[Title] Speech on the Third Round of Policies under the Growth Strategy by Prime Minister Shinzo Abe at the Research Institute of Japan

1. Towards a sound growth cycle

The Japanese economy, poised to greet a new dawn

Returning to capitalism's point of origin

2. Reform is never-ending

A test for the most internationally reasonable regulation

Never-ending regulatory reform

National Strategic Special Zones

Aiming at still greater heights

3. Boldly opening up government enterprises

(1) Diverse energy businesses

Reforms to the electric power system

Reviewing the use of environmental assessments

(2) Creating a new industry focused on good health and longevity

Expanding the possibilities of health and preventive services

Reviewing the use of the insurance system

(3) Making use of the power of the private sector in the field of infrastructure

Lengthening service life through the latest technologies

Proactively using public-private partnerships (PPP) and private finance initiative (PFI) projects

4. What the Growth Strategy aims to achieve

A Growth Strategy that enriches family finances

Transitioning from 20 years of stagnation to ten years of revival

5. At last, a time for action

6. Closing remarks

1. Towards a sound growth cycle

(The Japanese economy, poised to greet a new dawn)

Good afternoon. I am Shinzo Abe.

I very much appreciate having the opportunity to make this address to you today.

It has been a while since I have spoken to such a large crowd. While I am quite nervous in a sense, I feel that this is truly an excellent opportunity as we at last head into the elections for the Tokyo Metropolitan Assembly and the House of Councillors, so I would like to express my gratitude to you once again.

There are some people who look at the recent movement in stock prices and say, "If stock prices decline, it will be the end of Abenomics."

In my view, it has been in this manner that Japan has slid into a "valley" of a deep loss of self-confidence, a result of deflation that has spanned 20 years.

My first two prongs of economic revival, which I call my first two "arrows," have been bold monetary policy and flexible fiscal policy. They have been efforts to restore Japan's confidence by exterminating the monster of "deflation," which has become engrained into every corner of society.

However, the central constituent of my economic policy is the Growth Strategy, which is my third arrow. Its essence lies in encouraging a broad spectrum of creative endeavors by the private sector to engender throughout Japan a wide range of innovations that transcend nationality.

Japan will contribute to global development by unlocking the various types of potential held by Japanese companies in such areas as high quality manufacturing, well-tailored services, integrated systems, and delicate operations and expanding those business areas overseas.

This is the kind of growth that I aim to achieve.

Looking back, we find that from the latter half of the 1990's, all around the world a shift towards enhanced economic services took place, with the IT revolution and finance capital leading world growth. However, the "excessive finance capitalism" in which finance controlled even the distribution of wealth suffered a setback in 2008 with the Lehman Shock.

In order to recover from this difficult situation, nations came to have little choice but to become involved in the running of the economy in a sweeping manner. Countries reinforced their fiscal spending and operated investment funds themselves. Together with the rise of emerging economies, the world's economic system saw the emergence of a tide of what can also be called "state capitalism."

However, I consider this to be only a temporary state of affairs. We must change direction once more towards a growth cycle in which private sector industrial capital pulls growth forward. Japan is now conscious of the fact that the significance of the "third arrow" to be launched lies in creating a sound cycle in the world economy once more.

I would argue that Japan, haunted by the monster of deflation, has thus far sat cringing rather than take on this enormous surge in the world economy for itself.

The ratio of job offers to job seekers recovered to 0.89 in April, a level not seen in four years and nine months. It has returned to the pre-Lehman Shock level.

Various indicators signaling the movement of the real economy - consumption, corporate performance, the GDP growth rate - are, in my opinion, telling us that we are at long last poised to greet "a new dawn on the path to growth."

Now is the time for Japan to become the engine that revives the world economy.

The world is also beginning to stir. President Obama has been advancing a 'revival in the manufacturing industry.' In Europe as well, countries are changing their direction towards growth strategies, with the manufacturing industry commanding attention once more.

Now is the time for Japan to pull forward vigorously the world that is attempting to revive "industrial capitalism."

(Returning to capitalism's point of origin)

Japan has since antiquity been eulogized as Mizuho no Kuni - "a land lush with rice."

Exhibiting the fundamental principle of self-reliance, in Japan's traditional culture, villagers all help each other out when anyone should unfortunately fall ill. A respectable society that rewards those who work hard has developed out of these beginnings.

Sow seeds in the spring and reap the harvest in the autumn. This is not an economy engaged in short-term speculation, but rather one that values long-term "investment," matched to the cycle of the four seasons.

We should return to capitalism's point of origin.

Rather than engage in a money game in which players move only in accordance with immediate profits, we must grow the real economy squarely and ensure that the fruits of those efforts are delivered widely to the people who worked hard. That is the aim of Abenomics.

Here I would like to introduce a quotation.

"They are all fat, well clad, and happy looking, but there is an equal absence of any appearance of wealth or of poverty, - a state of things that may perhaps constitute the real happiness of a people."

This is an excerpt from the diary of Townsend Harris, the first U.S. envoy to be resident in Japan, depicting the daily lives of the Japanese people at the end of the Edo period.

Edo at that time was one of the world's largest cities, with a population exceeding one million people. It is said that as of 1800, the populations of London, Beijing, and Paris were all less than a million people.

Why was Japan, which did not import foodstuffs from overseas, able to sustain such a large urban population?

The late Dr. Thomas C. Smith, the illustrious expert on Japan, points to dramatic improvements in agricultural productivity. His analyses also indicate that as time progressed, the income of Japan's farmers rose due to improved productivity.

In other words, improved productivity increases income, which then leads to the next round of improvements in productivity. Here we see a superb virtuous circle of industrial capital.

2. Reform is never-ending

The leading actors as we achieve growth are going to be you, private sector entities who are overflowing with vitality.

I attended the Tokyo International Conference on African Development, also known as "TICAD," until the day before yesterday. There can be no mistake that Africa has changed. As emerging economies boldly make investments there, Japan has clearly fallen behind.

Unless we completely reset our mental map in which Africa is somewhere "way far away" and jump in now, we will be unable to seize business opportunities there.

For you as managers in the corporate world, what is required now is a sense of speed, as well as the ability to make decisions and take action, without being afraid of the risks.

I too will create opportunities so that you are able to take on challenges to the extent that you like. I will resolutely push forward with reforms, not fearing the risks.

Regulatory reform is in fact at the very heart of the Growth Strategy.

Naturally, at times, there will be issues that split public opinion. This was also the case when I decided that Japan would take part in negotiations for the Trans-Pacific Partnership (TPP) Agreement. However, if it is necessary for growth, I am determined to take on any "bedrock" without flinching.

(A test for the most internationally reasonable regulation)

What we have introduced to make this achievable is a "test for the most internationally reasonable regulation."

Japan still has regulations that are not in line with the times. This becomes evident if you compare Japan with the rest of the world. We will comprehensively remove hindrances to corporate activities.

Today I received a report from the Regulatory Reform Council. I sincerely appreciate the efforts of the Council members. I would like to introduce the main results of their discussions.

We will lift the ban on online sales of over the counter drugs.

In the modern day, with online transactions now so firmly established, it is logical to take an approach that in any event enhances consumer safety and consumer convenience, whether purchases are made face-to-face or online.

We will lift the ban on the sales of all non-prescription drugs under carefully crafted rules while ensuring the safety of consumers.

We will lift the ban on online election campaigning, beginning with the upcoming House of Councillors election. While I cannot deny there is a feeling of "At long last!" in this area, it is a major reform that is compatible with the IT age. Japan has not yet tapped its latent potential in information technology to the fullest.

We must thoroughly draw out IT's potential in order to foster societal innovations, revolutionary business practices, and dramatic rises in productivity. I regard IT strategy as an area that will continue to be a major pillar of my Growth Strategy into the future.

We will lift the ban on functional claims displayed on health foods. The people will protect their own health by themselves. In order to do that, it is imperative that accurate information be provided. This is only natural.

At present, unless a food product is recognized as a "food for specified health uses" by the national government, it is not permitted to indicate health effects such as "builds strong bones" anywhere on the product. But getting such recognition takes both money and time. It seems fair to say that for people running small and medium enterprises and micro enterprises in particular, the doors to opportunity are in fact closed.

In the United States, it is possible to assert functional claims on a product as long as there is also a clear and proper indication that these health claims have not received government approval. A company only needs to submit notification to the national government later.

This lifting of the ban is not limited simply to bringing our system in line with the rest of the world. With an eye to expanding the market for agricultural products overseas, I would like to examine arrangements that promote functional claims in a manner that is more easily understood by consumers than the methods used by other countries.

Our aim is not to be "in line with the rest of the world." Rather, we aim to stand at the very frontier internationally. We will make it easier for companies to flourish in Japan than anywhere else in the world. That is the basic policy of the Abe Cabinet.

(Never-ending regulatory reform)

Early in the Meiji era, it is said that a large number of the common people submitted a petition to the government with a view to building a new country, and that they played a proactive role in bringing their proposals into fruition.

The Abe Cabinet enthusiastically welcomes "modern-day petitions." We will actively incorporate new ideas from both the public and private sectors into this Strategy and expand the front line where we are taking action.

Today's report from the Regulatory Reform Council is nothing more than the first of many steps we will take. We will continue in the future to clear away any regulations we find that hinder growth.

In the field of medical services, the issue of what is called "mixed medical treatment" has been pointed out. This refers to a situation in which patients who wish to make use of the latest medical treatment techniques in addition to conventional techniques are forced to cover the entirety of the costs out of pocket [of both types of treatment , even though the conventional treatments would normally be covered by insurance].

I will dramatically develop this area. We will create a new structure by which the latest medical treatment techniques vault into widespread use.

Until now, the medical institution making an application has borne the entirety of the burden of demonstrating the efficacy and safety of an "advanced medicine" technique covered under the "specified medical care coverage" system.

This will be transitioned over to a setup by which the national government provides comprehensive support, based on the proposals of academic societies and others.

The time required to gain approval for use will also be slashed in half by making use of outside evaluation organizations.

As cutting-edge medical treatment techniques emerge, we will promptly recognize them as "advanced medicine" and expand the range of coverage under the "specified medical care coverage" system.

In the field of agriculture, we will further reinforce our efforts to create what are called "farmland consolidation banks," which will increase competitiveness by bringing together fragmented tracts of farmland.

We will move forward on making the necessary procedures increasingly transparent and simple while also preparing immediately an "electronic map depicting farmland use" through which anyone can see where available farmland exists.

I would like for motivated private sector entities, including corporations, to take up efforts in this field proactively.

(National Strategic Special Zones)

We will also newly establish National Strategic Special Zones. Under the Special Zones for Structural Reform initiated by the Koizumi Cabinet, the national government approved modifications to existing regulations tailored one by one to local conditions, in response to proposals received from local authorities. A large number of special cases were subsequently expanded nationwide, making this really the front-runner in regulatory reform efforts.

The National Strategic Special Zones that I am proposing here will develop the Special Zones for Structural Reform approach into something that is more "all-inclusive."

We will foster an international business environment that rivals such cities as London and New York. I wish to create cities that bring together technologies, human resources, and capital from around the globe.

However, if we are to achieve this goal, we cannot simply address one regulation and then another in turn, as the task would be endless.

In order to make internationalized cities, it is necessary to have an environment in which everyone, including non-Japanese, is able to go to the hospital with peace of mind. We will make it possible for non-Japanese to receive medical services from doctors with communicative competence in other languages and review the system so that top-class foreign doctors are also able to practice medicine in Japan.

We must also enhance our international schools for children to attend. We will boldly push forward with a review of the rules that make it difficult to establish such schools in Japan.

Having one's workplace near one's home is an issue for people living in our major cities. The daytime and nighttime populations of Manhattan hardly differ at all. We will also change regulations governing the floor area ratio in order to promote residency within the central parts of our cities.

We will prepare an "international business environment" at any rate. After clarifying our goals in this fashion, the national government will work in cooperation with local areas, rather than assuming the position of screening proposals put forth by local authorities. The national government itself will clarify the goal and then proactively do whatever we can.

This is what I envision for these "National Strategic Special Zones."

We have already formed a working group and have begun the process of examining the issues thoroughly. There are no areas maintained as sanctuaries within these "National Strategic Special Zones."

(Aiming at still greater heights)

I was genuinely moved at Mr. Yuichiro Miura scaling Mount Everest at the age of 80.

"If you have a dream and put it into practice without giving up, you will come to realize that dream."

I consider Mr. Miura to have illustrated those words through his example.

At age 65, he set forth his dream of scaling Mount Everest, and he achieved it at age 70. Next was his dream of climbing to the summit at age 75, and then after that, at age 80. Dreams expand to become really tremendous ones.

My Growth Strategy is just like that.

In this age of megacompetition with the globe, there is no safe refuge where we can be satisfied by tackling only certain things.

The Growth Strategy, which will be decided next week, is a stepping stone. We will aim at still greater heights and work continuously to expand our efforts. This Growth Strategy is therefore the starting point towards what might be called "The Growth Strategy: Season 2."

3. Boldly opening up government enterprises

In fact, Mr. Miura's journey to Mount Everest at age 70 was not his first time there.

He had previously skied down Everest from an elevation of 8,000m. It was 1970 when he established this record that shines brilliantly in the Guinness World Records.

In Japan, this was exactly when the Osaka Expo had opened and the Expo was chaotic with all the crowds. The corporate pavilions at the Expo proposed "visionary products" that were the first anywhere in the world, including moving sidewalks, computer-controlled automobiles, and "human washing machines," sparking the excitement of a great many Japanese.

We can also aim to be "best in the world." This was an age in which Japan was working to restore its self-confidence and pride. The driving force behind this was the power of the private sector, including both the Japanese people and Japanese companies.

I think that the establishment of the principle of privatization by the Doko Provisional Commission on Administrative Reform in the 1980's regarding the three public corporations of Japan National Railways, NTT, and Japan Tobacco and Salt was truly inevitable historically.

I am firmly convinced that in the era of an aging society with a dramatically falling birthrate, what will carve out a new path forward is again the power of the private sector.

Still now in a broad array of fields, including energy, medical services, and infrastructure development, we can find a world that may be called "government enterprises," in which public systems and institutions restrict the role of the private sector against a backdrop of entangled regulations.

In each case, these are all industries for which future growth is forecasted.

I will boldly open up this world of government enterprises. And, believing in the creativity of the Japanese people and Japanese companies and in their ability to achieve breakthroughs, I will liberate their dynamism, allowing them to engage freely in their endeavors.

This is the task for the Abe Cabinet. It is the vitality of the private sector that is the engine powering Abenomics.

(1) Diverse energy businesses

(Reforms to the electric power system)

Reforms to the electric power system will help advance these private sector efforts.

For the 60 years since the end of World War II, one enormous electric power company in each region has monopolized a range of functions from power generation to power transmission and retail.

However, times are changing significantly through a number of innovations coming together.

In Oita Prefecture, I saw electricity generated from steam vapor, an idea that makes you think, "Exactly what you'd expect from micro enterprise entrepreneurs." It is also an idea that naturally comes from a community with a lot of onsen, or hot springs. Energy is also something that can be locally produced and locally consumed.

Through the appearance of fuel cells and storage batteries, we are now in an age in which consumers generate their own electricity and use it wisely.

In addition, businesses have appeared that sell electricity cheaply by expanding renewable energies through the use of a menu showing a list of fees for eco-friendly options and by selling them as a set together with gas and telecommunications services.

We will be able to draw out such innovation to the full through an overall liberalization of retail combined with splitting the power generation and power transmission functions.

The more we diversify supply sources, the more difficult it will be to ensure a stable supply of electricity. The task of ensuring a stable supply of power is no easy matter.

For that exact reason, I believe that we must foster innovation to a greater degree. I would like to ask people in the electric power companies with their wealth of experience to be active as true "pros" and become creators of further innovation.

There is a veritable mountain of issues surrounding the electrical power system, including increased costs, concerns about supply, and environmental restrictions. We will foster an environment in which anyone will be able to take on the challenge of creating a dynamic and magnificent energy market that simultaneously resolves these issues.

The benefits of this will not stop at only people's daily lives or domestic industrial activities. It is my firm belief that the diverse electrical power businesses emerging from our 16-trillion yen domestic market will also be able to take the world by storm.

Bills to reform the electrical power system have already been submitted to the Diet at present. The Abe Cabinet wishes to have these bills passed at all costs.

(Reviewing the use of environmental assessments)

The path Japan has followed as a country with few natural resources has historically incorporated a vast array of innovations. The highest level of power generation technology in the world has its origin in that Japan. I am referring to high efficiency coal-fired power generation.

The need for low cost coal-fired thermal power is increasing globally. A key that contributes to both stable growth and climate change countermeasures around the world hinges upon increasing the efficiency of coal-fired thermal power.

Simply replacing the coal-fired power plants in the United States, China, and India with Japan's current technologies would reduce carbon dioxide emissions by an amount that exceeds the entire amount of carbon dioxide generated by Japan. What's more, the future holds the promise of leading to technologies that capture carbon dioxide.

The fastest way to reduce global carbon dioxide emissions is most certainly to promote innovations in coal-fired power generation.

We will improve the efficiency of Japan's coal-fired power generation even further and expand the market for this technology overseas. In order to do so, the new construction of plants will be possible even domestically, in the case of coal-fired power generation incorporating the world's most advanced technologies. We have conducted a review of the use of environmental assessments.

Of course, we will also reduce dramatically the amount of time required for environmental assessments for power generation facilities utilizing wind power, geothermal power, and other types of renewable energies and further accelerate investment in these areas.

We will extend all types of energy technologies through investing domestically and also by expanding the market for these technologies overseas. This is the sole course of action for Japan as a country with few natural resources.

I expect that Japan's electric power-related investments over the next decade will be able to expand to a scale of 30 trillion yen, a figure 1.5 times the size of actual investments over the past ten years.

(2) Creating a new industry focused on good health and longevity

(Expanding the possibilities of health and preventive services)

Consider the famous "Tanita Shokudo" employee cafeteria. Weight measurement scalemanufacturer Tanita is engaged in supporting the health of its employees by developing low-calorie dishes at its company cafeteria, among other efforts.

The result of this has been company medical expenses that are an amazing 20 percent lower than the industry average. But that is not all. The company cafeteria evolved into a new business for Tanita.

I understand that businesspeople wanting to improve their health queue up daily at the "Marunouchi Tanita Shokudo" restaurant.

Fitness, guidance on exercise, and dietary management are all areas of business within the field of good health and longevity that people did not even imagine until now, and yet they are emerging one after the other, led by the private sector.

However, we find regulations confronting us here as well. The issue is that it is not entirely clear where to draw the line between these activities and the practice of medicine, and thus it is hard to know how far one can go.

In light of that, we will create a new system to authorize new entrants to health and preventive services legally, enabling them to conduct their business with peace of mind.

This authorization is not only for the purpose of enabling economic assistance such as in finance aspects. By receiving advance authorization, a company can receive an official stamp of approval that it is a lawful business. It also eliminates the regulatory gray zone.

I would like private sector entities to jump into this area actively and provide services that meet people's health needs, without being afraid of regulatory matters.

(Reviewing the use of the insurance system)

We will conduct a review of the use of the insurance system, centered on the treatment of diseases, in order to spur on new entries in this field and significantly advance health management and the prevention of disease.

Until now, the computerization of health insurance claims - that is, the detailed statements of medical services received which is used to make claims against insurance - aimed at increasing the efficiency of insurance services.

We will make use of this computerization in order to engender new industries.

Analyzing and evaluating the treatment information found within health insurance claims will lead to possibilities for health management. This is a treasure trove that has the potential to give rise to various services.

For every person insured with a health insurance society, national health insurance, and the like, we will seek to prevent disease in the insured member by introducing analyses and evaluations of the data gleaned through his or her medical consultations.

Japan's medical expenditures currently amount to 40 trillion yen. If we are able to divert even 1 percent of that into health and preventive services at present, a new 400 billion yen market will emerge. This will enable a flow of funds that will bring about a diverse range of private sector services.

From that, we will attain a "society of good health and longevity," which is something that everyone seeks. I am fully confident that now, by opening up government enterprises, we will also succeed in tying this in to curbing our medical expenditures, which are forecast to increase to much as almost 60 trillion yen a decade from now.

(3) Making use of the power of the private sector in the field of infrastructure

(Lengthening service life through the latest technologies)

The development of Japan's social capital reached its apex from the high-growth era of the 1960's through the 1980's. This means that the number of facilities built more than 50 years ago will increase at an accelerated pace over the next 20 years.

The accident in the Sasago Tunnel brought that reality home to us once again.

The key to solving this will again be the power of the private sector. More and more kinds of the latest technologies have been appearing, including nondestructive inspections using laser scanners and new operation and maintenance methods that combine sensors and robots with IT.

This coming autumn, we will compile a "Basic Plan for Extending the Service Life of Infrastructure," which will utilize the latest technologies to improve safety while holding down costs.

In addition, based on this Basic Plan, we will draw up a concrete action plan and realize both improvements in the safety of all types of infrastructure and efficiencies in their operation and maintenance.

(Proactively using public-private partnerships (PPP) and private finance initiative (PFI) projects)

Yet even as we move forward with extending the service life of infrastructure, there is some infrastructure that needs to be renewed.

One example of this is the Shuto Expressway, which was opened to traffic before the Tokyo Olympics. Its aging over the past half-century has become a major problem. However, provisional estimates of the cost of a large-scale renewal range from roughly 800 to 900 billion yen.

Here too we will utilize private sector capital to the greatest possible extent. By making use of public-private partnerships (PPP) and private finance initiative (PFI) projects, both of which help advance the improvement of infrastructure under partnerships between public and private actors, we will reduce the public burden as much as possible.

For example, the area near Kyobashi on the Inner Circular Route was developed by reclaiming the land from the Tsukiji River. As a result, ditches stretch for about two kilometers there.

However, rather than simply renewing the Expressway, as much as six hectares of new land - more than the size of the Tokyo Dome - would appear in the best districts of the city, if this area were to be covered. We have great expectations for proactive private sector investment through urban renewal.

In an area in Dusseldorf, Germany where more than two kilometers of a federal road running along the Rhine River was transferred underground, redevelopment of the urban district has been estimated as having generated 130 billion yen of private investment.

By also combining the sale of air rights it is expected that the further necessary public financial burden can be reduced greatly.

We will promote the most suitable public-private partnerships and PFI projects, tailored to the characteristics of each facility, including airports, water supply and sewage systems, expressways, and more. On the basis of this action plan, over the next ten years we will promote PPP and PFI undertakings at a scale of 12 trillion yen, which is three times the actual amount over the previous decade.

"Art is an explosion!"

These are the famous words of the late Mr. Taro Okamoto, who stunned the world with the Osaka Expo's "The Tower of the Sun."

In 1954, as Japan was trying to rise again from the burnt-out ruins, Mr. Okamoto stated the following in the book he authored, entitled Modern Day Art:

"All people must now have something to live for in each passing moment and also self-confidence. The joy of that is art, while artworks are what express it."

Each person must put his entire heart and soul into what he does, taking pride in his own way of living. I consider this to be a very intense message from Mr. Okamoto to the Japanese people.

Mr. Okamoto's words appear to be a commentary on art, but I believe that they are also in fact his view on life and his view on growth.

Now is the time for both the Japanese people and Japanese companies to "explode" with all the force they can muster.

"An explosion of private sector vitality" is the last key expression of my Growth Strategy.

4. What the Growth Strategy aims to achieve

"Active participation by women," "winning in the global market," and "an explosion of private sector vitality"-these expressions represent the three pillars of my Growth Strategy.

(A Growth Strategy that enriches family finances)

As for what it aims to achieve, this Growth Strategy clearly sets out key performance indicators as well as the timeframes in which they should be attained.

Over three years, we will restore private sector investment to 70 trillion yen.

By 2020, we will expand infrastructure exports to 30 trillion yen.

By 2020, we will expand the balance of inward direct investment from non-Japanese companies to 35 trillion yen, a doubling of current figures.

By 2020, we will attain an export value of one trillion yen for agricultural and marine products and food products.

Over ten years, we will have ten Japanese universities ranked within the top 100 in the "World University Rankings."

I am afraid that I do not have enough time to list all of the Strategy's goals, but I would like to take up individual policy areas in concrete terms.

We will continue to forge policies in a consistent manner until these goals are attained. We will continuously encourage unceasing innovations by the private sector.

Should we fail to make progress, we will analyze the root causes for that situation and hammer out further appropriate measures. Continual action is the key. In view of this, it is necessary to stipulate key performance indicators in concrete terms and monitor our progress.

What key performance indicator is the most important of all? I consider it to be per capita gross national income.

My reason for this is that the aims of my Growth Strategy are all about creating jobs for people motivated to work and increasing the take-home pay of people who work hard.

That is to say, it is about enriching family finances. That is the Growth Strategy in a nutshell.

(Transitioning from 20 years of stagnation to ten years of revival)

Prolonged deflation has made the Japanese people lose confidence in themselves while causing all types of investment to wither away. However, the non-performing loans that ushered in these 20 years of stagnation are already a thing of the past. The private sector is not lacking in money.

Now is an opportunity to achieve growth.

By shooting my third "arrow," we should be able to recover over the next three years gross national income that comes close to the 50 trillion yen lost over the last few years.

We will move capital that now lies dormant in great amounts and discover potential markets both domestically and overseas, spurring private investment. In addition, we will shift human resources, technologies, and capital to highly productive sectors.

By doing so, we will increase per capita sales. We will return the fruits of this to people's family finances in the form of wages and income. The increase in income will provide an upward thrust for consumption, thus leading to further growth.

This truly completes a "virtuous circle of growth" that is centered on family finances.

If, buoyed by [growth in] overseas economies as well, we succeed in bringing about this growth scenario, the per capita gross national income will reverse the trend towards contraction that we now see, ultimately expanding at an annual rate of more than three percent. I believe that ten years from now, we will have succeeded in increasing this number by more than 1.5 million yen over the current level.

We must transition from 20 years of stagnation to ten years of revival.

We will dramatically transition the Japanese economy from stagnation to revival through the Growth Strategy's key elements of "challenges" - actively taking on challenges - "openness" - openness to other countries - and "innovation," as well as "action."

5. At last, a time for action

Next week, the Cabinet will take a decision on the Growth Strategy.

However, no matter how magnificent the Growth Strategy may be, we must not allow it to be only words on paper.

At last, it is time for action.

I have been saying that in order to break out of this critical situation, it will be necessary for us to employ measures that are altogether different from what has come before-measures of a "different dimension."

In light of this, I consider it essential for not just the policies themselves but also their means of implementation to be of a "different dimension."

There are some who ask about the Growth Strategy to be decided in June, "You will be moving into actual execution from next fiscal year, I assume?"

However, if execution of these policies is delayed, the policies' effects will emerge still later than that. In light of the present economic climate, there is no time to lose.

In the face of a national crisis, first of all we should discard the thinking in which we get caught up in the sense of scheduling we have had until now, such as "Legal changes should be addressed during ordinary Diet sessions starting each new year," or "Revisions to the tax code should be decided at the end of the calendar year."

The government will address pressing matters by taking decisions as early as this autumn.

Without action, there can be no growth.

The government and the party will engage in united efforts to transition into execution of the Growth Strategy.

6. Closing remarks

What will be necessary to execute these policies in a vigorous manner is political stability.

Next week the holding of the Tokyo Metropolitan Assembly election will be officially announced. After that, we head into the House of Councillors election, so we will be plunging into a very heated "election summer."

The "divided Diet" has given rise to some political irregularities, and I suspect everyone here shares the feeling that we have had enough of that situation.

The upcoming House of Councillors election will also be a battle to take back Japan's politics.

So what are your thoughts on all this? If we compare the situation now to that of half a year ago, the leaden atmosphere that had covered Japan has changed completely, has it not?

"Japan still has more than ample ability to grow." "Japan can be active at the heart of the world once again."

That confidence is now sprouting up suddenly. This is a feeling very similar to "anticipation."

My mission is to change this "feeling" into a "firm conviction." The battle to "restore Japan" is still only halfway through.

It is not just a matter of the economy. The critical moments are still to come in accelerating reconstruction, rebuilding education, and turning around our diplomatic and security policies.

The Japanese national soccer team has become the first team in the world to qualify for the World Cup. Japan will again be in the limelight on a worldwide stage. Japan must once again come out on top in the world center.

I would be very pleased if together with you I could move Japan "one more step forward." I wish for us to take our steps forward towards growth in a steady and powerful manner.

I am firmly resolved to carry through on these measures without fail.

Now, having made that statement to you, I would like to end my remarks.

Thank you for listening.