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

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UNCLAS SECTION 01 OF 09 TOKYO 002457

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 09/09/08

INDEX:

(1) Shock of Fukuda's resignation announcement (Part 2): Debate on
economic growth and tax hikes should be held openly and squarely
(Nikkei)

(2) Put an end to one year of gridlock (Sankei)

(3) Democratic Party, Republican Party set forth Japan policy in
platforms for U.S. presidential election (Nikkei)

(4) Japan's national security based on international teamwork
(Mainichi)

(5) TOP HEADLINES

(6) EDITORIALS

(7) Prime Minister's schedule, September 6 (Nikkei)

ARTICLES:

(1) Shock of Fukuda's resignation announcement (Part 2): Debate on
economic growth and tax hikes should be held openly and squarely

NIKKEI (Page 1) (Slightly abridged)
September 4, 2008

By Mikio Kanno, editorial writer

Business managers are now astonished by Prime Minister Yasuo
Fukuda's sudden announcement of his resignation. The president of a
small mold maker in Ota Ward, Tokyo, lamented Fukuda's decision: "I
have desperately made efforts to get jobs for the sake of my
employees and their families. I wonder why he could so easily
abandon his administration." With the prime minister's resignation
amid an economic downturn, the flow of economic policy making will
stop. It is only natural that 70 PERCENT of major company managers
are concerned that Fukuda's resignation may have a negative impact
on their business. Fukuda set the slogan of realizing "peace of
mind" and of building "trust," while distancing himself from the
structural reform policy course, when he took office last September.
He was eager to reform the public pension system that would boost
public confidence, as well as to look into the possibility of
increasing the consumption tax rate.

With his announcement that he was quitting the prime minister's post
less than one year since taking office, Fukuda failed to implement
his policy agenda. The government's national council on social
security is expected to present its final report as early as next
month, but how the report will be used after Fukuda steps down is
unknown. There is still no prospect for fiscal resources that would
enable the government to halve the treasury's share of the basic
pension burden for 2009. It is also uncertain whether tax revenues
currently earmarked for road maintenance and construction will be
appropriated into general spending from fiscal 2009.

It is true that a global credit crunch and economic slowdown caused
by the U.S. subprime mortgage crisis adversely affected the Fukuda
administration. The government, after the cabinet shuffle in August,
admitted to the possibility of an economic slowdown and it began to
compile an economic stimulus package. However, since the New Komeito

TOKYO 00002457 002 OF 009


forced Fukuda to accept its demand for a fixed tax reduction, the
policy of Fukuda, who attaches priority to fiscal reconstruction,
was undermined.

What is of major concern is that moves aiming at creating "big
government" are gaining ground in both the ruling and opposition
parties. Fukuda announced his intention to maintain the goal of
bringing the primary balance into the black by fiscal 2011. However,
LDP Secretary General Aso, who has announced his candidacy for the
party leadership race, has referred to the possibility of putting
off that goal. In the main opposition Democratic Party of Japan
(DPJ), as well, there is no move to review its campaign pledges for
the 2007 Upper House election such as creating a minimum welfare
pension system with no fiscal support, as well as income
compensation to individual farmers. If both the ruling and
opposition parties compete by offering great deals, while postponing
tax hikes, future generations will have to pay accumulated debts.

In addition to Aso, several candidates, including lawmakers
advocating the importance of the Koizumi reform initiative and
economic growth, will run in the upcoming LDP presidential election.
Ichiro Ozawa, who is certain to be reelected as DPJ president for
his third term, will reportedly reveal his policy again. With an eye
on the next Lower House election and political realignment that
follows the election, there will be opportunities to assess the
persuasiveness of LDP and DPJ candidates.

We would like to pose three questions to LDP and DPJ candidates.
First, how they will increase an economic growth under the growing
aging population and international competition? They also should
make clear their position toward regulatory reform, policy of
opening the country to foreign business, and a corporate tax
increase, which is a global trend.

Second, how they will keep a balance between the benefits and
burdens of the social security? They should clarify how they will
secure fiscal resources for a policy of realizing the public's peace
of mind. Unless they do so, they will be called irresponsible. They
should also reveal their thinking as to whether they prefer a
welfare insurance system or a tax system when pension premiums are
collected.

Third how they will reduce the wasteful use of tax revenues in order
to cut huge fiscal deficit. They should ask the public when, for
what purpose tax hikes, including a consumption tax increase, will
be needed.

Once voters learn what the clear distinction is between the LDP
candidates' position and that of the DPJ candidates, they will be
able to demonstrate their clear will in an election to choose the
party that they feel should hold the political helm. Candidates and
parties that stress rosy policy toward voters, skillfully avoiding
arguments on tax hikes, will not be able to get public confidence
and will lose their competitiveness. Such policy debate is expected
by the electorate.

(2) Put an end to one year of gridlock

SANKEI (Page 13) (Abridged slightly)
September 5, 2008

By Hisahiko Okazaki, former ambassador to Thailand

TOKYO 00002457 003 OF 009

First, I would like to express my respect to Prime Minister Yasuo
Fukuda for his swift decision to step down.

Asked for my views on Prime Minister Fukuda since he came into
office, I have always indicated that his strongest point lies in his
humbleness.

Constantly compared to his late father, Takeo Fukuda, who had
enjoyed the confidence of conservatives as a lawmaker following in
the footsteps of the Nobusuke Kishi administration, Yasuo Fukuda is
a person capable of looking at himself objectively.

It was like this when he resigned as chief cabinet secretary (in
2004). He knows when to quit without clinging to authority and his
position.

As was mentioned by Fukuda himself, his decision this time resulted
from the divided Diet. This is a product of the drawback no one
intended to create in the process of drawing up the Constitution
during the Occupation.

Under the parliamentary government system originated in Britain,
politics is supposed to be conducted while striking a balance
between the government's right to dissolve the parliament and the
parliament's right to submit a no-confidence motion. The mistake
that created the Upper House, which cannot be dissolved by the
government, though it has the authority similar to that of the Lower
House, has surfaced after the end of the LDP's control over the
upper chamber following half a century of the Occupation.


Currently, there is only one means to dissolve this situation, that
is, to create a system or a mental attitude to reach agreements that
cross party lines on matters of national interests.

The Maritime Self-Defense Force's refueling mission in the Indian
Ocean to support Afghanistan is a vital issue in view of Japan's
national interests.

Party interests harm national interests

The UN resolution on the U.S.-led coalition forces in Iraq expires
at the end of this year. The ongoing assistance for Afghanistan is
Japan's only support to the United States' counterterrorism
strategy. In the event Japan terminates this assistance, Republican
presidential candidate John McCain's immediate reaction can easily
be imagined.

Such would also be a matter of great concern for the policy of
Democratic presidential candidate Barack Obama, who plans to put
high priority on relations with Japan amid a variety of views on
options.

It is understandable that the Democratic Party of Japan led by
Ichiro Ozawa, whose top priority is to win the next election, is
trying to drive the government into a corner at all costs with the
aim of scoring points. National interests take precedence over party
interests. Can a person who does not understand such a thing be
called a lawmaker?

I want to see the next administration firmly promote the extension

TOKYO 00002457 004 OF 009


of the Antiterrorism Special Measures Law authorizing the MSDF's
refueling operation in the Indian Ocean.

I have more expectations for the next cabinet. The media reported
that former Prime Minister Shinzo Abe walked off the job. He had no
intention to walk off the job if not for his ill health.

On the contrary, he was planning in the previous Diet session to
resolve and implement the LDP's longstanding issues, such as
amending the Basic Education Law, the establishment of a national
referendum law necessary for amending the Constitution, and
upgrading the Defense Agency to ministry status.

Suspension of Abe reform drive regrettable

A blue-ribbon panel was especially ordered to accelerate its
deliberations on the government's interpretation of the right to
collective self-defense. Completing its debates on four situations
during the summer, the panel was scheduled to meet on Sept. 14 last
year to wind up its discussions. Prime Minister Abe came down with
an illness two days earlier. It was truly regrettable that the
reform drive ended one step short of resolving the LDP's
longstanding issues.

No one has explained the reason why. The mood of passive resistance
to Prime Minister Abe's courageous attempt to break away from the
habitual thinking of over a half-century after WWII -- the lack of
the courage and intellect to offer a logical explanation -- has
blocked the reforms that were set in motion.

I remember the following words by a grade school teacher who had
received the Hakuho Award, which honors organizations and
individuals for outstanding achievements in elementary and middle
school education: "I have encouraged children to turn Japan into a
beautiful country. Today's mood does not allow me to say those words
to the children. What should I do?"

It is a strange phenomenon. The education to abhor Occupation-period
Japan, the remnant of the Japan Teachers' Union's education to
benefit the communist bloc during the Cold War, has heavily shrouded
Japan over the last one year like smog, though there is no longer an
argument or intellect to defend it.

I earnestly hope that the next cabinet or Japanese politics
resulting from the latest political event will bring a ray of hope
to this dark cloud.

(3) Democratic Party, Republican Party set forth Japan policy in
platforms for U.S. presidential election

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

In latest party conventions, the Republican Party and the Democratic
Party adopted their respective policy platforms for the coming U.S.
presidential election. The Democratic Party, which gives top
priority to Afghanistan in the war on terrorism, will likely call on
Japan to continue Maritime Self-Defense Force's (MSDF) refueling
mission in the Indian Ocean if it wins power. An administration of
the Republican Party, which places emphasis on the Japan-U.S.
alliance, might ask for Japan to assume more responsibility and a
greater burden, using the expression "demonstrate leadership." No

TOKYO 00002457 005 OF 009


matter which party wins in the November election, the new Japanese
government will inevitably be pressed to make a specific reply.

Democratic Party may call for continuation of refueling mission in
war on terror, also seeks multinational framework

The Democratic Party, which has nominated Barack Obama for
president, notes in its platform: "The central front in the war on
terror is in Afghanistan and Pakistan." Without any reference to
Japan, the platform just stresses the need for deepened cooperation
with the North Atlantic Treaty Organization (NATO), but it
incorporates assistant measures in the economic and education areas,
besides cooperation on the military front. Given this, a Democratic
Party administration might ask Japan to make more contributions in
infrastructure construction.

Based on its advocacy of promoting international cooperation, the
Democratic Party gives priority to strengthening cooperation with
Pakistan. The Bush administration, in its call for Japan to continue
the MSDF refueling operation, has cited the need for assistance of
the sole Islamic nation that has taken part in the war on terror.
Either a President Obama or a President McCain may come to ask Japan
to continue the refueling service.

The Democratic Party places Japan at the top on the list of allies
in Asia, noting the U.S. will maintain its current strong relations
with Japan, while also seeking a multilateral framework. This is
similar to State Secretary Condoleezza Rice's approach to Asian
nations to form a regional security organization that is based on
the six-party talks on North Korea's nuclear problem. Candidate
Obama calls for a policy of dialogue in dealing with North Korea,
taking a different stance from Japan.

Republican Party takes step into North Korea policy

The Republican Party defines the long-term U.S.-Japan alliance as
the cornerstone for maintenance of peace and stability in Asia. On
policy toward North Korea, too, its platform urges Pyongyang to
scrap all its nuclear weapons and programs in a complete,
irreversible and verifiable way. It also stresses the need to shed
light on its moves to proliferate nuclear weapons, taking one step
farther than the Democratic Party's platform. A senior member of the
McCain indicated consideration for and emphasis of Japan, saying:
"Although the six-party talks are effective, they have moved forward
only slightly. We will discuss how to resolve the issue with our
allies, Japan and South Korea."

But emphasis on the allies is to impose due responsibility on them.
The Republican Party platform notes: "We hope that Japan will
demonstrate leadership in dealing with Asian issues, as well as
global issues," urging Japan to take action. The Defense Department
expects Japan to expand cooperation not only in dealing with such
international challenges as global warming but also in the military
area, like progress in the realignment of U.S. forces in Japan and
improvement in the ballistic missile defense network.

In the war against terrorism, the U.S. military's strength,
equipment, and budget are about to reach their limits. Its basic
principle, therefore, is to urge its allies to shoulder a fair
share. In the U.S. government, there is an atmosphere of seeking an
increase in defense outlays.


TOKYO 00002457 006 OF 009


(4) Japan's national security based on international teamwork

MAINICHI (Page 2) (Abridged)
August 31, 2008

Makoto Iokibe, president of the National Defense Academy

In April this year, a 150,000-ton Japanese tanker, bearing the name
Takayama Maru, was attacked and shot by pirates in the Gulf of Aden
(in the Arabian Sea). On learning of the emergency, the German light
cruiser Emden, which was on stage off Somalia, flew a helicopter to
the rescue of the Takayama Maru. Eventually, the Japanese tanker was
safe.

Although it is not well known, Japan and Germany have actually
helped each other out. In 1997, there was a riot in Albania, one of
the Balkan states. At the time, Germany carried out military
operations to rescue its nationals in that country. The military
operations went well, and the German forces rescued foreign
nationals, including 11 Japanese. The Japanese ambassador to Germany
called on the foreign minister to express his gratitude.

Soon after that, a crisis was just about to happen in Indonesia,
with Suharto's impending downfall. Then Prime Minister Ryutaro
Hashimoto decided to use Self-Defense Forces aircraft to rescue
Japanese nationals. Hashimoto had four SDF planes flown to Singapore
and ordered them to stand by there. At that time, Germany asked
Japan to take care of about 100 German nationals. Japan was helped
by Germany in the Balkans, so the Japanese government responded in a
positive manner and revised its plan to prepare for that
contingency. However, the crisis came to an end with Suharto's
resignation. The German foreign ministry expressed its appreciation
with impressive words: "Japan made the plan. That's the same as an
actual rescue."

Japan was willing and ready to engage in mutual assistance. In point
of fact, however, Germany extended a helping hand to Japan twice,
while Japan has done nothing for Germany in terms of mutual
assistance. This is not exactly the spirit of give-and-take.

Instead, Japan is carrying out refueling activities in the Indian
Ocean. Of course, Germany is also receiving fuel from Japan in the
Indian Ocean. In February this year, Japan resumed the Maritime
Self-Defense Force's once-suspended refueling activities there.
Germany has so far received three refueling services, ranking fourth
in frequency next to Pakistan, France, and Canada. Japan's refueling
activities are highly appreciated by various countries engaged in
maritime interdiction operations in the Indian Ocean--which is far
and inconvenient-for the war on terror. In January this year, when
Japan decided to resume its Indian Ocean refueling activities, the
German government welcomed the decision, stating: "Japan is an
important international partner for us." There was such a
background, and a German battleship rescued the Takayama Maru.

Japan is a trading nation, so the sea lanes are its lifeline.
However, Japan cannot defend its sea lanes alone. In order for Japan
to secure its activities around world, there is no choice but to
team up with other countries. In that respect, Japan's alliance with
the United States, which has overwhelming power, has great merit. In
addition, it is also essential for Japan to work together with many
countries in each other's area of activities, as Japan has been
doing so with Germany.

TOKYO 00002457 007 OF 009

Last year, Japan hosted an international training exercise in Sagami
Bay for the proliferation security initiative (PSI) to prevent the
proliferation of weapons of mass destruction. I had a chance to see
the PSI training exercise there. The PSI is a framework of
multilateral cooperation to crack down on weapons of mass
destruction (WMD) smuggling. In the PSI drill, a small MSDF vessel
chased, halted, and inspected a gigantic suspicious ship of more
than 60,000 tons. I felt uneasy as I saw a crew of MSDF members
climbing up the ladder from their dinghy and being swallowed up in
the huge ship. What if the suspicious ship bared its fangs? The next
moment, however, I figured it out. When I turned my eyes out over to
the vast expanse of water, I found out that there were a number of
warships floating over the horizon from such countries as the United
States, Britain, France, and Australia. The suspicious ship was
surrounded. Their presence backed the MSDF's bold action. The ship
would have no choice but to surrender.

This is the way Japan should secure itself, isn't it? Japan cannot
completely defend itself with military spending up to 1 PERCENT of
its gross domestic product. Japan's national security is based on
its international cooperation.

"Japan's security is (a gamble for) all or nothing," Kyoto
University Professor Masataka Kosaka, a scholar of international
political science, once said. Japan covers its national security
with 1 PERCENT of GDP, but the reason why Japan can do so at this
exceptionally low level of military spending is because Japan
maintains its international cooperation including its alliance with
the United States. Then, how about if Japan wants to have
self-contained military systems on its own? In that case, Japan-its
GDP was about half the scale of the United States in those
days-would need 8 PERCENT of its GDP for its military spending, or
doubling the United States' military spending (4 PERCENT ).
Professor Kosaka humorously talked about such an outline of how
Japan's national security is.

Japan cannot secure itself or pursue economic activities critical to
its survival without international cooperation. Even so, Japan's
international cooperation, including its participation in United
Nations peacekeeping operations, is extremely low-keyed. Should
Japan face a crisis without international cooperation, it would feel
isolated and have no choice but to build up its military
preparedness. We must not forget that giving up Japan's refueling
mission in the Indian Ocean, which is one of the few means for Japan
to shore up international cooperation, will affect Japan's national
security and survival.

(5) TOP HEADLINES

Asahi:
Lower House to be dissolved at outset of extraordinary session

Mainichi:
Tainted rice sold to confectionery maker in Kansai region

Yomiuri & Nikkei:
U.S. government takes control of troubled mortgage firms

Sankei:
Another alleged abduction of Japanese woman by North Korea 10 years
ago

TOKYO 00002457 008 OF 009

Tokyo Shimbun:
Oita board of education cancels hiring in 2007 of 6 teachers

Akahata:
JCP wins Tokyo City assembly by-election

(6) EDITORIALS

Asahi:
(1) NSG's approval of lifting embargo of nuclear technologies and
materials against India historical mistake
(2) Countries should jointly use the Large Hadron Collider (LHC)
for research

Mainichi:
(1) Extension of North Korea's reinvestigation of abductions: Japan
must prevent agreement with North Korea from becoming a dead letter
(2) Defense White Paper: 2008 report should be last one that
includes "scandals"

Yomiuri:
(1) LDP presidential race: Good opportunity to deepen debate on
economic issues
(2) Google's 10th anniversary: Is it all right for us to depend so
heavily on Google?

Nikkei:
(1) Lifting of arms embargo of nuclear materials against India
incomprehensible
(2) Review also necessary achievement test

Sankei:
(1) New type of flu: Companies must seriously deal with matter
(2) UN disarmament conference: New cooperation framework needed for
nuclear nonproliferation

Tokyo Shimbun:
(1) If thalidomide is reauthorized, it must be used under strict
control
(2) New Pakistani president will face many difficulties

Akahata:
(1) Heating oil: Support for daily lives of people should be
expanded

(7) Prime Minister's schedule, September 6

NIKKEI (Page 2) (Full)
September 7, 2008

09:47
Met Defense Minister Hayashi and National Public Safety Commission
chief Hayashi in the JR Tokyo VIP room.

10:02
Saw off the Emperor and Empress to attend the national convention
for marine life.

10:22
Returned to his official residence.


TOKYO 00002457 009 OF 009


11:19
Enjoyed shopping with wife Kiyoko at Iwaki Ginza. Afterward saw the
Michiko Kobayashi exhibition at the Shinwa Art Museum.

12:14
Had a dinner with wife at a Hotel Okura Chinese restaurant.

13:48
Returned to his official residence.

Prime Minister's schedule, September 7

NIKKEI (Page 2) (Full)

September 8, 2008

Morning
Spent time at his official residence.

18:26
Had a family dinner at a Chinese restaurant in Higashi-azabu.

20:41
Returned to his official residence.

ZUMWALT

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