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Cablegate: Daily Summary of Japanese Press 11/27/06

DE RUEHKO #6731/01 3310804
P 270804Z NOV 06





E.O. 12958: N/A

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(1) To what extent can Prime Minister Abe follow his convictions in
budget compilation?

(2) Prime Minister Abe moves to official residence to work around
the clock

(3) NSC initiative: Role sharing a difficult problem for Kantei,
Foreign Ministry, Defense Agency

(4) Uncertainly looming over fate of regulatory reform, with no
input from prime minister and resistance to market testing by
government agencies

(5) Vacillating conservatism (Part 1): Image of "Abe-style" politics
precedes substance

(6) Vacillating conservatism (Part 3-conclusion): Is Prime Minister
Abe trying to rally "grass-roots conservatives?

(7) Agriculture Minister Matsuoka received 6.86 million yen in
donations from companies and groups involved in bid-rigging over
forestry projects


(1) To what extent can Prime Minister Abe follow his convictions in
budget compilation?

NIHON KEIZAI (Page 2) (Almost Full)
November 27, 2006

Two months have passed as of yesterday since Shinzo Abe took office
as prime minister. He has thus far made achievements on the
diplomatic front, as can be seen in his surprise visits to China and
South Korea. In the economic field, he has yet to produce
satisfactory results. How far can he carry through with his
structural reform policy amid a growing trend for a swing-back in
the name of narrowing disparities or giving consideration to local
regions? The compilation of the fiscal 2007 budget will serve as a
test of the Kantei leadership he has touted.

Moves to look for funds in supplementary budget

Abe moved out of his private residence in Tomigaya to the official
residence in Nagata-cho on Nov. 26. He was in casual attire wearing
a blue jumper and black pants. He told reporters, "I will move to
the official residence in the knowledge that I will be on stand-by
around the clock."

The official residence had originally been used as the Prime
Minister's Office (Kantei). The residence, constructed in 1929, was
refurbished to coincide with the construction of the new Kantei
building. The refurbishment was completed in 2005. Koizumi was the
first occupant of the newly built Kantei, followed by Abe. Abe's
comment about being on stand-by likely betrayed his feeling that he
is too busy with work to care about the fact that he is the second
occupant of the Kantei.

Liberal Democratic Party (LDP) Policy Research Council Chairman
Shoichi Nakagawa and New Komeito Policy Research Council Chairman
Tetsuo Saito gathered in a room at the Hotel New Otani on the

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evening of Nov. 24. On the agenda was the supplementary budget for
this fiscal year. Participants tried to find spending items in line
with the Abe administration's slogans, such as second chances and
local revitalization.

Commenting on the second budget, Abe at the meeting of the Council
on Economic and Fiscal Policy (CEFP) on Nov. 24 announced that
expenditures would be limited to reconstruction of disaster-hit
areas. LDP Secretary General Hidenao Nakagawa, who supports Abe,
proudly said, "We have been able to disrupt the attempt to impede
the Koizumi policy." However, a plan to incorporate road
construction expenditures financed with surpluses from special road
revenues, which are larger than the road budget, has been floated in
the LDP.

A senior ruling party official noted, "We have a plan to look into
the possibility of a 15-month budget including the supplementary
budget." The 15-month budget is a budget combining a supplementary
budget and an initial budget so that there will be no disruption in
the implementation of public projects from January through March.
This is a measure to give consideration to local governments. It was
not an unusual method in the past.

The way the reallocation of special road construction revenues was
decided, a policy that Koizumi proposed as his campaign pledge and
has been relegated Abe to handle, is also unclear.

Both local governments and the auto industry are against the idea of
reviewing special road construction revenues. New Komeito, which has
sent Tetsuzo Fuyushiba as minister of land, infrastructure and
transport, is also cautious about the idea. Abe has stated, "I will
reallocate road funds as I expressed in my policy speech." However,
is it possible to convert road funds into funds for more general
use, a category of funds under which there are no restrictions on
usage at all, including the use of surplus portions of road funds?
Skepticism is rife in the ruling camp and Kasumigaseki.

Private-sector member of CEFP shouts at politicians

A private-sector member of the CEFP during a panel meeting held at
the Kantei on the evening of the 24th, shouted at Internal Affairs
and Communications Minister Yoshihide Suga, "I want politicians to
take the initiative instead of letting bureau director generals of
each government agency make decisions." Under the Koizumi
administration, the state minister for economic and fiscal policy
was in charge of the panel. He got the ruling camp under his thumb,
characterizing the panel as a main setting for policymaking. Koizumi
even scolded cabinet ministers at times, saying, "Do not allow
bureaucrats to take the lead." Being fresh as prime minister, Abe
lacks the punch and authority of Koizumi. The private-sector member
also had Abe in mind when he lashed out at Amari and Suga.

Openly states consideration for local governments

When he moved to the residence on the 26th, Abe said, "Sometimes I
want to return to my private residence on weekends." Unlike Koizumi,
whom Foreign Minister Aso described as "being able to put up with
complete solitude," Abe has a feeling of warm-heartedness, which is
part of his appeal.

His warm-heartedness raises hopes among politicians that Abe will
listen to them. With one faction leader saying that "Koizumi is
special, while Abe is ordinary," this can be seen as a call for a

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traditional prime minister who coordinates among the LDP factions
rather than a top-down leader in the mold of Koizumi.

Abe stressed, "There will be no change in the spending cut policy of
the Koizumi cabinet." At the same time, he openly expressed
consideration for local regions even during the LDP presidential
race. His convictions are now being put to the test.

(2) Prime Minister Abe moves to official residence to work around
the clock

SANKEI (Page 3) (Abridged slightly)
November 27, 2006

Two months after taking office, Prime Minister Shinzo Abe and his
wife, Akie, moved yesterday from their private residence in Tokyo's
Tomigaya to the prime minister's official residence (Kotei) adjacent
to the Prime Minister's Office (Kantei).

Immediately after arriving at the Kotei, Abe went shopping in
Shibuya to buy blazers, slacks, a set of dictionaries and so on.

Two 2-ton trucks carrying books and clothing arrived at the Kotei
shortly before 1 p.m., and Abe and his wife entered the new
residence 30 minutes later with bags in their hands.

The move for Abe and his wife was initially scheduled for early
November. "Bidding for the curtains and wallpapers for the prime
minister, the quintessential public figure, took a long time," an
aide explained.

"Now that I have finally moved to the Kotei, I am ready to work
around the clock," Abe told reporters yesterday at his official
residence. Now that Abe no longer needs to spend 20 minutes
commuting between his private residence and the Kantei, the crisis
management system will be stepped up. Abe and his wife, however,
will spend weekends at their private residence, where they can have
more privacy.

New environment

Security police officers and Cabinet Secretariat staffers will
frequent the Kotei, which also houses an office of Kunihiko Miyake,
the first Kotei liaison and coordination officer, and his wife, who
is responsible for coordinating schedule and offering advice to the
First Lady. The Abes will certainly not the only ones who will be
using the Kotei. "The place looks comfortable," Abe told an aide.
The residence is also equipped with a theater where the prime
minister can enjoy movies and comedies on DVDs after a day's work.

The dog

In moving to the Kotei, Abe and his wife were concerned most of all
about their pet, Roy, a miniature dachshund.

An aide to Akie quoted her as saying when leaving for the Kotei
yesterday: "Sensing something unusual, Roy seems upset. But we
cannot take him with us because he might feel alone at times at the
Kotei when we are out." A decision has been made to leave the dog in
the care of Abe's mother, Yoko.

With no supermarkets in Kotei's vicinity in Nagatacho, shopping
would also become difficult for Abe and his wife.

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High-tech house

The Kotei has a floor space of 7,000 square meters. It was
originally built in 1929 as the Kantei by modeling on the style of
Frank Lloyd Write, who designed the Imperial Hotel.

Before being remodeled into Kotei, the Kantei was scarred by the
bullet holes from the 2.26 incident," a failed coup on Feb. 26,
1936, which was led by a group of young Imperial Japanese Army
officers calling for a "Showa Restoration." A former prime minister
described the musty Kantei as "spooky."

The office used by the previous 42 prime minister from Giichi Tanaka
to Junichiro Koizumi has been made into a study. The Kotei also has
a tearoom for guests. The former Kantei was remodeled into a
high-tech house last spring with the installation of rooftop solar
panels and the world's first household fuel cells that hardly
generate carbon dioxide.

(3) NSC initiative: Role sharing a difficult problem for Kantei,
Foreign Ministry, Defense Agency

YOMIURI (Page 4) (Full)
November 23, 2006

An advisory panel of experts to Prime Minister Abe has now kicked
off a full-fledged debate on his initiative to establish a national
security council (NSC) like the one at the White House of the United
States. The question, however, is whether it is possible to
reorganize and consolidate Japan's inconsistent foreign and security
policy planning systems in its bureaucratic sectionalism and
establish a system for the prime minister's office (Kantei) to make
decisions under its initiative. There are a number of challenges in
store, including how to clear up role sharing with the Foreign
Ministry and the Defense Agency.

"We're facing newly emerging threats like North Korea's nuclear
weapons programs, so it's urgently necessary to develop foreign and
security policies to meet the changes of the times in a swift and
adequate way." With this, Yuriko Koike, special advisor to Abe on
national security, spoke for the premier's ardor at the outset of
the advisory panel's first meeting held yesterday at the Kantei.

Abe's NSC initiative is for the Kantei to function as a control
tower, imagining two functions: 1) formulating long-term foreign and
security policies; and 2) making prompt decisions to meet

At present, the Security Council of Japan (SCJ), chaired by the
prime minister, is set up under the Cabinet Office to discuss and
decide on Japan's security policy. However, the SCJ does not have
enough personnel as it is currently staffed with only about 30
personnel, including those concurrently seconded from other
government offices. "The SCJ only hears briefings from government
offices and does not work out national strategies," Koike says.

In its meeting this time, the advisory panel decided to reach a
conclusion in February next year for the time being. Yet, the NSC's
role is unclear about whether it will map out diplomatic strategies
or whether it will prioritize Japan's security policy. The
government plans to present a legislative measure to the Diet in its
ordinary session next year to replace the SCJ with the NSC. In that

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case, however, one in the government presumes that the SCJ can only
reinforce its staffing at best. The NSC in the United States is an
organization under the presidential system, so another government
official says the newly planned body can model after the Cabinet's
Defense and Overseas Policy Committee in Britain, which is also
under a parliamentary system of government.

In point of fact, the chief cabinet secretary has been at the center
of information and policy coordination for Japan's foreign and
security policies. However, the Kantei has no system to gather and
analyze foreign and defense intelligence. "Policy decisions have
been greatly affected by the individual capabilities of chief
cabinet secretaries," one government official notes. The government
has now decided on sanctions against North Korea over its nuclear
test. In that process, the Foreign Ministry and the Defense Agency
were eager to report their respective plans to the prime minister,
according to a government official. This official says these two
government offices were at odds in a conflict of opinion.

This time as well, the Foreign Ministry and the Defense Agency have
voiced their respective desires. A senior official of the Foreign
Ministry says, "Someone who served in the post of administrative
vice foreign minister is competent to fill the new body's top post."
A staff officer of the Self-Defense Forces also says, "We want to
send a uniformed officer to a key position in the new body to get
the Kantei's information." At the Kantei, Chief Cabinet Secretary
Shiozaki and Abe's Special Advisor Koike reportedly locked horns
with each other, respectively claiming to be the counterpart of the
US president's national security adviser. The two seem to be
struggling for the initiative.

(4) Uncertainly looming over fate of regulatory reform, with no
input from prime minister and resistance to market testing by
government agencies

NIHON KEIZAI (Page 2) (Full)
November 26, 2006

The previous administration led by Prime Minister Koizumi set the
policy goal of transferring operations and authority from the
government to the private sector. Under the Abe administration,
however, uncertainty is looming over the fate of regulatory reform.
Government agencies have reacted fiercely to a planned increase
starting in FY2007 in projects subject to the bidding system as part
of market testing introduced by the Koizumi administration. They
fear that their authority might be eventually reduced. Some
observers also anticipate that activities by an expert panel on
regulatory reform could start to be slimmed down next fiscal year.
Prime Minister Shinzo Abe has eagerly addressed diplomatic and
educational issues, but when it comes to regulatory reform, he seems
to be less enthusiastic.

In an unofficial meeting held by the Committee on Competitive
Bidding Management composed of officials from the private and public
sectors in Tokyo on Nov. 21, representatives from the Ministry of
Health, Labor and Welfare (MHLW), as well as the Ministry of Land,
Infrastructure and Transport, reacted strongly to the council's
proposals urging the government to transfer the services of Public
Employment Security Office institutions and the management of parks
to the private sector.

Under the market testing system, both the government and the private
sector present their respective proposals for each project subject

TOKYO 00006731 006 OF 010

to competitive bidding, and the party that presents a superior plan
in terms of cost wins a contract. State Minister in Charge of
Economic and Fiscal Policy Hiroko Ota is willing to hold
negotiations with the cabinet ministers concerned, such as MHLW
Minister Hakuo Yanagisawa, stressing the need to consider matters
"from the perspective of users." But time is running out in the
run-up to the deadline set for the end of December.

The focus of attention is also on what body should be formed to
succeed the Council on Regulatory Reform and Privatization, which is
to expire next March. Such plans as reform of agricultural
cooperatives and introduction of an education-voucher system have
been in limbo. One private-sector member was overheard saying,
"Under the current situation, the new body is likely to be tasked
only with monitoring the regulatory measures that have already been

The prime minister remains indifferent at present, though he was
expected to back the council. In his policy speech in September, Abe
indicated eagerness to push ahead with market testing, but in the
Liberal Democratic Party, cautious views are dominant about
regulatory reform.

The Cabinet Office wants to have all regulatory reform plans
discussed at a meeting on Nov. 30 of the Council on Economic and
Fiscal Policy. It remains to be seen whether the prime minister will
issue a clear-cut instruction to move the situation forward.

(5) Vacillating conservatism (Part 1): Image of "Abe-style" politics
precedes substance

YOMIURI (Page 1) (Full)
November 22, 2006

Abe's basic political philosophy is "open conservatism." We wonder
what the term actually means and where it is heading for. We here
examine the term "conservatism" -- an emerging new buzzword in
political circles -- from various angles.

"It is specified to foster an attitude of respecting Japanese
culture and traditions, loving our country and land, respecting
other countries, and contributing to international peace and

Prime Minister Abe emphasized the significance of revising the Basic
Education Law while highlighting a clause in which patriotism is
referred to, in a final session of questions and answers at a
meeting on Nov. 15 of the Lower House Special Committee on the Basic
Education Law.

Abe frequently refers to confidence and pride. The title of a policy
platform released this September, when he served as chief cabinet
secretary, was "Toward a beautiful nation, Japan."


On Oct. 2, when Abe took the floor for the first time as prime
minister to answer representative questions in the Lower House
plenary session, he defined "open conservatism" this way: "I don't
regard it as an ideology but rather an attitude of reconsidering the
long history of Japan from the viewpoint of our ancestors while
having confidence in the country where we were born. This idea is
not something closed or exclusive."

The Abe cabinet enjoys the high approval rating of 65% (according

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to a November poll by the Yomiuri Shimbun). This has come partly
because of a favorable effect of his visits to China and South Korea
he made right after he took office as prime minister, but another
reason is a prevailing atmosphere among the public of reconsidering
traditions, history, and culture with a strong awareness of the
country, Japan.

Shiseido this year came out with a new set of shampoo and
conditioner packaged in red bottles and called "Tsubaki." The new
product created a sensation in the hair care market in Japan. The
catchword used for the popular product was: "Japanese women are

The feature of the product is "tsubaki or camellia oil," which has
been long used in Japan for hair care. In part because of the
commercial message in which Turin Olympic Gold Medalist Figure
Skater Shizuka Arakawa and others appeared, this product at one
point pushed Shiseido, which had until then ranked forth in the
share of the hair care market, into the top of the market. Shiseido
Public Relations Section's commercial strategy accentuated this
line, "We are happy to have been born in Japan," and this strategy
made a great success because it was able to draw public sympathy.

Mathematician Masahiko Fujiwara, professor at Ochanomizu University,
insisted in a book, "Kokka no Hinkaku" (Dignity of the Nation), a
paperback published by Shinchosha: "Japanese traditions that have
nurtured 'sensibility' and 'Japanese chivalry' must be preserved."
His book became a best seller with the sale of more than two million
copies. The fact that "Japan" and the "state" are employed as
buzzwords here and there in the book is kind of proof of a widening
awareness of positively taking "conservatism" in the sense of
"valuing and preserving conventional customs and traditions," as
defined by the "Kojien" Japanese Dictionary.

Kyoto University Prof. Keishi Saeki, a well-known expert on
conservatism, stated: "Experiencing the decline of postwar mores,
many people now want to rebuild family values and the education
system. They seem likely to smoothly accept ideas Prime Minister Abe
shows." Saeki, however, added that "I don't understand well" what
"open conservatism" as mentioned by the prime minister actually

Prime Minister's Special Advisor on Public Relations Hiroshige Seko,
an aide to Abe, commented: "Frankly speaking, we, too, can't respond
well if we are asked, 'what is conservatism'. The term
'conservatism' entails a conventional image, so we employed the
expression, 'open conservatism,' which may give a slightly different
nuance, but...."

An image of Abe-style of conservatism precedes the substance. How
can he give body and substance to the image is a key to whether his
"conservatism" will take root as a new political philosophy.

(6) Vacillating conservatism (Part 3-conclusion): Is Prime Minister
Abe trying to rally "grass-roots conservatives?

YOMIURI (Page 1) (Full)
November 24, 2006

A dinner party was held on the night of Nov. 15 at the British
Embassy in Ichiban-cho, Tokyo, an area facing the inner moat of the
Imperial Palace, in honor of a visiting British diplomat, director
of the Foreign Office's Far East Department. A major topic for

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conversation there was what Prime Minister Abe's term 'open
conservatism' meant.

"Does the UK have the term 'open conservatism'?"

"There are rumors that Prime Minister (Abe) is a nationalist. Does
what he calls 'conservatism' mean that?"

Various opinions were exchanged there among Japanese international
political scientists and journalists, and British officials. But the
conclusion reached there was that the actual meaning (of what Abe
calls conservatism) remains unclear.

The United Kingdom (UK) is viewed as the "home" of conservatism.
That is partly because of the historical circumstances. According to
Chubu University Prof. Hidekazu Kawai, "People's freedoms and rights
have been guaranteed by traditional systems, such as royal rule, so
the French Revolution, which made mincemeat of traditions, was seen
as something destroying freedoms. In this context, the British
statesman and philosopher, Edmund Burke, criticized the French
Revolution. This reflection has become the origin of

As for Abe, many point out: "Mr. Abe would have realized the
importance of conservatism when he opened his eyes to the traditions
of British conservatism," as Kyoto University Prof. Terumasa
Nakanishi said.

However, a British diplomat argued: "(Here in Japan), conservatives
voice the need 'to revise the Constitution,' while those not viewed
as conservatives insist on defending 'the Constitution.' Japanese
conservatism is difficult for average people in Britain to

On the other hand, the Untied States from the beginning had nothing
to preserve, for instance, a class system, so the meaning of
conservatism in that country is different from that of Britain.
Perhaps reflecting the founding philosophy of surviving with own
efforts, the US attaches importance to individualism, liberalism,
and market principles. Making changes is viewed as a good thing in
American conservatism, and the goal of Abe, who intends to follow
the Koizumi-led reform line, appears to be close to American

Prime Minister's Special Advisor Hiroshige Seko commented: "Mr. Abe
appears somewhat affected by America's 'grassroots conservative'

While the situation in Iraq was worsening in the fall of 2004,
President Bush of the Republican Party won re-election. At the time,
grassroots conservatism was cited as one of the causes of the Bush
victory. Soon after the presidential race, at the order of then
Acting Secretary General Abe of the Liberal Democratic Party (LDP),
Seko set in motion a study of grassroots conservatism. In June 2005,
Abe invited Kinichi Yoshihara, an expert on grassroots conservatism
and executive director of the Asian Forum Japan, to a study meeting
of the LDP Reform Implementation Headquarters he headed and
exchanged views with him in the session.

According to Yoshihara, "America's 'economic conservatives' are
market economy-oriented, while 'social conservatives' are opposed to
abortion, homosexuality, and gun control. These groups are
essentially incompatible with each other but they joined hands based

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on thousands of grassroots' groups. This is the origin of
'grassroots conservatism."

In order to rally grassroots conservatives, the Republican Party set
up a philosophy that includes such elements as small government,
moral values, maintaining peace by means of force, and cutting
taxes. "If you support at least one of those ideas, you are a
'conservative,'" said the Republicans.

The LDP saw its traditional support base weakened during the five
and a half years of the so-called Koizumi reforms. Rebuilding the
party's supporting base by rallying conservative forces is a big
challenge facing Abe. "'Open conservativism' as described by Abe can
be defined as involving various types of conservatives," Yoshihara
explained. If that is the case, Abe's strategy is to cast a net over
voters among whom a conservative mood prevails.

(7) Agriculture Minister Matsuoka received 6.86 million yen in
donations from companies and groups involved in bid-rigging over
forestry projects

AKAHATA (Page 15) (Excerpts)
November 27, 2006

Agriculture, Forestry and Fisheries Minister Toshikatsu Matsuoka
(Lower House member elected from the Kumamoto No.3 District)
received a large amount of donations from public corporations and
companies that were raided by the Fair Trade Commission (FTC) in
late October on suspicion of a violation of the Antimonopoly Act,
according to an investigation by the Akahata. These entities
allegedly were engaged in collusive negotiations over bids for such
projects as a forest road-construction project offered by the Japan
Green Resources Agency (JGRA), an independent administrative
corporation based in Kawasaki City under the Ministry of
Agriculture, Forestry and Fisheries (MAFF).

It is suspected that JGRA officials were also involved in
determining successful bidders, and the MAFF minister's
responsibility is likely to be questioned.

The inspected entities include such public-interest corporations
under MAFF as the Japan Forest Engineering Society; the Japan
Forestry Foundation; Forest Engineering Facilities Research Council;
and the Japan Forest Technology Association, as well as more than 10
private-sector consultant firms, such as Shinrin Technics (TN:
phonetic); Forestech; and Wesco.

The Japan Forestry Foundation, Forestech, and other entities offered
donations to the Liberal Democratic Party's Kumamoto No. 3 District
branch office, headed by MAFF Minister Matsuoka, and the Council for
Economic and Political Studies in the New Century under the lead of
Toshikatsu Matsuoka. If donations from the Japan Forest Engineering
and the Japan Forest Technology Association added, the donations
Matsuoka received from 1996 through 2005 total 6.86 million yen.

In December 2001, too, the FTC issued a recommendation to 15
companies, including four public corporations, to cease activities
in violation of the Antimonopoly Act. The watchdog body suspected
that they had repeatedly made prearrangement starting around April
1997 in taking part in bidding for survey and measurement services
for national forests under the jurisdiction of the Forestry Agency's
Tohoku Forest Management Bureau Aomori Branch Office. A considerable
number of companies investigated this time were also included among

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those investigated in 2001.


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