[Title] Keynote Address by Prime Minister Abe at The Economist Japan Summit 2014 "Japan towards 2020: Time to get started,"

Towards a Japan, at ease, that relishes change

Let me start by thanking Andrew Staples and Dominic Ziegler for giving me this superb opportunity. My respect also goes to Tamzin Booth, who's working hard as Tokyo bureau chief.

And good morning to you all. I will be speaking for 15 minutes, and after that I will be happy to answer some of your questions.

Before giving you my speech may I pay my deep condolences to the victims, and their family members, of the ferry boat that sank in the ROK.

Concurrent cycles, from the super-long term to the short term

Recently, I came across an analysis that's from a seasoned economist who's been keeping track of cyclical developments of Japanese economy for well over 30 years.

Consider, if you will, super-long-term cycles known as "Kondratiev waves" influenced by innovation and the investment in infrastructure, as well as the long-term cyclical "Kuznets swings" which have construction investment as a factor. Consider too the "Juglar cycles" and "Kitchin cycles," which are cycles over the medium and short terms. The analysis holds that an uncommon phenomenon is now taking place in the Japanese economy, insofar as each of these four types of cycles, ranging from the super-long to the short term, is now on the upswing concurrently. Upon learning this, there were three thoughts that occurred to me.

What can be said at present, with four cycles on the upswing concurrently

Firstly, a golden opportunity to put the economy onto a stable, new growth track is now upon us.

The economic policy my Cabinet is pursuing must this year enrich each and every individual and deliver the fruits of growth to every corner of the nation. We ought to give further impetus towards the realization of this goal. That was the first thought that I had.

My second thought was of making use of Japan’s geographic advantage. Now the global economy getting intertwined at a furious pace, Japan is not in the "Far" East, but rather, in the very center of the Pacific Rim. Moreover, Japan is a neighbor to the world’s growth center that stretches from Southeast Asia to India. Japan’s direct investment is expanding in Viet Nam and India, both in the midst of their growths. This will most certainly give rise to vigorous demand for Japan’s machine tools and capital goods. There can be no doubt that the great growth center of Asia will continue to propel Japan upward for quite some time into the future. My third thought was that precisely because of these facts, it is imperative for Japan to open its economy further and become a country that actively incorporates outside vitality, along with human resources, capital, and wisdom from abroad.That is to say, we must be a country capable of growing by directly incorporating the vitality of a growing Asia.

The implications of National Strategic Economic Growth Areas

Let me footnote my points a little bit.

First, about what we call National Strategic Economic Growth Areas.

In the very near future we will be taking the decision to designate six areas -- Tokyo, Kansai, Okinawa Prefecture, and the cities of Niigata, Yabu, in Hyogo Prefecture, and Fukuoka -- as National Strategic Economic Growth Areas.

For example, in Tokyo, the sky is literally the only limit. We will allow various kinds of experimental endeavors and in time impart the fruits of these efforts to the entire nation.

In the areas of medical practices, education, agriculture, and employment practices, what has fallen out of step with the needs of the era, and in what way? These National Strategic Economic Growth Areas will insert the probe of reform down into our regulatory system, which has become solidified just like bedrock.

As I always say, I myself will serve as the drill bit that will shatter the hard bedrock.

From the Japan-Australia EPA to the TPP and a Japan-EU EPA

I am accelerating negotiations on economic partnership agreements, or "EPAs," with our various partners around the world at an entirely different degree of speed than we did in years past.

First of all, on April 7, Prime Minister Tony Abbott and I reached agreement in principle on the Japan-Australia EPA.

Next, it's TPP's turn. I confirmed with U.S. President Barack Obama at The Hague in the Netherlands last month that we would focus our efforts going forward into concluding negotiations.

Both Japan and the U.S. attach a great deal of importance to rules, uphold the principles of freedom and democracy, and possess the most advanced technologies and industries.

We intend to overcome our mutual differences and together forge a sturdy economic order for Asia and the Pacific in the 21st century. We wish to create an unshakable foundation for growth.

Rather, I should say it is my firm belief that we must create such a foundation.

We will also make all-out efforts towards realizing an EPA with the EU.

On the one hand, we have the TPP, and on the other, we have the EPA between Japan and the EU.

The realization of these two agreements means the advent of a truly immense market.

What will emerge is a free and open as well as highly-advanced and integrated economy. A single enormous growth engine that will benefit the entire globe will kick into life.

I intend to achieve this future, no matter what.

Towards a more open Japan

We are now in an era in which Japan’s frontiers extend well beyond Asia and the Pacific, expanding to Latin America and Africa.

That being the case, Japan must completely cast off the inward-focused stance it has had until now.

We will have non-Japanese brimming with ability playing more active roles here in Japan. This month we already set about creating a new structure to make this happen.

A large number of highly motivated and ambitious young people have already come to Japan from all around the world, especially from neighboring Asian countries, and are working diligently day in and day out at university campuses and workplaces.

We must be a Japan that interacts with these young people in an unfailingly courteous and kindhearted manner. Treating people courteously is after all a point of pride for Japan.

For people who want to come to Japan to pursue job opportunities or further their studies, Japan must remain their hope. We must not be disrespectful of them, and our arms must always be wide open towards them. I believe that's the kind of country Japan is.

Promoting even further dynamic engagement by women

Another area that must be improved upon is the way of thinking that tends to be male-oriented in virtually all aspects.

We've taken the decision to ensure that at least 30 per cent of all personnel hired by the national government will be women. I am also now urging listed companies to add at least one woman as a board member.

I often cite a quote of Arianna Huffington, which goes, "If 'Lehman Brothers' was 'Lehman Brothers and Sisters,' they might still be around." As that suggests, if we are able to foster diversity, companies and economies alike will enjoy stability over the long run.

Once we reach the point where it will no longer be news to have a woman or a non-Japanese serving as a CEO, I'd say Japan will reinvent itself and recover the spirit of boldly taking on risks and pressing forward to innovate.

"Womenomics" tells us that a society in which women are dynamically engaged will also have a higher birth rate. I intend for us to tackle urgently the expansion of day-care facilities and other such areas necessary as the foundation for such a society.

Towards a country that relishes change

Japan is a country that changes dramatically when the time comes.

Once they proceed beyond a certain point, the people of Japan have the ability to push reforms further and further along, pressing on with and accepting changes.

In the very limited period of just over a year, we have come to discuss the necessity of the various reforms that I mentioned just now as if they were nothing whatsoever out of the ordinary.

Japanese society is now picking up speed as it moves to change, taking on an orientation that accepts diversity even as it continues to place importance on the merits of its traditions, and to accept these in a relaxed, quintessentially Japanese manner.

Six years from now, the Olympic and Paralympic Games will come once more to Tokyo. That's already serving as a major catalyst.

We are fully capable of change. What’s more, we are able to relish change. In the months and years to come, Japan will be showing you exactly that.

Transitioning from "JAAD" to "JAAA"

As I say that, I recall something from almost 16 years ago. In September 1998, The Economist ran a feature whose title, "Japan’s amazing ability," adorned the cover in huge letters.

Naturally, this was not an expression of praise.

Which reminds me, last year, The Economist kindly likened me to Superman, zooming through the sky.

But I suppose that that too might have been intended as something that can be turned into a joke later on, saying, "Well, there you have it; he stalled and came crashing back to earth." Sorry, I am not up to your expectations.

Sixteen years ago, the "amazing ability" that The Economist marveled at was Japan’s ability to disappoint and frustrate people. In that regard, Japan was simply astounding, it pointed out witheringly.

Let us abbreviate that as "JAAD" -- "Japan's Amazing Ability to Disappoint."

But I know that both Tamzin Booth and Dominic Ziegler would instead want to say that it is not "JAAD" but rather "J-triple A" -- "Japan’s Amazing Ability to Amaze."

I know that Tokyo has already changed its scenery dramatically even since the days you lived here, Dominic, while also retaining its excellent public safety, clean streets, clear blue skies, and water you can drink straight from the tap.

The number of visitors to Japan is increasing at a brisk pace, not only for visitors from Thailand and Indonesia but also from China and the ROK. You are already aware of this, I am sure.

Japan will transform still more from now on in substance, not merely in appearance. I ask you to stay on the lookout for this, keeping your eyes and ears peeled.

Some things are unchanging

There are some things that are unchanging, and some that must not be changed.

One of these is our track record, which supports our stance of being a "Proactive Contributor to Peace," the new banner of the new Japan.

Japan has been invariably faithful to the banner of ideals hoisted by the United Nations. Both historically and at the present time, Japan has been of the very highest order in its financial contributions to the United Nations and to other UN organizations.

Since the time when our economy was still only toddling along, we began providing foreign assistance and young volunteers have set out to Asia and Africa.

This past January in Mozambique I had the opportunity to meet some of those young volunteers. The number of women is quite sizable. It was very clear to me that they are unruffled by hardship and thoroughly enjoy their experiences.

There is a pillar found consistently across this guiding principle of Japan of rendering assistance to others. It is an approach that fosters the abilities of each individual and promotes self-reliance.

It is a way of thinking by which we strive together with the people receiving the assistance in order to foster ownership, whereby people regard work as pleasure. The eyes of these young volunteers sparkle with this kind of thinking.

Here I must also cite Japan’s Self-Defense Forces.

Members of the Self-Defense Forces displayed exemplary cooperation with the armed forces of the United States and Australia in the wake of the recent Great East Japan Earthquake.

At a time when the entire nation of Japan was grieving deeply, that cooperation truly gave us hope. And yet, that was just a very small portion of what they do.

The Self-Defense Forces have earned deep appreciation and respect from the local people in every location they have gone to, in Haiti, in Indonesia, and recently, in the Philippines.

We Japanese have established warmhearted services, built up through high levels of training, that value peace, human rights, and democracy.

This is what Japan has achieved, and something in which we should take due pride.

Towards a "Proactive Contribution to Peace"

These unchanging things within a changing Japan are truly our way of life.

If deflation made Japanese go through life with downcast eyes and often become inward-focused, then now, as we once again turn our heads upward and set off towards growth, we entrust to the banner of "Proactive Contribution to Peace" the mettle to create with our own hands the security that will support global prosperity and stability.

Working together with nations with whom we share common values and interests, we will safeguard and cultivate international public goods, ranging from space and cyberspace to the skies and the seas, all of which are indispensable for making the world happy and prosperous.

In order to do so, I intend for us to demonstrate all possible wisdom and capabilities.

This "Proactive Contribution to Peace" of which I speak encompasses just such a meaning.

Nothing would make me happier than "Abenomics" succeeding in cultivating young people who readily look to shoulder such responsibilities.

I wish to nurture a new generation of Japanese who will gladly work for the sake of world peace, prosperity, and security in a vibrant, courteous, and steady manner, just like the young people with sparkling eyes whom I met in Mozambique.

We, the politicians of Japan, bear the responsibility in fostering such young people in the next generation. That is precisely why we must make "Abenomics" a success.

Thank you very much for your kind attention.