Cablegate: Daily Summary of Japanese Press 08/13/07-3

DE RUEHKO #3717/01 2250823
P 130823Z AUG 07





E.O. 12958: N/A



(23) Yomiuri poll: 36% want to see DPJ win in Lower House election;
32% have hopes for LDP

(24) DPJ to field candidates in 300 constituencies for next Lower
House election, even if it takes place this year; Ozawa to reprise
nationwide campaign

(25) Interview with Ishiba, leader of the call for Abe's

(26) Public opinion and government: Public moving away from "9/11"

(27) Reform of independent administrative agencies to become
important test for prime minister; Battle with government agencies
over administrative and fiscal downsizing

(28) Revision of greenhouse gas emissions reduction program: Council
members in interim report criticize optimism over nuclear power


(23) Yomiuri poll: 36% want to see DPJ win in Lower House election;
32% have hopes for LDP

YOMIURI (Page 2) (Full)
August 11, 2007

The Yomiuri Shimbun on Aug. 4-5 carried out a nationwide follow-up
survey on the Upper House election, based on an interview formula.
The survey asked pollees which party -- the Liberal Democratic Party
(LDP) or the Democratic Party of Japan (DPJ or Minshuto) -- they
want to see win in the next Lower House election. The number of
pollees who want the DPJ to win reached 36% , while 32% cited the
LDP. Some 31% were undecided.

The result indicated that people have great expectations of the DPJ
in the next Lower House election but that there are also many who
want to make up their mind, after determining the responses of the
Abe administration and the DPJ in the future.

Regarding when they wanted to see a dissolution of the Lower House
and a general election, 32% , the largest number, replied "as soon
as possible," followed by 21% who said "within the year," and 16%
who replied "by Sept. 2009, when Prime Minister Abe's term of office

By party affiliation, a total of 74% of those who support the DPJ
and a total of 54% who have no party affiliation said that they
hoped to see a dissolution of the Lower House and a general election
either "as soon as possible" or "within the year."

To a question on what sort of administration framework they want to
have, 27% , or the largest number replied, "A coalition government
of opposition parties led by the DPJ." "The present coalition
between the LDP and the New Komeito" and "an administration based on
a new framework created after the reorganization of the ruling and
opposition camps" were cited by 21% , respectively.

(24) DPJ to field candidates in 300 constituencies for next Lower

TOKYO 00003717 002 OF 008

House election, even if it takes place this year; Ozawa to reprise
nationwide campaign

YOMIURI (Page 4) (Full)
August 12, 2007

With an aye on an early dissolution of the House of Representatives,
Minshuto (Democratic Party of Japan) will start preparations for a
possible Lower House election. The DPJ is now considering
advertising for candidates, aiming at deciding on its candidates to
run in the 300 single-seat constituencies before the end of the
year. President Ichiro Ozawa will resume a nationwide stumping tour
in September or later.

Ozawa told his party members in a meeting on Aug. 7: "Next is the
Lower House election. I want you to put all your efforts into
regional and Diet activities while being on your guard."

The Lower House election is contested in 300 single-seat electoral
districts and the proportional representation segment, which has 180
seats. Ozawa has now set a target of winning more than 150 of the
single-seat districts. "We will be certain to become the largest
party in the Lower House if we win half of the single-seat
districts," said a senior party member. The DPJ has yet to decide on
its candidates for 97 single-seat districts, mostly in such urban
areas as Tokyo and Osaka, where it suffered a humiliating setback in
the 2005 Lower House race, as well as in the Shikoku and Kyushu
regions, in which its electoral turf is regarded as weak.

In a bid to file candidates in "vacant districts," the DPJ will
likely advertise for candidates as early as the fall. The party
predicts that talented people will apply since the public
expectations of it have grown because of its strong achievement in
the Upper House election. It intends to pick candidates for the
single-seat electoral districts from among new successful candidates
selected from among new applicants and 150 former candidates. It
will conduct a public opinion poll to explore voter preferences in
the single-seat constituencies as a reference to setting priority

Ozawa will visit the party's prefectural chapters and regional
organizations of Rengo (Japan Trade Unions Confederation) in an
attempt to strengthen ties between them. He is confident about
obtaining support from swing voters in urban areas. He then intends
to work hard in winning voters in agricultural circles in the
campaign for the next Lower House election as he did so for the
latest Upper House race. Nearly ten former senior agricultural
cooperative officials joined a group to discuss agricultural policy,
which was made up of former agricultural cooperative officials and
DPJ lawmakers, in June. The party wishes to solicit participants
from across the nation.

Meanwhile, Rengo plans to step up its efforts for the next Lower
House election. As the electoral districts of the Upper House
election system are composed of 47 prefectures, the support system
was created under the lead of Rengo's prefectural headquarters.
However, the reality is that there are differences in organizational
power in the prefectures.

Rengo plans to realign more than 400 regional councils nationwide
into about 300, which would become support bases for the single-seat

TOKYO 00003717 003 OF 008

(25) Interview with Ishiba, leader of the call for Abe's

TOKYO SHIMBUN (Page 20) (Abridged)
August 11, 2007

Katsumi Sekiguchi

Lawmakers of the governing Liberal Democratic Party (LDP) are
calling on Prime Minister Shinzo Abe to step down to take the
responsibility for the crushing defeat in the July 29 Upper House
election one after the other. In the vanguard of the call is former
Defense Agency Director-General Shigeru Ishiba (50). What is the
problem with Abe staying in office as prime minister? The Tokyo
Shimbun interviewed Ishiba, who criticizes Abe in public, about his

On Aug. 10, Ishiba said in his room of the No. 2 Diet members'
Office Building: "Prime Minister Abe appears to be clinging to his
position. I know the Upper House election is not an opportunity for
voters to choose which party should come to power. But Mr. Abe
declared it was an election to do so. I can't put aide that fact."
He spoke in a gentle manner, choosing his words as he spoke, but
every word was harsh.

Ishiba since the Upper House election has criticized Abe for staying
on, reiterating at LDP meetings, including the one of the General
Council: "Prime Minister Abe repeatedly asked voters to choose
between himself and DPJ President Ichiro Ozawa. How can he explain
this situation to voters?" Meanwhile, Abe has asked for his party's
understanding about his staying in office, saying, "I must repent
what I should repent." Ishiba, however, looked perplexed.

Ishiba noted: "Prime Minister Abe needs to indicate quickly what was
rejected (by the crushing defeat) and how the LDP should reform
itself. Criticism in the LDP of the prime minister is presumably
attributable to the prime minister's failure to explain what to
repent rather than his staying on as prime minister. LDP lawmakers,
including myself, will return to their hometowns during the O-bon
holidays and meet with their supporters. But they have nothing to
explain to voters why Prime Minister Abe stays on."

Some former cabinet members, including former Education Minister
Kenji Kosaka and former Defense Agency Director-General Gen
Nakatani, likewise have called on Abe to step down. The critical
view of Abe for his staying on in office is gaining momentum in the
LDP, but it is unlikely to dominate. Why?

Pointing to the mood in the party for tolerating Abe's staying in
office, Ishiba critically explained: "Mr. Abe is likely to be in
power for the time being. So, some in the party think that they want
to grab cabinet portfolios or party executive posts and serve the
state and the nation." "But if the LDP goes down," he added, "there
won't be any posts."

Selection of cabinet members by ability

The next Lower House election will literally be an opportunity to
choose which party should hold reins of government. Can the LDP stay
in power under the leadership of Prime Minister Abe?

TOKYO 00003717 004 OF 008

Ishiba noted: "If Prime Minister Abe signals a clear message that he
will give due consideration to both the now impoverished rural areas
and the weak, and if he wins the public's sympathy, I have no
objection to his staying on. But without doing so, he has simply
declared that he'll stay on. He is undermining the LDP's image and
in a way helping the opposition parties to come to power. Is it all
right to let this situation go as is?"

Last September, Abe installed his friends in cabinet posts, like the
appointment of Yasuhisa Shiozaki for the post of chief cabinet
secretary, and because of that, he came under fire in and outside

the LDP. The way Abe will reshuffle his cabinet and the LDP
executives on Aug. 27 is likely to serve as a litmus test to see
whether he has changed.

Ishiba said: "Now that the opposition parties hold a majority in the
Upper House, it has become unprecedentedly difficult for the ruling
parties to manage the Diet. The LDP should get out of faction-based
pecking order and seniority and instead adopt meritocracy in the
selection of the cabinet members and LDP executives. The LDP is now
in a crisis. Pursuing harmony in the party is important, but there
would be no point in doing so if our party stumbles in the Diet in
doing so."

Ishiba reiterates criticism of Abe in public. Does he have no
hesitation about alienating the prime minister who concurrently
serves as president of the LDP?

Ishiba answered: "I have no hesitation. I have no grudge against
Prime Minister Abe. I simply do not want to see such a person who
thinks criticism in the party of him will die down as the time goes

(26) Public opinion and government: Public moving away from "9/11"

MAINICHI (Page 2) (Abridged)
August 8, 2007/08/09

Jitsuro Terashima, chairman of the Japan Research Institute

Interviewer: Sei Uchiyama

-- Why do you think the ruling Liberal Democratic Party (LDP)
suffered a crushing defeat (in the July 29 Upper House election)?

Terashima: Some have analyzed that the public exploded in anger
against the pension fiasco and the politics-and-money scandals. But
I think this analysis is superficial. In the public's subconscious,
there was surely the "9/11" mentality, but I mean this does not
point to the "9/11" in the United States but the "9/11" general
election in Japan in 2005.

At the time the voters were asked whether to support the reform of
postal services, including their privatization. And they voted for
the continuation of the so-called Koizumi reform. They, however,
realized afterwards that their choice concerned sovereignty and led
to moves for revising the Basic Education Law and the Constitution.
That was not what the public had desired. To add to that, the
pension fiasco and other political problems fueled the voters'
discomfort with the government.

TOKYO 00003717 005 OF 008

-- The major opposition Democratic Party of Japan's (DPJ) President
Ichiro Ozawa has been opposed to extending the Antiterrorism Special
Measures Law. Don't you think this will have an ill effect on
Japan-US relations?

Terashima: There seem to be moves for departing from the 9/11
mentality at home and abroad. I don't think this situation will be
settled if only the law is extended. Japan should take this
opportunity to reconsider its engagement in the Middle East by
separating the war on terror in Afghanistan from the Iraq war and
then to give the impression abroad that Japan's decision is
profound. If Japan's assertion is based on its policy debate and
reasonable, it will not hurt the Japan-US alliance.

-- Is Japan's foreign policy problem-free?

Terashima: The Bush administration began calling China a "strategic
stakeholder" instead of a "strategic competitor," the term it had
used previously, and turned course to look for ways to build
reciprocal relations. Given this situation, I think the Abe
administration's present attitude that the Japan-US alliance is the
only bedrock supporting Japan is too simple-minded. Taking this
opportunity, the Abe administration, which is no longer able to push
things by numbers, should review its diplomacy in a modest manner.

-- Are economic circles alarmed by this situation?

Terashima: The three major economic organizations will not take
action unless the establishment falls into a crisis. For example,
they would closely bond together should the Japanese Communist Party
come into power. But now is not the time for us to have an
ideological conflict, so I don't have any sense of ideological

-- There seems to be a significant impact on economic policy. In
fact, the government-sponsored Tax System Research Council's
Chairman Yutaka Kosai indicated it has become difficult to hike the
consumption tax.

Terashima: The overall tax system should be reviewed, for instance,
how to distribute wealth. If hiking the consumption tax is
unavoidable, politicians must explain that directly to the people.
It is never a good thing to say that no discussion of the
consumption tax will be held in response to the election results.

-- Will the outcome of the elections affect talks on the free trade
agreements (FTAs) or economic partnership agreements (EPAs)?

Terashima: I don't think so. Rather, Japan and the US, whose
economies resemble each other in terms of maturity, should take the
lead in concluding an FTA. If Japan is unable to do so, that would
mean Japan lacks vision.

-- The cabinet is to be reshuffled by the end of this month. What do
you expect of a new cabinet?

Terashima: The problem with the current cabinet is that it lacks
prudence in words and policies. The LDP has personnel well-versed in
economic, foreign, and security policies. My advice is that the
ruling parties should establish a working cabinet that will not go
along with public opinion but can signal appropriately to the

TOKYO 00003717 006 OF 008

(27) Reform of independent administrative agencies to become
important test for prime minister; Battle with government agencies
over administrative and fiscal downsizing

SANKEI (Page 2) (Full)
August 12, 2007

A battle between the prime minister's official residence (Kantei)
and central government agencies will move into full swing over
reform of independent government agencies, for each government
agency is expected to come up with a consolidation and streamlining
plan within this month in response to the basic consolidation and
streamlining guidelines illustrating strict abolition standards by
example adopted by the government at a cabinet meeting on Aug. 10.

Prime Minister Abe, who is determined to stay in office, wants to
make administrative and fiscal downsizing centered on reform of
independent administrative agencies one of the features of the
reconstruction of his administration. However, there was a case
during the Koizumi administration of the reform efforts having been
rendered null and void with government agencies giving zero-replies
over reform of special organizations in protest of losing their
vested interests.

Reform of independent administrative agencies will likely become a
touchstone of Abe's effort to maintain his administration.

Downsizing worth 1% of consumption tax projected

The main features of the basic consolidation and streamlining
guidelines include abolition of projects other than those
indispensable for people's lives and stabilizing the socio-economy,
a ban in principle on arbitrary contracts and sale of assets in
possession to the private sector. A government source said, "It
would be possible to cut the number of projects by 50% , as all
projects with the exception of absolutely necessary ones, will be

The Kantei is rushing reform of independent administrative agencies
out of a desire to first reduce expenditures in a far-reaching
manner instead of looking into the possibility of a tax hike because
of the harsh fiscal condition of the state, as a close aide to the
prime minister put it.

When the Koizumi administration reformed special corporations and
authorized corporations in 2001, fiscal expenditures totaling 1.9
trillion yen were slashed. Since the state outlays approximately 3.5
trillion yen a year to independent administrative agencies as
subsidies, the Kantei has calculated that if such outlays are cut,
it would be possible to achieve a constraint on spending worth
approximately 2.5 trillion yen or equivalent to 1% of the
consumption tax.

Independent administrative agencies are one of major organizations
that award retired bureaucrats with high positions. The Kantei wants
to dig into the structure of cozy ties between the bureaucracy and
the private sector with the introduction of a ban in principle on
discretionary contracts and far-reaching disclosure of information
on companies awarded with contracts.

Zero replies likely

TOKYO 00003717 007 OF 008

There is concern that the reform drive could be watered down by the
time when a consolidation and streamlining program is due to be
compiled in December. Cabinet ministers will draft a plan to
streamline independent government agencies under their ministry's
jurisdiction by the end of this month. Chances are they might come
up with a zero reply noting that they have not redundant agencies.

In the reform of special corporations, the main pillar of the
Koizumi administration's structural reforms without sanctuary, all
of 163 corporations were up for scrapping and privatization.
However, meeting fierce opposition from government agencies, only 21
corporations were consolidated and reorganized, 30 corporations were
privatized, and 39 were merely renamed and became independent
administrative agencies.

State Minister Yoshimi Watanabe did not show wariness, simply
saying, "I would like to sternly watch what replies we will
receive." However, he and Chief Cabinet Secretary Yasuhisa Shiozaki
have already received petitions from various cabinet ministers
asking for the continuation of projects. Some ruling party members
are keeping their distance from the Abe cabinet with one
medium-ranking member saying, "I wonder if the Abe cabinet still has
strength left to fight government offices at Kasumigaseki."

(28) Revision of greenhouse gas emissions reduction program: Council
members in interim report criticize optimism over nuclear power

MAINICHI (Page 2) (Full)
August 11, 2007

The Environment Ministry and the Ministry of Economy, Trade and
Industry are now taking a second look at the greenhouse gas
emissions reduction goal attainment program that the government
adopted in line with the Kyoto Protocol. They yesterday held a joint
council meeting and compiled an interim revision report. Noting that
progress of the program is in an extremely harsh state, the report
projected that even if all measures were accomplished as planned,
the program would still fall short of meeting the reduction goal by
20 million tons in fiscal 2010. If the measures were taken at the
present pace, 34 million tons of emissions would be left unachieved.
The program is based on a high operation rate of nuclear power
plants and a precondition that industrial circles will smoothly
achieve their voluntary action programs. Many council members voiced
a harsh view with one saying, "The premises of the government
program are far too optimistic,"

The problem about the government's goal attainment program is that
it assumes an operation rate of nuclear power plants at 87% -88% , a
level that has never been achieved in the country. The rate in
fiscal 2003 was 59.7% due to the fact that Tokyo Electric Power Co.
hid glitches. The operation rate has been around 70% since fiscal
2004. If a thermal electric power station were operated as a
substitute for the Kashiwazaki-Kariwa nuclear power station, which
stopped operations due to the Chuetsu earthquake, carbon dioxide
emissions would likely increase more than 28 million tons a year, or
2% of the whole.

Provided that carbon dioxide emissions increase with the operation
rate of nuclear power stations falling short of the targeted level,
the Federation of Electric Power Companies of Japan (FEPCJ) plans to
make up for the shortage by purchasing emissions rights from abroad.

TOKYO 00003717 008 OF 008

Purchasing emissions rights costs about 1,000-3,000 yen per ton at
present. One FEPCJ official noted, "There is the possibility of our
discussing passing the buck of the cost of the purchases of
emissions rights to the power generation cost."

Participants voiced objections to the handling of carbon dioxide
trading, which has been in effect put on hold, with one noting that
purchasing carbon dioxide is an issue that requires consideration
from a comprehensive perspective. Under the carbon dioxide trading
system, each company will be allocated an emissions framework.
Companies that failed to constrain carbon dioxide emissions within
the framework can purchase emissions rights from companies whose
carbon dioxide emissions were below the framework.


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