Cablegate: Daily Summary of Japanese Press 07/30/08

DE RUEHKO #2075/01 2120106
P 300106Z JUL 08




E.O. 12958: N/A



1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Defense and security affairs:
4) Meeting with Prime Minister Fukuda, Ambassador Schieffer
expresses U.S. expectation that Japan will continue Indian Ocean
refueling services (Tokyo Shimbun)
5) It is definite now that new anti-terror law allowing MSDF
refueling services in Indian Ocean will expire, since New Komeito
balking at Lower House override (Sankei)
6) Opposition group from Okinawa assembly protests at U.S. Embassy
against "building a new base" (Akahata)
7) Defense Ministry plans to provide Zama City subsidy for accepting
USFJ realignment plan (Yomiuri)
8) Self-Defense Forces drill planned for this fall cancelled due to
soaring fuel prices (Tokyo Shimbun)
9) White Paper on Defense, ready in outline, focuses on ministry
reform (Tokyo Shimbun)

10) Prime Minister Fukuda will touch down in Beijing for Olympic
ceremony aboard an SDF plane (Asahi)
11) North Korea says its needs more stages before it can fully
abandon its nuclear program (Asahi)
12) ROK premier visiting disputed Takeshima (Dokdo) isles, and ROK
military stages drill there (Tokyo Shimbun)

Political agenda:
13) Heads of ruling parties will meet to coordinate cabinet shuffle
on Aug. 4 (Sankei)
14) Foreign Minister Koumura postpones three-nation tour due to
expected cabinet shuffle (Mainichi)
15) Timing of extra Diet session still unsettled, with Fukuda still
pushing for late August convocation (Tokyo Shimbun)
16) New plan to ease the financial situations of the populace but
little in it reflects a Fukuda policy imprint (Mainichi)

17) Structural reforms lost in the mist as politicians scramble to
reverse the course and insert pork barrel into budget, delay plans,
and strengthen regulations (Nikkei)



Asahi: Mainichi: Yomiuri: Nikkei: Tokyo Shimbun
WTO negotiations beak down as U.S., China and India remain reluctant
to make concessions, making long-term stalemate likely

New Antiterrorism Special Measures Law likely to expire, with New
Komeito determined not to take part in second vote in Lower House

Budget request guidelines for fiscal 2009: Social security expenses
-- constraint on natural increase by 220 billion yen to be


TOKYO 00002075 002 OF 011

(1) Cabinet shuffle: Policy should come first
(2) Accidents in rivers: Pitfalls in water parks

(1) Social security: Important to translate words into action
(2) River accident in Kobe: Prepare cities for heavy rain

(1) Fiscal resources needed for social security plan
(2) Heavy rain leads to accidents in rivers in urban areas

(1) Create a powerful budget through bold change in public
(2) Five proposals in social security plan fall short of ensuring
peace of mind

(1) Budget request guidelines for fiscal 2009: Stay on course in
implementing fiscal reconstruction
(2) Social security plan: Reform MHLW

Tokyo Shimbun:
(1) River accidents: Rivers in urban areas can be dangerous
(2) Budget request guidelines have become hollowed out

(1) Budget request guidelines: Change the basis of a policy of
constraining increases in social security expenses

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, July 29

NIKKEI (Page 2) (Full)
July 30, 2008

Met Chief Cabinet Secretary Machimura at the Kantei.

Handed recommendation letters to the potential candidates for the
Niigata and Toyama gubernatorial elections at LDP headquarters, with
Secretary General Ibuki, Election Committee Chairman Koga, and
others present. Attended an executive meeting.

Attended a meeting of the global warming taskforce at the Kantei.
Later, met Foreign Minister Koumura. Attended a cabinet meeting.
Health, Labor and Welfare Minister Masuzoe stayed behind.

Met Mark Kelly, the commander of the space shuttle Discovery, and
other astronauts.

Met members of the Chinese Youth People's Association. Followed by
Internal Affairs Minister Masuda.


TOKYO 00002075 003 OF 011

Met Machimura.

Met U.S. Ambassador Schieffer.

Attended a ceremony to present certificates for environment-friendly
model cities.

Attended a meeting of the Council on Economic and Fiscal Policy.

Attended a cabinet meeting. Later met Deputy Chief Cabinet Secretary

Met Special Advisor Ito. Followed by former Foreign Minister

Met Machimura.

Returned to his official residence.

4) U.S. envoy hopes for Japan's continued refueling mission

TOKYO SHIMBUN (Page 2) (Full)
July 30, 2008

Prime Minister Fukuda met with U.S. Ambassador to Japan Schieffer at
his office yesterday and exchanged views over the Self-Defense
Forces' activities for international contributions, including the
Maritime Self-Defense Force's refueling mission in the Indian Ocean
and the Air Self-Defense Force's assistance to Iraqi

After the meeting, Schieffer told reporters, "We hope Japan will
continue its contributions to realize a peaceful Afghanistan and a
peaceful Iraq." With this, he clarified that the United States
strongly hopes for the SDF's continued contributions.

5) New antiterrorism law certain to expire; New Komeito rejects
re-adoption, casting pall over international contributions

SANKEI (Top play) (Excerpts)
July 30, 2008

It has become nearly certain that the new Antiterrorism Special
Measures Law, the legal basis for the Maritime Self-Defense Force's
refueling operation in the Indian Ocean, will expire next January.
The reason is that the New Komeito, which is calling for the
convocation of an extraordinary Diet session in late September, has
decided not to go along with the coalition's use of a two-thirds
House of Representatives override vote to pass the legislation with
an eye on a Lower House dissolution before the end of the year.
Additionally, the LDP Upper House leadership has begun echoing the
New Komeito's decision. Now that the government has decided to put
an end to the Air Self-Defense Force's activities in Iraq before the
end the year, the expiration of the antiterrorism law is certain to
take a toll on the Japan-U.S. alliance. The MSDF's withdrawal, which

TOKYO 00002075 004 OF 011

is likely to have a serious impact on the framework of Operation
Enduring Freedom - Maritime Interdiction Operation (OEF-MIO), is
expected to draw fire from the international community.

Majority leaned toward suspension

Defense Minister Shigeru Ishiba, in an LDP national defense joint
meeting on the morning of July 29, underlined the importance of the
MSDF's refueling operation, saying: "The war on terrorism is at a
crucial stage. The question here is if Japan truly has a sense of
being involved in this war." Some attendants echoed Ishiba, with
Upper House member Masahisa Sato asking, "Should a contingency occur
in the Strait of Hormuz from an outrageous act by Iran, who will
assist Japan with the transport of crude oil?"

In an LDP General Council meeting, Upper House member Ichita
Yamamoto said: "If China joins the war on terrorism in Afghanistan,
Japan's image would be damaged immeasurably on the security and
diplomatic fronts." But no one subscribed to Yamamoto's view. The
prevailing view in the LDP is that the suspension of the MSDF
activities cannot be helped.

Since a supply vessel was dispatched in January this year, the MSDF
has contributed to measures against terrorism and piracy, proving a
total of 5,475 kiloliters of fuel through 32 occasions to vessels of
such countries as the United States, Britain, France, and Pakistan.

The continuation of the MSDF operation requires amendments to the
Antiterrorism Law in the extraordinary Diet session. Chances are
slim that the opposition parties, including the Democratic Party of
Japan, which opposed the legislation in last year's extraordinary
Diet session, will reverse their position and support the law's

Further, with a Lower House dissolution before the end of the year
in mind, New Komeito has announced its opposition to the Lower House
readopting the legislation, with Secretary General Kazuo Kitagawa
saying, "Conducting thorough discussion between the ruling and
opposition camps in order to obtain the opposition bloc's
understanding is our priority." Winning a two-thirds majority in the
Lower House without the New Komeito's cooperation is impossible. The
option of readopting the legislation in the lower chamber has
effectively been sealed off.

New Komeito is also calling for the convocation of an extraordinary
Diet session in late September instead of in late August, which
makes it difficult to secure enough deliberation time. With an eye
on the U.S. presidential race in November, a former cabinet minister
said, "I wonder if we should amend the law by putting the
administration out on the line at a time when the future of
America's security policy remains unclear."

6) Opposition bloc mission from Okinawa Prefectural Assembly visits
American Embassy in Japan and other offices to call for halt in
building new base

July 30, 2008

A delegation consisting of representatives from the opposition bloc,
including the Japan Communist Party (JCP), of the Okinawa

TOKYO 00002075 005 OF 011

Prefectural Assembly yesterday visited Tokyo in order to request of
the Diet, U.S. Embassy in Japan, and U.S. Forces Japan headquarters
that the contents of the assembly's opinion paper and resolution
opposing the building of a new base at Henoko in Nago City, adopted
at a regular meeting of the assembly by majority made up of
opposition parties, be implemented.

The mission consisted of five assembly members including Masaaki
Maeda of the JCP. On the same day, the request was made at the U.S.
Embassy in Tokyo and the U.S. Forces Japan Headquarters at Yokota
Air Base.

The mission made this appeal: "The realignment of U.S. forces in
Japan was an arbitrary decision made by the Japanese and U.S.
governments. The view of most of the prefectural residents is to
protect our beautiful sea. They are opposed to any building of new

At the U.S. Embassy, they were received by Security Policy Chief Ray
Greene. According to the delegation, Greene reportedly stated, "If
the relocation to the Henoko district is not realized, none (of the
realignment plan) will go forward."

7) Gov't to subsidize Zama for USFJ realignment

YOMIURI (Page 4) (Abridged)
July 30, 2008

The Defense Ministry decided yesterday to subsidize the city of Zama
in Kanagawa Prefecture over the planned realignment of U.S. forces
in Japan. Zama had opposed the U.S. Army's planned relocation of its
1st Corps' forward-deployed headquarters to Camp Zama, a U.S.
military base in the city. But the city has now agreed to set up a
consultative body with the government over the U.S. military's
realignment. In response, the Defense Ministry made the decision.
All 39 municipalities will now be subsidized in return for their
acceptance of U.S. force realignment plans.

The Defense Ministry yesterday proposed setting up a consultative
body for the government and base-hosting localities to discuss how
to alleviate local burdens along with the U.S. force realignment.
Zama agreed to the proposal.

8) MSDF drills likely to be called off due to rising fuel prices

TOKYO SHIMBUN (Page 3) (Full)
July 30, 2008

The Maritime Self-Defense Force is scheduled to carry out annual
training exercises this fall. In this regard, MSDF Chief of Staff
Keiji Akahoshi told the press yesterday that the MSDF would have to
consider downscaling or calling off the scheduled training exercises
in the wake of rising fuel costs.

The MSDF annually carries out large-scale training exercises with a
full-fledged lineup of vessels and airplanes participating. The
MSDF's annual training exercises were not called off even in the
face of the oil crises in the 1970s. If the exercises are called
off, it would be the first case since 1954.

9) Defense white paper outlined

TOKYO 00002075 006 OF 011

TOKYO SHIMBUN (Page 2) (Full)
July 30, 2008

The Defense Ministry yesterday completed an outline of its white
paper for 2008 and presented it to the ruling Liberal Democratic
Party at a joint meeting of its defense-related divisions. The white
paper has four themes, including the Defense Ministry's plan to
reform itself. In this regard, the white paper lists the Defense
Ministry's proposals and efforts to prevent scandals and restructure
its organization. The Defense Ministry will present a report on it
at a cabinet meeting in late August.

The white paper introduces an outline of a government advisory
panel's recent report regarding the Defense Ministry's reform. Based
on an analysis of scandals in the past, the white paper underscores
the importance of following the rules and specifies a restructuring
plan to integrate the Defense Ministry's bureaucracy and the
Self-Defense Forces' staff offices.

10) Fukuda to use SDF aircraft to attend Beijing Olympics opening

ASAHI (Page 2) (Full)
July 30, 2008

It was decided yesterday that Prime Minister Yasuo Fukuda will use
an Air Self-Defense Force U-4 multipurpose support plane in order to
attend the Beijing Olympics opening ceremony on August 8. It will be
the first time for an ASDF aircraft, not a government plane, to land
in China.

The size of the entourage traveling with the prime minister will be
smaller than a regular foreign trip and the flight distance will be
short. Given the situation, the government has decided to use the
U-4 19-seat transport aircraft, which has a shorter flight range
than the 150-seat government plane. The government is now arranging
a time for a U-4 test flight with China.

In June 2007, then Foreign Minister Taro Aso also used a U-4 in his
one-day trip to Jeju Island, South Korea. Fukuda will be the first
prime minister to use a U-4 for a foreign trip.

11) North Korea asserts at Six-Party Talks that it still needs more
stages before it is denuclearized

ASAHI (Page 2) (Excerpt)
July 30, 2008

(Seoul) It has been learned that North Korea during the Six-Party
Talks by the heads of the delegations held in Beijing July 10-12,
asserted that before it reaches the "third stage" that aims at
complete elimination of its nuclear programs, it "still needs one or
two more stages." This was revealed in a speech in Seoul given by
the chief ROK delegate to the talks.

North Korea aims at each stage of eliciting in return economic
assistance and other measures, and has been stalling for time in
order that the pace of moving toward denuclearization will slow

12) South Korean Prime Minister visits Takeshima for first time,
aiming to avert criticism of government as "weak-kneed"

TOKYO 00002075 007 OF 011

TOKYO SHIMBUN (Page 7) (Excerpts)
July 30, 2008

(Kaname Fukuda, Seoul)

South Korean Prime Minister Han Seung Soo visited the Takeshima
islets, called Dokdo in South Korea, on July 29. He is the first
South Korean prime minister to visit the islets. By going there, he
aimed to counter recent moves by Japan and the U.S. in connection
the territorial dispute and to underscore to domestic and foreign
audiences that Seoul is in effective control of the islets.
Suffering from low public support, the ROK administration led by
President Lee Myung-bak seems to have been trying to take a tough
stance in the dispute in order to avert public criticism of its
being "weak-kneed."

According to the South Korean media, Han met security squad members
stationed on the islets and spoke words of encouragement. He also
set up a stone signpost marking, "Our land, Dokdo." He emphasized:
"With this visit, we must impress the world that Dokdo is South
Korea's territory."

The Navy, Air Force, and Naval Police will start a three-day drill
in the sea off the islets on July 30 on the assumption of an
invasion of the Takeshima islets by foreign vessels. Drills have
been carried out from before, but the South Korean government is
willing to play up its determination to protect its territory
through the new exercise.

13) Fukuda-Ota meeting tomorrow

SANKEI (Page 2) (Full)
July 30, 2008

Prime Minister Yasuo Fukuda has decided to hold a meeting on July 31
with New Komeito leader Akihiro Ota to discuss the timing of a
cabinet shuffle and the opening of an extraordinary Diet session. He
is expected to tell Ota that he will shuffle his cabinet as early as
August 4. Fukuda aims to convene the extra session in late August,
but the New Komeito has called for opening it in late September.

The ruling Liberal Democratic Party (LDP) and New Komeito will hold
a meeting today of their secretaries general and Diet affairs
committee chiefs. In the meeting, the timetable for the Fukuda-Ota
meeting will be confirmed. The LDP will hold an emergency executive
meeting tomorrow to finalize the future political schedule. There is
a view in the LDP that a shuffle of the executive members will be
carried out on August 3.

14) Foreign Minister Koumura puts off visit to Sri Lanka, India,

MAINICHI (Page 2) (Full)
July 30, 2008

The Foreign Ministry announced last night that Foreign Minister
Masahiko Koumura has foregone a trip to Sri Lanka, India, and
Uzbekistan August 1-8. In the government and ruling coalition, there
is a view that Prime Minister may shuffle his cabinet on August 4.
Koumura, therefore, appears to have put off the planned
three-country tour for that reason.

TOKYO 00002075 008 OF 011

A Foreign Ministry source said: "It is not that the Prime Minister
instructed him to put it off; the Foreign Minister himself made that
decision, and we thought that it would be better to inform the three
countries of our decision as early as possible."

Koumura said at a press conference yesterday morning: "I want to
make a decision on (whether to visit the three countries) after
considering external and internal matters."

15) On timing of extra Diet session, Fukuda eyes late August while
ruling members call for late September

TOKYO SHIMBUN (Page 2) (Excerpts)
July 30, 2008

Prime Minister Yasuo Fukuda has kept silent on the possibility of a
cabinet shuffle, as well as on the timing for opening an
extraordinary Diet session. Fukuda's cautious stance reflects his
judgment that the timing for opening the session will affect his
administration's fate. Will the session be convened in late August
or in late September? Fukuda and ruling party members, while also
keeping a possible Lower House dissolution in mind, now have
slightly different ulterior motives.

On June 20, when the ordinary Diet session ended in effect, Fukuda
declared that he would convene an extraordinary Diet session at an
early date.

"The session is usually convened in September but might open a
little earlier this year. Everyone must have the same view." In
response, the government and the ruling camp started preparations
for convening the session on Aug. 22 or 25.

Fukuda aims to extend the new antiterrorism special measures law
beyond its Jan. 15 expiration in order to have the Maritime Self
Defense Force (MSDF) continue its refueling mission in the Indian

The government enacted the said law by extending the extraordinary
Diet session last year, which opened on Sept. 10, to the following
year and taking an override vote in the Lower House. To avoid a
recurrence of such confusion, the government judged it necessary to
open the session earlier than usual.

However, when the prime minister was on summer vacation, ruling
party members began to move to modify the government's plan.

A senior New Komeito member grumbled to his aide on July 18: "Don't
assume that the session will open in late August." Around that time,
a senior House of Councillors member of the Liberal Democratic Party
also said, with attacks by the opposition camp in the Diet in mind:
"The less time we spend on the defense, the less we will be

Calls for the session in September were not only part of their Diet
strategy. Delivering a speech on July 23, LDP Election Committee
Chairman Makoto Koga expressed his caution about convening the
session in August on the premise of passing the bill extending the
MSDF mission by taking an override vote in the Lower House. He also
said: "For the next general election, any other timing than early
next year is inconceivable."

TOKYO 00002075 009 OF 011

Those who are calling for the session opening in September eye a
general election early next year in a bid to avoid forcible
management of the Diet session, which would inevitably result in a
setback to the government. They are not obsessive about passing the
bill extending the refueling mission.

A mid-ranking New Komeito member said: "Our party is eyeing (Lower
House dissolution in) January." In response, a former cabinet member
said: "The New Komeito will no longer agree on the override-vote
approach." This view is gaining influence in the LDP.

Fukuda is still willing to pass the bill extending the MSDF mission
as part of Japan's international contributions. If the prime
minister gives up on his plan to open the session in August and on
the passage of the said bill under pressure from the ruling camp, he
will rapidly lose his grip on the party. Even so, if he insists on a
Lower House convocation in August, friction will occur between him
and the ruling camp. Now that people in the ruling camp have voiced
doubts about their chances of winning a Lower House election under
the premier, Fukuda must be willing to avoid friction.

16) Fukuda's policy imprint cannot be seen in social welfare plan

MAINICHI (Page 2) (Slightly abridged)
July 30, 2008

The government's emergency social welfare program, called the "five
step relief plan," was revealed yesterday. It was compiled under
instructions from Prime Minister Yasuo Fukuda, who has been
increasingly alarmed by public criticism of the pension-record
fiasco and the controversial health insurance system for people aged
75 and over. However, the government only had one month to ready the
plan, since it was only announced on June 23. The plan includes many
existing policy measures and lacks fiscal backing. Nor can the
policy imprint of the Prime Minister be clearly seen in the set of
emergency measures to improve the social welfare system.

Fukuda told reporters last night: "The public's anxiety about the
future and its distrust of government must be eliminated."

Fukuda ordered the compilation of an emergency plan in mid-May. Due
to the public's dissatisfaction with the health welfare system for
those aged 75 and older, the cabinet support rate dropped to below
20 PERCENT a poll conducted by the Mainichi Shimbun. Fukuda
consulted only with former Chief Cabinet Secretary Kaoru Yosano and
Special Advisor to the Prime Minister Tatsuya Ito on the plan. He
did not say anything to concerned cabinet ministers. He wrote up a
draft on a flight from Okinawa to Tokyo immediately his press
conference on June 23.

Timetable for the five step plan to ease public anxieties

? Policies for the elderly (support companies that hire people aged
65 or older, which would be reflected in fiscal 2009 budget; and
review the pension system for the working elderly, with the
government considering the submission of a bill to the next regular
Diet session).
? Medical services (increase financial support to doctors who have
been sent to remote areas, which would be reflected in fiscal 2009
budget; and financial assistance to medical institutions that have
many patients, which would be reflected in the fiscal 2009 budget).

TOKYO 00002075 010 OF 011

? Support for child-rearing (establishing of "child subsidy", which
would be reflected in FY2009 budget; a bill to create a
"child-rearing mom" system, on which the government would submit a
bill to the next extraordinary Diet session).
? Policies for irregular workers (support "Internet cafe refugees,"
which would be reflected in FY2009 budget; expanding the application
of social insurance.
? Reform of the Health, Labor and Welfare Ministry (establish an
experts panel, who would hold a first meeting on August 1 and would
come up with an interim repot within the year).

17) Structural reform drive losing steam, meeting number of
setbacks, including pork-barrel budget allocations, postponement of
burden sharing, strengthening of regulations

NIKKEI (Page 2) (Excerpts)
July 30, 2008

Moves to counter the reform policy line set by the Koizumi cabinet
can be seen one after the other in the government and the ruling
parties, including pork-barrel budgetary allocations, postponement
of burden sharing, and the strengthening of regulations. These
efforts give a strong impression of being intended to counter the
Democratic Party of Japan (DPJ or Minshuto), since the next Lower
House election could occur anytime soon. The Fukuda cabinet has
managed to maintain a spending-cut policy line in the compilation of
budget request guidelines for fiscal 2009. However, its reform
policy line is beginning to fray at the edges.

The government and the ruling parties on July 29 adopted a set of
additional measures to address the surging crude oil prices,
centered around a government plan to compensate commercial fishermen
for their increased fuel expenses. The package is attached with a
condition that recipients make an energy-saving effort in a group
consisting of more than five. However, a senior official of one
fishing industry organization was surprised at the government
assistance, saying, "To be honest, I have never expected that the
government would go to this extent."

Nightmare of Upper House election

The government plans to draw the necessary money from an existing
8-billion-yen fund, instead of using new resources. However,
fisheries policy experts are in high spirits with Yasukazu Hamada,
chairman of the comprehensive fisheries research commission, noting,
"If we quickly use up the fund, it would make it easy for us to call
for the compilation of a supplementary budget." Mikio Aoki, former
head of the LDP caucus in the Upper House, said, "8 billion yen
means infinite." Machimura hinted at a possibility of an early
compilation of a supplementary budget, noting, "If we determine that
there is a shortfall in budgetary funds, we will cope with the
situation swiftly and flexibly."

What is driving the ruling party to go through such efforts is
election driven: the expiration of the term of office of members of
the Lower House late next year and the DPJ's moves in the run-up to
the next Lower House election.

The DPJ in June proposed 100 billion yen worth of measures to
address the steep rise in crude oil prices. Nobutaka Tsutsui, the
agriculture minister of the "Next Cabinet" said, "80 billion yen is
insufficient." He underscored his party's plan to expand in its

TOKYO 00002075 011 OF 011

manifesto for the next Lower House election the household income
compensation system for farmers, released for the Upper House
election last year, to cover the fisheries, forestry and livestock
industries, as well. Such a move by the DPJ reminds the LDP of its
crushing defeat in the Upper House election. The LDP was criticized
during the Upper House election campaign as abandoning the rural
areas and as a result, it suffered a devastating defeat in such

The ruling camp also lost a seat in the by-election in the Yamaguchi
No. 2 Constituency held this spring. It is viewed that the
introduction of the public health insurance scheme for elderly
people aged 75 or older was the reason for the defeat. Following the
defeat, the LDP and the New Komeito have decided to put a moratorium
on the hike in over-the-counter payment of medical treatment fees
paid by elderly people in the 70-74 age bracket, even though it was
scheduled to be implemented in April 2009. Moves to put off the
ruling camp's election pledge to raise the proportion of state
contribution to the basic pension starting in fiscal 2009 are also


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