Speech by Prime Minister Junichiro Koizumi

Japan and Australia toward a Creative Partnership
at the Asia Society Dinner on 1 May 2002


Mr. Hugh Morgan, Chairman of the Asia Society Austral Asia Centre,
The Honorable Minister for Trade, Mr. Mark Vaile,
The Honorable Minister for Foreign Affairs, Mr. Alexander Downer,
Ladies and Gentlemen,

I would like to extend my sincere appreciation to Mr. Morgan for giving me an opportunity to speak here today. In his capacity of President of the Australia-Japan Business Co-operation Committee, Mr. Morgan, together with Mr. Imai, President of the Japan Federation of Economic Organizations and Mr. Murofushi, Chairman of ITOCHU Corporation, has long worked for the promotion of bilateral economic relations, and has given me significant proposals on the future course of our relationship. I would like to thank him once again for his efforts.

I last visited Australia in 1998 when I was Minister of Health and Welfare. I vividly remember Dr. Wooldridge, then-Minister for Health and Family Services, showing me his wonderful wine collection. Mr. Smith, then-Minister for Family Services, took me to his farmhouse in a beautiful area of Tasmania. Mr. Smith recently came to see me in Tokyo, and we talked about the memories at the time of my visit. Australia is a valuable mate to Japan as well as to myself.

The Japanese people think highly of Australia. A recent public opinion poll indicated that Australia is the most popular country among Japanese. My son homestayed in Australia two years in a row during his summer vacation. I suggested to him that he visit another country in the second year, but he chose Australia. He clearly feels Australia's hospitality.

Australia and Japan have a long history of cooperation. Let me give you a symbolic example. Around 90 years ago, Japan dispatched for the first time an Antarctic expedition party led by Lieutenant Shirase. The party failed to reach the Antarctic and arrived in Sydney to prepare another attempt. Australians offered moral and financial support to the Shirase party, which was suffering from various difficulties. Eighty-seven years later, the icebreaker "Shirase," named after the lieutenant, rescued an Australian research and transportation vessel, the "Aurora Australis," which was trapped in the ice. I do not know of a better basis for friendship than the people of one country helping the people of another country in times of difficulty.

Japan and Australia have different landscapes and histories, but we share values and interests that provide the basis for our cooperation. We are friends, and I believe we should be even better friends. I came to Australia to let you know that Japan seeks to deepen the spirit of cooperation between us.

In today's meeting, Prime Minister Howard and I agreed that our two governments should construct a "Creative Partnership"--a partnership that would enhance exchanges on political and security issues, strengthen economic ties and intensify cooperation and share experiences on educational, social, scientific, technological and other matters.

Very notably, Prime Minister Howard and I agreed that we should explore all options for deeper economic linkages. We must consider what type of economic partnership we should create to respond to the new international economic realities, particularly in East Asia, whole maintaining the basic structure of our complementary economic relationship.

I realize that the recovery of the Japanese economy, which alone accounts for 60% of Asian GDP, has a big impact on the economic dynamism of East Asia, including Australia.

Looking over history, one can see that nations decline without new visions and without the reforms to bring them about. I do not intend to let that happen to Japan. Australia's current good economic performance can be attributed to the tough economic and regulatory reforms that you undertook. I congratulate you. Japan must do the same. Japan must sacrifice what it is for what it can become.

A decade ago when Japan was in the economic bubble, we were overconfident and neglected reform. Now, we have lost our confidence. I keep telling the Japanese people that we should avoid both of them. Since my appointment as Prime Minister last April, I have accelerated my country's reform as a matter of the highest priority. I have also launched measures to tackle deflation. It is an economic certainty that Japan will have "no growth without reform." I have total confidence in the potential of the Japanese economy in such fields as technology, human resources and IT. While dislocation and resistance always accompany true reform, I believe reform will be achieved. It must be achieved, because it is indispensable to the future of Japan, East Asia and the global economy.

I often hear the questions, "Why isn't structural reform occurring faster? Why don't we see more results?" I would point out that Great Britain experienced negative growth for the first two years after Prime Minister Thatcher's reforms were inaugurated. Likewise, the United States under President Reagan suffered negative growth before enjoying the fruits of his reforms several years later.

Our structural reform includes the disposal of non-performing loans over the course of next two or three years, the reform of government-affiliated corporations, the participation of private capitals in postal businesses, the abolition of regulations preventing free economic activities in the private sector and changes in rigid fiscal and social systems. Reforms are already underway, and I believe we can see indications that the economy is moving toward bottoming out.

The structural reform is expected to encourage foreign investment in Japan, which would further accelerate the recovery of the Japanese economy.

Our cooperation in the Asia Pacific region is also an important agenda for our Creative Partnership. Today, I would like to focus upon one aspect of that, our cooperation in East Asia.

East Asia is the region with the greatest potential for growth in the world. In the speech I made in Singapore, I made a proposal of a "community that acts together and advances together." Australia should become a core member of such a community.

I do not believe it is always the best policy to set up new organizations or institutions to build a community. In a region like East Asia where there is a great deal of diversity, I believe functional cooperation itself can be more effective. We will do by doing. Acts of cooperation in themselves will create a sense of community. Let me give you some examples of the kind of functional cooperation that I mean.

The first example would be joint efforts for regional stability. Japan respects the leadership shown by Australia in the stabilization of East Timor. I sincerely hope that Australia, in cooperation with the United Nations and countries in the region, will continue to play an active role in the nation-building process, which will significantly contribute to the stability of the entire region. Japan has already dispatched engineering units of our Self Defense Forces to East Timor as a part of UN peace keeping operations. We would like to cooperate with Australia in this context.

Second, we need intensive cooperation to solve transnational issues such as smuggling of people. I greatly appreciate the work of Australia and Indonesia in co-chairing the Regional Ministerial Conference last February in Bali. This type of joint initiative is extremely useful.

Third, further strengthening of regional economic partnership by focusing on trade and investment is very important. I know that the Australian government has been pursuing ways to bring about closer economic relations with Korea, China, Singapore and Thailand. Such endeavours will add significantly to the creation of a community. Japan, too has been exploring comprehensive economic partnership with ASEAN and Korea. I believe this is a policy agenda that we can work on respectively.

In East Asia, we should give considerations to the diversity in the region and uniqueness of other countries. Furthermore, in promoting cooperation and joint regional initiatives, we should respect the existing regional cooperation frameworks. We should avoid foisting our values on our neighbors. Australia embraces a considerable diversity in its own territory and, having overcome difficulties arising from such diversity, is building a multicultural nation. Australia's understanding of diversity can help strengthen cooperation throughout our region.

Japan and Australia have been core members of APEC since its creation and we need to continue our cooperation in the framework of APEC.

We can work together globally on the basis of our shared values. Terrorism poses the most serious threat to democracy and the rule of law. We share the common objective of fighting the madness of terrorism. Japan has dispatched Maritime Self Defense ships to the Indian Ocean. Australia has deployed vessels and special forces to Afghanistan. I have been told of Sergeant Andrew Robert Russell who lost his life in Afghanistan. We wish to express our deepest condolences to Sergeant Russell's family. I would also like to pay my most heartfelt tribute to the numerous contributions Australia has made for international peace and security. International solidarity is of vital importance in fighting terrorism. In light of this importance, Prime Minister Howard and I agreed that our two nations need to consult on counter terrorism measures.

Since the end of the Cold War, regional conflicts arising from religious and ethnic causes have been rampant the world over. The international society has been engaged in peacekeeping operations designed to consolidate peace and build basic foundations in countries suffering from such conflicts. The Government of Japan will consider how to increase our international role by providing an added pillar for the consolidation of peace and nation building. We hope to cooperate with Australia, which has expertise and experience in this area.

In trying to achieve the goal of a free market economy, we must expand and improve the multilateral free trade system. Trade is the benefactor of nations. For this purpose, Japan would like to closely cooperate with Australia for the success of the new round of WTO negotiations. I believe that our two countries can find common positions on trade liberalization as well as improvement, strengthening and extension of WTO rules.

Global environmental protection is becoming increasingly urgent. In the run-up to the Johannesburg Summit, Japan is proposing an idea of "Global Sharing," in which, each country shares strategy, responsibility and experiences. I hope that Japan and Australia can work together and make positive contributions to the success of the summit. The early ratification of the Kyoto Protocol would be an important step forward to strengthen international efforts. Implementing the commitment in the protocol is not easy for Japan which has already achieved the highest level of energy efficiency. Nevertheless, I am determined to ratify the protocol with the approval of the Diet in the current session. I strongly hope that Australia will move forward to ratify the protocol with us.

In conclusion, I would like to mention an element that I respect in the character of the Australian people. During the Second World War, the Australian Navy held a navy-style funeral for Japanese soldiers who infiltrated Sydney Harbour in midget submarines. Rear-Admiral Muirhead-Gould, who was in charge of the funeral, said, "However horrible war and its results may be, it is a courage which is recognised and universally admired. These men were patriots of the highest order." The coffins of the soldiers were wrapped in Japanese flag and their ashes were sent back to their home country. From the bottom of my heart, let me say that I sincerely respect the Australian people's generosity and fair spirit--even toward enemies in time of war.

There is an epilogue to this. Twenty two years later, the mother of the late commander Matsuo, one of the soldiers who died, visited Australia to express her appreciation and to console the spirit of her son here in Sydney Bay. The people of Australia, including then-Prime Minister Gorton, warmly and generously welcomed her, saying, "The mother of the brave has come."

I also admire the enthusiasm and forward-looking outlook with which they face the future. It is said that the kangaroo and the emu, two animals depicted in Australia's national emblem known for always moving forward and never retreating, symbolize the character of the Australian people. With such characteristics, the people in Australia have succeeded in a series of reforms that have build the Australia that stands today.

With the same forward-looking spirit, Prime Minister Howard and I agreed to construct a "Creative Partnership." As we begin this new century, I sincerely believe that we can increase our cooperation in a spirit that strengthens our friendship and embraces the future.

Thank you very much.

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