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Cablegate: Daily Summary of Japanese Press 09/02/08

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UNCLAS SECTION 01 OF 14 TOKYO 002392

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 09/02/08

INDEX:

(1) Having lost his spirit, Prime Minister Fukuda walks away from
his post; Strains with New Komeito evident; Priority policies reach
impasse (Mainichi)

(2) Prime minister to leave office without policy agenda unfilled:
Fate of supplementary budget unknown; Only sets direction for
reallocation of special road-construction funds (Asahi)

(3) Editorial: Fukuda government reaches cul de sac as it fails to
come up with strategy for Lower House dissolution (Nikkei)

(4) Fukuda made decision secretly without even consulting his wife
(Mainichi)

(5) "I am different from Mr. Abe," says Fukuda without offering
apology (Mainichi)

(6) Poll on Fukuda cabinet, political parties, MSDF refueling
mission (Asahi)

(7) Summit of lower house speakers opens in Hiroshima; U.S. House of
Representatives Speaker Pelosi and others lay wreathes at the Atomic
Bomb Memorial Tomb (Yomiuri)

(8) Essay by Asahi columnist Yoshibumi Wakamiya on the Hiroshima
Summit: Next time the U.S. President should come (Asahi)

(9) Defense Ministry seeks Guam base-construction costs in budgetary
estimate to cover U.S. military buildup expenses with taxpayer money
(Akahata)

(10) Rate of contract price to target price at 99 PERCENT in more
than 50 PERCENT of all projects during three years until fiscal
2007, showing no progress on ODA reform (Tokyo Shimbun)

(11) Prime Minister's schedule, September 1 (Nikkei)

ARTICLES:

(1) Having lost his spirit, Prime Minister Fukuda walks away from
his post; Strains with New Komeito evident; Priority policies reach
impasse

MAINICHI (Page 3) (Abridged slightly)
September 2, 2008

Having lost his drive, Prime Minister Yasuo Fukuda abruptly
announced last night his decision to step down ahead of the next
extraordinary Diet session, scheduled to convene on Sept. 12. Ever
since taking office after former Prime Minister Shinzo Abe "walked
off the job," Fukuda has been struggling amid sagging support
ratings. He has also been stigmatized by the ruling coalition as
unfit to be the banner carrier for the next Lower House election.
The major opposition Democratic Party of Japan has intensified its
confrontational stance toward the government. Discord with the New
Komeito over the management of the administration has become
noticeable.

Around 6 p.m. yesterday, after returning from Osaka, where he
visited to participate in the National Disaster Prevention Day

TOKYO 00002392 002 OF 014


event, the Prime Minister called LDP Secretary General Taro Aso and
Chief Cabinet Secretary Nobutaka Machimura to his office.

Their meeting lasted one hour and 10 minutes. Aso and Machimura
tried to dissuade Fukuda from resigning, but he rejected their
advice, saying, "I have made up my mind." Fukuda held a press
conference two hours later in which he crisply said: "I have made up
my mind after seriously considering how politics should be. I made
the final decision last weekend."

His decision "last weekend" was taken seriously within the LDP.

In response to soaring crude oil and other commodity prices, the
government and ruling coalition decided on a package of economic
stimulus measures on Aug. 29 including a flat-sum tax cut in
compliance with the New Komeito's request. Although Fukuda was
cautious about the fixed-rate tax breaks on income and resident
taxes from the viewpoint of fiscal discipline, he eventually gave in
to the New Komeito's request.

After the July Lake Toya summit, the New Komeito began to distance
itself from the Prime Minister, some leaders complaining that their
party would not be able to put up good fight in the next Lower House
election under Prime Minister Fukuda. Taking the initiative in the
process of determining the timeframe and the period of the next Diet
session, while keeping in mind possible Lower House dissolution for
a snap general election between the year-end and New Year period,
the New Komeito succeeded in having the flat-sum tax cut included in
the stimulus package.

A bill amending the Antiterrorism Special Measures Law to continue
Japan's refueling mission in the Indian Ocean is expected to take
center stage in the upcoming Diet session. But there were no signs
that DPJ President Ichiro Ozawa, who is now certain to win his third
term, would make any concession on the bill. Further, the fate of
the refueling mission has become uncertain due to the New Komeito's
reluctance to use a two-thirds overriding vote in the House of
Representatives.

A bill to set up a Consumer Affair Agency, one of the prime
minister's top priorities, is also deadlocked.

Former Economy, Trade and Industry Minister Akira Amari, who is
close to Aso, has recently referred to the possibility of unseating
Fukuda, and former LDP Policy Research Council Chairman Shoichi
Nakagawa criticized Fukuda as a prime minister who does nothing. The
view was prevalent that such moves were linked to the New Komeito's
alienation from Fukuda.

A former LDP cabinet minister presumed Fukuda's frame of mind was
this way: "The New Komeito gave Fukuda the coup de grace after the
DPJ relentlessly bullied him. Fukuda felt he had no other option but
to resign."

Fukuda reportedly explored ways to dissolve the Lower House after
the FY2009 budget clears the Diet. Nevertheless, given the political
situation where his administration was being encircled by the
opposition bloc, Fukuda felt that it was impossible for him to steer
his administration.

(2) Prime minister to leave office without policy agenda unfilled:
Fate of supplementary budget unknown; Only sets direction for

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reallocation of special road-construction funds

ASAHI (Page 6) (Full)
September 2, 2008

The fate of the government's economic stimulus package has become
unclear due to Prime Minister Fukuda's sudden announcement of his
intention to step down from his post. How can the package adopted
late last month now be realized? Fukuda said in his resignation
statement that he was able to set a direction for the reallocation
of special road-construction funds for other uses and for the
establishment of a consumer agency. However, his efforts so far to
complete this agenda have been half-baked. Many items, including a
consumption tax hike as a means finance social security, have been
left for later discussion. The resignation of Prime Minister Fukuda
could become a turning point for the structural reform line adopted
during the Koizumi administration.

In a bid to address the economic downturn, the government on August
29 adopted a comprehensive economic stimulus package consisting of
1.8 trillion yen in fiscal spending funded from the fiscal 2008
supplementary budget and 11.7 trillion yen worth of projects. His
announcement came right after the package had been completed. One
Finance Ministry Official, looking dismayed, said, "I have no idea
what will happen from now."

Pressure for pork-barrel spending will likely mount, with an eye on
the next Lower House election. The trend of moving away from the
Koizumi reform policy line could accelerate.

The prime minister had ruled out the possibility of issuing
deficit-covering bonds, insisting that the goal of moving the
primary balance into the black by fiscal 2011 must be achieved.
Secretary General Taro Aso, who has been tipped as the most likely
candidate to replace Fukuda, said, "Until the economy picks up,
there is no other way than using fiscal disbursements." There is
thus a possibility of the new administration actively mobilizing
fiscal expenditures.

Even though Prime Minister Fukuda during a press conference on the
1st said that he had set a direction for the reallocation of special
road funds for other uses, a final settlement has yet to be reached.
He intends to do away with the mechanism of gas tax revenues
automatically diverted to cover expenses for road construction so
that the revenues can be used for other purposes. However, deciding
on the amount of road budget funds to slashed for reallocation for
other uses has been delayed until the year-end compilation of the
budget. Because the prime minister was the one who adopted that
policy, brushing aside objections from the ruling camp, the road
policy clique in the Liberal Democratic Party (LDP) can be expected
to try to roll back the move to free up special road-construction
funds.

Regarding future economic stimulus measures, Ryutaro Kono, chief
economist at the BNP Paribas predicted: "Many market players see the
economic stimulus package as pork barrel. In order to spur growth
over the mid- to long-term, deregulation and measures to lure
foreign investment instead of tax cuts or fiscal disbursements are
necessary. I am worried that the new cabinet might tilt toward
turning budget money into pork-barrel largesse."

What will become of a consumption tax hike, establishment of

TOKYO 00002392 004 OF 014


consumer agency?

Regarding social security policy, Prime Minister Fukuda took a
stance of positively addressing urgent items on the agenda,
including measures to deal with the elderly, a shortage of doctors,
and employment issues. However, regarding the goal of constraining
social security spending by 1.1 trillion yen over five years, no
prospects have been obtained for ways to achieve a 220 billion yen
cut in fiscal 2009.

In specific areas, there are many issues to be addressed. State
contributions to the basic pension are set to be raised starting in
fiscal 2009. It will cost 2.3 trillion yen to finance this policy.
However, no decision has been made yet on a consumption tax hike,
the most likely measure to be adopted. The government and the ruling
parties plan to consider fundamentally reforming the tax code,
including the consumption tax, starting in the fall. The Liberal
Democratic Party (LDP) had planned to hold a meeting of its Tax
System Research Commission this week. Many government officials take
the stand that if a political vacuum occurs, it would be impossible
to discuss measures that ask the public to bear more of a burden.

Regarding such issues as a shortage of doctors and emergency medical
service, the government had decided to increase the enrollment limit
to medical departments at universities up to the largest-ever 8,300,
starting from the next fiscal year. However, discussions on specific
measures were to be pursued in the future.

As a measure to address the working-poor issue, the prime minister
had ordered the drafting of a bill amending the Worker Dispatch Law
at an early date. In response, the labor ministry had intended to
submit such a bill before the end of October in the extraordinary
Diet session. However, the effort could be wasted, depending on the
situation in the Diet. The prime minister had been enthusiastic
about establishing a consumer agency. However, the proposal is now
in danger of being killed.

The government had been preparing to submit a bill to set up a
consumer agency to the extraordinary Diet session to be convened
this month. The Democratic Party of Japan (DPJ or Minshuto) in late
August released the outline of a countermeasure to establish a
consumer interest authority that is independent of government
agencies. It has been anticipated that passage of the
government-sponsored bill would require a revote in the Lower House.
However, the New Komeito is presumably negative toward the idea of
holding a revote on the bill.

There is also a possibility of Fukuda's resignation affecting the
fate of environment measures. When he chaired the Lake Toya Summit,
the prime minister released the Fukuda Vision, a package of
proposals featuring cutting Japan's greenhouse gas emissions by 60
PERCENT -80 PERCENT from the present level by 2050. He was
determined to display leadership in negotiations to set the
next-term framework that will replace the Kyoto Protocol, by calling
for the sharing of the achievements made at the G-8, including a 50
PERCENT carbon emissions cut. However, his sudden resignation could
serve as a negative factor for Japan exerting an influence.

(3) Editorial: Fukuda government reaches cul de sac as it fails to
come up with strategy for Lower House dissolution

NIKKEI (Page 2) (Full)

TOKYO 00002392 005 OF 014


September 2, 2008

Prime Minister Yasuo Fukuda suddenly held a press conference and
announced his intention to resign from his post. He said: "Now is
the best time for me to step down so that a political vacuum will
not be created. I thought it would be good for someone not myself to
serve in the prime minister's post." He revealed that he had chosen
yesterday to announce his resignation before the opening of the
upcoming extraordinary Diet session. The Fukuda administration has
reached an impasse because the Prime Minister has failed to come up
with a strategy for dissolving the House of Representatives.

New premier should dissolve Lower House as early as possible

Under the current politically difficult situation with the Diet
divided between the ruling and opposition camps, in order to
stabilize his administration, Fukuda felt out the possibility of
forming a grand coalition with the main opposition Democratic Party
of Japan (DPJ). After this notion hit a snag, he has been busy
handling bills in a Diet session. According to the results of the
latest Nikkei poll, the Fukuda cabinet's approval rate dropped to 29
PERCENT from the 38 PERCENT of the previous poll, which was
conducted soon before the cabinet shakeup. Therefore, the prevailing
view in the ruling bloc was that lawmakers would not be able to
campaign the Lower House election under Fukuda. There was concern
that the move of unseating Fukuda out of alarm about the next Lower
House election would have surfaced.

The New Komeito, which has called for dissolution of the Lower House
and a snap election before the end of the year or early next year,
began to take a severe stance toward the Fukuda administration.
There was constant discord between Fukuda and the New Komeito over
when to convene the extra session, as well as over the length of the
term of the session.

Fukuda expressed his desire to enact during the extra session a bill
extending Japan's refueling mission in the Indian Ocean and
legislation to establish a consumer affairs agency. The DPJ,
however, has maintained its policy of opposing an extension of the
refueling law. Therefore, in a bid to extend the refueling law, the
ruling coalition had no other choice but to take a two-thirds
overriding vote in the Lower House. The New Komeito opposed it,
however. Given that the situation, Fukuda would have had to deal
with bills in the extra session without the cooperation of the New
Komeito.

The possibility was high that Fukuda, unable to break the deadlock,
would have been forced to resign as prime minister soon or later, in
our view. It is understandable that Fukuda decided to step down
before the opening of the extra session to keep the political vacuum
to a minimum.

Former Prime Minister Shinzo Abe, Fukuda's predecessor, gave up on
his post after serving in his post just one year. Fukuda will step
down from the prime minister's post in less than one year without
asking for a vote of confidence through a Lower House election. It
is an extremely abnormal situation that a third prime minister will
come into existence due to the rotation of political power in the
ruling camp.

Prior to his press conference last night, Fukuda told LDP Secretary
General Taro Aso: "I would like you to push ahead with the selection

TOKYO 00002392 006 OF 014


of a date for a presidential election and its procedure." The LDP
must promptly implement the presidential race and launch a new
government.

No matter who becomes prime minister, that person should receive the
judgment of voters by dissolving the Lower House as quickly as
possible. Carrying out the Lower House election is a shortcut to
keeping a political vacuum to a minimum.

Meanwhile, DPJ President Ichiro Ozawa formally announced at a press
conference that he will run for his party's leadership race. The
outlook is that it will be decided on Sept. 8 whether Ozawa will be
reelected for his third term uncontested and he will be reelected at
the party's convention on Sept. 21. Ozawa would become the DPJ prime
ministerial candidate in the next Lower House. He expressed his
intention at the convention to give a policy speech that would
become the basis for his administration.

Katsuya Okada and Seiji Maehara, both DPJ vice presidents, are
regarded as strong rivals to Ozawa, announced that they would not
run in the race. Public Relations Committee Chairman Yoshihiko Noda
gave up his candidacy due to opposition from his group, even though
he expressed his desire to run in the race.

We have called on the DPJ to come up with a manifesto (set of
campaign pledges) for the next Lower House election, after carrying
out active policy debate during the campaign for the leadership
race. It is regrettable that the DPJ squandered a good chance to
promote its political presence.

Ozawa must talks about policy

Following Fukuda's announcement of his resignation, the LDP is
expected to hold a presidential election quickly. Voters must not be
completely satisfied with the uncontested DPJ presidential race.

Ozawa said in the press conference that there would be no change in
thinking between his party's manifesto for the Lower House election
and the one for last year's House of Councillors race.

However, the DPJ's manifesto for last year's Upper House election
stated that most of totaling 15.3 trillion yen in fiscal resources
to compensate the incomes of individual farmers and to allocate
child allowance would be covered by reducing wasted tax money by
public administration. It lacked persuasiveness. After that, the
largest opposition party came up with new measures to abolish
provisional taxes, including a gasoline tax. However, some DPJ
lawmakers have criticized the new measures for lacking fiscal
support.

If a DPJ-led government is inaugurated, it would deal with issues,
including the compilation of a budget, based on its manifesto. Ozawa
needs to talk more about policies in drafting a set of campaign
pledges. He also needs to humbly listen to criticism. It is
indispensable for the DPJ to make clear its priorities about its
policies, after examining the set of campaign pledges for the Upper
House election.

With the prime minister's announcement of his resignation, the
possibility has increased that a Lower House dissolution and general
election will be carried out before the end of the year. The next
Lower House election will become a historic one which gives voters a

TOKYO 00002392 007 OF 014


chance to choose a new government. It is urgent for the LDP and DPJ
to show their manifestos and contents that will directly link to
national prosperity.

(4) Fukuda made decision secretly without even consulting his wife

MAINICHI (Page 3) (Full)
September 2, 2008

Prime Minister Yasuo Fukuda made preparations for his resignation
secretly.

The prime minister said in a press conference yesterday that he had
made up his mind last weekend. In reality, he reportedly made the
decision earlier.

The prime minister did not reveal his intention to resign to his
aides. He did not even consult his wife, Kiyoko, either.

As a result, his decision to step down did not reach beyond the
Prime Minister's Office before his press conference.

Apparently feeling relieved after the news conference, the prime
minister frankly told his aides: "September 1st, 2nd or 3rd was the
only timing I considered for the announcement. I chose the day that
(DPJ President Ichiro) Ozawa decided to run in the party leadership
race." He thus revealed his plan to overshadow the DPJ presidential
race with his announcement to resign, which would then be followed
by an LDP presidential race.

Fukuda also said: "Because (both the DPJ and New Komeito) are
calling for the prime minister's policy speech for Sept. 29, the new
prime minister should do so on Sept. 29."

(5) "I am different from Mr. Abe," says Fukuda without offering
apology

MAINICHI (Page 3) (Full)
September 2, 2008

Prime Minister Yasuo Fukuda held a press conference last night to
announce his abrupt decision to step down. Asked for his view about
the two successive prime ministers "walking away from their
administrations," Fukuda said: "This is different from the case of
my predecessor, Prime Minister (Shinzo) Abe. He was suffering from
ill health. I don't have any health problems."

Abe felt compelled to resign following the revelation of misconduct
by some of his ministers about a month after he shuffled his cabinet
to boost his administration. Fukuda's resignation, too, came about a
month after he shuffled his cabinet.

Fukuda started off the news conference with the complaint: "A series
of issues emerged, such as political funds, pension records,
hepatitis-C, and misconduct at the Defense Ministry, and I have been
busy dealing with those issues. The Democratic Party of Japan did
not respond to our calls for discussion on important issues and only
delayed and boycotted deliberations. It took much time to decide on
anything."

Citing a decision to free up road-related revenues for general
spending, he also played up his administration's achievements,

TOKYO 00002392 008 OF 014


saying: "From the people's viewpoint, my administration has started
reforms that no one would touch, although in an unobtrusive manner."
He continued to lament: "I wanted to do something about important
matters, but there were a variety of political circumstances. It
would be better for someone other than me to take the helm of
government in the upcoming extraordinary Diet session."

The prime minister calmly recounted chronological events without
offering an apology for the resulting political stalemate. A
reporter told Fukuda, "You are reporting on matters as if they are
someone else's problem." In response, Fukuda showed his temper,
saying: "I am a person who can see myself objectively."

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

ASAHI (Page 4) (Full)
September 2, 2008

Questions & Answers
(Figures shown in percentage, rounded off. Bracketed figures denote
proportions to all respondents. Figures in parentheses denote the
results of the last spot survey conducted Aug. 1-2.)

Q: Do you support the Fukuda cabinet?

Yes 25 (24)
No 55 (55)


Q: Why? (One reason only. Left column for those marking "yes" on
previous question, and right for those saying "no.")

The prime minister is Mr. Fukuda 18(4) 6(3)
It's an LDP-led cabinet 33(8) 23(12)
From the aspect of policies 18(4) 60(33)
No particular reason 28(7) 9(5)

Q: Which political party do you support now?

Liberal Democratic Party (LDP) 26 (23)
Democratic Party of Japan (DPJ or Minshuto) 20 (22)
New Komeito (NK) 3 (4)
Japanese Communist Party (JCP) 3 (3)
Social Democratic Party (SDP or Shaminto) 1 (1)
People's New Party (PNP or Kokumin Shinto) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 0 (1)
None 40 (35)
No answer (N/A) + don't know (D/K) 7 (11)

Q: Do you think the House of Representatives should be dissolved as
early as possible for a general election? (Figures in parentheses
denote the results of a survey taken June 14-15.)

Yes 43 (45)
No 45 (42)

Q: If you were to vote now in a general election for the House of
Representatives, which political party would you like to vote for in
your proportional representation bloc?


TOKYO 00002392 009 OF 014


LDP 27 (25)
DPJ 31 (32)
NK 3 (4)
JCP 4 (3)
SDP 2 (1)
PNP 0 (0)
NPN 0 (0)
Other political parties 1 (1)
N/A+D/K 32 (34)

Q: Which one between Prime Minister Ozawa and DPJ President Ozawa do
you think is appropriate for prime minister? (Figures in parentheses
denote the results of a survey taken July 12-13.)

Mr. Fukuda 36 (37)
Mr. Ozawa 28 (28)

Q: The government and ruling parties unveiled a package of economic
stimulus measures to deal with rising prices and economic downturn.
This package includes an across-the-board income tax break. Do you
appreciate this uniform tax break?

Yes 35
No 46

Q: There is an opinion saying the government should issue
deficit-covering bonds and compile a large-scale supplementary
budget to turn the economy around. Are you in favor of this
opinion?

Yes 15
No 67

Q: Do you feel badly off these days. If so, to what extent?

Very much 33
Somewhat 49
Not very much 15
Not at all 2

Q: U.S. and other foreign forces have sent fleets to the Indian
Ocean to fight against terrorist groups in Afghanistan. A law
intended for the Self-Defense Forces to back up their fleets there
will expire in January next year. The government will present a bill
to the Diet at its forthcoming session to extend this SDF mission.
Do you think Japan should continue the SDF's activities in the
Indian Ocean?

Yes 37
No 50

Polling methodology: The survey was conducted Aug. 30-31 over the
telephone on a computer-aided random digit dialing (RDD) basis.
Respondents were chosen from among the nation's voting population on
a three-stage random-sampling basis. Valid answers were obtained
from 2,048 persons (58 PERCENT ).

(7) Summit of lower house speakers opens in Hiroshima; U.S. House of
Representatives Speaker Pelosi and others lay wreathes at the Atomic
Bomb Memorial Tomb

YOMIURI (Internet edition) (Full)

TOKYO 00002392 010 OF 014


September 2, 2008

The G8 meeting of lower house speakers opened this morning in
Hiroshima City. This is the seventh time for the speakers' summit to
be held, but it is the first time for Japan to host it. Lower House
Speaker Yohei Kono, who serves as the chair for the meeting, and
U.S. House of Representatives Speaker Nancy Pelosi are among the
representatives from the G8 countries attending the meeting.

Prior to the opening of the session this morning, each country's
speaker laid a wreath at the city's memorial to those who died in
the atomic bombings. They listened to a message calling for peace
from a local elementary school student. They also visited the
Hiroshima Peace Memorial Museum, where the tragedy of the atomic
bombings is displayed, and there, they listened to the experiences
related by atomic bomb victims.

Ms. Pelosi, being next to the vice president in line for the
presidency should succession be needed, is the highest seated
dignitary from the United States to visit Hiroshima and the site of
the atomic bombing.

Afterward, the group exchanged views on the theme, "Role of
parliaments in promoting peace and disarmament," at Hiroshima's
International Conference Center. Speaker Kono deepened discussion of
nuclear disarmament at Hiroshima, making an appeal for international
peace, but there is a likelihood that the topic of the dispute over
Georgia will come up, since the confrontation between the U.S. and
European countries on the one side and Russia on the other has been
heightening. The afternoon session will be devoted to discussions on
the theme, "Democracy in Bicameral Legislatures."

The speakers' summit is an informal meeting. Although it is
customary for political statements and the like that integrates
views not to be issued, after the meeting ends this evening, a press
conference will be held at which Speaker Kono will summarize the
summit.

(8) Essay by Asahi columnist Yoshibumi Wakamiya on the Hiroshima
Summit: Next time the U.S. President should come

ASAHI (Page 11) (Slightly abridged)
September 1, 2008

On that fateful morning, then Illinois assembly member Barrack Obama
was driving his car in downtown Chicago when he heard on the radio
about the first airplane crashing (into the World Trade Center). By
the time he reached his meeting, two more planes had crashed into
buildings. He immediately got out of the car, looked to the heavens,
and thinking about his country and family, was overcome by grief for
the victims.

It will soon be seven years since the tragedy of 9/11, when
terrorists attacked the World Trade Center and the Pentagon. "With
those incidents, everything changed," Obama later said. Three years
later, he became a U.S. senator, and now, he himself has completely
changed, having become a presidential candidate.

That Barrack Obama, recalling the fear that 9/11 generated, came out
with a statement of his thinking this July 16 that went: "I will
place at the center of nuclear policy the goal of complete abolition
of nuclear weapons." In a campaign speech in Indiana, he heatedly

TOKYO 00002392 011 OF 014


stated, "It is time for America to send a clear message that we will
aim for a world where there are no nuclear weapons."

His statement could only come from a sense of alarm about how
fearful it would be if terrorist groups got their hands on nuclear
weapons. The Democratic Party that nominated him at its convention
at the end of last month included that in its election promises.

Having just played a role in that party convention, U.S. House of
Representatives Speaker Nancy Pelosi has come to Japan, and is now
in Hiroshima. She is attending the G-8 Summit of Lower House
Speakers that convenes on Sept. 2. This year, the seventh such
event, is being hosted by Lower House Speaker Yohei Kono.

At the Toyako Summit of world leaders that was held in July, the
main theme was global warming. If that is the case, I would like to
bring up here another global crisis. The proposal came from Mr. Kono
to choose Hiroshima as the sight to discuss "peace and disarmament."
In the past, the eight countries represented here divided themselves
into "Axis" countries of Germany, Japan, and Italy and "Allied"
countries centered on the U.S. and Britain and fought a war. Now,
their parliamentary speakers have assembled to lay wreathes at the
monument in Hiroshima dedicated to atomic bomb victims, and tour the
Peace Memorial Museum, where the bombings are vividly portrayed. The
most noteworthy participant is no doubt Speaker Pelosi, who has come
from the country that dropped the bombs.

Prior to 1963, the feeling in Hiroshima, which had made the atomic
bombings its hell, was that the United States could not be forgiven
and the tragedy could not be wiped away. However, the United States'
thinking was that without using the bombs, Japan could not have been
subjugated, the expectation being that in ending the war, there
would be tragic resistance. There was also a feeling of resistance
from Japan, which stressed the catastrophe of the bombings, tending
to forget that it had been the aggressor in the war. Even in 1996,
when the Atomic Bomb Dome (Peace Memorial) was recognized as a World
Heritage, the U.S. was against the move.

Mr. Kono, who fully realizes the existence of such a situation, last
year broached the idea to Speaker Pelosi first of all with the
words, "If you were to come, it would be to Hiroshima." She replied
that it would be a "good idea." Perhaps the Speaker's decisiveness
was because she is a liberal, but Speaker Pelosi is the highest
level U.S. politician to visit Hiroshima in the 63 postwar years.

Even John McCain, the Republican Party candidate for president, in
May made a similar statement. He introduced former President
Reagan's words, "Our dream is a day when there will be no nuclear
weapons on this earth," and then stated, "This is my dream, too."

If such is the case, I would like to see the next president, whether
it is Mr. Obama or Mr. McCain, make a visit to Hiroshima. In the
message of aiming for a nuclear-weapon free world, there is no doubt
such a spirit.

In fact, this July 2, President Bush, then on the way to the Toyako
Summit, had this exchange with reporters: When asked, "There has
been a proposal for the prime minister of Japan to visit Pearl
Harbor in Hawaii, and for the U.S. president to visit Hiroshima," he
answered, "I haven't given it any thought, but it is an interesting
idea."


TOKYO 00002392 012 OF 014


It is difficult for him to make the trip, given his remaining short
stay in office, but Mr. Bush did make this significant remark: "Wipe
the slate of the past clean, and turn to look to the future." This
may have been lip-service, but if his friend (Koizumi) and he as a
combination had continued, would it have been out of the question?

That reminds me, there has never been a prime minister who has
visited Pearl Harbor. There seems to be a strong resistance to do so
within the Japanese government. In 1994, such a visit was considered
when the Emperor visited the United States, but it never came
about.

If the prime minister visits Pearl Harbor, the U.S. president, too,
would find it easier to pay visits to Hiroshima and Nagasaki. If
both leaders bowed their heads in reflection and then laid down
memorial wreathes, it would take the form of a real reconciliation
and friendship. The atomic bomb victims, too, would perhaps be
somewhat buoyed up by the gesture.

What words would be used at Hiroshima by Mr. Obama, who captured
peoples' hearts with his speeches that called for change and unity?
What kind of emotions would be evoked by Mr. McCain, who suffered as
a prisoner of war?

It may be said to be premature, but my interest in this has
continued to climb.

(9) Defense Ministry seeks Guam base-construction costs in budgetary
estimate to cover U.S. military buildup expenses with taxpayer
money

AKAHATA (Top Play) (Full)
August 30, 2008

The Defense Ministry has earmarked for the first time outlays for
constructing facilities in Guam for U.S. Marines in the budgetary
estimate for next fiscal year that was formally decided yesterday.
The ministry is about to pour taxpayers' money into a plan to
reinforce the U.S. military's presence in Guam on the pretext of
relocating U.S. Marines in Okinawa to Guam. It is unprecedented for
a foreign government to bear the costs for construction of military
base facilities in a territory belonging to the U.S.

Under an agreement reached between Japan and the U.S. (in April
2006) on the relocation of U.S. Marines in Okinawa to Guam, Japan
agreed to (1) foot the bill for construction of such facilities as a
headquarters (2.8 billion dollars or 324.8 billion yen, 116 yen to
the dollar) from national coffers; and (2) commission private
companies to build infrastructure facilities at the base, such as
electricity and houses for Marines and their family members by
disbursing government funds (3.29 billion dollars or 381.6 billion
yen).

The Defense Ministry decided to propose some of the above two
categories of expenses in its budgetary request for next fiscal
year. The estimate also includes costs needed to construct a Guam
relocation office (tentative name).

Regarding outlays for a plan to relocate Marines from Okinawa to
Guam, the Defense Ministry included expenses for preliminary studies
in its past budgets. But this is the first time for the ministry to
seek actual construction costs. The ministry has said it will decide

TOKYO 00002392 013 OF 014


on a specific amount of money to pay through coordination with the
U.S. military and in the process of compiling a budget.

Ministry also request costs for repairing GSDF choppers, with eye on
Afghanistan

The Defense Ministry incorporated in its budget request expenses
needed to upgrade the capability of the Ground Self-Defense Force's
CH-47 transport helicopters, keeping in mind a strong request coming
from the U.S. to dispatch CH-47 choppers to Afghanistan.

The Defense Ministry is eager to enhance its engine output so that
the choppers can cope with a variety of environments, such as very
high land, when they are used to transport troops overseas on a
mission connected to international peacekeeping operations. The
ministry plans to bulletproof the helicopter against attacks from
the ground.

The slaying of aid worker Kazuya Ito in Afghanistan showed that the
U.S.-led military operation has exacerbated the security situation
there. At such a time, the Defense Ministry has proposed budgetary
allocations for a plan to dispatch GSDF troops to the ground of
Afghanistan, and that is an extremely serious matter.

(10) Rate of contract price to target price at 99 PERCENT in more
than 50 PERCENT of all projects during three years until fiscal
2007, showing no progress on ODA reform

TOKYO SHMBUN (Top Play) (Excerpts)
August 31, 2008

The rate of the winning bid price to the target price was over 99
PERCENT in more than 50 PERCENT of all non-reimbursable official
development assistance (ODA) projects during the three years up
until fiscal 2007. The rate of the contract price to the
predetermined price has dropped recently as bid-rigging or bribery
cases have been proactively exposed, but the Tokyo Shimbun has found
that the rates in ODA-related projects remain high.

The Board of Audit has pointed out that the rates in ODA projects
remain high, but signs of improvement are nowhere in sight.
Recently, a former president of a Tokyo-based consulting firm and
others were arrested on suspicion of violating the unfair
competition prevention law (that incorporates a clause banning
bribes to public servants of foreign countries) for bribery in
connection with an ODA-financed project in Vietnam. The bidding
system and ways to implement the system for ODA projects are now
being questioned.

Of the grant aid projects during the three years up until fiscal
2007, the Foreign Ministry posted information on 457 projects
related to highway construction, fisheries, and other affairs on its
website by Aug. 31. The total amount of their estimated costs was
approximately 524 billion yen.

Of the 316 cases in which the target price was announced, the
winning-bid price was over 99 PERCENT of the predetermined price in
163 cases, with 72 cases in fiscal 2005, 41 cases in fiscal 2006,
and 50 cases in fiscal 2007. There were 79 cases in which negotiated
contracts were concluded as the amount of the bid tendered was
higher than the predetermined price. This figure accounts for
one-fourth of the total cases.

TOKYO 00002392 014 OF 014

Participating in these biddings were 1.8-2.7 companies on average. A
total of 139 cases drew in only one bidder.

(11) Prime Minister's schedule, September 1

NIKKEI (Page 2) (Full)
September 2, 2008

07:49
Cabinet meeting on comprehensive disaster preparedness drill at the
Kantei

08:30
Press conference. Then meeting of Emergency Disaster Countermeasures
Headquarters.

11:20
Left Haneda Airport by MSDF's U4 plane.

12:34
Arrived at Kansai Airport.

13:01
Inspected joint drill by prefectures in the Kinki region carried out
at Hama Industrial Park in Kishiwada City, Osaka.

13:24
Inspected disaster prevention drill on Chikiri Island, an artificial
isle.

15:08
Left Kansai Airport y U4 plane.

16:10
Arrived at Haneda Airport.

16:44
Arrived at the official residence.

17:54
Met with Secretary General Aso, joined by Chief Cabinet Secretary
Machimura. Machimura remained.

21:30
Press conference.

21:50
Met with Machimura, and Deputy Chief Cabinet Secretary Iwaki and
Futahashi, joined by Deputy Chief Cabinet Secretary Shionoya.

22:28
Arrived at the official residence.

ZUMWALT

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