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.