Cablegate: Daily Summary of Japanese Press 12/12/07

DE RUEHKO #5530/01 3460808
P 120808Z DEC 07





E.O. 12958: N/A



(1) Sympathy budget for U.S. forces stationed in Japan to be cut by
250 million yen in utilities costs; Status quo just about maintained
out of consideration for the U.S. (Yomiuri)

(2) "Sympathy budget" sounds discourteous (Sankei)

(3) Nakaima puzzled by stalled Futenma relocation plan, saying, " I
thought it would be settled in three, four months"; Government,
Okinawa still at odds over V-shaped plan (Asahi)

(4) Japan, U.S. agree on alternative location for Naha military port
(Okinawa Times)

(5) Prime minister determined to extend Diet session until January
to readopt refueling bill in Lower House (Asahi)

(6) High price for Irresponsible pledge on pension records

(7) Nippon Keidanren adrift in effort to keep right distance from
politics; Moves to approach DPJ also seen (part 1) (Asahi)


(1) Sympathy budget for U.S. forces stationed in Japan to be cut by
250 million yen in utilities costs; Status quo just about maintained
out of consideration for the U.S.

YOMIURI (Page 1) (Full)
Eve., December 12, 2007

The Japanese and U.S. governments today are heading toward an
agreement on a just about maintaining the status quo in the amount
of Japan's host nation support for the U.S. forces stationed in
Japan under a special measures agreement related to Japan's share of
the cost (sympathy budget). The current agreement expires at the end
of next March. However, final coordination is still underway to cut
funding of utilities costs by 250 million yen. The outlook is that
before the end of the day Foreign Minister Koumura and U.S.
Ambassador to Japan Schieffer will meet and seal the agreement.

The sympathy budget that is based on the special measures agreement
totals 140.9 billion yen. Although the Japanese government has been
seeking a large-scale cut, it reached a decision to maintain almost
the status quo, which was the U.S. strong desire. The agreement is
expected to be extended for three years.

In response to the Japanese government's request for a reduction,
the U.S. would not take a stance of going along with it, citing such
factors as the war costs in Iraq and Afghanistan.

With the expiration of the antiterrorism special measures law on
Nov. 1, the Maritime Self-Defense Force's refueling mission in the
Indian Ocean was halted. At this stage, with the government unable
to determine when the new antiterrorism bill will be passed, the
judgment was made that the burden borne by the U.S. (for stationing
its forces in Japan) should not be increased.

Moreover, concern is piling up about the bilateral relationship,
given such other issues as the importing of American beef into

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Japan. A senior Defense Ministry official stated: "The current
environment does not allow Japan to negotiate at its own pace. We
have no choice but to give consideration to the United States."

On the other hand, negotiations between the Japanese government and
the labor union representing Japanese employees on U.S. bases have
bogged down over cuts in their pay and allowances.

(2) "Sympathy budget" sounds discourteous

SANKEI (Page 13) (Full)
December 7, 2007

Dr. Masashi Nishihara, president, Research Institute for Peace and
Security (RIPS)

Prime Minister Fukuda visited the United States Nov. 15 and stayed
there for only 26 hours. The prime minister, who is said to be
pro-China, made his diplomatic debut in the United States. It was

However, Prime Minister Fukuda is the leader of Japan, which is the
world's second largest economic power. He should have exchanged
views with President Bush in their meeting about trends in
international politics, such as the situations in the Middle East,
Southwest Asia, and the western part of Eurasia, the future of the
Korean Peninsula, and strategy toward China. The summit meeting of
the Japanese and U.S. leaders this time was in the lowest gear since
the Japan-U.S. partnership declaration of 1992. This is an apparent
setback for the alliance between Japan and the United States.

Indeed, the timing of Prime Minister Fukuda's visit to the United
States was bad, since the new antiterrorism bill was left pending in
the Diet. Accordingly, the prime minister's U.S. visit under such
circumstances was not seen by President Bush as the coming of a
friend. The visit thus symbolizes the current situation that Japan
and the United States find themselves facing: having no time for
each other in order to work together on the big-picture issues,
distrustful of each other on a number of issues, and seeing the
bilateral alliance in retreat.

The primary issue, needless to say, is the impact of Japan's halting
the Maritime Self-Defense Force's (MSDF) refueling activities in the
Indian Ocean. This means Japan is giving up its political influence
in the international community. Moreover, the withdrawal has made
the United States wonder if Japan is truly a reliable ally.

Second, the government is about to review its procurement of
equipment for the Self-Defense Forces in connection with former
Administrative Vice Defense Minister Moriya's arrest on suspicion of
receiving bribes. The process will likely delay regular SDF
procurement substantially. Furthermore, it looks like the Finance
Ministry is already applying great pressure on the Defense Ministry
to cut its budget. The United States fears that these developments
may weaken bilateral defense cooperation.

The third issue is the conflict of interests over the government's
initial plan to relocate the U.S. Marine Corps' Futenma Air Station
to an alternate facility along the coast of the Henoko district also
in Okinawa Prefecture. Once such a conflict of defense interests
becomes entangled with collusive-minded politicians, bureaucrats,
and businesses, it will complicate the start of the construction of

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the new replacement facility for Futenma airfield. Moreover, it
could delay the relocation of 8,000 Marines from Okinawa to Guam.

The fourth issue is the Japanese government's move to slash
host-nation support (HNS) for U.S. forces stationed in Japan. Here,
too, the U.S. is dissatisfied. On the occasion of the prime
minister's recent visit to the United States, Secretary of Defense
Gates referred to this issue and asked Japan to do its best to
resolve it. The United States is spending an enormous amount of
money from its defense budget in Iraq and Afghanistan. Meanwhile,
Japan, an ally of the United States, wants to cut 10 billion yen in
its HNS budget for the USFJ. This appears irresponsible and
insensitive in the eyes of the United States.

The fifth problem is the impact of the leakage of classified
information. An incident took place this January when an MSDF member
took home data about an Aegis-equipped ship without permission. The
leaked data was under the category of defense secrets. In late
November, a warship of China's navy visited Japan as part of defense
exchanges between Japan and China. On that occasion, Japan planned
to invite the Chinese warship's crew to tour an Aegis ship. However,
the U.S. military reportedly filed a protest with the MSDF for fear
of intelligence leakage. Japan cancelled the plan. This also
exemplifies the United States' distrust of Japan. It is an extremely
serious matter of concern to the alliance.

The sixth issue is the mutual distrust that is growing between Japan
and the United States over the denuclearization of North Korea and
abductions of Japanese by North Korean agents. Rumors are flying
that the U.S. Department of State will delist North Korea as a state
that sponsors terrorism late this year or early next year. President
Bush told Prime Minister Fukuda, "We will never (TN: sic) forget the
abduction issue." However, many of the Japanese people cannot take
him at his word.

There is one more matter of concern to many Japanese: that the
United States in the end may tolerate North Korea's possession of
nuclear weapons, opting for diplomatic normalization instead, and
that the United States may even allow the Korean Peninsula's
reunification with nuclear weapons.

The seventh and last issue is the U.S. House of Representatives'
adoption in July of a resolution denouncing Japan over the
comfort-women issue. This caused doubts to arise among the Japanese
public about the House of Representatives being insensitive to Japan
as a U.S. ally. Regrettably, the U.S. government also failed to make
efforts to stop the resolution. From the Japanese perspective, there
is concern about why is the United States doing this to its ally.

The Japan-U.S. alliance has been set back to this extent. I wonder
how seriously the government and the Democratic Party of Japan
(Minshuto) are taking it.

There are things Japan should do in the meantime. The DPJ should
cooperate to enact the new antiterror legislation at an early date
and behave as a responsible political party. The Defense Ministry
should prevent defense secrets from being leaked. The cabinet should
push forward the plan of the Abe administration to allow Japan to
participate in collective self-defense. Government officials,
lawmakers, and the media should avoid using words that are
discourteous to the United States, such as "omoiyari yosan"
(literally "sympathy budget" to refer to Japan's host nation support

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for USFJ).

An alliance between one country and another needs fine-grained
consideration and preparedness like growing a bonsai through both
countries' efforts. Both countries need to maintain the spirit of
protecting their alliance.

(3) Nakaima puzzled by stalled Futenma relocation plan, saying, " I
thought it would be settled in three, four months"; Government,
Okinawa still at odds over V-shaped plan

ASAHI (Page 2) (Abridged)
December 11, 2007

The planned relocation of the U.S. Marine Corps' Futenma Air Station
has been stalled for over the last 11 years since Tokyo and
Washington reached a dramatic agreement in April 1996 to return the
airfield to Japan. The government, which believes the best plan is
the one to build a V-shaped pair of runways, as was agreed upon with
the United States in May 2006, remains at odds with Okinawa, which
wants the planned runways to be moved further towards the sea.
Nevertheless, there have been signs of concessions following the
establishment of the Fukuda administration advocating a dialogue and
the departure from the Ministry of Defense of Administrative
Vice-Defense Minister Takemasa Moriya, who led the government's
hard-line policy course. Is there a solution to the relocation issue
that can satisfy Okinawa led by Governor Hirokazu Nakaima, Japan,
and the United States?

Ahead of his first anniversary in office on Dec. 10, Governor
Nakaima gave a press interview on Dec. 7, in which he was visibly
perplexed about the deadlocked Futenma issue:

"The government has been more insistent on implementing what was
agreed upon between Tokyo and Washington than I had expected,
turning a deaf ear to our opinions. A year has passed, and the
government has begun showing a willingness to heed our voices. I
thought that the matter would be settled in three, four months, but
I was wrong."

Nakaima, who was endorsed by the LDP and New Komeito in the
gubernatorial race in November 2006, explicitly said that he "cannot
support" the government's plan to build a V-shaped runways at Henoko
Cape in Nago, pledging to press the government for a review.

The V-shaped plan was devised so that the envisioned flight paths
would not pass over residential areas when flying blind in poor
visibility during bad weather. Nakaima is adamantly demanding that
the planned runways be moved as far off the shore as possible,
saying that their location is too close to residential areas and
will cause much noise.

The government, on the other hand, adheres to the current plan
because a removal to toward the sea would: (1) require more landfill
that would have an adverse effect on marine habitat, and (2) makes
it difficult to prevent anti-base activities. The Futenma relocation
consultative council to discuss the relocation issue had not met
(until November) since January this year.

The atmosphere changed in September this year when the Fukuda
administration was launched. Prime Minister Fukuda emphasizing the
need for a humble approach and talks began searching for a

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settlement line on the Futenma issue in dealing with Okinawa.

The first Fukuda-Nakaima meeting took place on October 31 at the
Prime Minister's Official Residence (Kantei). Fukuda also made it
clear that he would give consideration to views in Okinawa, telling
the press corps: "I am fully aware of the hardships Okinawa
residents have experienced as well as the huge burden on Okinawa. We
would like to hold talks by taking Okinawa's views into account as
much as possible."

Fukuda was involved in the Futenma relocation issue as chief cabinet
secretary under the Koizumi administration. The government adopted

the current plan in May 2006 after Fukuda resigned as chief cabinet
secretary. A government official noted: "Former Prime Minister

Koizumi who decided on the government plan was uncompromising,
saying, 'The runways must not move even an inch.' Mr. Fukuda is not
fixated on the plan."

In addition, hardliners who regard talks with Okinawa as meaningless
have vanished from the inner circles of the government. It was
Moriya and Koizumi's secretary Isao Iijima that nailed down the
government plan without prior consultations with local authorities.
Iijima has retired from politics, and Moriya is under arrest for
taking bribes.

Prime Minister Fukuda has played up the Kantei-led system by
upgrading the presidency of the Futenma consultative council from
the defense minister and Okinawa minister to the chief cabinet
secretary, while listening to views of the defense policy clique in

the Diet. The Futenma council met in early November for the first
time in 10 months.

It is possible to find common ground on removing the planned runways
further out to sea? Nakaima proposed a two-stage relocation formula
in November.

The first stage is designed to move the construction location within
the scope permitted under a prefectural ordinance (55 meters at a
time) in compliance with local wishes so that MOD does not have to
redo the environmental impact assessment procedures that started
without the concurrence of Okinawa. The second phase is to move the
location further offshore in the assessment process in accordance
with the governor's view.

"We have played all the cards we have. It's now the central
government's turn to play," a senior Okinawa official said. Local
business leader Eiji Chinen who supports Nakaima took this view:
"The governor does not think the runways can move hundreds of
meters. I think an agreement can be reached on a number in excess of
the three digits (100 meters). I'm hopeful that the matter will be
settled with a political decision by the government."

However, it is unclear how far the government can respond since the
talks also involve the negotiations with the U.S.

The United States remains determined to reject a call for making
changes to the plan, with Secretary of Defense Robert Gates saying,
"Allowing changes to (the plan) might end up destroying the entire
(U.S. force transformation plan)." A senior government official also
said, "A slight change such as moving the runways by dozens of
meters would be permissible," adding, "But this can be done only
once. Otherwise, the United States would not respond."

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A sense of distrust between the government and Okinawa is also a
major barrier.

"Okinawa's interest does not lie in the runways but in how much
money it can get," a senior MOD official noted. Meanwhile, an
Okinawa official said: "Although the Kantei and the Cabinet Office
appear to be trying to settle the matter in one way or another, MOD
seems only trying to push ahead with the current plan."

There are limits to the government's plan to implement the current
plan. In order to build the alternative base after the two and a
half years of the environmental assessment, landfill will be
necessary, which requires the governor's authorization.

Nakaima told his aides:

"The government has done what it pleases without listening to local
views. Even if it says, 'We want to build (the runways) as the next
step,' I will naturally say 'no.' Cabinet ministers change
constantly. I will be the only one in office three, four years from

(4) Japan, U.S. agree on alternative location for Naha military

OKINAWA TIMES (Page 2) (Abridged)
December 12, 2007

TOKYO-The Japanese and U.S. governments held a meeting of their
joint committee yesterday to discuss the planned relocation of the
U.S. military's Naha Port Facility (military port) to a site off the
Makiminato Service Area (Camp Kinser). In the meeting, the two
governments agreed on specifics, such as the location, shape, and
size of prepositioning and other alternative facilities to be
additionally built.

The Japanese government will enter into full-fledged coordination
with the U.S. government on a blueprint to lay out the location of
facilities, including a prepositioning site.

(5) Prime minister determined to extend Diet session until January
to readopt refueling bill in Lower House

ASAHI (Page 2) (Abridged slightly)
December 12, 2007

The government and ruling parties have decided to extend the current
Diet session until January despite the danger of its resulting in
Lower House dissolution for a snap general election. The decision
reflects Prime Minister Fukuda's strong resolve. Unless the
government enacts the new refueling bill, it would lose the
credibility at home and abroad, forcing the Fukuda administration to
face a rocky road ahead. Aware of the prime minister's acute sense
of crisis, the Liberal Democratic Party (LDP) leadership made
strenuous efforts to set the stage for re-extending the Diet session
to allow the Lower House to readopt the bill, successfully
persuading the New Komeito, which was reluctant to extend the
session out of fear of Lower House dissolution.

Prime Minister Fukuda held a meeting last night with New Komeito
Chief Representative Akihiro Ota. Ahead of the meeting, Fukuda said

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to reporters in a strong tone: "Are you saying that the legislation
can clear the Diet in the next session but not this session. Then
why did we bother to extend the current session?" Fukuda was
responding to a question, "You are intent on enacting the bill
during the current Diet session. Do you think you can win public

Just a week earlier, on the night of Dec. 4, Fukuda dined at the
Fukudaya Japanese restaurant with U.S. Ambassador to Japan Thomas
Schieffer, his predecessor Howard Baker, and former Finance Minister
Masajuro Shiokawa.

Touching on the Maritime Self-Defense Force's refueling operation in
the Indian Ocean, Schieffer said to Fukuda: "I would definitely like
Japanese people to understand that this is international
cooperation." In response, Fukuda said: "We will do it at any cost."
Shiokawa reportedly thought that the prime minister has already made
up his mind.

The continuation of the refueling operation has not always been
Fukuda's top priority since taking office in September, however.
Given the fact that former Prime Minister Shinzo Abe resigned after
indicating that he would stake his job on the extension of the
Antiterrorism Special Measures Law, evidence suggest that Fukuda did
not think the matter should be the focus of the political

Throughout the LDP presidential race, he "sealed off" criticism of
the major opposition Democratic Party of Japan (DPJ or Minshuto),
which adamantly opposed extending the refueling operation. In his
inaugural press conference, Fukuda also highlighted the need to
continue the refueling operation, while expressing his desire for
talks with the opposition bloc.

A turning point came from his meetings with Ozawa on Oct. 30 and
Nov. 2. The DPJ's flat rejection of his proposal for a grand
coalition to bring stability to the administration forced the prime
minister to clash with the largest opposition party over

"Not even a single bill has passed the Diet over the last month
since my cabinet was launched." Fukuda often so complained to his
aides before and after his meetings with Ozawa. "He was visibly
frustrated and under a lot of pressure as the country's top leader,"
an aide explained.

The approach of his first foreign trips as prime minister to the
United States and Singapore to attend an international conference in
mid-November seems to have affected his frame of mind as well.

A senior government official explained the prime minister's
mentality this way: "If the government fails to make decisions under
the divided Diet, the prime minister would be underestimated by
other countries. Foreign leaders would be discouraged to have frank
talks with the prime minister."

Fukuda told President George W. Bush that he would make utmost
efforts for an early enactment of the refueling bill -- a more
modest expression than such words as "international commitment" and
"staking the job" that were used by Abe. That was the moment Fukuda
cut off his retreat both domestically and internationally.

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The presence of the New Komeito that feared early Lower House
dissolution was the biggest challenge for Fukuda, who has decided to
extend the Diet session until January in order to use a two-third
Lower House override vote.

LDP Diet Affairs Committee Chairman Tadamori Oshima held talks with
his New Komeito counterpart Yoshio Urushibara in the Diet building
on Dec. 7. Oshima proposed a lengthy Diet extension with the aim of
applying the 60-day rule to determine the opposition camp's possible
filibustering strategy as a rejection of the bill.

After the meeting with Oshima, Urushibara voiced his reluctance to
substantially extend the session by pointing out the danger of the
Ministry of Defense (MOD) scandal escalating.

The New Komeito's fear of the future course of the MOD scandal was
fueled by former Vice-Defense Minister Takemasa Moriya's Nov. 15
testimony that some lawmakers had been present at a dinner party (in
December 2006). If deliberations on the refueling bill reach a dead
end in an extended session, that could trigger Lower House
dissolution, as was warned by Ozawa.

Early Lower House dissolution is the last thing the New Komeito
wants, whose largest support base, Soka Gakkai, is exhausted from
the nationwide local elections and the Upper House election this
year. Since the ruling camp-backed candidate was defeated in the
Nov. 18 mayoral race of Osaka, the New Komeito's bastion, the party
has been urged by Soka Gakkai to delay Lower House dissolution long
as possible.

Around that time, New Komeito executives began objecting to
re-extending the Diet session and readopting the bill. On Nov. 27,
Land and Transport Minister Fuyushiba said to a close LDP executive:
"We are absolutely opposed to using a two-third overriding vote." A
sense of alarm was evident in the New Komeito executive meeting on
Nov. 29, the day after Moriya was arrested, with one saying, "Lower
House dissolution might follow a re-extension of the Diet session."
Party Representative Ota also held his own fundraising party in
Tokyo that day in which he said: "I have repeatedly insisted that
the next general election should wait until next fall or later."

An LDP executive has taken all those developments as the New
Komeito's willingness to re-extend the session as long as the Lower
House is not dissolved. In December, Oshima began officially telling
the New Komeito that chances are slim for early Lower House

The New Komeito tried to fathom the LDP's real intention. On Dec.
10, the day before his meeting with Fukuda, Ota called on LDP
Election Committee Chairman Makoto Koga and General Council Chairman
Toshihiro Nikai in succession and confirmed that there would be no
early dissolution. Ota then made up his mind to accept a

Then on Dec. 11, the Fukuda-Ota meeting took place. A person close
to Fukuda noted: "We did not discuss the Fukuda-Ozawa meeting with
the New Komeito in advance. It has become a trauma for the New
Komeito. It is important to forge relations of trust between the top
leaders (of the LDP and New Komeito). After the Fukuda-Ota meeting
that lasted half an hour longer than schedule, another person close
to Fukuda also said: "Although it lasted a bit longer, the meeting
went well."

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After the meeting, the press asked Ota if relations of trust with
the prime minister have been strengthened. In response, Ota said:
"The answer is 'yes.' We were able to discuss a variety of topics
frankly. That was good."

The prime minister is set to railroad (the refueling bill) through
the Diet in the current session in cooperation with the New Komeito.
An additional clash with the DPJ is expected over the budget bill
and related bills in next year's ordinary Diet session. How long the
prime minister can aggressively run his administration remains to be

(6) High price for Irresponsible pledge on pension records

MAINICHI (Page 3) (Excerpts)
December 12, 2007

The Social Insurance Agency (SIA) yesterday announced the results of
its investigation (estimated figures) that clarified an
impossibility to keep the government's promise to identify by the
end of March all holders of 50.95 million accounts that remain
unidentified. The SIA says that it is difficult to identify holders
of about 40 PERCENT of them and that 9.45 million accounts or about
20 PERCENT are particularly difficult cases. The government is
eagerly trying to ward off criticism over the investigation results,
but former Prime Minister Shinzo Abe said in his House of
Councillors election campaign: "The government will complete the
identification process, down to the last person and last yen."
Health, Labor and Welfare Minister Yoichi Masuzoe has also
explained: "This determination will not change even if the cabinet
is changed."

Hard to trace unidentified records caused by errors in data input

The SIA has been verifying 50.95 million unidentified pension
accounts on a computer-based system using registered names, gender,
and date of birth on about 130 million records. The agency has
judged it necessary to make more efforts to trace 19.75 million
records and has classified these records into four groups: (1)
People believed to have died; (2) people whose names were improperly
recorded due to errors in converting names from kanji into kana
letters on the agency's kanji-kana conversion software; (3) people
whose family names have changed due to marriage or other reasons;
and (4) people whose name were mistakenly input into the SIA's
online system during the computerized process, and those who
registered false names.

The SIA is developing software to dissolve unidentified cases caused
by misreading or inputting erroneous gender or birth of date. So it
is expected to trace a number of records classified in the first
three groups. But identification of those classified in the group 4
is considered particularly difficult.

The SIA began to enter handwriting pension records into the online
form in 1974, and the work completed in 15 years. In this process,
there were cases in which names were mistakenly input into the
online system. There may also be those who registered false names
for tax purposes.

Pension mess may be Achilles heel of government

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The pension record-keeping fiasco cropped up as one of the main
campaign issues for the July House of Councillors election. Former
Prime Minister Abe repeatedly emphasized in his election campaign:
"The government will pay every last yen to the very last person,"
making it his administration's pledge, in effect. Health, Labor and
Welfare Masuzoe echoed Abe, and Prime Minister Yasuo Fukuda also
took over the public commitment from Abe.

Chief Cabinet Secretary Nobutaka Machimura said: "We used a
simplified expression (that everything within the current fiscal
year) because it was during the Upper House election campaign"
against the backdrop of the Democratic Party of Japan (DPJ)
ratcheting up pressure on the ruling camp over the pension problem.

Prime Minister Fukuda told reporters yesterday: "We must tackle the
issue with determination to identify all of the unidentified
policyholders," adding: "You will understand, won't you?"

The SIA unofficially continued to explain: "Most of the 50 million
holders of unidentified records are people who have already received
their benefits or those who died." This explanation was found to be
a groundless lie. It was also found that only 15.5 million cases
(30.4 PERCENT ) have already been settled. A senior Liberal
Democratic Party member angrily said: "The SIA deceived us."

The government also promised to complete the process of tracing 50
million cases by March of next year. But the investigation results
were already announced yesterday. Regarding this, a senior ruling
party member said, apparently with an eye on a possible dissolution
of the House of Representatives next year: "If the people were
informed next March that (it would be impossible to identify all of
the unconfirmed policy holders), they would be more shocked." This
remark implies a desire to ease the current adverse wind against the
ruling camp.

LDP Secretary General Bunmei Ibuki explained: "(The government's
pledge) meant that all of the 50 million records will be checked (by
the end of March)." It is now certain, though, that a large number
of unidentified pension records will be left unconfirmed as of the
end of March, so this issue may be the Achilles heel of the

(7) Nippon Keidanren adrift in effort to keep right distance from
politics; Moves to approach DPJ also seen (part 1)

ASAHI (Page 12) (Slightly abridged)
December 12, 2007

An informal top-level meeting between the Liberal Democratic Party
(LDP) and the Japan Business Federation (Nippon Keidanren) was held
at a Tokyo hotel early in the morning in early October soon after
the inauguration of the Fukuda Cabinet. A senior official of Japan
Business Federation during the meeting explained the mechanism of
the organization's policy assessment system, which it introduced in
2004. When he said, "We might raise the ratings of policies of the
Democratic Party of Japan (DPJ or Minshuto), if they are good."
General Council Chairman Toshihiro Nikai lashed out at him, noting,
"Why do you say such a thing, when we are being hit the hardest
since the founding of the party."

In response to the statement, which could be taken as the
organization having changed a party to support, Secretary General

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Bunmei Ibuki drove the point home to that Nippon Keidanren official,
"The DPJ's policies are like a promissory note that are not endorsed
with a fund program. I hope Nippon Keidanren will assess policies,
by comparing our policies with DPJ policies in an appropriate manner
bearing such an aspect in mind."

The meeting, permeated with an awkward atmosphere, ended with Nippon
Keidanren Chairman Fujio Mitarai pledging that the organization
would support the policy-oriented stance of the LDP and cooperate
with it.

Nippon Keidanren's policy assessment serves as a yardstick when
companies make political donations. It is Keidanren's report card
rating political parties. It rates each political party's policy
themes on an A-to-E scale. As a result, political parties that won
high grades receive a large amount of donations.

The results of assessment are released between late September and
early October every year. However, the ratings for this year were
released as late as Nov. 12. The one-month delay in the release of
its assessment is ascribable to the impact of the Upper House
election in late June.

DPJ's election pledges included many policy proposals that were not
acceptable to Nippon Keidanren, such as the introduction of an
environment tax, for instance. However, the DPJ leaped ahead beyond
imagination in the election, allowing the opposition camp to hold a
majority in the Upper House. As a result, it has become impossible
for Nippon Keidanren to see policies they want realized, if the DPJ
opposes them.

The Nippon Keidanren Political Measures Committee in late August
held a meeting to decide on a general framework for policy
assessment. Many senior officials asked questions, such as whether
the LDP's reform line would not step back or how the LDP is going to
deal with the DPJ. With no conclusion reached at a meeting of the
chairman and the vice chairman in September, either, the panel
decided to reach a judgment, after determining the DPJ's approach in
the extraordinary Diet session.

Many Nippon Keidanren members reportedly took the position to give
the DPJ slightly higher scores than the previous year. The statement
made by that senior Nippon Keidanren officer appeared to have
reflected such an atmosphere.

According to the policy assessment Nippon Keidanren released in
November, the DPJ did not get an A as usual. Six items were given
lower grades. A record number of four items were rated D, which is
in essence the lowest grade, in contrast with the LDP, whose
policies received nine A's like the previous year.

Commenting on this result, Chairman Mitarai stressed that the result
is based on an objective judgment. He said, "We avoided to the limit
rating the parties on purpose, based on a political judgment."

However, the DPJ's response was harsh. Policy Research Committee
Chairman Masayuki Naoshima complained, "We map out policies
seriously. To be honest, I want to ask why are the ratings of our
policies so low." Another DPJ lawmaker categorically said, "We have
no intention whatsoever of selling policies for money."

The DPJ is agitating Nippon Keidanren by various means.

TOKYO 00005530 012 OF 012

In relation to the falsified subcontract scandal involving an
illegal work arrangement, the DPJ was geared up to demand in
cooperation with other opposition parties the summoning of Chairman
Mitarai to the Diet as a witness. One DPJ lawmaker even warned a
senior Nippon Keidanren officer, "If you give the DPJ a grade of E,
I will not see you any more."

Nippon Keidanren has repeatedly called on DPJ President Ichiro Ozawa
to hold a top-level meeting. Ozawa is quoted as having intention to
respond to the call. However, no schedule has yet been set, with
Ozawa insisting that it would not be possible to do so until the
Diet situation quiets down.

Mitarai has inherited Nippon Keidanren's close relationship with the
government, which his predecessor established with the Koizumi
administration. When former Prime Minister Abe made three foreign
trips, more than 100 business leaders, including Mitarai,
accompanied Abe on each trip. They were in step with the government
regarding policies other than economic policies, such a
constitutional revision.

The DPJ is seeking the continuation of honeymoon-like relationship
with the government even after the resignation of Abe. The DPJ has
now tremendous political power as the no. one party in the Upper
house. Nippon Keidanren is forced to walk a tightrope, sandwiched
between the motives of the two major political parties.


© Scoop Media

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