Cablegate: Daily Summary of Japanese Press 04/10/08

DE RUEHKO #0989/01 1010804
P 100804Z APR 08





E.O. 12958: N/A



(1) Bank of Japan gets started under newly appointed Governor
Shirakawa after three-week vacuum at top (Tokyo Shimbun)

(2) Independence of BOJ to be tested (Mainichi)

(3) Ozawa's top-down decision to disapprove Watanabe's nomination as
BOJ deputy chief creates strong discontent among DPJ members

(4) Politics malfunctioning: (Part 1): Takeshi Sasaki, professor at
Gakushuin University: Political parties relying on numbers have
reached a dead end (Nikkei)

(5) U.S. military cop admits involvement in Okinawa robbery

(6) Futenma relocation council session held; Defense minister
clearly tells for first time that government will reconsider
elimination of risk factors (Ryukyu Shimpo)

(7) Akamine blasts U.S. response (Ryukyu Shimpo)

(8) U.S. military sweeps under the rug the fact that there are seven
more deserters (FLASH)

(Corrected copy) USAID Administrator Fore: Good balance between
democracy and economic growth important for African development
(Hokkaido Shimbun)


(1) Bank of Japan gets started under newly appointed Governor
Shirakawa after three-week vacuum at top

TOKYO SHIMBUN (Page 9) (Full)
April 10, 2008

At a cabinet meeting yesterday evening, the government decided to
promote Deputy Bank of Japan (BOJ) Governor Masaaki Shirakawa (58)
to the position of governor and formally appointed him to the post.
His term of office will be five years. The absence of a BOJ governor
for the first time since the war had continued for three weeks since
March 20, when former BOJ Governor Toshihiko Fukui retired from the
position, but now, this unusual situation has been settled. Governor
Shirakawa is scheduled to leave for the United States today and
attend the Group of Seven (G-7) Finance Ministers and Central Bank
Governors meeting in Washington that starts tomorrow.

After his investiture, Shirakawa held a press conference at the BOJ
head office and expressed his aspirations: "I will fulfill the BOJ's
mission of keeping prices stable and maintaining orderly credit
conditions and contribute properly to Japanese economic growth."

Shirakawa, after serving as deputy governor for three weeks, was
promoted to the governor when two candidates hailing from the
Ministry of Finance (MOA) were each rejected in the Diet. When asked
about this circumstance, Shirakawa said: "I refrain from making any
comment on individual appointments because they are matters the
government and the Diet decide. However, I was perplexed by the
rapidly changing situation."

TOKYO 00000989 002 OF 010

The Policy Board is a panel to decide monetary policy. The
government proposed to appoint former Vice Minister of Finance for
International Affairs Hiroshi Watanabe (58), professor at
Hitotsubashi University Graduate School, to the deputy governor, but
this proposal was rejected in the Upper House plenary session; as a
result, one of the two posts of the deputy governors will be left
vacant. A successor to former Policy Board member Kiyohiko
Nishimura, who has now assumed the post of deputy governor, has yet
to be decided. The Policy Board consists of nine members, but at
present, it is operating with two members lacking.

Shirakawa wants to bring the Policy Board back to the normal
condition as quickly as possible, saying: "A variety of views makes
the Board powerful. I hope suitable persons will be appointed to the

Lack of communication channels with political circles

With acting Governor Masaaki Shirakawa promoted to the governor's
post yesterday, the BOJ ended an unusual three-week situation of
having to tide over without anyone at the top. But of the two posts
of deputy governors, one is still vacant. The Shirakawa-led BOJ is
likely to face difficult tasks shortly, including building political

Important events await the BOJ governor, starting with the Group of
Seven (G-7) Finance Ministers and Central Bank Governors meeting
tomorrow. At the end of this month, the BOJ is scheduled to compile
the "Outlook for Economic Activity and Prices," a report that shows
the direction of monetary policy.

In the Diet session yesterday, the government's proposal to appoint
former Vice Minister of Finance for International Affairs Hiroshi
Watanabe to the post of deputy governor was rejected by opposition
from the major opposition Democratic Party of Japan (DPJ) and other
parties. Although the governor's post has now been filled, this fact
has led to concern over the lack of communication channels with
political circles and the conformity of the BOJ's monetary policy
with the government's fiscal policy, both of which are expected of
the former Finance Ministry official.

At his inaugural press conference, questions were focused on
Shirakawa's lack of experience with Diet relations, as well as
relations with the Ministry of Finance (MOF).

Shirakawa frankly admitted, "In terms of external relations (for
instance, relations with political circles), I don't have ample
experience," but he indicated, "I will strive to make up for what I
am lacking and move forward one or two steps at a time."

How to secure the BOJ's independence is another important task,
given that the BOJ was swayed by political motives over the
appointment of its key positions. Shirakawa pointed out: "A correct
policy decision will be more important than external
communications." He said, "Confidence of the BOJ is supported by its
correct policy decision. That will eventually improve relations with
the government and politics." For that end, he revealed that he
would step up the BOJ's ability to monitor matters.

There is no mechanism to install an acting deputy governor to fill
the vacancy, Shirakawa and Deputy Governor Kiyohiko Nishimura will

TOKYO 00000989 003 OF 010

operate the BOJ in harness together for a while. The monetary market
has yet to emerge from the chaotic situation caused by the subprime
mortgage issue, and due to the soaring crude-oil prices, there is a
growing sense of crisis that the economy will further slow down.
Faced with important tasks for the domestic economy, Shirakawa, as
the top leader of the BOJ with its some 5,000 employees, is expected
to do well in steering the Japanese economy.

(2) Independence of BOJ to be tested

MAINICHI (Page 8) (Abridged slightly)
April 10, 2008

At long last, the question of appointing new Bank of Japan governor
and deputy governor was settled yesterday. Mainichi Shimbun
interviewed former BOJ Deputy Governor Sakuya Fujiwara and
University of Tokyo Professor Motoshige Ito to learn of their
expectations of the new BOJ executive lineup and other matters.

Former BOJ Deputy Governor Sakuya Fujiwara -- Absence of one deputy
governor might hinder bank's operations

The BOJ governorship was left vacant for some time, and for that,
both the ruling and opposition parties should be held responsible.
The BOJ governorship, which forms the foundation of the country's
economic policy, was neglected because the state system is immature
and dysfunctional. I cannot sense that politics and the economy will
be easily improved.

The Democratic Party of Japan has been calling for the separation of
fiscal and monetary policymaking. An addition of retired Finance
Ministry officials to the BOJ lineup will help the central bank
change its thinking in a good sense. Monetary policymaking today
requires both domestic and international insights. It is not
appropriate to reject all former Finance Ministry officials.

The Bank of Japan Law was amended in 1998, and the number of deputy
governors has been increased to two as a result. The new law is
characterized by the so-called troika leadership with the two deputy
governors assisting the governor in dealing with the globalized
monetary system. The absence of one deputy governor might undermine
its significance. I am concerned that the spirit of the amended law
is not being fully reflected.

The BOJ's nine-member policy board is designed so that arbitrary
decisions will not be made. Mr. Shirakawa is an impartial person
with an extensive international network, so he is perfectly fit for
the job. The bank's independence can be maintained by conducting
thorough discussions at policy board meetings and fulfilling its
accountability in defiance of occasional political interferences.

The BOJ Law does not envision a divided Diet. Lessons learned from
this episode must be used to enroot the amended law.

University of Tokyo Graduate School Professor Motoshige Ito -- BOJ
must transmit a clear message

There is no doubt that the BOJ turmoil has undermined Japan's
international credibility.

Determining the central bank chief is tantamount to sending out an
important message on directions of a country's monetary and economic

TOKYO 00000989 004 OF 010

policies. Legislators toyed with such an important post, and that
has given the impression that the central bank governorship is
regarded lightly (in Japan).

Mr. Masaaki Shirakawa, who has now become the new BOJ governor, and
I have often discussed monetary policy. My impression of (Mr.
Shirakawa) is that he is a person who discusses matters extremely

Mr. Shirakawa, a former BOJ official who has been at the center of
monetary policymaking, will probably aim at a direction not much
different from his predecessor, Toshihiko Fukui's normalization of
interest rates.

Nevertheless, the economic situation is significantly different from
that of the five years of the Fukui era. Given a slowdown in the
global economy resulting from the subprime crisis and growing
concerns due to surging crude oil prices, the BOJ is naturally
required to take different steps. Growing inflation worries might
result in calls for defending prices, and the bank might also be
pressed for lowering interest rates depending on the trend of the
real economy.

The central bank is required to adjust the country's monetary policy
in accordance with moves of the market. The bank must set forth a
clear direction so that the market does not waver.

Amid financial turmoil at home and abroad, President Shirakawa is
required to play the role like a lighthouse that sends out a clear
message to the market.

(3) Ozawa's top-down decision to disapprove Watanabe's nomination as
BOJ deputy chief creates strong discontent among DPJ members

YOMIURI (Page 4) (Full)
April 10, 2008

Some lawmakers of the Democratic Party of Japan (DPJ) yesterday
defied the party policy of opposing the government's nomination of
Hiroshi Watanabe, a former vice finance minister for international
affairs, as one of the two deputy governors of the Bank of Japan, at
the plenary sessions of the two Diet houses. The DPJ exposed
internal discord. As seen in the fact that some in the party are now
openly criticizing President Ichiro Ozawa's decision to disapprove
Watanabe's nomination, reversing the prevailing view in the party,
dissatisfaction is growing in the largest opposition party. The
dominant view in the party is that Ozawa's grip on the party will
inevitably weaken as the September party leadership election

Three House of Councillors members, including Hideo Watanabe, voted
in favor of Watanabe's nomination. Four Upper House members,
including Masaaki Sakurai, abstained from voting. Four House of
Representatives members, including Motohisa Furukawa, failed to
attend the Lower House plenary session. The party leadership intends
to punish Watanabe and two other members who voted for the
government's nomination of Watanabe.

After the Upper House plenary session, however, Secretary General
Yukio Hatoyama told the press: "It is regrettable that the three
defied the party policy, but in consideration of the situation they
had no choice but to do so." Hatoyama's remark indicates that many

TOKYO 00000989 005 OF 010

party members are growing dissatisfied with the party's decision to
reject Watanabe's nomination. "(As long as we oppose everything,)
the public will not want to entrust the DPJ with the reins of
government," Hideo Watanabe told reporters.

Upper House member Takashi Morita, an independent and a member of
the DPJ-led parliamentary group, who had absented himself from the
plenary session, severely criticized (Ozawa's top-down approach),
saying: "The chamber of wisdom will die if all common sense is
rejected by the top-down approach."

Even DPJ members who followed the party policy have mixed feelings.
Former President Seiji Maehara made this comment: "The policy of
rejecting the nominations of all retired senior bureaucrats should
be reviewed. The public may see that the DPJ has no mind for taking
over the helm of government."

DPJ legislators are increasingly dissatisfied with Ozawa's top-down
decisions on the nominations of BOJ executive posts, as well as with
the low support rate for the party.

The view is quickly prevailing in the party that such
dissatisfaction will affect on the party's presidential election.

Hatoyama and Azuma Koshiishi, chairman of the DPJ caucus in the
Upper House, have already expressed their support for Ozawa being
elected for a third term. However since Hatoyama and Ozawa were at
odds over Watanabe's nomination, a mid-level member sees that the
bad blood between the two will remain. Therefore, Ozawa's political
footing in the party may weaken. One of the mid-level lawmakers, who
have distanced themselves from Ozawa, made this comment: "This is
the beginning of the end. Everything will start moving with an eye
on September."

(4) Politics malfunctioning: (Part 1): Takeshi Sasaki, professor at
Gakushuin University: Political parties relying on numbers have
reached a dead end

NIKKEI (Page 1) (Full)
April 7, 2008

Under the divided Diet, delays in making decisions are now starting
to stand out. In order to prevent the political system from
malfunctioning, the newspaper interviewed experts to hear their

-- How do you see the present political situation?

Sasaki: The entire political and administrative systems have moved
backward or headed toward dismantlement. Before forward-looking
policies can be issued, problems have come out one after another.

Last year, Prime Minister Yasuo Fukuda and Democratic Party of Japan
(DPJ) President Ichiro Ozawa held talks. They tried to resolve
political issues by taking advantage of their superior numbers. It
is true that decisions are made by a majority in democratic society.
In Japan, however, lawmakers believe that if party numbers decrease,
politics will not able to resolve issues. Forming a grand alliance
was highly risky, and the talks ended in failure, as I had
predicted. It seems to me that political parties have to pay the
price for having been just satisfied with relying on numbers.

TOKYO 00000989 006 OF 010

-- Do you mean that there are problems with the political parties

Sasaki: Political parties are poor at management, including managing
their own members. Their management abilities are extremely low in
terms of personnel and organizational matters. They can solve
matters by steamrolling them with their superior numbers, but their
management capability to boil down the contents of policies and the
like remain immature. They cannot work out good manifestos (set of
campaign pledges) that we have advocated. This is an indication of
their lack of maturity.

-- Do you mean that political parties can only push bills through
the Diet by using their superior numbers?

Sasaki: They now have to change to a different know-how. Taking tax
revenues currently earmarked for road maintenance and construction
and converting them into general spending funds is not the only
issue. Although they have a mountain of issues to deal with at the
Diet, they have been just standing at the door arguing over one
thing or another. Government agencies have been busy dealing with
scandals involving their senior officials. If worst comes to the
worst, the Japanese political and bureaucratic systems might fall
into turmoil of having no administrators.

Reform of the pension and public servant systems that are common
issues for both the ruling and opposition parties should be
vigorously discussed in the committees of the two Diet chambers. If
the Democratic Party of Japan (DPJ) takes over the reins of
government, it will face similar issues. It should not be the
government offices but the Diet that should set up a body where both
chambers can deliberate what measures to take.

-- It is necessary to sort policies out, isn't it?

Sasaki: Politics needs to be able to sort out problems. Since such a
capability has weakened, politicians do not know what to do. When
two top leaders hold a meeting, the most important thing is to
coordinate issues. Under the divided Diet situation, the ruling camp
needs to talks about that point with the opposition bloc."

-- Some criticize the failure of political reform aimed at creating
a two-party system.

Sasaki: We are confident about having created certain suitable
systems. The reason for the political party system not working well,
if you research it, is that there remains the nature of a party
having an aspect of being one's own organization. The personal
support groups and other aspects of political parties that were
cultivated under the multiple-seat constituency system remain the
biggest obstacle for reorganizing political parties.

(5) U.S. military cop admits involvement in Okinawa robbery

YOMIURI (Page 35) (Full)
April 10, 2008

In March, a taxi driver was hit and his money was stolen in Okinawa
City, Okinawa Prefecture. In this incident, local police arrested
four boys whose fathers are U.S. servicemen. The arrested teenagers
told local police officers that they were masterminded by a
22-year-old U.S. Air Force airman first class assigned to the

TOKYO 00000989 007 OF 010

military police at the Kadena base. This airman has now admitted to
his involvement in the incident by telling the local police that he
was there where the crime took place.

The Okinawa Police Station will shortly send papers on the airman to
prosecutors on suspicion of robbery resulting in inuring the taxi
driver. The police will ask the U.S. military to hand over the
suspect after he is indicted. However, the suspect has denied that
he is not the mastermind, according to the police.

The airman first class had totally denied his involvement, according
to a senior official of the Okinawa prefectural police. However, the
four boys told the police that the airman first class was waiting
near the crime scene and drove his car to run away.

The airman first class used to hang around with the four boys. One
of the boys told the police that he could not refuse helping the
airman first class' cab robbery attempt because he had "owed" the
airman first class.

(6) Futenma relocation council session held; Defense minister
clearly tells for first time that government will reconsider
elimination of risk factors

RYUKYU SHIMPO (Page 1) (Full)
April 10, 2008


The consultative council (chaired by Chief Cabinet Secretary
Nobutaka Machimura) to discuss between Okinawa and the government
the relocation of Futenma Air Station met for the seventh time at
the Prime Minister's Office (Kantei) on the evening of April 9. In
the session, Governor Hirokazu Nakaima indicated that the Ministry
of Defense's (MOD) plan, presented last August, to review the flight
paths in order to eliminate the dangerous nature of Futenma Air
Station was insufficient. In response, Defense Minister Shigeru
Ishiba clearly expressed his intention for the first time to review
measures to eliminate risk factors, saying, "We would like to study
what is technically possible." Chief Cabinet Secretary Nobutaka
Machimura also made a similar statement.

Governor calls for venue to consider offshore option

Nakaima urged the government to reveal its thinking about Okinawa's
and Nago's request to move the planned replacement facility further
offshore and called for establishing a framework to discuss the
matter at the working level. In response, Machimura expressed the
intention of discussing specifics possibly at the next council
meeting, saying: "We would like to continue discussing the matter."

In the fourth council session last November, Ishiba indicated
difficulty considering additional measures to remove (risk factors),
saying that a review of the flight paths "is the maximum step at
this point in time."

In a press conference after the council meeting, Nakaima underscored
the need to establish a framework to discuss matters at the working
level, with the offshore relocation option in mind. He said:
"Although six ministers are lined up, working-level matters always
remain ambiguous. In order to put matters together, involvement of
engineers and working-level is necessary. The council is allowed to

TOKYO 00000989 008 OF 010

set up an executive board, but I also feel such a thing (framework)
is necessary."

In reaction to Nakaima's request for a framework, many (government
members) expressed views to leave the matter to future talks.
Foreign Minister Masahiko Koumura, for instance, said, "We would
like to consider it after hearing specifics." Ishiba noted, "It is
also necessary to continue discussing how to proceed with future
talks among participants."

In regard to the MOD's review of the Futenma Air Station flight
paths, Nakaima reiterated his call for improvements, saying:
"Although some points merit high marks, we would like to see a
desire to remove risk factors at an early date by the conducting of
technical studies."

(7) Akamine blasts U.S. response

RYUKYU SHIMPO (Page 2) (Full)
April 10, 2008


In the wake of a series of incidents by U.S. service members, House
of Representatives member Seiken Akamine of the Japanese Communist
Party filed a protest with the U.S. Embassy in Japan on April 8.
Receiving Akamine, Raymond Greene, chief of security affairs of the
Embassy's political section, reportedly emphasized, "The United
States will work closely with Japan in conducting investigations."
In response, Akamine assailed, "You are just shifting the focus of
the matter." The lawmaker also sought a fundamental review of the
Japan-U.S. Status of Forces Agreement. In reply, Greene just
repeatedly said, "It has been operated smoothly since its
application was improved." Angry with the United States' response,
Akamine later said, "Unlike Consul General for Okinawa Kevin Maher,
(Greene's) response was tactful. Still, they share the same
perception that incidents have been caused by a few bad apples among
the U.S. soldiers."

(8) U.S. military sweeps under the rug the fact that there are seven
more deserters

FLASH (pages 22-23) (Full)
April 22, 2008

"I heard a voice in my brain saying, 'Stab him.' I intended to stab
anyone." Seaman Olatunboson Ugbogu (22) assigned to the Yokosuka
U.S. Navy Base reportedly made this remark with regret during
interrogations by Kanagawa prefectural police after being arrested.

The murder of a taxi driver in Yokosuka City has now been settled
with suspect Ugbogu having been handed over to Japanese authorities
and arrested. But it was found that since 2005, there have been nine
more deserters from the U.S. armed forces like him who are holed up
somewhere in Japan. An official from the National Police Agency
(NPA) said in his Diet replies at a session of the Lower House
Committee on Foreign Affairs in March: "It is our understanding that
there have been nine cases on which the U.S. military have asked the
NPA since 2005 to arrest seven U.S. deserters." Of the nine
deserters, two have been arrested, but the NPA has no idea about the
remaining seven's whereabouts: whether they were captured or are
still at large. Given this situation, there is a possibility that a

TOKYO 00000989 009 OF 010

second or third Ugbogu may emerge.

Of the nine deserters, five belonged to U.S. military units in
Okinawa. As for the remaining four, where they were assigned to is
unknown, because the U.S. forces have yet to release information
about them.

In addition to those deserters, there seem to be a number of U.S.
military personnel who continue to be AWOL or absent without leave
or continue to leave their base without notice. It is unknown how
many American military personnel are hiding out in the country.

A foreign news agency correspondent said:

"In the past, those who volunteered for military service (in the
United States) were required as the minimum conditions to have an
academic background of senior high school graduation or equivalent
and have no criminal history of heinous crimes. However, with the
prolonged Iraq war, anybody can volunteer for military service at
present if they are green card holders. It is safe to say that a
large number of rough characters from the cities have joined the
U.S. military."

In fact, suspect Ugbogu is a green-card holder of Nigerian
nationality. Other deserters, as well, came from Mexico and other
Latin American countries, Southeast Asia, and Africa. The U.S.
military may be described in this sense as a multinational force.
Tetsuo Maeda, a military critic, said: "Suspect Ugbogu is a deck
hand on the Aegis-equipped USS Cowpens. His major job is to clean
the deck, but most sailors of foreign nationality are low-level
ranking, so their jobs are minor ones. Notwithstanding that, they
are granted America's citizenship on a priority basis, so they
volunteer for military service. Enrolling them as military personnel
is an unavoidable choice for the U.S. to secure personnel, given
that the U.S. has deployed 160,000 troops in Iraq."

This weekly succeeded in making contact with one deserter on April
5. He responded to the weekly's interview under the condition of
absolute anonymity. He said: "There are dozens of deserters." He has
married a Japanese woman, and he works for a security-related
company. He said:

"I came here as a U.S. serviceman, but my job in the military was
not being a soldier but in effect a clerk. It was bad to have
deserted from the military, but if I had planned to revisit Japan
after retiring from the military and returning home, I would have to
pay a huge traveling expense. What I did was walk out.

"'Formal deserters are those who come here on some kind of mission
but desert from the military. I keep contact with my friends in the
U.S. forces, and the military police can arrest me anytime. But I am
not an important military officer who would be tried by
court-martial, so the U.S. military seems to leave me alone."

The U.S. forces in Japan not only leave their deserters alone, they
also do not disclose any information about them. Their arrogant
attitude endangers the Japanese people.

(Corrected copy) USAID Administrator Fore: Good balance between
democracy and economic growth important for African development


TOKYO 00000989 010 OF 010

April 9, 2008

The G8 Development Ministers' Meeting that took place on April 5-6
discussed the development of Africa that is enveloped in poverty.
Newly industrializing countries also participated in the
international conference. This newspaper interviewed the United
States' representative to hear what the U.S. considers important in
dealing with African development.

Henrietta H. Fore, administrator of the U.S. Agency for
International Development (USAID) and director of U.S. Foreign
Assistance, responded as follows:

In Africa in recent years, small-scale companies have become
remarkably active. Unlike big companies, however, it is difficult
for small to medium sized businesses to access international capital
markets. The Group of Eight (G8) countries have a framework of
cooperation between the public and private sectors. Through the
private sector, the G8 countries can contribute to Africa's
stability and prosperity. If doing so, young Africans, after
graduating from school, should be able to stay in their own
countries, start their own companies and carve out the future of
their countries.

Many countries on the African continent are now carrying out free,
peaceful and democratic elections. Democracy brings about freedom,
prosperity, and stability.

Achieving economic growth and democracy simultaneously leads to
building a stable world. It also provides a means to deal with
terrorism and conflict.

Everyone should be concerned about peace, security, and the fight
against global terrorism. In order for African countries to protect
their national security, activities that maintain peace through
exercises are desirable. To that end, the role of international
organizations, such as the United Nations, is important.

President George W. Bush has placed special emphasis on the need for
good (uncorrupted) governments, in addition to democracy and
elections. To fight AIDS, the Bush administration has come up with a
special program, and is asking Congress for a budget of 30 billion
dollars over five years. I hope that priority will be given to
health issues at the Hokkaido Lake Toya Summit in July.


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