Keynote Address by Prime Minister Ryutaro Hashimoto
at the East Asian Ministerial Meeting on Caring Societies
(Provisional Translaion)
December 5, 1996
Okinawa Convention Center
Ginowan City, Okinawa Prefecture
Mr. Chairman, Excellencies, ladies and gentlemen.
It is my great pleasure to deliver my opening address for the East Asian Ministerial Meeting on Caring Societies. I would like to take this opportunity to extend my hearty welcome and express gratitude for your participation.
(The Initiative for a Caring World and the East Asian Ministerial Meeting on Caring Societies)
At the Lyon Summit in June this year, I presented my proposal for an "Initiative for a Caring World." This is a proposal for the countries of the world to come together to share their knowledge and experiences in the broad field of social security, and it is based on the concept that this exchange can make an important contribution to our efforts to create better societies for our future generations. This meeting today represents the first concrete step toward the realization of this Initiative in East Asia, and we have been preparing for this conference here in Okinawa with high hopes and expectations.
The Japanese term which I have just used to express "Initiative for a Caring World" tends to be literally translated into English as "concept for global welfare." However, the choice of the word "caring," as it also appears in the name of this meeting, reflects my desire to convey to people of other countries what I believe to be the essence of what I regard as social security. A sense of mutual concern and respect among self-reliant people are reflected in using the term "caring."
(Significance of International Exchange of Experiences in the Field of Social Security)
Life awaits us with the possibility of many challenges and difficulties. We may fall ill or experience physical or mental disabilities. We may lose our income in later years of life when work is no longer possible. These are the hard facts of life shared by all human beings. As the previous generations have bequeathed upon us various arrangements for mutual care and support, so are we also endeavoring to create new arrangements to help us overcome the problems of this age, and we hope that we can pass these improvements on to our future generations. These arrangements in their entirety constitute the social security system. From its inception, this has not been a system of people becoming totally dependent upon others. The essential pillar of the system is the dignity, self-reliance and self-help efforts of an individual. Once this vertical pillar is firmly established, combined to it is the horizontal axis, which is the spirit of social solidarity. This is as if you have a beam and a pillar in a structure. I believe that the fundamentals of the social security system are comprised of such two principles.
Here, I would like to remind you that we have a very broadly-based conception of social security which goes way beyond the pension, health insurance and unemployment insurance. Our concept encompasses the broad range, such as public assistance, medical and social welfare services, as well as public health and sanitation. We view these measures to constitute a single, integrated bundle of activities which share a basic and common purpose, which is to ensure the health and stable livelihoods of our people. I should add that education constitutes one of the important factors in achieving the goals of "social security."
Allowances must be made for differences in culture and socio-economic conditions, such as family structure, urbanization, and industrial structure, as well as population profile and trends in the aging of society. No doubt, therefore, that there will be some similarities and differences among the social security systems of various countries. For instance, some countries are just now beginning to expand their medical care and pension programs, while others are preparing bold, but painful, reforms in their social security systems which have already grown to a very large proportion in their national economies. Thus, the challenges at hand may be different. But there is a very strong universal element in this field, in which all of our efforts are aimed at creating better arrangements which are structured by the two axes or principles of individual self-reliance and social solidarity. For this reason, it is my conviction that the international sharing of experiences in this field is highly significant. With this awareness in mind, we look forward to conveying the experiences of Japan to you in the course of today's meeting and to learning from your experiences in this mutual process.
(A Perspective for Analyzing Experiences in Social Security)
Regarding the details of the experiences of Japan, I have told the responsible ministries and agencies to prepare the report which is before you entitled, "The Japanese Experience in Social Security." I would like to propose a certain perspective which I believe will prove very useful in examining these experiences.
While many different approaches are possible in analyzing our experiences, one of the most critical questions from the standpoint of public administration of the state is "how should the various groups of people interact and cooperate in supporting the social security system, which should be built upon the spirit of social solidarity?" In other words, how should the public sector and the private sector be combined to build a solid social security structure? I find that this is an important approach.
Japan's public sector is comprised of the central government, 47 prefectural governments, and 3,232 municipalities. On the other hand, the private sector embraces the variety of individuals, families, local communities, and companies. This highly diverse group of players combine to form an amalgam in which each can demonstrate its best capacities and powers. Certainly, this combination of public and private elements will differ from age to age, from field to field, and from country to country. However, it is my conviction that by contemplating the experiences of the past with an eye to this matter, we can glean much that is instructive for future policy development, both from the experiences of our own country and those of other countries.
(Public Health and Sanitation)
Having established this perspective, I would first like to review the Japanese experiences in the field of public health and sanitation. While it was the public sector which took the initiative in this field, the active support of the local communities was effectively enlisted, resulting in major successes being achieved through this combination.
Health and sanitation conditions in Japan fifty years ago were deplorable. There was a high incidence of acute communicable diseases, such as cholera, typhoid fever and dysentery, as well as parasitic diseases, and also tuberculosis, which was commonly referred to as the "national disease." For instance, statistics for 1945 show that the prevalence per 100,000 population was 134.0 for dysentery and 80.5 for typhoid fever. Infant mortality rates per 1,000 live births stood at the very high level of 76.7 in 1947. In the following years, excellent progress was made in the removal of these problems, and epidemics of acute communicable diseases have diminished rapidly since the 1960s.
Japan's economic growth and the subsequent betterment of general housing and dietary conditions certainly played a part in these vital improvements. At the same time, however, strong government leadership played no less an important role in this area when it acted to undertake concerted nationwide programs for health examinations, vaccinations, and health education. For this purpose, the health centers were established by the governments as specialized technical agencies for public health. Approximately 800 health centers were set up at prefectures throughout the country and functioned under the guidance of the national government as centers for public health activities. The government also took the initiative in various other ways to build up this system, such as training of the human resources needed for these programs, upgrading the quality of school lunches, and improving rural living conditions. One of the successes in this last area was the "Better Ovens" campaign in rural areas.
One thing that must not be overlooked is that throughout this process, the local communities actively and voluntarily supported and participated in the efforts of the government. The fact that the active participation of local residents is indispensable has been very aptly portrayed in the film entitled "No Greater Love Than This," which many of you had a chance to see yesterday Allow me to give another example of this principle. Around 1950 some local communities took the initiative to start community programs for the extermination of pests and rodents. Gradually, these developed into full-fledged programs and were given the support of the national and local governments, resulting in the "Campaign for the Mosquito-Free and Fly-Free Environment" which was undertaken nationwide.
In the fight against water-borne communicable diseases in digestive organs, development of the water supply system has played a significant role. The coverage of the water supply system in Japan increased drastically from about 30% to more than 80% in 20 years from 1955. During this period, through an introduction of a national subsidy scheme for a small-scale water supply system covering the population less than 5,000, coverage was extended to rural villages, and simultaneous reduction in morbidity by infectious diseases was witnessed.
In recent years the world has seen a return of the communicable diseases which at one time were believed to have been conquered. At the same time, we are seeing new types of communicable diseases up and coming. These emerging and re-emerging diseases pose difficult challenge to the world, and Japan also has not been spared its share of these problems. For instance, during this past year, Japan experienced a large-scale epidemic of the E-coli O-157. The world is also threatened by drug-resistant strains of microbes. Thus, we find that mankind is experiencing a counterattack of micro-organisms that simply transcends national boundaries. These cases make us search our souls as to whether we might have been arrogant to believe that the communicable diseases of the past had been conquered for good. We will have to return to the basics and work out new responses built on reinforced international cooperation.
(Universal National Pension and Universal Insurance)
Now I would like to go on to the issue of public assistance as well as universal national pension and health insurance, which constitute the fundamental framework of Japan's social security system.
In the context of the fight against poverty, during a tough period around half a century ago, public assistance programs were initiated to assist and support the needy, replacing for the previous relief system which was available for the limited categories of people. This was a system of non-discriminatory and equal emergency assistance for the persons who became poor. Within the overall system for social security, these relief programs represented a refuge of final resort, and the responsibility for this is borne by the public sector, in particular, by the national government.
On this foundation, in 1961, Japan proceeded to initiate universal pension and health insurance systems based on the principle of social insurance. We believe that it is these universal pension and health insurance systems which have been one of the most important contributing factors in achieving Japan's caring society with long life expectancy.
Let me first review the development of the public pension system. The pension system initially got underway by offering coverage to employees only. Universal coverage was started in 1961, when coverage was extended to other groups, such as the self-employed and farmers, and the program for them was referred to as "National Pension."
Today the public pension benefits account for more than 55 percent of the income of elderly households and have come to stand as one of the main pillars in Japan's entire income security system for the elderly. This well-established system provides the foundation on which supplemental programs, such as individual corporate pension plans, are built. To this are added the annuities and individual savings. The combination of these public and private measures constitutes the structure of the income security system which supports our post-retirement elderly population.
One of the most difficult challenges which we face today with regard to our public pension program is how to assure the long-term stability of the system and how to pass on a viable system to the next generation in the face of the rapid aging of society with fewer children. At the present time, each elderly member of our society is supported by slightly less than five working-age persons. However, twenty years from now in the year 2015, we will only have 2.5 persons to support each elderly member, or half the present level. The function of the public pension program is to provide assurance for the basic portion of the livelihood of the elderly. For this reason, we are now being challenged to make appropriate adjustments in pension benefits so that the working generation of the future is not unduly burdened. At the same time, we are studying the optimal combination between private and public efforts.
It is essential for us to understand the trend toward an aged society with fewer children as a fundamental transformation affecting our entire society. Just a little over sixty years ago, our life expectancy was below 50 years. However, since then Japan has experienced a dramatic rise in life expectancy, and various factors contributed to this improvement. In the early stages, the decline in infant mortality rates had a particularly strong impact. Today we are living in an age where the average Japanese is expected to live eighty years. As a result of these changes, a 65 year old person today is placed in a very different situation as compared to the 65 year old one or two generations ago. Thus, two years ago we amended our laws to gradually raise the pensionable age from 60 to 65. In the future, we will have to reconsider our current scheduled retirement practices and to explore systems of "partial employment" which overlap the boundaries of work and retirement. Also, it will be our task to promote various forms of post-retirement social participation and to develop a society in which the elderly can maintain a full sense of purpose to the end of their life.
I would like to move on to the subject of the health insurance system. With the establishment of a universal health insurance system, all members of society, regardless of the differences in their personal income, became able to receive medical treatment at any medical facility in Japan with little concern for costs. All that they have to do is to present their health insurance card. The average co-payment ratio has been kept low and remains below 20 percent of the medical expenditures. By assuring access to necessary medical care, this system has eliminated the public fear of falling into poverty because of medical payments. In addition, we believe that this system has made an important contribution to raising the health level of the general public.
On the other hand, there is a concern that a general decline in cost-consciousness may be leading to the inefficiencies of the medical system in Japan as represented by such phenomena as hospital-hopping and the excessive prescription of drugs and tests. Concerning the health care delivery system, there also remain challenges such as insufficient differentiation of functions between home doctors and specialized hospitals and between medical care for acute and chronic illnesses. The large gap between remote areas and urban areas is also a concern. Another problem is that emphasis has been placed on hospitalization, resulting in prolonged length of stay and long-term hospitalization of those who mainly need nursing care rather than medical care. Home-based health care and visiting nurses are still insufficient. As the progressive aging of the society implies that our medical expenditure will continue to increase in the future, we must now directly look at the challenge of the current situation faced by our national health insurance system, which has fallen into a state of perennial deficits. We must clarify and systematize the functions which we expect our medical facilities to perform. Finally, we must prioritize the benefits provided by the health insurance system and seek ways to maintain the equitable distribution of burdens.
While I am on the subject of medical care, I would like to briefly talk about drug-related hazards. Pharmaceuticals are said to be knowledge-intensive products which represent the highest achievements of modern sciences. Indeed, these are indispensable weapons in our fight against diseases. Yet it is a source of great pain to recall the tragedies in the Thalidomide incident, the SMON incident, and more recently the case in which unheated blood products caused extensive harm. To prevent the recurrence of such tragedies, the government is acting to strengthen the system at each step of the entire process of clinical testing, drug approval, and the collection and analysis of side-effect data.
(Medical and Welfare Services)
Now I would like to proceed to examine the role and relation of the public and private sectors in the provision of medical and welfare services.
First, let us take a look at Japan's medical system. Currently, the majority of medical service providers are in the private sector. Our statistics show that private hospitals account for roughly 70 percent of the total number of hospital beds in Japan, while national hospitals and sanatoria account for 5 percent. The role that is envisioned today for such national facilities is one of providing advanced and specialized medical treatment for a larger geographical area. These national facilities are currently being restructured to adequately these roles.
Let me move on to the subject of welfare services. In the beginning, Japan's various welfare programs tended to be institution-centered and were largely funded by tax revenues. Such programs included programs for disabled persons and programs for the elderly. Initially these services were provided mainly by public institutions, but in later years there was a gradual increase in the role of private institutions, most of which were non-profit organizations. We are hoping that the private sector will continue to actively participate in these areas to respond to the increasingly diverse needs of our society.
The provision of welfare services has also been institution-centered. Granted that this was what the times called for, we find that this choice has resulted in various distortions. For instance, in the past large-scale live-in facilities for people with disabilities were built throughout the country. This had the effect of weakening the ties between the residents of these facilities and their local communities. I believe that the fundamental principle should be to take the necessary steps not to make disabilities, either physical or mental, a hindrance to participation in social activities of the people with disabilities. We must provide the support which will enable maximum self-reliance, and we must actively promote social participation. We should encourage the realization that the constant presence of the sick and disabled amongst us is actually the natural state of human society. We must not exclude each other. Rather, what is being sought today is the creation of local communities where all people can live together. For this purpose, it is important for each of us to remove the barriers which may exist in our mind. No doubt, education plays a major role in this process. But at the same time, progress must be made in our physical environment. For instance, we must reconsider the design of our buildings and transportation facilities so that our disabled citizens are not held back because of the physical barriers. Steps should also be taken to support the development and spread of technical aids for people with disabilities.
All that I have just said applies in full to the field of welfare services for the elderly. For the future, welfare programs for the elderly should emphasize leading a self-reliant life, as far as possible, at home and in the communities where they have long resided. For this purpose, in-home services must be expanded and other service systems must be established in order to achieve a better balance between institutional and in-home care.
(Current Challenges and Future Directions)
In closing, I would like to discuss the current challenges and future directions of Japan's social security system. Social security has come to play a very important role in the national economy, affecting a very broad range of social and economic activities in Japan. The share of social security benefits in total national income had risen to 16.21 percent by fiscal 1994. The continued aging of the society will no doubt raise this ratio further in the future, which is foreseen to surpass 30% in fiscal 2025 if the present system continues.
Against this background, I believe that one of the most pressing tasks is to re-consider the balance between the benefits and burdens of the social security system, in view of Japan's low economic growth and the inexorable steps toward an aged society with fewer children.
Regarding medical and welfare services, the aim will be to create user-oriented systems in which the users' choice of services is more fully honored. For this purpose, it will be necessary to pursue broader disclosure of information and to develop an environment in which users are able to freely select high-quality services at appropriate costs. Furthermore, more effective and efficient service-providing systems must be created by encouraging greater competition among providers. Finally, these reforms must be undertaken while fully preserving the public's trust in the social security system.
These ideas and challenges lend further impetus to the need to promote greater administrative decentralization. More emphasis must be given to the role of municipal governments, as these are the closest administrative unit to the people. Further progress must also be made in deregulation in order to promote more active participation by the private sector in these fields.
The rapid aging of society and the transformation of family structures point to the urgent need to find appropriate responses to the issue of long-term care for the elderly. We should aim at a system in which those who receive long-term care will be able to freely choose the services one receives, and to lead an independent life as much as possible. It is necessary to re-organize the system so that various services, such as health care, medical care, and welfare services, be provided in a coordinated manner, making the best use of the creative approach of the private sector. With these in mind, at the end of last month we introduced a series of bills to the Diet for the creation of a social insurance scheme for the long-term care for the elderly. The establishment of a long-term care insurance system will provide us with an excellent opportunity to undertake a comprehensive review of the existing structures for medical care, pensions, and welfare services. Likewise, this new system stands at a critical juncture in the realization of a befitting system for the 21st century and can be said to constitute the first concrete step toward structural reform of Japan's social security system.
(International Cooperation in the Field of Social Security)
I stated that social security has a vertical pillar of individual self-reliance and a horizontal beam of the spirit of social solidarity. We can replace "the individual" with "the nation" to describe relationships among nations in the international community where the same philosophy applies.
Over the past fifty years of the road to economic construction which Japan has traveled, we see that this success was built on the incalculable efforts made by the individual members of our society. Yet at the same time, it is also true that Japan was able to rebuild its social infrastructure through the large amounts of assistance provided by the World Bank. The same pattern holds true in the field of social security. Because of poor sanitary conditions and the lack of adequate food about half a century ago, children were stricken by diseases and malnutrition. To save the children, the Japanese government led the way with self-helping efforts in the field of public health and sanitation. Parallel to this, we received valuable financial assistance from UNICEF and many other international NGOs.
It is from this perspective that I have come to believe that international cooperation is one of the important pillars in the realization of the Initiative for a Caring World. With an aim to improving the lives of human beings in the world, my earnest hope is for Japan to actively promote development assistance projects in the field of social security, such as upgrading of health and medical resources, improving the general living environment and the human resource development.
(Conclusion)
Mr. Chairman, Excellencies, ladies and gentlemen, I have attempted to outline some ideas which may serve as a lead-off to the meeting in which you will be participating today. I have proposed a specific perspective for examining the development of social security systems which rests on this question: how can the capabilities and potentials of the various providers of social security services be best combined in building up a structure for social solidarity? It is certainly true that social security encompasses a very broad range of activities and fields. And it is also true that the social security system has developed over a long period of time and that it represents the accretion of a myriad of experiences. Therefore, I firmly believe that there is much more that we can learn from each other if we look upon this field from more diverse perspectives.
It is my conviction that it is the social security that is the great wisdom in channeling the spirit of social solidarity to give support to our individual efforts to live our lives in dignity based on the principle of individual self-reliance and self-help. Everyone, regardless of whether or not they have disabilities, should be able to live out his or her life with dignity. No doubt, the governmental sector must play its role fully for the realization of this fundamental philosophy of social security. At the same time, the private sector which embodies the advantages of free competition, must be appropriately involved in this vast undertaking. Thus, I feel that it is of vital importance to combine the powers of the government and private sectors if the countries of the world are to safeguard and nurture this system which stands out as one of the assets of humanity. I have submitted my proposal for the Initiative for a Caring World in the belief that a vastly expanded international exchange of knowledge and experiences in this field can make a valuable contribution to the future development of social security. I expect that this theme will be presented for further discussion at the Denver Summit, OECD, and other international forums. Personally, I have very high hopes for the future development of our endeavor, whose first step is being taken today here in Okinawa.
In closing, I hope that this meeting today will conclude with great success, and again I would like to express my sincere gratitude to all of you who have traveled long distances to participate in this conference. Also, I would like to extend my hearty appreciation to the people in Okinawa, who diligently supported us in holding this conference.
Thank you.
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