A Dialogue with the New York based Business and Financial Community Opening Remarks by Shinzo Abe, Prime Minister of Japan

At Thomson Reuters, September 21, 2016

Thank you. Thank you so much.

I am Shinzo Abe, not Mario. Like Mario, though, I keep on fighting. Fighting to boost Japan’s economy.

Three things, ladies and gentlemen. Continuity, that is point number 1. More openness, number 2. And changes in our work style, point number 3.

Continuity, openness, work style changes. What do I mean by those three?

Voters gave me a fresh mandate earlier this year. I am determined to use it. My top priority: the economy. My second: the economy. And my third: the economy. Make no mistake. That will not change.

Continuity makes a difference. Take, for instance, the corporate tax. That is down by 7 percentage points, on my watch.

Shinzo Abe
Photo by theglobalpanorama
Shinzo Abe

Or the corporate governance code. More than 2,000 listed companies have adopted it. Among them, 80 per cent have independent non-executive members of the board.

A year ago, that was about to happen. One year later, it has already happened.

The stewardship code also matters. That’s the flip side of the same coin. Institutional investors must be responsible stewards of the money they manage.

But, for what? It is to urge companies to achieve growth. It is for Japan to grow and become more robust.

And here is a question. If your asset manager belongs to a large financial group, and the same financial group has other business connections with the company your money is invested into, can you be sure that your money is under good stewardship? There may be a conflict of interest, you should wonder.

To make sure that your money is under good care, Japanese stewardship code will introduce something new next year. Each institutional investor will be urged to set up safeguard measures including a third party committee, ensuring that investment decisions be made always to maximize your benefits.

Point number two, openness. Please remember, Japan is for openness. Japan is for trade liberalization. Japan is for investment liberalization.

For instance, in Japan, under some conditions, you will soon be able to obtain your green card very quickly. The speed will be among the fastest in the world. We are now working on the details, so stay tuned.

The most important agenda item here, of course, is the TPP.

Ladies and gentlemen, for the TPP, we will seek approval of our parliament, and do so A.S.A.P. Why? Because it is good for free, fair, and open trade.

The TPP is good also for Japanese farmers who are ambitious. Japan’s high-value added products, such as wagyu beef, will find it much easier to enter overseas food markets.

Japan will remain an engine for free trade. We will work harder and harder to achieve the Japan-EU Economic Partnership Agreement and do so, again, A.S.A.P.

And here is my request to you. Please do ratify the TPP. The Asia Pacific should be much, much, much better off with the US fully being a TPP member. We are simply waiting for you to take a leadership role. “Come along, America,” should be my own message to you.

Now, point number 3, changes in our work-style.

The crux of the matter here is to give workers better prospects for the future.

Listen up. Abenomics is for the future. It is for future growth. It is for future generations. And it is for a future Japan that is robust.

We will propose new laws. Those laws will help bring equal pay for equal work.

Some may wish to work from home. Others wish to come back home early. Still others wish to work 9 to 5. So long as they work with the same company and bear the same amount of responsibilities, there must be absolutely no difference in the amount of money they get.

At present, those not in regular employment get less. And there are many such people. As many as 40 per cent of the entire Japanese workforce works as temp staff, and they tend to get less money. We must change that.

We must fill the gap between regular and non-regular workers so that young people can have brighter hope for the future.

Only then do I expect the middle class will once again grow and spend more. Only then do I expect more and more people to start having families. Only then do I expect Japan’s birth rate to turn to the better.

Long working hours are, needless to say, harmful. We will change that as well, by enhancing the regulatory framework. We will propose new laws to that end.

The hope is that women will find it easier to work. The elderly will find it easier to work.

This is an economic issue before it is a social one. We must increase the labor force participation rate. We must increase wages. We must increase labor productivity. And to change the way we work, I believe, is the best way to improve our productivity.

Next week, upon getting back home, I will roll up my sleeves and start working on this. I will launch an expert group with a single mission, a mission to change the way we work. We will sort out what laws will be necessary. We will then propose those laws. This is what will take place within the next couple of months.

Yes, Japan is gaining speed. Abenomics is gaining speed, too. And I will sharpen my drill bit. To change the structure of Japanese economy, my drill bit is still spinning fast.

I will close my remarks by giving you good news. I have absolutely no worries about Japan’s demography.

My country has lost, over the last 3 years, 3 million people of working age. And yet, our nominal GDP has grown.

We should look to the future, rather than worry about the present. Japan may be ageing. Japan may be losing its population. But, these are incentives for us.

Why? Because we will continue to be motivated to grow our productivity. We will continue to be motivated to use, say, everything new and digital, from robots to wireless sensing, and big data to AI.

So, Japan’s demography, paradoxically, is not an onus, but a bonus.

In 4 years, Tokyo will yet again have changed its profile.

With the Olympic and Paralympic games, it will have become a city of more tolerance, not less, more openness, not less, and more diversity, not less.

And in the late-2030s, which is actually not so far away, you will be popping on a maglev train in Tokyo, and boom, forty minutes later, you will be standing in Nagoya. Only twenty minutes more, meaning in just an hour out of Tokyo, you will be getting off at Osaka station.

The distance between Tokyo and Nagoya is almost the same as that between New York and D.C. And by the way, you could do the same thing here with the maglev technology that is there for you to get.

See, in about twenty years, you will find a brand new Japan. From Tokyo, through Nagoya to Osaka, you will see what? It will be among the biggest, richest, most technologically advanced, cleanest, and yet most relaxed mega cities the world

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