"Japan and the World"
　
Remarks by Yasuhisa Shiozaki
Minister of Health, labour and Welfare, Japan
At World Economic Forum, Davos, Switzerland
Jan. 23rd, 2016
　
Last year, I attended the Davos Meeting as the Minister of Health, Labor and Welfare for the first time. By attending a session such as "Economics of Longevity", I could easily tell that everyone was watching Japan, with hope, to be a possible leading model of a mature nation, because Japan is aging at the fastest speed. If Japan succeeds by muddling through, then everyone would follow Japan. If Japan fails, everyone would look for another model. So, we must succeed.

Thus, demographic change with aging population is obviously a universal challenge.

But, Japan has been suffering not just aging population, but with low birth rate and declining population and labor force. So, it is a "socio-economic challenge."

In the first Abe Administration, where I served as the Chief Cabinet Secretary, the fundamental economic policy was the growth-oriented structural reform, along with fiscal consolidation. From the start of 2nd Abe Administration 3 years ago, PM Abe made it even clearer that the economic revitalization was the top priority of his policy agenda. Last September, PM Abe announced the policy of "New 3 Arrows", or "Promoting the Dynamic Engagement of All Citizens", in which he re-affirmed that the growth policy remains the top priority. He even went on to state clearly that "without growth, no fiscal consolidation".

It is obvious that, for all citizens, social security such as pension, medical care, and elderly care is so indispensable that we must make it as sustainable as possible in the long run. And we have to achieve this goal with economic growth.

The reason is simple: social security is financed only by 3 resources. Contribution, tax and partial payment by beneficiaries at hospitals, for example, which all come from private sector. So we need economic growth.
　
Our total social security expenditure doubled in 20 years and currently covers 55% of the government's policy expenditure. With aging population and ever advancing healthcare, it is unavoidable to have growing social security cost but we need to harmonize its increase with the pace of economic growth. We have just set up 44 policy targets in social security field for 2020 for fiscal consolidation.

We will enhance health promotion and prevention, and fully utilize health data analysis to promote health care system reform enhancing efficiency of care. Moreover, investment to medical and health sectors will lead to development of pharmaceutical products and stable employment, and contribute to economic development.

With potential growth rate of as low as 0.5% or so, Japan must go through an economic and industrial structural reform. By shifting companies from low productive, unprofitable to more productive, high value-added, competitive, we must maintain the strong economy to sustain ever increasing social security costs.

Since our ministry is in charge of labor policy, we are also responsible to improve the labor productivity throughout all industries. Large listed companies are expected to improve their productivity by strengthening their corporate governance. For SMEs, we just started a mechanism where our ministry would collaborate with banks, expecting bank lending policy together with our ministry's policy tools as a leverage to improve SMEs' productivity. We will encourage investment for productivity improvement and labor shift to emerging industries.

More flexible and diverse way to work is indispensable for stronger economy. Yesterday, PM Abe announced in his annual policy speech that he will promote "equal pay for equal work" which will increase payments for non-full time workers. Also, we have already handed out the bill to our Diet that would allow payments based on the work achievements rather than the length of working hours. New way of work for new economy.

Finally, we must admit that for strong economy, international trade and investment is crucial. However, once a public health emergency occurs, such as cross-border pandemics, it will hinder international travel and trade, and consequently impact the global economy.

We have learned from the Ebola outbreak that preparedness and response to public health crises are essential. Resilient, sustainable, and inclusive health systems enable us to improve preparedness for and response to public health threats. In this respect, Japan is ready to contribute by sharing our experience of UHC with developing countries under new SDGs.

We also need to fight against antimicrobial resistance (AMR), a growing challenge of increasing number of bacteria without effective antibiotics, which is estimated to kill more patients in 2050 than the current number of deaths by cancers.

To tackle antimicrobial resistance effectively, "One Health Approach", coordinated response among human health, "animal health and feed" and environment, is necessary since only 1/3 of antibiotics are used to protect human health in Japan, for example. Also, because of the costly research and the low commercial return which can lead to the "market failure", promotion on research and development of new antibiotics by providing proper incentives to pharmaceutical industry is required.

We, as the host of the G7 Summit meeting, we are planning to raise these health issues on the agenda.

Japan is firmly determined to contribute further to achieve a stable and healthier world by making Japan economically robust and responsible.

Thank you very much.