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Cablegate: Japanese Morning Press Highlights 01/30/08

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UNCLAS SECTION 01 OF 13 TOKYO 000236

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: JAPANESE MORNING PRESS HIGHLIGHTS 01/30/08


Index:

TODAY'S FEATURES

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

4) Prime Minister Fukuda, commenting on President Bush's State of
the Union speech, expresses hope for swift U.S. measures to help the
economy (Sankei)

"Gasoline Diet session":
5) Ruling parties submit a bridging bill to the Lower House to
prevent the gasoline tax from expiring, but the opposition camp vows
to wage all out war against it (Asahi)
6) Ruling camp starts playing hard ball in the Diet, matching the
opposition's stance, leaving no room for compromise on tax bills in
sight (Nikkei)
7) Main exchanges by the prime minister in the Lower House Budget
Committee (Yomiuri)
8) Supplementary budget clears the Lower House (Asahi)
9) DPJ head Ozawa, under fire for skipping key vote in Diet to
campaign in Osaka, dismisses connection between his absence and
candidate's loss (Sankei)

African aid:
10) LDP project team proposes a three-fold increase in ODA to Africa
(Yomiuri)
11) First Aid being readied for Africa, focusing on measures to
counter greenhouse gas emissions (Nikkei)

12) Libyan deputy foreign minister: If Japan backs "United States of
Africa", possibility that oil field rights will be opened up
(Asahi)

13) China's State Councilor Tang Jiaxian coming to Japan in late
February to pave way for state visit of President Hu (Nikkei)

14) Newly elected ROK president Lee scheduling his visit to Japan
for April (Yomiuri)

Defense affairs:
15) High oil prices creating a burden for national defense, as well
(Sankei)
16) Project team envisages activated the Self-Defense Forces in case
of an influenza epidemic (Yomiuri)
17) Prime Minister Fukuda expresses his desire to see a permanent
SDF dispatch law enacted (Yomiuri)
18) Reorganization of Defense Ministry would strengthen the internal
bureaus (Sankei)
19) Ruling parties approve three year extension of U.S.-Japan
special measures agreement on host nation support (Sankei)
20) Cabinet approves another extension of peacekeeping activities on
the Golan Heights (Sankei)

Articles:

1) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Nikkei: Sankei: Tokyo Shimbun: Akahata
Ruling parties submit to Lower House stopgap bill to keep

TOKYO 00000236 002 OF 013


provisional gas tax rates with Lower House speaker's arbitration
effort failing; Opposition determined to resist; Bill to be adopted
today

2) EDITORIALS

Asahi:
(1) McDonald's must pay overtime to store managers
(2) President Bush's State of the Union address: What to do about
the fissures his administration has left?

Mainichi:
(1) State of the Union address: President Bush should be aware of
the dangers of dogma
(2) Social security conference: If it is expected to play stopgap
role, we do not need it

Yomiuri:
(1) Extension of provisional gas tax rate unavoidable measure to
avoid chaos
(2) State of the Union address: Heavy tasks imposed on the outgoing
administration

Nikkei:
(1) President Bush undergoing economic ordeal at the end of his
term
(2) Pension talks should be held not at the Kantei but in the Diet

Sankei:
(1) Social security conference: Do not use panel as excuse for
putting off settlement of social security issues
(2) State of the Union address: Display leadership that will benefit
next generation

Tokyo Shimbun:
(1) State of the Union address: Pending issue is redressing
divisions
(2) McDonald's outlet managers: Does the company throw away
employees in managerial position after use?

Akahata:
(1) State of the Union address: President Bush's responsibility for
starting illegal war remains

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, January 29

NIKKEI (Page 2) (Full)
January 30, 2008

07:52
Arrived at the Kantei.

08:10
Attended a meeting of the Local Revitalization and Integration
Headquarters. Later attended a cabinet meeting.

09:24
Attended a Lower House Budget Committee meeting.

12:15

TOKYO 00000236 003 OF 013


Met Chief Cabinet Secretary Machimura and Deputy Chief Cabinet
Secretary Ono.

SIPDIS

12:45
Met Machimura and Ono.

12:57
Met Machimura at the Kantei.

14:15
Attended the Lower House Budget Committee meeting.

17:08
Attended an Upper House Budget Committee meeting.

17:28
Attended a national social security meeting at the Kantei.

18:06
Met Osaka governor-elect Hashimoto, with Election Committee Chairman
Koga, Osaka Prefectural Federation of Chapters Chairman Nakayama
present. Later met Libyan Vice Foreign Minister Siala.

20:02
Attended a Lower House plenary session.

20:37
Arrived at the Kantei.

20:58
Returned to his official residence.

21:15
Met Machimura.

4) Fukuda pins hopes on America's early economic stimulus package

SANKEI (Page 5) (Full)
January 30, 2008

Prime Minister Yasuo Fukuda made the following comment last night
regarding the fact that U.S. President George W. Bush expressed his
resolve to ward off recession in his State of the Union address:
"The recent global stock plunge (resulted from) the subprime loan
crisis. Any measures taken by the United States are extremely
vital." Fukuda thus indicated that he pins hopes on an early
implementation of the 150-billion-dollar (approximately 16 trillion
yen) emergency economic stimulus package announced by President
Bush. He also underlined the need for a swift response, saying: "If
(the stock plunge) drags on, it might affect not only Japan but also
the whole world."

5) Ruling camp submits stopgap bills to extend provisional
road-related tax rates

ASAHI (Top Play) (Excerpts)
January 30, 2008

The Liberal Democratic Party (LDP) and the New Komeito last night
submitted to the House of Representatives a package of
lawmaker-sponsored bills to extend the provisional gasoline and
other road-related tax rates by two months beyond their end-of-March

TOKYO 00000236 004 OF 013


expiration. Given strong opposition to the bill by the Democratic
Party of Japan (DPJ), Lower House Speaker Yohei Kono asked senior
members of the ruling and opposition parties to try to find common
ground in a bid to avoid a stalled session of the Diet. Despite
intermittent discussion between both camps, the two sides failed to
reach an agreement. As a result, the ruling parties decided to
submit the bill. The opposition bloc is poised to put up all-out
resistance by boycotting deliberations and other means. Both camps
will unavoidably plunge into total confrontation.

The stopgap bills are those amending the Special Taxation Measures
Law, the Local Tax Law, and the Provisional Tariff Measures Law. The
bills were referred to the executive committee and the fiscal and
monetary committee of the Lower House. The bills are likely to be
approved at a Lower House plenary session by a majority from the
ruling parties. Even if the opposition bloc boycotts the vote on the
bill, the ruling parties intend to enact the bills at the end of
March by an override vote in the Lower House under Article 59 of the
Constitution.

Once the bills are enacted, the current gasoline tax rate will be
maintained until the end of May. During this period, the ruling bloc
plans to enact a bill amending the Special Taxation Measures Law to
extend it for 10 years by a two-thirds lower chamber overriding
vote.

In an effort to break through the impasse, Kono met ruling and
opposition party executives, including LDP Secretary General Bunmei
Ibuki and DPJ Secretary General Yukio Hatoyama, in succession in the
Diet building yesterday. He told them: "I want you to deal with the
issue with common sense for the sake of the authority of the Diet
and to make efforts to create an environment for both sides to be
able to make compromises."

Following this, discussion was carried out at a meeting between the
Diet Affairs Committee chairmen of the ruling and opposition blocs
and other meetings intermittently. In response to the opposition
side's requests, the ruling side presented a compromise plan that
includes proposals of removing parts related to an extension of the
gasoline and other road-related tax rates from the revenue-related
bills based on legislation by Lower House members, as well as of
refraining from submitting the stopgap bills if the opposition
promises to take a vote in the House of Councillors by the end of
March.

But DPJ Diet Affairs Committee Chairman Kenji Yamaoka declined the
ruling parties' plan, arguing: "It is impossible to hold a
discussion in which a final judgment has already been made. Such a
proposal is tantamount to forfeiting our right to debate." The
opposition side decided to reject the ruling parties' compromise
plan at its meetings between the secretaries general and between the
Diet Affairs Committee chairmen.

6) Ruling camp changes to hard-line stance; Area of compromise on
tax bill still not in sight

NIKKEI (Page 2) (Excerpt)

The ruling parties yesterday changed its line away from seeking
talks with the opposition camp, and presented to the Lower House a
"bridging bill" that would extend the provisional taxes, such as the
gasoline tax. The reason is that with the confrontation between the

TOKYO 00000236 005 OF 013


two camps intensifying in the Diet, the ruling parties could see no
clear outlook (for the main legislation). On the other hand, Prime
Minister Fukuda has turned over the matter to the ruling parties and
is taking a wait-and-see approach. He is aiming at preserving his
card of calling for party-heads talks with Democratic Party of Japan
President Ichiro Ozawa.

7) Main questions and answers at Lower House Budget Committee
session

YOMIURI (Page 4) (Full)
January 30, 2008

The following is a gist of Prime Minister Yasuo Fukuda's replies at
the House of Representatives Budget Committee session on Jan. 29.

Stopgap bill

Masao Akamatsu (New Komeito): The top leaders of (ruling and
opposition parties) should discuss the matter.

Prime Minister Fukuda: In running Diet business, a variety of topics
are being discussed between the ruling and opposition camps. I pin
hopes on talks. It is extremely regrettable for political issues to
dim economic prospects. We need to make a breakthrough in the
situation.

Chinami Nishimura (DPJ): You should order the ruling camp not to
submit a lawmaker-sponsored bill.

Prime minister: I am not aware of the contents (of the legislation).
I also don't know whether or not (the ruling bloc) will submit the
bill. It will be determined through talks. In order to avoid such a
consequence, (the opposition camp) should respond to a call for
talks.

Hirofumi Ryu (DPJ): You really don't know the contents of the bill?

Prime minister: I really don't know. The ruling camp asked me to
leave the matter to them, so I am trying not to interfere in it. I
won't issue any order, because the talks concern the Diet.

Ryu: Talks were held between the ruling and opposition camps while
(the committee session) was in a recess for two hours. Did you
receive a briefing?

Prime minister: There was no contact.

Kazunori Yamanoi (DPJ): Forcibly extending the provisional tax rates
is tantamount to tax increases. The bill designed to increase 2.6
trillion yen in taxes in 10 years is not something that can be
determined in just one day without deliberations.

Prime minister: We can thoroughly discuss what to do with the
gasoline tax because there is sufficient time before the bill
(amending the Special Taxation Measures Law) is enacted. We should
discuss the matter during that period.

Yamanoi: It is not fair to decide to extend the provisional tax
rates in an instant without deliberations.

Prime minister: It is meaningless to say this or that about (a bill)

TOKYO 00000236 006 OF 013


that has not been submitted. I would like you to create an
atmosphere to conduct discussions calmly.

Yamanoi: Can you say that the bill will not be submitted today?

Prime minister: To be honest, I am not really happy to have to
answer the same question over and over. I don't know the contents,
and discussing a supposition is meaningless.

Road construction in regional areas

Ryu: Budget allocation lacks strategy.

Prime minister: There is strategy. Public works projects have been
halved over the last seven to eight years. We must give thought to
local economies as well. Local regions must be cherished. To do so,
roads must be built.

Permanent legislation governing overseas dispatch of SDF

Yuriko Koike (LDP): How are you going to address the question of a
permanent law?

Prime minister: I truly want to enact a permanent law. The question
is whether we can create conditions for discussing the matter. I
would like to advance the matter while watching the overall
situation. It is ideal to advance the matter with support from
opposition party members.

Greenhouse gas reduction

Koike: I would like to see the Lake Toya Summit use the carbon
offset model (to offset the generated greenhouse gases with carbon
dioxide reduction projects).

Prime minister: We have been considering that idea. We would like to
come up with the best means available.

8) Supplementary budget bill clears Lower House

ASAHI (Page 4) (Full)
January 30, 2008

The House of Representatives passed a supplementary budget bill for
fiscal 2007 in its plenary session yesterday by a majority from the
Liberal Democratic Party (LDP) and the New Komeito. The bill was
sent to the House of Councillors the same day. The bill includes
measures to deal with rising oil prices and to put off an increase
in the government's burden of medical costs for the elderly. Even if
the bill is rejected in the Upper House, which the opposition camp
controls, the bill will be enacted at the end of February, at the
latest, since the superiority of the Lower House is recognized for
budget-related bills under the Constitution. Bills amending the
local tax-allocation law and other laws were also approved by a
majority from the LDP, the New Komeito, the Democratic Party of
Japan (DPJ), and other parties in the Lower House.

The total amount of the budget is 895.4 billion yen. The budget
includes 171.9 billion yen to finance measures to freeze the plan of
increasing the government's burden of medical costs for the elderly
and 57 billion yen in aid for the management of transport companies
in order to maintain services to isolated islands and depopulated

TOKYO 00000236 007 OF 013


areas as measures to deal with rising oil prices. The bill amending
the local tax-allocation law is designed to allow local governments
to issue deficit-covering bonds as a special measure, given sharp
drops in their tax revenues in fiscal 2007. Both the LDP and the DPJ
agreed to specify the validity of the special measures as "for the
time being," instead of limiting it only to fiscal 2007.

9) DPJ President Ozawa rebuts: My walking out of Lower House plenary
session was not cause of defeat in Osaka gubernatorial election

SANKEI (Page 5) (Full)
January 30, 2008

Democratic Party of Japan (DPJ or Minshuto) Secretary General Yukio
Hatoyama has pointed out that DPJ President Ichiro Ozawa's skipping
the second vote at the House of Representatives plenary session on
the antiterrorism special measures bill was one of the reasons for
the DPJ-backed candidate's defeat in the Osaka gubernatorial
election. Asked by reporters yesterday about Hatoyama's comment,
Ozawa snipped: "I don't know what the secretary general really said,
but I don't think that was a cause."

Referring to the defeat in the Osaka gubernatorial race, which the
DPJ considered prelude to the next Lower House election, Ozawa
stated:

"There will be many kinds of elections until the next Lower House
election, which is our biggest goal. It is only natural to do our
best to achieve that goal. So Osaka is not so special."

In order to support the DPJ-backed candidate for the Osaka
gubernatorial election, Ozawa skipped the voting on Jan. 11 at the
lower chamber, which took a second vote on the new antiterrorism
bill to resume the Maritime Self-Defense Force's refueling mission
in the Indian Ocean.

On the night of Jan. 27, the day of the Osaka election, Hatoyama
said that Ozawa's walking out of the plenary session "was severe
criticized by the public."

10) LDP panel proposes tripling ODA for Africa

YOMIURI (Page 4) (Full)
January 30, 2008

The ruling Liberal Democratic Party's (LDP) ODA project team (headed
by Toshio Yamauchi) in the National Strategy Headquarters yesterday
formed a package of aid measures for Africa ahead of the fourth
Tokyo International Conference on African Development (TICAD) and
reported it to the joint session of the LDP's foreign
affaires-related departments. The aide measures include tripling
official development assistance (ODA) over next five years.

As priority items, the package cites yen loans for the construction
of infrastructure, such as an expressway system that will span the
African continent, and grant aid for healthcare, such as measures to
deal with AIDS, as well as educational aid, such as construction of
elementary school buildings.

11) Japan's first step to help developing countries' efforts to
tackle climate change will start with Africa


TOKYO 00000236 008 OF 013


NIKKEI (Page 5) (Excerpts)
January 30, 2008

The Japanese government's idea put forward just recently to help
developing countries address climate change will now get rolling. In
this regard, the first set of measures is being discussed in the
government to cover four African countries, including Nigeria. With
an eye on the upcoming Group of Eight summit (G8 Toyako Summit) in
July, which Japan will host and where how to deal with climate
change and how to help develop Africa are expected to be high on
agenda, the government intends to make clear its attitude of
attaching importance to the environment and Africa.

Prime Minister Yasuo Fukuda declared in a speech given at the annual
meeting of the World Economic Forum in Davos, Switzerland, that
Japan will create a "financial mechanism" for developing countries
to deal with climate change. Japan will provide some 10 billion
dollars for this financial mechanism.

Candidate countries to receive the first set of measures under this
mechanism are Nigeria, Madagascar, Senegal, and South Africa.
Details of the measures will be discussed in February. Japan has
judged it necessary to provide measures as quickly as possible,
given desertification and deforestation in Africa because of climate
change.

The measures are expected to be offered mainly in the form of grant
aid and technical cooperation. Yen loans from the Japan Bank for
International Cooperation (JBIC) and the use of trade insurance will
also be discussed. As specific measures to help African countries,
Japan is considering offering an afforestation project to Senegal,
where desertification is spreading. Toward Nigeria, which is
frequently hit by floods, Japan is considering helping it in the
area of disaster prevention planning. In addition, promotion of
electrification by actively using solar and hydraulic power is also
cited as a candidate project. After discussions on specifics about
those planned aid projects, Japan will formally announce a set of
measures toward Africa at the fourth Tokyo International Conference
on African Development (TICAD) in Yokohama in May and the G8 Toyako
Summit.

Japan will select countries that will receive aid based on the
following four criteria: (1) whether countries suffer damage from
climate change; (2) whether countries have sufficient personnel and
infrastructure, such as a Japanese embassy that can verify progress
on aid projects; (3) whether countries have good projects worth
receiving aid; and (4) whether countries have influence politically
and economically in Africa. As for South Africa, its income levels
are high and it has taken measures to deal with climate change to
some extent. So, that country may not be selected as an
aid-recipient country.

12) Libyan vice foreign minister says if Japan backs the concept of
"United States of Africa," Libya will share oil-drilling concessions
with Japan

ASAHI (Page 7) (Full)
January 30, 2008

Libyan Vice Foreign Minister Siala yesterday arrived in Japan as a
special envoy of that country's leader Qaddafi and had an interview
with the Asahi Shimbun in Tokyo. In it, Siala indicated that Libya

TOKYO 00000236 009 OF 013


will share the right to develop oil fields in the country with
Japanese firms if Japan backs the concept of creating a "United
States of Africa" advocated by Libya. Later in the day, Siala met
with Prime Minister Fukuda and handed him a personal letter from
Qaddafi, reportedly conveying this notion.

Libya has several undeveloped mining areas inland and offshore, for
which international bidding have begun. Siala said that Japanese
firms can take part in the bidding and added that "(Libya) can sign
a negotiated contract with (Japanese firms) on the already-developed
mining areas." He also noted that "Japanese firms should be directly
involved in exploring oil fields and producing crude oil," in
addition to simply buying crude oil.

Libya, backed by ample natural resources, has worked out a
180-billion-dollar (1.9 trillion yen) economic plan covering the
next four years for such projects as constructing roads and
developing ports and harbors. Siala expressed hope that Japanese
firms will join large development projects other than those for
oil.

The concept of United States of Africa is an idea to reorganize the
current African Union (AU consisting of 53 countries and regions)
into a United States of Africa with one central government. At
present, Libya seeks to establish such major cabinet posts for that
as foreign minister and defense minister. This concept is planned to
be discussed at an AU summit meeting in Addis Ababa slated for early
February.

Siala noted: "We hope Japan, which has no history of colonizing any
part of Africa in the past, will convince (other countries) about
the idea."

13) Chinese State Councilor Tang Jiaxuan to visit Japan in late
February to pave way for presidential visit

NIKKEI (Page 2) (Full)
January 30, 2008

The Japanese and Chinese governments launched yesterday coordination
with the possibility of Chinese State Councilor Tang Jiaxuan
visiting Japan in late February. As Tang is expected to attend the
presidential inauguration in South Korea, which will take place on
Feb. 25, he will likely to come to Tokyo around that time. The two
governments are also looking into the possibility of a visit to
Tokyo in March by Foreign Minister Yang Jiechi. With these visits,
efforts to pave the way for President Hu Jintao's visit to Japan
this spring will be in full gear.

Placing emphasis on Hu's planned visit to Tokyo, which will be the
first Chinese presidential visit to Japan in a decade, Beijing has
sounded out Tokyo to issue a new joint statement during the Hu
stay.

Beijing intends to characterize the new joint statement as "fourth
important document, following the Japan-China Joint Statement in
1972, the Japan-China Pace and Friendship Declaration in 1978, and
the Japan-China Joint Declaration in 1998. The purpose of Tang's
trip to Tokyo will be to explain Beijing's intention to seek such a
document.

Tang is expected to exchange views with Japanese leaders on such

TOKYO 00000236 010 OF 013


issues as North Korea's nuclear ambitions, exploration rights in the
East China Sea gas fields, and reform of the United Nations Security
Council.

Prime Minister Yasuo Fukuda said that an agreement was reached in
his meeting with Hu that the timing for Hu's visit to Japan would be
around cherry-blossom time. With an eye on the presidential visit in
April, Tokyo and Beijing has begun coordinating schedules.

14) South Korean President-elect Lee to visit Japan in April

YOMIURI (Page 2) (Full)
January 30, 2008

The governments of Japan and South Korea have launched final
coordination on a plan to carry out in mid-April a visit to Japan by
President-elect Lee Myung Bak, who will take office in February. If
realized, it will be the first time for a South Korean president to
come to Japan in about three years and four months since President
Roh Moo Hyun visited in December 2004. Prime Minister Yasuo Fukuda
is expected to attend the presidential inauguration on Feb. 25. The
protocol of mutual visits by the top Japanese and South Korean
leaders will resume. The Japanese government has called on Lee to
visit Japan as early as possible after he takes office.

According to a source familiar with Japan-South Korea relations, the
South Korean side sounded out a plan for Lee to visit Tokyo on the
way back home from the United States where he is expected to visit
after the April 9 general elections in South Korea. In his telephone
talks with Fukuda in late last December, Lee said: "I want to meet
often with Prime Minister Fukuda to build a new future." The two
leaders agreed in their telephone talks to resume the mutual summit
visits.

Fukuda is expected to hold the first summit with Lee when he visits
Seoul to attend the presidential inauguration. He plans to discuss
with Lee such issues as South Korean trade deficit with Japan, and
negotiations on a free trade agreement, which have been suspended
since November 2004.

15) High crude oil prices affecting national defense? Additional
fuel expenses earmarked in supplementary budget bill

SANKEI (Page 2) (Full)
January 30, 2008

Soaring crude oil prices and the present lopsided Diet, in which the
opposition camp controls the Upper House and the ruling bloc holds a
majority in the Lower House, could affect national defense and
security. That is because the fiscal 2007 supplementary budget bill
includes fuel expenses for patrol vessels of the Self-Defense Forces
(SDF) and the Japan Coast Guard (JCG). Deliberations on the second
budget bill could be stalled, depending on the Diet situation. The
Defense Ministry is trying to save fuel consumption by conducting
drills near SDF bases. However, in order to maintain the level of
performance of SDF troops, it is not possible to cut the number of
drills, as a senior SDF officer said. As such, they are closely
watching developments in Diet deliberations.

Expenditures in the fiscal 2007 supplementary budget bill total
2.4952 trillion yen, of which 57 billion yen has been earmarked as
appropriations to cover the rise in crude oil prices. Though the

TOKYO 00000236 011 OF 013


specifics of the additional appropriations are mainly measures for
the people, such as a reduction in expressway tolls for trucking
companies and small and medium-sized businesses, 12.1 billion yen
for fuel used by the SDF and the JCG is also included.

According to the Defense Ministry, fuel expenses have surged
approximately 15 PERCENT , compared with the preceding year.
Although the ministry is saving fuel by conducting drills in oceanic
and air areas near bases, the forces are apparently worried, with
one source saying, "We cannot conduct drills at the same sites
forever. Least of all, we cannot possibly order vessels and
aircraft not to use fuel when they detect North Korea's missiles or
suspicious ships." The same source said that the activities of
patrol vessels and aircraft could be extensively restricted without
additional fuel expenses in the supplementary budget.

The Defense Ministry and the JCG have secured additional fuel
budgets in the fiscal 2008 budget bill. However, one Defense
Ministry source expressed concern, "The high crude oil prices could
affect the security and defense of areas surrounding Japan."

16) Ruling coalition mulls utilizing SDF troops to help fight avian
flu proliferation

YOMIURI (Page 4) (Full)
January 30, 2008

The ruling coalition of the Liberal Democratic Party and New Komeito
held a meeting of their project team yesterday to work out
countermeasures dealing with a new-type avian influenza. The meeting
was held in the Diet, with former Health, Labor and Welfare Minister
Jiro Kawasaki presiding. In the meeting, the project team focused
its discussions on how to prevent at an early stage the new-type
avian flu from reaching an epidemic stage in Japan. There were
suggestions from a number of project team members that the
government should activate the Self-Defense Forces in that event.
The project will consult with the government on how far the SDF can
be utilized under the current law.

The project team will work out a report of recommendations in June
and will ask the government to budget necessary measures for fiscal
2009.

The government has an action plan for the new-type bird flu, but it
does not expressly stipulate anything about the idea of utilizing
the SDF. However, the project team anticipates a case where several
hundred people might be infected with the disease in a local area.
In order to cope with such a case, the project team suggested the
need for the government to send in SDF troops at an early stage.
Specifically, the project team notes that the SDF would use school
gyms and other local facilities with medical equipment in order to
conduct medical treatment. Other countermeasures suggested by the
project team include blockading roads to prevent the disease from
spreading.

17) Fukuda positive about permanent legislation for SDF missions
overseas

YOMIURI (Page 4) (Full)
January 30, 2008

Prime Minister Fukuda attended a meeting of the House of

TOKYO 00000236 012 OF 013


Representatives Budget Committee in the Diet yesterday, during which
he expressed his view over the idea of creating a permanent law for
Japan to send the Self-Defense Forces for overseas missions. "If we
choose to legislate special measures each time, we usually need two
full months to have a special measures law enacted in the Diet,"
Fukuda stated before the committee. "I am worried whether that way
is sufficient for carrying out our cooperative activities," Fukuda
added. He stressed, "That is why I want to create a permanent law."

Fukuda was also asked whether the government would present a bill to
the Diet during the current session. "I would like to continue to
look at the overall picture to see if we can get the Diet to discuss
this matter," Fukuda stated. He added, "If we can do this with the
opposition parties' understanding, that would be best."

He was replying to a question asked by Yuriko Koike from the ruling
Liberal Democratic Party.

18) Ishiba's idea puzzles Defense Ministry bureaucrats, SDF brass

SANKEI (Page 5) (Abridged)
January 30, 2008

The government is now planning to restructure the Defense Ministry
and the Self-Defense Forces. In this connection, Defense Minister
Shigeru Ishiba's initiative is creating a stir in the Defense
Ministry. His idea is to integrate the Defense Ministry's internal
bureaus and the SDF's staff offices into a head office. Ishiba has
been insisting that the Defense Ministry's internal bureaus and the
Ground, Maritime, and Air Self-Defense Forces' respective staff
offices should be integrated into one organization. In concrete
terms, Ishiba has specified three functions: 1) the SDF's joint
operations; 2) Japan's defense buildup, including hardware
development and procurement; and 3) public relations and
parliamentary affairs, including legislative measures. However,
there are still no formal orders from Ishiba about his initiative.
The Defense Ministry's bureaucrats and the SDF's brass officers are
therefore watching with a wary eye.

"I would not preclude any option," Ishiba told a press conference
yesterday about integrating the Defense Ministry's internal bureaus
and the SDF's staff offices. With this, Ishiba indicated that he
would work it out from scratch. In February, the government will
hold a meeting of its panel discussing an overhaul of the Defense
Ministry. On that occasion, Ishiba will state his view about
civilian control and will raise issues about the Defense Ministry's
reorganization.

However, the Defense Ministry's bureaucracy and the SDF's brass are
'oil and water.' It would be no easy matter to merge them. "We may
lose our posts." With this, one of the Defense Ministry's senior
officials voiced concern. An SDF staff officer also said, "That may
end up reinforcing the ministry's bureaucracy."

19) Ruling coalition OKs 3-yr sympathy budget extension

SANKEI (Page 5) (Full)
January 30, 2008

The ruling coalition of the Liberal Democratic Party and New Komeito
approved a new special agreement for a three-year extension of the
Japanese government's sympathy budget (host nation support), which

TOKYO 00000236 013 OF 013


is to expire at the end of March this year. The government will make
a cabinet decision in early February to renew the current special
agreement. After that, the government will present it to the Diet.

Japan currently shoulders the burden of base pay for Japanese
employees working at U.S. military bases in Japan as well as
utilities for U.S. military bases, totaling approximately 140
billion yen. The new special agreement is to maintain this level of
burden-sharing in fiscal 2008 and is to reduce 400 million yen each
in fiscal 2009 and 2010. On Jan. 25, Foreign Minister Koumura and
U.S. Ambassador to Japan Schieffer signed it at the Foreign
Ministry.

The Japanese government first proposed a substantial cutback of
spending in its burden sharing due to financial stringency. However,
the U.S. government insisted on keeping the current level because of
its increasing war costs in Iraq and Afghanistan. In the end, the
Japanese and U.S. governments agreed on a slight cutback of
utilities. However, the two governments have agreed on a
comprehensive review of burden-sharing. As it stands, bilateral
consultations will likely face rough going.

20) Cabinet decision made to extend SDF Golan Heights mission

SANKEI (Page 5) (Full)
January 30, 2008

The government decided at a cabinet meeting yesterday to extend
Self-Defense Force participation in the UN Disengagement Observer
Force (UNDOF) in the Golan Heights for six months until September 30
beyond the March 31 end of the current deployment under the UN
Peacekeeping Activities Cooperation Law. The decision follows the UN
Security Council's step last December to extend the UNDOF mission.
The SDF dispatch to the Golan Heights started in 1996. Currently, 45
personnel, mostly Ground Self-Defense Force members, are conducting
transport activities.

SCHIEFFER

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