Cablegate: Daily Summary of Japanese Press 08/13/08

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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 08/13/08

INDEX:

(1) Reinvestigation of abduction incidents "to conclude by autumn";
Japan-DPRK agreement, sanctions to be partially lifted (Asahi)

(2) LDP, New Komeito secretaries general agree to submit large
supplementary budget bill to next extraordinary Diet session
(Yomiuri)

(3) Prime minister positive about making dividends tax-free:
"Capital investment should be made duty-free, too" says Aso (Tokyo
Shimbun)

(4) Waning of LDP in Upper House: Losing power as votes from
industrial circles decrease; Persons recommended unable to secure
ministerial posts (Tokyo Shimbun)

(5) DPJ policies (part one): Funding resources finds party split
(Asahi)

(6) Can Fukuda display his policy imprint? Second Fukuda cabinet
already running into snag over information sharing (Mainichi)

(7) Defense Ministry to request budget for post-cluster munitions
(Akahata)

(8) Global warming prevention: All industries broadly classified
into three categories (Mainichi)

(9) TOP HEADLINES

(10) EDITORIALS

(11) Prime Minister's schedule, Aug. 12

ARTICLES:

(1) Reinvestigation of abduction incidents "to conclude by autumn";
Japan-DPRK agreement, sanctions to be partially lifted

ASAHI ONLINE (Full)
August 13, 2008

(Toru Tamakawa, Yoshihiro Makino, in Shenyang)

Japan and North Korea agreed during a formal meeting of their
foreign ministry working-level officials in the predawn hours of
August 13 in Shenyang, China that North Korea will set up a
reinvestigation committee on abduction victims at an early date and
finish the investigations by this fall. Upon the establishment of
the committee, the Japanese Government will lift its sanctions on
travel by people between the two countries and operation of
chartered flights.

The Japanese Government considers that the agreement on specific
ways to conduct the reinvestigations marks a certain level of
progress, but it remains uncertain whether this will lead to the
discovery and return of abduction victims.

Akitaka Saiki, director general of the Foreign Ministry's Asian and
Oceanian Affairs Bureau, from Japan and Song Il Ho, North Korea's
ambassador for normalization talks with Japan, participated in the

TOKYO 00002225 002 OF 010

meeting. According to the Japanese briefing, the subjects of the
investigations include all abduction victims, including those who
are missing, in addition to the victims officially recognized by the
Japanese Government. Japan and North Korea also agreed that
appropriate authority will be given to the investigation committee;
progress in the investigation will be reported to the Japanese
Government as needed; and the Japanese Government will be allowed to
confirm the results of the investigations by interviewing relevant
officials and visiting related sites.

At the latest meeting, no agreement was reached on the repatriation
of people connected to the hijacking of the Japan Airlines "Yodo-go"
jetliner (in 1970) and on allowing North Korean ships to enter
Japanese ports for transporting humanitarian goods.

Up until reaching the agreement, Kyoko Nakayama, minister in charge
of the abduction issue, called for exercising caution in making
decisions, according to several Japanese Government officials. When
Prime Minister Yasuo Fukuda was consulted for the final decision,
the Prime Minister reportedly gave the following instruction:
"Proceed cautiously. Also, exert utmost efforts so that survivors
can be found."

After the meeting, Saiki told reporters, "We sincerely hope that the
investigation committee will be set up as soon as possible and that
it will lead to the return of the victims." Song said, "Should there
be any betrayal of the agreement (by Japan), or should the agreed
contents do not move in the determined direction, everything will
break down."

It remains uncertain how far the "investigation committee that has
been given authority" will be able to pursue the truth. In addition,
in response to an interview by Asahi Shimbun, a North Korean
government authority indicated that regardless of the outcome of the
investigation, North Korea intends to bring the abduction issue to a
close once and for all, saying, "Once the results of the
reinvestigation comes out, the rest is a matter of how the Japanese
Government accepts the results."

On August 13, Nakayama welcomed the latest Japan-DPRK agreement,
saying: "If North Korea will conduct investigations once again from
the beginning (by withdrawing its conventional assertion), there is
a good possibility that survivors will be found. It could lead to
new developments." However, Nakayama also stressed the need to
carefully discern North Korea's moves before Japan partially lifts
its sanctions.

(2) LDP, New Komeito secretaries general agree to submit large
supplementary budget bill to next extraordinary Diet session

Yomiuri Online
13:45, August 13, 2008

Secretaries general, Policy Research Council chairmen, and Diet
Affair Committee chairmen of the Liberal Democratic Party (LDP) and
the New Komeito on the morning of August 13 met at a Tokyo hotel.
Participants agreed that a fiscal 2008 supplementary budget bill
that includes an economic stimulus package and other proposals
should be submitted to the Diet at the outset of the next
extraordinary session.

The envisaged budget will likely be large, topping at least several

TOKYO 00002225 003 OF 010

hundred billion yen. Participants put off a decision on when to
convene the extraordinary Diet session. However, it will likely be
convened in or after early September.

Participants also confirmed that LDP Secretary General Aso will
shortly meet with Prime Minister Fukuda and confer on bills to be
handled in the extraordinary session. When to convene the session
and the duration of such will then be decided next week.

(3) Prime minister positive about making dividends tax-free:
"Capital investment should be made duty-free, too" says Aso

TOKYO SHIMBUN (Page 2) (Full)
August 13, 2008

Liberal Democratic Party (LDP) Secretary General Taro Aso has
proposed a measure to make dividends less than 3 million yen
tax-free. Prime Minister Fukuda on August 12 indicated a positive
stance to the proposal, saying, "I do not see why not, if many
opinions can be taken into account, while a good balance is achieved
with other tax codes."

Commenting on Aso's proposal, the prime minister said, "Japan's
stock market has no vigor. I think he made that proposal to
encourage more people to buy stocks."

In this connection, Aso in a speech given in Kitakyushu City
revealed his view that a tax cut measure should be taken for capital
investment by companies as a tax stimulus measure." He said, "It
would be effective to think about a tax cut policy in a manner of
channeling money for investment. I do hope to see my proposal
implemented in the tax code revision in December."

He also repeatedly stressed the importance of making dividends
tax-free. He said, "I am not calling for a pork-barrel policy. A tax
cut policy does not mean the government spends money. I would just
like to change the tax code."

(4) Waning of LDP in Upper House: Losing power as votes from
industrial circles decrease; Persons recommended unable to secure
ministerial posts

TOKYO SHIMBUN (Page 2) (Abridged slightly)
August 13, 2008

The Liberal Democratic Party (LDP) in the Upper House has become a
minority ruling party in the Upper House election last summer. This
summer, it suffered a setback in the cabinet shuffle, which Prime
Minister Yasuo Fukuda carried out on August 1, with lawmakers whom
it had recommended unable to secure even one ministerial post. The
LDP in the Upper House, which had been holding the reins of power
because of its influence on governments of the day, is visibly
declining.

The LDP in the Upper House has thus far recommended persons for
ministerial posts on the basis of seniority, including such elements
as how many terms candidates have served as lawmakers and party
executives.

This time, it recommended Tetsuro Yano and Gotaro Yoshimura -- both
second-term Upper House members. However, the recommendation by the
Upper House was ignored, though it has maintained three seats --

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Health, Labor and Welfare Minister Yoichi Masuzoe, Defense Minister
Yoshimasa Hayashi and State Minister for Abduction issue.

The successive chairmen of the LDP in the Upper House had been
reigning the government, displaying independence of the Upper House,
as can be seen in the cases of former Chairman Mikio Aoki, who was
called the don of the Upper House, and former Chairman Masakuni
Murakami, convicted of bribery, who was called the emperor of the
Upper House.

Even former Prime Minister Junichiro Koizumi, who adhered to a
top-down approach for the selection of cabinet ministers, was unable
to ignore the Upper House's wishes and accepted its list of
recommendations of politicians for cabinet posts. Former Prime
Minister Shinzo Abe openly pledged to revise the Upper House
framework for ministerial posts when he formed his cabinet. However,
he had to rescind his pledge, meeting fierce opposition from the
Upper House.

The LDP in the Upper House was easily deprived of its sanctuary in
the cabinet shuffle this time, which is attributable to the decline
in the power of industrial organizations, which it has protected and
solidified.

Both sides have built a close relationship with the LDP in the Upper
House reflecting the wishes of industrial associations, by making
candidates affiliated with such organizations elected in the
proportional representation portion. However, the solidarity of
industrial associations has gradually weakened due in part to the
impact of structural reforms. Many incumbent Upper House members and
new candidates recommended by the Japan Medical Association, the
Japan Nursing Federation and other industrial organizations were not
elected, allowing the Democratic Party of Japan (DPJ or Minshuto) to
make a big leap.

The LDP in the Upper House has lost numbers and influence on
personnel selections. One senior lawmaker said weakly, "The weight
of recommendations by the Upper House has collapsed just as the
weight of recommendations by party factions did. It means that the
recommendation system has been replaced with a merit system."

(5) DPJ policies (part one): Funding resources finds party split

ASAHI (Page 4) (Full)
August 13, 2008

"Hula Girl," a movie that was a big hit in 2006, is a story about
the hardships that people living in a town built around a coal mine
went through when they faced the crisis of the closing of the coal
mine and faced the need to reconstruct the town. On July 24, the
Democratic Party of Japan (DPJ) held a public hearing on its
manifesto in Iwaki city in Fukushima Prefecture, the very setting of
this story.

The problem that Iwaki city now faces is a lack of doctors.
Approximately 350,000 people live in the city, which has an area
about twice as large as that of the 23 special wards of Tokyo
combined. After experiencing exhausting duties, physicians assigned
to local hospitals have resigned one after another, resulting in
limited availability of medical services not only in the pediatric
and obstetric departments, but also in the internal medicine,
urology, and cardiovascular surgery departments. In 2006, there were

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78 cases of "musical ambulances" (i.e., musical chairs or
"tarai-mawashi") in Fukushima Prefecture, in which emergency
patients in ambulances were rejected at more than10 hospitals before
they were finally admitted. Of these cases, 76 happened in Iwaki
city.

In response to the emotional appeal of people in the audience at the
public hearing who called for resolving the problem of the shortage
of physicians, Masahiko Yamada, minister of health, labor, and
welfare in the DPJ's "Next Cabinet," proclaimed: "There is a
shortage of 100,000 physicians (in Japan). The government's plan to
reduce social security spending is as big problem. We would set
measures related to medical and healthcare services as our top
priority and allocate a budget of 3-4 trillion yen!"

However, Norio Hasegawa, vice chairman of Iwaki Medical Association,
who participated in the public hearing, had mixed feelings. He
sensed that the situation would not improve if things were left as
is. He also heard colleagues in the association talk about seeking
"a change of administration at least for once." Nevertheless,
Hasegawa felt uncomfortable about the DPJ's explanation, saying:
"They have no understanding of medical services. All they talk about
is reviewing the special budget and eliminating wasteful spending."
Three days later, Hasegawa went to a lecture given by DPJ Vice
President Katsuya Okada, who visited Fukushima Prefecture. Okada
talked about breaking down bureaucratic domination and reviewing
budget allocations. This impressed Hasegawa, who said to himself,
"He's pretty good." He then handed Okada a document explaining
measures for resolving the problem of shortage of physicians that he
and his colleagues had worked out.

However, Hasegawa has yet to discern whether it would be acceptable
to him if the DPJ were to take over the reigns of government.

Reform of the pension system, creation of a child benefit program, a
system of income security for individual farming households, making
public senior high school charge-free...These are some of the
policies included in the manifesto drawn up by DPJ President Ichiro
Ozawa for the Upper House election that advocated "giving priority
to the people's livelihood." Revenues worth 15.3 trillion yen are
needed to implement these policies. Presuming that medical reforms
would be carried out and the provisional tax rate put in place for
road-specific revenues would be scrapped, the cost of implementing
all these policies would add up to around 20 trillion yen.

The DPJ's policies have often been criticized as not being supported
by revenue sources. However, Ozawa has not changed his position on
keeping the consumption tax rate at the current level and does not
seem to be bothered by this matter at all.

In late June, Ozawa held an informal meeting with women in Gifu
City. Asked about the revenue source issue, Ozawa feverishly
replied: "The first thing is to completely eliminate patronage and
corruption among politicians and bureaucrats. Wasteful spending is
rooted in patronage. We will completely eliminate them through
thorough cleaning. We will stop wasteful spending of the budget and
tax money. Then we will have the necessary revenues."

If the DPJ takes over the reigns of government and conducts
self-inspections, it will find latent revenue all over the place.
That is why a change of administration is necessary.... This is the
Ozawa-style "break-through-a-single-point policy (itten toppa

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shugi)."

Around the same time, Ozawa tapped on the shoulder of a senior DPJ
official who came to consult him on the revenue source (for the
policies) in the manifesto for the upcoming general election and
whispered to him: "It's all right, it's all right. You many not have
done it (manage the government), so you might feel uneasy, but
things will work out. Don't worry."

Hirohisa Fujii, chairman of the DPJ Research Commission on the Tax
System, who hails from the former Finance Ministry and has
experience serving as a finance minister, told a DPJ official in
charge of policy: "A 10 PERCENT change in the way that the central
and local governments spend their administrative costs that total
200 trillion yen will give us 20 trillion yen to work with. That
should do it."

The DPJ's top priority is to take over the reigns of government
through a general election. That appears to be the air predominating
over the party leadership.

(6) Can Fukuda display his policy imprint? Second Fukuda cabinet
already running into snag over information sharing

MAINICHI (Page 5) (Full)
August 12, 2008

Ten days have passed since the second cabinet of Prime Minister
Yasuo Fukuda was launched. Fukuda calls his shuffled cabinet, one
"to realize peace of mind." This newspaper probes into whether
Fukuda can display his policy imprint by examining five policy
issues.

On June 6, there was an incident that poured cold water on Fukuda's
policy of unifying consumer affairs administration, his showcase
theme. The incident was the revelation that people in China had been
poisoned by domestic frozen gyoza dumplings in June. Consumer
Administration Minister Seiko Noda frankly told reporters that the
Cabinet Office had never received the information:

"Actually, I got the information this morning through media reports.
I told the Foreign Ministry and National Police Agency (NPA) that
since the Cabinet Office is in charge of consumer administration, we
should have had their cooperation. They gave their assurances."

Following a rush of falsifications of food products, Prime Minister
Fukuda announced in a policy speech delivered in January a plan to
unify consumer affairs administration. He entrusted a consumer
affairs council of experts to study creating a new organization.
However, he ordered the creation of a Consumer Agency without
waiting for the council to reach its conclusion in a meeting on
April 23. The government intends to submit to the upcoming extra
Diet session four bills related to the establishing of a Consumer
Agency, aiming to launch it in 2009.

Fumio Kishida, Noda's predecessor at state minister, pushed forward
with coordination on such issues as the transfer of jurisdiction
over 29 consumer-related laws and regulations to a Consumer Agency,
but he lacked the ability to publicize the plan.

Noda, a former postal rebel who until recently chaired the Liberal
Democratic Party's Consumer Issues Research Commission, is a

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suitable person to head the Consumer Agency.

In fact, she often appears on TV programs. This has delighted
Cabinet Office officials, with one saying: "I wonder how many times
the name Consumer Agency was reported."

The issue of food poisoning from Chinese-made frozen dumplings has
thrown doubt on Fukuda's stance of placing importance on consumers.
It also has shed light on the lightness of the post in charge of
consumer affairs. The principle of sharing information has already
undermined by the dumpling incident.

In order to launch the Consumer Agency in 2009, it will be necessary
to enact relevant bills during the next extra Diet session. All the
more because consumer issues are the opposition camp's area of
expertise, Noda took the offensive, saying: "They will never oppose
our plan." The main opposition Democratic Party of Japan (DPJ),
however, has come up with a counterproposal of setting up the post
of protecting the rights of consumers for the reason that the
Consumer Agency will not be able to take measures to protect
consumers. The focus will be on whether consultations on revising
the bills will be moved forward between the ruling and opposition
parties.

The government has yet to come up with a concrete plan on how the
Consumer Agency will operate. The agency will likely have the
recommendation right to urge such related ministries as the Health,
Labor and Welfare Ministry and the Agriculture, Forestry and
Fisheries Ministry to take measures to protect consumers, but the
right has no teeth.

The Ministry of Land, Infrastructure and Transport will establish a
Tourism Agency and abolish the Marine Accident Inquiry Agency in
October. Like this, the scrap-and-build is the basis for creating a
new organization. In order to avoid criticism for bloating the
administration, sufficient coordination among relevant ministries
and agencies is indispensable.

If the structure of regional consumer affairs centers and other
local organizations are not reinforced, it would be difficult for a
Consumer Agency to function properly. Although the government plans
to upgrade the status of the consumer affairs centers that were set
up by local governments based their ordinances, securing fiscal
resources for an increase of agency staff will likely become an
issue.

(7) Defense Ministry to request budget for post-cluster munitions

AKAHATA (Page 2) (Full)
August 13, 2008

In the wake of an international convention's adoption in May of a
draft treaty that prohibits cluster munitions, the Defense Ministry
will procure alternative weapons instead of cluster munitions,
officials said yesterday. In this connection, the Defense Ministry
seems to be earmarking multibillion yen in its budget estimate for
next fiscal year, including costs for research intended to scrap
cluster bombs that Japan currently has.

The government possesses four-type cluster munitions, explaining
that its possession of such weapons is intended to repel airborne
and seaborne landing enemy troops at the water's edge. Once the

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cluster ban treaty comes into effect, all cluster munitions will be
prohibited. The Defense Ministry therefore decided to make a budget
request for alternative weapons. "There will be a hole in our
defense to block enemy landings," a Defense Ministry official said.
"Our deterrent capability will go down," the official added.

In its white paper for last year, however, the Defense Ministry also
admits that a full-scale invasion is less likely to take place
against Japan. The possibility of operations against enemy landings
is low, so the meaning of deploying alternative weapons will likely
be called into question.

The government has so far spent 28 billion yen to procure cluster
munitions, and the cost of scrapping the cluster munitions Japan
currently has is also estimated at about 20 billion yen (as reported
in detail by the Akahata dated July 28).

The cluster ban treaty will be signed in December and will come into
effect with 30 countries ratifying it. Japan, following the United
States' stance against prohibiting cluster munitions, was reluctant
about joining the treaty. But Japan has now agreed to adopt it.

At present, Japan has four-type cluster munitions: 1) M-26 rockets
for firing from the multiple-launch rocket system (MLRS) mounted on
vehicles; 2) CBU-87B bombs for dropping from fighter jets; 3) 155m
multipurpose howitzers for firing from guns; and 4) 70m antitank
rockets for launching from helicopters. The Defense Ministry is now
considering single-warhead bombs with no bomblets as alternatives
for the M-26 and the CBU-87B.

(8) Global warming prevention: All industries broadly classified
into three categories

MAINICHI (Page 1) (Full)
August 9, 2008 Eve.

By Hajime Eguchi

The Japanese Government plans to propose its so-called
"sector-specific approach" at UN negotiations scheduled to begin on
21 August for creating a new framework for reducing greenhouse gas
emissions beyond 2013, which is not stipulated by the Kyoto
Protocol. The details of the "sector-specific approach," a method of
reducing greenhouse gas emissions based on industries and sectors,
were revealed on August 9. Under this method, all industries are to
be classified into three categories. In order to maintain fairness
between industrialized nations and developing countries, which have
no reduction obligations, Japan's proposal calls for quickly
formulating a unified international standard for reducing greenhouse
gas emissions in sectors with particularly high volume of emissions,
such as the iron and steel industry.

Under Japan's method, reduction targets will be set for each country
by adding up the potential volume of emissions reductions according
to industries and sectors. By positioning this method as a "fair
method that enables making comparisons with other countries," Japan
intends to seize the initiative in negotiations on the next
framework for reducing greenhouse gas emissions.

In its proposal, Japan classified all industries into the following
categories: 1) sectors (iron and steel, cement, and aluminum) in
which industry organizations can take concerted action to reduce

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emissions by working on international countermeasures and continuing
to uphold common reduction targets, among other things, in the
future; 2) sectors (power generation and road traffic) in which
international cooperation is possible, but making simple comparisons
is difficult due to differences in policies, among other things; and
3) sectors (office, homes, and waste materials, among other things)
in which setting common reduction targets is difficult and will be
centered on individual countries' domestic countermeasures.

Among these sectors, Japan's proposal calls for giving priority to
studying concrete reduction measures in such sectors as iron and
steel, where international cooperation that includes developing
countries, which have no emissions reduction obligations, are
expected to produce results.

Japan will also call on each country to study specific reduction
measures appropriate for each sector and assistance measures to
developing countries that have concerns that they "may be subject to
the same reduction obligations as industrialized countries."

The negotiations, which are in preparation for the COP-14 UN Climate
Change Conference to be held late this year, will be held in Accra,
Ghana until August 27

(9) TOP HEADLINES

Asahi: Mainichi: Yomiuri: Sankei: Tokyo Shimbun:
Tanimoto wins second gold medal

Nikkei:
CO2 emissions of electric power companies up 14 PERCENT due to
suspension of nuclear power plant operation

Akahata:
CO2 emissions by TEPCO up 1.3-fold in fiscal 2007

(10) EDITORIALS

Asahi:
(1) Keep wasteful expenditures firmly in mind when discussing
whether or not to hike consumption tax
(2) Japanese-made silk: Make full use of last opportunity

Mainichi:
(1) Peace of mind realization cabinet: Do not imperil fiscal
reconstruction
(2) Foreign nurses: Who will take care of elderly people?

Yomiuri:
(1) Cutting back on airline routes: Make more efficient flight
network
(2) Exploration of life in space

Nikkei:
(1) Deepen discussion for unified taxation on financial gains
(2) Agony of South Korea as it marks 60th anniversary of the
founding of the nation

Sankei:
(1) Russia announces ceasefire: Russia should completely pull out of
Georgia
(2) Precious metals: Strengthen resource recovery system

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Tokyo Shimbun:
(1) Delisting of North Korea: Don't be impatient
(2) Recommendation by National Personnel Authority: Use
resourcefulness when conforming to standards of private sector

Akahata:
(1) Integration of SDF counterintelligence units: We will not allow
reinstate of military police politics

(11) Prime Minister's schedule, Aug. 12

NIKKEI (Page 2) (Full)
August 13, 2008

10:34
Met at Kantei with Minister for Declining Birthrate Nakayama.

11:04
Met with Minister for Consumer Administration Noda.

14:23
Met with incoming and outgoing Tokyo Metropolitan Commissioner
Yonemura and Yashiro. Met afterwards with Special Advisor to the
Cabinet Okuda.

16:30
Met with Kyushu International University Next Generation System
Institute President Okamoto and the Land, Infrastructure and
Transport Ministry's Housing Bureau Director General Izumi.
18:36 Met at his official residence with Defense Minister Ishiba.

SCHIEFFER

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