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Cablegate: Daily Summary of Japanese Press 05/24/07

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RUEHBJ/AMEMBASSY BEIJING 7155
RUEHUL/AMEMBASSY SEOUL 3214
RUCNDT/USMISSION USUN NEW YORK 4372

UNCLAS SECTION 01 OF 09 TOKYO 002336

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/24/07


INDEX:
(1) Eliminating the danger of Futenma airfield: US wants to expedite
relocation plan

(2) US forces realignment law enacted; How will subsidies help
relocation plans move forward?

(3) 2007 Close-up column -- US forces realignment bill to be enacted
into law today: Local governments housing US bases forced to make a
difficult decision with subsidies tied to realignment plans

(4) Interview on collective self-defense (Part 3): Opposition DPJ's
policy chief Takeaki Matsumoto insists on using UN judgment as
yardstick for Japan's response

(5) OIE classifies US as controlled-risk nation for BSE; Japan may
be pressed to ease import conditions for US beef

ARTICLES:
(1) Eliminating the danger of Futenma airfield: US wants to expedite
relocation plan

OKINAWA TIMES (Page 5) (Full)
May 24, 2007

Kevin K. Maher, US consul general in Okinawa

I had an opportunity on May 14 to speak about the issue of Futenma
relocation in a regular meeting of the Okinawa Association of
Corporate Executives. Again, I would like to convey to the people of
Okinawa Prefecture an outline of my speech there and my true
opinions.

First of all, I want to stress that the US government is aware of
the concerns of local residents living in the vicinity of Futenma
airfield about danger and noise and that we agreed more than 10
years ago in the SACO final report to relocate Futenma airfield.
Unfortunately, however, Japan was unable to implement the SACO
relocation plan for various reasons.

In October 2005, the Japanese and US governments agreed anew in a
two-plus-two meeting of the Japan-US Security Consultative Committee
to relocate Futenma airfield to a US military facility at Camp
Schwab on Henoko Point in Nago. In addition, the US government
agreed again on Futenma relocation in May 2006 and in May 2007. Now
is the time to implement this relocation plan. We hope that the
Futenma relocation plan will be accelerated.

The realignment plan in Okinawa is a rare chance that comes once in
several decades, and I believe that this large-scale plan, if it is
brought to fruition, will lead to a substantial reversion of bases
and to a mitigation of the burden.

This realignment plan is to relocate the Futenma base from a densely
populated place in the city of Ginowan to a US military facility at
Camp Schwab and is to transfer 8,000 Marines to Guam, thereby
reducing or returning the sites of most US facilities that are
located south of Kadena. In order to carry out the plan, it is
desirable that all those concerned, including the prefectural and
municipal governments, cooperate. We would like to ask for local
understanding and support.

We need to do things in a realistic way. In October 2005, the

TOKYO 00002336 002 OF 009


Japanese and US governments agreed to a document titled "Japan-US
Alliance: Transformation and Realignment for the Future." This has
two major goals. One is to mitigate the burden of base-hosting local
governments. The other is to improve the capabilities of our
alliance. It is very important to proceed with these two things at
the same time.

It is not realistic to call for simply closing down Futenma
airfield. Given the present security environment of Asia, it is
indispensable to maintain the Futenma base's functions, and it is
realistic to relocate the base functions of Futenma to a US military
facility at Camp Schwab. We should carry out the Futenma relocation
plan as soon as possible to dissolve the anxiety of Ginowan
citizens. That is all I meant in what I said at the meeting of the
Okinawa Association of Corporate Executives.

(2) US forces realignment law enacted; How will subsidies help
relocation plans move forward?

YOMIURI (Page 13) (Abridged)
May 24, 2007

The Diet yesterday passed a bill to facilitate the realignment of US
forces in Japan featuring a plan to subsidize local governments that
will bear greater security burdens, paving the way for the
implementation of the realignment plan, agreed upon last May between
the governments of Japan and the United States.

Iwakuni

"It is not proper to manipulate the wishes of local governments with
state subsidies. Such an approach won't be able to change my
decision."

This comment came in a press conference yesterday from Mayor
Katsusuke Ihara of Iwakuni City, Yamaguchi Prefecture, the planned
relocation site for carrier-borne jet fighters, now based at US
Naval Air Facility in Atsugi, Kanagawa Prefecture.

Ihara's firm stance reflects the fact that the Iwakuni pubic has
expressed their opposition to the relocation plan on two occasions.

Iwakuni City conducted a municipal referendum last March, shortly
before the merger with seven neighboring municipalities, in which 87
PERCENT said "no" to the fighter jets' relocation. Although the
outcome of the referendum lost its effectiveness with the municipal
merger, Ihara won the new city's mayoral race in April on the slogan
of blocking the relocation.

The situation has changed markedly over the last one year, however.

The government produced last May a US force realignment final report
mentioning the plan to relocate the carrier-borne aircraft to
Iwakuni regardless of the city's referendum and the outcome of the
mayoral race. As a result, the Yamaguchi prefectural government,
which had been aligned with Iwakuni, effectively endorsed the
relocation plan in hopes of receiving state subsidies.

The Defense Facilities Administration Agency compiled its fiscal
2007 budget that did not include 3.5 billion yen in subsidies for
the project to build a new Iwakuni city hall. It was intended to
serve as pressure on the anti-base group in the city.


TOKYO 00002336 003 OF 009


Ihara now finds himself facing a growing number of local calls for a
pragmatic response in order to obtain the government's economic
package and subsidies.

For instance, Iwakuni Chamber of Commerce and Industry President
Hisashi Nagano took this view: "It is not appropriate to describe
the government's steps as a carrot-and-stick approach. There is
every reason for a municipality bearing a security burden to receive
financial aid from the government. This is a once-in-a-century
opportunity."

The tide has also changed for the city assembly in which the pro-
and anti-base groups had been competing with each other. The city
assembly rejected in March the FY2007 budget designed to make up for
the shortfall in the city hall construction spending with the merger
special bonds. Then came the assembly's adoption of a resolution to
effectively accept the relocation plan. "The fact that the mayor's
attitude is blocking the government's economic package is a serious
blow to the city, which is financially strapped," an assembly member
noted.

Given the turmoil in the municipal government over the force
realignment plan, some city executives fear that the city might
collapse.

Hardships have not ended for Ihara. On May 22, the prefectural
government decided to suspend its housing project in Atagoyama in
central Iwakuni. The city is likely to be pressed to convert it into
a US military housing project.

Some people speculate that in the event of the FY2007 budget being
rejected once again in the regular June city assembly session, Ihara
would resign and run in the mayoral race that would follow in order
to seek the public's judgment on the realignment plan. Will Ihara be
able to reverse the subsidy-oriented public opinion?

Futenma

In the wake of Diet approval of the special measures legislation,
Mayor Yoshikazu Shimabukuro of Nago, the relocation site for the US
Marine Corps' Futenma Station, commented yesterday: "I will make
every effort to stabilize the livelihoods of the local residents and
revitalize the local economy." Touching on the fact that the law is
good only for 10 years, Shimabukuro said: "I hope the government
will extend it as long as there are bases here."

Nago City Assembly Chairman Kenyu Shimabukuro of the henoko district
adjacent to Camp Schwab also noted: "We are the only place in Japan
that has accepted the Futenma relocation plan, so we think we
deserve special treatment from the central government."

Nago has been split over the Futenma relocation plan since the
government came up with a sea-based heliport plan in 1996. The
government has supported the pro-base group by, among other steps,
hosting the 2000 Summit in Okinawa and offering a 10-year,
100-billion-yen northern part economic package to improve
infrastructure there. In enacting the special measures law this
time, the government has decided to continue giving special
consideration to Okinawa, as seen its partial continuation of the
northern part economic package.

But past developments also showed difficulty in implementing
relocation plans after obtaining local understanding.

TOKYO 00002336 004 OF 009

The Futenma relocation plan has stalled over making changes to the
government's plan to build a V-shaped pair of runways at Camp Schwab
rather than over the appropriateness of the relocation plan itself.

"The special measures law was enacted, but that doesn't mean the
Futenma relocation plan would move forward immediately," a senior
Okinawa official noted.

47 of 68 affected local governments accept relocation plans

The US forces realignment special measures law will be good for 10
years until March 31, 2017. The law is designed to give a boost to
the implementation of the US forces realignment plan, agreed upon by
Tokyo and Washington last May. The key element in the law is to
create a system to provide subsidies to municipalities accepting
additional security burdens in accordance with the state of progress
in implementing the plan. The government has earmarked 5.1 billion
yen for FY2007, the program's initial year. The total amount is
expected to reach 100 billion yen in the end.

According to the Defense Ministry, 47 out of the 68 affected local
government have expressed a willingness to accept realignment plans.
Although they are not totally happy with the relocation plans
because of projected noise and security factors, carrots in the name
of state subsidies are extremely appealing to them.

Mayor Yoshifumi Tsuchiya of Shintomi Town, Miyazaki Prefecture, home
to the Air Self-Defense Force's Nyutabaru base, which has accepted
US fighter training, took this view about the new law yesterday:
"It's best not to bear any burden. Nonetheless, I can give a
positive assessment to the law to some extent. As the next step, I
would like to ask the government to allow us to spend subsidies in a
broader way."

(3) 2007 Close-up column -- US forces realignment bill to be enacted
into law today: Local governments housing US bases forced to make a
difficult decision with subsidies tied to realignment plans

MAINICHI (Page 3) (Full)
May 23, 2007

Kaori Onaka, Yudai Nakazawa, Norio Oyama

A bill for facilitating the implementation of USFJ realignment plans
is to be enacted into law today. The bill will pressure relevant
local governments to accept more of the burden of hosting US
military facilities in return for subsidies amounting to 100 billion
yen concerning the realignment plans. It will also serve as the
grounds for Japan to pay the costs of relocating US Marines from
Okinawa to Guam, which are expected to exceed 700 billion yen. The
central government wants to both maintain deterrence and reduce
Okinawa's burden, and it also wants to build an irreplaceable
alliance between Japan and the US with a vast amount of financial
aid as the driving force. Meanwhile, local governments are being
forced to make a difficult decision on the question of whether to
accept subsidies in return for tolerating an increase in the burden
related to the military facilities.

"Some people describe the subsidy system relating to the force
realignment plans as something like slapping local governments in
the face with a wad of cash. What do you think?" Ichita Yamamoto of
the ruling Liberal Democratic Party (LDP) said at a session

TOKYO 00002336 005 OF 009


yesterday of the Upper House Committee on Foreign Affairs and
Defense, turning to Prime Minister Shinzo Abe. Under the subsidy
system, subsidies will be provided to local governments in
proportion to the degree of their cooperation in accepting the
burden.

Abe's answer to Yamamoto was: "Subsidies are not meant to persuade
local governments by the strength of money but meant to properly
respond to the local governments that decided to (accept an increase
in the burden of their hosting US forces) for the security of the
country."

It is no mistake, however, that the subsidies of this kind can
become a bargaining chip for facilitating the realignment plans.
Local governments' moves in this sense are divided into four stages:
(1) announcement of accepting realignment plans; (2) launch of an
environmental impact assessment; (3) launch of the construction of a
necessary facility; and (4) implementation of realignment plans. The
amount of subsidy will increase according to progress. This
mechanism makes it easy to induce local governments to accept
realignment plans, as well as to prevent them from "running away"
after receiving subsidies. The central government has already
budgeted 5.05 billion yen for subsidies to be provided in this
fiscal year.

In fact, local governments, which have six candidate bases for the
transfer of US military aircraft drills conducted at present at
Kadena Air Base in Okinawa, announced they would accept the
transfer, like Aomori Prefecture's Misawa City Government noting,
"It's unavoidable for our burden to increase because of our
cooperation with the central government for its policy." Mayor
Hisami Arakawa of Fukuoka Prefecture's Chikujo Town, where the
drills were already transferred, voiced his expectations: "Our town
was the first to accept the relocation, so we believe we will
receive the largest subsidy."

In contrast, Yamaguchi Prefecture's Iwakuni City, which houses the
Marine Corps Air Station Iwakuni Base, which is seen as the
relocation site for the 59 carrier-based planes assigned to the
Naval Air Facility Atsugi Base (in Kanagawa Prefecture) and 12 air
refueling planes based in the Futenma Air Station, was thrown into a
jumble over the subsidy issue, because the central government put an
end last December to subsidizing the city for the construction of a
city office building. This subsidy had been provided in line with
the agreement of the Japan-US Special Action Committee on Okinawa,
per se, but as a result of the city being involved in the
realignment plans, the situation has changed. On May 17, Mayor
Katsusuke Ihara attended a meeting of the Lower House Committee on
Security and argued: "It's incredible that the subsidy was stopped
owing to US force realignment plans. That is disturbing the citizens
even further."

The city government has yet to find a way out of the confusion.
During a city assembly session in March, the assembly rejected the
initial budget bill, which included a plan to use special merger
local bonds for the construction of a new city office building,
while the assembly adopted a resolution in effect accepting the plan
for the transfer of carrier-based aircraft.

What are the grounds for 730 billion yen figure for Japan's share?

Along with the relocation of the Futenma airfield, 8,000 Marines and
their 9,000 dependants are expected to move from Okinawa to Guam. A

TOKYO 00002336 006 OF 009


road map for the implementation of the US force realignment as
agreed on between Japan and the US at a Japan-US Security
Consultative Committee (2+2) session in May 2006 mentioned that the
realignment costs would be shared by Japan and the US. However, how
much money Japan will actually pay has yet to be determined, as
Foreign Minister Taro Aso said, "A number of rumors are flying
around. One rumor is that the Japanese side's burden will amount to
3 trillion yen, but the exact amount has yet to be calculated."
Paying that amount is an administrative act, but the grounds for
that calculation are very vague.

A symbol of this vagueness would be the construction cost of family
housing. At a meeting yesterday of the Upper House Committee on
Foreign Affairs and Defense, Tsurunen Marutei of the major
opposition Democratic Party of Japan (DPJ or Minshuto) argued that
the construction cost per house calculated by the US side was no
more than 20 million yen or so, but Washington indicated
construction costs of 800 million yen per unit to the Japanese side.
Marutei sought to disclose the basis for the calculation, arguing,
"It's a waste of money." But Prime Minister Abe simply said: "We
will carefully calculate the cost."

According to the road map, the total relocation cost is estimated at
10.27 billion dollars (or some 1.23 trillion yen). Of this amount,
Japan will pay 6.09 billion dollars (some 730 billion yen), of which
a maximum 2.8 billion dollars (or 340 or so billion yen) is to be
disbursed from the national coffers. The remaining 3.29 billion
dollars (or some 400 billion yen) is likely to be financed or lent
by a special purpose entity (SPE) to be established by private firms
in the region via the Japan Bank for International Cooperation
(JBIC) and other organizations. The SPE will construct housing and
repay the loans from rent income to the Japanese government through
the JBIC.

However, Defense Minister Fumio Kyuma pointed out that "it will take
50 years" to repay the loans from rent income. Depending on the
circumstances, the buildings during that period could become
superannuated and turn into nonperforming loans. Osaka University
Prof. Kazuya Sakamoto, a close aide to Abe, noted at a
question-and-answer session of the Lower House Committee on
Security: "This sort of cost-sharing is quite unusual. As a matter
of fact, Japan's payment for the construction of another country's a
military facility in that country's territory is questionable."

(4) Interview on collective self-defense (Part 3): Opposition DPJ's
policy chief Takeaki Matsumoto insists on using UN judgment as
yardstick for Japan's response

NIHON KEIZAI (Page 2) (Full)
May 24, 2007

-- What is your view about Prime Minister Shinzo Abe's approach of
having an expert panel discuss the question of the exercise of the
right to collective self-defense?

Matsumoto: "I think the establishment of that panel in itself has
become his goal. He appears to be fanning the flames and trying to
come up with a conclusion at a sitting instead of promoting
discussion according to a plan based on his term in office. This
approach is sensational. It's dangerous to debate the question of
the use of armed force under such a time table."

-- Some members in you party are tolerant of exercising the right to

TOKYO 00002336 007 OF 009


collective self-defense.

Matsumoto: "Every member has his or her own taste, but our party
bands together. Using armed force is viewed as an illegal act
internationally. Cases where using armed force is allowed are
limited for cases of self-defense and action taken in accordance
with the United Nations Charter. These two are the premise for
(Japan to) exercise the right to collective defense."

-- The prime minister instructed the panel to examine four cases
regarding the question of the use of the right to collective
self-defense. Of the four, intercepting missiles and protecting US
war ships are strongly called for by the US military.

Matsumoto: "We need to value our relations with the United States,
but should Japan-US relations turn into those between the US and the
United Kingdom, Japan, following America's decision to exercise the
individual defense right, would support it. We never aim to develop
the Japan-US alliance into global alliance.

"To give an example, whether it was the right thing to open war
against Iraq is now viewed as a big issue internationally. Launching
that war was a decision by the US. If Japan totally allows the
exercise of the right to collective self-defense, chances will
increase that Japan will be affected by other countries' individual
self-defense rights and decisions to use armed force. We therefore
have been sticky on the propriety of the Iraq war."

-- Do you mean that the Japan-US alliance should not be made a
criterion for Japan to decide whether to exercise the right to
collective self-defense?

Matsumoto: "In the area of diplomacy, Japan needs to keep it in mind
that Germany and Japan are considered by the rest of the world as
the countries that caused the war 60 years ago. Should Japan be
engaged in using armed force, Japan should use a UN decision that
can easily obtain approval from most people as a criterion for Japan
to make a decision."

-- Minshuto insists that Japan should play an active part in UN
peacekeeping operations (PKO).

Matsumoto: "We must further step into debate on PKO cooperation. If
we establish an international peace cooperation basic law in
conformity with the Constitution, I think Japan could respond even
more to PKO requests. Regarding the use of armed force, Japan needs
to at least create a law for that purpose. This may lead to amending
the PKO Cooperation Law."

(5) OIE classifies US as controlled-risk nation for BSE; Japan may
be pressed to ease import conditions for US beef

YOMIURI (Page 3) (Excerpts)
May 24, 2007

New international standards

The World Organization for Animal Health (OIE) classified the United
States as a "controlled-risk nation" for BSE to allow it to export
beef irrespective of cattle age. The OIE has introduced a new
three-level safety-classification system for BSE since early this
year. The OIE divides countries into three categories: those having
"negligible risk of BSE"; "controlled BSE risk"; and "undetermined

TOKYO 00002336 008 OF 009


risk of BSE". This classification is reached as a result of
screening documents related to outbreaks of BSE and the management
of feed. Countries in the first category are allowed to export beef
without any restrictions at all. Countries in the second category
are allowed to export even specified risk materials (SRM) if such
materials are from cattle aged 30 months or younger.

In its general meeting, the OIE unanimously approved the
applications of 11 countries and regions. Japan also supported the
OIE Science Committee's decision on the US application, but it still
takes the view that "the OIE authorization will not immediately lead
to a relaxation of Japan's import conditions," as Chief Cabinet
Secretary Shiozaki noted.

SIPDIS

On this point, a senior official of the Ministry of Agriculture,
Forestry and Fisheries (MAFF) commented: "Since we have not read the
contents of the detailed report submitted by the US to the OIE, it
will be impossible for us to judge whether an outbreak of BSE would
be prevented in Japan."

Japan currently limits imports of US beef to cattle 20 months of age
or younger, adding the extra condition that all SRMs be removed.
Japan's requirements are considerably severer than those of the US.
OIE authorization is legally unenforceable, so the two countries
will determine final conditions through bilateral negotiations, but
Japan will be inevitably pressed to ease its conditions based on the
new OIE standards.

US pressure

After the OIE decision was announced, US Secretary of Agriculture
Mike Johanns told reporters: "We hope that countries closing their
markets will start moving in the direction of drawing a conclusion
immediately."

US congressional members and high-ranking government officials have
quickly issued comments in succession. Taking advantage of the OIE
authorization, persons concerned in the US are aiming to urge their
trade partners to review their import conditions. Following the
discovery of the first case of BSE in the US, its trade partners
thrust different import requirements with the US. Under such a
circumstance, the US was pressed to set up country-specific
production lines, making it impossible to resort to mass production
and resulting in being unable to boost exports.

Given the seal of approval from the OIE of the safety of US beef,
the US is now expected to apply greater pressure on Japan to review
its import conditions. Japan is likely to be forced to make a
concession in bilateral talks.

Focus from now

MAFF Minister Matsuoka indicated that, if officially asked by the
US, Japan would consider the possibility of starting talks with the
US on relaxing its import conditions for US beef. As the timing, he
implied sometime after Japan completes its ongoing inspections to
check whether meatpacking plants in the US have abided by the safety
procedures set by Japan in early June.

In order for Japan to ease its import requirements for US beef, the
Japanese government should submit an agreement reached in bilateral
talks to the Cabinet Office's Food Safety Commission to solicit its
advice.

TOKYO 00002336 009 OF 009

The focus of bilater talks will be on Japan's conditions of limiting
imports of US beef to cattle aged 20 months or younger and of having
SRMs removed. In 2003, a 21-month-old cow and a 23-month-old cow
were identified as BSE positive in Japan. These cases prompted Japan
to adopt tougher import requires than the international standards.
However, no infection was confirmed in an experience conducted by a
team of the Ministry of Health, Labor and Welfare, and Japan is
losing grounds for its assertion.

Countries or region designated under new OIE safety classification
system for BSE

Countries or region:

Negligible risk of BSE: Australia, New Zealand, Argentina, Uruguay,
Singapore

Controlled BSE risk: America, Canada, Switzerland, Taiwan,
Chile, Brazil

SCHIEFFER

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