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Cablegate: Daily Summary of Japanese Press 11/29/07

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UNCLAS SECTION 01 OF 12 TOKYO 005376

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 11/29/07


Index:

(1) Futenma relocation: Japan, U.S. agree to landing of barges to
transport helicopters, premised on seawall construction (Okinawa
Times)

(2) Japan must return supply ship to the Indian Ocean (Part B):
Yukio Okamoto (Sankei)

(3) Japan must return supply ship to the Indian Ocean (Part C) --
Japan disappearing from war on terror: Yukio Okamoto (Sankei)

(4) Editorial: Diet deliberations on new antiterror legislation; We
want to hear essential debates in Upper House (Yomiuri)

(5) Ruling coalition filled with sense of crisis due to Moriya's
arrest; DPJ to gear up its offensive (Tokyo Shimbun)

(6) Spot interview with Takushoku University Professor Satoshi
Morimoto on arrest of former Vice Defense Minister Moriya:
Foundation of defense policy has lost credibility (Yomiuri)

(7) Editorial: Japan needs to overcome delay in defense exchanges
with China (Tokyo Shimbun)

(8)Working population estimated to fall by 10 million in 2030,
necessitating reform of working system (Nikkei)

ARTICLES:

(1) Futenma relocation: Japan, U.S. agree to landing of barges to
transport helicopters, premised on seawall construction

OKINAWA TIMES (Page 2) (Full)
November 29, 2007

Speaking about the alternate facility to Futenma Air Station, U.S.
Consul General to Okinawa Kevin Maher at his regularly scheduled
press conference yesterday revealed that Japan and the U.S. had
agreed to secure a landing dock for barges in order to transport
damaged helicopters. The landing dock would be separate from the
docking area to be used for fuel supply ships to come and go
transporting aircraft fuel. Consideration is being given to a
building a straight line sea-wall structure. Consul General Maher
said, "I think (the Japanese government) has generally decided (the
landing location)."

In connection with the port functions of the alternate facility,
Defense Minister Shigeru Ishiba commented in the Lower House
Security Affairs Committee about the transport of helicopters by
ship for repairs: "This would be different facility cost related to
vessels than the port facility." He hinted the idea was being
studied.

Consul General Maher said, "I will not deny of course what Minister
Ishiba had said." He then explained: "Since it will be difficult to
transport a plane needing repairs by truck, we (the U.S. and Japan)
studied whether we needed a separate location for barges aside from
the alternate facility for the sake of repairing helicopters.

On the landing site, he stated: "I will probably be separate from
the dock used for fuel. We are studying it in the master plan. It is

TOKYO 00005376 002 OF 012


not a special facility; we just need a spot. For example, usually a
seawall is tilted, but if it is made straight, the barge reportedly
could land there."

On the other hand, he also said: "We are not talking about building
a port or a wharf." He stressed that there was no assumption of
using vessels that regularly carried and unloaded cargo.

(2) Japan must return supply ship to the Indian Ocean (Part B):
Yukio Okamoto

SANKEI (Top play and Page 3) (Full)
November 28, 2007

Chinese personnel 40 times greater than Japan's

Vessels of other countries have been continuing surveillance
activities in the Indian Ocean, struggling to fill the void left by
Japan's departure. Vessels carrying terrorists and drugs sail from
Afghanistan to the Arabian Peninsula and even to Africa to return to
the country loaded with weapons. (The maritime interdiction
operation) is designed to block such maritime navigation.

The number of suspicious vessels cruising in the Indian Ocean has
declined owing to their patrol.

The withdrawal from the Indian Ocean has set back in one blow
Japan's peace-building efforts since the Gulf war of 1990. It has
hit Japan like a body blow. Japan's quest for a permanent UN
Security Council seat, while abandoning the joint obligation of
defending freedom sounds ludicrous.

Necessary legislation cannot clear the Diet due to the confrontation
between the lower and upper houses. Such a situation will persist
for the next six years. The future course of Japan remains
uncertain. The world is expected to change significantly while the
Liberal Democratic Party and the Democratic Party of Japan will be
locking horns in the next six years.

In China, for instance, power is quickly shifting to
international-minded young generations. Western-educated people with
international sensitivity and the power to send messages out to the
world would become national leaders.

At present, 47 Self-Defense Force personnel from Japan are engaged
in UN peacekeeping operations (PKO), mostly in the Golan Heights. In
contrast, 1,810 Chinese personnel -- 40 times Japan's number -- are
engaged in PKO at 12 places.

It might be the Chinese Navy that will deploy troops to the Indian
Ocean for the international community. Where will Japan be when such
happens?

Refueling is "super-safe"

Actions against terrorism in Afghanistan can be classified into the
following four categories in the order of risk:

Category 1: The anti-Al-Qaeda and Taliban operation called Operation
of Enduring Freedom (OEF) is the most dangerous. Needless to say,
Japan should not join this operation.


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Category 2: Ground operations of the International Security
Assistance Force (ISAF) for maintaining security in Afghanistan are
dangerous after Category 1. Although ISAF activities are designed to
assist the Afghan government with its security operations, they have
become targets of terrorists.

Category 3: The Provincial Reconstruction Team (PRT) entails some
risk, although it is not as dangerous as Category 2. The PRT is
composed of the government officials and private-sector personnel
who are engaged in economic reconstruction and humanitarian
assistance in local areas in Afghanistan, and the escort units.

Category 4: Inspecting suspicious vessels in the Indian Ocean far
away from the terrorists is most safe, although it is not risk-free
because suspicious boats might fire shots.

Japan did not belong to any of these categories. Japan created a
"super-safe" framework outside Category 4.

Japan was responsible strictly for providing fuel oil without
joining the maritime interdiction operation. Once waters in which
the Japanese supply ship was operating became dangerous, it was
allowed to evaluate to a safe zone. Although the SDF personnel had
to expend sweat, they were free from the danger of losing their
lives or suffering injury.

But that does not mean Japan's role was less significant. The SDF
personnel burning with a sense of mission performed their duty
wholeheartedly. The bottom line is that in operations against
terrorism, there is no mission that is safer than this. The
operation was not costly and was appreciated by the international
community.

It was a good role envied by 40 other countries. The operation was
not possible without the MSDF's equipment, technology, and
enthusiasm.

The Democratic Party of Japan forced Japan into abandoning the
operation. What does the party have in mind for Japan after this?

(3) Japan must return supply ship to the Indian Ocean (Part C) --
Japan disappearing from war on terror: Yukio Okamoto

SANKEI (Top play and Page 3) (Full)
November 28, 2007

Ichiro Ozawa announced that Japan should stop the refueling
operation at sea and join the International Security Assistance
Force (ISAF). Although his view opposing the safe ship-to-ship
refueling operation and urging Japan instead to join more dangerous
activities surprised me, the proposal itself is laudable. It is a
path Japan should aim at.

Why? Ground Self-Defense Force troops repaired hospitals and roads
in the southern Iraqi city of Samawah; their work was appreciated by
local residents. And they returned home safely. It was splendid. Of
some 40 countries that sent troops to Iraq, the Japanese troops
completed their operations most smoothly and safely.

Other countries were envious of Japan. Other countries wanted to
engage in clean operations, like the SDF. But in view of reality,
someone had to protect the lives of Iraqi citizens before providing

TOKYO 00005376 004 OF 012


humanitarian assistance. That is why troops of other countries stood
on the streets armed with guns.

The area in which SDF was stationed was protected by Dutch, British,
and Australian forces in succession. Other countries welcomed the
SDF in Iraq. But Japan is no longer allowed to say: "We will provide
humanitarian assistance, while you are responsible for dangerous
security operations."

What Ozawa said is good. Japan should join ISAF and play a role in
security operations. If the main operations are too dangerous, Japan
should engage in safer operations, such as transport assistance. The
Air Self-Defense Force's C-130H has been transporting supplies and
personnel from Kuwait to Baghdad and Irbil in Iraq. How about flying
from Kuwait to Kabul, as well?

SDF aircraft is fully capable of flying there. Besides, the Kabul
Airport area is safer than the Baghdad Airport area. Airlifting ISAF
supplies and personnel would be a fine way of ISAF participation.
Furthermore, it would be a great contribution for Japan to provide
necessary supplies free of charge. Providing support services at
ISAF headquarters would be another option. In short, once the mind
is set, there are many ways to join it.

But some LDP members opposed the option of joining ISAF simply
because the proposal came from Ozawa. Will the LDP seal off one of
the state options? Prioritizing the political situation over
national interests means that the LDP is the same (as the DPJ). Who
thinks of the country?

PRT participation

Without notice, Ozawa retracted the ISAF proposal and the DPJ has
instead proposed joining the Provincial Reconstruction Team (PRT) in
the aforementioned Category 3 to provide "civilian assistance." It
would be good if the proposal is based on a thorough knowledge, but
there might be a fundamental misconception.

Nearly 40 experts from the Japan International Cooperation Agency
(JICA) and nongovernmental organizations (NGOs) have already been
offering regular civilian assistance at various parts of
Afghanistan. The PRT is a project for the military, border guards,
and special police forces to escort civilian support teams apart
from it.

The PRT is important. All of Afghanistan is in need of civilian
assistance. For instance, girls were prohibited from going to school
during the Taliban era. Today, girls go to school with sparkling
eyes. Yet there are no desks, chairs, or blackboards in classrooms.
Medical equipment is in short. Vocational training facilities are
also necessary. There is the question of antipersonnel mines, as
well. The PRT is there to defend experts facing such tasks. At
present, 27 countries are participating in the PRT.

For instance, Britain is in charge of the PRT in Helmand, German in
Kunduz, and the Netherlands in Uruzgan. This means that those
countries are responsible for escorting the foreign experts and NGO
personnel carrying out activities in those provinces.

If Japan can join them, that would be creditable. Work is intended
to directly bring stability to Afghanistan. But I wonder if (Japan)
can really do such work.

TOKYO 00005376 005 OF 012

Countries participating in OEF and ISAF and numbers of people
killed

United States 463
Britain 84
Canada 71
Spain 23
Germany 22
France 12
Netherlands 12
Italy 9
Denmark 7
Romania 5
Norway 3
Australia 3
Sweden 2
Estonia 2
Poland 1
Portugal 1
Czech 1
Finland 1
South Korea 1
Total 723

(As of November 16, 2007, by US CNN)

(4) Editorial: Diet deliberations on new antiterror legislation; We
want to hear essential debates in Upper House

YOMIURI (Page 3) (Full)
November 29, 2007

We want to hear essential debates pursued in the Upper House
regarding how Japan should tackle the war on terror to fulfill
responsibility as a member of the international community.

The Upper House has at last started deliberating on the new
antiterror special measures bill aimed at resuming refueling
operations in the Indian Ocean by the Maritime Self-Defense Agency
(MSDA). More than a fortnight has passed since the passage of the
bill in the Lower House.

The recent war of words between the ruling and opposition camps has
focused on whether Finance Minister Nukaga was present at a wining
and dining session hosted by the former executive director of Yamada
Yoko. In an unusual move, the Upper House Financial Affairs
Committee has decided by a majority vote to summon Nukaga and former
Administrative Vice Defense Minister Takemasa Moriya on Dec. 3 as
sworn witnesses.

Nukaga denied his presence at the wining and dining session on Dec.
4 last year. The Democratic Party of Japan (DPJ or Minshuto) is
geared up for a full-fledged confrontation with Nukaga, insisting
that he was present there.

However, even if Nukaga were present at such a session joined by
many guests, including a key US official, it would not prove that
there were collusive ties between Nukaga and the former executive
director. It is questionable whether it was necessary to decide to
summon them as witnesses, even if it meant undermining the solid
vote principle.

TOKYO 00005376 006 OF 012

It will likely that only four days or so can be spared for actual
deliberations on the bill at the Diplomatic and Defense Affairs
Committee by the time the Diet session ends next month. The ruling
and opposition parties must give top priority to discussions on
whether to resume the refueling operations and whether there are any
alternative measures. A precondition to realize such discussions is
for the DPJ to come up with a realistic counterproposal at an early
date.

The DPJ says that it is now carrying out the work of shaping
essential features of a bill, which it has already drafted, into the
general outline of a bill. However, the problem is its contents.

The outline of the drafted bill includes the consolidation of
farmland, medical services and transportation as activities the
Self-Defense Forces should engage. It does not indicate to which
areas of Afghanistan they will be dispatched and to what operations
they will be assigned.

The DPJ-sponsored bill stipulates that SDF operations are to be
carried out in areas where a ceasefire is established or where it
has been acknowledged that there would be no damage likely to be
inflicted on civilians. There are no areas that meet those
conditions in Afghanistan, which means that the DPJ's basic stance
is that Japan should do nothing for humanitarian assistance.

Refueling operations are based on the United Nations Security
Council (UNSC) Resolution 1368. The international community hopes to
see Japan resume its refueling operations at an early date. DPJ
President Ozawa has declared that refueling operations are
unconstitutional. However, no DPJ members made similar assertions
during Lower House deliberations on the new legislation.

An early resumption of the refueling operations is an option that
will benefit Japan's national interests most.

The Upper House adopted the Iraq Special Measures Law scrapping bill
introduced by the DPJ. Iraq is now at a crucial juncture with public
security improved. Transportation operations by the Air Self-Defense
Force (ASDF) are a major pillar for Japan's international peace
activities along with the refueling operations.

There may be no prospects for the new legislation to obtain Diet
approval. Does the DPJ think that it is all right for Japan to
further lose its presence in the international community?

(5) Ruling coalition filled with sense of crisis due to Moriya's
arrest; DPJ to gear up its offensive

TOKYO SHIMBUN (Page 2) (Full)
November 29, 2007

The arrest of former Administrative Vice Defense Minister Takemasa
Moriya, who was called the "don" of the Defense Ministry, has
shocked the government and ruling parties. If criticism of the
Fukuda government increases, it will be even more difficult for the
government to enact a new special measures law that would enable the
Maritime Self-Defense Force to resume its refueling operations in
the Indian Ocean. As a result, the view spreading in the government
and ruling coalition is that the House of Representatives should not
be resolved for the time being. Meanwhile, the main opposition

TOKYO 00005376 007 OF 012


Democratic Party of Japan (DPJ or Minshuto) is determined to gear up
to go on the offensive, calling for placing priority on shedding
light on allegations about the Defense Ministry rather than on
deliberations on the new anti-terror bill.

The ruling Liberal Democratic Party's Secretary General Bunmei Ibuki
denied there would be an impact from the arrest of Moriya on
deliberations on the new anti-terror bill, telling reporters last
night: "That is different issue from the refueling operation that is
connected with Japan's national interests."

However, the "Moriya shock" will have a serious impact on the future
course of the legislation. Because of the arrest of Moriya, who led
the nation's defense policy for four years, the credibility of such
aspects of defense policy as the realignment of US military forces
in Japan will be called into question. Moreover, the responsibility
of successive governments for having appointed Moriya as vice
defense minister will also be under scrutiny.

Many in the ruling camp have now called for re-extending until
mid-January the current Diet session, which will end on Dec. 15, in
a bid to show their stance of not hesitating to re-adopt the bill at
the Lower House. There is a possibility, however, that if the Lower
House readopts the bill, the DPJ will submit to the Upper House a
censure motion against the prime minister and that it will be
approved in that chamber. This could force Fukuda to dissolve the
Lower House. Should the approval rating for the Fukuda government
drop due to Moriya's arrest, a cautious view that the ruling parties
cannot do well in the next Lower House election will definitely gain
momentum.

There is also a possibility that if the investigation extends into
political circles, the view will become stronger that in order to
avoid the DPJ's pursuit of the allegations, the current Diet session
should not be extended and the bill should be let die so that the
government will be able to submit a new bill to the next regular
session.

Meanwhile, the DPJ intends to heighten its offensive, placing a
priority on shedding light on the scandals over continuing the
deliberations on the new antiterrorism bill.

DPJ Secretary General Yukio Hatoyama told reporters yesterday: "The
scandals involving the Defense Ministry have significantly damaged
the beauty of the bill." Diet Affairs Committee Chairman Kenji
Yamaoka also emphasized: "What we first should do is reform the
scandal-tainted Defense Ministry."

Backed by the power of numbers in the Upper House, the DPJ, which
had been predominant in managing the chamber's Foreign Affairs and
Defense Committee, to which the new anti-terror bill was submitted,
has now gained greater strength with the arrest of Moriya. There is
a move in the opposition bloc pursuing the supervisory
responsibility of Defense Minister Shigeru Ishiba, who was defense
chief when Moriya assumed the vice minister's post.

The DPJ has not given up on summoning Finance Minister Fukushiro
Nukaga to testify as a sworn witness before the Upper House
Financial Affairs Committee on Dec. 3 as planned. DPJ President
Ichiro Ozawa and Hatoyama confirmed yesterday that at least Nukaga
alone should be summoned as scheduled. The party intends to seek a
hearing from Moriya.

TOKYO 00005376 008 OF 012

Yamaoka even said: "Moriya was arrested the day after the Upper
House committee decided to summon him on Dec. 3. If this is a
maneuvering to cover up the scandals, it is very regrettable." He
made it sound like that the government intentionally hid the
witness.

(6) Spot interview with Takushoku University Professor Satoshi
Morimoto on arrest of former Vice Defense Minister Moriya:
Foundation of defense policy has lost credibility

YOMIURI (Page 13) (Full)
November 29, 2007

Interviewer: Yuji Anai

It is difficult to tell how the bribery scandal involving former
Vice Defense Minister Moriya will develop in the days ahead, but
there will be certainly a serious impact (on Japan's defense
policy). As a government official, Moriya acted out of line. Did he
lack morality and common sense as a public servant? Didn't he feel
any pricks of conscience?

Everybody has both a good side and a bad side. It is hard to say all
aspects of one's performance and behavior are evils. Working for
both the Koizumi and Abe administrations, Moriya was deeply involved
in an important part of Japan's defense policy, including emergency
legislation on national security, the realignment of the US
military, missile defense, and the elevation of the Defense Agency
to a ministry status. I wonder whether Moriya might have
overestimated his achievements related to those defense elements.

Moriya was well-versed in seeking prior advice or consent from
politicians, political maneuvering and putting forth policy
measures. He was unparalleled in terms of the ability to do those
things. Perhaps for this remarkable ability, he was promoted to the
post of vice minister. I frequently exchanged views with Moriya over
Japan's defense policy, but I was unaware at all that he was
involved in bribe-taking. I am now astonished to learn he had two
faces.

There seem to be five lessons from the bribery case this time.

First, the vice minister got hold of the fundamental guidelines for
Japan's defense policy and was in a position to exercise his
authority over the purchase of equipment related to the guidelines.
If the vice minister had acted out of line and benefited a defense
contractor, the current system applied to the Defense Ministry,
under which the vice minister controls defense policy as well as the
procurement system, must be drastically reviewed. Particularly, the
current procurement system needs to be fundamentally revamped.

Secondly, the way information has been managed is problematic.
National defense policy is directly linked to weaponry to be
procured. What if a very fundamental piece of information linked to
national defense was leaked out to a private company and then a
third country?

The third problem is that Moriya might have had a wrong idea about
civilian control. Moriya appears to have believed that he could
bring about anything as the top leader of the defense bureaucracy by
just issuing orders to the Ground, Air, and Maritime Self-Defense

TOKYO 00005376 009 OF 012


Forces. However, if what was done in response to orders from a
civilian official is now found to have been wrong, the reliability
of civilian control could be totally undermined. Self-Defense Forces
(SDF) officials' distrust of the civilian official system would
seriously affect the way civilian control should be in the future.

Fourth, the bribery case will have a grave impact on deliberations
on systems and bills after deliberations on a budget bill for next
year, even though Japan is now in need of reviewing its national
defense system. Depending on how the scandal develops in the days
ahead, a number of officials and persons concerned would be punished
in some way or other or they would be subject to criminal
investigations; as a result, the defense budget could be further
slashed and the introduction of a new weaponry system could be
suspended. In fact, the Ministry of Finance is gearing up to make a
drastic cut in defense spending in compiling the budget bill for
next year. This bribery case would have an immeasurably negative
impact.

Lastly, the bribery case will affect Japan's alliance with the
United States. Moriya's intentional attempt to manipulate
politicians and mass media in dealing with such issues as relocating
the U.S. Marine Corps' Futenma Air Station has resulted in Japan
losing America's confidence. As a result, the Japan-U.S. alliance is
not necessarily in a good shape right now. It will be a major
challenge for Japan to be able to restore the credibility of the
Japan-U.S. alliance.

The bribery case has rocked the most fundamental part of Japan's
defense policy and caused Japan's defense policy to lose
credibility. Japan needs to thoroughly review the way the Defense
Ministry operates and then to regain credibility.

The East Asian situation surrounding Japan is not stable at all at
present. Nevertheless, if this kind of bribery case ruins Japan's
defense capability our predecessors have built over the past 50 or
more years, it will become impossible to scheme national defense
from a long-term perspective from now on. This is the most serious
crisis since the foundation of the SDF. The Defense Agency was
upgraded to the Defense Ministry, but the organization in itself was
not ready to be elevated to a ministry. This point must be deeply
examined.

Satoshi Morimoto: professor at Takushoku University.

(7) Editorial: Japan needs to overcome delay in defense exchanges
with China

TOKYO SHIMBUN (Page 5) (Full)
November 28, 2007

A Chinese naval vessel will arrive today at Tokyo's Harumi Pier for
its first port call in Japan. Defense exchanges between Japan and
China have substantially fallen behind those between the United
States and China in the aftermath of bilateral issues, such as
Yasukuni Shrine. In order to avoid a dispute between Japan and
China, Japan should take this opportunity to further develop
bilateral exchanges with China.

In October 2000, when then Chinese Premier Zhu Rongji visited Japan,
the two countries agreed on a Chinese naval vessel's port call in
Japan.

TOKYO 00005376 010 OF 012

However, former Prime Minister Junichiro Koizumi's visit to Yasukuni
Shrine strained relations between Japan and China. The visit of a
Chinese naval vessel was put on hold. In August this year, the two
countries held a meeting of their defense ministers and then finally
decided to carry it out.

Since the initial agreement, eight years have passed. Over the past
years, China has markedly developed its defense exchanges with the
United States and other countries. Of course, the United States and
China had their respective naval ships visit each other. In
addition, the two countries also even carried out joint seaborne
rescue training exercises.

It is important to promote defense exchanges between Japan and
China. It may sound paradoxical, but that is because there is a
conflict of national interests between the two countries and that
there is a sense of distrust in each other.

In the East China Sea, China has been claiming territorial rights to
the archipelago of Senkaku isles (named "Diaoyu Islands" in China).
Japan and China have been claiming their respective exclusive
economic zones (EEZ) in the sea.

Near the equidistant line, China is developing gas fields. Bilateral
talks for joint development are running into trouble. China even has
rattled its saber, declaring that it would send out naval forces if
and when Japan tried to drill an experimental gas well in that sea
area.

In that disputed area, the two countries' defense forces face each
other. Small trouble could develop into a conflict.

China is still doubtful of Japan's self-defense capabilities for
historical reasons. Japan is wary of China's growing military power
due to its rapid military buildup and the scale of its officially
announced military spending that outpaces Japan's defense budget.

Japan and China need to accumulate defense exchanges and understand
each other's intentions and capabilities in order for the two
countries to ease such a sense of mutual distrust and avoid
conflict. That is the key. It is also important to lay a hotline
between Japan and China for emergency communications.

At one time, Japan and China fought each other in a war. Their armed
forces are now deepening exchanges and showing that they are getting
along well with each other. This will help the two countries ease
their respective nationalism and national sentiments.

Japan and China must avoid conflict through defense exchanges. In
addition, it is necessary for the two countries to deepen their
mutual defense exchanges not only at the level of top brass officers
but also at various other levels for further confidence building.
China is now being called to increase the transparency of its
defense power. We suggest that officials in charge of white papers
on both side engage in exchanges and swap ideas.

Both Japan and China are even more responsible in the international
community. It is important for their forces to work together through
joint training for United Nations peacekeeping operations and
seaborne rescue operations.


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Japan and China will hold a foreign ministerial meeting early next
month, and Prime Minister Yasuo Fukuda is expected to visit China
late this year. Japan and China will then go for an agreement on the
pending issue of East China Sea gas fields. The two countries, both
protecting their own sovereignties and territories, are now facing
rough going in expanding defense exchanges. Their talks will lead to
creating an atmosphere for an agreement on the issue.

(8)Working population estimated to fall by 10 million in 2030,
necessitating reform of working system

NIHON KEIZAI (Page 3) (Excerpts)
November 29, 2007

According to an estimate made by the Ministry of Health, Labor and
Welfare (MHLW) on Nov. 28, Japan's working population (number of the
employed and job seekers over the age of 15) will drop by 10.7
million from the current 66.57 million in 2030. Japan's dwindling
birthrate and aging population are most pronounced in the world. It
will enter an aging society with fewer children at a speed that no
countries have ever experienced. Japan's workforce will also decline
at an unprecedented pace. Such being the outlook, it would be
difficult to maintain the current form of the society with the
present working system.

Japan's working system has an aspect of hampering even those who are
capable of working from doing so. For instance, if employee pension
scheme members continue to work after 60 years of age, their pension
benefits would be slashed, according to their wages. Atsushi Seike,
professor at Keio University, pointed out, "Such a system dampens
people's desire to work. It is necessary to reform it immediately."

(10 PERCENT of elderly people come to 3 million)

At present, the number of elderly people aged 65 or over is
approximately 27 million. The number is estimated to continue to
rise in the future as well.

Some companies have started employing elderly people. Aeon, a
leading retailer, increased the mandatory retirement age to 65 in
February. Toyota Motors allows its employees aged 60 years or older
who have reached the mandatory retirement age to continue to work
four hours a day at their request and depending on the details of
their work.

The number of workers aged 65 or older at present stands at
approximately 5 million. If 10 PERCENT of the 27 million get jobs,
it would mean that nearly 3 million workers would make up for the
labor shortage.

(Potential female labor force stands at 3.5 million)

Japan has yet to fully use female as labor force. Japan is an
unusual country where 70 PERCENT of women quit jobs when they give
birth. The measure that should be taken first is to keep female
workers by proving flexible working patterns, such as a
telecommuting system and an improved short working-time system.
Leading companies have started improve systems. For instance,
long-term employees at Teijin have increased from 23 PERCENT to 47
PERCENT over the past decade or so.

The number of women who gave up their jobs due to housework and

TOKYO 00005376 012 OF 012


child-rearing stands at 3.5 million. If these women can work in a
flexible manner, potential female workers would come back to
workplaces.

(NEET numbers 600,000)

The population of those at their working prime in the 18-34 age
bracket stands at approximately 28 million, but the number is
estimated to dwindle to approximately 19 million in 2030, down by
more than 30 PERCENT . The number of NEET, who are not in education,
employment or training, stands at 620,000. So-called freeters
(job-hopping part-time workers), who do not have permanent jobs,
stand at 1.8 million. It is time to boost the measures backing the
government's second-chance job plan so that freeters can become
permanent workers so that they do not have to worry about losing
jobs.

(Refined state-of-the-art technologies are worth a hundred men)

Robots are expected as labor force that can replace humans. Japan is
already the top industrial robot country in the world. Approximately
370,000 units of industrial robots are in operation in Japan,
largely topping the numbers operating in North America and Germany.

Many companies see business opportunities in nursing-care or
medical-service robots. Secom has put on sale robots that help with
eating. Robot suits that help humans move their hands and feet will
also be put on the market shortly. According to an estimate made by
the Japan Robot Association, the shipment value of robots in Japan
in 2007 will reset a new record high with 760 billion yen. This is
an area where Japan's state-of-the-art technologies are made most
of.

(Creation of systems for foreigners)

Demand for workers is expected to rise in the nursing-care area as
the population ages. The government is pressing ahead with a plan to
accept Philippine nurses and care- givers. However, the Philippine
Congress has yet to approve the plan. There is no telling when it
will approve the plan, according to the MHLW.

The Organization for Economic Cooperation and Development (OECD) has
estimated that in order for Japan to maintain the current level of
population of productive age, it is necessary for it to accept
500,000 foreign workers a year. However, only about 20,000
foreigners were in fact approved to work in Japan in 2005 on a
long-term basis. Unless Japan consolidates a system enabling
competent foreigners to work, it would fall behind in global
competition to secure human resources.

SCHIEFFER

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