is evident that the current economic recovery has also been driven by nonmanufacturing activities ( chart 7 ). before the lehman shock and the earthquake disaster, nonmanufacturing activities moved in almost the same direction as those in manufacturing, with manufacturing leading the way. since 2012, when the effects of the earthquake disaster mostly dissipated, the level of nonmanufacturing activities has marked an apparent increase, while manufacturing activities have been lackluster. a further intensification of global competition can be pointed to as part of the background behind the fact that it has been difficult for exports and domestic manufacturing activities to realize an upward bounce. manufacturing firms in particular are further increasing their production, procurement, and fixed investment in overseas countries where there is demand. this may be acting as a burden for exports and business fixed investment at home ( chart 8 ). in this situation, however, firms have been steadily enhancing their ability to make profits on a global basis. an increase in the consolidated profits of firms will contribute to the rise in stock prices, and an improvement in japan ’ s net income from the rest of the world, or income balance, will be an important source of increasing national savings and net external assets ( chart 9 ). these developments will support japan ’ s economic growth. 2. progress with efforts to boost potential demand exactly what kinds of activities have supported the recovery driven by consumption and nonmanufacturing? efforts to stimulate potential demand have been spreading to a wider range of nonmanufacturing sectors, such as retailing, eating and drinking services, tourism, transport activities, and construction. more specifically, they range from active openings of new convenience stores and shopping malls, construction of apartments for the elderly, home - delivery service, and online shopping, to the building of new advanced distribution centers. these efforts can be categorized into ( a ) developing and providing services for the rapidly increasing number of senior citizens to increase their life expectancy and promote a better quality of life, ( b ) working to boost the demand of foreign tourists, and ( c ) providing new services for firms and individuals to meet more sophisticated or diverse needs. these efforts are made to produce higher value - added goods and services backed by primary demand. each of these efforts may appear tiny in magnitude but can be long - lasting and sustainable, and they are spreading to many segments of the overall economy. some of them are also inducing business fixed investment that embodies new technology. in fact, the profit

decided to increase the maximum amount of its fund - provisioning to each financial institution from 150 billion yen to 1 trillion yen. under these facilities, financial institutions will be able to borrow funds at a fixed rate of 0. 1 percent per annum for four years. thus far, the loan support program has supported financial institutions ’ efforts to increase the total amount of their lending and has produced positive effects as a catalyst in regard to firms ’ and financial institutions ’ efforts to strengthen the foundations for japan ’ s economic growth. the bank expects that the enhancements made at the february monetary policy bis central bankers ’ speeches meeting will further promote financial institutions ’ actions as well as stimulate firms ’ and households ’ demand for credit, with a view to encouraging banks ’ lending and strengthening the foundations for economic growth. these enhancements will reinforce the transmission effects of qqe. in order to strengthen the growth potential of japan ’ s economy, in addition to efforts made by the private sector, it is critical that the government take action. the joint statement of the government and the bank, released in january 2013, asserts that the government will strongly promote measures for strengthening the competitiveness and growth potential of japan ’ s economy by carrying out bold regulatory and institutional reforms. it also expressly states that the government will steadily promote measures to establish a sustainable fiscal structure and ensure the credibility of fiscal management. i strongly expect that the government will steadily proceed with these measures. concluding remarks : the economy of okayama prefecture my concluding remarks will touch on the economy of okayama prefecture. the industrial structure of okayama prefecture has an advantage in monozukuri, or manufacturing, which accounts for about 30 percent of gross prefectural production. petroleum, chemical, and iron and steel products, as well as automobiles, are supplied to other regions and overseas mainly from the mizushima industrial complex located in the southern part of okayama prefecture, which is one of the major industrial complexes in japan. with the cooperation of industry, government, and academia, as well as of financial institutions, the prefecture has recently been working aggressively to foster new industrial clusters, such as electric cars and aircraft, which are linked to a wide range of industries and have growth potential. besides manufacturing, thanks to a favorable geographical condition of lying between the chugoku and shikoku regions, there has recently been an increase in the building of distribution centers and shopping malls with the aim of transferring goods and attracting people from throughout those regions. to take advantage of the power of