Cablegate: Daily Summary of Japanese Press 01/17/08

DE RUEHKO #0134/01 0170825
P 170825Z JAN 08





E.O. 12958: N/A



(1) Poll on Fukuda cabinet, political parties, new antiterror law

(2) Poll on Fukuda cabinet, political parties, MSDF refueling
mission (Sankei)

(3) DPJ enjoys high support rating despite its blunders; People pin
hopes on the party being better than others (Tokyo Shimbun)

(4) Overheated row over gasoline tax between LDP and DPJ (Asahi)

(5) No criticism against Ozawa raised in DPJ in order to win Lower
House race; Ozawa instead strengthens self-confidence (Sankei)

(6) Sapporo to call for self-restraint on events at three parks
before and after Lake Toya Summit, as security measure against
violence or terrorist acts (Mainichi)

(7) Australia's new government intensifies antiwhaling position,
urges Japan to stop killing whales (Tokyo Shimbun)

(8) Kisha no Me (Reporter's eye) column by Nakae Ueno: Okinawa faces
contradictions between U.S. bases and economic packages (Mainichi)

(9) Editorial: Bring about growth with M&As that can turn change
into opportunity (Nikkei)


(1) Poll on Fukuda cabinet, political parties, new antiterror law

YOMIURI (Page 2) (Full)
January 16, 2008

Questions & Answers
(Figures shown in percentage. Parentheses denote the results of a
survey taken in December last year.)

Q: Do you support the Fukuda cabinet?

Yes 45.6 (52.5)
No 41.6 (35.3)
Other answers (O/A) 3.5 (3.3)
No answer (N/A) 9.3 (9.0)

Q: Which political party do you support now? Pick only one.

Liberal Democratic Party (LDP) 35.5 (35.3)
Democratic Party of Japan (DPJ or Minshuto) 16.9 (17.1)
New Komeito (NK) 2.2 (2.5)
Japanese Communist Party (JCP) 2.3 (2.1)
Social Democratic Party (SDP or Shaminto) 1.0 (0.8)
People's New Party (PNP or Kokumin Shinto) 0.2 (0.3)
New Party Nippon (NPN or Shinto Nippon) --- (0.1)
Other political parties --- (0.2)
None 40.7 (40.8)
N/A 1.3 (0.7)

Q: The Diet has now enacted a new antiterror law to resume the
Maritime Self-Defense Force's refueling activities in the Indian

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Ocean for naval vessels belonging to multinational forces engaging
in antiterror operations in Afghanistan. Do you appreciate this

Appreciate very much 16.1
Appreciate somewhat 31.3
Don't appreciate very much 26.1
Don't appreciate at all 17.8
N/A 8.8

Q: The new antiterror law was enacted in a second vote of the House
of Representatives after it was voted down in the House of
Councillors. Do you think it was appropriate?

Yes 41.4
No 45.7
N/A 12.9

Q: On the issue of pension record-keeping flaws, the government
promised to check about 50 million unaccounted-for pension records
for benefit payments to all. Late last year, however, the government
admitted that it would be difficult to identify all. Do you think
this is a breach of public pledge?

Yes 54.8
No 40.5
N/A 4.7

Q: Prime Minister Fukuda announced that the government would provide
across-the-board relief to all hepatitis C victims of
government-approved blood products over their class action lawsuits
against the government, and the Diet has now enacted a law for that
purpose. Do you appreciate Prime Minister Fukuda for his response to
this issue on the whole?

Appreciate very much 38.0
Appreciate somewhat 43.5
Don't appreciate very much 11.8
Don't appreciate at all 4.0
N/A 2.7

Q: Currently, gasoline prices include a tax for roads in conformity
with a law. This law is due to expire at the end of March this year.
If the tax is not added thereafter, gasoline prices will go down.
However, the government and local public entities will fall into a
substantial shortfall of revenues for their budgets. Do you think it
would be better to continue this tax by extending the law, or do you
otherwise think it would be better to discontinue the tax?

Continue 29.9
Discontinue 61.1
N/A 9.0

Q: Prime Minister Fukuda visited China late last year and met with
Chinese leaders, including President Hu Jintao. Do you appreciate
his China visit this time on the whole?

Appreciate very much 23.4
Appreciate somewhat 41.2
Don't appreciate very much 20.2
Don't appreciate at all 7.1
N/A 8.1

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Q: Do you appreciate the DPJ's response in the current Diet session
on the whole?

Appreciate very much 5.7
Appreciate somewhat 28.2
Don't appreciate very much 41.5
Don't appreciate at all 17.2
N/A 7.3

Q: Do you think the DPJ is competent to take office?

Yes 29.2
No 59.8
N/A 11.0

Q: When would you like the House of Representatives to be dissolved
for a general election? Pick only one from among those listed

As early as possible 19.6
In the spring of this year 9.3
After this July's G-8 summit 22.2
Within this year 18.0
Sometime during the current term up until September 2009 22.2
N/A 8.7

Q: If an election were to be held now for the House of
Representatives, which political party would you like to vote for in
your proportional representation bloc? Pick only one from among
those listed below.

LDP 34.7
DPJ 22.2
NK 2.7
JCP 3.0
SDP 1.5
PNP 0.5
NPN ---
Other political parties ---
Undecided 34.4
N/A 0.9

Polling methodology
Date of survey: Jan. 12-13.
Subjects of survey: 3,000 persons chosen from among all eligible
voters throughout the country (at 250 locations on a stratified
two-stage random sampling basis).
Method of implementation: Door-to-door visits for face-to-face
Number of valid respondents: 1,780 persons (59.3 PERCENT ).

(2) Poll on Fukuda cabinet, political parties, MSDF refueling

SANKEI (Page 5) (Full)
January 16, 2008

Questions & Answers
(Figures shown in percentage, rounded off.)

Q: Do you support the Fukuda cabinet?

TOKYO 00000134 004 OF 017

Yes 36.6 (41.1)
No 47.3 (40.3)
Don't know (D/K) + Can't say which (CSW) 16.1 (18.6)

Q: Which political party do you support?

Liberal Democratic Party (LDP) 32.1 (32.2)
Democratic Party of Japan (DPJ or Minshuto) 25.0 (26.5)
New Komeito (NK) 4.0 (3.6)
Japanese Communist Party (JCP) 3.5 (3.1)
Social Democratic Party (SDP or Shaminto) 2.1 (2.6)
People's New Party (PNP or Kokumin Shinto) 0.6 (0.7)
New Party Nippon (NPN or Shinto Nippon) 0.3 (0.1)
Other answers (O/A) 0.9 (1.3)
None 30.6 (28.2)
D/K + Can't say (C/S) 0.9 (1.7)

Q: Do you appreciate Prime Minister Fukuda and his government on the
following points?

His personal character
Yes 58.0 (62.3)
No 33.4 (22.6)
D/K+CSW 8.6 (15.1)

His leadership
Yes 24.4 (28.5)
No 62.7 (43.1)
D/K+CSW 12.9 (28.4)

Foreign policy
Yes 30.9
No 48.8
D/K+CSW 20.3

Economic policy
Yes 17.0
No 64.7
D/K+CSW 18.3

North Korea policy
Yes 14.0 (15.5)
No 70.2 (60.3)
D/K+CSW 15.8 (24.2)

Response to Defense Ministry scandals
Yes 17.5 (13.3)
No 73.2 (66.9)
D/K+CSW 9.3 (19.8)

Response to pension issues
Yes 28.0 (31.2)
No 64.0 (53.9)
D/K+CSW 8.0 (14.9)

Response to hepatitis C infections
Yes 74.1 (43.5)
No 20.1 (37.5)
D/K+CSW 5.8 (19.0)

Q: What do you think about those listed below in connection with the

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newly enacted antiterrorism law intended to resume the Maritime
Self-Defense Force's refueling mission for multinational forces in
the Indian Ocean?

The new antiterror law was enacted
Good 45.1
Questionable 43.8
D/K+CSW 11.1

The Diet took time to deliberate, and the MSDF pulled out
Good 52.5
Questionable 35.2
D/K+CSW 12.3

The opposition-dominated upper chamber took time to deliberate
Good 48.8
Questionable 42.0
D/K+CSW 9.2

The ruling parties took a second vote in the lower chamber with a
majority of two-thirds
Good 39.4
Questionable 48.4
D/K+CSW 12.2

DPJ President Ozawa abstained from voting in the lower chamber's
last plenary sitting
Good 12.1
Questionable 77.0
D/K+CSW 10.9

Q: The ruling coalition holds a majority of the seats in the House
of Representatives, and the opposition bench dominates the House of
Councillors. What do you think about this lopsidedness in the Diet?
Pick only one from among those listed below.

That's good because there's political tension 13.8 (13.9)
The ruling and opposition parties should compromise 40.1 (41.3)
The House of Representatives should be dissolved at an early date
for a general election 43.7 (41.3)
DK+C/S 2.4 (3.5)

Q: Do you support a "grand coalition" of the LDP and the DPJ?

Yes 33.7
No 54.6
D/K+CSW 11.7

Q: The Fukuda cabinet has taken over almost all of the former Abe
cabinet's ministers. Do you think the Fukuda cabinet should be
shuffled substantially at an early date?

Yes 44.0 (41.1)
No 51.1 (49.2)
D/K+CSW 4.9 (9.7)

Q: When would you like the House of Representatives to hold its next

During the first half of this year 23.6 (35.8)
After this July's G-8 summit in Japan and during the latter half of

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this year 45.9 (29.9)
Upon the current term's expiry or early next year 29.0 (19.9)
D/K+C/S 1.5 (4.8)

Q: Which political party's candidate would you like to vote for in
the next election for the House of Representatives?

LDP 34.4
DPJ 33.9
NK 4.1
JCP 3.9
SDP 2.6
PNP 0.5
NPN 0.3
O/A 9.2
D/K+C/S 11.1

Q: What form of government would you like to see after the next
election for the House of Representatives?

LDP-led coalition government 28.5 (29.7)
DPJ-led coalition government 32.5 (32.1)
LDP-DPJ grand coalition 34.4 (29.3)
D/K+C/S 4.6 (8.9)

Q: How long do you think the Fukuda government will continue?

Until around the next election for the House of Representatives 46.7
Until the fall of next year 34.0 (21.9)
Continue until after the fall of next year 15.8 (10.3)
D/K+C/S 3.5 (6.9)

Q: A gasoline tax law is due to expire this spring. What do you
think about this?

Extend the gasoline tax for local traffic networks 28.6
Abolish the gasoline tax in view of rising oil prices and other
circumstances 66.2
D/K+C/S 5.2

(Note) Figures in parentheses denote the results of the last survey
conducted Nov. 10-11 last year.

Polling methodology: The survey was conducted Jan. 13-14 by the
Sankei Shimbun and Fuji News Network (FNN) over the telephone on a
computer-aided random digit dialing (RDD) basis. For the survey, a
total of 1,000 persons were sampled from among males and females,
aged 20 and over, across the nation.

(3) DPJ enjoys high support rating despite its blunders; People pin
hopes on the party being better than others

TOKYO SHIMBUN (Page 2) (Abridged)
January 17, 2008

The major opposition Democratic Party of Japan (DPJ or Minshuto)
held a convention yesterday in which it adopted an action program
for 2008 specifying that the party will aim at achieving an Ichiro
Ozawa administration. In various opinion polls, the party's support
rates have been high since the House of Councillors election last

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July. If a House of Representative election is held this year, the
10th anniversary of the establishment of the DPJ, the party might
win and assume power despite its blunders. Why?

The DPJ's support rates in the past often fluctuated a around the 10
PERCENT level. Rates occasionally topped the 20 PERCENT line
following the party's leaps in national elections, but they always
retuned to the usual low level in just several months.

The party's support rate marked a record 37.6 PERCENT immediately
after last year's Upper House election. In a poll in mid-January,
nearly six months after the previous election, the party scored 27.0
PERCENT , only 5 points behind the Liberal Democratic Party (LDP).
Given a series of blunders by the DPJ during that period, including
Ozawa's resignation fiasco, this phenomenon seems mysterious.

One plausible explanation is that people may now think the DPJ is
better than the LDP that has been taking the wrong steps.

Despite the ruling coalition's crushing defeat in the Upper House
election, former Prime Minister Shinzo Abe announced that he would
stay in office, but he soon resigned from the post at the beginning
of the previous extraordinary Diet session. Chief Cabinet Secretary
Nobutaka Machimura and others offered improper explanations about
pension-record mismanagement, drawing heavy fire. A senior DPJ Upper
House member noted: "People are increasingly distrustful of the
government because of the pension fiasco. They think that management
by the current administration is so sloppy that they are willing to
accept (an administration) by any other party."

High approval ratings seem to be connected to some extent with the
increased presence of the DPJ, which has become the largest party in
the Upper House. Being a relatively young party, the DPJ was
occasionally mistaken for the former Democratic Socialist Party in
rural areas. The Upper House election has transformed the DPJ into a
party holding the key to the enactment of bills.

It is certain that the DPJ's popularity comes from growing public
interest in politics due to the divided Diet where the ruling bloc
no longer holds absolute numerical superiority.

The public also has a keen sense of urgency because of growing
socioeconomic disparities and other factors.

Today's data are far more serious than those when the Hosokawa
non-LDP coalition cabinet was established in August 1993. At
present, one out of three is a nonpermanent employee and is not
paying into the National Pension Plan. National and local debts have
also ballooned.

Feeling anxious about the future, people seem to be willing to let
the DPJ run the government for a change. "Voters have greater
expectations for regime change than us," a mid-level DPJ member

The DPJ, however, has passed up opportunities to take over the reins
of government over the last several years. At the party convention,
Ozawa declared that he will stake his political life on the next
Lower House election.

Interview with Masaki Taniguchi, associate professor at the
University of Tokyo

TOKYO 00000134 008 OF 017

The Tokyo Shimbun asked Masaki Taniguchi, a University of Tokyo
associate professor of modern Japanese politics, why the DPJ has
been able to enjoy high support rates since the Upper House election
last summer.

For one thing, the LDP has been sloppy. The party has yet to come up
with a plan to build a solid socioeconomic system since suffering a
crushing defeat in the Upper House election last summer. Although
the Fukuda cabinet seemingly wants to win greater public support by
implementing specific policies, there have been noticeable delays
and failures. Public opinion is that the DPJ is better than the

The DPJ's plan to provide the child allowance of 26,000 yen per
month is a policy of interest to urban areas with dropping
birthrates. A plan to implement an income-subsidy system for farmers
is appealing to local districts, and another plan to reform the
pension system is a policy of interest to a wide range of people
from the young to elderly. The DPJ has been more skillful to play up
its livelihood-oriented policies than the LDP. It seems easy to find
reasons to support the DPJ.

The DPJ's shift toward bread-and-butter policies under the
leadership of Ichiro Ozawa seems to have struck a chord with general

But in terms of foreign and security policies, the gap between DPJ
supporters and its lawmakers is bigger than that of other parties.
The party has put some policies on the back burner because views in
the party are diverse. When that part comes under close scrutiny,
some might initiate a "political realignment game" in the capitol
district of Nagatacho irrespective of public expectations.

(4) Overheated row over gasoline tax between LDP and DPJ

ASAHI (Page 2) (Slightly abridged)
January 17, 2007

The Democratic Party of Japan (DPJ) held its annual convention
yesterday, in which President Ozawa defined the upcoming regular
Diet session as a session that will focus on the challenge of
lowering gasoline prices. He stressed his resolve to block the
government's plan to maintain the provisionally high tax rate on
gasoline. If related bills are not passed by the time of its
expiration in late March, gasoline prices will be lowered. Given
that the gasoline issue is directly linked to family finances, the
government and the ruling camp, out of a sense of alarm, emphasize
that (if gasoline prices come down,) local governments will suffer
revenue shortages and their finances will eventually be thrown into
confusion. Industrial circles concerned are also worried about the
overheated showdown over the gasoline issue.

"Now that the rises in gasoline and light oil prices are hitting the
people's lives, we must step up efforts in the Diet to scrap the
current provisional tax rate on gasoline, demonstrating our efforts
to the people. We must lower the current gasoline prices by 25 yen
(per liter)."

In the party convention in Yokohama, Ozawa positioned the regular
Diet session as the first step toward a general election and
stressed his enthusiasm to break the vested-interest structure over

TOKYO 00000134 009 OF 017

financial resources for road construction. Ozawa expects it will be
possible to obtain public understanding because gasoline rates are
part of living expenses. The Social Democratic Party (SDP) also
decided to call for abolishing the provisional gasoline tax rate.
With the Japanese Communist Party also joining them, the opposition
bloc now locks arms against the government's plan.

Under the DPJ's plot, the party would prolong deliberations in the
House of Representatives on a bill amending the tax special measures
law, which includes a measure to extend the provisional tax rate
beyond its expiration, up until early March and have the bill
expired in the House of Councillors. If the ruling camp resorts to
its two-thirds overriding vote in the Lower House, the opposition
camp will adopt a censure motion against the prime minister in the
Upper House, calling on the government to dissolve the Lower house
while boycotting deliberations "with an indomitable resolve," as
said by Diet Affairs Committee Chairman Kenji Yamaoka.

In a meeting of the national LDP secretaries generals held at party
headquarters yesterday, the secretary general of the Wakayama
Prefectural Chapter commented: "We want the government to make more
efforts to explain that the extension of the provisional gasoline
tax rate will be better for local people's lives. Our party is
behind the DPJ over this issue."

Reflecting such voices, the LDP leadership has drawn up a rollback
strategy. The leadership distributed to lawmakers materials
detailing that the abolishment of the provisional tax rate will
inevitably deal a blow to local finances and people's lives, with a
list of the expected amount of financial shortages to be accrued for
each local government. Deputy Secretary General Hiroyuki Hosoda
said: "Is it possible to win DPJ members in prefectural chapters
over to our side? We expect you to make efforts to persuade local
opposition members to be against the plan of lowering gasoline

LDP prefectural assemblies' members will hold a rally on Jan. 23 to
call for maintaining the provisional tax rate. About 20
DPJ-affiliated prefectural assembly members and DPJ lawmakers,
including House of Councillors member Yasuhiro, are also expected to
participate in the rally.

Concern is also growing in the DPJ. In the party convention
yesterday, a representative from the Aomori Prefectural Chapter
complained: "Local government heads are taking lead in preparing to
attack the DPJ, out of the dissatisfaction that it will be
impossible to construct roads and to use snowplows. I hope the party
leadership will give a full explanation on its policy."

Both ruling and opposition camps are concerned about public opinion.
In a speech in front of JR Sakuragi-cho Station in Yokohama City
after the party convention, DPJ Deputy President Naoto Kan
emphasized: "Public power is indispensable. I want you to stage
citizens' campaign to prevent the ruling bloc from using an override
vote in the Lower House.

(5) No criticism against Ozawa raised in DPJ in order to win Lower
House race; Ozawa instead strengthens self-confidence

SANKEI (Page 5) (Full)
January 17, 2008

TOKYO 00000134 010 OF 017

The main opposition Democratic Party of Japan (DPJ or Minshuto)
stressed in its annual convention yesterday a policy of forcing
Prime Minister Yasuo Fukuda to dissolve the House of Representatives
as early as possible. Advocating its determination to scrap the
provisional gasoline tax, the DPJ is expected to turn up the heat on
the government of Prime Minister Yasuo Fukuda with such issues as
the government's mishandling of pension premium payment records.
Diet Affairs Committee Chairman Kenji Yamaoka stated in a street
corner speech that the DPJ would present a censure motion against
the Prime Minister if the ruling coalition takes a lower chamber
override vote on annual revenue-related bills to maintain the
provisional tax rates. In the annual convention, however, no
criticism was raised against President Ichiro Ozawa's dogmatic acts.
This appears to be the weakness of the DPJ, which relies on Ozawa's
political power.

When asked in a press conference after the convention about
criticism against his conduct of having left the plenary session on
Jan. 11 of the Lower House, Ozawa responded in a strong tone: "I
promised from before to go to Osaka to support the gubernatorial
campaign. As party head, I make my own priorities about my own
duties." He rebutted with his argument mixed up the official duties
of cabinet ministers and party duties: "The prime minister and state
ministers do not attend all plenary sessions, do they? Why do you
criticize me but not them?"

In the DPJ there was a view critical about Ozawa's abstention from
voting. Some DPJ members were perplexed at his act. Concerned about
more criticism of Ozawa coming up, Secretary General Yukio Hatoyama
and other senior party members apologized on behalf of Ozawa. In the
press briefing, Ozawa bluntly said, "I don't know what the secretary
general talked about."

It seems that the fact that there was no view criticizing Ozawa in
the convention is one of the reasons Ozawa has bolstered his

A veteran lawmaker explained: "In a bid to win the Lower House
election, the DPJ has to rely on Ozawa's political power. It is not
time to criticize him." The said lawmaker made this comment: "The
political dynamics that is the same as the one in the internal
uproar last November over Ozawa's on again off again resignation is
now operating."

There were DPJ members who expressed dissatisfaction to reporters.
The party executives intend to conduct soon an opinion poll in all
the Lower House single-seat districts. Election Campaign Committee
Hirotaka Akamatsu said: "(Looking at the results of the survey) we
may change candidates." This appears to become one of the reasons
for preventing DPJ members from criticizing Ozawa.

The DPJ considers March the best chance to force the Fukuda
government to dissolve the Lower House to call a snap general
election because the annual revenue-related bills on the provisional
tax rates, including the gasoline tax, are set to expire at the end
of March.

The government and ruling parties initially pledged to complete the
work of matching pension accounts that remain unidentified by the
end of March as well. Therefore, the DPJ intends to force Fukuda
dissolve the Lower House around that time.

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Yesterday after the annual convention, a group of junior and
mid-level lawmakers calling for reducing the gasoline prices, which
was formed on Jan. 15, gave street corner speeches in front of JR
Sakuragicho Station in Yokohama.

Among regional organizations of the DPJ and local assembly members,
there still remains a view cautious about abolishing the provisional
tax rates as they are concerned that road projects will be delayed.

Another issue remains unsolved is to form a coalition of opposition
parties. The opposition camp failed to reach a consensus over how
their response to the new antiterrorism special measures bill in the
latest extraordinary Diet session. If a similar thing happens, "We
will be unable to force the Prime Minister to dissolve the Lower
House for a general election in March; as a result, we may have to
act on the defensive," said a senior member. The DPJ is in financial
difficulty, with Financial Committee Chair Taisuke Sato saying,
"Although the leadership says funds should be mainly allocated to
the election campaign, our party has a shortage of money. We will
collect the deeds of the houses of senior party members to get
loans." There are a number of hurdles for the DPJ to overcome before
taking over power.

(6) Sapporo to call for self-restraint on events at three parks
before and after Lake Toya Summit, as security measure against
violence or terrorist acts

MAINICHI online (Full)
January 12, 2008

The Sapporo municipal government announced on Jan. 11 that if
applications are filed for events planned at Odori, Nakajima, or
Maruyama parks in Chuo Ward during the July 1-11 period, before and
after the Lake Toya Summit, the government will ask their sponsors
to cancel the events themselves or to change the places or times.
This measure stems from the fear that events in the central part of
the city may lead to violence or terrorist acts. The municipal
government explains that this is not a regulation but a request.
However, non-government organizations (NGOs) and civic groups,
taking the measure as a move to restrict gatherings and speech,
asked the city not to restrict the use of "parks open to the

An official of the city's administrative division said: "This is a
measure giving top priority to the safety of the citizens. Ordinary
gatherings will not be subject to the measure." Sapporo has in mind
the Heiligendamm Summit, at which a large-scale demonstration was
staged in the area and many people were injured or arrested in
clashes between police and demonstrators.

The city explains that if an application is filed after the issuance
of a request and if it is judged the planned event would not bother
other people, based on the city ordinance on parks, the city would
give permission. Even so, there are no definite standards. For
gatherings or demonstrations in the three parks, permission from the
municipal government is needed. Given this, NGOs are concerned that
the city's move might become a regulatory measure in effect.
Representative Koji Akiyama of the G-8 Summit Civic Forum Hokkaido,
which has already applied for permission, complained: "It is
excessive to restrict the use of the parks that should be opened to
the public."

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Free PMF concert canceled

The municipal government has decided to cancel the annual Odori Park
concert, a free concert as part of the international education music
festival scheduled for July 6. Regarding a flower festival, the
Sapporo summer festival, the creation of a flower garden, and a flea
market to be held at Odori Park, as well, coordination is underway
to delay the dates.

(7) Australia's new government intensifies antiwhaling position,
urges Japan to stop killing whales

TOKYO SHIMBUN (Page 6) (Full)
January 16, 2008

Michio Yoshieda, Manila

The Australian Labor Party-led government, which was established in
last December, is bolstering its antiwhaling position by mobilizing
patrol boats to watch Japanese research whaling vessels. When the
new government was formed, it committed itself to implementing
hard-line policies. Perhaps because of this stance, it has behaved
in a way quite different from its predecessor government. Yesterday,
antiwhaling activists including one Australian from an environmental
protection organization created a commotion by jumping aboard a
Japanese research whaling vessel on the high seas.

"The Australian government will formally urge Japan to stop killing
whales." Both Foreign Minister Smith and Environment Minister
Garrett of the Rudd government made this remark last December, when
they described Japan's research whaling as a meaningless and cruel
act. The two ministers declared they would put all their efforts
into preventing whaling.

In Australia, whales are considered a symbol of environmental
protection, so opposition against whaling is deep-seated among the
people. The former Howard administration, mainly consisting of
members of the Liberal Party, was also opposed to whaling, but the
Labor Party in its election campaign criticized the Howard
government as being lenient on whaling and declared it would be
ready to send naval vessels to track the Japanese whaling fleet. The
Labor Party also announced it would conduct monitoring when a new
government was launched.

Monitoring includes watching research whaling by patrol boats and
air planes, reinforcing the coalition of antiwhaling countries at
the International Whaling Commission (IWC), and making protests
against whaling. Furthermore, the Labor Party reportedly has a plan
to send a special envoy for protection of whales to Japan in order
to press it to stop whaling.

Monitoring is a visible, concrete action, so the Labor Party has
drawn a lot of responses. The Customs' patrol boat "Oceanic Viking"
and airplanes are tracing the Japanese whaling fleet navigating in
the Antarctic Ocean. (The Labor Party) also says it will collect
"evidence," such as photos, envisioning the possibility of taking
the case to an international court. It is working for that end, but
the government has been silent on the details of the Labor Party's
activity. When asked about relations with Japan, Foreign Minister
Smith reiterated that "because relations with Japan are close, they
will not be affected." But some of the opposition parties are
voicing concern about possible adverse effects.

TOKYO 00000134 013 OF 017

Local media and environmental protection groups are inciting the
government. Regarding monitoring, for instance, they criticized the
Labor Party as being slow to implement it. Three weeks after the
announcement of monitoring, the party started such action, but some
criticized monitoring as lacking substance or criticized the party
as apparently being hesitant and not serious about monitoring
Japanese ships.

Meanwhile, on Jan. 15, the Federal Court of Australia issued an
order for research whaling in the protection zone designated by
Australia to be stopped. This order has no binding force in terms of
international law, but the anti-whaling campaign in that country is
likely to further heat up.

(8) Kisha no Me (Reporter's eye) column by Nakae Ueno: Okinawa faces
contradictions between U.S. bases and economic packages

MAINICHI (Page 6) (Abridged)
January 17, 2008

Nakae Ueno

I visited Okinawa in last December to collect news materials for a
serial titled "The Age of 'Emperor Moriya." This serial was to delve
into the areas of defense policy in which former Administrative Vice
Defense Minister Takemasa Moriya was involved. When I was collecting
news information in the prefecture, I realized that contradictions
existed between the presence of U.S. military facilities and
economic packages offered by the central government.

"The problem Okinawa is facing is also a 10-year-old pending issue
for me. No person other than me can explain why 10 years have been
lost," Moriya told me in the fall of 2005, when I visited him before
being transferred to the Mainichi Shimbun's West Japan Head Office.
In response, I said, "I'm going to gather news materials in

"The lost 10 years" point to the problem of the return of the U.S.
Marine Corps Futenma Air Station (in Ginowan City, Okinawa) to
Okinawa, which has become a political challenge for both Japan and
the United States following the occurrence of a rape of an
elementary school girl by U.S. soldiers. Agreement on the full
reversion of the Futenma base was reached in 1996 between Prime
Minister Ryutaro Hashimoto and U.S. Ambassador to Japan Mondale.
Local protests greeted the plan to relocate Futenma to an offshore

Later, Japan and the U.S. struck a deal on a plan to relocate the
Futenma base to the coastal area of Camp Schwab. But the way Japan's
central government and the U.S. government negotiated that plan,
without consulting Okinawa, resulted in strong objections in
Okinawa. The Defense Agency (now Ministry of Defense) continued
negotiations with Nago City and later added changes to the initial
plan and decided to construct two airstrips that would be V-shaped.
In May 2006, Japan and the U.S. again reached an accord (on the
V-shaped airstrips plan). But Okinawa remains unconvinced even now
two years after the accord was reached. It continues to call on the
central government to alter the plan. Strains continue between
Okinawa and the central government.

Why has there been a lost of a decade? I will answer the question

TOKYO 00000134 014 OF 017

for Moriya. The reason is because the relocation of the Futenma base
and a package of economic development measures for the northern part
of Okinawa have been made a set. I felt the remarks made by Moriya
just before he was arrested were on target: "The governor is the
problem. Isn't there anyone among the heads of municipalities in the
northern region of Okinawa who is willing to play the role of a bad

The initial reason dates back a decade. The central government came
out with a set of economic promotion measures for 12 municipalities
in the northern part of Okinawa in order to influence a referendum
in Nago City on the construction of an offshore heliport, but the
result of the referendum was that a majority opposed the
construction. In December 1997, however, Tetsuya Higa, then mayor of
Nago City, accepted the construction plan on the condition that a
package of economic measures would be provided to the northern
region, but he then declared he would step down as mayor. After some
bumps and detours, the Okinawa governor expressed his opposition to
the economic package for the northern region. The package was being
implemented in line with a promise that the package would be worth
100 billion yen over 10 years starting in 2000.

By obtaining cooperation from those heads of municipalities in the
northern region who sought to continue the economic package, Moriya
forced Okinawa to accept the V-shaped airstrips construction plan.
He then decided to halt implementing the package, citing as the
reason that "if they continue to receive money even though there has
been no progress on the relocation plan, they are simply portraying
themselves as lacking self-reliance." Later, however, Moriya,
meeting with calls by heads of northern-region municipalities for
the continuation of the package, revived the package but in name
only. Until he stepped down as vice minister, Moriya would not allow
the budget for the package to be used.

The people of Okinawa denounced "carrot-and-stick approach" used by
the government for the set of economic measures for the northern
region. Moriya criticized the package as stemming from Okinawa's
"lack of self-reliance." But relations between the bases and such
economic measures go back to Okinawa's reversion to Japan in 1972.

Tsuneo Oshiro, professor emeritus at the University of the Ryukyus

who was involved in the Okinawa Promotion and Development Plan
(currently Okinawa Promotion Plan) the central government had
hammered out when Okinawa was reverted to Japan, made this comment:
"The package of economic measures for Okinawa from the beginning has
been linked to the U.S. bases." "For the central government, the
primary purpose of the development plan is 'how to maintain U.S.
bases in a stable manner.' This purpose was made much clearer with
the addition of promotion measures including those for the northern
region, which were taken after the elementary school girl rape
incident," Oshiro continued. The central government offers financial
resources and works out projects to be implemented. Simply in terms
of the effects, the package of pump-priming measures for the
northern region is a microcosm of the economic promotion measures
for Okinawa as a whole.

In the 2006 gubernatorial election, in which incumbent Governor
Hirokazu Nakaima was elected, there were signs that the Okinawan
people were prioritizing economic affairs and were tolerating the
presence of the bases. But the reality is that because of the
existence of bases, Okinawa has no choice but to call for economic
measures. The more Okinawa seeks such measures, the more it finds

TOKYO 00000134 015 OF 017

itself unable to separate itself from the bases. This vicious spiral
has continued since Okinawa's reversion to Japan. The spiral has
been even worse after the agreement was reached on the return to
Okinawa of the Futenma base, whose theoretical purpose was to reduce
Okinawa's base burden.

Last month, the central government decided to lift the freeze on the
implementation of the set of economic measures for the northern
region with the aim of letting Okinawa sit at the table for talks on
the Futenma relocation. But this is not a real solution. Some 75
PERCENT of U.S. military bases in Japan are concentrated in
Okinawa, forcing it to shoulder most of the burden of the Japan-US
security alliance. If the central government forces Okinawa to
continue to play that role in the future, the first matter to do is
to discuss a new set of measures that will actually help Okinawa to
become economically self-reliant. The populace in Okinawa desire
neither a burden reduction in name only nor promotion measures
financed by the central government in return for Okinawa's
acceptance of the base burden. All this raises a fundamental
question about the Japan-U.S. security arrangements.

(9) Editorial: Bring about growth with M&As that can turn change
into opportunity

NIKKEI (Page 2) (Full)
January 15, 2008

It was revealed early in the new year that JFE Holdings and IHI have
started talks to integrate their ship-building businesses. Mergers
and acquisitions (M&A) are bound to become a major focus of
corporate management this year as well. The business environment is
unclear, what with such concerns as the slowing of the U.S. economy,
the soaring of natural-resource and energy prices, and plummeting
stock prices. We would like to see business managers opt for M&As
that will turn change into opportunity for corporate growth, instead
of their being swayed by the changes going on.

Japan's global share stands at only about 3 PERCENT

An increasing number of Japanese companies now use M&As as an option
for corporate management. However, M&As in Japan are not so highly
visible. According to Thomson Financial, a financial information
service provider, the value of M&As throughout the world last year
reached approximately $4.48 trillion, resetting a record high. Japan
was involved in less than 3 PERCENT of that activity. Given the
fact that Japan accounts for about 10 PERCENT of the aggregate
market value and gross domestic product (GDP) in the world, the
figure is small.

The subprime loan issue surfaced last summer. Since then, European
and American banks have become cautious about highly risky lending
of funds for purchases of companies, deteriorating investment funds'
capital procurement capability. As such, some take the view that the
global M&A boom has passed its peak.

However, it could be taken instead that now is the chance for
Japanese companies, whose financial structure is strong and
corporate performances are good. That is because there is a better
chance of carrying out M&As with lower costs, as can be seen in the
fact that competition with investment funds over target companies
for mergers and acquisition has decreased. Teijin President Toru
Nagashima said, "Now is the best opportunity to carry out M&As,

TOKYO 00000134 016 OF 017

looking at it from the opposite perspective." Canon President
Tsuneji Uchida and Mitsubishi Corporation President Yorihiko Kojima

expressed in their New Year messages their determination to tackle
M&As in a proactive manner.

Of course, cost is not the only condition for a successful M&A. For
a successful M&A, it is essential to first clarify a mid- to
long-term business strategy and goals to tackle at the
pre-negotiation stage. M&As are prone to fail to work if an
acquiring company tries to diversify its business into areas remote
from its main line of business, without having a basic policy
regarding which business areas should be strengthened.

Looking at companies that have expanded operations through M&As,
many of them clarified the main line of business to be strengthened,
as can be seen in that Nidec Corporation focused on motors and JS
Group Corporation centered on the diversification of housing-related
businesses. Kirin Holdings last year decided to purchase Kyowa
Hakko. It also acquired a leading Australian dairy products company.
These decisions are apparently made, based on the company's key
business areas of food and health.

Acquiring companies is not the only aspect of M&As. Companies should
be positive about the idea of becoming a seller of business areas in
order to sell off unprofitable businesses for the sake of selecting
out and concentrating operations and introducing other companies'
capital, technology and management know-how. In particular, there is
large room for introducing foreign capital.

According to Recof, an M&A service provider, foreign companies
acquired a record number of 308 Japanese companies last year. Japan
in May last year lifted a ban on triangular mergers, which enable
foreign companies to buy Japanese companies using their own stocks
as merger consideration. However, there was only one successful case
last year -- the purchase of Nikko Cordial Securities by Citigroup
of the U.S.

Many companies now cross-hold stocks to fend off hostile takeover
bids. However, it would not be possible to attract capital both from
domestic and foreign investors, if they fail to show a growth
strategy to investors, giving the impression that their stance is
inward-looking. The global flow of money has drastically changed.
Investment funds, newly emerging countries, such as China, and
oil-producing countries in the Middle East have emerged as
investors. In order to attract global money, by changing the image
that Japanese companies have a closed nature, it may be worth
considering that Japan Airlines, for instance, which thinks itself
as Japan's representative carrier, procures funds from foreign

How to manage new company after M&A counts

Needless to say, it is important to produce management results after
the achievement of an M&A. In an M&A between companies in the same
line of business, there are many cases in which expected effects
were not produced, because a merger between rival companies could
give rise to friction due to differences in their corporate

In the merger carried out by Nidec Corporation, President Shigenobu
Nagamori himself spearheaded a cost reduction effort and reform of
staff-consciousness in the merged company. Japan Servo, which it

TOKYO 00000134 017 OF 017

bought from Hitachi, had been running an operating deficit for two
straight terms until the previous term. However, its operational
performance moved into the black six months after the merger.

There is no fixed method of running a merged company. Kenjiro
Unshod, the founder of Tostem, a leading construction material
company, and the former chairman of JS Group Corporation, said,
"Whether businesses acquired through an M&A will get on track will
largely depends on who will manage those businesses." Selecting such
a person is one of the key jobs of the top leader.

When the top persons of previous companies share chairmanship and
presidency, how closely they communicate will largely determine the
integrity of the new company. A gap in the management policies of
the two top persons would bring about an internal split. Top
management personnel are responsible for paving the way for
producing synergy effects, by disseminating the management policy of
the new company.


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