-performing loans through providing greater liquidity to real estate. We will introduce a new system for urban planning under which all existing regulations on urban planning will be dispensed with and in which private contractors will be able to freely make project proposals. At the same time, powerful financial assistance will be provided to private-sector businesses. In order to enhance the appeal and international competitiveness of our cities, I will steadily promote urban renaissance projects, including the creation of regional disaster relief centers in the waterfront areas along Tokyo Bay.

(A Society That Nurtures the Dreams and Hopes of its Children) It is the people who will shoulder the responsibility of boldly opening the way to a bright future as we aim towards the society described under the "Five Goals of the Koizumi Structural Reforms." I will do my utmost to realize "A Society That Nurtures the Dreams and Hopes of its Children"; to imbue our children with pride and self-awareness as a Japanese national, so that they can grow up as individuals with abundant individuality and talent, who can shoulder the work of new nation building. I will strive to cultivate "solid academic capabilities" by promoting classes with fewer pupils and, differentiated guidance according to their level of proficiency, as well as improving the qualifications and quality of teachers. At the same time, aiming to enrich "education of the heart," I will create an environment in which our youth can be involved in diverse volunteer activities and hands-on learning experiences and expand opportunities for extra-curricular activities in light of the full transition to a five-day school week. Furthermore, I will aim to effect structural reform of universities to expand Japan's intellectual foundation, through promotion of creative research with international competitiveness and human resource development, so that Japan could contribute to the world, and to Asia. Culture and Art move people, inspire in them the joy of life and are powerful in enriching their lives. I will advance the "Plan for the Creation of Culture and Art" and thereby create excellent innovative art and prepare an environment that nurtures top-level artists who will be recognized by the world over. Furthermore, I will create an environment in which people themselves can participate in cultural and artistic activities, enabling them to create culture and art through cultural volunteer activities. I will promote comprehensive measures across a broad range of sectors, including health and welfare, employment, education and housing, to adequately respond to the birth rate rapidly declining in recent years. In particular, I will promote the "zero wait listed children strategy" aiming at accepting 150,000 children, mainly at nursery schools, by FY2004, and expand plans to establish clubs for after school activities for children to assist parents in bringing up their children.

(Basic Posture on Security and Crisis Management) The fight against terrorism, which is a grave challenge to civilized society, is an issue of our own as we must ensure the safety of our people and we must be proactive in acting to prevent and eradicate terrorism in solidarity with the international community. Japan has already implemented cooperation and support activities for the US Forces, as well as assistance to affected people. Through the implementation of the relevant United Nations Security Council resolutions and the conclusion and implementation of the various conventions for the prevention of terrorism, Japan will continue to actively participate in international efforts, beginning with measures to cut off the financial flow to terrorist organizations, measures to enhance immigration control and prevent hijacking. In order to ensure the peace and security of the world, in addition to measures against terrorism, Japan will steadily address disarmament and non-proliferation of weapons of mass destruction, as well as issues related to anti-personnel landmines. Furthermore, reflecting the recent revision to the International Peace Cooperation Law, Japan intends to participate even more actively in United Nations Peacekeeping Operations (PKO). Preparations are now underway for the dispatch of an Engineering Unit of the Self-Defense Forces (SDF) to East Timor in March. The issues of terrorism and unidentified armed vessels have once again made clear that there exist forces capable of threatening the lives of our people. We should bear in mind the adage "Be prepared and have no regrets." It is the duty of our nation to establish a structure in times of peace necessary to ensure the independence and sovereignty of our state and to ensure the safety of our people under the Constitution of Japan. It is absolutely imperative to gain full understanding of the people by making clear under which principles and policies what kind of specific structure will be created. In order to secure the safety of the people of Japan and take steps to ensure that our nation is capable to respond to national emergencies, I will cooperate closely with the ruling parties to compile legislation to provide for a response to national emergencies, and submit the relevant bills to this session of the Diet.

(Basic Posture on Diplomacy) The security and prosperity of Japan cannot be realized without the peace and prosperity of the international community. We will take proactive action toward the development of an international order in which diverse cultures and values are mutually respected and the happiness and dignity of each and every human being are ensured on the premise of respect for basic human rights and democracy, market economy and free trade. For that purpose, Japan will develop broad cooperative relations with other nations, while striving to strengthen the functions of the United Nations, beginning with Security Council reforms. Japan supports the Afghanistan Interim Authority established in December 2001, and will actively provide humanitarian and reconstruction assistance with a view to establishing true stability in Afghanistan. As announced at the International Conference on Reconstruction Assistance to Afghanistan hosted by Japan, our nation will implement assistance measures across a broad spectrum, with priority focused on sectors such as reintegration of refugees and displaced persons, rebuilding communities, clearance of landmines and unexploded ordnance, health and medical care, education and the empowerment of women. Japan and the United States are enjoying ever-closer relations. I will have summit talks with President George W. Bush when he visits Japan later this month. I intend to continue to strive to enhance the strategic dialogue that we agreed to at our Summit Meeting in June 2001, and while enhancing the credibility of the Japan-US Security Arrangements, I intend to engage in constructive dialogue through the Japan-US Economic Partnership for Growth in order to ensure that sustainable growth can be achieved for the economies of Japan and the United States. Moreover, I intend to work to ensure further development in Okinawa, which this year marks the thirtieth anniversary of its reversion to Japan. In addition, I will continue to make efforts to alleviate the burden on the people of Okinawa Prefecture, while sincerely making every effort for the steady implementation of the Final Report of the Special Action Committee on Okinawa (SACO), including the relocation and return of Futenma Air Station, and will support efforts by Okinawa to attain economic self-reliance. Last month I visited five countries of the Association of Southeast Asian Nations (ASEAN), and I proposed that we aim for the creation of a growing East Asian community under the basic concept of "acting together and advancing together" as "sincere and open partners." In order to give shape to the proposal, building on the relations of trust that were fostered with the leaders of the nations that I visited, I intend to steadily move forward to enhance relations with neighboring countries in Asia, in various areas including the Initiative for Japan-ASEAN Comprehensive Economic Partnership. Last year, the People's Republic of China acceded to the World Trade Organization (WTO) and it is expected to play an even more constructive role in its relations with the international community, including Japan. This year marks the thirtieth anniversary of the normalization of relations between Japan and China and through various events that will be conducted: in China as "Japan Year," and in Japan as "China Year," we will aim to expand the wave of exchange, especially among the younger generations, who will lead our societies in the future and thereby, make even firmer the foundation of Japan-China relations, one of the most important bilateral relationships. This year, Japan and the Republic of Korea will jointly host the 2002 FIFA World Cup Korea/Japan. As a result of substantial relaxation of visa requirements and enhanced aviation capacity, I expect to see an even greater promotion of travel between the peoples of Japan and the Republic of Korea. Furthermore, a great variety of cultural exchange events will take place under the aegis of the Year of Japan-Republic of Korea National Exchange. I will strive to ensure that this year deepens the ties that bind the cooperative relations between Japan and the Republic of Korea as we work together hand-in-hand to ensure the success of these events. There exist difficult security and humanitarian issues related to North Korea. For its part, Japan intends to work tenaciously to engage in normalization talks with North Korea to resolve those issues, while maintaining close cooperation with the Republic of Korea and the United States in order to resolve these issues. Under President Vladimir Putin, domestic reforms have been steadily advanced in the Russian Federation, which is continuing to play an even more constructive role in the international community. It is vital that Japan support these transformations in Russia and advance cooperation across a broad spectrum to build firm relations of trust with Russia. Based on the consistent position that we should conclude a peace treaty by resolving the issue of the attribution of the Four Islands, I intend to do my utmost to carry forward with negotiations. Through such actions as the implementation of the Action Plan for EU-Japan Cooperation announced in December 2001, I intend to further develop Japan's relations with European nations, which are gaining in importance in the international community. It is vital that while Japan strives to achieve its own revival, it also play an appropriate role toward stabilizing the global economy. Toward that end, Japan intends to actively engage in the New Round of trade negotiations of the WTO in order to further liberalize world trade and strengthen WTO rules, while taking into account the interests and concerns of developing countries. At the same time, based on the recent signing of the Japan-Singapore Economic Partnership Agreement, I intend to advance economic partnership with many nations and regions in the future. I recently replaced the leadership at the Ministry of Foreign Affairs. Under the new leadership, I intend to powerfully advance reform of the Foreign Ministry so that we can address many diplomatic issues that must be resolved and restore the Foreign Ministry's credibility both at home and abroad as soon as possible.

(Conclusion) The series of Town Meetings that I launched in June 2001 have now been held in all 47 prefectures of our nation, allowing my Cabinet opportunities to engage in lively dialogue with many people. I intend to carry on many forms of dialogue. No policy can be implemented unless the people have trust in politics. In order to realize structural reform, the members of the Diet need to take the lead in setting good examples and join together with the people to implement reform. It is extremely regrettable that we have seen a succession of acts that have betrayed the trust that the people place in politics. I hope that sufficient discussion will take place in the Diet on the establishment of legislative frameworks to underpin political ethics to prevent the recurrence of such behavior. Furthermore, to prevent impropriety in public works projects, we will see that the Law to Ensure Appropriate Tendering and Contracts for Public Works, which was enacted in April 2001, is duly adhered to. In my first policy speech to the Diet, I called on the people to be resolved to stand up for reform. In my address to the last Extraordinary Session of the Diet, I exhorted the people to have the courage not to be afraid of change. Today, at a time when the pains of reform are beginning to be felt, I again ask you to be strong and never lose hope for the future trusting our nation and our people, who have overcome great and diverse difficulties in the past, to lay a path to a new age. Those reforms that were hitherto thought impossible are now steadily moving in the direction of realization, thanks to broad support of the people. What is vital for the development of a nation are a spirit of self-help and a spirit of self-discipline. Each and every person serves as the driving force of reform. In closing, I would like to read a tanka, a small Japanese poem. Composed by Emperor Showa, this was read aloud at the New Year's Imperial Poetry Reading on the New Year's occasion for exchanging poems in the 21st year of the Showa Era, 1946. Undaunted stands the pine tree in mounting snowdrifts. Heed its example. Emperor Showa is thought to have composed the poem while gazing at the pine trees surrounding the Imperial Palace less than six months after the end of the Second World War. We could imagine that it encapsulates Emperor Showa's hopes for the people to be valiant, just like evergreen pine trees that grow in defiance of the severe winter and the falling snow. Let us be emboldened to overcome the current difficulties before us as we remember the selfless efforts of our forefathers who built our nation into a modern state through the rapid changes of the Meiji Restoration, as well as those who undauntedly rose to the challenge of rebuilding our nation from the ashes of a burned out landscape after the Second World War! We must do this for a better tomorrow. We must do this for our children's future. In this, I sincerely ask for the support and cooperation of the people of Japan and the members of the Diet.