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Japanese Leader Calls for All-Out Push to Revamp Economy - 2003-01-31

Japanese Prime Minister Junichiro Koizumi has called for an all-out push on revamping the nation's economy during his annual policy speech to parliament. He also pledged Japan will work closely with the United States and South Korea to resolve the nuclear stand-off with North Korea.

In the same week President Bush delivered his annual State of the Union address, Japanese Prime Minister Koizumi laid out his policy agenda for the year ahead in a nationally televised speech. His focus: the economy, which has been foundering for 12 years.

Mr. Koizumi promised to avert a financial crisis in the world's second largest economy, but warned his reform program needs time to take effect. The prime minister said it is necessary to mobilize every possible policy measure and the government will accelerate reforms in expenditure, the tax system, financial affairs and regulation.

After 21 months in office, he reaffirmed his commitment to work in tandem with the Bank of Japan to overcome three-years of deflation and to resolve the banking sector's huge mountain of bad debts by March 2005.

The prime minister's address comes on the same day official unemployment figures were released showing a record five-and a half percent jobless rate.

On foreign policy, the Japanese leader stressed a diplomatic solution for the crisis over North Korea's nuclear ambitions. Mr. Koizumi vowed to continue closely cooperating with Washington, Seoul and other governments to urge the Stalinist state to abandon its nuclear development program.

He also promised to try to resolve the standoff with Pyongyang over the abductions of Japanese citizens decades ago by North Korean agents to help train spies in Japanese language and customs.

Five of those abductees are now in Japan for their first visit in 25 years. They were able to come after Northern leader Kim Jong Il admitted in September that Pyongyang had kidnapped them. North Korea has demanded their return, but their future remains uncertain and the issue is a major stumbling block to normalizing bilateral ties.

The uncertainty over the obductee issue has hurt Mr. Koizumi's public support ratings. They are now about 40-percent, down from more than 80-percent when he took office in April 2001.