n addition to recovery and reconstructionfrom the Great East Japan Earthquake,another priority issue that must beaddressed by my Cabinet is the rebuildingof the Japanese economy. Since the March 11 disaster, issues such as the rapidappreciation of the yen, constraints on electricitysupply and demand, and the instability of internationalfinancial markets have occurred in a compositemanner. Japan is on the verge of suffering a major lossof national credibility due to the hollowing-out of itsindustries and its exacerbating financial situation.RECONSTRUCTION OF ENERGY POLICYThe first step towards rebuilding Japan's economy isreconstructing its energy policy. We continue to face asituation where the supply and demand of electricity isconstrained due to the nuclear power station accident.Without the stable provision of electricity, which is thevery "blood" of our economy and society, thefoundation for Japan's affluent lifestyle will losestability and we will become unable to bolsterdomestic industrial activities.Thanks to the energy saving efforts of the public thissummer, we did not have to resort to carrying outrolling power outages. I thank you for your sincereunderstanding and cooperation. In order to empowerJapan to escape the situation of being forced to endureenergy-saving measures, we will spend the next one ortwo years implementing supply and demandcountermeasures. At the same time, we will revisefrom scratch the current Basic Energy Policy, whichlasts until 2030, and will create a new strategy andplan by around summer of next year. In doing so, wewill steadily consider a mid- to long-term energycomposition that citizens can feel comfortable withfrom the perspective of energy security as well as usingcost analyses, while widely taking into account theviews of wide-ranging groups of citizens.Concerning nuclear power generation, it isunproductive to grasp nuclear power as a dichotomybetween "zero nuclear power" and "promotion." In themid- to long-term, we must aim to move in thedirection of reducing our dependence on nuclearpower generation as much as possible. At the sametime, however, we will restart operations at nuclearpower stations following regular inspections, for whichsafety has been thoroughly verified and confirmed,under the premise that a relationship of trust isdeveloped with the local government. As per anorganisational restructuring of nuclear safetyregulation, the Nuclear Safety and Security Agency willbe established as an affiliated agency of the Ministry ofthe Environment and will work to boldly unifyregulations for nuclear power safety.The history of humankind is also a history of peopleattempting to develop new types of energy. Japan, acountry with few fossil fuel resources, must lead therest of the world in constructing a society that basesitself on new forms of energy. Japan will utilise itsadvanced technological power to pair regulatory reformwith measures to promote dissemination intransmitting a cutting-edge model for energyconservation and renewable energies to the world.Implementation of bold countermeasures to theappreciating yen and industrial hollowing-outHistorical levels of yen appreciation paired with therise of emerging economies and other factors areprecipitating an unprecedented industrial hollowing-RESPONSE TO THE GLOBAL ECONOMIC CRISIS134G20 MEMBER COUNTRIESYOSHIHIKO NODA, PRIME MINISTER, JAPANIPhoto: UN Photo/Evan Schneider

" "JAPAN, A COUNTRY WITHFEW FOSSIL FUEL RESOURCES, MUSTLEAD THE REST OFTHE WORLD INCONSTRUCTING ASOCIETY THATBASES ITSELF ONNEW FORMS OFENERGYG20 MEMBER COUNTRIES135out crisis. The exporting companies and small tomedium-size enterprises that have led Japaneseindustry in the past are now crying for help. Unlesssomething is done, there is the concern that domesticindustries will drop in strength and employment will belost. If that happens, overcoming deflation andreconstruction in the affected areas will becomesignificantly more difficult tasks.Countries in Europe, the US and Asia are engaging in alocation battle where national efforts are being made toattract companies to their countries. In order for Japanto prevent the hollowing-out of its industries andmaintain domestic employment, we must worktogether with the Bank of Japan, which conductsmonetary policy, in utilising all policy means available.First, we will utilise reserve funds and the thirdsupplementary budget to implement emergencyeconomic countermeasures that include the boldenhancement of location subsidies. Furthermore, wewill take advantage of the merits of the appreciatingyen to support Japanese companies in purchasingforeign companies and acquiring resource interests.Achieving economic growth and fiscal healthSince before the March 11 disaster, Japan relied onnational bonds for half of its national revenue, and thenational debt was at risk of reaching one thousandtrillion yen. The disaster has raised the crisis level ofthe public finance even further, making Japan'ssituation the worst among major advanced nations.Today, as "national credibility" is severely questioned,we cannot continue to manage public finance bycovering old debt with new debt. Do we have the rightto force more debt on future generations, who cannotnow speak for themselves? The responsibility of today'spoliticians is being put into question. nThe above remarks by H.E. Yoshihiko Noda, the PrimeMinister of Japan, are excerpted from his policy speech to the178 Session of the Diet on 13 September 2011, in Tokyo,Japan. For more information please visit: www.kantei.go.jp