Cablegate: Daily Summary of Japanese Press 09/09/08

DE RUEHKO #2474/01 2530806
P 090806Z SEP 08




E.O. 12958: N/A



(1) Diplomatic tasks left by Fukuda administration: Coordination
with new government urged for (Mainichi)

(2) NSG decides to lift ban on nuclear trade with India; Major
nuclear powers' double standard revealed; Japan endorses decision
that conflicts with nuclear disarmament (Mainichi)

(3) America's excitement and Japan's casualness (Asahi)

(4) DPJ Ozawa announces set of basic policies, lacking specifics on
fiscal resources, timing (Nikkei)

(5) DPJ President Ozawa to stipulate in administrative concepts that
senior vice ministers and parliamentary secretaries would be
increased to 100 (Nikkei)



(8) Prime Minister's schedule, Sept. 8 (Nikkei)


(1) Diplomatic tasks left by Fukuda administration: Coordination
with new government urged for

MAINICHI (Page 7) (Full)
September 5, 2008

By Hitoshi Tanaka, senior fellow at the Japan Center for
International Exchange

Prime Minister Fukuda's abrupt announcement of his decision to step
down has been criticized as irresponsible. He should have apologized
to the public in a press conference. But I guess that behind this
decision might have been the pangs of conscience as a politician. I
conjecture that Mr. Fukuda might have come to this conclusion: It is
no longer possible for his government to implement policies in a
responsible manner due to the current lopsided Diet and low public
support; In order to help out the nation's crisis, since it is the
sole way for a new administration that wins public trust in a
general election to implement policies, a new prime minister should
be elected, and a general election should be carried out as soon as

I think that Japanese political leaders should give priority to
national interests over party interests. A new prime minister of the
Liberal Democratic Party should dissolve the House of
Representatives at the outset of the extraordinary Diet session
without wasting time and seek to win public confidence by holding a
general election. The new political leader should establish his or
her administration as soon as possible and implement powerful
policies, because Japan is now in a serious crisis.

Although Japan's national power is on the eclipse, Japan's status in
the international community has been undermined more seriously by
the ongoing political confusion than by the decline in national
power. Diplomatic clout should work more effectively than national
power. But we cannot expect Japan, which tends to be affected by

TOKYO 00002474 002 OF 008

political populism, to engage in vigorous diplomacy. It would seem
impossible for a government that lasts only one year or so to
produce diplomatic results.

The next full-scale government will have to address three major
diplomatic issues. These are closely linked to the issue of what
Japan should be doing.

The first challenge is coordination of relations with the U.S. I
think Japan should fulfill its due responsibility in the war on
terrorism, but I do not think the sole way to do so is by continuing
the ongoing refueling mission in the Indian Ocean. A new Japanese
government should consider what role Japan should play in the
international security area. I think the next U.S. administration
will shift from the unilateralism of the Bush White House toward a
multilateral stance and call on advanced democratic countries to
shoulder an appropriate burden. It is the right time for Japan to
partially review the government's interpretation of the
Constitution, focusing on the right to collective self-defense, to
enable Self-Defense Force troops to participate in the collective
security system under the United Nations. After doing this, the new
Japanese government should hold close talks with the new U.S.
government on burden-sharing.

The second challenge is coordination with East Asia. The recent
remarkable economic growth of China and India has changed power
relations among countries. Under this situation, the world remains
unable to find an effective solution to such emergency issues as the
environment, energy, and food. It is the top priority task for Japan
to establish a stable order for East Asia involving China and India.
Japan should assume the initiative in creating a multilateral
economic partnership region in East Asia, as well as multinational
mechanisms to prevent proliferation of weapons of mass destruction
and attacks by terrorists or pirates, as well as to ensure energy
security. To that end, Japan, China, and South Korea should urgently
hold trilateral talks to discuss their visions.

The third challenge is the Korean Peninsula issue. In an effort to
resolve the issue of Japanese nationals abducted by North Korean
agents, Japan should launch comprehensive talks with North Korea,
based on the Pyongyang declaration. I think Japan should call for
negotiations that would lead to a Japan-North Korea summit, from a
broad perspective, instead of considering only the North's start of
a reinvestigation in the abduction issue in exchange for Japan's
partial removal of sanctions against it.

(2) NSG decides to lift ban on nuclear trade with India; Major
nuclear powers' double standard revealed; Japan endorses decision
that conflicts with nuclear disarmament

MAINICHI (Page 3) (Abridged slightly)
September 7, 2008

Takuji Nakao in Vienna, Kenichi Komatsu in Washington

The latest general meeting of the Nuclear Suppliers Group (NSG) has
endorsed a proposal to lift a global ban on nuclear trade with India
as an exceptional to NGS guidelines, despite the country's
development of nuclear weapons in defiance of the Nuclear
Nonproliferation Treaty (NPT) regime. Such countries as the United
States, which has been eager to cooperate with India as the world's
largest democracy, France, and Russia steamrollered New Zealand and

TOKYO 00002474 003 OF 008

others countries that had called for a cautious response. The NPT
which aims for nuclear nonproliferation and the NSG's visions are
now in danger of being reduced to pie in the sky.

Japan, which is supposed to advocate a nuclear-free world as the
sole atomic-bombed country, effectively endorsed the nuclear
exception for India from the viewpoint of security and enhancing
bilateral relations with that country, siding with the United
States. Japan's act that is tantamount to helping the NPT turn into
a dead letter will inevitably be criticized as a double standard at
home and abroad.

In the NSG meeting, Japan applied pressure on the United States by
urging that a moratorium on India's nuclear testing be specified in
the accord, but it backed off in the end. It was because India
issued a foreign minister's statement declaring that the country
would continue its nuclear moratorium and also because Japan highly
valued a decision on stricter nuclear inspections by the
International Atomic Energy Agency.

A Foreign Ministry official explained: "Although it was insufficient
from the ultimate goal of eliminating nuclear weapons, priority was
given to the pragmatic objective of winning India over to the NSG
side as a nuclear power." Priority was reportedly given to defining
India in an international agreement although such is not quite
consistent with the NPT regime.

The government's decision also comes from its desire to strengthen
ties with India, which is keep on growing at a fast pace. The
cooperation of India, a major greenhouse gas emitter, is
indispensable in reaching an anti-global-warming framework
agreement. The decision also intended to give a boost to efforts to
conclude an economic partnership agreement (EPA) with India before
the end of the year.

It is also a fact that the treatment of India which sits outside the
NPT regime runs counter to the international nuclear disarmament
trend. Additionally, the NSG accord might also have a negative
impact on the denuclearization talks with North Korea that conducted
a nuclear test. Japan's prioritization of the reality of nuclear
control while obscuring the principle might end up stifling Japan's
foreign policy in the long run.

(3) America's excitement and Japan's casualness

ASAHI (Page 2) (Abridged slightly)
September 9, 2008

By Yoshibumi Wakamiya, Asahi columnist

In the United States, Democratic presidential candidate Barack Obama
is aiming to take over the reins of government from the Republican
Party, hitting the Iraq war and economic mismanagement. His rival,
John McCain, is trying to restore the pride and the principles of
the Republican Party. Obama has become the first African-American
presidential candidate, while McCain has picked a female governor as
his running mate. All eyes are on the historic U.S. presidential
race as the Nov. 4 election approaches.

Meanwhile in Japan, Ichiro Ozawa yesterday sealed his third term
unopposed as president of the Democratic Party of Japan. The Liberal
Democratic Party's presidential campaign period also begins on Sept.

TOKYO 00002474 004 OF 008

10 in the wake of Prime Minister Yasuo Fukuda's decision to step
down. After that, the next general election apparently lies. Timed
with the U.S. presidential race, a political battle that might
result in a change of government is likely to take place in Japan,
as well.

The next LDP president, who automatically becomes the next prime
minister, might be short-lived, however. The LDP and DPJ
presidential elections are primaries, so to speak. How are the races
on this side of the Pacific going?

Although Ozawa's policy stances have often been criticized as
unrealistic, no one ran against him. The DPJ is buckling down to
take power, but there is no comparison with the excitement of the
Obama and Clinton campaigns. The selection of the DPJ president that
was conducted without asking any questions about his policies has
left concerns about what would come should that party assume the
reins of government.

In contrast, the LDP race, joined by candidate after candidate, is
full of life. Nevertheless, with the two consecutive presidents
having walked off the job, the LDP presidential election has now
turned into a seasonal event. Several LDP lawmakers have come
forward without feeling ashamed of such a fact. The casualness of
the post of the prime minister has been exposed.

Declined factional clout is fine, but it is deplorable that the LDP
has now turned into a disorderly and lax party. The LDP's attempt to
showcase policy debates has exposed the deep paradox over reform
that has existed in the party since the Koizumi administration.

The LDP presidential candidates, including the first female
candidate and veteran and junior lawmakers, are all attractive in
their own way. But when it comes to their credentials to become the
prime minister, many questions remain. Some have made slips of the
tongue and another reportedly has health problems. One was even
blamed for a major accident. They must first make efforts to dispel
public mistrust and concerns.

Ozawa, whose desire to serve as the prime minister had been
questioned due to his failed attempt to form a grand coalition,
reportedly has made up his mind this time around. Legislators eyeing
to become the country's top leader must have the drive and gutsiness
to continue steering the government under any circumstances.

(4) DPJ Ozawa announces set of basic policies, lacking specifics on
fiscal resources, timing

NIKKEI (Page 3) (Full)
September 9, 2008

Democratic Party of Japan (DPJ) President Ozawa, who was reelected
uncontested for a third term, reiterated his determination to take
over the reins of government from the ruling coalition in a press
conference yesterday. The same day, Ozawa announced a set of
fundamental policies, including measures to reform the pension and
medical systems, as well as to abolish the provisional gasoline tax
rate, under the slogan of giving top priority to the lives of the
people. But the package stops short of explaining how to secure
fiscal resources worth over 18 trillion yen to fund these measures.
It also lacks a timetable for each proposed item to be implemented.

TOKYO 00002474 005 OF 008

At least 18 trillion yen needed

The shadow cabinet in a meeting today will start working out in
earnest a manifesto for the next House of Representatives election,
based on Ozawa's package of basic policies released yesterday. The
basic-policy package will add policies set forth after the House of
Councillors election in July 2007, such as a measure to scrap the
provision gasoline tax rate, to those included in the manifesto for
the July election. A major question is how to secure fiscal
resources to pay for everything.

The Upper House manifesto estimated the necessary amount of fiscal
resources at 15.3 trillion yen. To implement the measures cited in
the basic policies, an additional 3 trillion yen will become needed
unless Ozawa presents spending-cut measures to be able to set off
the revenue loss expected from the abolition of the provisional tax
rates. If the package also includes a fresh measure to give income
support for individual fishermen as an economic stimulus measure,
outlays for policies will expand further.

In the press conference yesterday, Ozawa, asked about how he would
secure fiscal resources, said in disgust: "Saying that there are no
fiscal resources is exactly what bureaucrats often say. If politics
and administration are fully examined, satisfactory fiscal resources
can be squeezed out." Ozawa has insisted that if wasteful outlays
are reduced, it will be possible to secure enough fiscal resources.
He said that he would slash useless spending specifically by: (1)
dismantling special corporations and special accounts in principle;
(2) discontinuing subsidies but granting fiscal resources to local
governments in a package; and (3) completely abolishing the
amakudari practice (government officials finding lucrative jobs in
private corporations after retirement).

The package makes no reference to the government's plan to return
the national and local governments' primary balance into the black
by fiscal 2011, although it was incorporated in the Upper House
manifesto. Debates on fiscal resources will significantly change,
depending on whether to maintain the plan or not, so attention is
likely to be paid to how the party will treat this issue.

On global warming and security policies, Ozawa has left some parts
ambiguous. The party's taskforce has recommended introducing a
global warming countermeasure tax, but the package notes nothing
about this measure. On the security area, in which views are split
over whether to send Self-Defense Force troops overseas, the package
just notes: "SDF troops should proactively participate in UN
peacekeeping operations."

The party is expected to discuss the issues left vague in the
process of drawing up a manifesto for the Lower House election, but
coordination in the party may face rough going.

Dependence on cuts in special accounts overly easy-going

On Ozawa's call for stopping wasteful spending, the dominant view
among economists and experts is that Ozawa's explanations lack

For instance, he promised to abolish the National Debt Consolidation
Fund Special Account, but it does not mean that the funds to redeem
national bonds will become unnecessary. On the National Pension
Special Account, as well, many observers say that it is too

TOKYO 00002474 006 OF 008

easy-going to think that fiscal resources will be secured if the
account is completely abolished. To avoid useless spending,
reviewing the pension system itself is indispensable.

The total amount of expenditures in the special accounts reaches
approximately 178 trillion yen. Ozawa pointed out: "About 10
trillion yen has been earmarked for unnecessary items. Money has
also been disbursed from the general account (to special accounts)
in various forms."

To be sure, an abolition of special accounts will lead to shrinking
some reserve funds, and there might be some unnecessary parts in the
48 trillion yen into special accounts from the general account
annually. But it will become necessary to discuss each special
account, so it is uncertain to what extent fiscal resources can be
secured by this means.

On the highway budget, Ozawa referred to a reduction in the gasoline
and other road-related tax rates, saying: "The highway budget worth
5.6 trillion yen is no longer necessary." He then came up with a
measure to impose no charges for expressway use. There was no
reference to how to tap the fiscal resources to pay off the debts
held by the Japan Expressway Holding and Repayment Agency and
boosting maintenance costs, either.

On the measure to discontinue the amakudari practice, too, it will
become necessary to establish a system to keep all senior government
officials in office until they reach retirement age. In such a case,
personnel costs will increase, so the impact of the proposal remains

The economic research department chief of the Nissei Research
Institute commented: "It is somewhat ambiguous whether he is
pursuing aggressive fiscal policy or economic growth by cutting
wasteful spending."

(5) DPJ President Ozawa to stipulate in administrative concepts that
senior vice ministers and parliamentary secretaries would be
increased to 100

NIKKEI (Page 1) (Slightly abridged)
September 7, 2008

It was learned on Sept. 6 that Democratic Party of Japan (DPJ)
President Ichiro Ozawa would come up with a plan to double the
number of senior vice ministers and parliamentary secretaries to
about 100. He intends to incorporate this plan in a set of
administrative concepts he will soon reveal. The aim is to shift the
center of gravity of the government from bureaucrats to politicians
by drastically revamping the compilation of budgets and
policy-making, in which bureaucrats now have the initiative, when a
government led by the DPJ is launched.

Ozawa is expected to announce administrative concepts at the party's
convention on Sept. 21. Based on those precepts, the DPJ will draft
a manifesto (set of campaign pledges) for the next House of
Representatives election.

In addition to an increase in the number of senior vice ministers
and parliamentary secretaries, ministerial assistant posts would be
created and the posts would be served by politicians. The number of
deputy chief cabinet secretaries would be increased from the present

TOKYO 00002474 007 OF 008

two, which are now served by Upper and Lower House members. An
assistant deputy chief cabinet secretary post, which is served by an
administrative vice minister-level bureaucrat, would be given to a

Ozawa will look into the possibility of expanding the political
appointments of senior ministry officials, including bureau director
general-level officials, and he will also come up with a plan to
actively appoint private-sector persons to let them serve in
government posts. Although the revised basic law on the national
civil service system stipulates the establishment of a cabinet
personnel affairs agency, which would control the personnel changes
of senior government officials, Ozawa has judged that the revision
is insufficient to correct the seniority-based promotion system.

Ozawa will also include decentralization in his administrative
concepts. A government-led by the DPJ would abolish in principle
individual subsidies from the state to local governments, but it
would provide subsidies in a lump to local governments, which would
be able to use them freely. The state, prefectures and
municipalities would be reorganized to about 700 to 800 broad and
basic autonomous bodies over the next five to seven years.


Asahi, Mainichi, Yomiuri, Sankei and Tokyo Shimbun:
Sumo association fires Roho, Hakurozan after they tested positive
for marijuana

Bank deposits top loans by record 145 trillion yen

National convention for aged adopts resolution to abolish medical
insurance system for people 75 and older


(1) Ozawa-led DPJ must demonstrate unity in drafting policies
(2) Tainted rice misused: MAFF to blame partially

(1) DPJ must produce a solid manifesto
(2) Sumo world needs a fresh start

(1) DPJ must show itself ready to govern
(2) Sumo needs drastic reform

(1) U.S. financial crisis far from over
(2) Ozawa must join policy debate

(1) DPJ still unconvincing to take power
(2) U.S. financial sector needs bolder bail-out plan

Tokyo Shimbun:
(1) Ozawa must speak up
(2) Sumo world must be reformed

TOKYO 00002474 008 OF 008

(1) Misused tainted rice: Food security essential

(8) Prime Minister's schedule, Sept. 8

NIKKEI (Page 2) (Full)
September 9, 2009

Met at Kantei with METI Minister Nikai and METI Economic and
Industrial Policy Bureau chief Matsunaga. Nikai remained.

Attended consumer administration promotion council meeting.

Met with former Deputy Chief Cabinet Secretary Ono.

Met with Internal Affairs and Communications Minister Masuda and the
ministry's Local Tax Bureau chief Kono.

Met with Indonesian Ambassador to Japan Anwal. Me afterwards with
China-Japan Friendship Association Vice Chairman Wang Xiaoxian.

Met with Czech President Klaus.

Returned to his official residence.


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