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Cablegate: Daily Summary of Japanese Press 08/28/07

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UNCLAS SECTION 01 OF 14 TOKYO 003987

SIPDIS

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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 08/28/07


Index:

(1) Reshuffled Abe cabinet launched: Finance Minister Nukaga to
firmly maintain government's fiscal recapitalization goal;
"Discussion should include the consumption tax"

(2) Will Abe be able to uphold his policy?

(3) New Abe cabinet to take cooperative stance with the opposition
in extra Diet session with eye on extension of Antiterrorism Law

(4) Editorial: Reform is last means of survival for new Abe cabinet

(5) Government starts effort to revise bill to extend Antiterrorism
Special Measures Law: Consideration to be given to DPJ's wishes

(6) Shiten (Viewpoint): Japan should consider long-term impact of
Antiterrorism Law

(7) Ozawa's betrayal as he turns anti-US

(8) Ozawa's irresponsible anti-US performance

ARTICLES:

(1) Reshuffled Abe cabinet launched: Finance Minister Nukaga to
firmly maintain government's fiscal recapitalization goal;
"Discussion should include the consumption tax"

NIHON KEIZAI (Page 5) (Excerpts)
August 28, 2007

The new Abe cabinet, launched yesterday evening, will be under
pressure to swiftly deal with a mountain of pending issues,
including tax and fiscal reforms and the pension fiasco. Concerning
tax system reform, Finance Minister Fukushiro Nukaga told a press
conference, "It is important to discuss the tax system reform issue,
including the consumption tax." Health, Labor and Welfare Minister
Yoichi Masuzoe indicated a stance of giving top priority to settling
the pension issue. He noted, "My responsibility for settling the
pension issue is weighty." However, coordination of views with the
Democratic Party of Japan (DPJ or Minshuto), which gained a majority
in the July Upper House election, is expected to be difficult. His
ability to move pension policy forward will be tested.

Tax and fiscal reforms

Hidenao Nakagawa, who attached importance to a natural increase in
tax revenues through economic growth, is no longer LDP secretary
general. A Finance Ministry official took the view that the Abe
administration has delicately changed the balance between growth and
fiscal recapitalization with the appointment as chief cabinet
secretary of Kaoru Yosano, who advocates fiscal recapitalization.

SIPDIS

The government will aim at achieving a primary balance surplus by
fiscal 2011 so that administrative expenses can be covered with tax
and non-tax revenues. Nukaga stressed, "I will firmly maintain the
government goal of moving the primary balance into the black by
fiscal 2011." Yosano during a press conference also indicated his
determination to promote expenditure and revenue reform, noting, "It
is imperative to check whether it is possible to move the primary
balance into the black, based on various premises."

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The greatest focal point is a consumption tax hike. The government
plans to raise the portion of the basic pension funded from tax
revenues in fiscal 2009. Nukaga indicated his intention to fully
discuss the issue as previously planned by the government and the
ruling camp, noting, "I would like to pursue discussion on how to
secure stable funding resources in a far-reaching manner." However,
the opposition parties are calling for keeping the consumption tax
rate intact. There is no common ground in sight.

Regarding a corporate tax break, Nukaga indicated his perception
that it important to boost the vitality of small and medium
businesses." He indicated a positive stance to the idea of applying
a policy tax cut to limited items. Regarding a cut in the effective
corporate tax cut, he simply said, "It is necessary to give
consideration to their international competitiveness." However, when
it came to a question of when to cut the rate, he simply noted, "We
must discuss that issue." Touching on the sub-prime loan issue in
the US, Nukaga said, "We must carefully observe economic indexes so
that we will not make a mistake."

Immediate challenges in economic and fiscal policy

Tax and fiscal reforms
? Drastic reform of the tax system, including the consumption tax
? Secure funding resources to raise the portion of the basic pension
to be financed from tax revenues
? Moving the primary balance of the central and local governments
into the black by fiscal 2011
Economy and growth
? Break with deflation (for an additional interest rate hike by the
Bank of Japan)
? Vitalize local economies with such measures as the establishment
of a regional power revitalization organization.
? Take measures to boost labor productivity and increase
part-timers
Social security
? Blanket settlement of the public pension premium contribution
record-keeping error
? Take measures to deal with the shortage of medical doctors in
regional districts
? Secure Diet approval for a bill amending the Minimum Wage Law
Economic strategy
? Strengthen diplomatic talks to procure resources and energy
? Secure safety of nuclear power plants
? Promote economic partnership agreements (EPA) with Asian nations
Agriculture
? Secure food safety by dealing with such problems as false labeling
of food
? Improve the productivity of agriculture in order to cope with
globalization
? Promote liberalization talks at the World Trade Organization
Disparities between urban and rural areas
? Steadily promote decentralization reform
? Adjust fiscal disparities among local governments
? Making a hometown tax payment system a concrete deal

(2) Will Abe be able to uphold his policy?

ASAHI (Page 3) (Abridged)
August 28, 2007


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Following the July House of Councillors election in which the ruling
coalition lost control of the chamber, a new Abe cabinet was
launched yesterday. Now that the major cabinet ministers have been
replaced, will the Abe administration be forced to revise its policy
course? This article discusses what might happen to tax and fiscal
policies, including the consumption tax, social security policy,
including the pension issue, and the question of extending the
Antiterrorism Special Measures Law that are all likely to take
center stage in the next extraordinary Diet session.

Tax, fiscal policy, and economy

"We won't be able to enact any bill unless the Democratic Party of
Japan supports Things must be discussed thoroughly with the
opposition parties in order to meet public expectations."

This comment came last evening at the Kantei (Prime Minister's
Official Residence) from Fukushiro Nukaga, who has been named
finance minister. Nukaga underscored the importance for the ruling
and opposition blocs to discuss tax reform.

The Abe administration has repeatedly indicated that it would launch
an effort to fundamentally reform the taxation system, including the
consumption tax, this fall after the Upper House election. The
government and ruling parties were supposed to begin discussing a
consumption tax hike as early as September in order to present a
bill in the ordinary Diet session next year. The plan was derailed
by the July Upper House lection in which the opposition gained
control over the chamber. Discussion between the ruling and
opposition camps is essential for advancing tax reform.

But a dominant mood in the Liberal Democratic Party is that hiking
the consumption tax is not possible for the time being. In the
previous election campaign, the Democratic Party of Japan, which has
now become the largest party in the Upper house, pledged not to
raise the consumption tax rate. Even if the DPJ opted to hold talks
with the LDP, chances are slim for the largest opposition party to
agree to raise the rate.

The possible consumption tax hike is being mentioned in connection
with a law requiring raising the government's contribution to the
basic pension scheme from the current one-third to half in FY2009.

Difficult challenges also lie ahead for budget compilation for
FY2008. For instance, the government has yet to come up with
concrete ways to curb 220 billion yen in automatic increase in
social security. Discussion on the extent to which the national road
maintenance and improvement project must be pushed ahead is also
bound to face rough going. At the same time, many think that Abe's
decision to retain the minister of economy, trade and industry and
the state minister in chare of economic and fiscal policy reflects
his determination to keep the economic growth strategy intact. In
fact, METI Minister Amari put high priority on economic growth in
his press conference yesterday.

Still, the government is likely to shift weight to local areas and
small businesses. Economic and Fiscal Policy Minister Ota already
unveiled a plan yesterday to establish a local-style Council on
Economic and Fiscal Policy.

Foreign and security affairs


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Prime Minister Abe who advocates "proactive diplomacy" has also
appointed former foreign minister Nobutaka Machimura as new foreign
minister and another former foreign minister Masahiko Komura as
defense minister. Machimura and Komura, who are on friendly terms as
faction heads, will join efforts in addressing an extension of the
Antiterrorism Special Measures Law. The ability of the veteran duo
will also be tested in dealing with the deadlocked North Korean
nuclear and abduction issues.

In 2004-2005, Machimura busied himself in trying to find ways to
improve relations with China and South Korea as foreign minister of
the then Koizumi cabinet. This time, his leadership will be tested
with preparatory work for next year's Tokyo International Conference
on African Development (TICAD), the 2008 G-8 Hokkaido Toyako Summit,
and measures against global warming.

To the Foreign and Defense Ministries, extending the antiterrorism
law beyond its November 1 expiry is the most pressing issue. The law
has been the legal basis for the Maritime Self-Defense Force's
refueling services to the US-led coalition forces in the Indian
Ocean.

DPJ President Ichiro Ozawa has expressed his opposition to the law's
extension. Unlike former Defense Minister Koike, who played up her
antagonistic stance toward the Ozawa-led DPJ, both Machimura and
Komura have begun showing flexible stances about altering the bill.
At the same time, there are calls in both the ruling and opposition
camps for greater information disclosure in order to determine the
propriety of the MSDF's refueling operation in the Indian Ocean.
Attention will be focused on whether Machimura and Komura can
present the MSDF's concrete achievements to persuade the forces
opposing the mission in the Indian Ocean.

Meanwhile, many observers think the cabinet reshuffle would not
affect the administration's policy toward North Korea, which is
controlled by Abe.

In his first press conference yesterday, Machimura reiterated the
government's traditional policy course, saying: "Once the abduction
issue is settled, Japan will be able to play a more active role in a
range of fields, including economic and energy aid."

As talks between Washington and Pyongyang on denuclearizing North
Korea moved forward, Japan has begun putting forward the thinking
that progress in denuclearization would push the abduction issue
toward a settlement. Some Foreign Ministry officials, however, have
pointed out the possibility of the denuclearization talks running
into snags due to the light-water reactor project and the
declaration of North's uranium enrichment plans. Whether or not the
Abe cabinet can pave the way for settling the abduction issue might
affect the fate of the administration.

Social security

The pension-record mismanagement would be one of the focuses in the
fall extraordinary Diet session. The DPJ intends to exercise its
investigative powers to summon relevant personnel to testify before
the Diet. Health, Labor and Welfare Minister Yoichi Masuzoe shares
the opposition bloc's call for greater information disclosure. An
MHLW official described Masuzoe this way: "He is the kind of person
who calls a spade a spade. He doesn't hesitate to point out
problems, and that's fine with us."

TOKYO 00003987 005 OF 014

The DPJ is also expected to present a bill prohibiting insurance
premiums for purposes other than paying benefits. At present, of the
380 billion yen necessary for running the pension recordkeeping
system and offering consultation services, 200 billion yen is
covered by pension premiums. The DPJ-proposed legislation would
force the government to find a new financial resource. Finding a
settlement point with the DPJ would be difficult.

A warning yellow light is also flashing for the option of raising
the government's contribution to the basic pension scheme. The
option would discourage the debate on hiking the consumption tax as
a promising alternative financial resource. Masuzoe, too, has
expressed a cautious view about raising the consumption tax.

But a delay in raising the government's contribution would
deteriorate pension funding, possibly resulting in decreased pension
benefits and higher pension premiums.

The issue of integrating the employee and the mutual aid pension
programs into one is also far from being settled. The DPJ favors a
single program that incorporates the National Pension Plan as well.
Over sweeping pension reform, there also is a deep gulf between the
DPJ, which calls for a new minimum pension benefit system totally
financed by tax money, and the ruling bloc, which wants to maintain
the current system.

(3) New Abe cabinet to take cooperative stance with the opposition
in extra Diet session with eye on extension of Antiterrorism Law

MAINICHI (Page 5) (Full)
August 28, 2007

With the inauguration of a new cabinet of Prime Minister Shinzo Abe
yesterday, the major political issue will change to debate at the
extraordinary session of the Diet to be convened as early as Sept.
10. Following the trading of placed between the ruling and
opposition camps in the July 29 House of Councillors election, the
ruling coalition intends to place importance on discussion in the
upcoming extra session, while the Democratic Party of Japan (DPJ)
has already decided to reject a bill extending the Antiterrorism
Special Measures Law, to which Abe gives top priority. The DPJ plans
to continue pursuing the "politics and money" scandals, as well as
the pension record-keeping debacle. Therefore, a fierce battle will
develop over those issues, contrary to the ruling camp's strategy of
"taking a modest approach."

At a press conference yesterday, Liberal Democratic Party (LDP)
Policy Research Council Chairman Nobuteru Ishihara explained his
basic stance of managing Diet affairs, saying:

"As responsibility of the ruling camp, which has become a minority
in the Upper House, my major mission is to make efforts to pass
policies and bills through the Diet through consultations with the
opposition camp."

Ishihara experienced cooperation with the opposition during the 1998
extra Diet session, in which the Early Financial Correction law was
enacted.

Deliberations on the bills to extend the Antiterrorism Law, which is
set to expire on Nov. 1, will top the agenda in the upcoming extra

TOKYO 00003987 006 OF 014


Diet session, which will convene probably on Sept. 10. The ruling
bloc wants to get the legislation through the Lower House in
mid-September through the DPJ's cooperation. Abe apparently
appointed veteran lawmakers -- Nobutaka Machimura and Masahiko
Komura, who are well versed in foreign and defense affairs -- as
foreign and defense ministers with an eye on an extension of the
Antiterrorism Law.

The question is how to deal with the legislation in the Upper House,
which the opposition party controls, not in the Lower House, in
which the ruling coalition has two-thirds of the seats. If the bill
fails to clear the Diet, the Abe administration would be in danger.
In case the bill is rejected in the Upper House, the ruling parties
are considering an option of extending the law through second voting
at the Lower House. However, this means a failure in negotiations
with the opposition, boosting tensions in the political situation.
The Abe administration will unavoidably encounter difficulties.

DPJ Secretary General Yukio Hatoyama indicated in a press meeting
yesterday that his party would not make any deal with the ruling
coalition in managing Diet affairs. He stated at party headquarters:
"The opposition should not maneuver behind the scenes, while
fighting on the surface.

The DPJ has envisioned a fierce battle with the ruling coalition at
the Upper House by submitting its own bill to revise the Political
Funds Control Law and other tactics. The party intends to exercise
the full range of administrative investigation rights if any
politics-money scandals involving new cabinet ministers are
discovered.

Meantime, the ruling camp, which will be forced to walk a precarious
tightrope in managing Diet affairs, plans to zero in on the bill to
extend the Antiterrorism Law in the extra Diet session in September.
A senior LDP member said that the LDP would have no choice but to
accept a bill to ban the use of pension premiums for other purposes
than for pension benefits.

The government and ruling coalition want to convene the extra Diet
session on Sept. 10 and begin a meeting on the 18th of the Budget
Committee after the prime minister's policy speech and party
representatives' questions. They assume that the session will last
for about 60 days up until early November.

(4) Editorial: Reform is last means of survival for new Abe cabinet

NIKKEI (Page 2) (Full)
August 28, 2007

The ruling camp lost its majority in the July Upper House election.
In an effort to survive under such a situation, Prime Minister
Shinzo Abe launched his new cabinet yesterday. The new cabinet
lineup shows Abe's willingness to solidify the unity of the ruling
camp. Abe will have to pigeonhole for the time being his own
policies, such as a change in the government's interpretation of the
right to collective self-defense stipulated in the Constitution. The
Abe administration should tenaciously discuss matters with the
Democratic Party of Japan (DPJ), which has control of the Upper
House, and make efforts to put the economy on a sustainable recovery
track by steadily forging ahead with fiscal, administrative, and
regulatory reforms. This is the Abe administration's top priority
mission.

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A series of scandals involving cabinet ministers were one of the
major causes for the Liberal Democratic Party's (LDP) crushing
defeat in the election. Some cabinet ministers were unable to
perform their duty to explain in connection with office-expense
scandals, and other members made improper remarks that rubbed the
voters up the wrong way. Agriculture, Forestry and Fisheries
Minister Toshikatsu Matsuoka, who had been attacked over his fund
groups' bogus reports on office expenses, committed suicide, sending
a shock wave across the nation.

The opposition camp strictly urged Prime Minister Abe to take
responsibility for appointing Matsuoka as a cabinet minister. The
problem was that Abe's continued protection of such scandal-tainted
cabinet members resulted in aggravating the problem. Since Prime
Minister Abe and the Prime Minister's Office (Kantei) failed to take
prompt action, people began to be skeptical about whether they were
capable of crisis management. It is undesirable to frequently change
cabinet members, like regular personnel changes, but the prime
minister must not be hesitant about dismissing those unqualified to
work as a cabinet minister.

Prime Minister Abe this time around took the time and carefully
picked proper persons for cabinet posts. When he formed his first
cabinet, the cabinet was criticized as a "cabinet of friends" that
rewarded supporters with appointments. Keeping this experience in
mind, the prime minister gave priority to a whole-party approach
this time. When considering the current severe political
circumstances surrounding the Abe cabinet and the LDP, it might be
natural for Abe to give top priority to unity in the party.

Abe also overhauled his party's leadership by appointing Taro Aso as
secretary general. Aso has political ideals similar to those of Abe,

SIPDIS
and they are on friendly terms with each other. Aso also promptly
expressed his support of Abe's remaining in office on the day of
vote counting in the Upper House election. But his capability for
party management remains unknown. Nobuteru Ishihara, who was named
chairman of the LDP Policy Research Council, is certainly a fresh
face, but there is also concern about his competence. In solidifying
the party and steering the Diet, Ishihara may greatly depend on the
coordination capability of Toshihiro Nikai, who was picked as
General Council chairman.

Abe tapped Kaoru Yosano as chief cabinet secretary. He installed
veteran LDP lawmakers who are expert on policy making and are
capable of unifying the party to key posts, with the aim of
regaining the Kantei's functions, which was criticized as lacking
stability. The prime minister named Yoichi Masuzoe as health, labor
and welfare minister responsible for tackling the pension issue and
disbanding the Social Insurance Agency, and Masahiko Komura as
defense minister saddled with the issue of extending the
Antiterrorism Special Measures Law. Both will be pressed to
reconstruct their ministries for the time being.

With an eye on the Lake Toya Summit next year, Abe tapped Nobutaka
Machimura as foreign minister and Ichiro Kamoshita as environment
minister. He appointed Fukushiro Nukaga as finance minister. Abe
retained Akira Amari and Hiroko Ota as economy, trade and industry
minister and state minister in charge of economic and fiscal policy,
respectively. They are all veteran lawmakers.

As a star item in the appointments, the prime minister awarded the

TOKYO 00003987 008 OF 014


post of internal affairs and communications minister to former Iwate
Governor Hiroya Masuda, who was known as a reformist governor and is
now from the private sector. This appointment probably reflects his
consideration to voters' strong dissatisfaction shown at the
disparities between urban and local areas in the Upper House
election.

To revitalize local communities, it is important to promote
decentralization and regulatory reform, instead of doling out
subsidies. We expect Masuda to take the lead in conducting
discussion on promoting deregulation and introducing a regional
system in a positive manner.

The new lineup shows Prime Minister's switch of policy emphasis from
security, constitutional revision, and educational reform to
economic growth, pension problems, and regional revitalization. This
about-face naturally reflects the outcome of the Upper House
election. In order to regain voters' support, the administration was
pressed to demonstrate its emphasis on domestic affairs and to make
arrangements to build a united party as part of efforts to
reconstruct the LDP.

The Abe cabinet has its back against the wall. The support rating
for the cabinet also remains at a low level. With the opposition
camp has control of the Upper House, no prospects are in sight for a
bill designed to extend the Antiterrorism Law to be adopted in the
Diet. Although the ruling camp holds more than two-thirds of all the
seats in the House of Representatives, the road ahead of the ruling
bloc is likely to be bumpy in the extraordinary diet session this
fall and the ordinary Diet session next year.

The Abe cabinet might be able to get out of the current hard
situation if it makes steady efforts to put the economy onto a
recovery track and to attain sustainable economic growth, without
loosing its grip on reforms. Regional revitalization will also be
realized through economic growth. The administration must not slow
down its reform drive by easily distributing subsidies. To regain
voters' trust, Prime Minister Abe should send a message at home and
abroad expressing his determination to continue to carry out reforms
and implement them.

(5) Government starts effort to revise bill to extend Antiterrorism
Special Measures Law: Consideration to be given to DPJ's wishes

MAINICHI (Page 1) (Full)
Evening, August 28, 2007

The government today has started looking into the possibility of
revising a bill amending the Antiterrorism Special Measures Law, the
focus of highest attention in the extraordinary Diet session to be
convened in the fall. It is envisaging a switch of Self-Defense
Force's operations from refueling activities in the Indian Ocean to
other types of logistical support in the form of reflecting the
wishes of the Democratic Party of Japan (DPJ or Minshuto), which is
opposing an extension of the present law. It will rush to ready a
revised bill in cooperation with the ruling camp in the hope of
entering revision talks with the DJP in the extraordinary Diet
session expected to be convened on Sept. 10.

Defense Minister Masahiko Komura during an inauguration press
conference yesterday indicated a flexible stance toward revising the
amendment bill. He noted, "We will hear the views of the DPJ and

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consider whether there are proposals that can be adopted, involving
the entire cabinet. The government should allow some revisions to
the extension bill. "Foreign Minister Nobutaka Machimura during a
press conference the same day also noted, "If we can obtain
constructive replies and agreements from the DPJ, we must take good
care of them."

Chief Cabinet Secretary Kaoru Yosano in the press conference held
yesterday morning also indicated understanding: "Our stance is that
the government should not continue its rigid attitude."

DPJ head Ichiro Ozawa is opposing the idea of extending the law,
based on the principle that the maritime refueling activities by the
MSDF dispatched under that law are not based on the United Nations
Security Council's (UNSC) resolution." However, his stance is
flexible to the dispatch of MSDF troops to the International
Security and Assistance Force (ISAF), which is based on the UNSC
resolution. It is absolutely impossible for SDF troops to take part
in the main part of the ISAF, which engages in actual battles,
according to a senior SDF officer. The government will likely
consider the transportation of goods from neighboring countries as a
realistic possibility.

(6) Shiten (Viewpoint): Japan should consider long-term impact of
Antiterrorism Law

ASAHI (Page 11) (Slightly abridged)
August 27, 2007

By Kurt Campbell, former deputy assistant secretary of defense, and
Michael Green, former senior director for Asian affairs at the
National Security Council

Democratic Party of Japan (DPJ) President Ichiro Ozawa seems to be
determined to drive the Abe administration into corner by blocking
an extension of the Antiterrorism Special Measures Law. Ozawa's
stance has disappointed those Americans who still remember Ozawa's
efforts to protect the Japan-United States alliance as deputy chief
cabinet secretary about 20 years ago. We hear that Ozawa believes
that even if his opposition undermines the Japan-US alliance, no one
will remember this if the Democratic Party wins the presidential
election in the US and if the DPJ seizes political power in Japan.
We think such a view is incorrect. We hope Ozawa will reconsider his
opposition and find a creative and effective way to reach a
compromise with the Abe government.

DPJ members seem to think that a withdrawal of Maritime Self-Defense
Force's (MSDF) naval ships from the Indian Ocean will only hurt the
relationship between President Bush and Prime Minister Abe. The two
leaders have been exposed to domestic criticism. In the US, in
particular, public views are split over the propriety of the Iraq
war. The law that Ozawa is willing to kill provides the basis for
Japan to dispatch naval vessels to support the war on terrorism in
Afghanistan. It has noting to do with Iraq. In the US, many members
of Congress from both parties support the campaign in Afghanistan.
Should Japan drop out of the Coalition of the Willing, which is
fighting with the Taliban government and Al-Qaeda, the next US
administration, regardless of which party - Democratic or Republican
- wins the presidential election, will be skeptical of Japan's
credibility as an ally.

Pakistan President Musharraf and Afghan President Karzai have highly

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evaluated the contributions by the MSDF. The Indian government is
also eager to strengthen strategic ties with Japan and has welcomed
the operations by the MSDF in the Indian Ocean. Persian Gulf
countries also give high marks to Japan's dispatch of Ground,
Maritime, and Air Self-Defense Force troops, against the backdrop of
uncertainty looming over the situation in Iraq and China's attempt
to strengthen its access to and influence in the region blessed with
abundant oil resources. Each nation expects Japan to play up its
military and diplomatic presence in the region, hoping to see the
region stabilized.

Persian Gulf nations and Japan have strengthened relations mainly in
the diplomatic and economic areas. But Japan's readiness to offer
military contributions demonstrates how seriously Japan is to
fulfill its strategic role in the South Asian and Southwest Asian
regions.

Japan's withdrawal from the Coalition of the Willing would affect
other coalition members, as well. In Canada's case, some of its
soldiers were killed in Afghanistan. Australia, South Korea, and New
Zealand also have dispatched troops and personnel for various types
of rescue operations at their peril. The Coalition of the Willing
also includes members of the North Atlantic Treaty Organization
(NATO). As it stands, major democratic countries in the world have
been involved in the war in Afghanistan, because they view it as a
conflict between world civilization and terrorism. They have
supported Japan playing a major role in the world. Whether Japan
joins hands with these countries in Afghanistan will affect to what
extent Japan's leadership will be approved at the G-8 summit, the
Asia-Pacific Economic Council, and the United Nations Security
Council (UNSC).

If the DPJ is able to grab political power in the near future as a
result of Ozawa's successful opposition to an extension of the
Antiterrorism Special Measures Law, would it be possible for the DPJ
president to tell his Canadian and Australian counterparts that
Japan is cooperating with them in fighting terrorism and is ready to
play a more significant role in the international community? After
Japan withdraws Maritime Self-Defense Force forces due to the
expiration of the Antiterrorism Law, would the Japanese ambassador
to the UN be able to say that Japan is ready to perform the
responsibility required of a permanent UNSC member?

North Korea would be pleased to see Japan withdrawing MSDF troops
from the Indian Ocean and the US-Japan alliance being undermined.

Many countries are expected to respect Japan's decision and continue
to value relations with Japan. But they may reconsider their views
about Japan's role in the international community.

Ozawa should be aware of such a possibility. When Iraq invaded
Kuwait, the international community expected Japan to play a leading
role, but the Kaifu cabinet was unable to meet such expectations. At
that time, Ozawa made more efforts than any other members in the LDP
to prevent Japan's diplomatic position from collapsing. Later, Ozawa
set up his vision of making Japan into "an ordinary country," in
which he stressed the need for Japan to play its due role in the
international community. It took as long as 10 years until the
international community began to seriously treat Japan as its
partner. It is significant to remember this, because even if
coalition countries can perform the part played by the MSDF after
its withdrawal, and even if the DPJ grabs power, it will take many

TOKYO 00003987 011 OF 014


years for Japan to restore its scarred reputation.

(7) Ozawa's betrayal as he turns anti-US

SANKEI (Page 7) (Full)
August 25, 2007

Yoshihisa Komori, Washington

Is Ichiro Ozawa a wolf in sheep's clothing? Ozawa is president of
the major opposition Democratic Party of Japan (DPJ or Minshuto). He
has been opposed to extending the Antiterrorism Special Measures
Law. Japanologists in the United States are actively exchanging
views over Ozawa's attitude. For instance, a hot debate is unfolding
among Japan watchers on a Japan affairs-related website of the
private-research institute "National Bureau of Asian Research" (NBR)
with their real names shown.

A veteran journalist who has covered Japan-US relations for three
decades wrote: "Mr. Ozawa has disguised Japan's long-sustained
attitude of not doing anything internationally in the area of
security affairs by emphasizing his slogan of 'prioritizing the
United Nations.' It's absolutely clear that the UN is powerless on
the security front." The journalist portrayed Ozawa as a wolf in
sheep's clothing.

A scholar who has studied Japan over dozens of years noted:

"Mr. Ozawa's opposition to extending the Antiterrorism Special
Measures Law is apparently intended to prevent a group of former
socialists in his party opposed to Japan taking any defense action
from leaving the party. At the time of the Gulf War, no Japanese
politician other than Ozawa strongly insisted on the need for Japan
to cooperate with the US in the security area and on the need for
Japan to dispatch Self-Defense Forces (SDF) personnel abroad,"

The two Americans expressed similar skepticism about Ozawa. They
noted that Ozawa tends to turn anti-American or assume an attitude
to oppose international cooperation, even if that means shifting his
long-held views, once he sets his aim at rocking the Liberal
Democratic Party (LDP)-led government or at achieving his party's
goal of taking the helm of government.

Dr. James Auer, former Japan desk director at the Pentagon was more
acid in criticizing Ozawa:

"Does Mr. Ozawa think that the UN will protect Japan from North
Korea's missile threat or a contingency over the Taiwan Straits or
China's ambitious military build-up? Japan's SDF's refueling
operations going on in the Indian Ocean under the Antiterrorism
Special Measures Law have been viewed not only as a valuable
contribution to the US-Japan alliance but also critically important
cooperation for international security efforts by a number of
countries fighting international terrorists in Afghanistan. Ending
such refueling services would be viewed as moving away from the
US-Japan alliance, as well as from international security
operations. It would cause a significant loss for Japan's own
security."

Even in the US political world, peacekeeping operations in
Afghanistan apparently have been endorsed widely. Even Senator
Barack Obama, a Democratic presidential candidate opposed to the

TOKYO 00003987 012 OF 014


deployment of US troops in Iraq, and House of Representative Tom
Lantos, who criticized Japan for its former comfort women issue,
have admired Japan's logistical assistance to the multinational
forces in the Indian Ocean as an important contribution to
exterminating international terrorists and stabilizing Asia.

Even among Republicans, former Mayor of New York Rudolph Giuliani,
who plans to run for the presidency, highlighted the importance of
Japan increasing security cooperation through the bilateral
alliance, warning that if operations in Afghanistan failed, that
country would become a paradise for terrorists. Moreover, a
resolution appreciating the US-Japan alliance was adopted by a
majority of bipartisan votes in the House Foreign Affairs Committee,
which did so to minimize the possible adverse impact of the
so-called comfort women resolution earlier adopted by the House. The
resolution appreciating Japan's role in the alliance highly praised
Japan's refueling operations in the Indian Ocean.

Ozawa's opposition to extending the law is certain to meet with
bipartisan objections in the US.

In addition, the campaign to eliminate terrorists from Afghanistan
has wide international participation. Aside from the degree of their
participation, a total of some 30 countries, most of which are NATO
members, have taken part in the campaign. I, too, visited Kabul and
saw firsthand troops from Romania and Italy engaged in peacekeeping
operations. I then realized that the operations international in
nature. It is the international consensus that peacekeeping
operations in Afghanistan have the approval of the United Nations
Security Council (UNSC) under Resolution 1386.

Auer criticized Ozawa also for his allowing the media to cover every
part of his meeting with US Ambassador to Japan Thomas Schieffer,
describing such a behavior as "running counter to diplomatic
protocol and rude toward the US." Auer rapped Ozawa for his apparent
tendency to shift even his basic policy if he is motivated by his
desire to grab political power.

These two elements appear linked to each other. Making light of the
US ambassador to Japan and demonstrating an "anti-US" stance in
Japan may be a somewhat childish act but it may appeal to a portion
of the Japanese public.

In the early 1990s, Ozawa was renowned both in Japan and the US as a
political leader most receptive to America's desires and concerns,
since he then attached importance to bilateral ties in dealing with
market opening issues and economic disputes, as well as the question
of dispatching the SDF abroad at the time of the Gulf War. Ozawa was
then even called a "traitor to the country" by Hiromu Nonaka and
other influential politicians. But now Ozawa has turned anti-US and
is peddling an anti-US policy stance. Is this the way Japanese
politics is?

(8) Ozawa's irresponsible anti-US performance

SANKEI (Page 13) (Full)
August 24, 2007

Toshiyuki Shikata, professor at Teikyo University

The Democratic Party of Japan (DPJ or Minshuto) now has the Liberal
Democratic Party and New Komeito on the run, the ruling coalition

TOKYO 00003987 013 OF 014


having lost its majority in the House of Councillors as a result of
the recent election. Cashing in on that momentum, the DPJ has
launched a battle aimed at a victory in the next House of
Representatives election that would allow it to take over the reins
of government. To start the process, the DPJ plans to vote against a
bill extending the Antiterrorism Special Measures Law beyond its
Nov. 1 expiry. Under the anti-terror law, the Maritime Self-Defense
Force has been staging its vessels in the Indian Ocean to engage in
refueling activities there. The DPJ, however, has plans to force a
recall of the MSDF unit.

The DPJ has given its endorsement to the SDF's proactive
participation in United Nations peacekeeping operations (PKO).
However, the party has preconditioned such PKO participation on a UN
Security Council resolution.

The UNSC's current functions, however, are still insufficient. The
interests of the permanent members are entangled, and the
international situation is complicated. As it stands, UNSC actions
are very limited. A UNSC resolution uses equivocal wording if the
permanent members have different stakes. Ambivalent resolutions
allow them to interpret them as they please. Actually, many
countries think UNSC Resolution 1746-which requests international
community members to continue their assistance with Afghanistan's
reconstruction efforts-is enough for them to participate in an
antiterror drive and other operations conducted in Afghanistan.

Accordingly, should the DPJ concept of a "brake" be strictly
applied, Japan will be almost unable to have the SDF fulfill Japan's
international responsibilities to resolve important issues arising
in the international community (or issues that are directly
connected to Japan's vital interests).

The DPJ is free to oppose the legislation revising the antiterror
law as its political tactic. However, I wonder if the DPJ has an
alternative plan for how Japan would take part in the international
community's antiterror campaign in Afghanistan once the MSDF ships
were recalled.

The MSDF is now on a refueling mission in the Indian Ocean. In my
view, this is the best possible option for Japan. If Japan is not
able to do so, two alternative options are available.

These would be apart from Japan joining the North Atlantic Treaty
Organization's military operations in Afghanistan. One conceivable
option for Japan would be to bankroll NATO with a huge amount of
money for the time being. With the DPJ saying that Japan should not
send SDF members but should make personnel contributions, the second
option would be to pick several dozen volunteers from among the
DPJ's crackerjack young people and send them to Afghanistan.

Afghanistan's public security has turned very difficult-as seen from
the fact that a group of religious volunteers from South Korea were
kidnapped and some even slain. It is most difficult and dangerous to
send civilians to Afghanistan now.

The DPJ has criticized the Koizumi and Abe governments for "clinging
to the United States" not only in a political sense but also in a
military sense, claiming that Japan should be more independent of
that country. Then, what would the DPJ do for Japan's national
security in order for Japan to distance itself from the United
States and step up its independence?

TOKYO 00003987 014 OF 014

There are five big factors that explain Japan's "clinging" to
America in the security area. First, Japan is under the US nuclear
umbrella. If the DPJ says Japan should strengthen its independence
in the nuclear area, the DPJ should account to the nation in
specific terms what it means to do. Second, Japan fully depends on
the United States for "strategic striking capability." If the DPJ
says Japan should strengthen its independence in this area, does it
mean that Japan will also have strategic bombers and
intermediate-range ballistic missiles? Third, Japan depends on the
United States for the greater part of its military intelligence.
Does the DPJ think Japan, as well as the United States and Russia,
should have a national intelligence organization like the Central
Intelligence Agency (CIA) in order for Japan to display its
independence? Fourth, Japan depends on the United States largely for
military technologies. If Japan is to scale back on its introduction
of military technologies from the United States and make efforts to
develop its own, Japan would have to make its defense industry quite
colossal. Otherwise, would Japan export weapons to make up for the
defense budget with profits from the overseas sales? Fifth, Japan
depends on the US Navy's 7th Fleet for the greater part of its
sea-lane defense. So, how far would the DPJ build up the MSDF in
order for Japan to strengthen its independence?

The DPJ is aiming to take the helm of state. In the run-up to power,
however, the DPJ must make public its own ideas for at least these
five principles of strengthening Japan's independence.

The DPJ says Japan should center its foreign policy on the United
Nations. Then, I wonder if the DPJ has a realistic process in mind
to shape Japan's bid for a permanent seat on the UNSC. The DPJ has
never explained its blueprint to the nation.

Many people want to see a two-party system in place. They are
waiting for the DPJ to show a convincing answer. The DPJ should make
public its down-to-earth security policy to meet the public
expectations.

Playing to the gallery, the DPJ only discusses domestic issues that
are appealing to the public. DPJ President Ozawa has scoffed at the
US Embassy in Japan, and he made a display of his party's stance of
being able to say "no" to the United States. Such a stand, however,
will not lead to the DPJ being able to take over political power.
The public is wiser than the DPJ thinks. The DPJ must not forget
this.

DONOVAN

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