Table Speech

Architecture of the New Global Economy and Dignity of Business Leaders and Public Officials

April 17, 2013

Mr. Charles D. Lake
Chairman & Representative in Japan, Aflac Japan

 The global financial crisis that started in the US has consequently formulated the architecture of the new global economy, in which regulations of international finance and international insurance are undergoing dramatic changes. Each country is identifying its political agenda to protect national interests, developing internal and external economic policies based on national strategy as well as implementing consistent financial administration, while responding to the following global trends: rise of the emerging countries and global imbalances, increased geopolitical risk in the Asia-Pacific region, international discussion on “state capitalism,” further globalization of the economy, as well as multi-polarized and complicated global governance. Financial institutions and insurance companies are urged to take measures against such dynamic changes in the business environment.

 The G20 Summit was summoned in 2008 to respond to the global economic crisis and it was recognized as the “primary forum on international economic cooperation.” The Financial Stability Board (FSB) was established to promote a comprehensive regulatory reform of international finance, together with standards-setting organizations, including the “International Association of Insurance Supervisors (IAIS)” for the insurance sector. It’s notable that international standards are being reinforced to coordinate interests of various countries and thus, each country is required to introduce domestic regulations that are consistent with these international standards.

 I welcome the new mechanisms being formulated to regulate international finance and insurance. To prevent future financial and economic crisis, however, I believe business leaders and public officials must uphold “utmost sincerity” as the fundamental value that reinforces the market function, based on a realistic understanding that “market failure” and “government mismanagement” could result from overheated market.

 Professor Michael Porter of Harvard Business School advocates the role of business in society is “Creating Shared Value (CSV).” The notion of “what is good for the community is good for business” is shared by the old Omi merchants’ philosophy of “Triple merits (benefit to company, customer, and society at the same time).” I believe we are entering a new era where business leaders and public officials are expected to keep questioning themselves about the dignity and values pertinent to the new global architecture.

 Thinking about the “nature of dignity,” we can find a clue in Dr. Inazo Nitobe’s Bushido: The Soul of Japan. The book shows how the spirit of “noblesse oblige” has long been respected by the Japanese. The role-model of “dignity,” “ideal behavior” or “utmost sincerity” of merchants and officials have been depicted in the Japanese entertainment business, including popular long-running samurai dramas on TV. I believe leaders in the international community today should also respect such universal values.

 Japan is my beloved country. I feel honored to join this Tokyo Rotary Club which has the longest history with so many distinguished senior members. Let me close my speech by asking for your warm advice and guidance.

Water Sustaining Our Daily Life

April 17, 2013

Mr. Hajime Watanabe

 Water is essential for our daily life. Our body is composed of 60% water, which is of vital importance to all living things. Earth is called the “water planet.” 97.5% of water on earth is salty seawater, while the remaining 2.5% freshwater is usable for us. Nearly 70% of freshwater exists as ice in Antarctic or alpine glacier, 30% as infiltrated groundwater and merely 0.008% can be taken from rivers and lakes for our daily use. Human beings are the largest consumer of such limited and precious freshwater.

 The demand for water is increasing as a result of the world’s population growth. Water usage is expected to increase by 1.3 times, from 4 trillion tons in 2000 to 5.2 trillion tons in 2025. There are growing concerns of future water shortages, as the amount of water circulating on earth is fixed.

 Nearly one billion people, or 13% of the global population of 7 billion, lack access to clean water today. 4,000 children under the age of five die every day from preventable water-related diseases. According to the Global Environment Outlook published by UNEP in 2007, the number of people without access to safe drinking water will keep increasing due to population growth. By 2025, 1.8 billion people (one-fourth of the global population) are estimated to live in areas of extreme water deficiency, while half of the global population will not have access to safe drinking water. Water will become a precious resource and scarce water could prompt wars in the 21st century.

 Japan is self-sufficient in water and almost everyone has access to clean and safe water, thanks to the waterworks system. The history of water-supply dates back to the Edo era when the Kanda Aqueduct and Tamagawa Aqueduct were constructed, yet insufficient wastewater treatment or drainage facilities triggered outbreaks of water-borne diseases. The outbreak of cholera in 1887 led to the installation of the UK-imported water pipes in Yokohama, marking the inception of modern waterworks. The 1957 Water Supply Act stipulated three major goals to provide “abundant, low-cost and clean” water. Our water coverage ratio increased dramatically, from 26.2% in 1950 to 97.5% as of today. Water-borne diseases are close to total eradication and sanitary conditions have shown remarkable improvement.

 Japan also enjoys advanced technologies. Our water pipe leakage rate is as low as 3.6% in Tokyo, while that of major cities around the world average around 10%. New water-purification technologies are being developed. Further measures must be taken to improve quake-resistance or facilitate replacement of deteriorating pipes.

 Freshwater is the only self-sufficient resource we are endowed with in this mountainous country. I believe we should convey the importance of mountains and rivers and work towards conserving the nature in order to hand down this abundant water to future generations.