Opening Remarks by H.E. Mr. Taro Aso, Prime Minister of Japan,
at the Business Leaders' Lunch
Annual Meeting of the World Economic Forum
January 31, 2009,
Ladies and gentlemen,
Let me begin my remarks by extending my sincere thanks to Executive Chairman Professor Schwab and the many others at the World Economic Forum for arranging this opportunity for me to meet today with leaders of the business world from all around the globe.
I myself was a businessman before entering politics some thirty years ago. I spearheaded the transition and diversification of a company in the coal-mining industry, an industry which had lost its competitive edge, to a business centered on cement. Ever since that time, I have consistently held the belief that being in a "tight spot" is also an opportunity. The world is now in a financial crisis said to occur once every hundred years. My awareness of this problem is that we need to make this crisis lead to the next leap forward.
Over the last 50 years Japan has overcome two major economic crises.
The first of these was the oil shocks that occurred in 1973 and 1979. As a result of those two shocks, world oil prices ended up at roughly 13.5 times their pre-1973 price. These brought major impacts to Japan's economy as well as to our daily life, as Japan has an approximately 99% dependence on foreign crude oil. However, the public and private sectors worked together to overcome this difficult challenge, and today we have achieved the most energy-efficient society in the world. For example, in Japan's developing stage, Japan's oil dependency ratio before the Oil Shock was as high as 73%, but now it is reduced to only 11%, thanks to the introduction of nuclear and natural gas.
The second crisis was the financial crisis we faced in the 1990's. As the result of the bursting of our "bubble economy," real estate values in Japanese urban area plummeted 87% in roughly 15 years from 1990 and assets of roughly three times our GDP were written off the nation's balance sheets. However, Japan succeeded in emerging from this financial crisis, maintaining the amount of its GDP at approximately $ 5 trillion by using capital injections, full guarantees on bank deposits, and the purchase of non-performing loans on the financial side, in combination with aggressive fiscal stimuli to boost the real economy.
Now, Japan is facing three challenges, namely the global financial crisis, global warming, and a rapidly aging society. Yet even amidst challenges such as these, I intend for Japan to realize a society and markets with vitality that can serve as a model for the world by creating new markets and employment opportunities through technological innovation.
Today at Davos I have advocated that the key to resolving the global financial crisis and global environmental issues lies in the innovation of systems and technologies and in creating mechanisms for diffusing the fruits of those efforts to the world, including to developing countries. I also stated that in order to have the emotional energy and the passion to achieve these things, it is critical that we maintain optimism. This sentiment is rooted in my own experience and the experience of Japan over the last half century.
Peter Drucker once said that the best way to predict the future is to create it. It is we ourselves who will create the future. With that firmly in mind, let us all work to surmount the various challenges that face our countries and our companies.
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