
	Lyon Summit Information

Press Conference by the Japanese Delegation
G-7 Summit Morning Session Discussions


Speakers:	Mr. Hiroshi Hashimoto Spokesman for the Delegation of Japan Mr. Kaoru Ishikawa Spokesman for the French-speaking Press
Date :	28 June 1996
Time :	14:30 -- 15:08
Location:	Japanese Press Briefing Tent Lyon, France

MAJOR TOPICS

Introduction of speaker and briefing status
Moderator: Good afternoon, ladies and gentlemen. Welcome to this on-the-record briefing by the Japanese delegation. Before we begin, I would just like to remind you of the ground rules for this press conference. Today's speaker will be Foreign Ministry Press Secretary Hiroshi Hashimoto. Mr. Hashimoto is the official spokesman for the Japanese delegation to the G-7 Summit. As this is an on-the-record briefing, you may quote Mr. Hashimoto by name and title or as the spokesman for the Japanese Government. Mr. Hashimoto will begin with a brief statement. Following this statement, he will open the floor to questions. If you have a question, please raise your hand and wait to be recognized by the spokesman. Once you are called on, please proceed to the microphone. Please state your name and affiliation before proceeding with your question. Thank you very much, ladies and gentlemen. Let me now introduce Mr. Hiroshi Hashimoto, Spokesman for the Japanese Delegation.
G-7 Leaders' Morning Economic Discussions
Spokesman for the Delegation of Japan Hiroshi Hashimoto: Good afternoon, ladies and gentlemen. Welcome to this press conference. I have just arrived here and I have not had time to consult with my colleague regarding what I am going to brief you on. I was debriefed on the economic sessions of the summit this morning. I am going to tell you what Prime Minister Ryutaro Hashimoto of Japan said at the meeting. I will ask my colleague to brief you on the separate meeting between the foreign ministers and financial ministers. I think Mr. Ishikawa will explain it to you, and he will be happy to take questions on those two separate meetings. At the economic sessions of today, they talked about the international economy, globalization and employment. Those three issues were taken up, and the Summiteers exchanged views deeply on those three subjects. Prime Minister Hashimoto made his contributions to the following four subjects. One is Japan's economic situation; the second is the situation of the Asian economy; third, globalization; and fourth, employment. During the course of the discussion, Prime Minister Hashimoto proposed a new idea to the meeting which had not been discussed in the preparation of the Summit by the Sherpa. He proposed this idea, and the Chairman of the Summit and several other Summiteers appreciated Prime Minister Hashimoto's idea. We understand that this subject will be taken up from now on, either in the Summit process or in the Organisation for Economic Co-operation and Development (OECD) process. I will quickly tell you the content of his proposal. This is related to social security and welfare. He, at first, stated that this issue is his life-work as a politician. He believes that the responsibility of this present generation is to endeavor to strengthen welfare for the next generation. Each country has its own problems on social welfare and social security. He said that it is very important to share the experience and knowhow on this issue, so that a sustainable social security system should be established. This issue is not only for the developed countries, but also for the developing countries. In order to improve social welfare, the fund is not the whole answer. When we exchange experience and knowhow on this issue, we should not only talk about successes but also various failures. He suggested to call this new initiative the initiative for "a caring world." On the Japanese economy, he explained to his colleagues on the recent trends of the Japanese economy. He stated that Japan's economy will develop on its own foot, so that it will lead to medium- and long-term stable economic development. In more concrete terms, he stressed the need to conduct deregulation programs, and tackle fiscal restructuring, and settle as soon as possible the issue in order to secure the financial system. At the same time, he pointed out that structural change in the Japanese economy, particularly noting that the rate of imports of manufactured goods has been steadily increasing. On the economic situation in Asia, he expected that, not only in the first half of the nineties, but also in the last half of the nineties, the Asia-Pacific region, specifically East Asia, is expected to be the growth center in the world. This is a result of efforts by various Asian countries for attaining further voluntary liberalization of their economies by introducing market mechanisms and taking appropriate macroeconomic measures. He said that it is very necessary to keep this dynamic economic growth in the region. However, in some countries, the physical infrastructure has still not been improved, so we should try to utilize the private capital for this. The economic growth started in East Asia and has begun to spread to South Asia. The internal dependency within the region has also deepened. It is also important for the region to keep the region open to the outside world. He noted that that Asia-Pacific Economic Cooperation (APEC) is an example. The role of the Asia-Europe Meeting (ASEM) is also important to try and find more potential for economic cooperation between the two regions. On globalization, he said that we should accept this as a good challenge, and we should go ahead with globalization. In order to cope with globalization, it is indispensible to let the market become more flexible and introduce further regulatory reform. He does not support the idea that various issues related to the rigidity to its social structure and unemployment is a result of globalization. The Asian countries treat globalization in a positive way, because they are flexible in adopting themselves to a new environment. But at the same time, it is true that there are people who are concerned about globalization, therefore, we should pay due attention to these people. In this sense, he has appreciated President Jacques Chirac of the French Republic initiative to talk about globalization. In this respect, Prime Minister Hashimoto explained to his colleagues about his new idea -- Initiative for a Caring World. At the same time, Prime Minister Hashimoto said that Japan would like to host a conference related to employment in the future. I think that is about all they discussed this morning. After the meeting, together with the other cabinet ministers, they formally adopted the Economic Declaration. This is my initial briefing, if you have any questions, I will be delighted to answer them for you.
Japan's Initiative for a Caring World
Q: Could you tell us more details about this Initiative for a Caring World? Can you expand on what the goals of it would be with respect to social welfare and social security?

A: Prime Minister Hashimoto wants to address this issue together with other G-7 countries. So, probably, in the future Sherpa process, together with other G-7 countries, the Japanese side will table its idea and put substance to this. But, at this moment, Prime Minister Hashimoto proposed this idea, because this welfare idea is very important for the G-7 Summit, other G-7 countries and other developing countries. We will further elaborate on this matter in the future.

Q: I am looking for something more precise. When you say welfare, do you mean the domestic welfare systems within each country as they are concerned with budgetary expenditures, or the welfare of the world, such as in the third world countries which don't have such kind of infrastructure developed?

A: Each country has its own welfare system and social security system, but because of the aging society and budgetary restraints, each country has a problem on this. So, in this sense, Prime Minister Hashimoto proposed that we exchange knowhow and experience on each social security system, so that we can learn many things from each other and we can maybe harmonize or create something better which can be applied to each country in the future. But, in any case, he proposed this in a very broad sense this time.

Q: I would still appreciate a clarification. The Organisation for Economic Co-operation and Development (OECD) has carried out for many years extraordinarily detailed comparisons, not only on the conditions in these issues in G-7, but in all of the industrialized countries. Can you please tell us what the G-7 can do here that has not already been done by the OECD?

A: We may have done many things on this field, but it does not necessarily mean we have solved these issues. Even if we have talked in the past, still we have enormous problems on this. This issue is worth tackling by the G-7 countries, and probably the other countries, too.

Q: You just mentioned we have enormous problems with it. Can you be a bit more elaborate? What sort of problems do you see? Does Japan have enormous problems? Does Asia have enormous problems? Or is it only Europe?

A: Probably, "enormous" is not the right word. Prime Minister Hashimoto is basically talking about the problem Japan faces. Japan's society is now aging. The budgetary burden on the social welfare is increasing. We cannot just let it go. If we talk about pensions, for example, we have to delay the disbursement of pensions from 60-year-old persons to later. By doing so, we will have more and more experience. Japan probably has good experiences which can be shared with other countries, and at the same time, we have bad experiences which can be shared by the other countries, and Japan wants also to learn form this.

Q: Two questions. To clarify this section on social welfare, are you talking about exchanging experiences within the G-7 to help other G-7 countries, or to spread that to benefit other non-G-7 countries in Asia or wherever.

A: The Prime Minister of Japan said today that this welfare is not only an issue within the developed countries, but also the developing countries have their problems. But, he does not have in his mind actually how to proceed on this question. In any case, he would like to discuss this issue with G-7 countries. Probably, we may invite the developing countries or other developed countries outside the G-7 to this formula later.
International Monetary Fund (IMF) gold sales
Q: My second question. I just wanted to clarify this one. I am going to change topics unless you want to come back on the same area. My second question concerns the Japanese position finally on whether the gold sales by the IMF should or should not have been included? As I understand it, they are not to be included in the communique. Where does Japan stand on that issue?

A: The Summiteers have formally adopted the Economic Declaration. It will be released soon at 15:00. Prime Minister Hashimoto did not speak on this subject; however, there is a clause in reference to this. So, would you please wait another five minutes or so and you will know what it is.
Employment issues
Q: The Japanese volunteered in Lilles about three months ago to host a conference on employment -- on problems of aging and bringing younger people into the work force. It sounds like you are reaffirming that goal here. Do you have any specifics as to when Japan plans to host this conference?

A: Are you talking about the conference on employment?

Q: The employment conference.

A: Prime Minister appreciated the importance of the last Lilles Meeting. I will further explain to you that when Prime Minister Hashimoto proposed this idea, there were some reactions by the other Summiteers. It is necessary to do comparative studies on job creation by the small and medium-sized enterprises. And, on the basis of the OECD actions which have already been done in relation with the aging society and the welfare system, etc., let's ask the Sherpas to study it by the next Denver Summit. This is what they actually talked about. I missed relaying that part to you.

Q: So, Japan is not going to host a conference on employment?

A: On this, the Prime Minister said Japan would like to host a conference on employment. But, he promptly said so, and at least I do not know what he has in mind as to when and how this conference will be held.
Further matters relating to the Japanese Initiative for a Caring World
Q: One other questions related to this social welfare -- the caring world initiative. It sounds to me like you are talking about budget constraints, pension reform, possible tax reform. Are these the issues that the leaders discussed? Or, in terms of fleshing this out, in terms of the social welfare and social security initiatives -- I mean, will the Sherpas and the finance ministers be talking about pensions?

A: This time, Prime Minister Hashimoto surprised the other Summiteers on this question. The time was rather limited, and I do not think they had sufficient time to exchange views on this particular subject.
Trade issues
Q: What about the American pressures on Japan to liberalize its importations of American goods and world goods? What was discussed?

A: Bilateral matters were not taken up at the Summit. They talked about macroeconomic issues. Bilateral trade issues were not taken up. Yesterday, Prime Minister Hashimoto and President Clinton talked about that.

Q: So, there was not such a question made by the other Summiteers?

A: I do not think so, no.
Further matters relating to the Japanese Initiative for a Caring World
Q: You described how the issue, the Caring World Initiative, was not something that was discussed by the Sherpas, but brought up on his own by Prime Minister Hashimoto. I just wonder, would you characterize this as Prime Minister Hashimoto's main contribution to the Summit so far?

A: This is a very unusual event. The Government of Japan has probably never done this before. But, this time, Prime Minister Hashimoto wanted to take the initiative and proposed this on his own. The detail of this discussion will be taken up on the level of the Sherpas. But, by taking the initiative, he wants to focus, not only for Japan, but for the other developed and developing countries, especially when we think of the 21st century.

Q: I come from South Korea. My question is related to the Asian economic situation. Was there any discussion on the difficulties and starvation in North Korea?
Briefing on the G-7 Finance and Foreign Minister's Meetings
A: At this particular session, they didn't talk about this. I think I will ask my colleague, now, to brief you on the separate talks among the foreign ministers and finance ministers.

Spokesman for the French-speaking Press Kaoru Ishikawa: How do you do? My name is Kaoru Ishikawa. I am usually the spokesman in French, but today, with Spokesman Hashimoto, we are making a joint effort. I am going to brief you about the separate meetings held among foreign ministers, finance ministers, and then the joint meeting between foreign and finance ministers. This relates to your question, sir. In the separate meeting of foreign ministers which was held this morning, there were two main subjects. One was Asian security. Two was non-proliferation. On the question of Asian security, Minister for Foreign Affairs Yukihiko Ikeda of Japan took the lead in the discussion, and he explained to his colleagues about the security situation in Asia -- North Korea, the People's Republic of China and the Union of Myanmar. Main points in the Asia-Pacific region -- he stressed that the political stability of the region contributed to the dynamic economic development of the region. On the North Korean issue, he pointed out that it is not a regional issue of the Asia-Pacific region, but it is a global issue. He encouraged his European counterparts to participate in Korean Peninsula Energy Development Organization (KEDO). He also stressed the importance that the international community should make North Korea engage in that community, and he also stressed the importance of the realization of the Four-party Meeting. Furthermore, on China, he pointed to the importance of confidence building and the "engagement policy" -- that is to say, the international community should support the open and reform policy led by the Chinese authority. On Myanmar, he expressed his concern over the recent developments in Myanmar, and that the democratization of the country should be realized by talks between the Government of the Union of Myanmar and the National League for Democracy (NLD). Now, on non-proliferation, Foreign Minister Ikeda expressed the importance of the successful conclusion of the Comprehensive Nuclear Test Ban Treaty (CTBT). You know that today is the very last day of the meeting, and if my understanding is correct, the Chairman of the CTBT meeting is going to put his proposal on the table today. End of my guess, and back to what Foreign Minister Ikeda said. He stressed the importance of the successful agreement on this issue. Now, on the separate meeting held by the ministers of finance, Minister of Finance Wataru Kubo of Japan talked about the globalization of international financial markets, and he stressed the importance of coordination among the supervising authorities on these matters. He also mentioned about follow-up matters since the last Halifax Summit Meeting, such as coordination among the supervising authorities vis-a-vis a kind of multilateral financial issues. Someone earlier asked about the tax, connected to social welfare. The tax actually was mentioned, but in the other context, in what I was briefed on, in the general line of discussion, about the tax there was some discussion. According the Summit rules, I am afraid that I cannot quote who said this; but, there was a general discussion about tax incentives to draw foreign investment, and so on. This is not good, and the OECD is actually studying this kind of tax competition. They said that the G-7 as such should encourage this study carried on by the OECD. Later, after these two separate meetings, there was a joint meeting between the foreign and finance ministers. They talked about two subjects. One was develoment aid and the United Nations and international financial institutions. Two was the situation after the regional disputes. On the first subject, Japanese Finance Minister Kubo stressed the importance of the efficiency of development aid. Foreign Minister Ikeda reiterated the importance of the Japanese proposal of the new global partnership in the field of development assistance -- that is to say, to launch together with the recipient country's concrete target, in a concrete and pragmatic way, to realize these matters. He also stressed the importance of doing something about the duplication of the international organizations configured, and he proposed that maybe a case study would be able to be carried out in the area of human resources development. He also expressed his view on the so-called aid fatigue, which is unfortunately a weakness among the member countries of the Development Assistance Committee (DAC) of the OECD. As you may know, Japan and the host country of this Summit, France, are two rare countries which continue to increase their development aid. Actually, Japan is bearing one quarter of the total development assistance in the world. Foreign Minister Ikeda said there might be some kind of aid fatigue emerging inside Japan as well, so we really need some kind of new development strategy to convince Japanese tax payers as well. The last point is Bosnia and Herzegovina. There were discussions among participants that when people or parties concerned discuss the political aspects of the agreement for peace, the economic side should also be input. The aspect of assistance for reconstruction should really be inside the discussion of all those matters. Thank you. If there are any questions, please ask them.
The situation in Myanmar
Q: Two questions which are completely unrelated. Firstly, Myanmar. Was there any discussion of Myanmar, and any discussion of what financial or political pressure might be exerted by the G-7 to bring about democratic reform?

A: Sorry, I was not briefed on that.
Financial regulation
Q: The second is on financial regulation -- the supervision and coordination of that. Was there any sense that progress was being made toward preemptive regulation to avoid things like Sumitomo's recent difficulties?

A: There were not those kinds of things in the briefing which I received.
Tax incentives for foreign investment
Q: I was a little confused -- I was a tax person. You were talking about a general discussion on tax incentives on foreign investment?

A: To draw foreign investment.

Q: To draw it in?

A: Yes.

Q: Is it the G-7 sense that -- did you say it was not a good thing? That they want to avoid using tax incentives?

A: Let me translate the current wording from my Japanese notes of the briefing. If there is a competition on tax among nations to invite financial activities and other investment, then it would -- if I translate it directly from Japanese -- have an adverse effect.

Q: So, they are saying that if they are competing on the basis of taxes, as opposed to real draw, that that is OK?

A: That has nothing to do with social welfare and that sort of thing you were interested in before.

Q: OK. But, that is OK, that doesn't matter. You said tax -- my readers care about that. You said that the OECD is studying this? They haven't released anything on this yet?

A: No. Thank you very much.

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Press Conference by the Japanese Delegation G-7 Summit Morning Session Discussions

MAJOR TOPICS

Press Conference by the Japanese Delegation
G-7 Summit Morning Session Discussions