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Cablegate: Daily Summary of Japanese Press 08/27/09

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RUEHBJ/AMEMBASSY BEIJING 0662
RUEHUL/AMEMBASSY SEOUL 7325
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UNCLAS SECTION 01 OF 09 TOKYO 001977

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 08/27/09

INDEX:

(1) Comparison between foreign and national security policies in
LDP, DPJ manifestos (Tokyo Shimbun)

(2) "Seiron" column: Priority is to break away from
bureaucrat-controlled cabinet system (Sankei)

(3) Comparing manifestos: 1,000 SDF personnel deployed overseas
(Tokyo Shimbun)

(4) Sustainability of economic systems, equal Japan-U.S.
relationship cited as issues for new administration (Mainichi)

(5) MAFF to lift ban on investment in agricultural production
corporations by investment funds (Sankei)

(6) Editorial: DPJ pledge on Japan-U.S. FTA; Find ways to
materialize pact with rice export in mind (Sankei)

ARTICLES:

(1) Comparison between foreign and national security policies in
LDP, DPJ manifestos

TOKYO SHIMBUN (Page 2) (Full)
August 26, 2009

During the Cold-War period after the end of World War II, Japan
chose the option of depending on the U.S. in protecting itself. The
Cold War ended 20 years ago. Japan is now facing new threats, such
as international terrorism and nuclear development by North Korea
and Iran. What foreign and security policies should Japan take in
such a new international environment? The key lies in distance from
the U.S.

The Liberal Democratic Party's (LDP) basic foreign policy is to make
Japan-U.S. relations closer. Its policy manifesto for the upcoming
House of Representatives election pledges to strengthen the
Japan-U.S. alliance and to prepare a structure to enable the two
countries to jointly combat threats from North Korea and other
countries.

The manifesto notes: "In order to protect Japan from a ballistic
missile from North Korea, it should be made possible for Japan to
intercept a ballistic missile heading toward its ally, the U.S., or
protect U.S. warships under the missile defense (MD) system." The
LDP has thus come out with the stance of allowing Japan to invoke
the right to collective self-defense to protect the U.S.

Japan has prohibited invoking the right to collective self-defense
except for a case of Japan being attacked by enemies. In short,
Japan has defined "sole self-defense" as its national policy. Based
on this policy, the government has banned the exercise of the right
to collective self-defense under its interpretation of the
Constitution.

The LDP has called for changing the nation's postwar defense policy
and lifting the long-standing ban as part of efforts to deepen
cooperation with the U.S.

The manifesto specifies that Japan will continue the Maritime

TOKYO 00001977 002 OF 009


Self-Defense Force's (MSDF) refueling mission in the Indian Ocean.
Regarding antipiracy efforts in waters off Somalia, it says: "Japan
should continue antipiracy efforts in light of international
cooperation and national interests." Amid North Atlantic Treaty
Organization's (NATO) countries participating in the fight against
terrorism, the manifesto underscores the need for Japan to play a
reasonable role as the U.S.'s ally.

Prime Minister Taro Aso emphasized: "We are willing to strengthen
the foundation of Japan's national security system so that Japan
will be able to intercept a ballistic missile heading toward its
ally, the U.S."

In contrast, the Democratic Party of Japan (DPJ) is calling for
emerging from the current policy of totally depending on the U.S.
Its manifesto specifies: "To establish an equal Japan-U.S.
relationship, the party will map out a proactive diplomatic
strategy." This expression apparently reflects its view that Japan
and the U.S. have not had an equal relationship.

Specifically, the DPJ manifesto refers to reviews of the U.S.
force-realignment plan agreed on between Japan and the U.S. and of
future options for U.S. military bases. In addition, the manifesto
proposes establishing an East Asia community, indicating the party's
willingness to turn the current unqualified pro-American policy into
a multi-polar foreign policy.

Americans concerned have voiced concern, but DPJ President Yukio
Hatoyama emphasized: "I will establish a relationship of trust with
President Obama." By deepening relations between the leaders of the
two countries, Hatoyama aims to obtain U.S. understanding (of his
party's policies).

The DPJ however leaves its foreign and national security policies
vague in its manifesto.

Hatoyama has said that Japan will end the refueling mission in the
Indian Ocean when it expires next January.

The manifesto also makes no reference to the right of collective
self-defense. The party just noted in its policy index regarding the
MD system: "We will study it in a comprehensive way, taking into
account technical possibility, cost-effectiveness and other
elements."

With respect to the Japan-U.S. Status of Forces Agreement, the party
also tones down the expression "proposal for a revision" to "look
into a revision."

On the assumption that it will be taking over the reins of
government, the DPJ has begun to a pragmatic policy approach but is
apparently attempting to put aside issues over which views are split
in the party.

The New Komeito has proposed maintaining the Japan-U.S. alliance in
principle. But the party is negative about invoking the right to
collective self-defense. The party vows to reduce the defense budget
by 500 billion yen over the next five years.

The Japanese Communist Party in its manifesto proposes scrapping the
Japan-U.S. military alliance and concluding a friendship treaty with
the U.S. in a bid to establish an equal bilateral relationship.

TOKYO 00001977 003 OF 009

The Social Democratic Party's manifesto calls for immediately
pulling MSDF troops engaged in the refueling mission out of the
Indian Ocean. It also lays down a plan to legislate the three
nonnuclear principles. It further proposes creating an ombudsman
system for SDF officials.

The People's New Party, which is fielding candidates in Okinawa
Prefecture, pledges to review the U.S. force realignment plan.

(2) "Seiron" column: Priority is to break away from
bureaucrat-controlled cabinet system

SANKEI (Page 7) (Excerpts)
August 27, 2009

Taro Yayama, political commentator

"Basic law" emasculated

The significance of the forthcoming election lies solely in whether
the change from a bureaucrat-controlled cabinet system to a
parliamentary democracy under which politicians hold the initiative
in political administration can be accomplished. This will be the
first such political reform since the Meiji era. While Article 41 of
the Constitution stipulates that the Diet is the highest organ of
state power, in reality, politics has been managed in such a way
that the bureaucrats have control even over the legislature. The
upcoming general election is supposed to change this system, which
can hardly be called a democracy, to the democratic system as
stipulated in the Constitution.

The Abe cabinet had begun to take steps to reform the civil service
system, and under the Fukuda administration, the "basic law on civil
service system reform" was finally enacted, thanks to the efforts of
Minister for Administrative Reform Yoshimi Watanabe. This law aims
to: (1) eradicate amakudari (golden parachutes); and (2) break away
from bureaucrat-controlled politics.

The reason why amakudari has to be eliminated is because special
public corporations, independent administrative agencies, and other
bodies are created to accommodate bureaucrats who are urged to leave
their jobs when they are around 50 years old. At present, a total of
4,500-4,600 such organizations regularly take in 27,000-28,000
retired bureaucrats. These bodies are purely meant to benefit
retired career bureaucrats and no consideration is given to whether
they are useful to society or if tax money is being spent
unnecessarily.

The key to breaking away from bureaucrat-controlled politics is
whether the political authorities hold the right to appoint
bureaucrats. The "basic law" stipulates the creation of a personnel
bureau under the cabinet for unified performance appraisal of some
600 senior officials from all ministries. However, the law has been
emasculated due to the Aso cabinet's attempt to please the
bureaucrats. A bill on creating the personnel bureau was eventually
scrapped without any serious deliberation.

Difficult to realize local autonomy

I believe that the prospects for civil service reform will be
brighter if the Democratic Party of Japan (DPJ) takes over the reins

TOKYO 00001977 004 OF 009


of government rather than working with these lousy laws because this
party has called for breaking away from bureaucrat-controlled
politics and eradicating amakudari vigorously.

President Yukio Hatoyama had once taken a tough stance, declaring
that "bureau chiefs who are at odds with the cabinet will all be
asked to submit their resignations," but his determination has since
been shaken, as illustrated by a recent statement that, "It appears
that legally, this will be difficult to do."

Under the present system, the dismissal or demotion of civil
servants requires the approval of the National Personnel Authority
(NPA). This NPA was created in exchange for depriving the civil
servants the right to strike or engage in wage negotiations. Japan
is the only country among the industrialized countries that has a
body like this. Actually, the International Labor Organization (ILO)
has recommended repeatedly that the NPA should be abolished and
civil servants given the right to strike.

However, Rengo (Japanese Trade Union Confederation), with the
Government and Public Workers' Union under it, does not want to lose
the NPA as the price for giving up the right to strike. This is
because under the current system the wages of civil servants are
increased to levels on par with the private sector without their
having to do anything, so this is a perfect system for them. This
system will also make local autonomy - another policy goal of the
DPJ - difficult to accomplish.

Rengo, which does not want to give up its vested interests, and the
NPA are actually working together behind the scenes to emasculate
and fudge civil service reform. NPA President Masahito Tani even
boycotted the final meeting on reform measures presided over by
Prime Minister Taro Aso.

The DPJ is planning to create a "national strategy bureau" directly
under the prime minister which will be responsible for deciding on
the outline of the budget. "Cabinet committees" will be formed for
each major policy issue. The party also plans to set up an
"administrative reform council." However, some party officials in
charge of administrative reform are already saying at this early
stage that it is better not to come into conflict with the
bureaucrats, get along with the Ministry of Finance, and coexist
nicely with Rengo.

There is no lack of ways to find fault with the DPJ's policies, not
only in foreign affairs and security, but also in domestic politics.
However, the important thing is that Japan needs to get itself onto
the right path toward a parliamentary democracy.

The DPJ should bear in mind that the verdict on its administration
will depend on the first three months. It is important that the
party stands firm on its principles.

(3) Comparing manifestos: 1,000 SDF personnel deployed overseas

TOKYO SHIMBUN (Page 1) (Full)
August 26, 2007

Nearly 1,000 Self-Defense Force (SDF) personnel are now deployed
abroad. About 350 of the 1,000 personnel are engaged in the
refueling of U.S. and other countries' warships in the Indian Ocean
and about 400 are protecting ships of any nationality from pirate

TOKYO 00001977 005 OF 009


attacks in waters off Somalia. Approximately 150 Ground Self-Defense
deployed in the Republic of Djibouti monitor pirates by patrol
aircraft.

The government believes the overseas deployment of as many as 1,000
SDF personnel serves Japan's national interest. It is especially
conscious of the United States and believes that strengthening the
Japan-U.S. alliance is necessary to stave off the threat of North
Korea.

The refueling mission in the Indian Ocean began in conjunction with
the U.S. invasion of Afghanistan in response to terrorist attacks
against America. Through July 2009, Japan has provided 12 countries
with 510,000 kiloliters of fuel worth 24 billion yen free of charge.


Although antipiracy operations in waters off Somalia are to protect
security in the Gulf of Aden, a commercial artery for Japan, it is
true that Tokyo fell into step with Washington.

The antipiracy mission has often been criticized as lacking
transparency. In 2007, it was discovered that the government had
covered up an error in the amount of fuel Japan had supplied to U.S.
ships. There still remains the allegation that fuel was rerouted to
an Iraq-bound U.S. aircraft carrier and thereby diverted for the
war. Originally the government sent escort ships to waters off
Somalia by stretching the interpretation of the
maritime-policing-action provision of the SDF Law beyond its
original scope.

Against the background of the inauguration of the Obama
administration, what sort of relationship will Japan build with
America? What will become of the expanding role of the SDF overseas?
These are issues for Japan as a member of the international
community.

The Liberal Democratic Party (LDP) has called for continuing the
refueling mission in the Indian Ocean. It has also taken steps to
gain approval of collective self-defense, prohibited by the
Constitution, to strengthen the Japan-U.S. alliance. The Democratic
Party of Japan has advocated building an equal Japan-U.S. alliance
relationship. It does not plan to extend the refueling mission
beyond next January.

(4) Sustainability of economic systems, equal Japan-U.S.
relationship cited as issues for new administration

MAINICHI (Page 9) (Full)
August 26, 2009

Atsuro Kurashige, commentary writer

Newspapers are wicked. Their opinion polls predict that the
Democratic Party of Japan (DPJ) will win 300 seats, and this
information is being circulated as if it's a fact. The voters may
decide to adjust their voting behavior to prevent the DPJ from
"winning too much," but the overall situation will not change. We
should rather be thinking about what will happen after the
election.

My image of the probable outcome of the August 30 election is a
belated change of administration. The reason is that the present

TOKYO 00001977 006 OF 009


single-seat-district-centered election system was introduced in 1996
to facilitate the creation of two major parties between which power
alternates. By reducing the winner of the most number of votes in
each electoral district to one, the system is supposed to enhance
and reinforce the popular will at a given time. The election called
by Prime Minister Junichiro Koizumi in 2005 over postal
privatization is an example of an election reinforcing the
administration.

The problem is not only in the election system. The raison d'etre
and governing ability of the Liberal Democratic Party (LDP) as a
ruling party embracing a policy of anti-communism and high economic
growth has declined. Personally, I believe that the LDP's historical
mission ended after the end of the Cold War and the bursting of the
economic bubble in 1990.

In fact, the non-LDP administration of Morihiro Hosokawa came into
being in 1993, and even after the LDP's return to power, it has been
able to win only around 230 seats (239 in 1996, 233 in 2000, and 237
in 2003) - failing to win a majority of seats - in all subsequent
House of Representatives elections, except for the 2005 election
over postal privatization. The secret of its hanging on to power
lies in co-opting the Diet seats and votes of New Komeito and its
knowhow in staging "quasi change of administration" by rotating
power amongst its own people. This mechanism fell apart with the
turnover of the premiership three times in a row in the three years
after the Koizumi administration. The "DNA relay" of passing the
administration from the grandson of a former prime minister to a son
of a former prime minister, and then to another grandson of a former
prime minister exposed the shortage of talent in the party.

The DPJ's ability to improve its governing ability both in terms of
policy and personnel is also a major factor. Its present manifesto
is particularly well written. I do not think the proposal to pay out
5 trillion yen worth of child allowance is pork barrel. This is a
policy that responds to a graying society with a low birth rate by
focusing the distribution of the limited resources on child rearing.
It is a good policy based on choice and focus. The same is true of
income subsidies for farming households, toll free expressways, and
free high school education. The idea of making payments directly to
the people without channeling through the various bodies serving as
employers of retired bureaucrats is a sound one. Since the DPJ is
saying that the 17 trillion yen needed to implement all these
policies can be funded by eliminating wasteful spending under the
system of bureaucratic accounting, well, let's see how it works.

What is happening is just a natural consequence of the guidance
provided by the election system and the rise and fall of the LDP and
the DPJ. This should not come as a surprise because a change of
administration through elections is a normal feature of a democratic
state.

What we need to give serious thought to is how to make this change
of administration successful from a level-headed and mature
viewpoint. Let us recall the Hosokawa administration 16 years ago
which demised in less than one year. This administration made two
fatal mistakes. First, its setting of the political agenda (the
proposal on national welfare tax and so forth) after the
long-cherished dream of election system reform was fulfilled was not
well thought out. There was a dual structure of power under which
Ichiro Ozawa (then leader of the defunct Shinseito) was more
powerful than Prime Minister Hosokawa, and this gave rise to

TOKYO 00001977 007 OF 009


confusion.

The present situation is similar to the dual power structure in
1993. Some 100 "Ozawa children" will be born after the Lower House
election. Ozawa will again be increasing the number of Diet members
under his influence in the House of Councillors election next year
since he will preside over the campaign. The question is whether
Ozawa, who will control a majority in both houses of the Diet, will
be stupid enough to repeat the same mistake.

In any case, the beauty of a change of political regime lies in the
opportunity to set the mid- and long-term policy agenda for issues
that can only be resolved by a political decision which previous
administrations failed to tackle and in implementing this agenda. I
would like to cite two examples here for which the DPJ manifesto has
already proposed a clear policy direction.

First, making the economic systems sustainable. Japan's economic
development model of depreciation of the yen, reliance on foreign
demand, and focusing on growth is facing a formidable wall due to
the rise of the newly emerging economies and such constraints as the
earth environment and energy. How do you foster a sense of happiness
not reliant on the size of the GDP by taking advantage of the strong
yen and propelling domestic demand proficiently? Making the social
security systems sustainable will also be a tremendous job. Even a
child can figure out that the present systems will collapse as the
society moves from one where 10 working-age citizens support one
elderly person to one where three working-age citizens support one
elderly person. This will be a rare opportunity for the ruling and
opposition parties to engage in patient discussions under the DPJ's
leadership.

Second, developing an equal Japan-U.S. relationship. Former Prime
Minister Shigeru Yoshida's policy of entrusting foreign and security
policies to the United States and focusing on economic development
has produced an unprecedented success story of rapid economic growth
in the world. However, it is also a fact that this has seriously
degraded Japan's independence as a country. There needs to be a
review to find a good balance. So, what is to be done? The key
issues will be how to handle U.S. military bases in Japan and
enhancing Japan's diplomatic capability. Numerous issues that are
already in progress, including the nuclear umbrella and Futenma
relocation, need to be tackled, but I believe the key concept of a
"close and equal relationship" with the U.S. is valid. The new
administration may need wisdom and energy comparable to that during
the Meiji Restoration and the postwar reconstruction.

I would like to add one item not found in the manifesto: the
regeneration of the LDP and a new start for this party. This is also
indispensable for educating and disciplining the DPJ administration.
How do we retain a core cadre of people for this purpose? This is
another job for the voters.

(5) MAFF to lift ban on investment in agricultural production
corporations by investment funds

SANKEI (Page 3) (Abridged slightly)
August 27, 2009

The Ministry of Agriculture, Forestry and Fisheries (MAFF) on August
26 decided to set up a new system that will approve investment in
agricultural production corporations by investment funds. Currently,

TOKYO 00001977 008 OF 009


only farmers and agriculture-related companies can invest in such
corporations. MAFF aims to diversify means to procure funds
available to agricultural production corporations in order to help
them expand their business activities and advance into new
businesses, by enabling banks, security houses, and institutional
investors to invest in them through investment funds.

MAFF will incorporate in its general-account budget requests for
fiscal 2010 to be submitted to the Finance Minister on August 31 a
proposal for establishing an investment fund using Japan Finance
Corporation's funds as a model case, and submit related bills needed
to set up such a system to the regular session of the Diet next
year.

Agricultural production corporations are expected to play the role
of strengthening the competitiveness of Japanese agriculture by
urging farm households to expand their farming scale or companies to
advance into the farm sector. However, investors in such
corporations are limited due to the requirements for establishment
stipulated under the Agricultural Land Act. In addition, if such
corporations do business using rented farmland, they are unable to
borrow money from banks as they have no collateral. As such, the
means available to them for raising funds are extremely limited. For
this reason, MAFF has determined that it is necessary to pave the
way for direct investment in them through investment funds.

Under the envisaged system, investment funds will not be given a
voting right, which allows investors to become involved in
management. However, there will be no limit to the amount of money
they can invest. MAFF will also look into measures to curb
investment funds' activities, by obligating them to notify it of
their activities. It will also launch an investment fund as a model
case by fiscal 2010 using Japan Finance Corporation's funds as a
base and publicly seeking investors from the private sector.

(6) Editorial: DPJ pledge on Japan-U.S. FTA; Find ways to
materialize pact with rice export in mind

SANKEI (Page 2) (Full)
August 27, 2009

Free trade agreement (FTA) policy is a major campaign issue in the
Lower House election. The Democratic Party of Japan (DPJ) at first
noted in its manifesto that if it came into power, it wanted to sign
an FTA with the U.S. and promote liberalization of trade and
investment. However, meeting opposition from agricultural
organizations and criticism from Liberal Democratic Party (LDP)
lawmakers that such a pact would destroy Japanese agriculture and
farming communities, the DPJ has changed the wording to "will
promote talks on such a pact."

If this is its stance, it cannot be helped even if it is criticized
as running about in confusion in pursuit of votes. How is it going
to ensure consistency between trade policy and agricultural
administration? It is clear from its haphazard approach that the DPJ
has yet to sort out its stance to such essential issues.

Japanese business circles have been wanting to bring about an FTA
with the U.S. In particular, export-oriented industries are
concerned that they would suffer a setback in price competition,
since South Korea has already signed such a pact with the U.S.


TOKYO 00001977 009 OF 009


The U.S. is bound to ask for the total abolition of trade tariffs as
a condition for entering into FTA talks. South Korea has agreed to
scrap tariffs on more than 99 percent of trade items. Given the
U.S.-South Korean FTA, Japan would have to decide on extensive
agricultural and livestock market liberalization, if it is to sign
such an accord with the U.S. The government therefore has been
reluctant to go ahead with FTA talks with the U.S.

However, agriculture should not remain an obstacle to trade talks
forever. The LDP's manifesto also notes that it will proactively
pursue an early settlement of talks at the World Trade Organization
(WTO) and FTA talks. The DPJ has pledged to sign an FTA with the
U.S., which could trigger moves to launch in-depth discussions on
trade liberalization and the protection of agriculture, issues that
have thus far been considered taboo.

The focus of argument is to settle such problems as abandoned
farming land, the aging of a farming population and a serious lack
of young farmers to work the fields when their elders retire. It is
possible to export Japan's good farm products, such as rice and
apples, if Japanese farmers improve their competitiveness, by
finding ways to improve production efficiency.

However, implementing policies is intertwined with ensuring funding
sources. The DPJ has pledged to compensate farm households' income
to cover losses incurred by farmers due to gaps between the cost of
the cultivation of rice and other crops and the sales prices of
such, after setting a goal of production volume. However, there is
concern that such a cost could increase unlimitedly, depending on
movements of the prices of agricultural products.

Free trade is the basis of growth, and the WTO and the FTA are a
means to achieve that end. As such, it is not wise for Japan to put
on hold these issues. A trade strategy, which is linked to the
planning of agricultural revitalization as a set, is a key issue,
which the next administration cannot avoid.

ROOS

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