Keynote Address by Minister for Foreign Affairs Taro Aso at the 17th Asia Corporate Conference

May 21, 2007

On May 18, Mr. Taro Aso, Minister for Foreign Affairs, attended the plenary meeting of the 17th Asia Corporate Conference that opened on May 16 and delivered a keynote address entitled “Global Management and the Mission for Japanese Diplomacy” about the importance of Japanese diplomacy from a corporate management perspective. The gist of the address is as follows:

One of the lessons of the 20th century was that no one could predict what would happen in 10 or 20 years. The diplomatic efforts of a responsible country should help corporate management to view the future as clearly as possible.
One of the critical tasks of diplomacy is global risk management. The diplomatic efforts of a responsible country never shirk preparations against ‘force majeure,’ risks such as civil war that are beyond the capacity of private corporations. After World War II, it has been the presence of the United States armed forces and the Japan-US alliance as their cornerstone, that has succeeded in steadily eliminating these risks in Asia. By providing infrastructure for security in the broadest sense – infrastructure which supports the stability and development of the Asian economy – with the Japan-US Alliance as its primary axis, Japan’s diplomacy increases the ability to predict the future business environment while also decreasing the risk.
There is the issue of how to reduce the risk associated with investments. Foreign direct investment, or FDI, results in invested capital becoming part of the long-term landscape of the recipient nation. For that reason, it is necessary for them to have reliable systems, including civil law, accounting, and auditing, as well as policies and measures addressing the protection of intellectual property rights and competition in the market place. Providing assistance so that Asian countries are themselves able to create these types of institutional infrastructure is a type of effort that Japan and the United States pursue jointly as part of the strengthening of the Japan-US partnership.
Another mission for Japan’s diplomacy is to maximize the network effects. To maximize the network effects by channeling ODA and other diplomatic resources as a concentrated investment into an area that appears likely to become a bottleneck for the world economy in the area of physical distribution is one of the largest missions for Japan’s diplomacy to accomplish. Japanese diplomacy should readily undertake investments that would precede private-sector investments and bring about what is called the “cowbell effect.”

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