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Cablegate: Japanese Morning Press Highlights 05/15/08

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UNCLAS SECTION 01 OF 12 TOKYO 001324

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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 05/15/08


Index:

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

4) Interview with Defense Department DAS Sedney: U.S. not
considering changing Futenma relocation plan to move the proposed
site into ocean (Asahi)

China relations:
5) Japan's offer of sending teams to assist in earthquake-stricken
Sichuan not being accepted, China citing difficulty in accessing cut
off areas (Sankei)
6) China's earthquake may have impact on gas field development
talks, panda rental (Yomiuri)
7) E. China Sea gas-field development: Japan, China may co-develop
only selected areas (Mainichi)

8) Prime Minister Fukuda, New Zealand Prime Minister Clark agree to
cooperate on global-warming countermeasures (Mainichi)

9) North Korea's nuclear program: U.S., Japan, ROK may resume
director-general talks on May 19th (Mainichi)

10) Greenpeace accuses crewmembers of Japanese research whalers of
hauling home boxes of whale meat, rampantly abusing the IWC mandate
(Asahi)

11) As food prices soar, government's Council on Economic and Fiscal
Policy begins considering the issue of Japan increasing its food
self-sufficiency rate (Asahi)

Political merry-go-round:
12) Ruling parties and government concur that there is no need to
extend the current Diet session (Yomiuri)
13) Ruling parties are delaying submission of bills right and left
with only one month left in the current Diet session (Nikkei)
14) Government and ruling camp encountering hurdles in revising the
controversial system of medical care for the elderly over 75
(Nikkei)
15) Democratic Party of Japan President Ozawa to change his election
district from Iwate to Tokyo, creating a stir (Yomiuri)
16) Delicate gap is opening between Ozawa and DPJ's Kan and Hatoyama
(Yomiuri)
17) Influential LDP lawmaker Hidenao Nakagawa writes book attacking
the bureaucracy but the real surprise is his admission in it of
adultery (Yomiuri)
18) Former postal rebel Shizuka Kamei, who now heads a small party,
blasts the DPJ as "fools" for policy mistakes (Yomiuri)

19) Japanese economy's international competitiveness is a dismal
22nd place, while U.S. stays at the top (Nikkei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei and Tokyo Shimbun:
Death toll in China's quake rises to nearly 15,000; Rescuers finally
reach epicenter; Victims scramble for relief supplies


TOKYO 00001324 002 OF 012


Nikkei:
Japan to offer low-interest yen loans worth up to 500 billion yen to
developing countries over five years to cut greenhouse gas
emissions

Akahata:
Elderly demonstrators stage sit-in strike calling for promptly
abolishing health insurance system for the elderly

2) EDITORIALS

Asahi:
(1) Put end to refugees' plights on 60th anniversary of
establishment of Palestine state
(2) Don't delay disposal of toxic gas weapons

Mainichi:
(1) Concerns still left about possible use of space for military
purposes
(2) Create environment first to receive highly skilled foreign
workers

Yomiuri:
(1) Kinki, Chubu must boost quake measures, focusing on key traffic
systems
(2) Questions looming over alleged fraud involving ex-intelligence
chief Ogata

Nikkei:
(1) Burmese military junta's response to cyclone victims a crime in
terms of humanitarian considerations
(2) Web 2.0 expected to spur reorganization of Internet market

Sankei:
(1) China's great earthquake: Government must give top priority to
saving human lives
(2) Increase the list of common use kanji characters

Tokyo Shimbun:
(1) Requirement of 6 PERCENT cut in greenhouse gas emissions:
Forests are Japan's lifeline
(2) J Power stake: Government must not discourage foreign direct
investment

Akahata:
(1) WTO agricultural talks: Review policy of trade liberalization
from foundation

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 14

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

09:20
Met at Kantei with State Minister in Charge of Economic and Fiscal
Policy Ota and Deputy Assistant Chief Cabinet Secretary Saka. Ota
remained. Afterwards, met with House of Representatives member
Takayoshi Taniguchi.

10:20

TOKYO 00001324 003 OF 012


Met with ILO Director-General Somavia, joined by MOFA International
Cooperation Bureau Director-General Bessho. Later, met with New
Komeito's Deputy Representative Hamayotsu.

11:30
Met with Special Advisor to the Prime Minister Nakayama.

13:27
Met with LDP Policy Research Council Chairman Tanigaki and New
Komeito Policy Research Council Chairman Saito.

14:05
Met with ROK-Japan Economic Association Chairman Cho Suk Rae and
others. Afterwards, photo-shooting.

15:04
Met with New Zealand Prime Minister Clark. Afterwards, issued a
joint press release.

16:32
Met with Japan Institute of International Affairs President Yukio
Sato. Afterwards, met with Chief Cabinet Secretary Machimura and
Deputy Chief Cabinet Secretary Futahashi.

17:31
Attended a meeting of the Council on Economic and Fiscal Policy.

19:01
Met with secretaries and others at Grand Prince Hotel Akasaka.

22:27
Arrived at Kantei residence.

4) Pentagon official: It's difficult to revise Futenma relocation
plan to move construction into ocean

ASAHI (Page 4) (Full)
May 15, 2008

Yoichi Kato

WASHINGTON-U.S. Deputy Assistant Secretary of Defense for East Asia
Sedney responded to the Asahi Shimbun's interview at the Department
of Defense on May 13 right after returning from his recent visit to
Japan. In the interview, Sedney clarified that the United States
would not concur with the idea floating in Japan of moving the
relocation site of Futenma airfield in Okinawa Prefecture into the
ocean.

Sedney, representing the Pentagon, accompanied Deputy Secretary of
Defense Negroponte on his recent tour of Japan, China, and South
Korea. In Japan, Sedney was present in Negroponte's meetings with
Chief Cabinet Secretary Machimura, Foreign Minister Koumura, and
Defense Minister Ishiba. In addition, he met with working-level
officials from the Foreign Ministry and the Defense Ministry.

Sedney first noted that the planned relocation of Futenma airfield,
including its location and size, is entirely based on Japan's plan.
"We didn't ask for it," Sedney said. He added: "Once we agree to
revise the plan, there will be pressure calling for other revisions
to the plan, and we won't be able to keep our agreement (to complete
the construction of an alternative facility in 2014). This plan

TOKYO 00001324 004 OF 012


stands on a delicate balance, so it's very difficult to revise it."

Meanwhile, the Japanese government has been falling behind schedule
in its environmental impact assessment of the relocation site in
Okinawa Prefecture's northern coastal city of Nago. However, Sedney
said: "Japan showed strong confidence through the series of meetings
this time in carrying out the agreement to complete the relocation
in 2014. I'm very satisfied." He stressed that all the cabinet
ministers he met promised again to carry out the "roadmap" for U.S.
military realignment in Japan. He also revealed that the Japanese
and U.S. governments would start working-level consultations in
order to work out specific challenges. "It's a substantial step
forward," he said, showing a stance of giving high marks to the
Japanese promise.

5) China tells Japan: "It's difficult to accept" Japanese rescuers;
Prime Minister Fukuda shows understanding toward China's response

SANKEI (Page 3) (Full)
May 15, 2008

The Chinese government as of yesterday told the Japanese government,
which had been preparing to send rescuers to help victims of the
deadly Sichuan earthquake, "It's difficult to accept Japanese
rescuers," several government officials revealed.

Later in the day, Prime Minister Yasuo Fukuda referred to China's
response and indicated understanding by noting: "At the time of the
(Great Hanshin Earthquake) occurred in Kobe City, when Japan was not
ready to accept foreign rescuers, we would have been confused if
they had come. China appears to be in the same situation."

Fukuda continued to say, "If they are ready to accept rescuers, I
think they will ask for 'cooperation.' We will then extend as much
cooperation as possible." Fukuda was replying to questions posed by
reporters at the Prime Minister's Official Residence.

6) Aftermath of Sichuan earthquake affects talks on gas fields; No
progress, either, on talks on China's loan of panda to Japan

YOMIURI (Page 2) (Full)
May 15, 2008

The aftermath of the deadly earthquake in Sichuan Province, China,
has begun affecting the achievements of the recent Japan-China
summit talks on May 7 between Prime Minister Fukuda and Chinese
President Hu Jintao. One government official yesterday revealed that
the two countries' leaders agreed to hold working-level talks on the
joint exploration of gas fields in the East China Sea for the
promotion of the joint development, but that the talks "have been
effectively stopped" since the occurrence of the earthquake.

China's loan of a panda to Japan's Ueno Zoological Gardens has drawn
public attention, but preparations for such a loan have been
effectively stopped because "making preparations for that at this
point in time may give the impression of being inappropriate," a
Japanese government official said.

Meanwhile, regarding how to help the devastated area in China, the
government yesterday adopted an aid policy of offering mainly goods
for the time being. As for a dispatch of personnel to an
international disaster relief team, China told Japan that there is

TOKYO 00001324 005 OF 012


no need for such a team, so Japan has decided to refrain from
sending personnel for that purpose.

Moves to help China are emerging also in political circles. The
Parliamentary Forum to Develop Japan-China Relations, a group
composed of lawmakers from the ruling bloc, including the ruling
Liberal Democratic Party's (LDP) General Council Chairman Nikai,
former Prime Minister Mori, and the junior coalition partner New
Komeito's Representative Ota, yesterday held an executives' meeting
at LDP headquarters. The meeting called Administrative Vice Foreign
Minister Mitoji Yabunaka to the session and asked him to actively
help the quake-hit area. The session confirmed it would discuss the
dispatch of a fact-finding mission to see the damage caused by the
earthquake.

According to the Ministry of Foreign Affairs, of some 300 Japanese
nationals who were in the region at the time, the whereabouts of 80
or so have yet to be confirmed as of yesterday evening. Officials
from the Japanese Embassy in Beijing and from the Consulate General
in Congqing will visit the disaster site and make every effort to
identify Japanese nationals by visiting hospitals and other
locations in the region.

7) Gas fields in East China Sea: Joint development to be carried out
in more than one area; Japan, China to share profits equally

MAINICHI (Page 3) (Excerpts)
May 15, 2008

Concerning the exploration of gas fields in the East China Sea, a
pending issue between Japan and China, it was learned on May 14 that
both countries had agreed to pursue to the maximum the economic
interest the joint development of gas fields would bring in, by
putting the demarcation line issue on the back burner and were
undergoing coordination with the possibility of subjecting more than
one areas to development. The premise for the agreement is that all
matters involved be carried out jointly. Boiling-down talks are thus
expected to be held for the two countries to jointly develop
Shirakaba (Chunxiao in Chinese), which China is exploring on its
own.

On this issue, Prime Minister Yasuo Fukuda during the bilateral
summit on May 7 stated, "There has been a major progress, making it
feasible to reach a settlement." According to a source involved in
the talks, the two countries found a breakthrough, reaching an
agreement that they would settle the issue in the form of equally
dividing profits of the development of resources, by putting on the
backburner the demarcation line issue, over which the two countries
are at odds.

The key to shelving the demarcation line issue is joint development.
Joint development in areas belonging to other countries requires an
arrangement that is advantageous to that nation in terms of the
distribution of the profits the development brings in. However, in
the East China Sea, Japan and China will undergo coordination so
that they equally share investment cost and distribute profits.

8) Japan, New Zealand to cooperate on creation of new international
framework for greenhouse gas emissions

MAINICHI (Page 5) (Full)
May 15, 2008

TOKYO 00001324 006 OF 012

Prime Minister Yasuo Fukuda yesterday held talks with visiting New
Zealand Prime Minister Helen Clark at the Prime Minister's Official
Residence (Kantei). In the meeting, the two leaders agreed that
their countries would cooperate on creating a new international
framework in which all major greenhouse gas emitters can participate
after 2012, when the first commitment of the Kyoto Protocol ends.

9) Japan, U.S., ROK to restart talks of their bureau
director-generals possibly on May 19

MAINICHI (Page 15) (Full)
May 15, 2008

Takashi Sudo

The Japanese, U.S. and South Korean chief delegates to the six-party
talks on the North Korean nuclear issue will meet in Washington
possibly on May 19. The major aim of the meeting is to analyze a set
of documents recently provided by North Korea in preparation for the
resumption of the stalled six-party talks. On the part of Japan, it
wants to resolve the nuclear and abduction issues simultaneously by
linking them. So, Tokyo aims to confirm concerted action (toward the
abduction issue) with the U.S. and South Korea, both of which have
indicated a certain degree of understanding about the issue.

The resumption of the trilateral meeting will in effect lead to
restarting a session of the Trilateral Coordination and Oversight
Group (TCOG) of bureau director-general-level officials from the
three countries, which has been suspended since June 2003. The
suspension of the TCOG was attributable to South Korea's
policy-shift to the so-called "sunshine policy." But the TCOG will
now be restarted because new South Korean President Lee Myung Bak
has turned around the previous policy toward North Korea, and also
because the president stated during the April Japan-South Korea
summit talks, "I will extend as much cooperation as possible to
resolve the abduction issue."

It is not correct to say, however, that Japan, the U.S., and South
Korea have consolidated their stances to jointly counter North
Korea. The U.S. has continued bilateral talks with North Korea and
reached one accord after another with North Korea. U.S. State
Department's Office of Korean Affairs Director Sung Kim rated the
nuclear documents presented recently by North Korea "complete." The
U.S. is expected to resume food aid to North Korea.

10) NGO to accuse crew of removing research whale meat

ASAHI (Page 1) (Abridged)
May 15, 2008

A Japanese research whaling fleet's crewmembers are suspected of
removing some portions of meat in large quantities from whales
caught in the Southern Ocean. Greenpeace (GP) Japan, an
environmental nongovernmental organization, has confirmed that whale
meat contained in cardboard boxes was delivered to the homes of
crewmen. GP Japan will report it to the Tokyo District Public
Prosecutors Office today on suspicion of professional embezzlement.

In April, the Nisshin Maru, an 8,044-ton whaling ship, returned to
Tokyo Bay. GP Japan traced home-delivered parcels through their
invoices from the whaling ship. As a result, GP Japan found that 12

TOKYO 00001324 007 OF 012


employees of Kyodo Sempaku, a research whaling company headquartered
in Tokyo, had sent a total of 47 suspicious boxes.

One of those delivered boxes had contained whale meat from the unesu
(lower jaw) for bacon at 23.5 kilograms (worth 100,000-300,000 yen),
according to GP Japan. If whale meat is contained in all the other
boxes, its total quantity would be over 1 ton. GP Japan suspects
that the whale meat could have been illegally sold to whale meat
stores or restaurants.

Japan's research whaling has been conducted by the Institute of
Cetacean Research with the Fisheries Agency's permission. ICR
charters Kyodo Sempaku vessels as well as their crew. Caught whales
are researched and disposed of. Edible portions are marketed as
"byproducts."

Meanwhile, a former crewman in his 50s, who was engaged in Southern
Ocean research whaling from 2005 through 2006, responded to the
Asahi Shimbun's interview and revealed facts about the crew's
removal of whale meat. He said many crewmen disposing of whales took
out unesu and other portions to salt them down. They packed whale
meat in cardboard boxes and sent them to their homes or elsewhere
after returning home. One of his colleagues sent 200-300 kilograms,
according to the former crewman.

11) Self-sufficiency main item of CEFP meeting agenda due to sharp
rise in food prices

ASAHI (Page 7) (Full)
May 15, 2008

The government's Council on Economic and Fiscal Policy (CEFP)
yesterday looked into the issue of agricultural reform. A sharp
increase in food demand is behind a steep rise in food prices
throughout the world. Japan's heavy dependence on imports is
increasingly becoming precarious. There is a great urgency to
introduce a system of large-scale farming through the easing of
regulations and raising the food self-sufficiency ratio by
introducing a corporate management system. However, barriers against
agricultural reform remain high with Agriculture, Forestry and
Fisheries (MAFF) Minister Wakabayashi indicating a strong resistance
to expanding corporate access to the agricultural sector.

Prime Minister Fukuda during the meeting revealed his intention to
map out a government plan before year's end, noting: "We are in a
crisis with Japan's food self-sufficiency now less than 40 PERCENT
while the global food supply situation becomes more severe. I would
like Agriculture Minister Wakabayashi to map out concrete measures
by the fall and have them discussed by the CEFP."

A number of emerging countries, such as China and India, where
demand for food is sharply increasing, are successively restricting
food exports in order to secure amounts for domestic consumption. An
increasing amount of corn is now being diverted for the production
of biofuel as part of a measure to combat global-warming greenhouse
gases. As such, the predominant view is that structural factors are
responsible for the sharp rise in food prices. Private-sector
members of the CEFP proposed measures such as expanding corporations
to enter the agricultural sector and promoting a large-scale farming
system, based on the notion that it is urgent to increase the food
self-sufficiency rate.


TOKYO 00001324 008 OF 012


Wakabayashi indicated a positive stance to such a proposal as to
establish a more-than-20-year-term leasehold interest system for
farming land." However, he balked at the proposal for expanding
corporate access to the agriculture sector, saying, "I will look
into that. Please leave the matter to me."

The government has already incorporated such policies as promoting
intensive agriculture and corporate access to the agricultural area
into the basic policy guidelines on economic and fiscal management
and structural reforms for the fiscal 2007 national budget, which it
adopted last year. MAFF also formulated an agricultural reform plan
last November. However, the actual implementation is far behind
their plans. MAFF has forgone the submission to the current session
of the Diet of related bills, such as one amending the Agriculture
Land Law. The ruling parties suffered a devastating defeat in the
Upper House election last summer. Some say that one reason for that
is the loss of the farm vote. MAFF and the agricultural policy
clique in the Diet are reluctant to carrying out reform that could
cause concern for farmers.

The greatest problem about Japanese agriculture is that it consists
in many cases of family-run operations, and therefore productivity
is low. Farmers who had stopped farming in the hope of seeing higher
land prices are still holding onto such land, hampering the
realization of intensive farming. In the meantime, abandoned
farmland is increasing due to a shortage of heirs to take over farm
households.

New entries into farming by companies or non-profit organizations
have increased, marking 281 as of March 2008. However, the number is
far too small, compared with the existing 2 million farm
households.

12) Current Diet session will not be extended

YOMIURI (Page 1) (Full)
May 15, 2008

The government and ruling parties decided yesterday not to extend
the current Diet session, which will close on June 15 as scheduled.
They have judged that it will be possible to pass certain bills
during the ongoing session, since the main opposition Democratic
Party of Japan (DPJ) has shown a stance of responding to
deliberations even after the enactment of a bill amending the Road
Construction Revenues Special Exemption Law.

The ruling Liberal Democratic Party (LDP) and its coalition partner
New Komeito confirmed yesterday that only bills the DPJ will support
will be deliberated in the final stage of the current session. LDP
Secretary General Ibuki Bunmei and Chief Cabinet Secretary Nobutaka
Machimura shared the perception in their meeting last night that
there was no need to extend the current Diet session.

13) Ruling coalition to put controversial bills on back-burner

NIKKEI (Page 2) (Abridged)
May 15, 2008

In the wake of the enactment of a road-related tax bill on revenues
for road construction and improvement, the government and ruling
parties will hurriedly gauge whether it is possible to enact during
the current session the remaining 51 bills still lingering in the

TOKYO 00001324 009 OF 012


Diet. With only one month left until the end of the session, the
government and ruling camp will give priority to enacting bills on
which the ruling and opposition camps do not disagree. With an eye
on continued deliberations on bills on which the two sides have
strongly been at odds, the government and ruling coalition will
likely put such bills as a government-run health insurance support
bill on the back-burner. They have no plan to resort again to an
override vote in the House of Representatives. At present, the
current session is unlikely be extended.

Ruling Liberal Democratic Party (LDP) Diet Affairs Committee
Chairman Tadamori Oshima yesterday asked his Democratic Party of
Japan (DPJ) counterpart Kenji Yamaoka for cooperation on Diet
deliberations, saying: "We want to push ahead with (deliberations)
on the remaining bills. So, I will rely on you."

In a House of Councillors plenary session yesterday, three bills,
including a designated structural reform district law bill were
approved. Of the 79 bill the government submitted to the ongoing
session, 30 have been enacted, falling short of 42 that cleared the
Diet the same day last year.

14) Improving implementation of new medical service system for very
old people fraught with challenges: Government, ruling parties start
discussion; Measures to reduce burdens to come into focus

NIKKEI (Page 3) (Excerpts)
May 15, 2008

The government and ruling parties have begun mapping out measures to
improve a new medical service system for people aged 75 and older,
which was introduced in April. The focal point of their discussion
is how to reduce the burden on those whose health insurance premiums
have risen despite low income. However, since the main pillar of the
new system is seeking a due share from elderly people, a major
reform is not envisioned. Implementing proposals made as improvement
measures is restricted due to limited fiscal resources. Completing
coordination of views by the mid-June target date will likely
encounter difficulties.

The Ministry of Health, Labor and Welfare on May 14 held a meeting
of officials in charge within local governments. In the Liberal
Democratic Party (LDP), Policy Research Council Chairman Sadakazu
Tanigaki the same day ordered Shunichi Suzuki, chairman of the
Social Security System Research Council, to look into specific
measures. The Policy Advisory Council of the Upper House also held
full-fledged discussions. The government and the ruling parties want
to map out measures by June 13, the day for the second deduction of
premiums.

The showcase of measures is how burdens can be reduced. Though the
MHLW had explained that low-income earners would shoulder lower
burdens under the new system, their premiums have in many cases
increased, because local governments are unable to take their own
burden-reduction measures.

15) Idea of Ozawa switching constituencies creates a stir

YOMIURI (Page 4) (Abridged slightly)
May 15, 2008

A sensational idea has cropped up that Democratic Party of Japan

TOKYO 00001324 010 OF 012


President Ichiro Ozawa run in the next Lower House election from the
Tokyo No. 12 constituency instead of his home turf of Iwate
Constituency No. 4.

DPJ Vice President Hajime Ishii made the proposal for switching
constituencies to Ozawa in a meeting yesterday at party
headquarters. New Komeito Representative Akihiro Ota now represents
the Tokyo No. 12 constituency. The DPJ has yet to determine its
candidate for the constituency. Many DPJ members think switching
constituencies is difficult in view of supporters' sentiments. The
DPJ seemingly intends to apply pressure on the New Komeito and its
support base, Soka Gakkai, by brandishing this surprising tactic.

Ishii quoted Ozawa as saying in the meeting: "If I decide to run in
the race from the Tokyo No. 12 constituency, (the prime minister)
might decide to carry out the next Lower House election at an early
time so that it will not overlap with next summer's Tokyo assembly
election, a priority for the New Komeito." Ozawa thus left some
latitude for the idea of switching constituencies.

Earlier, in a press conference on March 1 in Morioka, Ozawa was
asked about the possibility of changing his constituency. In
response, he said: "I will answer that question when election time
comes. I do not have such an intention at present."

16) Delicate gap opening between Ozawa and aides Hatoyama, Kan

YOMIURI (Page 4) (Full)
May 15, 2008

Democratic Party of Japan Secretary General Yukio Hatoyama and
Deputy President Naoto Kan attended DPJ House of Representatives
member Sakihito Ozawa's fund raising party held in Tokyo last night.
In the party, there was a scene suggesting there may be a delicate
gap opening between them and President Ichiro Ozawa.

Hatoyama said: "In the DPJ, there is another Ozawa. (I am) one with
this person (Sakihito Ozawa). President Ozawa does not think he is
one with (me)." The comment drew laughter from the audience.

Kan commented: "What the DPJ members need is 'patience.' You might
want to say, 'I don't like him. I cannot do it.' That might make you
feel good, but with such an attitude, we will never be able to take
power."

Both Hatoyama and Kan have already announced their support for Ozawa
for the upcoming DPJ presidential race in September. One observer
said, "They inadvertently voiced their discontent (with Ozawa)."

17) Referring to his "scandal," Nakagawa reveals in his book that he
had given "candid advice" to the woman himself

ASAHI (Page 4) (Abridged slightly)
May 15, 2008

Hidenao Nakagawa, former secretary general of the Liberal Democratic
Party, has written a book titled Kanryou Kokka no Houkai (Collapse
of a Bureaucracy-led Country) that will be published by Kodansha in
late May. In the book, Nakagawa harshly criticizes an LDP group that
is calling for a consumption-tax hike, writing, "Such a step is
designed to force a greater burden on the general public to prolong
the debased life of the elites in Kasumigaseki."

TOKYO 00001324 011 OF 012

Describing the current state of Japanese politics as bureaucracy-led
politics, Nakagawa also calls for the fundamental reform of the
political system, including the civil servant system. Specifically,
he proposes abolishing the civil servant career system, reducing
200,000 jobs, and introducing a doshu (regional bloc) system.

In October 2000, Nakagawa resigned as chief cabinet secretary under
the then Mori cabinet due to a scandal involving a woman. Nakagawa
reported that he had conveyed investigative information on the woman
on the phone. About this case, the book reads: "Based on what I had
learned from a private citizen, I gave frank advice not to associate
with that bad person. It was suspected that the police had leaked
information." He thus admitted that the information was conveyed by
himself, not by the police.

Now that Nakagawa has referred to the scandal involving a women,
which is regarded as his Achilles heel, some LDP members think that
he has revealed his eagerness to aim at the prime minister's post by
settling the past problem completely.

18) Angry Kamei calls DPJ "idiots"

YOMIURI (Page 4) (Abridged)
May 15, 2008

People's New Party Representative Shizuka Kamei in a regular press
conference yesterday disgustingly said, "The Democratic Party of
Japan is crazy, idiotic."

Kamei was angry with DPJ member Hiroshi Kawauchi. Kawauchi gave a
speech in a Lower House plenary session on May 13 explaining why he
would vote against readopting a bill to keep road-related tax
revenues earmarked for building and improving highways. In the
speech, Kawauchi said in reference to the 2005 "postal" Diet
dissolution, "In a sense, the idea of then Prime Minister Koizumi
was correct, (who drove Mr. Kamei to leave the Liberal Democratic
Party)."

Kawauchi simply indicated that Koizumi's view that even if
postal-related bills were voted down in the Upper House, they could
be readopted with a two-thirds overriding vote in the Lower House
was correct. Kawauchi also pointed, "(The results in the Lower
House) reflected public opinion only about postal privatization." He
did not give a positive assessment to Koizumi but cited the episode
to criticize the ruling bloc's recent revote.

But for the PNP, a party composed mainly of lawmakers who bolted the
LDP over postal privatization, opposing postal privatization is the
party's policy. Kamei apparently could not stand the words "postal
privatization."

After the plenary session, Kamei reportedly told a senior DPJ
lawmaker on the phone: "If you deny the PNP's position at the Diet,
we will not be able to cooperate with you in election campaigns or
form a parliamentary group in the Upper House."

19) Japan's competitiveness inches up from 24th place last year to
22nd in 2008 yearbook

NIKKEI (Page 7) (Full)
May 15, 2008

TOKYO 00001324 012 OF 012

In the 2008 World Competitiveness Yearbook, released on May 15 by
the International Institute for Management Development (IMD) (based
in Lausanne) in Switzerland, Japan's ranking inched up from the 24th
place last year to the 22nd. This year's survey, which marks the
20th anniversary of the issuance of the first edition in 1989, in
which Japan was at the top, presented the tasks that Japan should
address to recover its competitiveness.

IMD has produced yearly almanacs, based on statistics and results of
inquiries in 55 countries and regions regarding 331 items in these
four areas: (1) The macro-economy; (2) the government's efficiency;
(3) business efficiency; and (4) infrastructure.

In the areas of business efficiency and infrastructure, Japan saw an
increase in its ranking. In the area of business efficiency, in
which Japan's standing rose from the 27th last year to the 24th,
Japan attained first place in terms of the consumer-satisfaction
level and third place regarding training for employees.

In the area of infrastructure, Japan's standing recovered from 6th
place to 4th. Japan came first on the survey items of the school
attendance rate and the average span of life. Besides, Japan's
intellectual infrastructure was evaluated high, as seen from its
third ranking regarding corporate spending for research and
development as a percentage of GDP and the productivity of patents.

But on the macro-economy, Japan's place dropped from 22nd to 29th.
In terms of income from traveling as a percentage of GDP, Japan
ranked 55th, the lowest place, showing that the overseas movement of
Japanese personnel, goods, and money remains stagnant for a country
of its economic scale.

DONOVAN

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