32_G15_InSight_G20

Global Issue 15

Global Insight G20 contribute to the world not only economically but also politically and diplomatically. Is there an element of gamble here: a huge, audacious economic experiment? What about the inherent risks of your policies, such as concentration of wealth, managing an ageing population, and concerns over Japan’s national debt – and how do you address them? The short answer is, without taking risks, you cannot achieve anything. As I stated in my speech at the Guildhall, I would like to underline that, in the words of the late Baroness Margaret Thatcher, this is a case of TINA – “There is no alternative.” Japan has suffered from long-standing deflation, with gross national income of nearly 50 trillion yen (approx US$500 billion) evaporating away over the five years beginning in 2007. As Japan’s tax revenue continues to shrink, it is little wonder that people think it will become impossible for Japan to maintain public finances My mission is to restore Japan as a nation full of hope and confidence. I will stay the course... without issuing additional government bonds in large quantities. With our unavoidably and rapidly decreasing birthrate and ageing population, how will Japan be able to maintain adequate vitality? To tackle these issues, you first have to expand tax revenues. And to do that, you first need to pursue growth, which is what I am doing now. Gradual increases in our consumption tax rate have already been set into law. This will maintain confidence towards Japan while also securing the funds for our growing social security expenditures. I will make a careful decision on the actual consumption tax increase based upon Article 18 of the 2012 law, which stipulates consideration of the economic situation. But I would like to point out that even after the tax rate is raised, Japan’s consumption tax rate will continue to be lower than the UK’s VAT. What matters the most is our Growth Strategy. Japan can achieve growth, despite our ageing population, if we open up our markets and liberate thoroughly the power that women possess. Pessimists might claim that the current situation cannot be helped. But my mission and my fate are not to succumb to the pessimists or merely criticise what others do. Instead, I became Prime Minister in order to restore a strong Japan and implement policies that will build up the nation still further. Of course no policy is free from risk, but my economic policy is not some sort of gamble. I will go forward without wavering, implementing policies while standing firm in the belief that Japan can achieve growth through my ‘three arrows’. International fears that your policies effectively devalued the Yen and were thus protectionist, eased as world markets took off. So what now will be your message to the G20 summit? What lessons for global recovery can we learn from Japan’s experience? The three arrows of my economic policy are aimed solely at extricating Japan from deflation and reviving the economy. Nowhere do they target foreign exchange. Regarding this point, I explained my three arrows, and the Growth Strategy in particular, at the G8 summit held recently. The other G8 leaders responded to my explanation with both strong expectations and high appreciation, as the revival of the Japanese economy will lead to development of the global economy. There are two points in my message to the G20 summit to be held in St Petersburg. The first is that by pushing forward tirelessly for reform in order to revive the Japanese economy, I intend Japan to contribute to the growth of the world economy. I believe that such efforts by Japan, through which we aim to achieve a virtuous cycle of economic revival and sound public finance, can become lessons that others can learn from as the global economy works towards revival. The second point is that the G20 summit serves as a valuable opportunity for leaders of both northern and southern countries to meet directly and discuss matters face to face. Multilateral negotiations on trade and development sometimes have a tendency to end in deadlock, due to opposing viewpoints between the north and the south. I would like to hold candid discussions with the other G20 leaders and express my strong political will towards reinvigorating those efforts. Allied to the principles of Abenomics are major foreign policy objectives. Are you strategically rebranding and repositioning Japan in South-east Asia and the world? If so, how? My return to the office of Prime Minister came about in response to the expectations of the public, who want me to restore Japan’s robust economy. A strong economy is really the source of Japan’s power as a nation. I believe that Japan can contribute to the stability and prosperity of the world only when a strong Japan is revived again. My philosophy in diplomacy is to engage in a strategic diplomacy underpinned by the fundamental values of freedom, democracy, human rights and the rule of law while viewing the world broadly, much like taking in a panoramic perspective of a world map. In light of this, first of all Japan will reinforce the Japan-US 32 l www.global -br ief ing.org thi rd quar ter 2013 global 


Global Issue 15
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