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Cablegate: Daily Summary of Japanese Press 08/26/09

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UNCLAS SECTION 01 OF 14 TOKYO 001966

SIPDIS

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 08/26/09

INDEX:

(1) Two ways to turn around economy - growth strategy: Overview of
manifestos; LDP - increase wages through companies; DPJ - direct
assistance for household budgets (Yomiuri)

(2) Strategy needed for deadlocked Japan-DPRK relations (Yomiuri)

(3) Defense buildup against the "nuclear threat" (Yomiuri)

(4) 2009 Lower House election: My views on foreign and security
policies: The Japan-U.S. alliance must be strengthened (Mainichi)

(5) 2009 Lower House election: My views on foreign and security
policies: Japan must keep appropriate distance from U.S. and China
(Mainichi)

(6) Symposium on "Obama administration and Japan-U.S. relations"
(Asahi)

(7) Japan asked U.S. to keep documents on nuclear-related secret
pact classified in 1999 (Asahi)

(8) Editorial: Political parties should keep in mind retreat of
postal reforms will bring about major loss (Nikkei)

(9) Four wise men behind Obama's Prague speech in April on "world
without nuclear weapons" (Gaiko Forum)

ARTICLES:

(1) Two ways to turn around economy - growth strategy: Overview of
manifestos; LDP - increase wages through companies; DPJ - direct
assistance for household budgets

YOMIURI (Page 3) (Excerpts)
August 26, 2009

One focus of the Lower House election is what kind of growth
strategy each political party is envisioning for the Japanese
economy. Judging from the manifestos issued by the Liberal
Democratic Party (LDP) and the Democratic Party of Japan (DPJ),
differences between the two parties are clear - the LDP aims to
expand the economy based on the premise that corporate business
performance will pick up, and the DPJ intends to boost consumption
through direct cash handouts for household budgets.

Discussion on future burden of social security indispensable

The challenge of efforts to put the Japanese economy on the
full-fledged growth track is how to strike a balance between social
benefit handouts and financial burden. Social security expenses
continue to increase at the rate of 1 trillion yen a year. The
proportion of the number of people aged 65 or older is expected to
grow from about 20 percent in 2005 to about 30 percent by 2025 and
about 40 percent by 2050. Payments of the basic portion of pensions
to baby boomers will begin in 2012. Japan's sales tax rate of 5
percent is lower than the levels of European countries, where such
rates are around 20 percent. Japan is now a country with medium
welfare and low burden in terms of welfare size and burden level.

The outstanding balance of long-term debts combining those held by

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the central and local governments reached 816 trillion yen or
approximately 170 percent against the GDP at the end of fiscal 2009.
This is the highest level among industrialized countries. The amount
of the issuance of new government bonds will likely exceed tax
revenues in fiscal 2009. This is an abnormal situation caused by
Liberal Democratic Party (LDP)-led administrations.

The LDP incorporated a goal of achieving medium welfare and medium
burden in its manifesto. It says that it will implement drastic
reform of the tax code, including a hike in the sales tax, without
delay after the economy turns around and necessary legal steps are
taken by fiscal 2011. However, the manifesto does not mention the
rate or timeframe for the hike.

The DPJ calls for substantially improving social security by
establishing such benefits as child allowances and a pension system
that guarantees a minimum payout of 70,000 yen per month. In the
meantime, the party has pledged that it will not raise the sales tax
for the next four years. It has determined that in order to obtain
understanding from the public, wasteful spending must be reduced
first.

Same goal

Prime Minister Aso in a speech given in Sendai City on the 25th
underscored that the GDP in the April-June quarter marked positive
growth with an annualized growth rate of 3.7 percent in real terms
for the first time in a year and three months. He proudly said that
the economic decline, which kicked in last fall, has stopped due to
economic stimulus measures costing roughly 132 trillion yen,
including a boost to public works and financial assistance to small
and medium-size businesses.

DPJ President Hatoyama in a speech given on the 25th said, "We want
to turn around the economy, by improving family budgets." He thus
indicated his party's stance that directly stimulating household
budgets by providing child allowances or making highways toll-free
is a shortcut to shoring up the economy.

The pillar of the LDP's stimulus measures is company-driven growth
measures based on the idea that backing corporate activities will
raise wages, which will in turn boost personal consumption. The DPJ
will aim to provide direct assistance by household budget-type
measures, in other words, boosting consumption by directly
increasing households' after-tax income with payouts of various
allowances. The LDP and the DPJ share the same goal but their
approaches to attain that goal are totally different.

Sluggish growth

The LDP's scenario is to materialize annualized 2 percent of growth
by the second half of fiscal 2010, by continuing the stimulus
package and put the economy on the full-fledged growth track with
domestic and foreign demands starting in fiscal 2011.The party
incorporated the goal of raising per-capita national income to the
highest level in the world, by boosting each household's after-tax
income by 1 million yen in 10 years. Its manifesto also incorporates
such strategies as strengthening competitiveness using
environment-related technology and bringing in Asian markets'
vitality. However, they all lack details.

Unknown effects

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The DPJ advocates that it will shift the Japanese economy to a
domestic demand-led type by expanding consumption with a boosted
disposal income in the household budget. It has also indicated
readiness to assist the development and dissemination of
state-of-the-art technologies, such as biotechnology or
nanotechnology with President Hatoyama noting, "There is a
sufficient possibility of finding industrial areas that can be
developed into blue-chip industries worldwide. Such industrial
sectors include agriculture, marine resources, development and the
aerospace industry."

However, to what extent assistance for the household budget will
boost domestic demand is not known. The Daiichi Life Research
Institute has estimated that the consumption-boosting effect of
measures incorporated in the DPJ manifesto, such as the introduction
of child allowances and the abolition of provisional tax rates,
including the gas tax, will be no more than 0.4 percent in the next
fiscal year.

Japan's unemployment rate is on at its worst-ever level. Employment
uncertainty and a decline in wages continue. The party has proposed
raising the minimum wage to 1,000 yen with the aim of increasing
after-tax income of workers. However, if workers' wages are raised,
companies will just hold back on hiring more workers. Chief
economist Toshihiro Nagahama takes this view: "As long as employment
uncertainty remains, personal consumption will continue to be
sluggish, because cash handouts in the form of child allowances,
etc, will be channeled to savings."

(2) Strategy needed for deadlocked Japan-DPRK relations

Hitoshi Tanaka, former deputy minister of foreign affairs, senior
fellow at Japan Center for International Exchange

YOMIURI (Page 11) (Full)
August 26, 2009

The situation in North Korea presents a serious threat to Japan's
security. It is a strange neighbor who would suddenly begins a
dialogue right after it heightened tensions by conducting missile
launches and nuclear tests. However, all the political parties have
not presented any concrete policies toward North Korea in the
election campaign and the point of contention has been unclear. What
are the essential issues in North Korea policy?

(Editorial staff member Ichiro Ue spoke with two experts - Hitoshi
Tanaka and Hideshi Takesada - and summarized their comments.
Tanaka's comments appear below; Takesada's are found in the
following article.)

North Korea fired ballistic missiles in April and conducted a
nuclear test in May, but accepted a visit by former U.S. President
Bill Clinton in early August and dispatched a delegation to the late
South Korean President Kim Dae Jung's funeral - doing a complex
zigzag between a tough and soft stance. However, this is a
calculated strategy on the part of the DPRK. Japan will need to
respond accordingly.

North Korea has long been carrying out two parallel policies. One is
the vigorous development of nuclear weapons to acquire a military
capability that will discourage any attack from foreign countries.

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The other is economic reconstruction, because the development of
nuclear arms alone will not be adequate to maintain the political
regime and will cause increasing discontent among the people.
However, the DPRK cannot accomplish economic reconstruction alone.
It is talking a tough line as leverage to obtain cooperation from
other countries. North Korea has formulated a policy for survival
relying on the strategic manipulation of a tough stance and pursuit
of dialogue.

The change of administration in the United States is also a factor.
The North Koreans have been thinking about where to start
negotiations with the new administration. They have fired missiles
and conducted a nuclear test before the Obama administration and its
policies were consolidated. They probably intended to send the
message "don't take us lightly."

The DPRK has yet to complete development of a nuclear weapon.
However, once it has developed a weapon, the country will not be
easily persuaded to abandon it. This means that we do not have much
time. But the same holds true for North Korea. If it fails to deal
with its economic problems, the regime may collapse from within.

President Clinton's visit to North Korea will probably become a
turning point that will lead to dialogue, even if not immediately.
Against this background, one thing needs to be borne in mind. The
neighboring countries should be solidly united and continue to send
the message that North Korea cannot obtain aid from the
international community if it continues possess nuclear weapons.

On the part of Japan, it needs to collaborate with other countries
based on this principle and apply pressure on the DPRK while
implementing the UN Security Council sanction resolution. At some
point it will have to be prepared for the worst and plunge into
negotiations that will produce results.

Both the Liberal Democratic Party (LDP) and the Democratic Party of
Japan (DPJ) are saying that North Korea's possession of nuclear arms
is unacceptable, and they both pledge to work for a comprehensive
solution to the abduction, nuclear, and missile issues. However, no
concrete policies have been presented. They must bear in mind that
talking only about pressure or dialogue but not producing any
results is meaningless.

The North Korea issue is a litmus test for Japan's foreign policy.
Foreign countries see Japan as an important party in the North Korea
issue. Yet, it has not played the role of a concerned party. The
Japan-DPRK relationship has been at a stalemate since Koizumi's two
visits to North Korea, which resulted in the return of five
abductees and their families. North Korea will not be moved only by
cries for the return of abduction victims. A strategy for a
comprehensive solution to the abduction and security issues and the
normalization of diplomatic relations are necessary.

In order to break the deadlock, the political leadership needs to
take the responsibility to design an unwavering negotiation
strategy. It will need a framework and the determination to
implement this strategy. For this purpose, a framework across
ministerial boundaries, such as the national security council
proposed by the LDP in its manifesto or the national strategy bureau
the DPJ plans to create, is needed.

North Korea is not a point of contention in the general election.

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Actually, it is undesirable to make this a point of contention
without an adequate strategy, thus binding the hands of the new
administration. In any case, whatever the composition of the new
administration, this is an urgent issue that needs to be debated at
an early date.

(3) Defense buildup against the "nuclear threat"

YOMIURI (Page 11) (Full)
August 26, 2009

Hideshi Takesada, chief researcher at the National Institute of
Defense Studies

North Korea's actions since this spring suggest a clear strategy. It
is seeking bilateral talks with the United States by showing the
international community that its development of nuclear weapons will
become a threat in the near future.

North Korea wants to interact with the U.S. on an equal footing as
much as possible. For this purpose, it needs to complete the
miniaturization of its nuclear warheads. On top of that, it is
looking to sign a mutual non-aggression treaty or replace the
armistice agreement for the Korean War with a peace agreement,
building good relations with the U.S., and ultimately realizing the
withdrawal of U.S. forces from South Korea. For this reason, it has
no intention to give up its nuclear weapons. It is noteworthy that
its goal is to possess nuclear missiles that can reach New York or
Washington to prevent U.S. intervention if a military conflict for
the unification of the two Koreas, like the Korean War of 1950,
occurs in the future.

The DPRK has declared that it will not return to the Six Party Talks
in order to concentrate on U.S.-DPRK dialogue. It has eliminated
other venues for negotiating the nuclear issue and is focusing on
the normalization of U.S.-DPRK relations.

Japan's relations with North Korea are in a stalemate under such
circumstances not because there was any problem on the Japanese side
or that it has made any diplomatic mistakes. This is the consequence
of North Korea's strategy for U.S.-DPRK talks, and Japan's only
option is to watch closely developments in these bilateral talks.

However, as long as Japan is exposed to the threat of North Korean
missiles, how it deals with the DPRK is very important. In terms of
equipment, missiles capable of interception at high altitude and
Japan's own early warning satellites with improved capability to
detect the launching of ballistic missiles instantly with ultrared
rays are needed for missile defense. The Liberal Democratic Party
(LDP) has discussed this issue repeatedly at its subcommittee on
defense policy and formulated a policy direction, while the thinking
of the Democratic Party of Japan (DPJ) on foreign and defense
policies remains unclear.

The DPJ talks about playing a role in East Asia or Asia and the
Pacific and a close and equal relationship with the U.S., but it has
no concrete policies. This is probably due to the constraint of the
plan to form a coalition with the Social Democratic Party and other
parties after the election. A concrete strategy is indispensable for
strengthening the Japan-U.S. alliance from an independent standpoint
and for Japan to become a respected country in East Asia.


TOKYO 00001966 006 OF 014


Along with equipment, various legislative measures for defense will
be important. Will Japan be able to intercept North Korean missiles
apparently targeting the U.S.? Whether the LDP or the DPJ (is in
power), strengthening the Japan-U.S. alliance will require tackling
the legal issues in order not to lose the United States' trust. The
question is how to deal with the government's current negative
interpretation of the right of collective self-defense, which is
related to this issue. Concrete and thoroughgoing discussions are
necessary.

The abduction of Japanese citizens by the DPRK is an important issue
bearing on human rights and the people's safety. Although the LDP
talks about "staking the national prestige on realizing the return
of all abductees," while the DPJ says it will "make every effort for
a solution to this issue," they are not even sure how many people
have been abducted or how many of them are still alive.

While it will be a very tall order, the new administration formed
after the election needs to have the determination and the wisdom to
realize the start of a joint investigative body of the Japanese and
DPRK governments. It needs to be prepared to go to Pyongyang to
negotiate directly if needed.

(4) 2009 Lower House election: My views on foreign and security
policies: The Japan-U.S. alliance must be strengthened

Satoshi Morimoto

MAINICHI (Page 3) (Abridged slightly)
August 25, 2009

Japan's foreign and security policies based on the Japan-U.S.
alliance have been called into question. Growing tensions in East
Asia because of North Korea's possession of nuclear weapons and the
rise of newly industrializing countries, such as China, are likely
to shake Japan's position in the international community.

With next year marking the 50th anniversary of the conclusion of the
revised U.S.-Japan Security Treaty, there are strong calls for a
revision of the Japan-U.S. Status of Forces Agreement (SOFA), which
covers the handling of U.S. service members in Japan, centering on
Okinawa. What foreign and security policies should Japan, which take
has been enjoying prosperity under America's nuclear umbrella,
pursue?

(The Mainichi posed this question to two experts on defense and
security issues, Satoshi Morimoto, a professor at Takushoku
University Graduate School, and Jitsuro Terashima, honorary chairman
of Japan Research Institute. Morimoto's comments appear below;
Terashima's are found in the following article)

The future of East Asia is opaque. North Korea is saddled with the
question of a possible change of its leader as well as nuclear and
missile issues. China's hegemonic tendency could potentially
undermine the stability of the region. The Japan-U.S. alliance must
be strengthened to play a greater role for the stability of Asia and
the international community.

The new administration to be launched after the House of
Representatives election need not dwell on precedent. Much can be
expected from policy debate from a fresh perspective


TOKYO 00001966 007 OF 014


But if it formulates a policy that damages the credibility of the
bilateral alliance, the overall Japan-U.S. relationship will suffer.
As for the question of revising the SOFA, I think the United States
will respond to Japan's call for frank talks about the agreement
following reexamination of problems associated with it. I do not
think the United States will agree to negotiations if Japan simply
asks for revision of the agreement. In an "equal relationship" one
side should not make complaints. Foregoing complaining will help
forge a sound bilateral relationship.

At the same time, the continuation of the present foreign policy
will not strengthen the alliance. Japan is risk averse, for which
reason it does not amend the Constitution such that it could make
genuine contributions to the international community.

In the run-up to Lower House election, debate has centered on such
livelihood issues as pensions, nursing care, and roads. The people
must not choose a party to take the reins of government without
conducting serious discussions on how Japan should deal with the
North Korean nuclear issue and China. Discussion of bread-and-butter
issues is entirely different from discussion of the fate of the
state. A state cannot be saved by that discussion alone.

(5) 2009 Lower House election: My views on foreign and security
policies: Japan must keep appropriate distance from U.S. and China

Jitsuro Terashima

MAINICHI (Page 2) (Slightly abridged)
August 25, 2009

It goes without saying that the Japan-U.S. alliance is the
foundation of Japan's foreign policy.

But current Japan-U.S. relations are excessively skewed toward
military affairs. The new administration to be launched after the
(Aug. 30) House of Representatives election is obliged to redesign
the Japan-U.S. relationship, the foundation of Japan's foreign
policy, according to the international situation of
multi-polarization and non-polarization at the beginning of the 21st
century.

Because domestic politics became unstable in the 1990s, Japan was
not able to redesign its relationship with U.S. before the 9/11
terrorist attacks on the United States and the rise of China. Japan
opted for a policy of reinforcing its military ties with the United
States and confronting China. Its rationale was that there was no
other option than follow the U.S. lead. The country still adheres to
this policy.

The United States is now oriented toward "constructive involvement"
rather than "confrontation" with China. Therefore, in dealing with
the United States, it is essential for Japan to win the trust of
other Asian countries including China.

Rather than enhance the defense relationship Japan should keep an
appropriate distance from both the United States and China while
clearly asserting its position. That requires Japan to present a
framework for the gradual reduction of U.S. bases in Japan and to
revise the Japan-U.S. Status of Forces Agreement while not creating
a military vacuum in Northeast Asia.


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The Cold War structure has collapsed, and 64 years have elapsed
since the end of WWII. We must return to the common-sense view that
the continued stationing of foreign troops in Japan is an abnormal
situation.

(6) Symposium on "Obama administration and Japan-U.S. relations"

ASAHI (Page 37) (Full)
August 26, 2009

Following the appointments of high-level officials in the state and
defense ministries in charge of Asian affairs, new U.S. Ambassador
to Japan John Roos has arrived at his post. With Roos's arrival in
his post, the lineup of the Obama administration's Japan policy team
has now been formed. President Barack Obama is expected to visit
Japan in November. In order to look ahead in the Japan-U.S.
relationship, the Asahi Shimbun will invite to a symposium Daniel
Okimoto, expert in Japanese politics and economy and a professor
emeritus at Stanford University, who has close ties to Roos.

Date and time: Sept. 17 (Thursday) 14:00 - 17:00
Place: Hamarikyu Asahi Hall in Tsukiji, Tokyo
Host: Yoichi Funabashi, chief editor of Asahi Shimbun
Application: Asahi com symposium page
(http://www.asahi.com/sympo/)
Free of charge
Maximum capacity: 200
Closing day: Sept. 4
If there are a larger number of applicants than the application
spot, a lottery will be drawn. The result of the lottery will be
informed by mail.

(7) Japan asked U.S. to keep documents on nuclear-related secret
pact classified in 1999

ASAHI (Top play) (Abridged slightly)
August 26, 2009

Nanae Kurashige

In 1999 the United States declassified documents pertaining to the
fundamental part of a "secret nuclear pact" with Japan, and Tokyo
subsequently asked Washington to retract the declassification. The
documents indicate that the two countries confirmed that Japan had
agreed to allow U.S. warships and aircrafts carrying nuclear weapons
to stop over in Japan without prior consultations. The U.S.
Department of State relabeled the documents as classified soon after
receiving the request from Japan.

A source connected with the government at the time spoke of the
sequence of events on the condition of anonymity. The fact that
Japan asked the U.S. to keep the declassified documents under cover
shows that Tokyo tried to keep the existence of the covert agreement
a secret from the general public. From the perspective of
information disclosure, it is certain that the government's
consistent explanation that the secret nuclear pact does not exist
will collapse and draw criticism.

Included in the documents were "records of discussions on the
Security Treaty" from 1959 in which Japan and the United States
confirmed that Japan would continue to allow U.S. warships and
aircrafts carrying nuclear weapons to stop over in and pass through

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Japan as before ahead of the conclusion of the revised U.S.-Japan
Security Treaty in 1960. These records were included in the
documents that were prepared in June 1960 by the State Department
Northeast Asian affairs department for the purpose of briefing
Congress. They were believed to be prepared for then Secretary of
State Christian Herter to use in answering questions when asking
Congress for approval of the ratification of the revised security
treaty.

In principle, official U.S. documents must be declassified after 25
years. The "set of documents" was declassified and their full text
was open to the public until the fall of 1999. But on Dec. 13, 1999,
only the secret pact-related part, including the "records on
discussions," was re-categorized as classified supposedly because
confidential security information was included in it.

"As soon as (the government) became aware of the declassification of
the documents, it asked the United States to retract it," the source
connected with the government at the time said. He also said that
the United States' decision to make documents public was lax,
indicating that the circumstances in Japan were not taken into
consideration in disclosing the documents. The request was made via
diplomatic channels, according to the source.

Meanwhile, a research fellow of the National Security Archive, an
American independent non-governmental research institute pursuing
information disclosure, made copies of the documents at the U.S.
National Archives and Records Administration in November 1999,
shortly before the documents were removed from the public disclosure
records. The Asahi Shimbun obtained them and reported on the whole
picture in August 2000. If it had not been for the copies, the
contents of the documents would still have been in concealment
today.

"I am not in a position to comment," Yutaka Kawashima, grand
chamberlain of Japan, said about the secret pact in an interview
with the Asahi Shimbun last month. Kawashima was serving as
administrative vice-foreign minister under Foreign Minister Yohei
Kono in the Obuchi cabinet in December 1999.

Comment by Masaaki Gabe, professor at the University of the Ryukyus:
It is rare for diplomatic documents that were opened to the public
in accordance with the State Department's proper procedures to be
re-categorized as classified. Reports on the involvement of the
Japanese government did not surprise me. Records on talks in 1963
between then Foreign Minister Masayoshi Ohira and U.S. Ambassador to
Japan Edwin O. Reischauer, too, were moved out of the public eye
after being declassified temporarily. There are other cases in which
the Japanese government's involvement is also suspected.

In principle, the United States discloses all official documents,
whereas Japan selectively makes government documents public. Vital
parts of the revised U.S.-Japan Security Treaty, the Okinawa
Reversion Agreement, and Japan-U.S. defense cooperation have not
been disclosed. As researchers, we can learn about what took place
during U.S.-Japan talks through documents that were disclosed in the
United States. What has been preventing Japan from disclosing (the
secret pact) all this time? If the government is going to continue
denying the existence of the pact, why does that part not exist in
Japan? The government must demonstrate its accountability.

(8) Editorial: Political parties should keep in mind retreat of

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postal reforms will bring about major loss

NIKKEI (Page 2) (Full)
August 26, 2009

The government's postal reform plans, which obtained public support
in the House of Representatives election four years ago, are likely
to be revised significantly after the upcoming Lower House election.
If the reform momentum wanes and if the bureaucracy-controlled
financial system is preserved, Japan will find it more difficult to
improve the conditions of its economy, now faced with such issues as
the rapidly aging society and intense global competition.

In the previous postal-reform-centered Lower House election, (the
Liberal Democratic Party (LDP) led by) then prime minister Junichiro
Koizumi won an overwhelming victory. After this election, the
government began to offer privatized postal services in October 2007
under a system of four companies placed under Japan Post Holdings
Co. The four businesses are Kampo Life Insurance Company, Postal
Savings Company, Mail Delivery Company, and OTC Services Company.
But in the campaigning for the upcoming election, the ruling and
opposition parties have vowed to revise their initial stances to one
degree or another.

With an eye on taking over the reins of government, the DPJ promises
in its policy manifesto to sweepingly revise the nation's postal
services. The party proposes to offer postal, savings and insurance
services in an integrated manner by freezing such plans as listing
stocks of Postal Savings Co. and Kamp Life Insurance Co. planned on
the market in fiscal 2010 and selling the government's shares in
these two companies and Japan Post.

The DPJ made the proposals in response to public criticism of the
planned abolition of post offices and mail-delivery service
degradation. In addition, the party apparently gave priority to
garnering votes linked to the postal business through election
cooperation with the People's New Party (PNP), which has opposed the
privatization of postal services, and to forming a coalition
government with the Social Democratic Party and the PNP. Given that
there is a group in favor of postal privatization within the party,
a senior party member said: "We will not turn the businesses into
state-run or public corporations again. But the party has yet to
present a clear post-reform vision about what business form they
will take.

If a government led by the DPJ is inaugurated and if the planned
sales of its shares in the companies are delayed from late September
2017, it means the government's involvement in the businesses will
be prolonged and will eventually undermine the postal reform's
principle of shifting the flow of money from the government to the
private sector.

The LDP's manifesto specifies that the party will maintain the
four-company system but notes: "We will take measures to secure
offering postal, savings and insurance services in an integrated
manner." The party thus indicates a willingness to revise its
conventional policy. Some party members have taken action while
bearing in mind the recent trend of postal service-related votes
leaving from the LDP, for instance, Internal Affairs &
Communications Minister Tsutomu Sato's reference to a review of the
four-business system. The LDP's scenario for postal privatization is
also extremely unclear.

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Steadily privatizing postal services is indispensable for
sustainable economic growth. The bureaucracy-controlled financial
system, under which huge funds collected with the backing of the
government are injected into ineffective projects and public
investment, has shown its limitation. It is necessary to give
consideration to local users of postal services, but the burden on
the people will never be reduced without efforts to effectuate the
services.

Under the current situation, large portions of the postal savings
and Kamp insurance premiums have been used to float government
bonds. Unless this situation is altered, the structure of the
Japanese economy will never be improved. The LDP and the DPJ should
keep in mind that the retreat of postal reform will bring about a
major loss to Japan in the future

(9) Four wise men behind Obama's Prague speech in April on "world
without nuclear weapons"

GAIKO FORUM (Pages 42-44) (Slightly abridged)
August 2009

Tsuyoshi Sunohara, Nihon Keizai Shimbun editorial staff

The road to "a world without nuclear weapons" - Behind this grand
strategy proposed by President Barack Obama, leader of the only
country that has used a nuclear bomb, the United States, is the
notion of U.S. experts that nuclear bombs are inhuman and should not
be used from a moral standpoint. How did this notion come to the
attention of the President and become a concrete policy goal? We
examined this process based on testimonies from parties involved
with this affair.

Legacy of Reykjavik

In September 2006, three foreign policy and security experts were
having dinner in a corner of the Stanford University campus in
northern California. They were George Schultz, known as the
heavyweight secretary of state during the Reagan administration,
William Perry, secretary of defense during the Clinton
administration, and Sidney Drell, a physicist turned expert on
nuclear disarmament and arms management. Just when everyone was
having a good time at the dinner, Schultz suddenly noted:

"This year marks the 20th anniversary of the U.S.-Soviet summit in
Reykjavik. Can we not examine the 'significance' of that summit on
this occasion?"

Schultz, who was present at the Reykjavik Summit, remembered clearly
that Reagan and Soviet leader Mikhail Gorbachev used the words
"eradication of nuclear arms." He was wondering if such a
possibility should not be pursued once again in the 21st Century.
Perry and Drell, who thought that Schultz's proposal was a great
idea, immediately suggested holding a workshop of experts at
Stanford University.

After the small workshop ended, Perry put forward two goals for the
future: hold a similar workshop one year later and publish the
points discussed at the workshop.

Here, Schultz set a further condition to Perry's proposal. Among the

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many participants in the workshop, there were many "dyed-in-the-wool
Democrats" (in Perry's words), including former Democratic senator
Sam Nunn, who was responsible for passing the Nunn-Lugar Act
supporting the safe management of the nuclear weapons of the former
Soviet Union. Schultz was the only Republican.

Schultz wanted the position paper to be produced by the workshop to
be "bipartisan," so he invited former Secretary of State Henry
Kissinger, who was known to have studied issues relating to nuclear
capability since his days at Harvard University, to join the group.
Schultz, Perry, Nunn, and Kissinger later came to be known as the
"four wise men" who drew up a scenario for the complete eradication
of nuclear arms.

Encounter with Obama

An op ed signed by the four was published in the U.S. paper Wall
Street Journal in early 2007. In this appeal entitled "Toward a
Nuclear-Free World," Schultz, Perry, et al enumerated the following
specific policy goals: (1) drastic cuts in the nuclear capability of
the nuclear powers; (2) eliminate tactical nuclear weapons in the
allies and friends of the United States and Russia; (3) U.S.
ratification of the CTBT (Comprehensive Nuclear Test Ban Treaty);
and (4) complete stop in the production of fissile materials used in
weapons.

As expected by Perry and his group, there was a deluge of positive
response from all over the world to this article dealing with the
momentous subject of "eradication of nuclear arms." Groups modeled
after the American workshop were launched in the UK, Germany,
Russia, and India, and they all asked for cooperation from Perry's
group.

Needless to say, the proposal of the four wise men also became a
great sensation in the United States. Amid the heated debate on the
pros and cons, Perry noticed that one senator stood out in his
positive response. His name was Barack Obama. Obama, who had already
decided at that time to run in the 2008 U.S. presidential election,
called Perry's office several times subsequently to seek his advice
on drawing up a blueprint for the eradication of nuclear arms.

Perry made the following promise to Obama: "Senator, I am an old man
over 80 years of age. On condition that even if you get elected, I
will not assume an important government position, I am willing to
help in whatever way I can."

Perry left the job of briefing Republican presidential candidate
John McCain to Schultz, and was exchanging views frequently with the
Obama camp's foreign policy and security advisers, including former
Secretary of State Madeleine Albright. Eventually, Obama's campaign
advisers began drafting concrete "ideas for a comprehensive policy
to reinforce the nuclear non-proliferation regime" (in the words of
an Obama administration official) based on the four wise men's
paper.

Bipartisan committee launched

At about the same time, an idea emerged in the U.S. Congress that a
bipartisan committee should be formed to discuss the nuclear issues.
Perry, who became the chair of the Congressional Commission on the
Strategic Posture of the United States, devoted himself to drawing
up a concrete strategy for a nuclear-free world, dividing his time

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between the group of four wise men and the Congressional
commission.

Perry is a mathematician by training and is known for his promotion
of the development of stealth fighters. His approach was based on a
realistic geopolitical viewpoint. He called this "lead and hedge."

To reach the "distant summit" (in the words of Perry) of eradication
of all nuclear weapons, a base camp needs to be built, and "two
paths" consisting of: (1) the maintenance of deterrence; and (2)
reinforcing arms management and the non-proliferation regime, will
be built from this base camp toward the reduction of nuclear arms.
This "base camp concept" came to be supported by a certain measure
of consensus at the bipartisan Congressional commission.

It will be difficult to achieve the elimination of all nuclear
weapons without a dramatic geopolitical change on earth. It is
necessary to maintain nuclear deterrence not only for America, but
expanded deterrence (nuclear umbrella) will also have to be
maintained for allies and friendly countries. The "strategic
ambiguity" on the "first use of nuclear weapons" will have to be
maintained for the time being.

The recommendations in the final report issued by the Congressional
Commission on the Strategic Posture of the United States on May 6,
2009 point to the fact that there will be many twists and turns and
difficult problems on the path to a "nuclear-free world."

Prague speech

One month before Perry and his group submitted their final report,
Obama, the 44th president of the United States was in Prague,
capital of the Czech Republic in East Europe, on April 6. There, he
gave a policy speech on realizing "a world without nuclear weapons,"
a policy he had been advocating since the presidential election
campaign, and called on the world for cooperation.

He cited specifically the ratification of the CTBT, which the
Clinton and Bush administrations had given up on, and negotiations
for a new treaty on ending the production of fissile materials for
weapon use, declaring that the U.S. will exert utmost efforts for
the eradication of nuclear arms.

Furthermore, Obama became the first U.S. president to talk about the
"moral responsibility of the only nuclear power to have used a
nuclear weapon" because the U.S. dropped atomic bombs on Hiroshima
and Nagasaki during World War II.

Obama stated the above unequivocally even after receiving reports
that some 8,000 kilometers from Prague, North Korea had fired its
long-range ballistic missile "Taepodong-2" into the Pacific Ocean.
His resolute stance came as a "pleasant surprise" even to Perry, who
had advised Obama on the path to "a world without nuclear weapons."

About a week before the Prague speech, Perry visited Moscow with the
other three wise men. During their meeting with President Dmitriy
Medvedev at the Kremlin, they were bombarded with enthusiastic
questions from the president on their vision of a "nuclear-free
world."

Perry and his partners sensed Medvedev's sincerity when he stated
forcefully that he would like to realize START (Strategic Arms

TOKYO 00001966 014 OF 014


Reduction Treaty) III with the U.S. A few hours later, Kissinger had
a separate meeting with the "real power holder in Russia" Premier
Vladimir Putin. He whispered to Perry later: "Putin is also
positive. I think we can safely conclude that there are no
contradictions or differences between Medvedev and Putin on this
issue (nuclear disarmament)."

Top priority issue

On May 19, 2009, Obama invited the four wise men to his office in
the White House to seek their advice on policies for achieving "a
world without nuclear weapons."

Obama, who was then facing an unprecedented economic crisis, with
the symbol of American manufacturing industries General Motors
filing for bankruptcy protection, but he devoted 90 minutes to his
meeting with the four wise men despite his extremely tight schedule.
Seeing that Obama did not use any notes at all and expressed his
thoughts eloquently in his own words, Perry felt once again that
"this president is serious."

The four wise men, who are planning to visit Beijing to meet
President Hu Jintao and other Chinese leaders this fall through
Kissinger's mediation, made two policy recommendations to Obama at
the meeting on what needs to be done for now, namely: "comprehensive
strategic dialogue" with Russia, including on nuclear disarmament,
and the maintenance of expanded deterrence (nuclear umbrella) for
Japan and other allies.

"The United States will cooperate with Russia and other countries to
play a leading role in eliminating the nuclear threat."

After stressing to reporters his determination to achieve "a world
without nuclear weapons" in the above terms, based on the advice of
Perry and his group, Obama related his conviction to the four wise
men: "This issue is one of my top four priorities."

ROOS

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