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Cablegate: Daily Summary of Japanese Press 10/03/06

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P 030804Z OCT 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 7041
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
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RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 0838
RUEHFK/AMCONSUL FUKUOKA 8291
RUEHOK/AMCONSUL OSAKA KOBE 1655
RUEHNAG/AMCONSUL NAGOYA 8011
RUEHKSO/AMCONSUL SAPPORO 9373
RUEHBJ/AMEMBASSY BEIJING 4396
RUEHUL/AMEMBASSY SEOUL 0518
RUCNDT/USMISSION USUN NEW YORK 2118

UNCLAS SECTION 01 OF 07 TOKYO 005758

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 10/03/06


INDEX:

(1) Editorial: Prime Minister Abe's policy speech - why do you
intend to drive so slowly?

(2) Editorial: Keep turning on heat of reform as pledged in policy
speech

(3) Trend away from bid-rigging part 1: Co-existence and
co-prosperity mechanism beginning to collapse

(4) Series on by-election for House of Representatives (part 2):
Relocation of Army Command to Camp Zama without explanation or
choice

(5) Ibaraki Prefecture, assuming nuclear terrorism, conducts
training to protect citizens

ARTICLES:

(1) Editorial: Prime Minister Abe's policy speech - why do you
intend to drive so slowly?

ASAHI (Page 3) (Full)
September 30, 2006

"I will put all my body and soul in dealing the challenge to create
'a beautiful country, Japan,'" said Prime Minister Shinzo Abe in a
policy speech.

The Abe government was launched with more than 60% public support,
and the prime minister talked about his government's goals in his
Diet policy speech.

Advocating the slogan of breaking away from the postwar framework,
Abe has expressed his desire to amend the Constitution, but in his
speech, he mostly focused on ways to realize economic growth, as
well as on reform of the social security system.

After five years of the Koizumi government, which took harsh
measures, Abe must have though that his administration should now
show the prospects for the future, easing the people's anxiety.

Prime Minister Koizumi declared in his first policy speech in 2001
that he would promote structural reforms with no sacred domains. He
urged the public to endure strict structural reforms, citing the
spirit of 100 straw rice bags - a reference to an event in the late
1860s when the Nagaoka clan in northern Japan was experiencing a
famine and received 100 sacks of rice from another clan. The Nagaoka
clan leader decided not to use the rice to feed his starving people,
but instead sold it to gain money to build a school to educate the
people, thus ensuring their future prosperity. Abe talked, however,
about a bright future and peace of mind.

After removing Abe's tendency to use romanized English words, one is
left only with the "2006 set of policy guidelines for structural
reforms," as set by the Koizumi government. The policy guidelines
only set out a general direction, leaving the specifics to the next
government. Therefore, people were listening closely to hear Abe's
concrete policy measures, but they were disappointed.

Regarding the public pension program, Abe said, "The central
government is responsible and will not let it collapse, and people

TOKYO 00005758 002 OF 007


will not lose by paying premiums." That's all he had to say? The
public wants to hear details of where pension funding resources will
come from, and how premiums and benefit payments will be
maintained.

Many people expect that the consumption tax will be eventually be
increased. Abe, however, only said, "I will not avoid debate on the
consumption tax issue."

Another surprise was that Abe provided only a rather simplistic
statement on his pet subject, education reform. Abe's book "Toward a
Beautiful Country" outlines his vision of introducing nationwide
unified tests and school assessments by national inspectors. The
idea implies a strengthening of national oversight and control over
education. We are concerned about this. Yet, Abe spoke little of
education issues.

He will likely to leave the specifics to a cabinet panel on
revitalizing education, which will be set up in the cabinet. What
will the panel discuss and what will it suggest? Who will be chosen
as the panel members? If Abe is able to influence them, we must keep
a close eye on its deliberations.

Abe might have thought that it would be wise to tone down his
rhetoric in his policy speech, thus embarking on safe sailing.
Touchy phrases such as "breaking away from the postwar framework"
and "open conservatism," which Abe stressed during the Liberal
Democratic Party (LDP) presidential campaign, appeared nowhere in
his policy speech. He did not mention his determination to amend the
Constitution within five years or so.

In that sense, we can't help feeling disappointed. The opposition
parties must firmly question Abe in the upcoming Diet session on why
he avoided stating his long-held ambitions.

(2) Editorial: Keep turning on heat of reform as pledged in policy
speech

NIHON KEIZAI (Page 2) (Full)
September 30, 2006

In his first Diet policy speech, Prime Minister Shinzo Abe spoke to
the people in plain words of what politics and policies his
administration will pursue. The prime minister's policy goal has
been revealed, but he has yet to come up with any specific measures
to meet this goal. It is of importance for the prime minister to
swiftly implement necessary specific measures and keep turning on
the heat of reform as he pledged in the policy speech.

The Abe cabinet has made a smooth start, receiving an over 70%
popularity rating in a poll conducted by the Nihon Keizai Shimbun.
The prime minister said that the vision he is aiming for is that of
"a beautiful country, Japan." He visualized this beautiful country
as a country that: (1) values culture, tradition, nature, and
history; (2) is underpinned by free society, respects discipline,
and has dignity; (3) continues to possess the vitality to grow
toward the future; and (4) has leadership, and is trusted,
respected, and loved in the world.

In the policy speech, the prime minister implied eagerness to carve
out a future for Japan, setting forth the ideals of conservatism and
the policy of prioritizing economic growth as the two main pillars
in managing his government. He also expressed his determination to

TOKYO 00005758 003 OF 007


address educational reform on a priority basis and make efforts to
enact a bill amending the Fundamental Law of Education at an early
date. Further, he unveiled a plan to quickly establish an education
revitalization conference tasked with working out specific
measures.

In reference to constitutional revision, Abe expressed high hopes
for probing debate to be conducted in the Diet in order to set a
direction for the revision. On a change in the government's
interpretation of the Constitution to allow Japan's use of the right
to collective self-defense, Abe noted: "In order to have the
Japan-US alliance function more effectively, we will study specific
cases." On the ideals of conservatism, the prime minister's
arguments are very clear.

When it comes to pro-growth policy, however, Abe failed to present
specific measures. The prime minister stressed the need for
innovation, but he did not refer to regulatory reform, though such
reform should be imperative for creating innovation. Abe is urged to
flesh out modulated measures that will contribute to drawing out
power from the private sector, instead of tricky measures worked out
under the lead of government agencies.

The prime minister stressed the need to drastically cut spending and
then made the following remark on special revenues for road
construction: "The government, while keeping the current tax rate,
will review road funds on the premise of reallocating them for
general expenditures and will compile a set of specific measures by
the end of the year." If this challenge fizzles out, the prime
minister's posture toward reform itself will be questioned. The
prime minister must get down to brass tacks on this challenge.

It is hard to understand why the prime minister stopped short of
proposing cuts in state subsidies. In the previous Koizumi
administration's trinity reforms to reshape regional finances,
progress was hardly made in administrative reform and
decentralization, with only the grant rate brought down. The prime
minister must address the task even with a determination to scrap
the subsidy system; otherwise, expenditures will not be
satisfactorily reduced.

(3) Trend away from bid-rigging part 1: Co-existence and
co-prosperity mechanism beginning to collapse

NIHON KEIZAI (Page 11) (Almost Full)
September 26, 2006

It has been eight months since the enforcement of the amended
Anti-Monopoly Law designed to toughen penalties against bid-rigging
activities. As price competition in bidding for public projects
intensifies, the number of companies that pull out of or curtail
participation in public works in anticipation of price collapsing or
a potential risk of being arrested is increasing. The Nihon Keizai
Shimbun has investigated into the business situation in the
construction industry that is drastically changing due to a trend
away from bid-rigging.

Up to whether one is lucky in lotteries

President Iwata of Iwata Construction Co., a leading general
contractor in Sapporo City, Hokkaido, noted wryly: "For constructing
companies good salespersons used to be those who can accurately
calculate tender prices, but now those who are lucky in lotteries

TOKYO 00005758 004 OF 007


are good salespersons for us." With the bid-rigging system of
construction companies receiving orders for public projects in turn
adopted by the construction industry for the sake of their
co-existence and co-prosperity becoming shaky, the practic of
placing low-price tenders is increasingly spreading in Hokkaido,
where the number of companies is disproportionately large, compared
with the number of public projects.

Since Sapporo City releases in advance estimated prices of projects
it sponsors, lots of small and medium-size companies place tenders
at the lowest prices as they desperately want jobs. Since all
bidders offer their tenders at rock-bottom prices, successful
bidders are decided by lot. The ratio of the adoption of lotteries
for civil engineering works sponsored by the mayoral bureau with the
exception of the industrial bureau, such as the Traffic Bureau,
reached approximately 30% in fiscal 2005. President Iwata's remark
that employees who are lucky in lotteries come in handy is what many
people in the business feel.

Tendering bids at low prices has now become a national trend. The
ratio of a project cost to an estimated price usually topped 95% in
most projects. However, such a ratio in projects sponsored by the
Ministry of Land, Infrastructure and Transport and awarded to
leading general construction contractors plunged to the 70% level in
July and August.

Behind the bid-rigging system is the construction industry's order
based on lateral ties, under which companies similar in size share
works, and vertical co-existence between leading companies operating
nationwide and medium and small-size local companies that
subcontract with them. In Hokkaido, such a coexistence system is
beginning to disappear.

Construction companies continue to go under

The number of companies suffering from poor business performance has
increased. President Iwata said that he had recently received a
number of offers for purchasing such companies. An increasing number
of small and medium-size construction companies are now going under,
following the trend away from bid-rigging activities.

The Fair Trade Commission (FTC) last June ordered 91 local companies
to end unfair trade practices over bid-rigging activities for
construction works sponsored by Iwate Prefecture. As a result, four
companies went bankrupt. In Okinawa, the FTC 152 companies were
urged to stop unfair trade practices over bid-rigging practices for
projects sponsored by the prefecture. The Okinawa Construction
Industry Association has estimated that about 40 companies would go
under.

An executive of a leading general construction contractor noted, "We
can sense from the moves of the FTC and public prosecutors that they
are aiming at destroying the order of the construction industry,
such as the coexistence system. A number of related sources view
that there will be no change in this trend under the Abe
administration as well.

The former deputy manager of the Nagoya branch of Obayashi Corp. was
indicted over a bid-rigging incident involving a project sponsored
by Seto City, Aichi Prefecture. He admitted to all the facts
presented in the first trial in August, saying, "I have been
involved in bid-rigging from the early stage in various senses."
This person has allegedly served as a coordinator of bid-rigging

TOKYO 00005758 005 OF 007


activities over construction projects in the Tokai region for more
than 10 years along with executives of leading local companies,
including Meiko Construction Co.

The Nagoya District Public Prosecutors Office Special Investigation
Department is now investigating into alleged bid-rigging practices
for sewerage works. It questioned the same former deputy branch
manager on a voluntary basis. In this connection, it searched the
Nagoya branch of Konoike Construction Co. Public prosecutors are
gearing up to pursue construction companies from leading general
contractors to small and medium-size local companies.

The co-existence and co-prosperity system of the construction
industry is beginning to be destroyed from within and from outside.

(4) Series on by-election for House of Representatives (part 2):
Relocation of Army Command to Camp Zama without explanation or
choice

TOKYO SHIMBUN (Kanagawa edition) (Excerpts) (Page 27)
September 30, 2006

From behind a hilly area, helicopters could be heard repeatedly
taking and off and landing, their propellers making an unpleasant
chopping noise. On top of the hill is situated a heliport belonging
to the US Army at Camp Zama straddling the communities of Sagamihara
City and Zama City. "For the last year or two, it became even more
annoying over there. We could not even hear the sound of our TV, and
inside the house, it was as if the ground itself were vibrating, and
glass in the windows would rattle." The complaint came from a
housewife (60) living in the Isobe area of Sagamihara City that is
right under the flight path of the choppers. She gazed up at the sky
with malice in her eyes.

She has been married for approximately 40 years. She has lived the
whole time in Isobe, but recently the noise from the choppers became
unpardonable. The helicopters fly low overhead only a dozen or more
meters off the ground. They repeatedly practice touch-and-go
landings. The continuous noise from the helicopters has even damaged
her health.

According to the public relations section of Sagami City, there were
281 complaints about helicopter noise during the last fiscal year.
This fiscal year, as well, complaints are coming in at around the
same pace. It has been confirmed that US Navy helicopters from
Atsugi base are frequently carrying out training, and the city
decided to collect noise data starting last October.

Camp Zama is different from Atsugi base, where there is high-pitched
noise from aircraft carrier-based jet planes flying in. Camp Zama
until now has built a good relationship with the local residents.
However, the emotions of the local residents have risen due to the
helicopter noise, and in May with the agreement between Japan and
the US on the realignment of US forces in Japan, strains have begun
to appear in the relationship with local residents over the plan to
relocate the US Army's First Corps to Camp Zama.

The relocation of the Army Command to Camp Zama has a symbolic
identity of the strengthening of the Japan-US alliance, as promoted
by the Koizumi administration. The Ground Self-Defense Corps'
Central Readiness Command would be co-located in the same base,
which would strengthen the trend of unifying Japan's SDF and the US
forces. However, until the decision was made to strengthen the role

TOKYO 00005758 006 OF 007


of the base, no explanation was ever given to the local communities.


Said a local male resident from Isobe: "The decision was made
arbitrarily without our knowledge. There was not even request for
cooperation. I think they played us for fools." He said he had lost
his faith in the government.

The man last summer signed a petition against the relocation of the
Army Command. Over 200,000 in Sagamihara City overall signed the
petition. He said, "I sense that the mood of the local residents who
used to be resigned to the existence of the base until now has
changed." However, in the general election that occurred last
September, the only matter paid attention to was postal
privatization, and even in the 16th district of Sagamihara City
where Camp Zama is located, the propriety of the Army Command's
relocation was never disputed. The local residents have never been
given a choice in this matter.

(5) Ibaraki Prefecture, assuming nuclear terrorism, conducts
training to protect citizens

Asahi (Ibaraki Internet edition)
Sept. 30, 2006

Assuming a large-scale terrorist or military attack, the Ibaraki
Prefectural Government conducted training on Sept. 29 with the
central government, the Self-Defense Force (SDF) and other relevant
organizations to rescue citizens in cooperation under the Public
Protection Law. Participating in the drill were 2,400 persons from
about 100 organizations across the nation, but some participants and
involved parties pointed out problems in the drill.

The Public Protection Law is one of the emergency laws governing the
obligation and role of the central and local governments, as well as
relevant organs in evacuating or rescuing citizens in times of
emergency. The main purpose of the latest drill was to examine the
effectiveness of the prefecture's plan to protect the citizens laid
out this January based on the law. This was the third training held
between a prefectural government and the central government,
following the ones by Fukui and Hokkaido.

The training started around 7:00 a.m. of Sept. 29 on the supposition
of a terrorist attack on the Tokai Second Power Plant (Shirakata,
Tokaimura) of the Japan Atomic Power Co., in which the high-voltage
cable is destroyed, the reactor automatically stop, and radioactive
materials leak to the outside of the reactor building due to
multiple incidents.

In the training, an emergency headquarters was set up in the
prefectural government office. The headquarters contacted the
central government, the Ibaraki Prefecture Nuclear Off-site Center
(Hitachinaka City), and other relevant institutes to exchange
information through TV conference.

About 700 residents from Tokaimura and other areas joined the
evacuation training, in which social workers and firefighters helped
those who are unable to easily evacuate independently, such as
elderly persons. In order to facilitate evacuation by car or
evacuation on foot, a one-way restriction was imposed on some
streets.

In a press conference after the drill, Cabinet Secretariat

TOKYO 00005758 007 OF 007


councillor Genzo Inoue said, "The training was initially aimed to
confirm each institute's role and to cooperate with each other, but
this purpose was not attained." He added, "There should be training
procedures under which no decision is made beforehand on actions to
be taken." In response, Governor Masaru Hashimoto commented:
"Although he criticizes the training as having been carried out in
accordance with a scenario, I think it is important for people to
participate in training upon fully understanding the scenario."

Since the disastrous nuclear accident, the prefecture has held
nuclear disaster drills. Unlike such training, the training on the
assumption of a terrorist attack puzzled some persons.

Governor Hashimoto said, "Since there are the heads of the central
government and the local headquarters, (decision-making) might be
delayed in some cases." Tokaimura Head Tatsuya Murakami stated: "The
release of radioactive materials is a more realistic threat to local
people than terrorism. Where should priority be given to? It was a
difficult drill."

DONOVAN

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