Natural Resources versus Human Resources June 6, 2007 Natural Resources versus Human Resources Makoto Utsumi President and CEO Japan Credit Rating Agency, Ltd.

The Market Economy embraces 5 billion population Market Economy in 1990 U.S.A & Canada Western Europe Japan and some Asian Tigers The Market Economy embraces 5 billion population (a hypothesis) High commodity prices

Education in Edo Period( ) 1603 - 1876 “Terako ya” to read and to write ethics family value loyalty to the entities to which one belongs capacity building (small-scale private schools) 15,000 – 20,000 all over the country Meiji Restoration 1867 The modern Education System promulgated in 1973

Elementary Schools Year Ratios of attendance in total school age boys girls 1874 46.17% 17.23% (Compulsory Education introduced in 1888) 1895 76.65% 43.87% 1900 90.35% 71.73% 1905 97.72% 93.34%

The Secondary and the Higher Education Professors and Experts invited - from the U.S.A. and Europe - covering all fields in Western civilizations and culture Those cost 4 - 5 % of the total budget of each Ministry (more than 50 % in the case of the Ministry of Industry)

A Development Model Capacity building of the next generations Japanese young Elites enlightened Foreign Professors and Experts

Golden Triangle Loyalty to the company to which one belongs In-house Capacity Building Long-term Employment