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Daisuke Kotegawa: Japan’s outlook concerning Eurasian cooperation

Daisuke Kotegawa

Canon Institute Japan, former representative of Japan to the IMF


Japan’s outlook concerning Eurasian cooperation

Thank you, my name is Daisuke Kotegawa, and I’d like to divide my presentation into four parts. The first one is very short, about myself, why I’m here. The second part is about Japanese economy, with specific focus upon three points which were actually asked by Helga. And the third part is my observation about the world economy, from my own personal perspective. And the fourth point is, just inspired by Mr. LaRouche’s point, I would like to explain, a very, very important new invention which my company created, very recently which would complete change this world.

First, about myself: I worked in the Ministry of Finance of the Japanese government for 35 years, and fortunately, or unfortunately, I was in charge of the settlement of the financial crisis in the late 1990s in Japan. I lost some friends of mine and my staff, as well as my friends, Japanese bankers who were arrested and put in jail, or they committed suicide and died. But I survived.

At that time, I had to liquidate major Japanese investment banks, two companies, Yamaichi Securities and another, and also I had to partially nationalize two major banks in Japan. And also in I think 2007, I went to the IMF and I was involved in the liquidation of Lehman Brothers in 2008. Just last week, I had a chance to meet my former colleague, Mr. Dominique Strauss-Kahn, in St. Petersburg at the Economic Forum. That’s my background.

My second point is about the Japanese economy, but my first focus is upon the relationship between Japan and Russia. Last month, May 2, I celebrated my birthday; this is a joint birthday party with my friend who is a very famous Russian conductor, Valery Gergiev, because his birthday is May 2nd, and mine is May 3rd. So for the last seven years, we celebrate our birthdays together somewhere in the world.

And he told me that he would perform on the next day in Kazan, and in a city named Yekaterinburg on May 4th. But he didn’t say anything further. And on May 5th, I was sitting in a lounge of the Moscow Airport, and suddenly I saw his face, performing in Syria at Aleppo! That was a big surprise, but that was a fantastic performance. And at that birthday party of about 40 people, I had my friend, who is my very good friend, and who is the best speaker of the Russian language — he is our ambassador in Moscow. Early in the morning the next day, he flew to Sochi to support our Prime Minister Mr. Abe in his meeting with Mr. Putin. That meeting took place on May 6th. On May 7th, I

received an email from my friend. He said three things — Oh, I cannot say anything specific to you. Number 2, meeting went very well. Number 3, Prime Minister went back to Japan with full satisfaction. So, that was a very simple message.

As you know, in 2018, in Russia they have their Presidential election, and also in China they have this kind of election next year; usually one year before that kind of election, nothing moves, because people are more concerned about where they’re going to work, or something. So we had thought that next year, it is not likely that we will have a final agreement with Russia. But this meeting on May 6, changed everything.

Now, we expect that our Prime Minister, Mr. Abe, is likely to accept the invitation of Mr. Putin, and attend the economic forum in Vladivostok on Sept. 2-3, and I am quite hopeful that within this year, Mr. Putin will come to Japan.And if that happens, it is highly likely that we would come to the final agreement with Russia sometime next year. Now, I think I’m very optimistic about it. So that part is now going very well.

My second point is what is now going on in Japan with regard to the nuclear power plants. As you know, we shut down all nuclear power plants after the incident of Fukushima in 2011. Last year, finally, we reactivated two of them. And that was followed by one. And two weeks ago, our Ministry of Economy made public the report, which had the prospect for the future energy combination in Japan; the target year is 2030, and in that report, we expect that we will build 24 new nuclear power plants in Japan.

The third point I would like to mention is, actually, the Japanese economy is actually now in a kind of bubble which is not shown in figures. Instead, I’d like to just tell the incredible incidents now in Tokyo: We relaxed some visa requirements for people from Southeast Asia. Of course, we didn’t relax visa requirements for the Chinese, because we are afraid that if that would happen, several hundred million Chinese might come to Tokyo.

But last year, we received 5 million Chinese tourists. That was a 100% increase over two years ago. And the average purchase volume of each Chinese tourist is now something like $3,000. And now we have a shortfall in hotels. After big earthquake and tsunami in 2011, hotels in Tokyo had vacancy rates of about 90% — miserable. But these days, everything is full, especially starting last year, Chinese people started to come to Japan, at the end of March and early April, just in order to enjoy the cherry blossoms in Tokyo! So now, all cherry blossoms, those parks which are very famous for their cherry blossoms in Tokyo are completely occupied by Chinese tourists.

And because of the shortfall in hotels, what is going on is, starting last year, also, in local

cities, the population is something like Frankfurt am Main, and the other is something like Wiesbaden, they started to receive huge numbers of Chinese tourists. So they set up a fleet from Shanghai to those cities, and last year a ship with 2,000 Chinese tourists came in, followed by the other ship, with 3,000 Chinese tourists. And this year, in a very small city, something like Wiesbaden, they received a very big ship with the capacity of 8,000 tourists!

And as you can imagine, you need to have at least one bus for 100 tourists. In the first case, we had 20 buses and 30 buses; this year they had to arrange for 80 buses for those people. And they stayed on the ship! So thanks to those foreign tourists, our economy is now very good.

Actually, Mr. LaRouche talked about infrastructure, and I’m very thankful for that comment, because I was in charge of the budget examiner, in charge of the budget of Japanese economic assistance to China. And in 1989, we agreed upon the Japanese economic assistance to China of the amount of $10 billion each year, for over six years. So those loans were made to build, for example, an airport in Beijing, an airport in Shanghai, an airport in Guangzhou, and seven ports and seven railroads, and seven fertilizer factories, seven dams, and seven power plants. And also the phone network in Shanghai as well as the phone network in Beijing, and the subway system in Beijing were built, with these loans, were carried on 0.5% interest.

Thanks to that infrastructure, Japanese companies started to make investments in China, and now, we are actually getting the fruits in the form of a huge numbers of Chinese tourists.

So I’m very sure that if we just make investments in the right way, we can actually redouble the volume of demand which is completely missing in this world. As I completely agree with Mr. Zanni’s opinion, because we don’t care about investment bankers. They do care only about rich people. And they are interested in only gambling and we don’t need them. But we do need commercial banks, because they are the settlement bankers and they take care of deposits. And in order to stop investment bankers’ gambling, as he said, it is very important to look at the asset side. Even if we were to allow bankers to keep a huge amount of money under the name of equity, it does not stop gamblers from gambling.

So we have to separate these two, and we have to take all banks back to our own life. And he mentioned it, but of course, this a little bit difficult to understand, but there is a concept of “notional amount” for derivatives. When they gamble, they need some kind of base figure, which is not real. But it is said, the amount of notional amount of

derivatives held by Deutsche Bank, is EU300 trillion! That is five times larger than the GNP of Germany! So you’ll be really frightened. But don’t worry: There’s a way to set it. Those investment bankers, they just gamble with each other; maybe the counterpart might be Goldman Sachs or Morgan Stanley, something like that. So, they should just net out everything. Then, suddenly, the amount would become almost zero; so, here again, we don’t have to worry about it. And we should focus more upon manufacturing.

And so, now’s the time to disclose our invention: this is a small cooking machine. The size is the same as an electric range. There’s a small boiler inside, and using the hydrogen water, we’ll make heated steam, and we can control the temperature between 150 degrees and 600 degrees. And when we put this steam into the cooking machine, of course, air will be pushed out. But with this heat anything, vegetables, meat and fish can easily be cooked. And the most important thing, since air is pushed out, everything is cooked without oxygen, so they are not oxidized.

As you know, non-oxidized food is very good for your health; and, so, number 1, everything becomes very tasty. Everything is very tasty, so we don’t have any waste, so this is very good for your environment. And number 2, as I said, it’s not oxidized, so even seven days after cooking fish, the cells of the fish are still alive; so they are very juicy and very soft. And number 3. This can of course wash out all chemical additives out of vegetables. And number 4, because they are not oxidized, they don’t have any bad smell. The bad smell comes out when foods are oxidized. And number 5, it is very, very easy to cook. In the case of sliced meat, you put sliced meat into this machine, and only after two minutes everything is fine, everything is perfect.

So we started to sell this big one to the Japanese largest supermarket chain, and for the first time in our history, they started to produce lunch boxes completely free of chemical additives. And they can actually stay fresh for a long time.

Why did we start with these restaurants or other companies? Because we are afraid that if we first sell these machines to the consumers, since everything would become so tasty, nobody would go to a restaurant! So, I hope within one year, this machine will I think come to the market. And we don’t want to become rich; we want more, than all people on this Earth can have healthy food and can live long. And the expected price range I think will be between $1,500 and $2,000. Thank you very much.



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