Cablegate: Daily Summary of Japanese Press 06/22/07

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UNCLAS SECTION 01 OF 06 TOKYO 002841

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 06/22/07

INDEX:

(1) Iraq extension unaccounted for

(2) Interim settlement of account on Abe administration - part 6:
Moving services from government to the private sector; Enthusiasm
for reform lost steam; Market testing not picking up steam

(3) Interim settlement of account on Abe administration (Part 7 -
conclusion): Interview with Chief Cabinet Secretary Shiozaki: Pursue
not "destruction-oriented" but "creation-oriented" reforms

(Corrected copy) Hard to understand opposition: Maher

(Corrected copy) Yonaguni Town Assembly rejects petition opposing US
minesweepers' visit

ARTICLES:

(1) Iraq extension unaccounted for

ASAHI (Page 4) (Full)
June 21, 2007

A bill revising the Iraq Reconstruction Assistance Special Measures
Law to extend the activities of the Self-Defense Forces in Iraq for
two years cleared the Diet yesterday. The ruling coalition of the
Liberal Democratic Party and New Komeito has been steering the Diet
in an overbearing manner. And now, they chose again to bulldoze
their way through. In Diet deliberations, the government did not
even account for why the SDF has to stay on in Iraq now. Britain and
other members of the US-led multinational forces in Iraq are now
about to retouch their Iraq policy. Yet, the SDF's Iraq mission will
continue while the local situation is growing even more dangerous.

"What's important now is that the international community will do
its utmost to help with Iraqi reconstruction."

So saying, Prime Minister Abe again stressed the significance of
assisting Iraq with its reconstruction when he met reporters at his
office yesterday evening.

However, Abe weighed his "promise" to the United States, Japan's
ally. On June 19, the LDP-led coalition steamrollered the bill in a
meeting of the House of Councillors Foreign Affairs and Defense
Committee. "It's a big step forward for what I've promised," Abe
said later in the day.

Abe, since coming into office, has reiterated "cooperation with the
United States as an irreplaceable ally" about Japan's Iraq aid. The
government had initially considered extending the SDF's Iraq mission
for one year. Eventually, however, the government decided to extend
it for two years. This was in line with US President Bush's decision
in January this year to send about 21,000 more troops to Iraq.

Meanwhile, the government's public accountability through Diet
deliberations was insufficient. "Is it all right to leave Iraq as
is?" This remark came yesterday from Abe over the significance of
the Air Self-Defense Force's airlift activities in Iraq. However,
the question is how much the ASDF's activities will help with Iraq's
reconstruction. The bill was discussed for a total of 31 and a half
hours, broken down into 16 and a half hours in the House of
Representatives and 15 hours in the House of Councillors. The law

TOKYO 00002841 002 OF 006

came into effect in 2003, and the Diet spent a total of about 73
hours to deliberate on it before its passage. Ironically, what
became clear in Diet deliberations was the risk of ASDF activities
in Iraq.

On May 14, Defense Minister Kyuma stated before a special committee
of the House of Representatives: "In point of fact, it's
considerably dangerous for the ASDF to work in Iraq. The ASDF is
having a hard time of it while studying how to work it out there."

According to an ASDF source, there is an increase in the number of
cases where the ASDF's C-130 transport planes, which are tasked with
airlift services, suspend their flights. The C-130's alarm system,
which is activated when targeted for a missile attack or in other
eventualities, was rarely activated in the past. These days,
however, it reacts frequently. Each of the ASDF's C-130 transports
for the Iraq mission has a watchout window on the upper part of its
body. The source says an ASDF member sits near that window to look
around through the window. A number of US military helicopters were
shot down near Baghdad Airport in particular. As is evident from
this fact, the security situation in Iraq has gone from bad to
worse.

The government has been only underscoring safety. Dissatisfied with
such a posture, one ASDF echelon officer made a direct appeal to
Kyuma, saying: "Their mission is becoming even more dangerous from
day to day. I wish to ask for a little more consideration for the
feelings of those ASDF members working there in Iraq." Kyuma's reply
before the special committee was in response to such a voice from
within the ASDF.

Moreover, there is another fact that is evident from the Defense
Ministry's disclosed information. Actually, the ASDF's activities in
Iraq are intended for the US-led multinational forces rather than
humanitarian and reconstruction assistance. The C-130s made a total
of 150 flights from July last year through the end of March this
year, including 125 flights for the multinational forces. In the
breakdown of their payloads, 46.5 tons-or 95 % --were for the
multinational forces.

(2) Interim settlement of account on Abe administration - part 6:
Moving services from government to the private sector; Enthusiasm
for reform lost steam; Market testing not picking up steam

TOKYO SHIMBUN (Page 2) (Slightly abridged)
June 20, 2007

On January 25, the day before Prime Minister Abe delivered his first
policy speech, the Kochi Labor Department and the Nagasaki Labor
Department closed applications for public bidding for market testing
to transfer a job-offer boosting project from their public
employment service agencies to private companies. Neither department
received any tenders.

Three other labor departments, including one in Hokkaido, closed
public bidding for similar projects. The Hokkaido office only
received tenders that exceeded the estimated price. Both the Kochi
and Nagasaki offices once again held public bidding, but received no
tenders. As a result, the state is undertaking the projects there as
before.

Market testing is a system aimed at lowering costs of government
services and improving the quality of services through public

TOKYO 00002841 003 OF 006

bidding joined by the private sector and government. The idea was
formulated by the Koizumi administration, which advocated the policy
of transferring services from the government to the private sector.
It was then incorporated in the Administrative Reform Law and has is
now underway under the Abe administration.

The Administrative Committee, a vehicle to promote market testing,
recently carried out a five-grade appraisal of track records of
market testing by various government agencies. The survey found a
shocking result with two ministries rated C, the middle grade, five
rated at D, a slightly low grade, and another five rated E, meaning
no track records achieved.

This appraisal highlighted the negative stance of various government
agencies. There is an atmosphere among government agencies of openly
questioning the Koizumi administration's policy of shifting services
from the government to the private sector. One official in charge of
market testing at a certain ministry said: "Private-sector members
of the Council on Economic and Fiscal Policy (CEFP) under the
Koizumi administration insisted that government services should be
shifted to the private sector at any cost. However, the private
sector cannot necessarily provide good service at a low cost."

Abe himself does not seem to be enthusiastically tackling the task.
The sluggish submission of bids for the job-offer boosting project
is the evidence of the bureaucracy leaving such a situation
unattended.

The Administrative Reform Promotion Law was enacted in May 2006, a
time when the Koizumi administration was in its final phase. It
incorporates policy targets that were set in compliance with the
idea of moving services from the government to the private sector.
Since many of those targets are mid-term targets, it is difficult to
evaluate them at the present stage. Even so, the Abe
administration's effort to meet those policy targets is
questionable.

A representative example of such is a revision of
government-affiliated financial institutions, which are being
criticized as the root cause of a massive amount of postal money
being poured into wasteful public works.

The point has been made that the bureaucracy has watered-down
regulations in this process of drafting individual bills out of the
desire to retain their vested interests.

For instance, regarding Shoko Chukin Bank, which is set to be
privatized, the law incorporated as an additional clause a measure
to restrict qualifications to become its shareholders even after
full privatization. This measure is regarded as a means to limit
those who are qualified to become its shareholders to small and
medium business organizations with the aim of countering a possible
threat from foreign countries. Private-sector members of the CEFP
questioned about the measure with one member saying, "Is it really
necessary to restrict shareholders after full liberalization?"

In reforming the public servant system, the Administrative Reform
Promotion Law stipulates that retirement control should be made
appropriate and necessary measures to promote personnel exchanges
with private companies should be taken. In compliance this, the Abe
administration is aiming at submitting a set of bills reforming the
public servant system featuring the establishment of a
government-private sector personnel exchange center (new personnel

TOKYO 00002841 004 OF 006

bank) to the current Diet session for enactment.

State Minister for Administrative Reform Yoshimi Watanabe said, "I
will cut the cords of the golden parachute (amakudari practice)."
However, the opposition camp is criticizing the envisaged bank,
which will render job placement services to retired bureaucrats in
place of the government agencies they used to work for before
retirement, as an amakudari promotion bank financed with tax money.

The Administrative Reform Promotion Law provided that independent
administrative agencies should be reviewed from the perspective of
cutting expenditures. The government in fiscal 2006 revised 23
agencies. As a result, 32 services were abolished or curtailed.
However, no agencies have been dismantled.

The Administrative Reform Law is called a program law, because
whoever becomes prime minister, the Koizumi reform policy would be
inherited without fail. However, if the situation is left
unattended, the possibility of the law turning into a situation in
which the field has been ploughed, but the fact that the seeds to
sow have been forgotten cannot be ruled out.

(3) Interim settlement of account on Abe administration (Part 7 -
conclusion): Interview with Chief Cabinet Secretary Shiozaki: Pursue
not "destruction-oriented" but "creation-oriented" reforms

TOKYO SHIMBUN (Page 2) (Full)
June 22, 2007

-- The Abe administration has two roles to play -- one as successor
to the Koizumi administration and another to "build a beautiful
country." How is the administration going to fulfill these two roles
simultaneously?

In the days of the Koizumi administration, one voter told me:
"Although I am supportive of reforms, I don't know what will become
of post-reform Japan." In response, Prime Minister Abe presented a
future vision of Japan, saying that he had shifted the focus from
"reforms designed to destroy" under former Prime Minister Koizumi to
"reforms aimed to create."

-- There seem to be still many parts that must go through
"destruction-oriented" reforms.

That is why Prime Minister Abe has used the expression "new
embarkation" after emerging from the postwar regime. There are still
things that must be broken, and they stand in the way of the Abe
administration, like bedrock. The administration should destroy the
bedrock first and then get off to a start. The destinations of its
course are assertive diplomacy, constitutional revision, and
permanent status on the United Nations Security Council. The
government is asking the public for their views about it.

-- The Abe administration apparently takes the stance of setting an
ideal image of the nation first and then fixing its tasks.

That is exactly right. The idea of establishing a Japanese-version
national security council (NSC) is a typical case. While envisioning
the role of Japan under the context of the world and its future
image, the administration came up with the idea as a measure to
strengthen the Prime Minister's Official Residence's (Kantei)
necessary functions. It is impossible to manage this country based
on an isolated concept within a government office.

TOKYO 00002841 005 OF 006

-- Has the administration prepared a roadmap for revising the
Constitution, the last challenge for the Abe administration?

To propose revising the Constitution, it is necessary to obtain
approval from at least two-thirds of all the members of both
chambers, so this is a considerably difficult task. The Liberal
Democratic Party has prepared a draft new constitution, but some
lawmakers have not joined the compilation process. The people have
yet to be informed of the draft. Given this, Prime Minister Abe has
suggested, "Let's consider a future vision of the nation first."

-- Looking at the current administration's approach to short-term
policy challenges, such as administrative reform, we cannot detect
such enthusiasm as shown by the Koizumi administration.

In Koizumi reforms, government-affiliated public corporations were
reorganized into independent administrative corporations, winning
high marks from the public. But some voice skepticism that
reorganized corporations might be worse than their predecessors, as
represented by (the bid-rigging case involving) Japan Green
Resources Agency. The Abe cabinet, under the lead of State Minister
in Charge of Administrative Reform Yoshimi Watanabe, is stepping up
efforts to review such parts.

-- Some observers point out that the drive for fiscal reconstruction
has also decelerated.

I am fully aware that some groups are trying to take every
opportunity to have the increased portion in tax revenues to be
allocated to their budgets, on the premise of increasing taxes. But
the Abe administration will not easily increase taxes, although it
will follow the spending-cut policy.

-- What themes have pushing up their positions than those when the
administration was inaugurated?

It probably is environmental protection. Although this is a very
hard challenge, we would like to come to grips with this task, prior
to the G-8 summit in Japan next year. Another is decentralization.
This theme is directly linked to "forming the state." Government
agencies, local governments and local assemblies are expected to
raise objections to decentralization, but Prime Minister Abe has
said: "We must have the fire of reform continue to burn." To that
end, the prime minister has poured in considerable energy.

(Corrected copy) Hard to understand opposition: Maher

RYUKYU SHIMPO (Page 2) (Full)
June 20, 2007

YONAGUNI-US Naval Forces Japan is planning to have two minesweepers
make a port call at the island of Yonagunijima. On this plan, US
Consul General Okinawa Kevin Maher clarified that the two
minesweepers would call at the island as planned. He also said: "The
US Navy has contributed to Japan's security. It's hard to understand
why they are against the planned visit." With this, Maher raised a
question about the stance of Okinawa Prefecture and Yonaguni Town.
The Okinawa prefectural government is calling for the US Navy to
abstain from making port calls at the island, and the Yonaguni
municipal government has clarified its opposition to the planned
port call. Maher was replying to a question asked by the Ryukyu
Shimpo in an interview.

TOKYO 00002841 006 OF 006

In the face of opposition, the two US minesweepers will visit
Yonagunijima Island as planned. "Not all local residents are opposed
to the visit," Maher said, adding: "The US Navy has made more than
600 port calls in Japan over the past 25 years. Some people
demonstrate against the port call, but many people come out to see
the ships. Most visits are overwhelmingly welcomed." With this,
Maher indicated that he would promote exchanges with local residents
who are in favor of the port call.

One of the reasons cited by Yonaguni Town for its opposition to the
port call is that neither of the island's two ports-one in its Sonai
area and the other in its Kubura area-is an open port. In this
respect, Maher noted that the Japan-US Status of Forces Agreement's
Article 5 does not distinguish open ports from closed ones.

It is also feared that the planned visit of a US warship to the
island will irritate China and Taiwan. Maher stressed: "US naval
ships have visited here and there in Japan. Just because they visit
a port in Japan provides no reason for another country to oppose
it."

Moreover, with local residents in mind, Maher said: "We'd like to
ask for cooperation and consideration with exchange and friendship.
I hope they will come out to see the visiting ships."

(Corrected copy) Yonaguni Town Assembly rejects petition opposing US
minesweepers' visit

RYUKYU SHIMPO (Page 2) (Abridged)
June 20, 2007

YONAGUNI-The assembly of Yonaguni Town held a monthly regular
meeting yesterday, with Sonkichi Sakihara presiding. The assembly
voted down a petition opposed to the visits of US warships to
Yonagunijima Island with two of its members for the petition and
three against the petition.

The Okinawa prefectural government has asked the US Navy to abstain
from making port calls at the island of Yonagunijima. In addition,
Yonaguni Mayor Shukichi Hokama has also clarified his opposition.
The town assembly's response had been noted.

The petition was brought by Hiromoto Komine, a member of the
Yonaguni Town Assembly. Citing the record of discussions over the
Japan-US Status of Forces Agreement, Komine noted that US vessels
are allowed to make port calls only at open ports under the normal
circumstances. "The port call planned this time is against that,"
Komine said. He added: "Ishigaki City and other municipalities of
the Yaeyama Islands opposed the visits of US warships, so we should
keep pace with them. If the US warships make a port call, that will
give the impression that it is strong action taken on the strength
of the Japan-US Status of Forces Agreement. It will throw the island
into confusion."

DONOVAN

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