Well, good morning everybody and welcome to our Japan Update Conference, so I'm Shiro Armstrong I run the Australia Japan Research Center here at the ANU and on behalf of my co-convener's Professor Fujiwara Ipe and Dr. Lauren Richardson My delight to welcome you all here this morning before we get started We wish to acknowledge and celebrate the first Australians on whose traditional lands we meet and pay our respects to their elders past and present Emerging and for our online guests and our Japanese guests to let you know we're on Ngunnawal country So it's really nice to be able to hold this event in person again after two years being completely online But we are in a new normal and we have some speakers getting COVID We have to adjust to other uncertainties including flight delays flight cancellations And all of that so we've got some changes to the program which I'll make clear as we go But the first casualty off the block is of this new normal is the Dean of our College Helen Sullivan So before I introduce some of today's program and the issues we'll be discussing It's my pleasure to welcome you and formally open this year's update And to take on the Dean's duties So this year's Japan update is the 10th we've ran So the first one was nine years ago and we have Our keynote speaker who is actually here at the first Japan update This is one of the colleges the College of Asian Pacific's feature annual events that showcases our continued commitment to research Engagement and teaching and education on Japan So the update is brought to you by the Japan Institute here at ANU and the Australia Japan Research Center I think we're really lucky at the ANU to have two Dynamic centers that focus on Japan and really help us deepen the understanding of Japan and Australia's relationship with Japan So the age RC which I run is in its 42nd year It's been at the forefront of engagement in Asia and I want to acknowledge Professor Peter Driesdale Who's here who set up the Center 42 years ago with Sir John Crawford? The Japan Institute brings together all the teaching and research related to Japan on campus and under Lauren Richardson's leadership Has launched a weekly seminar series and kept a community of Japan scholars engaged throughout the pandemic The activities of the Japan Institute in fact all our work on campus on Japan is projected through that and the age RC And I hope you can all stay engaged in the various activities So our college here the College of Asia in the Pacific is home to the largest concentration of Asia expertise in the English speaking world That's a national asset and the one we continue to invest in I Think amongst all of that the specialists on China Indonesia of course the Pacific and elsewhere Japan has always been at the center of those efforts and leading leading the way for many decades So I'm delighted to see that continuing with some new appointments, which I'll mention later And a new generation of Japan scholars at the ANU So on behalf of the Dean and the ANU I'd like to welcome our guests from Japan Thank you very much for making the trip to Canberra We're looking forward to Japan opening its borders too so we can get to Japan visit freely We'd like to showcase our research and convening ability with our updates, but this year in particular Without our many colleagues without many of our colleagues being able to travel to Japan It's important that we have these firsthand insights from Japan So we're extremely grateful for our guests coming from Japan And on behalf of the Dean, it's my pleasure to launch this year's issue of The Japan issue of East Asia Forum quarterly Japan strategic choices and some of our speakers today have contributed articles to this So please grab a copy. There are plenty outside and for the online audience Hopefully you'll see a link pop up The East Asia Forum and the quarterly Magazines published by ANU Press proudly supported by the college It's one of our leading platforms that makes research accessible. We translate research For a broader audience And I think East Asia Forum stands out among the many efforts within the university and the university sector as a whole because of the rigorous double-blind peer review process And having a wide international reach and I can see a few of our anonymous reviewers in the room So thank you very much as always So this issue On Japan strategic choices examines the various crossroads that Japan has arrived at and which paths Are best taken and raises a lot of these questions That's especially so in the wake of Russia's invasion of Ukraine and the continuing uncertainty around recovery from COVID And of course great power strategic competition and regional uncertainty in Australia and Japan's backyard so Back to back to wearing my hat. Thank you to the Dean for opening the update and My pleasure on behalf of the Dean to launch the East Asia Forum quarterly It's great to have a nice audience in person I think a silver lining from COVID is that we've got a large online audience now So this is a new feature of what we're able to do here and stream live to YouTube So we've built a fairly loyal audience I think and we're we're delighted about this. It's become a An important event on the annual calendar for those interested in Japan I was lucky enough to be in Japan in June and July this year And really can confirm that zoom is no substitute for being there in person Being on the ground being with people seeing the sights and smelling the smells It was even nice to be back in offices and classrooms Even though it was set at 28 degrees and extremely hot And even hearing from all the taxi drivers about how Japan's not quite ready yet for foreigners and opening borders Many of us haven't been able to get back to Japan from from Australia and even fewer have lived through the last few years of Pandemic in Japan and for that reason, I'm particularly Grateful to our speakers for making the trip out here and traveling to join us today Having our guests from Japan really enriches our understanding of Japan The thinking that's going on there in Japan and that's especially important after the challenges And changes that have occurred in Japan behind the closed borders And I think Japan has changed and we'll hear a bit about that today Some of the social problems have been exacerbated brought to the surface as well during the crisis Energy price inflation has shifted public opinion a bit on nuclear power And Japan has joined Western efforts in sanctioning Russia And assisting Ukraine I think both of our countries too have become more inward looking And for Australia, it's even more important that we understand Japan now And that's because Australia and Japan have never been closer politically or strategically Of course, there's big economic relationship. Japan's our second largest investor In Australia and Australia is by far the largest energy supplier to Japan But that's also in strategic raw materials iron ore and beyond The trade and investment relationship is of course much broader than the energy and resource Relationship, but that is the pillar And that relationship continues to grow with Japanese investment in new forms of energy We are both US allies, of course dealing with the United States distracted by big domestic challenges Australia and Japan both have An increasingly uncertain and assertive China as our largest trading partner So Australia and Japan share a big regional and global agenda where both governments are working really closely together In fact, it's usually the private sector that would lead and the government would follow But that's not the case now. We have both governments leading and that's not a bad thing, of course There's some complacency in the relationship And we need a big national investment here in Australia in how we relate to Japan I think the rest of the community Business academia We really need to to lift our game. There's an opportunity as borders open So it's in that context that we produced this reimagining the Japan relationship report last year Again, we've got copies of this too plenty of propaganda outside for everyone to pick up And that was kindly supported by the Australia Japan Foundation That gave us the opportunity to consult across the community And we use the opportunity Of closed borders and not being able to travel for some introspection here in Australia And there's a lot of enthusiasm as we travel around the country and talk to people There's an oversupply of great ideas for what to do with Japan and how to deepen and elevate our relationship There are many recommendations in the report But more than that, I think we tried to to have a new way of thinking about the relationship And a plan for the future of our important bilateral relationship We really argued for two pillars of engagement Around the management of the first pillar being around the management of the huge regional and global challenges We both face And the other pillar being the demographic and energy transitions underway in Japan that are literally transforming Japan And that those trends will accelerate And to achieve those Pillars of engagement, we had an enabling agenda of getting close to Japan and better understanding Japan That includes building up our institutional links with Japan Investing in not just language, but Japan literacy and familiarity more broadly And of course, there are important sections in the the report on how the arts and sports and other aspects of our relationship can contribute What came out of the report, we really want to explore a new comprehensive regional security Moving towards such a concept that comes really from Japan's idea of comprehensive security during Prime Minister Orhida's Time and his study groups So there are a number of initiatives that we will be working on And working on with Japanese colleagues and research partners The discussions around the country showed us a little Of of the assets that we have in the relationship and the energy of the relationship Recognizing that there's so much more We came away thinking that there's a huge amount of enthusiasm on Japan To take advantage of the closeness, but it's been bottled up and ready to be utilized And we came to the conclusion that a signal from the federal government will help spark that activity from the community Spark some action and Energy from the community So I mentioned before on the dean's behalf that we have large asia expertise in the college That doesn't happen automatically Not just because we have a college of asia in the pacific and it doesn't happen by accident Uh, it's in this space that the australia japan research center has just recruited doctor andrew lavetis Who's here in the room today to the anu the historian of modern japan You'll see his piece on former prime minister abe in the east asia forum quarterly Andrew did his phd in law at Kyoto university In japanese, of course, and then went to harvard and cambridge before we were able to to bring him here And he adds huge capacity Joining other historians of japan, uh, professor simon avanel and tomoko akami Of course, so much more needs to be done What we need from the university sector is leadership strategic appointments and big initiatives And that's all because We have to not just understand japan better But help shape outcomes We need to get closer to japan to be part of the energy transition We need to learn from japan's management of its massive demographic challenges and how it How it manages that manages that transition All right, we need to better understand and influence Japan's place in the world how it relates to the united states how it relates to china south east asia south korea And how japan plays into multilateral forums Where of course, australia is actively playing into with japan The assets in our relationship are significant But i would argue across the community Not up to the task at this stage given the importance of the relationship So today's proceedings and what we'll hear today. I think will really help us understand some of these issues in more depth Got a session of course on the japanese economy The social challenges japan faces now and the strategic choices for japan I mentioned the new normal we're in in the post-covid world of holding in-person events That means that unfortunately a couple of our speakers professor yanagawa and professor soya will be joining us via zoom They'll still Be able to participate but only via zoom and we also have a last minute substitute for bruce miller the chair of the australia japan foundation And on the australia japan research center board So in substituting for bruce miller. I very much like to invite My co-convener professor fujihara it bear to introduce our keynote speaker. Please join me in welcoming it bear Okay, good morning everyone. I'm it be fujihara professor of macroeconomics here at the enu and the keio university chair of this keynote session So the We started the very first japan update nine years ago with the keynote speech by gavana shirakawa. So It's a it's a great pleasure for me to introduce gavana shirakawa again as a keynote speaker In this marked 10th japan update And there's no better person than professor shirakawa to explain to us how we can think about the big economic trends And the choices at time with so many uncertainty Serving as governor from 2008 2013 shirakawa-san helped to steer the japanese economy through the gfc And the great eastern east japan earthquake And the jump the bank of japan under his leadership was innovative and was reading Indeed the global economic community and other central bankers learned a great deal from japan's experiences And i myself had the privilege of working At the bank of japan under shirakawa-san's leadership I learned really really a lot and nowadays Everyone must agree that the societal aging Significantly influenced the macroeconomy in terms of low growth Interest rate and the inflation rate However, when shirakawa-san raised this this issue in the early to mid 2000 No one did discuss this issue in the central banks and even I didn't get it either Most of my colleague and I myself thought Changes in population is just a changes in denominator So it it is not them not so much to do with macroeconomic activities But our understanding at that time was totally wrong And today there are tons of papers to show the structural relationship Between aging and the low growth And I myself benefit from this a lot I published several articles on aging and the deflation and or low interest rate And they reached that to my job at the ANU here. So for which I cannot thank shirakawa-san enough and I believe the fundamental contribution of scholars is not to show something complicated But to propose a new concept that nobody thought about before but that becomes the standard way of thinking after Shirakawa-san is a person who can offer such a fundamental contribution by creating a new consensus So we are today very fortunate to have shirakawa-san here today And shirakawa-san is of course one of the japan's most sophisticated the economic thinkers today If you find yourself hungry for more of his insight, I suggest you to pick up a copy of his recent book Tumau Tuas Times I practiced this yesterday so that this is really hard hard word to pronounce I practiced the look here in the google translation yesterday Tumau Tuas Times T-U-M-U-L-T-U-O-U-S Times I would be very precise about this Tumau Tuas Times Central Banking in the era of the crisis Where shirakawa-san talks about how japan's efforts to combat low inflation, low growth And the low interest rate Has challenged the mainstream economic thinking And the shirakawa-san's many other applications are listed in your booklet He's currently a distinguished guest professor of international politics Economics and the communication at the aoyama gakuin university Okay, but for now without a further ado, let's turn to what he has to say today about the japanese economy and the priorities and the prospects for reform Please join me in welcoming shirakawa-san Good morning everybody And thank you. I'm mr. Fujiwara for your extremely kind introduction And I'm very glad to return to this place Uh It's my great honor and pleasure to speak at 2022 japan's update Before starting my talk, I want to express my deepest respect for What the australia japan research center and a new japan institute of the australian national university Have accomplished in the research and education on japanese studies over the years Uh, the title of my today's speech is misunderstanding realities and true challenges of the japanese economy and society Long ago, japan was viewed as a Country enjoying high-growth economy like present-day china Today i'm wondering what kind of image you have towards the japanese economy I suspect that You have the image that japanese economy Has been in quagmire Due to deflation over the decades Yes, japan japanese economies is faced with a lot of difficulties But i would say it is just like Any other uh countries And as I will explain later Some of the difficulties We are faced with are essentially common to other countries Although japan had explained those difficulties far ahead of other countries Some of the difficulties are relatively unique to japan For these and other reasons Misunderstanding about the japanese economy is so pervasive and deep-seated As I will explain Perhaps the expression which best captures such misunderstanding is the lost decade Or the lost two decades or even the lost three decades of the japanese economy Oh, it's not oh, yeah, okay Yes, japanese economies And the japanese GDP growth rate was declining This figure shows 10 year average of growth rate It is trending down and now about one percent But if we look at the growth of and the path of If we look at the the growth Of japanese economy since the start of 2000 In global context Japanese GDP growth was the second lowest along with italy among g7 countries But if we look at the path of real GDP per working age population Japan's growth rate is among the highest along with Germany our growth rate is higher than that of united states And if we look at the gdb pack capital then Japanese growth rate is just average So what I can say by looking at these figures is two One is Japanese economy growth is not so good But not so bad as as is implied by the word of lost decades or lost three decades The second The deflation Which is often cited as a culprit of low growth is nothing to do with low growth even if We succeeded in raising inflation rate from zero to say to percent The underlying realities of demographics Which created the divergence between gdb growth and gdb pack capital or gdb per working age population Is not resolved Nevertheless, the overly negative views about japanese growth performance is widespread Among both japanese and non-japanese It also deflation is often cited as culprit for low growth Such tendency is especially strong among US academics and policy makers They were quite influential in shaping the the image toward japanese economy in a global context They maintain deflation was the main cause of low growth of the japanese economy You can see This argument In the famous speech by ben bananke who was then governor and eventually became the chairman of the fed This speech was made in 2002 when us was nearing the The decline in inflation rate And the title Is The speech of his title is Oh, yeah deflation making sure it doesn't happen and He and others were so much concerned about The fact that us will become the country like japan because of deflation And essentially He saw that Low inflation rate was the main cause of low growth of japanese economy the us economy us academics believe that As long as central bank conduct aggressive monetary easing after the bursting of bubble The japanese like situation could be avoided The this is again the famous speech by alon blinder Princeton professor and former by chair of the fed The this speech was made in 2005 just six months before chairman alon green span was retiring And people discuss what kind of Lesson new chairman have to be equipped with And he said this Greenspan was determined not allow the fed to follow the bank japan into zero lower Zero nominal interest rate trap And he said this strategy Seem to work pretty well So he said as long as central bank is aggressively enough Then central bank can avoid japanese like situation This was just three years before the fed was faced with zero lower band of interest rate In any event As for gtb growth of the japanese economy Deflation was not its cause How about a policy prescriptions? proposed by such critics Again, this was wrong In order to assess the effectiveness or propose policy prescriptions The best way is to just look at what happened after The great or grand monetary experiment so to speak Which bank japan Started to conduct in 2013 This shows the expansion of central bank balance sheet of bank japan federal reserve and european central bank This is speaking for itself the size of central bank balance sheet was almost quadrupled The ratio of central banks balance sheet to gdp increase from 30 percent in 2013 to 110 percent in 2019 and now to 120 percent This is really gigantic increase in the central bank balance sheet or central bank money But response of inflation rate was quite muted The every three months bank japan is publishing its outlook growth rate and inflation rate and Inflation projection was always betrayed for instance In the spring of 2013 They projected inflation rate in 2015 will be 1.9 percent But the actual number was zero percent And again and again this kind of overestimation continued and so the The presumption was aggressive matter easing easily generate inflation And in those days bank japan was criticized for not not doing that And then great monetary experience started, but there is no response at all So proposed policy did not work And some may say inflation rate is now increasing globally But this is mainly due to the energy and price inflation caused by supply side factors including COVID-19 and Russian invasion into ukraine, et cetera in japan Inflation rate is increasing Although It is much lower compared with other advanced economies in any event Nobody is saying inflation is Finally coming to japan because of aggressive matter easing You may wonder why such thing misunderstanding about japanese economy was created Among the u.s. academics The reasons are very simple First japan experienced huge bubble ahead of other advanced economies Second japan experienced rapid aging again ahead of other advanced economies Suddenly human beings are not good at imagining what they have not experienced So it is understandable that the u.s. academics who had not had first-hand experience of First-hand experience and the timing of early 2000 could could not grasp the severity of bursting of bubble As well as rapid aging It was only after the great global financial crisis that they started to recognize the importance of the severity of bubble This misunderstanding was quite harmful For japan in the sense that policy debate was diverted from the very essential issues Of structural issues to peripheral issues of mild deflation All energy was wasted on discussing how to boost inflation rate misunderstanding about This year's was a pity But the harm was more than that Misunderstanding affected policy debate in other advanced economies as well I will say drawing wrong lesson from the japanese experience is at least partly responsible for the recent global inflation surge When inflation rates suddenly jumped in april last year Many central banks including the Fed initially saw this as being transitory transitory But inflation has kept rising And it was only much this year When the Fed started to increase policy rate from zero The central banks are now being criticized for being behind the curve Why did it happen? Huge uncertainties over the recovery speed of intricate global supply chain And the response of job market to the improvement Of covid-19 situation are often cited as Calculate on top of that the russian invasion of ukraine Was beyond anybody's expectation But just pointing to all these scientists Misses the important cause of elevated inflation I suspect That the misguided fear of deflation Based on alleged lesson of the japanese economy is partly responsible for this huge policy mistake They were both they were too much afraid of deflation And constrained of zero low bound of interest rate This was The lesson that they believed to have drawn from the japanese experience Their argument was that in order to retain the room for declining interest rate 2 percent inflation rate had to be achieved at all costs on a sustained basis Which called for allowing some overshooting of inflation rate Just to compensate for the past shortfall of inflation rate This was called average inflation targeting Or over running hot strategy This was formally incorporated into fed policy framework in august 2020 And the same concept was incorporated into ecb last year As this shows the reading of the japanese economy in the past three decades affected Multi-policy conduct and for that matter Marko equal performance in other advanced economies as well All this as this episode shows Falling studies are quite important In learning right lessons and avoiding wrong lessons Incidentally I myself are doing Modest effort in this respect Uh after I retired from the governor of the bank japan I wrote a book whose pronounce whose title is hard to pronounce too much at times a central bank in a year of crisis And it was motivated my growing frustration over Over negative over the popular Uh account of the japanese economy and more importantly Over concern over the negative consequence of misguided lessons for of the japanese economy on multi-policy conduct globally So far I have explained about misunderstanding and realities of japanese economy But I do not want to be misunderstood I'm not arguing that the japanese economy is in a good shape My intention is quite the opposite As is the same with any country including australia Japan too is faced with enormous challenges for example climate change rising influence of china polarization of society to name a few but I would Like to defer the argument of these issues to the experts who are attending in this conference Instead, I would like to focus on just on one issue Which is more visible most visible in japan compared with other countries That is demographic change I've already talked about a bit about the impact of rapid aging on the economy A minute ago But there is another more important aspect of demographic change That is a decline in population Due to low birth rate itself Again, japan is a forward runner In the this challenge far ahead of other countries But it is 100 percent certain that other major economies including china Will face the same challenge With some time lack Birth rate in japan is very low at 1.3 And the ratio of falling born People to total population is quite low at less than 2 percent Population started to decline from 2009 And the rate of decline is crucially Is currently mild But will accelerate Australia is one of a few Advancing countries that are recording high population growth Although the inflow of falling born people decrease recently after COVID-19 In any event built from australia It may be somewhat difficult to vividly imagine How the society losing population is In order to explain the meaning of declining population as opposed to rapid aging I'm always using this metaphor If I liken the japanese economy to a gigantic rowing boat Rapid aging is a situation in which the number of rowers is decreasing While the number of order passengers is increasing Asking healthy order passengers to continue to row will somewhat mitigate the program In contrast a declining population is a situation in which passengers in the boat are becoming sparse Imagining such a gigantic rowing boat makes me feel really appalled Even if actual birth rate is below the replacement level of 2.1 Population will increase for considerable period of time I have never had Proprietion will increase for considerable period of time simply because the number of mothers is large So people do not recognize the problem But this situation does not last Actual number of population starts to decline eventually At this stage people face up to the realities of declining population The point is that unless people have the expectation that population decline will stop at some point In future they cannot become confident about the future Weak domestic demand And rowing outward for entire investment are reflecting this fundamental demography in japan Nowadays people are increasingly talking about sustainability or ESG or SDGs. It is good But I have never heard declining population is referred to as one of important components of Of sustainability in the discussion in discussion of ESG or SDGs Unlike rapid aging Decreasing population is not discussed in a standard macroeconomic theory They are just looking at fluctuation around upward trend of GDP But the issue to be examined is what will happen if trend growth of GDP turns negative This may be a bit digression But what economists are currently discussing under the heading of demographic change is mainly rapid changing Rapid aging as opposed to declining population Two years ago Charles Gooden and others wrote an influential book titled Demographic Reversal This book is quite good And He argued but he argued The entry of the former social economy into the global market economy Which was the main factor in having profitability is now being replaced by rapid aging Which means declining labor supply He concludes this demographic reversal leads to higher inflation This argument sounds plausible But neglecting another important aspect He's looking into only one aspect of demographic change But neglecting another important aspect of demographic change that is declining population As is the case with mild deflation Japan is a forerunner in this respect But many countries will follow suit as I said Unfortunately, the implication of declining population is not free so through GDP growth rate is a sum of growth of number of workers and labor productivity As this figure shows the number of workers In is the number of workers is projected to decline in decade to come We can reasonably expect The decline of workforce by assuming that labor pathway for gender and elderly Is concern Then workforce decline or workforce will Accelerate more than 1% This is a huge headwind The issue is how to boost productivity growth And this determines final outcome of GDP growth If Japan tried to prevent GDP growth Rate from declining and possibly to raise GDP growth rate It is very clear Japan has to make strenuous effort on two fronts One is the effort at increasing workforce or population itself And the other is the effort at increasing productivity This shows the labor participant rate of male and female As for or we have Where to be succeeded increasing labor participant rate for the elderly considerably For both men and women This is evident If you compare the number of number for 2009 and 2019 And the female participant rate The female participant rate in Japan is lower than in Sweden But believe it or not It is now higher in Japan than in us But the problem is female rate female person in Japan is there is fewer female who are working At managers level In this regard Japan has to redouble the effort In this regard People outside Japan especially Australian May naturally have a question of receiving more foreign workers As you may know the ratio of foreign workers to total population Japan is quite low at less than 2% But the unrecognized fact is that Before the COVID-19 crisis Japan was already receiving increasing number of foreign workers In fact according to OEC statistics Japan was the third largest country in terms of annual growth number of receiving foreign workers in 2016 following Germany and UK And the fourth largest in terms of net number of number of receiving foreign workers following Following Germany I think this basic trend will continue once COVID-19 crisis is over But having said that I do not think receiving foreign workers Could not be a realistic solution for Japanese economy in decade to come Just because The sheer size of decreasing Working age population is so huge In the past 10 years or so the average number of decline of working population is about 6 or 7 thousand I know This is 600 or 700 thousand people This is a huge number So if we really try to offset decline in workforce by receiving foreign workers We have to continue to receive such number of foreign workers every year And I don't think any country Which is very The open And heterogeneous cannot cope with this kind of station. So in that sense I'm I'm in favor of receiving more foreign workers But I don't think it's a solution Now I'd like to turn to the efforts at boosting productivity This figure is a comparison of labor productivity growth of Japan the us germany In the past two decades Japan's productive growth is not much different from that of the us and Germany But at least not accelerating When it comes to productivity people often talk about technology and innovation Nowadays it AI robot robotics and digital transformation are buzzwords Of course, they are all important But when it comes to economy wide productivity as opposed to firms level productivity What is far more important is resource reallocation For example from less efficient firms to more efficient firms The left hand side of this figure shows distribution of Productivity of individual firms we find that the gap between firms with low productivity is We find the gap between firms with high productivity And those with productivity low productivity is widening The stagnation of firms with low productivity is putting downward pressure on Japanese macro labor productivity One hand side of this figure shows the survival rate of low-protective firms It is very clear that survival rate of low-protective firm in japan is higher than in the united states In essence, the problem with productivity is a lack of economic metabolism or churning And we have to think deeply what is behind these phenomenon And what is needed to boost productivity And people are fond of talking about innovation and technology And but just talking about innovation is just like Talking about dream and we have to talk about reallocation of resources more than that The in essence okay, and we have there are several important issues on this First employment practices Traditional japanese employment practice Characters by long-term Employment are increasingly waning in its importance, but still account for Unicorn part of the japanese economy In this system firms are expected to work as a kind of shock absorber And the provider of safety net when the economy is hit by shock To the extent that firms are constrained by such impressive social contract Necessarily we allocation of resources tend to be delayed Japan's labor mobility is low in international comparison This figure shows there exists a positive relationship between labor mobility and productivity growth Japan's low labor mobility is partly responsible for failure to boost productivity Second declining population itself Declining population affects not only the quantity of labor but also The productivity in a subtle through subtle mechanism Declining population affects region differently In regions losing population rapidly It is becoming costly to maintain public infrastructure But naturally it is difficult politically to reduce expenditure for those regions Although it is eventually implemented What we saw what we see in the process is gradual decline in productivity Due to delayed delayed allocation of resources across region Third prolonged monetary easing Monetary easing itself affects both efficient and inefficient firms But for innovative startup In this course is not a key factor for them to undertake innovation While for incumbent in efficient firms a continuation of low interest rate is very crucial In the long run Resource allocation namely movement of people and capital will be progress In a response to a change in market Reflecting underlying trend of the economy and society such as technology and demography The problem is that it takes increasing longer period of time for Japan to get a meaningful consensus And the division of opinion arises for several reasons First technology and globalization affect people differently Second the impact of rapid aging and declining population differs across region Third inequality is widening even though Japan's air is relatively egalitarian society in international comparison Reflecting these political decisions tend to be delayed For example in order to increase birth rate Government has to increase expenditure on newly born babies But in a grey hair democracy expenditure on the elderly such as pension and medical and caring services are preferred So boosting productivity growth is not not necessarily about technology It is ultimately determined by societal capability to forge a reasonable consensus leading to sustainable economy and society This is really a daunting task And every country every country is faced with more or less the same challenges having said that not Simple mindedly arguing that Japan should embrace the principle of free market economy only on efficiency grounds That's not my intention Stability is of course important consideration What is needed is to form a reasonable societal consensus by striking the balance between efficiency and stability In this regard it seems that every jurisdiction is now faced with enormous challenges For example in the United States We are surprised by sharp division between democrat and republicans In the EU, EU division between north and south is so strong The problem is the universal When I I'm afraid that my presentation Makes you a bit pessimistic But I'd like to close my speech with a positive tone When I make public speech on the future of japanese economy like this one I always conclude my speech by saying pessimism is a mood And optimism is the will by borrowing words of famous french philosopher In this field what is needed is well is informed discussion And research is supporting those discussions And in this respect, I hope Japan update will continue to play this role. Thank you very much for your kind attention Thank you very much, Shirakawa-san for insight for Presentation so I'm already above 50, but I learned I need to roll the boat much harder Okay, so the It's a great chance for for you to ask the Shirakawa-san the question director If you have any questions, please raise your hand and uh somebody Okay, I'm using one microphone so that Yeah Oh, could you could you go there and could you tell your name and affiliation before starting your question? David Lowe formally at the Australian embassy in tokyo as the treasury representative and currently on leave Thank you, Shirakawa-san for Extremely interesting. If you don't like could you wear off the mask and your your voice is a bit sounding. Yeah resounding. Yeah Okay, is that better? Okay, okay um, so David Lowe Formerly at the Australian embassy in tokyo The treasury representative there and currently on leave So, um, thank you, Shirakawa-san for your incredibly insightful presentation um In your presentation you were sort of pointing to I guess the failure of ultra easy monetary policy to um To solve deflation in japan. Yeah Next year the japan the the bank of japan will have a new governor And it may be an opportunity for the bank to revise its monetary policy Uh, I wonder if you um, would like to express a view about um, how the bank um, whether the bank should sort of Adjust or slightly normalize its monetary policy Given that those settings haven't worked towards deflation And if if so will that be possible without Increasing interest rates in japan to the extent that it might bring on a debt crisis You didn't touch on the very high levels of japanese government debt in your charts, but um, Of course, that's a huge issue in the background and I think Something that people are very worried about looking in at japan at the moment Okay, thank you very much for your question You raised profoundly important question and it's almost impossible for me to respond to a question in a minute or so but Uh, the reason why I chose this topic for today's presentation is Uh, I think uh, what is needed is to do a kind of structural reform And the monetary policy is just one aspect of what is needed And people often talk about how to exit from current monetary And of course this question itself is relevant, but Essentially the technically exit is not that difficult just to raise the interest on result but The the problem is what would happen given given for instance the very bad fiscal situation so Without addressing this kind of issue the process is would be bumpy And that's why I stress the importance of doing this kind of structural reform. I explain And I I'm afraid that my answer is not fully convincing Not comprehensive enough, but that's my initial response Thank you very much. Uh, any question anyone Okay, I have a question in the chat so that you'll figure about the fertility rate decline is really impressive so that One participant asking you about the what are the deep cause of the declining population? Maybe the particularly this person is asking is it due to the changes of the value? So what's the fundamental causes of the declining, you know population? Yeah uh First of all declining birth rate itself is universal from an advanced economist and I assume that many of you know the common factors first of all If uh borrowing if I borrowed the word from economists It is due to increasing opportunity cost of raising a kid. That is one part of the story but Other than that My sense is Japanese society is not friendly enough for young Young couples who want to have babies In this respect the I feel sorry for my wife when my First daughter was born in those days I was not cooperative. I was working hard from from 9 to 11 or 12 I was so I was spending so much time in the office and that was taking it for granted but raising kid joined work by both parents But still Japanese society Japanese society is trying to improve this kind of bad practice It is surely improving but still Not friendly enough That is one example so my response to the question is The society is not generous or friendly enough and in this regard We have many things to be tested and some cynical people are saying that It is impossible for us to raise birth rate And there's of course, I admit there's no silver breath, but at least we have explained What we think might be useful At least given that we Experimented with monetary policy at least it is more worthwhile for us to experiment with possible measure of raising birth rates. That's my response Okay, thank you very much so that you may have several questions But we are about the time to go to that at the tea break and thank you so much for the active participation And the Shirakawa-san kindly agreed to participate in the next panel as well So if you have any question, you can ask him at the panel or if you are shy you can ask him over the tea or something Okay, uh, please join me thanking Shirakawa-san for insight representation. Thank you so much And are we going to start the next session from? 10 30 10 30 so please enjoy coffee or something else Yeah Well, uh, good morning everyone It's uh, it's fantastic to be here this morning to see everybody in person and online And and of course we're joined today from Japan by A speaker who's going to follow on from the fascinating talk. I thought from from governor Shirakawa Professor Yanagawa from the University of Tokyo and um, I Invite him now. He's going to give an address and then we're going to have a discussion between the three of us and But after that, um, I will be opening also to questions from the audience.  So I have a have an idea that that people who want to participate So if I could invite professor Yanagawa now, um, thank you very much and um, We'd appreciate your address. Thank you Yes, I'm afraid so, uh, professor Yanagawa, can you hear us? Can you hear me? Is it clear? No, I'm just talking Is that okay? Of course the wonders of technology demonstrate once again. Well, there's nothing like doing things in person sometimes Uh, so uh, while we wait for uh, a few little technical difficulties we ironed out I'll start by following on from the um, terrific talk by the governor earlier And and you talked governor about, you know, learning the wrong lessons Much of the world also learning the wrong lessons From from what japan has done because it was the kind of the first into so many so many things So Can I ask you? Is it appropriate now to still be trying for a two percent target or an inflation rate of two percent or is that really Just no longer relevant Okay The Your question is about the japan or global context in japan japan first of all in no japan first and then We'll go to the global context. Okay the My answer is not Not so Simple a bit complicated, but let me try First of all the We need independent central bank. Otherwise economy tend to follow short-run Benefit and that's why central bank independent indeed But at the same time in a democratic society Central bank have to be accountable So we have to explain how and Why the central bank is passing particular course of monetary policy and in that context the we the we need some concept About what constitutes a price stability and In that context some number is needed and Two percent is adopted by many central bank including bank japan And i'm not against two percent itself, but also I'm not a big fan of particular number including two percent for several reasons one is If we look back on the economy in the past two or three decades Many of the problem did not manifest itself By taking the form of inflation In many cases it was bubble that created the considerable fluctuation of economic activity Back in bubble period in 1980s Average and the average emission rate was below one percent But still and viewed from today The very accommodate monetary policy at that time was criticized But if we had adopted two percent targetting at that time Then we should have we should have adopted Further more aggressive materialism and that was nonsense so Even though prosperity is important two percent doesn't capture What is needed and also We cannot become confident about precision of number of major inflation rate and so only all Two percent should be interpreted as a broad objective of monetary policy So if your question is about whether central bank should Should conduct monetary policy just with the aim of attaining two percent within short time frame My answer is no, but So my answer is two percent is okay, but we have to interpret it as a broad mandate That's my We've we've talked obviously about the the world taking the wrong lessons, but also in some ways. I think The japan initially applying the wrong formulas Do you what would have happened if japan had not Pursued this very aggressive monetary policy. Would we be looking at a better economy now or a worse economy? Uh I must be I joined the bank japan in 1972 and I was working for monetary policy department for many years and Since 2000 I was heavily involved in almost every decision on monetary policy so i'm a part of monetary easing story and I don't think that Monetary easing itself was wrong and of course Monetary easing should be pursued in each period but presumption of monetary policy is to adjust short-run fluctuation and We don't think that monetary policy should be tool for or the cure for The program of wrong nature So if Monetary easing is adjusted quickly Then it's okay, but Given social and political dynamics Monetary easing tend to be prolonged that is a prune and and this is a difficult part and even Even though Society does have such kind of tendency of asking central bank to do more and more MITRE easing for program of time Central bank cannot say no no We can't do any monetary easing just for that So that is the accountability issue and central bank is independent But central bank is not the country with Is it not the kingdom with the country? So that is my my Reaction for your question. Well, you said also that really when you talk about yield Curve control policy and and getting out of really easy monetary policy. It's not that technically difficult But it's obviously very politically difficult. Do you foresee that happening or are we looking in japan at this just continuing indefinitely because it is so difficult You come control was introduced some years after I left and the bank of japan and as a former governor, I I I'm a bit reluctant to criticize what my old institution are now doing But I'm not big fan of yield curve control for several reasons and anyway, somebody has set interest rate level That's why central bank is Set short-term interest rate But if central bank is faced with zero interest rate, anyway central bank have to change interest on the With some maturities and This is the only instrument through which Central bank can exert the effect of monetary easing. So in that sense I do not deny the importance of innovative instrument, but yield curve control is is act about about capping cap the interest rate on 10-year government bond yield But there's a huge uncertainties over the economy in decade to come And it's almost impossible for central bank or any Any economic entity to know what is a what is a prevailing level within during 10 years time. So I'm not big fan of And also as you said The longer this yield curve control continues The more difficult it is to change for political reason And and also I was fascinated When you said and I think I plead guilty to this The the perception of the Japanese economy having had you know lost decades and then you pointed out that Per capita or poor worker. They were average or or above in terms of per worker Do you think that led to a kind of complacency and over complacency within japan? No, despite the perception inside no outside The first of all, I'm not arguing for an arguing We should be satisfied and But at the same time The Japanese tend to look at tend to Tend to judge the performance of Japanese economy Based on how foreigners are viewing Japanese economy So given that foreign academy are saying Japanese economy is suffering from lost decade many Japanese tend to think that we are suffering from lost decade and That is that is what I want to avoid. So We should be we should just look at the reality So reality is both. So JP growth itself is declining The same time per capita per capita basis. It is not so bad and we have to look at What is a fundamental problem? That is my intention. So the I don't think Japanese and many Japanese Having some kind of complacency. No, it's opposite. All right. So what is going to also I think Bring it home to other people as to Japanese as it is in every country around the world Is inflation and particularly you've got the rapid decline or the very big decline in the value of the yen What type of impact will that have? Up until some years ago Up until some years ago many firms are arguing that the Overly strong yen is a fundamental reason why they are losing competitiveness. So they said if the overly Expensive yen is the result then we might regain the competitiveness But today yen depreciates sharply But the competitive Japanese firm is not returned. So The as I said in my presentation the basic problem is not deflation of yen's exchange rate rather the productivity and today the yen's depreciation is affecting the affecting inflation rate slightly And but more importantly the it is Decreasing the patching power of money. So for average the households and for average SMEs yen depreciation means erosion of real income or Squeeze of profit. So I'm not saying yen's appreciation is good What I'm saying is we have to look at What would be the Japanese economy built from sustainability? And I don't think the The continuation of this kind of yen depreciation is not sustainable built from overall economy Okay. Well, I I think that's probably a good point. I'm told we have Professor Yanagawa on the line is if that is correct We could possibly ask him now to To please address us. I hope this is working professor Yes, can you hear me? Is okay? Great. Thank you. Thank you. I'm feeling first of all, I'm feeling so sorry that I cannot attend this wonderful conference in person it's My great honor to attend this wonderful panel discussion with great governor Shirakawa san and I'm afraid I just interrupted the great discussion about monetary policy, but It's my work. So I'm going to address small my presentation and I'll share my slide Can you see the my slide? Okay And Could you just speak a little bit now the professor one? It is okay. It's just a little bit louder if possible. Okay. Thank you. So I'm going to talk about the two big issues one is the market mechanism in japan and the second one is the Potential growth rate in japan that is related to the presentation by Shirakawa san And this is a basic point but the the signaling effect of prices is very important for the market mechanism And price reflect demand and supply side conditions But also there's some information about the future possibility for the products or the industry so In order to inform this kind of information by prices Prices should reflect the market situation appropriately. This is a basic economic theory But in japan this price effect the signal effect of prices does not work appropriately So in japan price do not move so sensitively In some sense they are stable So in the world of Shirakawa san there's a shock absorbing movement for the prices So even though the market conditions are drastically changing just like in these days Wage do not change And interest rate do not change And the oil prices do not change actually if the retail oil prices do not change And the other retail prices do not change So this is very Friendly for the consumers But the market mechanism doesn't work well The information signaling effect of prices do not work well I think this is Very uh Some side negative aspect of japanese reform There are some reasons One reason is japanese culture or japanese custom Do not change the prices do not change the retail prices But some of the japanese legal rules or regulations Pretend to change the prices And some of the policies Pretend to change the prices. For example oil prices the retail oil prices is now controlled by japanese government In order to avoid that A drastic shock For the consumers This is good for consumers of course But Then so it sometimes functions to stabilize the economy against the temporal shocks But It prevents to adjust to the structural change of the market or structural change of the economy So now the example is under the covid 19s So in japan we fortunately that we experience a low unemployment rate And the stable wage rate wage rate do not go down And restaurants should be closed By regulation But those restaurants are subsidized by the government So that is okay for those restaurants but Entry and exit Mechanism did not work for the restaurants and Other industries hotels and something And by the this kind of policies or the customs GDP in japan did not drop down sharply compared to other oac countries By the covid 19 But the recovering process is very slow And Market prices are not so going up So that is one aspect one important aspect in japan That this is related to the differential But not This is quite different aspect about the movement of prices so that so One negative aspect of the shock absorbing economy is That's Do not stimulate the incentives for the farms or workers In order to stimulate the incentives and motivations Appropriate price changes are necessary. This is a basic theory of economics To revitalize the japanese economy I think it is necessary to exit from the mind And the policy stance to just sustain the status quo And just avoid the drastic change and the shocks absorbing And the kindness to the consumers I I believe this aspect is Important to stimulate the japanese economy and stimulate the incentives of investments or More active behavior in japanese before And at this point is also related to the fiscal and manipulated policy There's a Keynesian type of fiscal policy and monetary policy of similar aspect Temporary aggregate demand stimulate can avoid the short-term pain Can absorb the short-term shocks But they sometimes they do not stimulate structure change low interest rate and big subsidy Those type of policies Can avoid the structure change of the market for the people This is a negative side for the stimulating the structure change as shirakas and stress So in order to avoid the short-term drastic shock So tempers fiscal or monetary policies are necessary. I agree with this point but Keeping this Big fiscal policy and the monetary policy That may prevent the structure reform in some sense And second issues The eye I believe the most important issues in japan is how to raise up the potential growth rate It has declined in trend in the long run Of course, there are many reasons And one big reasons are aging society as shirakas and stress And the population decline These two issues at his point these two points are big program for japan and labor productivity as shirakas and stress shirakas and explain labor productivity growth is not so bad for japan but given the progress of aging society Given the population decline We need more high level of labor productivity growth So for the policy side The important point Is how to raise the labor productivity And more open So Even if the total population is declining Working population can be increased For example, labor participation by women So how to increase the working population? How to and how to increase the labor productivity these two points are main issues main problem for the japanese policy And that there was a negative pessimistic aspect But i think that's In japan we have the potentials So potential possibility of the growth Is also important to stress So japan The geographic point is close to asian country With high growth rate Of course the relationship with the china is a big issues A very controversial issues But not only china East asian countries experiences with high growth rates So close to these countries is a main big positive aspect for japanese economy So how to cooperate with those growing countries? One important aspect for japan including australia And Technological capacity of japanese companies companies are still very High and big So potential for those companies Very big. So i think how to stimulate This potential Is very important And more of the labor participation in japan is potential Very high potential So as silakasas pointed out The labor participation by women Is growing up but the They just think as a part-time job Or part-time work In order to increase the more productivity or more population labor populations So the old job those Female workers Should work more Intensively or just not only the part-time job, but also the normal Working isn't necessary And they are hoping to work more intensively Japanese female workers in general So Change the policy To stimulate the labor participation of the female workers Are very important and we have a potential to increase the labor participation And the last point is that now the startup companies Innovative startup companies are being created in japan So many startups coming out and as i will explain later that japanese government try to Push up those movements So this is very important and very good potential for japanese economy And in order to stimulate the labor productivity It is necessary to promote the human capital investments so The policy to stimulate the gdp or stupid economic growth rate some kind of investment to high tech products i t iot or ai those kind of industry Those kind of investment Promoted by japanese government of course those are important, but not only those Investment to the tangible asset, but also intangible asset particularly the human capital Is very crucial for japan Because in these 20 or 15 years The investment to the human capital by the japanese companies are declining drastically So that is i think i i think this is one reason that japanese labor productivity is not so growing up very much so The human capital Now i'll explain later that the japanese government try to stress the investment of the human so in japan hitoe no toshi That's a key point that key policy agenda to increase the human capital investment and but but also that just that the policy for the subsidy Is important, but also it is necessary to tackle labor market reform and education issues so and Moreover that as shirakasen stories In order to resolve the issue of the rapidly aging population It is necessary to strengthen Measures to address the decline in birth rate Including support for child rearing That's a ski point. I agree with shirakasen and Japanese government recently announced a new form of capitalism There's some of the many people are criticized what is the new What is the new aspect of the new form of capitalism? I don't explain the detail of what is the new element but I think that's Not so new And it is not so sorry to new so the Important the policy we would like to Realize is to increase the labor productivity and increase the potential growth rate so That the policy announcement is making the positive cycle of growth and distribution And they will be developing a new post-covid 19 society that is policy announcement Agenda but a key point is that as I stress in this presentation importance of the sustainability and the human capital and Building the sustainable capitalism focusing on various stakeholders And the leading happiness of the wide range of people those kinds of sustainability is important aspect for the new capitalism, but the key point is us again the human capital so and Market mechanism as I stress first That is also important aspect to issue stress So realize the economic growth by utilizing market functions. So that's So I like to stress So market make functions mean the market mechanism using the price mechanism to announce the economic conditions by the market prices And the deregulation and the structural reform of the japanese market And for the the side of human capital the recent policies stress the visualizing human capital or intangible asset So that is now coming that policies. That's uh, visualizing the human capital and intangible asset So the disclosure rules are changing and the japanese firms try to Disclose the level of human capital nowadays and I Almost time so that I don't explain the detail about other policies of the new formal capitalism, but DX digital transformation, this is a buzzword in japan and Gx this is also buzzword in japan and Gx mean that the green transformation investment to the sustainable energy and green technology And to support those kind of industry and the stimulated economy and dx and gx major government investment in in these three or five years in japan and startups that is the delivery of innovation And I believe in that the startups are important, you know, the japanese traditional firms companies are of course very intelligent and very productive in some sense, but The ROE or ROA of those companies is very low In order to raise up the ROE or ROA So startups venture companies are necessary more necessary in japan so Kind of supports or the government support subsidies is necessary, but the deregulation to open up the new field or new market to startups venture companies are necessary in japan So the summary is the how to raise up the potential growth rate So in these days japanese governments try to To stress to focus on these points investment to human capital and the major to convert the decline of birth rate and promoting women's participation in the workforce and the dx investment gx investment startup support And I Have no time to explain the detail of that Social security problem But the reform of social security is also important for the japanese economy in the future so that's all and I hope to discuss more detail about this point with syracos and other peoples. Thank you very much Well, thank you very much professor another terrific talk Why are we just on that you've outlined what you see as the Important some of the important aspects of structural reform in the japanese economy, but you also said That you need to change the mindset of The status quo and and no dramatic change so How we saw abinomic abinomics had had the idea of structural reform that seemed to not go as Well as people had hoped What makes you think that The new form of capitalism whatever that whatever that however that is described or what that means is going to do any better at actually Promoting the type of change that you are hoping for Yes It's structural reform and in abinomics that That the government too stressed the deregulation But even if that change of rules not Not only the change of rules does not change the economy By changing the rule and simultaneously Enter the new companies to the new market is necessary So promoting the startups and promoting the venture capital of venture companies And the promoting the human capital who has a new type of knowledge or new technology So those kind of support is necessary And in order to realize those points the labor market reform is necessary that is very tough work, but I hope the japanese government try to change Try to tackle the labor market reform And and governor how how confident are you that the government will be able to Institute those types of changes that you've been talking about and and professor Yanagawa has been talking about Okay, now first of all I agree with what professor Yanagawa said and basically and son His view is is the same as mine and The I have this kind of trouble always I can identify What is needed? but The everybody has its own preferred policy prescriptions And in a democratic society anyway, we need some sort of consensus. Otherwise, government cannot implement and so Just to say government should this and this is not Does not capture what we need And as a prerequisite for government to deliver on what they should do The real issue is how how to inform the how how to form the informed the consensus And that is the hardest part and in this regard in the short run. I am not so optimistic Uh, but in the long run, as I said the the closing of my remarks and the policy is eventually reflecting what society want to have so if we really discuss what The problem and what are the possible solution then eventually the I Would be optimistic. That's my new answer to your question. Okay So Governor Shirakawa talked a lot a lot about consensus, but also of course the the demographics of Japanese society and in that context reaching consensus about How to do the reallocation of resources to probably try and benefit Younger generations of kind of greater birth rate, etc. That becomes harder. Doesn't it professor? Which professor I'll call you governor I don't myself as a professor, but anyway, I seem to you The I the Eventually the as I said the the Okay, first of all, uh, the the I don't know the English connotation of consensus the The the consensus is of course not unanimous But by consensus, I mean reasonable majority who support this and this policy and All the citizens have a different feeling on the one hand, they are always complaining about The decrease in their pension But at the same time The all the elderly people are caring about what would happen to their children or grandchildren In that sense, they have they are having long-run perspective. So if someone Comes to explain What is the end result of of the status score? Then those people who are who are against the at the quote-unquote reform Might the Support those measures. So there is no silver plate and the If society the we we do this kind of effort collectively Then eventually the the preferred The consensus might be forced eventually and the preferred policy might pursue and that is my expectation So i'll try this yana gawa san Is that i don't want to offend the japanese by by tempting this is that if i can address you like that Is that uh, are you optimistic as well that that that change will happen and is happening? Uh, yes in some sense that uh optimistic that uh as shirakas and Stress the implementation is a very big problem for japanese policies That most of the policy most of necessary policies are recognized by many of the key persons But it is difficult to realize that policies that is uh Big big problem for japan and taking time to implement the policies but Gradually it's taking the time But the policies are changing So support for the young families support for the children's now gradually improving it taking time but Comparing to the 10 years ago the situation is much better than 10 years ago So in that sense, i'm pessimistic, but it's taking two time. There's this very negative side So very we should more speed up the change of the policies But people's mind and the consensus as shirakas and stress shirakas as definitions Consensus are changing and the policies are gradually changing. So in that sense, i'm pessimistic Also, there i think there's not japan is certainly not alone in this um In terms of the impact of covet making all countries be become a little bit more inward looking But of course japan In contrast to most Of the developed countries like australia the u.s And much of europe has has been very anti immigration Although i understand i appreciate your point that that's been changing now shiraka shirakaosan um said that um That's even at six to seven hundred thousand. I think you said immigration would be needed and that was just not sustainable um Do you think that uh the attitude to immigration is also going to change and that that can have any ability to Change those demographics in in japan or is that just not realistic? um The purple it depends upon how japanese uh japan come back to pre pre-covid The era and for the time being the the number of inflow of ring workers is reduced to Very small number, but after after covet 19 is over my guess is the inflow of Of foreign workers will be surely increasing but The problem is how to raise the per capita income and The the type of foreign workers Who whom japan is now receiving is Basically low-skill workers. So there's a competition between low competition of low-skill workers between japanese and non-japanis And but as long as this trend continues, it doesn't mean that increase in per capita income And the decision is worsen because of decline in population, which means that yeah, so my answer is It it does change the situation of japanese economy to some extent, but It doesn't solve the fundamental problem facing facing japanese citizens i'm not i'm not the The patria. I'm not a parol. I'm not holding a parochial view of Meaning the exclusion of foreign workers. We have to and that is a reality. So by necessity We have to receive more foreign workers but just Just receiving more foreign workers is not a fundamental solution to the problem what japan is going which japan is going in our face ianakawa san Yes Do you agree with that in terms of immigration? Not being as being a long-term solution really the The impact of that COVID-19 is very Temporal one. I think that the japanese economy might change the situation of COVID-19 the japanese economy inviting the many foreign workers And that we'd like to invite our high skilled workers as well But in order to impact the gdp macro level So we we have to introduce so many workers. So many immigrants and i'm thinking that's Not so realistic for japanese society can be Accommodate it can accommodate those huge number of foreign different cultures workers and one i'm Expecting possibility is the online Workers by using this kind of a zoom or online so online cross border workers, of course, that's the Contribution of those workers are limited But by inviting the those kinds of temporal at least the temporal stay in japan and And most of the working time is Stain in australia and other countries Those kind of workers can be Contributed to the japanese economy very much and they're not so stressful for the japanese society I'm just introducing so many online cross border workers one possibility. I'm hoping One of the things that i went to japan obviously a few years ago now, but what was Really struck me was the incredible technological sophistication of japan's most productive companies And yet I'd go to other companies and they would still be using paper Work in a in a way that just amazed me that it was so not Digitized Again, is that changing how is it changing quickly enough? Do you need more government policies to encourage that or is that part of a mindset and do you see Shirakawa-san that that gap between low productivity and high productivity firms increasing Japanese society is heading for the good direction in terms of embracement of IT technology But but having said that the speed is very slow And this is not because The government is doing a kind of sabotage rather because japanese society is so Kind to all kind of people Case in point I'm always referring to my experience when I returned from singapore to japan Tokyo Some months ago and the japanese government From today the rule had changed, but until yesterday And the rule was that the japanese The people Coming to japan have to take a PCR testing Within 72 hours of arrival And the information should be incorporated in install into my iphone app and so I Thought that everything is done digitally and Like what singapore was doing when I arrived at singapore airport And in tokyo When I try to go through immigration the Of course, I presented my iphone, but before that many people many staff the immigration office There and they are explaining now we you you have to present your your smartphone now you have to Next step is This and this and their experience and I guess that those those staff Try to be kind to the old people who are not so good at using that kind of The the item and this is just small example So even though technically we have digitalization, but at the same time The japan society always asked to to Be to take care of those people who cannot Embrace those fruit of technology and in the process the We need dual process Which means declining productivity. So that is not not about regulation that's about How government read possible reaction from And the many and the many walks of life and that is a subtle path. Yeah. Yes. So again gauss and I I think also You talked about the growth of innovative smaller companies in japan again, do they How do they manage to escape from that type of mindset? that the governor was talking about that So the mindset is changing that one example is Undergraduate student of the tokyo universities For example 10 years ago or 15 years ago Most of the students Working start to work at big companies big traditional companies or bureaucrats But nowadays most of the undergraduate student try to Start Make a startup companies Or just going to the venture companies and making their technologies To realize So the behavior of the japanese one young people's drastically changing. So the mindset will change The in the new future I think so In that sense that I like to stress that the japanese government the japanese big companies facing Very inefficient So labor intensive paperworks So even by doing that kind of inefficient works So those companies can realize some kind of profits and some kind of low But positive Profit So I think this is a potential So by changing the situation By digitalization that if they can They don't have to such kind of inefficient paperworks They have a chance to make a more productive works And the more they raise their productivity So that the necessary policy is to stimulate that kind of movement understand so So By the change of jobs by change of the work So they they can more productive Works and more they can show them more productive Tivity. So that is necessary to support the world by the japanese government Yeah, I'm aware that I said I'd leave room for questions So if anybody wants to ask a question, please just raise your hand and we'll send a mic There is a person up the back there While we get that mic to them. I will just start another question, which is the The impact of the economic security laws Obviously many companies are doing this Of many countries rather How big of a problem is that in terms of Create a stifling innovation or is that just one of the things that we have to live with? Governor I'm not expert on economic security issues But for obvious reason The I can understand the the the intention the Motivation behind introducing this kind of measure But viewed from purely economic viewpoint Yeah It is It has a lot of Adversarial effects And Yeah, that is only that is only what I can say All right, we just get this the question up from up for the audience Yeah, thank you for this Yeah, thank you for this kind chance to Asking the question. My name is Gali. I'm study master of asian pacific studies. Thank you for your detailed presentation Kira Sawasan and also Yana Gawasan I want to ask two things first about immigrants Is there any Detailed policy from japanese government regarding the How japan's accept the immigrant workers because Even though the data says that in 2016 that japan has the top five accepting the immigrants work, how Do they regulate Because I think the yana gawasan also Or kira sawasan mentioned that there is a conflict of low-skill workers between japan's and also immigrants and the second one is about the appliance of it within the company of japan because My wife has experienced the working in the company of manufacturing in japan and Until kofit happens she say that Everything is still going in traditional way even during kofit. There's a lot of lockdowns, but the production must continue but the manager and that's called the management cannot accept the The appliance of work remote working or something like Shifting their Production methods or something like that. So how do the government try to implement this way of Embracing the new technology. Thank you Could you answer that question yana gawasan? Yes, thank you very much. Uh first question is that Immigration yeah, the japanese government tried to So introduce some kind of skilled workers from foreign countries But uh definition of immigration is very difficult Particularly for japan so that we sometimes do not use Formerly the immigration but anyway that we try to promote the japanese government tried to promote uh Foreign workers particularly that's skilled foreign workers to uh contribute to japanese economy and uh japanese Economy must provide very good circumstances For those uh productive workers So that's uh, the Japanese Very apparent Japanese policy so that you can view some of the change of the policies in the near future, I think and uh, the second answer to the second question is that Yes, now still that the japanese uh big companies are very tradition Keep tradition style tradition in your center style So it is difficult for the government directly to force the change to those private companies So that the way the government can do is two things One is promoting the new companies startups those startups will use the more efficient technologies It is directly in order to survive in the market And the second way is the promoting So change of the government rules, for example that hanko's paperwork So the some most of the paperwork is Necessary by the government rules to submit to some government document to to to The bureau class or to the work governments So by changing the government rules who are using the papers So that could change the behavior of the companies that is very urgent and the necessary policy. So Uh, now try to now promoting that kind of policies Peter dr. I still had a Question. Thanks. Uh, peter dr. I still in you here Thanks very much shirokawa son and go son for very interesting presentations indeed just on the Migration and demographic things. I think it's useful to get this in a bit of perspective here if Japan had the equivalent migration program to australia adjusting for population size You'd have a migration intake of about a million a year which would solve shirokawa's problem So i'm firmly of the view that not only can japan have a higher level of migration But it should have a higher level of migration, but that won't solve All the problems we're talking about here. So let's start from the viewpoint that that's not going to solve the problems anytime soon So one of the problems and I think there's a strong consensus between shirokawa son and yanagawa son That productivity is everything really productivity is where we have to begin And and what's the issue here? The data that shirokawa son threw up are very interesting in this respect and what they revealed was that Lower productivity firms tend to persist longer in japan than in other countries that have a higher productivity performance And we're we're becoming worried about exactly the same thing in australia frankly Lower productivity firms persist much longer in australia than they should we have some kind of competition problem for some reason or other And we need to do reforms to address that So in in japan What what is the issue here? I think the other data that you threw up was very interesting And it relates to your observation that we don't want to move in japan to an american style free market economy because that Brings all sorts of terrible social divisions and strife And we don't here in australia want to move to such a society either So what kind of society do you want? And when you look at your other data there, what that revealed was that labor mobility and productivity highly associated with strong performances Not only in the united states, but also in scandinavia, which have very different social welfare systems and protection systems So my question to both of you is really What are your priorities both for reforms on? the firm side or on on on on the composition side and on the social welfare system side that would change the japanese system To emphasize as yanagawa said market mechanisms over social protection At the expense of market mechanisms and higher productivity performance Okay Thank you for your question and it's a deep Question and frankie speaking. I do not have clear cut answer, but I Some comment I I stress the importance of productivity But I emphasize two things. One is productivity. The answer is effort at and the increasing workforce or the population and because the we cannot the These two things are Not completely different thing. And as I said, both are Interrelated through very subtle mechanism. So we need both effort. That is one thing I should say And the how to strike the balance between efficiency and stability is Quite difficult choice and there is no Uniform uniformly true answer And every society has its own value judgment And also value judgment itself changes in response to change in economic conditions and Based on my personal philosophy I given the reality of demographics Our society should be put more emphasis on efficiency compared with a previous time and that is my philosophy but I fully admit that each person has a different philosophy so I do not want economists Is intrusive in value judgment Ultimately, that should be decided by by by political process But just to say voting is everything is not Right and the informed judgment is needed. So that's why I always stress the importance of discussion and supporting research And but if I'm asked my personal philosophy I Given the reality we should place more emphasis on efficiency. Otherwise, our society is not sustainable Uh, Yenkao-san Yes, thank you very much for very important questions and I I cannot answer totally but Uh, fully but uh, I pointed out two important things. I'm thinking about the productivity And the market mechanism deregulation For the entry and exit is important and at first for example 10 years ago I I believed that deregulation and exit from the market by the low productive farms are important to raise up the gross rate but uh, I I understood that is not the full package of the policy I would like to write the stress So the entry is necessary just for promoting the exit is inefficient At least for Japanese economy to promote the productivity or to promote the gross rate Introducing the new companies Uh, the promoting the new business and promoting the new Young workers coming into the new market That's it's necessary to promote the new field and promote the gross rate So that entry and exit So just not only the exit just introducing the entry is necessary to promote the market mechanism the behavior of the competition of the farms So that's the one reason I stress the The startup The importance of startups The second point is the labor mobility and the gross rate Yes, that that's this correlation between the labor mobility and the startups Even gross rate. So once again 10 years ago, I I believe in that promoting the labor mobility Just the deregulation of the Uh, labor protection is necessary to promote the labor mobility and the economic gross rate But once again, I recognize that is insufficient In order to promote the labor mobility some kind of re-skilling or recurrent education is necessary to change the job Appropriately for the workers Without those kinds of new skill new skill set to move out to the company other companies So Japanese workers are hesitate to move out to the other field or the other companies And they try to keep in the mark keeping the same company even if they have no chance to Raise up their skill and raise up the productivity So this is the behavior particularly in Japan So that's promoting kind of recurrent education re-skilling education Is necessary to promote labor mobility and promote a new Possibility of the those workers so that I stress the investment to the human capital Is the one Because of those That's my second answer Thank you um now governor you talked earlier in your speech about Countries and banks and governments in many ways learning the wrong lessons From from japan we we now have a situation where japan is really standing aside from So many other countries who are all raising rates Quite dramatically in some cases from very low. Are they on the wrong path now and will this in fact lead to recessions first of all Many set banks in many advanced equal and many countries are now raising interest rate Which is quite understandable, which I support and I do not want to make comment on bang japan's current monetary policy, but as you can imagine From what I said in my initial presentation Just relying on monetary easing is not solution Rather continuing with extremely monetary easing is counterproductive. So aside from timing Aside from rhetoric Just relying on continuing monetary easing is not solution. That's my response Yes, but of course you've also got the level of debt that japan has now How do you how does the country the economy manage with that? Particularly if interest rates do rise even a little uh, the country investors, okay, country the Anyway, up until recently the very low interest rate prepared globally. So japan's fiscal station Could be sustainable And but eventually given that the interest rate is rising globally. I don't think japan Could continue with the current low interest rate forever. So eventually At least the long-term interest rate might start to increase And if japan's government is not engaged with serious fiscal reform then investors might Might lose some kind of credibility. So, uh, in order for that kind of thing to happen uh Japanese government Have to do be serious about fiscal reform together with economic reform So, uh, you raised a question in terms of how bank japan should cope in this new environment But this is a bit narrow What is needed is how government Should implement fiscal and economic reform That's my answer to your question. Okay. Um, now yana gaverson you you talked, uh, about the importance of energy, uh, I and the fact that oil prices are controlled by the government And yet we're in the middle of an energy transition, which is proving very very expensive obviously for Many countries in in europe, uh, with what's going on as well What do you think the japanese economy? What impact is this going to have on the japanese economy? Particularly if um europe for example goes into recession, which looks extremely likely Now the japanese government and japan companies Try to Consider that this, uh, energy transformation is a chance for the investment for them So they are trying to There is a possibility to promote a new technology To support the transformation So this if they succeed some kind of, uh, uh, technology to support, uh, sustainable energies Does it be chance? so that of course that Transformation is costly and kind of the burden for the economy, but there is a chance So that uh government try to promote investment or taking a chance for the japanese company to promote a new technology investments But do you think for example that japan's current dependence on australian l and g will diminish over time? uh, I don't think so that in general japanese Has a big energy program so that Many sorts any sorts of the energy supply is important for japan so that they keep that relationship, I guess so, um Then another quick i'm again open for questions if anybody wants. Oh, we've got a question just there Hi, uh, thanks for the very insight for our talk Going back to the issue of immigration. I'm sorry returning the conversation back a bit The importance of productivity is stressed by our both professors here, and I absolutely agree but as Currently in japan pension is tied to average income and if productivity rise incomes rise and as well pensions must rise or otherwise Inequality will rise so I I've thought that immigration are introducing a larger number of immigration and reducing that dependency Ratio is the only way you can reduce the burden on those currently employed those currently employed To prevent further ballooning in the cost of social security But what would your opinions be on that? Thank you I'm sorry. I couldn't understand Your question exactly The the could you say your question more concrete? um So pension is currently tied to income And income is related to productivity So if we raise productivity incomes will rise and as a result pension payments will result rise So the ratio of cost between social security and total income Won't change even if Productivity does rise and I feel like the only way that can be resolved is introducing more number of workers itself through immigration Alongside productivity reforms and I was wondering what your sort of views might be on that the the design of a pension system is The Determined by the three factors One is the economic growth or productivity growth the other is at The age At which people start getting the pension the other the third element is The rate and the income of retiree Too relative to the work and the income of worker. So fundamentally the three parameters determines the pension system And in this context Suppose we receive more foreign workers and if those foreign workers are really skilled labor Then productivity Level could be increased, which is very beneficial for the average pension income But otherwise Just increase mere increase in the number of The foreign workers doesn't show the fundamental problem facing the pension system So I'm not against receiving more foreign workers but I don't think receiving more foreign workers could improve the pension situation Unless We succeed in receiving more skilled foreign workers Uh Last question says somebody just here as well Hi, I'm Joel Rathas from the prime minister's department. Can you just speak up a little? I will speak louder. Hi. I'm Joel Rathas I'm from the prime minister's department. I have a quick question So australia is doing a review of its central bank looking to learn from others And one question is about the relationship between monetary policy makers and fiscal policy makers Just to make sure that macroeconomic policy is is consistent So as you may know at the end of last year, australia walked away from the rba our central bank walked away from our yield curve control policy It was very sudden Basically, it was 80 basis points and our target was 10 basis points It had to end that obviously has some fiscal implications So I think japan still has its very loose Monetary policy settings in in place and you mentioned that some of these decisions are technically easy That politically is a is a is that is the question the question of timing and how to message and all those kinds of things So for big policy changes like that Is this the kind of thing that Japan considers in the in the fiscal context does it take it to the cabinet to talk to kante about those issues? And what's the sort of relationship now that's evolving between Ministry of finance and and bank of japan through the I couldn't hear what is the relationship between what and what between bank of japan and ministry of finance I am not setting governor So I don't know what is the relationship between the government or the ministry of finance and bank japan currently But based on my experience, it depends on personality of a finance minister or prime minister or governor Also, it depends on economic condition And When I was a governor between Between 2008 and 2013 My impression is Most of prime ministers does understand that deflation is not a fundamental problem of japanese economy in private But at the same time many ministers When many ministers Ask about his or her view in private in public Then they often frame the problem in terms of deflation in terms of monetary policy That is a sad reality And if that kind of element is strong then The relationship between central bank and the government could become 10th Otherwise it is good. So it depends on the The personality and it depends on economic condition. That's that's what I can say Would you like to add anything to that? professor Yenna gabelson Is it me? Yes I asked in my talk Yes on that. Yes. Sorry But I couldn't understand Yes that I think the policy the economic policy is complicated so that Not only the monetary policy affect The prices level or the inflation to inflation level or exchange rate So that policy mix A kind of coordination among the policies Monetary policy fiscal policy or deregulation policy or structural reform policies Those kind of policy mixes is necessary. That is obvious But the difficult question is the task is keeping the independence of the central bank and Necessarily how to Realize the necessary combination of the policy necessary make policy mix to realize So that is very difficult task and the formal and informal discussions are necessary And as silakerson said the informal discussion is much depending upon the personality And the very unstable some sense But anyway that I'm going to I would like to stress that now that In order to control the monetary situation appropriately in japan Not only bank of japan and that the Totally the government and bank of japan should coordinate to appropriate market situation To realize That's that's I like to stress. Thank you. Well, I think the governor said initially that they were Despite having in many ways a slightly pessimistic talk that he was optimistic Because the real issue was to debate and look at the the proper issues Rather than getting off onto long paths. I think what we've done this morning is is Made a very good beginning on that for today So I'd like to thank very much both our speakers for what has been a really really interesting discussion Thank you to both of you And now I believe we're heading to lunch. Is that correct? Thank you. Thank you very much. Enjoy Okay, I hope you enjoyed your lunch But there is no danger of you all falling into a post-lunch torpa Because our next speaker is going to keep you on the edges of your seat The next keynote Is by professor Sawako Shirahase from the university of tokyo She had stern words with me beforehand She said don't introduce me. Just tell them my name and let's get on with it Which tells you a little bit about her forthright nature But that's a great thing because when we hear about contemporary japanese society We don't need platitudes and we don't need repetition of headlines We need analysis and insight and our next speaker is incredibly well equipped To deliver that and i'm sorry, but i'm doing it anyway. Thank you. So Professor Shirahase is currently director of the university of tokyo center for contemporary japanese studies a professor of sociology at the graduate school of humanities and sociology at the university of tokyo And in case you're wondering how she manages all this I know she has cloned herself because she is also senior vice rector at the united nations university So you have to stay awake because she is so far ahead of all of us In terms of energy and achievement that it's going to take our collective energy to keep up with her Please welcome for the sociology keynote Professor Sawako Shirahase Thank you. Such a great interaction Ricky and it's really honor And I also feel a kind of nervous to make you know You know keeping awake.  But anyway, I I I'd like to Share what i'm thinking of today And uh, you know topic which I you know, uh, which I you know God with something on the covet 19 doesn't say You can't hear yes Yes This one It's better. It doesn't say anything Can you hear better now? Yes Okay, so I I won't use this one. Okay, so uh again, so uh today's uh topic on my presentation is japan now Gender-based super age society under the covet 19 I'm a sociologist so called social demographer and my field in sociology is social inequality social certification I trained in in states and mainly in uh in britain And my specialty was social mobility issues So surprisingly or luckily my talk is somehow related to syarcava senses talk Because I I very much interested in what he said even though he's a macroeconomist But the one i'm thinking and right now is quite close. Sometimes it's a common Common with what i'm thinking of so I will show some a lot of data today And to let you know what's it happened or let you feel What what are the happening in in japan? So this is a kind of basic, you know statistics What did happen in covet 19 and still the japanese society is close, you know Outsiders that this is a very political issues But again, this is a very challenging time for japan because mainly because How we can collaborate actually how specialists And the how scholars and researchers specializing in some particular field Can collaborate with policy makers. So that's a really urgent issue But I have to confess it doesn't work. Well, it didn't work well But like, you know syarcava sense and the other yonagawa sense as well, you know Keen to collaborate such a different kind of specialist or together to see some common goal So that I like to talk mainly three topics and demographic trend and expand the most age society Including declining fertility rate. So my talk is quite close to what syarcava sense talked, you know Another another girl and behind this kind of demographic transformation There's a persistent gender norms relations Even though the families an individual way of life are changing in japan This kind of gap makes the things complicated and that's why, you know, younger people in particular or the woman, you know Keep away from very important critical issues in japan. Maybe and finally, you know What i'm thinking of for the future of positive positive post-covid-19 pandemic Okay, so the here is overview. What did they happen in japan? So demographically The the fertility rate is the more important indicator To explain over all demographic structure. So this is a very classic research in demography either Fertility rate or the mortality rate has Has you know more important, you know, explanatory power to determine the fertility rate And then in 1960s and then, you know, british demographer finding out, uh, You know, uh fertility rate is more important indicator to To explain overall Um demographic structure So here is an fertility rate And an important thing is among the asia There is a you know High drop in fertility rate in particular time Actually, I showed this since 1970s, but after I showed this 1960s and 50s in japan has exactly the same pattern The high drop in fertility rate had occurred in 1950s And as a result along with You know expansion of the longevity and the percentage of the age Those aged people Increasing and very uh steeply in japan. So this is a kind of a demographic, you know trend and This is a more visually can see the 1965 1965 when japanese economy enjoyed their Miracle of Economic growth. So we have we are we have been very lucky to have Very high quality and really being low in a waste labor force It can uh could be found actually within within the society So japan is a kind of rare society to achieve high economic growth error without inviting or Introducing migration. I think this is a kind of Past sexist story To make things moved. I think one of the reasons why some japanese politicians do not, you know Believe or in regards how important not only the domestic labor market But also the foreign labor market as well and not only high school labor market But also the low skilled labor market as well And here is an you know close to now. This is a current, you know, uh pyramid of demography demographic structure So it's a kind of metamorphism. It can be seen right here Very low percentage of young people and these young people gradually enter to the work in aged people But once you enter the old age, you know, uh stage you cannot get rid of anything, you know, uh anywhere So the social expenditure is increasing Actually the as a result and here is 100 years between the two, you know, uh Demography a pyramid you can see over all sides of the population has shrunk and You know, uh, the the very aged people Uh increasing relatively to other, you know, uh other age groups If the anything doesn't change, you know, uh largely including Including immigration policies. So here is a kind of demographic Projection we said the projection not estimate projection means if you see the future Where you are standing So if the the reality Where you're standing a change of course in the future will be changed Uh, there are the couple, you know estimations for the future But the point is you can see the very, uh, uh declining overall, you know, size of the population So the aging population, uh can lead declining the size of the population after Fertility rate it doesn't increase because even though the nowadays and you know, healthy, uh elderly are Can be found but expected longevity As on average in the shrunk so if the proportion of the elderly is increased the overall size of the population Has declining. This is a quite natural consequences. Okay so, uh But then at uh from the demographic point of view and we have two kinds of dependent Demographic groups one is a younger age group who will be Working age in 10 or 15 years And then the other one is the old age. So nowadays the ratio of Young to old, you know age group are declining. So in other words, we have rather higher than sociality to take care of the old people And again, this is a percentage of in the 50 years. So as a result, uh, the social expenditure in japan are increasing and particularly social expenditure related to the old age in a policies increasing so our Basic structure of social security system skewed to the elderly people in 1960s However in 1960s the percentage of those age 65 are not that large nobody can predict We have such a large number of the people and um, you know Here is that you can see that what is the social benefit by category from 1970 to 2018 You can see the pensions are quite high and the medicine medical care Is also getting increasing But on the other hand, well welfare and other categories In that nowadays is the increasing but still the lower percentage behind of it You know, we are very much dependent on so-called, you know function of the families The families can be uh, has been regarded as a major institution to provide basic Library security So in fact a lot of elderly people has been has lived in a so-called three generation household So they can enjoy actually all the people enjoy the basic substantial Socials the library services within the household So this is one of the key point I'd like to emphasize. This is my colleague demographer new each kind echo He isn't, you know, such a great demographer She has been the head of the national institute of population social security research And then he actually I I I you know, uh Talked in the same session about a week ago and then he showed this kind of estimation So this isn't, you know, uh graph. What's going to happen? What's going to happen a degree of declining fertility rate after the combi 19 So I borrowed from them from, you know, Connecticut slides. So, uh, You can see the Japanese but thing is Here is an, you know, based on the projection most recent projection of fertility rate And this red a red line denotes the, you know, an actual observed Fertility rate the gap between estimation and actual Actual fertility rate has increasing however declining of fertility or more than expected had started Before the COVID-19 So the COVID-19 it's rather difficult to causality causal relationship What are going to happen and particularly once the negative impact or positive impact on Individual behavior this hard to judge But so that this is also the one he, you know, emphasized. I do agree with it We cannot Define what's going to happen during the COVID-19 again, you know negative consequences such as individual fertility behavior including individual fertility behavior or marital behavior Had started before the COVID-19 in japan I think this is one of the key thing key point which I like to emphasize So the water the impacts of the COVID-19 pandemic on Asian population declining fertility So the first question is the increase in the number of deaths among the elderly Yes, it was actually unfortunately. So this is you know, demographically We have the large growth of, you know, the people because of that Asian population Not only in japan, but also other developing countries, maybe in the future and in australia as well So the negative impact on the fertility behavior lowering fertility. Yes, and no, we have not sure So what did happen behind the demographic change? Maybe unequal consequences have made society the globe as a whole divided Maybe that might be true, but not only the COVID-19 pandemic pursue But maybe we have the responsibility as a society, you know, it's not that negative So in other words because of COVID-19 we have such a large divided society That's not true because this is our responsibility to make the society such divided So the critical factor in declining fertility rate, this is two factors One is a structural reason in which the, you know, in which the number of the parents to be Decrining because of the declining fertility rate the number of them are shrunken So the number of the people who become parents are declining. This is a structural reason We can't change it that drastically because the demographic structure has, you know, to go why to change So this is a structural, you know, factor and behavior reason among such a declining number of the parents Their behavior changing they no longer have a larger number of People but of course this this is not the universal and some very young people and a particularly young Young women happen to get pregnant before the marriage The number of them are increasing But the overall this number is quite minority because we can see the delay in the marriage as a whole on the macro level But then even though the number itself is really small But some teenage couples had the baby So once you started your first baby born and you are more likely to have a more number of the children This is demographically demographically in peak of approved. So I showed very briefly what's going to happen And um and um COVID-19 pandemic And so again With Japanese labor market has been or still is a farmer is segregated by gender This is a quite, you know famous fact And where they walk and how they receive the reward and how they're promoted And all aspects has been, you know, heterogeneous or unequal by gender Of course the gender is not just a dummy variable and in fact in Japan there is very active argument And you know diversity and gender but that today I'd like to focus on only, you know, man and woman at this point But in all areas clear gender gap has been persuasive and between man and woman So Shirakawa sensei and the Anagawa sensei and they're quite persistent based on persistent norm And regulations how we can make a change That's the important that's I'm very much interested in it Again, visually you can see what happened very easily This is a number of the people who left the labor market after the COVID-19 Here is a male, you know figures. Here is a few male figures And April, you know, you can see around this time all the Japanese schools are closed formally so moms in particular has to leave them, you know, has to leave them labor market However, if you are the one parent's families, long mom families They can they could not afford to leave the labor market because she's the one who, you know, raise the kids and You know support them their families. So the within the few male, you know, within the woman And there are the very different behavior against the COVID-19 but still The number of the people who left or who, you know, out of the labor market is much much higher among men So the Japan as you know, they're very much segregated by the type of the employment So the women are more likely concentrated in a part-time work and not regular work So among women, there are quite a larger number of the women who has worked as a part-time work can be a much much larger, but you can see the larger drop and male, male also of course they are suffering. I did not say that men didn't suffer at all But in fact, some of the low educated men are suffering The negative impact of COVID-19 as much as male. That's that's true But as a whole in a macro structure, a woman's situation is much worse And this is a kind of, you know, attitude type of the situation, you know, if you This is a lot of, you know, characters in there, but you know Tailwalking is one of the very high potential way of walking and they say it is easier to You know, easier to make it The balance work in life balance and it easier. However, you know You know, half walking is not that easy, I have to say So if you did a good job within the household, you have to get used to doing the job And women, you know, tend to say They're very much stressful and more stressful than before because he has to take care of many things in their home And in fact, women claim a more likely compared to women claim to have more time for the household Housework, so reputation or some kind of feeling towards what happened during the COVID-19 are quite different between men, between men and women And here is a kind of, you know, a data result How many hours do you You Spend more time and childcare and housework and walking walking. So the man and the woman You know, particularly telecommunication, you know, maybe they can spend more time at home and however, absolute number of, you know, spending hours in a time within At home are quite different between men and women And Oh, did I get tired? Oh, no That's your Yeah, this is mine, right? Okay Okay, thanks. So, uh, again Ah, okay too. Okay. So, uh, I have so many so maybe I should rush Japan is again highly gender-segregated society. And um, this is, you know, main fact So the way of, you know, participating in a labor market are quite different and how to work and very different Women are concentrated in a part-time work, which is not accumulated as a career Even though the way of, you know, walking is slightly different by age group and a cohort And um, in fact, you know, some of them, you know, the way of walking Less, uh, intermittent or destructive in their life course, but this is an, you know, a kind of overall, you know, pattern of working More, uh, labor force participation rate by age group.  So, um Staying being the single, single means staying in the labor market But once you get, uh, get children, they're more likely to leave. But nowadays majority of mom of the first child are likely to stay in the labor market This is an, you know, uh, important transition and we do need more support to, you know, uh, to to work and Work in the family and a gender gap is really high in japan And the part-time work is really high compared with other, you know, other countries And this is in, you know, place where, you know, uh, man and woman are walking again You know, uh, the woman are more likely to stay in the medicine healthcare and welfare areas And then, you know, wholesale areas some, you know, uh Service areas as well. It's quite, uh, unevenly divided And then the important thing is among the, uh, the men and women with higher education How many of the employment rate, uh, between men and women? This is a kind of comparison So higher means, higher bar means a larger difference and employment rate among those with higher education So this is overall rate. There's no, uh, taking, taking into account to age difference and cohort difference But then, you know, a japanese woman, even though they get higher education They're less likely to stay in the labor market So maybe because they cannot, uh, have the, you know, uh, support for the healthcare. I don't know, but that's that's a kind of, uh, I shouldn't say I don't know. This is true But I said there is no rigid causality issues Um, uh, this is, um, you know, how small, uh, the japanese and female managers Because nobody expects to, uh, normally expect a woman, uh, climbing up the carrier ladder This is true for, uh, for the male managerial people, but also the women themselves Didn't expect, uh, their, uh, climbing up the carrier ladder So, um, the changing way of life within Japan can be seen In fact, marital, you know, the situation of, uh, families are quite, you know, different Again, now, uh, Japan, the one person families and a couple of the families are the majority Not the families with a couple, uh, with couple and children. They are not the majority anymore And this is a kind of interesting, you know, statistics about marital, uh, marriage, divorce and remarriage Um, more likely getting remarried these days and, um, Divorce rate is not that really, really low But again, uh, you can see the first marriage, marriage and declining And this is because of the delay in the marriage and, um, remarriage rate is also It's kind of stable, but it's not that small, uh, nowadays So I like, you know, this is a very, I like this, this, you know, um Figures which I made by myself within about, you know, for the years and in difference, you know Gender gap in spending time for unpaid work, so-called household chores, childbearing, and long-term care, you know F, we, uh, we set, um, few men average in 100 You can see a kind of improvement among men to spend their, uh, spend their time for Unpaid work, so-called, but then if you look at, you know, uh, working, uh, pay work, You know, the situation doesn't change that much Again, you can see the improvement, I'm not sure the improvement or not But anyway, the women are more likely to spend more time in the labor market And, but this is becoming equal, but the women are more like, less likely to get married having an, you know, uh, Event, uh, doesn't occur to have a children, you know, uh, doesn't occur So this is the main reason why the women and show that, you know, larger, uh, higher Spending time in labor market, but after the 30th and 40th, there's no much, uh, difference in the way of, uh, The work, so the structure of family change, the marriage and the childbirth behavior also changed But again, the gender norms of expectation and playing roles in family, workplace, community and politics And doesn't change at all, uh, substantially So this is the three points, I like, here is a, I'm sorry, this is a kind of, you know, out of my time But the three points I like to, um I like to discuss, the three points which we need, diversity Flexibility and investment So or taking a risk, this is a, you know, three point I like to, uh, emphasize the inevitable trend of declining for this array And population size, this is inevitable And how do we break Japan's thick and rigid war against various social norms, very conservative social norms of values Related to gender, family in various social system Including social security system is very important indeed And inclusive future with innovation, so-called, should be a one of the common role And the key is how to promote investment to so-called human being and as the Yonagawa-san also emphasized Particularly the younger generation, uh, who could be apparent to be And how to allocate financial resources to them is also very, very important indeed But thing is we cannot see any kind of consequences immediately You know, we take a longer time to see what's going to happen this investment So with the Shirakawa-sensei, how to, you know, reach the consensus that's getting more and more difficult So the mutual discourse, uh, happened to be the same thing I didn't discuss about the beforehand But then the mutual discourse is very important with various people So diversity is very important indeed And flexible development, flexibility is one of the weakest point in Japan actually Because of the rigid, they can achieve something But now it's being rigid is very, very negative And in order, do you need assessment or we do need multi-level, multi-dimensional criteria To assess, you know, how the people achieve, how they, you know, uh, work So that's going to be a very important indeed I think that's, that's, I'd like to, um, talk today To thank, uh, Professor Shirakawa-sensei In the interests of time, I'd like to move straight to the sociology panel Professor Shirakawa-sensei is on this panel Please keep your questions burning Somewhere inside you, you will have a chance to ask them After the panel has convened Thank you To the sociology panel and thank you for that wonderful keynote Obviously COVID-19 has had a huge impact on Japanese society We've started to unpack some of these impacts in recent Japan updates last year and the year before But obviously as the pandemic unfolds, we're now in the third year Those impacts, um, change And we've also heard this morning a lot about the state of the Japanese economy But in today's panel, what we'd like to do is get more into the detail Of how COVID has changed work lives and work practices in Japan How it has shaped gender issues. We're going to delve into that further And also how it has impacted the sort of COVID discourse in Japan How it has affected, um, basically the way Japanese sort of, you know, look at illness How it's manifested in pop culture forms even, in anime And we're joined by a very esteemed panel today We've already heard a wonderful introduction from Riki Kirsten of Professor Shirahase But I'm also delighted to be joined here by Professor Hiroshi Ono Who is a professor of human resources management and also director of the executive master of business administration program at the school of international corporate strategy at Hitotsubashi University And we're also, um, being joined, I believe Soon, okay Language and also Japanese studies here at the ANU. She's also a distinguished educator As many of you are also aware, Carol is engaged in a very heroic battle against brain cancer and has just had surgery She was hoping she would have recovered to the extent that she could join us in person today and And also to join us verbally, but unfortunately she's undergoing a lot of challenges I hope she will appear with us, but in any case I have sent her the questions in advance and she sent me her responses So I think if there's one thing we've learned from COVID and this pandemic is that we we should be able to be very flexible with our arrangement So I'm just really delighted and humbled that she's able to Contribute to the panel regardless of of her really Delicate condition So first, um We're gonna I'm going to ask a few questions to our panelists, but I encourage all of you to Think of your own questions. You may have some questions from the keynote And people listening online, please send through the questions and and we'll also get to them as well So I'd like to start with professor honor Obviously the COVID-19 pandemic has has really had a massive impact on The way that Japanese work, okay This is something we've seen globally, but it's also played out a little bit differently in Japan I was wondering if you could speak to us about Both the sort of positive and negative impacts that COVID has had on the the work lives of people in Japan Okay, thank you very much Lauren for that introduction. Um, first of all, it's very Honoured to be here. It's a pleasure to be here Um, are there students in the audience that? Yes. Yes, it's it's wonderful to see the The future of australian right joining us Um, uh, I encourage you to if you have any questions, please post them at any time Um, so the question was about the good and bad things about what happened to work in Japan post COVID and It's very much related to what? We discussed in the morning panel with uh, Shirakasa and Yanagawa san and I think there's you know, um, I'm gonna start with a very interesting quote It's it says, um The japanese are very efficient at doing inefficient things Okay, and any of you that have worked in japan or been to japan will immediately realize what that means, you know japanese people are They're not lazy. They're actually very hard-working. They're diligent Um And they're punctual, you know, and so they have good work ethic But there's there seems to be something about the way that the japanese people work that it's rather wasteful, you know It's inefficient. It's unproductive and so this shows up in the it's a micro level observation that has macro level implications And it shows up in the statistics as we saw this morning, right? So um, unproductive labor force, um, so I think the Definitely what I can say about COVID. It's that it gave us an opportunity To identify the wastes and how we work You know, because immediately, you know, we went into lockdown People had to go into isolation. They couldn't go to the office anymore People were forced to become a little bit more efficient. Remote work helped And not, you know commuting also helped, right Perhaps an appreciation for what can be done outside of work as well So maybe the boundary between work and home became a little bit more clear Um, and there's an interesting survey So like what are the four wastes that you were able to identify as if it's a lot of COVID and number one is commuting Um, because you know, especially if you live in tokyo on the great metropolitan areas, you will spend a lot of time You know, um in the trains, which is a big waste um number two is drinking after work Also known as nomikai And I could have said that, you know, I mean, I I just it's There wasn't basically it was an excuse for people to to socialize after work because we need this hour to communicate with our colleagues This is when the real work gets done But that all turns out to be bs, right? so, um And number three was hanko the stamp of approval That, uh, we need these, you know, we need to carry these little stamps to make it official Um, not even signatures. It has to be a stamp and it was a very very inefficient way It still is a very inefficient way to do to um to work because sometimes you have to wait for the right person to show up To the office in order to get something approved and this could delay the process for a couple of days And number four was just a pile of documents Um as this morning. Yes, uh, I think, um, miss huet was talking about, you know, Japanese companies are so advanced But there's still loaded with paperwork. So that is definitely a big big waste And I think it's it gave us an opportunity to really revisit those kinds of wastes, right? And I could say more about that, uh, if I have an opportunity to to say that later on but Uh, yeah, I would say it gave us an opportunity to to accelerate digital transformation That was the other thing. So going remote doing telework Perhaps reviewing this hanko culture and transitioning to digital documents and I think it just so happens that the the east asian Um forum quarterly came out Yes, last week and I have an article in that about the digital transformation in japan and I think that, you know Right give you a little glimpse of about how, you know, the state of digital transformation is still a little bit behind But I think corona kind of kick started that transformation Now going to the bad stuff Uh, new inequalities evolved, right? So Um, siraha says I'm was talk, you know talked about, uh, you know, there could be a worsening divide between You know existing gender inequality So women were more likely to be affected negatively than than men There's also a divide between standard versus non-standard workers So people in precarious positions became even more, you know, were even more affected by this Um, and the other thing that, uh, if I have time I'll talk more about is that the fertility decline, which is also what she has talked about And primarily because people decided to delay their marriage, right? That's um Unlike in many european and also I think australia as well, you know, cohabitation is not really an option So people have to be married first in order to have babies. That's another point of very strong social norms And so delaying marriage actually has a negative impact on fertility Um, so anyway, I've spoken enough and I'll have some Thank you very much. I'm particularly happy to hear about Potential changes in the the hunker culture. I think we've all had our own problems with with hunker in japan Including me actually the first time I set up a bank account in japan I had a hunker and I stamped it and I returned home My home was about an hour from the bank and as soon as I got home the bank Called me to say that I hadn't stamped it properly and I would need to come back