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Cablegate: Daily Summary of Japanese Press 07/31/06

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UNCLAS SECTION 01 OF 10 TOKYO 004259

SIPDIS

SIPDIS

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

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 07/31/06


INDEX:

(1) Upper House election one year away

(2) The late former prime minister and Class-A war criminal, Koki
Hirota's enshrinement at Yasukuni Shrine: Hirota's bereaved family
says, "We didn't approve it"; Yasukuni Shrine says, "We didn't
obtain prior approval from the family"

(3) My view on Yasukuni Shrine (Part 4): Interview with LDP Policy
Research Council Vice Chairman Keizo Takemi on Chidorigafuchi
National Cemetery

(4) Debate: Is US beef safe? - part 1

(5) Editorial: US beef should carry labels marking its origin

(6) GSDF pullout from Iraq after completing important mission (Part
4): Mission accomplished

(7) Concern about ODA budget cuts breaching international
commitment

ARTICLES:

(1) Upper House election one year away

SANKEI (Page 5) (Abridged)
July 28, 2006

The Upper House election is just one year away, and it is likely to
be an uphill battle for the Liberal Democratic Party, which
accomplished an overwhelming victory in the poll five years ago
owing to the Koizumi boom. Maintaining a majority will be the top
priority for a post-Koizumi administration. The largest opposition
party Minshuto (Democratic Party of Japan) has begun careful
preparations to force the ruling coalition into the minority. This
article examines the progress of preparations by political parties.

Stakes high for LDP

In the 2001 Upper House election, the LDP achieved a landslide
victory by riding Prime Minister Koizumi's coattails. The party is
greatly concerned about next year's poll, in which 66 of its seats
will be up for grabs. The party garnered only 49 seats in the Upper
House election two years ago under the leadership of Koizumi and
Secretary General Shinzo Abe.

SIPDIS

In anticipation of an uphill battle, the party has begun endorsing
its candidates several months earlier than usual. The party has
already determined its second group of candidates. A total of 55
individuals -- 35 running in electoral districts and 20 seeking
proportional representation seats -- have begun making moves. But
the party has postponed selecting the third batch of candidates
until in October or later in accordance with Koizumi's wishes to let
his successor take the lead.

Although the LDP Saitama chapter has recommended Keio University
Associate Professor Toshiharu Furukawa to party headquarters as a
prospective candidate, when the party will make its decision is
unknown. "The party should endorse unfamiliar first-time candidates
as soon as possible," an LDP member said.


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The aftermath of the Lower House election last year is also serious.
Mikio Aoki, chairman of the LDP's Upper House caucus, has repeatedly
approached independents who left the LDP over postal privatization
with a view to joining forces with them and eventually allowing them
to return to the party.

Secretary General Tsutomu Takebe has also suggested their return to

SIPDIS
the party on the condition that they cooperate with the LDP in next
summer's Upper House election.

Single-seat constituencies are especially vital for the LDP in
facing off with Minshuto. In particular, of the seven single-seat
constituencies where the LDP has yet to endorse a candidate, either
incumbent lawmakers or prefectural chapters revolted against LDP
headquarters over postal reform in Yamanashi, Kagawa, Oita, and
Nagasaki in the previous Lower House election.

As if to add insult to injury, Kokumin Shinto (People's New Party)
has endorsed four incumbents and former LDP members, including
Hiroko Goto, for the upcoming election. Aoki plans to urge local
leaders to rise to action at the national secretaries general
meeting on August 1.

Minshuto focused on single-seat constituencies

Minshuto President Ichiro Ozawa believes winning a majority of the
single-seat constituencies will lead to the party's victory in the
election next year. Since May, Ozawa has visited many farming areas
in the country in an effort to split them off from the LDP.

Minshuto's basic strategy is to force the ruling coalition into the
minority, resulting in an early dissolution of the Lower House. The
party's goal specifically is to win at least 15 of the 29
single-seat constituencies available to garner nearly 60 seats in
total.

Although the party is certain to win more than its 32 seats that
will be up for reelection, the largest opposition party has been
slow to determine its candidates. In fact, it has informally decided
on candidates only for four constituencies: Tokushima, Kagawa, Saga,
and Kagoshima. Minshuto aims to announce its first group of
candidates by August 8 and informally decide on all its single-seat
candidates by mid-August. But coordination has run into difficulties
in the Tohoku and Chugoku regions.

On July 27, Ozawa exchanged views in Akita with members of Rengo
(Japanese Trade Union Confederation) Akita and local assemblymen.
Ozawa is determined to win all four single seats in the Tohoku
region: Aomori, Akita, Yamagata, and his home turf of Iwate. Ozawa
has visited eight constituencies, including Akita. Of the four
constituencies, Ozawa first visited Yamagata, where Minshuto failed
to win in the 2004 Upper House election.

The party also plans to field multiple candidates in six urban
constituencies with more than three seats up for grabs. It also aims
for a replay of the 2004 election in which the party won two seats
each in Tokyo, Kanagawa, and Aichi.

Minshuto plans to undertake full-fledged coordination with other
opposition parties with the exception of the Japanese Communist
Party. The LDP's attempt to rehabilitate anti-postal-reform
lawmakers has been an obstacle for Minshuto.


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Keeping status quo a challenge New Komeito

The party wants to add one more seat to its 13 (8 proportional
representation seats and 5 electoral district seats) up for
reelection. The election will be a test for the new leadership
following the resignation of party representative Takenori Kanzaki
in late September.

The Upper House election will coincide with unified local elections,
a combination that occurs only once every 12 years. Alarmed that a
consumption tax hike might become a campaign issue along with other
matters, the New Komeito announced its first group of candidates in
May, two months ahead of regular timetable. In order to garner
votes, the party is planning to use unusual means, such as shifting
incumbent Yuichiro Uozumi's priority area from southeastern Kanto to
the Chubu-Hokuriku region.

Japanese Communist Party

The party aims for five proportional seats, up one, and to collect
6.5 million votes. It also intends to maintain its sole electoral
district seat in Tokyo and win additional seats in Kanagawa and
Saitama.

Social Democratic Party

The party has set a target of at least 5 million proportional
representation votes. Although it currently holds only three seats
up for reelection, its goal is to win seven electoral districts and
proportional representation seats. But it has yet to determine its
candidates except for Secretary General Seiji Mataichi, who will run
in the proportional representation portion.

Kokumin Shinto (People's New Party)

The party envisages forcing the ruling coalition into the minority
and holding the casting vote. To that end, it is eager to join hands
with Minshuto. Although only two seats will be up for grabs, the
party has announced that it will field four proportional
representation candidates. "We want to field seven to eight
proportional representation candidates and a number of candidates
for big urban electoral districts," Secretary General Hisaoki Kamei
said.

(2) The late former prime minister and Class-A war criminal, Koki
Hirota's enshrinement at Yasukuni Shrine: Hirota's bereaved family
says, "We didn't approve it"; Yasukuni Shrine says, "We didn't
obtain prior approval from the family"

ASAHI (Page 35) (Abridged)
July 27, 2006

Koji Oide

The late former Prime Minister Koki Hirota was convicted as a
Class-A war criminal and executed. He and other Class-A war
criminals were enshrined at Yasukuni Shrine together with the war
dead (collective enshrinement or goshi). The Asahi Shimbun asked
Hirota's grandson, Kotaro, 67, a former corporate executive, about
Hirota's enshrinement at Yasukuni together with the war dead. Kotaro
voiced his opposition to his grandfather's enshrinement at the
shrine, noting, "We in the Hirota family have never given our
approval to the enshrinement at Yasukuni." Yasukuni Shrine enshrined

TOKYO 00004259 004 OF 010


Hirota without obtaining his family's approval. It is unusual for
the families of the Class-A war criminals to voice opposition to the
collective enshrinement as the Hirota family has done.

Kotaro is the eldest son of the late former Prime Minister Hirota's
eldest son, Hiroo, who is deceased. The former prime minister had
six children, all of whom are already dead.

Looking back on the days of 1978, when the Class-A war criminals
were enshrined at Yasukuni, Kotaro said: "We never agreed to the
collective enshrinement. Even now, we don't think our grandfather is
enshrined at Yasukuni." This feeling about Yasukuni "represents the
thinking of the Hirota family," Kotaro said.

The late former Prime Minister Hirota was the only civilian official
of the seven Class-A war criminals who were executed. He was accused
of, among other charges, nonfeasance because he did not call for a
halt to the massacre that occurred and continued in Nanjing even
though he was serving as foreign minister. Meanwhile, some have
judged Hirota favorably for persistently opposing the war despite
pressure from the military. Dutch Judge Roling in the Tokyo Trials
in fact submitted a statement seeking that Hirota be found innocent,
arguing: "He did not side with the influential group in Japan
advocating military aggression."

The Hirota family's family temple is located in Fukuoka Prefecture,
Hirota's hometown, but because his family placed a portion of his
hair at a temple in Kamakura, Kanagawa Prefecture, the relatives
worship there. In April 1955, the Ministry of Health and Welfare,
the predecessor of the current Ministry of Health, Labor, and
Welfare, was planning to hand the ashes of seven Class-A war
criminals to their families, but the Hirota family rejected the
plan. According to Kotaro, the Hirota family has not joined the
Shiragiku Bereaved Family Association, a group composed of the
relatives of war criminals.

Kotaro said: "I sometimes visit Yasukuni Shrine and offer a prayer
to the war dead who lost their lives fighting for the sake of the
country. My grandfather was neither a serviceman nor one of the war
dead. I think Yasukuni Shrine has nothing to do with our family."

Yasukuni Shrine's Public Relations Office said, "Before and after
the war and even today, we have informed the bereaved families,
including the Hirota family, of enshrinement, but we have never
sought their prior agreement."

Saburo Shiroyama, the author of Rakujitsu Moyu (Blazing Setting
Sun), a biographic novel of the late former Prime Minister Hirota,
commented: "The feelings expressed by a member of the Hirota family
were the same as I had presumed. I have nothing to add to the family
member's comments. I think the comments came after taking fully into
consideration what and how Prime Minister Hirota would say."

It's significant

Statement by Ikuhiko Hata, contemporary historian

In the prewar days, Yasukuni Shrine honored only military personnel
who lost their lives on the battlefield. The Class-A war criminals,
especially Koki Hirota, would not have imagined they would be
honored there. Hirota was a diplomat and not a military official.
This is a clear difference with the soldiers who went to battle in
anticipation of being enshrined at Yasukuni if they lost their

TOKYO 00004259 005 OF 010


lives.

Yasukuni Shrine Chief Priest Nagayoshi Matsudaira decided to
enshrine the Class-A war criminals collectively, apparently with the
aim of underscoring that the Tokyo Trials were unreasonable, but
before doing so, he should have obtained at least approval from the
bereaved families. The shrine's negligence in this context has now
been made clear by the remarks of a Hirota family member. The Hirota
family has become the first among those bereaved families to raise
clear objection to the collective enshrinement, and that is
significant indeed.

(3) My view on Yasukuni Shrine (Part 4): Interview with LDP Policy
Research Council Vice Chairman Keizo Takemi on Chidorigafuchi
National Cemetery

MAINICHI (Page 5) (Full)
July 29, 2006

Takashi Tanigawa: Why has the notion of expanding the Chidorigafuchi
National Cemetery become prevalent now?


Keizo Takemi: In the process of administrative and fiscal reforms,
an argument emerged to utilize nationally owned land and housing
units for civil servants. There are housing units for civil servants
next to the cemetery. A project team has been launched under Policy
Research Council Hidenao Nakagawa to review those units centering on
the cemetery, and I have undertaken the task as the chair.

Tanigawa: There is a view that the study will result in a new
national war memorial.

Takemi: The Chidorigafuchi National Cemetery is dedicated to
unidentified and unclaimed remains of those who died overseas in the
Pacific War and other wars. It is a national and secular venue to
offer condolences and prayers. There is no need to change the
purpose, and the cemetery is compatible with Yasukuni Shrine. That
should be understood clearly.

Tanigawa: Are you saying that expanding the cemetery is distinct
from the concept to build a national war memorial?

Takemi: That's right. They are two separate matters.

Tanigawa: You took a first look at the cemetery and housing units
for civil servants. What is your impression of them?

Takemi: My impression is that they sit in an isolated environment.
Access to the cemetery is not good. Many people visit there around
August 15 every year, but there are few restrooms, and other
facilities need improvements, as well. We need a place where
visitors can relax and rest.

Tanigawa: Do you envisage visits by foreign leaders?

Takemi: Foreign leaders may visit there once facilities are
improved.

Tanigawa: What is your view of Yasukuni Shrine?

Takemi: The shrine, which is the only place to pay tribute to those
who died fighting for their country, is controlled by a religious

TOKYO 00004259 006 OF 010


corporation. Such an arrangement is improper from a future-oriented
perspective. Complex equations, such as the relationship between
state and religion and the provision of a venue to offer condolences
and prayers, must be resolved.

Tanigawa: What about the memorandum showing Emperor Showa's
(Hirohito) displeasure with the enshrinement of Class-A war
criminals at Yasukuni Shrine?

Takemi: It made me realize that the emperor had born in mind how
precious peace was throughout the postwar period. The memo carries
historical significance. It was good in that it will prompt the
public to show an interest (in the Yasukuni issue). I think it will
also help set off a healthy, probing domestic discussion.

Tanigawa: There is a possibility that an expansion of the cemetery
will become a campaign issue for the LDP presidency.

Takemi: I will handle the matter carefully so that the matter will
not become a campaign issue.

Tanigawa: When are you going to reach a conclusion?

Takemi: It will be after the LDP presidential election, but before
the end of the year. The cemetery was established through a variety
of discussions. We need to be magnanimous and willing to accept new
developments.

(4) Debate: Is US beef safe? - part 1

MAINICHI (Page 3) (Full)
July 31, 2006

John Queen, president-elect of the National Cattlemen's Beef
Association (NCBA): We will do our utmost in order to prevent a
recurrence of any mistake; Do not punish the entire nation!

Prions, the infectious agents that cause BSE in cattle, tend to
accumulate in specified risk materials (SRM), such as brains, spinal
cords, etc. We are sorry that we have violated the agreement reached
with Japan, by shipping veal that contained SRM in January. We have
done everything we could do in order to settle the problem. We have
strictly trained inspectors at meat processing plants. At least two
inspectors check Japan-bound beef products so that no mistake will
occur.

However, even if the inclusion of such a material is a violation of
the agreement, the Japanese government must have known that the veal
shipped by mistake came from a calf that was less than eight months
of age. The case in point is not a safety issue but an issue
concerning a trade regulation, namely the removal of SRM. Why on
earth should the entire United States be punished?

Will the US place a ban on imports of all Japanese vehicles, if some
Japanese automaker uses fan belts that are banned in the US? The US
has lost a beef export opportunity worth 1.4 billion dollars a year
due to Japan's ban on US beef imports. If Japan places a total ban
on US beef imports for a small mistake without any scientific
grounds, then it cannot be said that the trade practice is fair. The
US has made strenuous efforts to prevent a recurrence of any
inclusion of SRM in shipments. There will be no more mistakes.
However, we are only human. Should another mistake occur, we want
Japan to punish only the concerned beef processing plant, instead of

TOKYO 00004259 007 OF 010


the whole of the US.

The US conducted BSE tests on roughly 760,000 head of cattle for
about two years starting in 2004, and identified two infected cases.
No BSE-infected cows were found among Japan-bound cattle aged 20
months or younger. In fact, it is impossible to determine through
inspection whether BSE-causing agents exist in the brains and spinal
cords of Japan-bound cattle that are aged 20 months or younger.
However, we remove all SRM from Japan-bound cattle in accordance
with the agreement with Japan. We consider Japan-bound US beef to be
extremely safe. In order to identify cattle aged 20 months or
younger, we adopt a quality system evaluation program for cattle to
be exported to Japan in order to indicate from which ranches the
products have been shipped.

It is not necessary for the US to carry out a blanket cattle test,
because the rate of BSE-infected US beef is extremely low and SRM
are removed from all cattle. Approximately 37 million head of beef
cattle are slaughtered in a year in the US. The cost of the blanket
testing will total 800 million dollars a year, as testing one cow
costs 20 to 25 dollars. The US Department of Agriculture will
curtail the number of cattle subject to the BSE test to 40,000 in
August, but this does not present any problem because the number of
cattle the World Organization for Animal Health (OIE) recommends for
testing is 4,000.

(5) Editorial: US beef should carry labels marking its origin

NIHON KEIZAI (Page 2) (Full)
July 28, 2006

The government placed a ban on imports of US beef due to faulty BSE
preventive measures in the US, but it yesterday formally decided to
lift the embargo. Now that the ban has been removed, we want the US
to make sure that any incident that could raise doubts about the
safety of its beef, such as the inclusion of so-called specified
risk materials (SRM), including vertebral columns, in a shipment,
will not happen again. Since the government has determined that US
beef is as safe as domestic beef and has now reopened the market, we
are not particularly nervous about the safety of US beef. However,
we want the government to familiarize distributors and the
restaurant industry with a country-of-origin labeling requirement in
order to enable consumers to make their own decision as to whether
to eat US beef or not.

Some companies are willing to use US beef, but mindful of consumer
responses, many retailers and restaurant chains seem cautious about
selling or using it. That is because they think consumer anxieties
are still deep-rooted due to the aftermath of the inclusion of SRM
in a shipment after the removal of the embargo last December.
Industrial circles will likely wait and see for the time being.

In essence, whether consumption of US beef will recover or not is up
to consumers. It is not until the number of consumers who buy US
beef has increased that one can say that trust in US beef has
recovered. In that sense, it is important that US beef carries
country-of-origin labels to allow consumers to make a decision.
Retailers are obligated to attach country-of-origin labels to the
products they sell. We want them to familiarize themselves more with
the regulation.

The restaurant industry last July established country-of-origin
labeling guidelines for food. As a result, an increasing number of

TOKYO 00004259 008 OF 010


leading chains now provide such information. We want to see leading
restaurant chains, as well as other restaurants, adopt the labeling
system for beef. In case they do not adopt the labeling system, it
is important for them to train their employees so that they can
explain the country of origin of the products they handle.

Japan introduced a traceability system for perishable foods
following the discovery of a BSE-positive cow. It has become
mandatory for retailers disclose the country of origin of the
products they sell. Some imported beef products, such as Australian
or New Zealand products, carry country-of-origin labels. The
fundamental cause of the complicated US beef import issue is that it
is not possible to grasp the actual BSE situation in the US. In
order to defuse the anxieties harbored by Japanese consumers, too,
we hope more US meatpackers will become able to track cattle by date
and place of birth or where they are raised and disclose such
information.

(6) GSDF pullout from Iraq after completing important mission (Part
4): Mission accomplished

SANKEI (Page 30) (Full)
July 27, 2006

On July 25, a little past 8:30 a.m., Ground Self-Defense Force Col.
Toshihiro Yamanaka, 45, who commanded the 10th contingent of GSDF
troops to Iraq, showed up in the international arrival lobby of
Haneda Airport, where GSDF Gen. Hajime Massaki, chief of the
Self-Defense Forces' Joint Staff Office, firmly shook the returning
colonel's hand. The SDF's top brass officer said to the colonel,
"Good job." The general then shook hands with 280 GSDF members who
were in the last batch to be back home from Iraq.

"Danger was next neighbor to their mission," Massaki admitted.
"That's why," he guessed, "they were probably feeling fulfilled." He
added, "Each of the returning GSDF members looked straight into my
eyes and shook my hand." So saying, Massaki looked really pleased to
see them all back home.

In January 2004, Massaki sent out the first contingent of GSDF
troops to Iraq. He was then in the post of GSDF chief of staff to
top all GSDF personnel. Since then, two and a half years has passed.
Massaki, meanwhile, served as chairman of the SDF Joint Staff
Council and then as chief of the SDF Joint Staff Office. With his
responsibility becoming heavier, Massaki worked under extreme
pressure. However, he never forgot-even for one single day-to care
about the GSDF members working in the southern Iraqi city of
Samawah.

Every morning Iraq time, Massaki received a report from commanding
officers in Samawah over the telephone, except when he was on an
overseas trip or for some other unavoidable circumstances. And he
did not forget to encourage them.

"I tried to listen to them so that I could let out their pent-up
feelings," Massaki said. "I wanted to cool them down even for a
moment," he added.

Massaki not only encouraged the Samawah-based commanding officers.
Massaki happened to see a female GSDF member with her sleeves rolled
up in video footage showing how GSDF members were doing in Iraq.
Massaki warned her commanding officer over the telephone that it was
a violation of Islamic culture, and he also advised the commander to

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tell all female GSDF members not to show their skin. Also, when
Massaki discovered an Iraqi woman in a transmitted picture, he
raised strict caution about pointing the camera at Iraqi women.
"That's why one in the US forces was shot," he admonished.

At one time, GSDF members held sporting events at their Samawah camp
with British and Australian forces. Massaki, however, told them to
get into the local communities of Iraqi people. He pointed to the
lax atmosphere and urged the GSDF members to pull themselves
together.

Massaki's heart was always in Samawah. It was his responsibility for
the GSDF members he sent there, and it was also like parents
thinking of their children.

The first time Massaki sent GSDF members to Iraq, he had something
in mind as a matter of fact. Massaki had told himself not to lose
his head should the GSDF's Iraq detachment unfortunately sustain
casualties. He wrote down what he would have to say in that
eventuality.

Massaki had anticipated public sensitivities in Japan to such GSDF
casualties. However, Massaki had made up his mind to state in his
prepared press remarks that Japan would have to overcome such a
tragedy without wasting the loss of valuable lives among those GSDF
members working in Iraq. Massaki thought to himself that he must not
show his weakness, so he worded nothing at all in his memo about his
resignation.

Now that the memo is no longer needed, Massaki looks back on the
GSDF's Iraq mission over the past two and a half years.

"I'm sure," Massaki recalled, "the GSDF's organization, its way of
working, and its training exercises are good enough to make it in
the international community." He added, "We're in the age of
internationalization, so we'd like to make still greater
contributions to peace and stability in the region."

In addition, Massaki underscored the GSDF's dispatch of troops to
Iraq from all its district armies in Japan and also laid emphasis on
the GSDF's experience in Iraq. "We can get big power from this
experience," he said. He went on, "And our visible, invisible assets
in the future are immeasurable."

His words were filled with a sense of satisfaction as the SDF's top
brass hat with the GSDF's accomplishment of an important mission.

This is the last of a four-part series, GSDF pullout from Iraq after
completing important mission.

(7) Concern about ODA budget cuts breaching international
commitment

YOMIURI (Page 13) (Excerpts)
July 19, 2006

Tsuneo Sugishita, professor at Ibaraki University

SIPDIS

The government on July 7 adopted at a cabinet meeting basic policy
guidelines on economic and fiscal management and structural reforms,
prepared by the Council on Economic and Fiscal Policy.

The basic guidelines are intended to bring the primary balance into

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the black by around fiscal 2011. It has already been reported that
to be specific, the aim is to cut expenditures by up to 14 trillion
yen and reform the tax system. However, intensive discussions were
not held on cuts in official development assistance (ODA). In this
article, I would like to delve into the possible impact of
continuous cuts in the ODA budget.

The Finance Ministry has already drafted the ceiling for budget
request estimates for fiscal 2007. A year-on-year reduction rate for
the fiscal 2007 ODA budget to be released on July 21 is estimated to
be between 2% and 4%. The ODA budget will be slashed approximately
140 billion yen from the current level by fiscal 2011 if an annual
reduction rate over the next five years is estimated at about 4%,
the average reduction rate for the past three years.

This means that 80% of the grant aid portion (approximately 170
billion yen) and 90% of the amount appropriated to the Japan
International Cooperation Agency (JICA), an organization that
implements technical cooperation, will disappear.

Aside from yen loans, which are funded by funds for fiscal
investment and loans, technical cooperation and grant aid, which are
funded by the general-account budget, are bound to suffer a big
blow.

To begin with, the ODA budget has continued to suffer cutbacks since
fiscal 1997. The general account in the fiscal 2006 initial budget
earmarked approximately 760 billion yen for ODA, down about 35% from
the fiscal 1997 initial budget, the peak year for ODA. Given other
major spending items in the tight budget compiled in the same fiscal
year, cuts in public works expenses stood at 16.4% and cuts in
defense-related expenses at 2.7%. A comparison with these spending
items highlights the heavy cuts to ODA.

A complex issue concerning ODA is that fluctuations in ODA funds are
always closely related to the livelihood of the peoples of
developing countries. Approximately 400 billion yen has been slashed
from the ODA budget since fiscal 1997. As a result, more than 40% of
ODA recipients now receive less than half the amount they received
prior to fiscal 1997.

It has been reported that cuts in Japan's ODA are seriously
affecting medical services and food situations in those countries.

Prime Minister Koizumi during last year's G-8 Summit pledged to
boost ODA by 10 billion dollars over the next five years. However,
if an ODA budget is compiled based on the adopted basic policy
guidelines, a breach of Japan's international commitment will emerge
as an issue.

As the future of the state depends on this policy, it is not
possible to oppose it. However, even if the nation's primary balance
is reconstructed in five years' time, the government will face the
question of the purpose of fiscal reconstruction if Japan becomes
isolated in the international community and loses its credibility.

SCHIEFFER

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