Good morning, ladies and gentlemen. It gives me a great pleasure to join the Second International Conference of Asian Political Parties. It is truly remarkable experience to get to know a variety of political parties in Asian countries.

Japan has seven political parties. One of our big neighbor nations, you see, has only one party. Well, one thing I have learned today is the fact that number of political parties in a country does not ensure the economic performance of the country. Maybe Japan should consider a reduction of the number of the political parties. Don't ask me how to do that. Rather, please tell me how.

My party, Liberal Democratic Party that has 47 years history, is currently forming a ruling coalition. Current Prime Minister Koizumi, our LDP leader, is an unprecedented Prime Minister in a sense that he won the election against the background of people's enthusiasm for reform one and half year ago and he insisted "no pain, no gain," and "Let's break the old LDP regime."

Indeed, the LDP itself consisted of Japan's past success model after the World War II. However in the 1990's, too many policy errors and mistakes were made especially in the economic policy area, just like in many socialist countries, which demonstrated that the past system did not ensure good performance. Two characteristic things we can point out.

First, political stability has been lost during the 10 years. Both ruling and opposition parties are seriously divided within each party over big issues, such as national security and privatization of the government services. Legislation that requires a departure from the past policy threatens a party split, and therefore makes politics more chaotic.

Second, bureaucratic paralysis is apparent. Bureaucrats in the ministries rarely admit past policy errors they made. Because of Japan's past cozy so-called iron triangle, policy mistakes tended to be overlooked, or even accumulated.

The National Strategy Headquarter of the LDP, where I serve as a team leader, proposed several points in order to institutionalize the new policy decision making system by getting back to the basics of the parliamentary cabinet system as follows.

First, integrate the ruling parties and the executive branch of the government. Senior party leaders must join the cabinet in order to reinforce the leadership of the Prime Minister.

Second, strengthen the Prime Minister's Office. An introduction of an advisory council with full time membership, just like "a Policy Unit" of Downing 10 in England deserves serious consideration.

Third, improve the quality of politicians to restore the trust. This is the most difficult task. But primary election system can at least improve the quality of candidates.

And lastly, widen the policy-making community. Strengthen the policy intellectual base with a variety of think tanks and Non Profit Organizations.

As you see, Japan already know how to get out of long term decline. The key lies in the politics. I also believe we can effectively enhance regional cooperation in Asia with these domestic political system reforms. Our challenges include various issues from economic development to regional security.

As to the economic corporation, Free Trade Agreement is a good approach for an integration of regional partnership. Since Asia is a region with diversity with various ethnic, cultural and religious backgrounds and it lacks multinational arrangement in terms of regional security, regional partnership can generate benefits each other. That's what basic economics tells us. What is essential should be how each Asian country can find its strength in the process of competitive selection through FTA measures.

As to regional security issues, Japan can and should contribute in order to ensure the peace and stability of the region, especially against the terrorism.

In both FTA and regional security areas, Japan wishes to promote cooperation, and exchanges with the Asian region, as the Prime Minister Koizumi stated in Singapore to build basic philosophy of "acting together, advancing together" in Asian region. Again, Japan leads the regional cooperation.

Thank you.