Today, we are talking about "changes" in Asia. I wonder how many of you know an Italian novel titled "Il Gattopardo," known in English as Visconti's film "The Leopard."

It is a story about a decadent, dying mid 19th century Sicilian aristocracy threatened by the approaching forces of democracy and revolution. "Gattopardo" is a name of a noble family, a big land owner in Sicily. An interesting paradoxical sentence is there; "Everything must change in order for everything to say the same. " We must avoid such a state in Asia, and let us think "how" together. I would first like to discuss two issues, which I consider to be most important when we envisage where Asia will and should go in the next century. The one is global capitalism, the other the diversity in Asia.

In recent years, global capitalism has been criticized for at most causing, at least abetting the Asian financial crisis to happen. Massive capital flows into emerging countries in Asia fueled asset price bubbles, while a sudden reversal of those capital flows burst the bubbles, entailing economic hardship in this area. But as was repeatedly pointed out in this conference, Asian economies had had fundamental weakness, e.g., in terms of legal framework for bankruptcy, accounting standards, check-and-balance mechanism between regulators and the regulated, which scared off short-term capital at a critical time. We all know this by now, and therefore, we have come to grips with structural reform in our economies.

A point I want to emphasize more is that the global capital flow is not only reality that we are up to, but it has also brought with it tremendous benefits to us. We all remember how the so-called Asian miracle presented itself. It began in the 80s, when both capital and technology flowed into Asia out of the United States and Japan, whose manufacturing sector was under heavy pressure of the strong dollar and, later, yen. In those days, the rapidly growing area was called Asian NICS, newly industrialized countries, or simply four dragons. As China opened its trading door to the rest of the world in the 90s, Asia finally became an area of promising prosperity as a whole. The Asia once shattered, by war and terror, also became part of the great market place. None of this would have happened without global capitalism.

However, I would not go on to discuss a regional economic integration too positively. Integration, yes, but an economic union, I am afraid, might be unrealistic. Unlike Europe, Asia has a much greater degree of diversity. Indeed, Asian countries differ from one another in terms of culture, ethnic, religion and resource endowment. And this diversity gives Asia immense advantages on the economic front. Trade and the gains thereof expand when trading partners differ. This is what recent history of Asia demonstrates. This diversity, however, makes any simple economic union infeasible as well as undesirable at least for the time being. The nature of economic as well as political problems in individual Asian countries differ, and so does the priority.

In my view, Asian countries have been emulating one another in the course of rapid economic growth during the past two decades. This peer pressure has balanced the two inherently conflicting, but alluring, axes; economic efficiency of global capital flows and diversity in the nature of Asian society. Today, I believe, an additional measure is needed to make global capitalism and Asian diversity compatible, after the Asia's goal changed from rapid economic development to sustainable growth and structural reform.

Here, I would like to suggest an improvement in the functioning of regional discussion in multiple fora, which are all open-ended with respect to membership, and soft, by which I mean any agreement be approached first by finding a large, if not the largest, common denominator.

After the recent currency crisis, structural reform in the economy became a common agenda in Asian countries. Structural reform generally means formidable tasks for all national constituencies and requires transformation not only in corporate governance but in national governance in a number of countries including Japan. At this conjuncture, the relationship among Asian countries should change from the one based on peer pressure to the one based on mutual understandings of Asia's diversity, which I term mutually-constructive "peer commitment."

Japan has a new role to play in this context. I believe Japan can and should be committed to Asia's problems including regional security issues, not only in the form of financial support but also in the form of direct human contribution wherever need through clarifying our national will to commit ourselves. Of course, we must always be mindful of the past in respect to individual countries. The fact that Japan is tackling structural reform similar to other Asian countries should give us the basis for deeper mutual understanding.

For the last several years, I have been involved in a serious of reforms with stronger initiatives by politicians including, the financial reform legislation of last year, The Ministry of Finance reform through amendments of central bank law, Tokyo Big Bang, and reform of Fiscal Investment and Loan Program," all of which changed the style of "national governance" better suited to the market oriented and more transparent global economic order, by departing from the strong bureaucratic control which once worked very well during high growth period after the war.

For the further enhancement of such reforms, our recent decisions to increase the number of Diet Member assigned to ministries as Parliamentary Vice Ministers, as well as barring bureaucrats from appearing in Diet Committees should bring about pivotal changes to Japan over time.

My immediate assignment ahead for another better governance, both for corporate and government sectors is the reform of corporate accounting by giving more power, independence and transparency to the standard setter, to the surveillance organization of capital market, as well as to the accountants.

Finally, I would like to tell you, with all the changes in Japan, that we will continue to commit ourselves as elected members with other colleagues in and out of LDP, even with opposition members if necessary, to such reforms as well as to the "mutually-constructive peer commitment" to Asia that I just mentioned a few minutes ago.

Thank you.