the yen. domestic wholesale prices are declining mainly due to the decrease in prices of electrical machinery. consumer prices continue to be somewhat weak owing to the decline in prices of imported products and their substitutes. corporate service prices are falling slowly. as for the conditions surrounding price developments, the recent yen depreciation is exerting upward pressure on prices. however, with the ongoing adjustments, the balance between supply and demand in the domestic market is likely to exert downward pressure on prices. in addition, the declining trend of machinery prices caused by technological innovations, the decrease in prices of consumer goods arising from the streamlining of distribution channels, and the reduction in communications charges aided by deregulation will continue to restrain price developments. overall, prices are expected to be weak for the time being. moreover, given the high degree of uncertainty regarding future economic this report is based on data and information available at the time of the bank of japan monetary policy meeting held on april 12 and 13, 2001. the bank ’ s view of recent economic and financial developments, determined by the policy board at the monetary policy meeting held on april 12 and 13 as the basis for monetary policy decisions. developments, the possibility that weak demand will intensify downward pressures on prices warrants careful monitoring. in the financial market, the overnight call rate has declined reflecting the increase in the currentaccount balance at the bank of japan to around 5 trillion yen, following the decision at the monetary policy meeting held on march 19 to adopt new procedures for money market operations, and is currently moving around zero percent. interest rates on term instruments are declining further mainly due to the monetary easing by the bank. the japan premium remains negligible. yields on long - term government bonds increased to 1. 4 - 1. 5 percent. the yield spreads between private bonds ( bank debentures and corporate bonds ) and government bonds are mostly unchanged or expanding somewhat. stock prices are rising reflecting the above - mentioned monetary easing and expectations toward the progress in disposal of non - performing bank assets. in the foreign exchange market, the yen has depreciated and is currently being traded in the range of 123 - 126 yen to the u. s. dollar. with regard to corporate finance, private banks continue to be more active in extending loans, mainly to blue - chip companies, while carefully evaluating the credit risks involved. there seem to be no significant changes in firms ’ perception on the lending attitude of financial institutions and the fundraising conditions of firms in the

. strong government does not mean one that is only militarily powerful or uses its intelligence apparatus to sniff out enemies of the state. instead, a strong government is also one that provides an effective and fair administration through clean, motivated, and competent administrators who can deliver good governance. rule of law means that government ’ s actions are constrained by what we indians would term dharma – by a historical and widely understood code of moral and righteous behaviour, enforced by religious, cultural, or judicial authority. and democratic accountability means that government has to be popularly accepted, with the people having the right to throw unpopular, corrupt, or incompetent rulers out. the origins of political order : from pre - human times to the french revolution by francis fukuyama, 2011, farrar straus and giroux, new york, political order and political decay : from the industrial revolution to the globalization of democracy by francis fukuyama, 2014, farrar straus and giroux, and political order in changing societies by samuel huntington, 1968, yale university press, new haven. bis central bankers ’ speeches fukuyama makes a more insightful point than simply that all three traditional aspects of the state – executive, judiciary, and legislature – are needed to balance one another. in sharp contrast to the radical libertarian view that the best government is the minimal “ night watchman ”, which primarily protects life and property rights while enforcing contracts, or the radical marxist view that the need for the government disappears as class conflict ends, fukuyama, as did huntington, emphasizes the importance of a strong government in even a developed country. no matter how thuggish or arbitrary the government in a tin - pot dictatorship, these are weak governments, not strong ones. their military or police can terrorize the unarmed citizenry but cannot provide decent law and order or stand up to a determined armed opposition. their administration cannot provide sensible economic policy, good schools or clean drinking water. strong governments need to be peopled by those who can provide needed public goods – it requires expertise, motivation, and integrity. realizing the importance of strong government, developing countries constantly request multilateral institutions for help in enhancing their governance capacity. strong governments may not, however, move in the right direction. hitler provided germany with extremely effective administration – the trains ran on time, as did the trains during our own emergency in 1975 – 77. his was a strong government, but hitler took germany efficiently and determinedly on a path to ruin, overriding