Cablegate: Daily Summary of Japanese Press 09/01/09

DE RUEHKO #2010/01 2440656
P 010656Z SEP 09




E.O. 12958: N/A




(1) Can DPJ achieve breakthrough and realize election pledges?

(2) DPJ President Hatoyama plans fundamental revision of budget
request guidelines with launch of new administration close at hand

(3) Column article: "Think carefully, Mr. Hatoyama. Differentiation
in foreign policy makes no sense" (Sankei)

(4) Editorial: LDP achieves overwhelming victory in Lower House
election; people have changed Japan; change of administration
requires new spirit (Mainichi)

(5) Change of government: Rapture and anxiety of "Prime Minister
Hatoyama" (Sankei)

(6) DPJ to review Defense Ministry's budget request (Sankei)

(7) LDP, New Komeito's Fall (Part 2): Internal policy conflicts;
path toward party's regeneration not in sight (Tokyo Shimbun)


(1) Can DPJ achieve breakthrough and realize election pledges?

ASAHI (Page 4) (Abridged slightly)
August 31, 2009

President Yukio Hatoyama of the Democratic Party of Japan (DPJ) has
starting to work on forming his cabinet. The new administration will
likely be launched as early as mid-September. The administration
will face the test of whether it can really carry out the pledges
the DPJ made during the election campaign. The Hatoyama cabinet will
face a heap of challenges, including a drastic change to the budget
compiled by the LDP administration, regaining trust in the public
pension system, rebuilding medical services, and establishing equal
Japan-U.S. relations.

Bold budget change key to secure funding sources

Compilation of fiscal 2010 budget

Major policy proposals alone, for which the DPJ has indicated
implementation schedules in its policy manifesto, would require
funding resources worth 7.1 trillion yen in fiscal 2010. Whether the
government can secure the necessary funds depends on how drastically
it can change the government budget.

The key player in compiling the budget is a national strategy bureau
directly reporting to the prime minister. The bureau will likely set
a budget outline. The administrative renewal council, which will
also be newly established, will reexamine existing projects in the
budget so as to squeeze funding resources out of them.

The panel will start review the Aso cabinet-compiled fiscal 2009
extra budget worth roughly 14 trillion yen. The plan is to squeeze
out approximately 3 trillion yen through carefully examining its

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details, by such means as calling off the construction of a national
media art center (hall for displaying anime cartoons) and
appropriating the extracted amount into the fiscal 2010 budget.

The administration will likely submit the extra budget after calling
off projects that it has determined to be unnecessary, cancelling
some project items in the existing extra budget or replacing them
with other items.

However, contracts with private companies have already been made for
some spending items. Local governments have set up a vehicle for
funds that are set to receive government subsidies for multiple
years. A senior official of a certain economy-related government
agency said, "I cannot imagine how the new administration will be
able to convince the persons involved."

The budget combining the general account and the special account
totals 207 trillion yen, of which the panel will make an overall
revision to items worth 70 trillion yen when compiling the fiscal
2010 budget. Substantive cuts in subsidies or cancellations of
public works are likely.

Of the 70 trillion yen, subsidies account for 49 trillion. It is
difficult to slash most of subsidies, as they are for social
security and local allocation tax grants. Trimming public works
could further undermine local economies. Lawmakers elected from
local constituencies may oppose such cuts, which would necessitate
the coordination of views among party members.

Some are concerned about a possible delay in the compilation of the
budget. Government agencies usually submit their budget requests by
the end of August and compilation work begins to be ready for the
final drafting of the budget at year's end. The DPJ intends to ask
various government agencies to submit their requests again so as to
reflect their wishes in the draft budget.

The Japanese economy is not yet on a recovery track. Although the
growth rate for the April-June quarter was positive, there is
concern that stimulus measures might run out of steam.

Takahide Kiuchi, a chief economist at the Financial and Economic
Research Center, Nomura Securities, pointed out: "If public
investment is slashed in the second half of the fiscal 2009 when the
negative effects of stimulus measures will be felt, the economy is
bound to plunge." He estimates that a 3 trillion yen cut in the
fiscal 2009 extra budget would push down the growth rate by 0.4
percent." The DPJ intends to expand domestic demand by enriching the
household budget through the payment of child allowances and other
benefits. However, since the Japanese economy relies deeply on
foreign demand, the DPJ will find it difficult to manage the

Fiscal reconstruction is another serious challenge. Hatoyama has
revealed a policy of constraining the issuance of new government
bonds in fiscal 2010 to less than 44 trillion yen - the amount
issued in fiscal 2009 -- after the compilation of the extra budget.
However, the outstanding balance of long-term debts combining those
held by both the central and local governments will reach 816
trillion yen as at the end of fiscal 2009. If the fiscal
reconstruction goal to be revealed coinciding with the compilation
of the budget fails to persuade market participants, long-term
interest rates will rise, creating a drag on the economy.

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Some households opposed to child allowances

Social security

The DPJ advocates child allowances as the showcase of the new
administration's policies. Each child will receive 26,000 yen per
month. The benefit will be provided until recipients graduate from
middle school. This would cost 2.7 trillion yen even in fiscal 2010,
when only half of that amount is handed out. Since the DPJ-proposed
new allowance is almost three times the amount of the present
allowance (paid until recipients graduate from a primary school),
securing funding sources is a major challenge.

The DPJ plans to secure funding resources, by abolishing spousal and
dependent deductions from income tax. However, households with
full-time homemakers that have no children might strongly oppose the

During the campaign, Hatoyama repeatedly stressed the pension record
issue in his stump speeches, saying, "Your pensions are falling
apart." The DPJ has pledged to tackle the issue intensively as a
national project at the cost of 400 billion yen over two years.
However, a concrete plan, such as the amount of personnel to work on
the issue, how to secure the necessary number of personnel, and to
what extent the issue should be worked out in two years, has yet to
be set.

Prompt measures are sought against the spread of the new swine flu
virus. The administration's crisis management capability could be
put to the test on this issue as well.

An especially serious question is how to secure vaccines. At
present, it is estimated that vaccines for 13 million to 17 million
people will be manufactured domestically before year's end. The
amount is far below the amount needed to vaccinate 53 million people
as estimated by the Ministry of Health, Labor and Welfare. Whether
to import vaccines and how to prioritize persons eligible for
vaccination must be decided as early as September.

The new administration is going to be launched right after the
jobless rate hit the worst-ever level of 5.7 percent in July. The
DPJ has pledged to build a second safety net to assist those who no
longer receive unemployment benefits, non-regular workers, and those
who cannot be covered by employment insurance to reenter the

The LDP-New Komeito administration established a measure to pay
about 100,000 yen in living expenses to those undergoing vocational
training as a temporary measure with a three-year life span. The DPJ
will take over this measure for the time being. However, it intends
to submit job-seeker assistance legislation to the Diet and
implement the measure incorporated in the bill in fiscal 2011 as a
permanent system.

On the issue of the ways people work, the focus is on amending the
Worker Dispatch Law. The DPJ incorporated a total ban on dispatching
workers hired by the day and a ban in principle on dispatching
workers to manufacturing firms in a package of common policies,
which it has compiled in cooperation with the Social Democratic
Party and the People's New Party.

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However, there is opposition to placing total bans even among DPJ
members. Business circles are concerned that such bans would deprive
job-seekers of job opportunities. Labor-management talks on the
issue are expected to encounter difficulties.

(2) DPJ President Hatoyama plans fundamental revision of budget
request guidelines with launch of new administration close at hand

ASAHI (Page 6) (Excerpts)
September 1, 2009

All government agencies have now presented their budget request
guidelines for the government's fiscal 2010 budget. There are many
requests that have different policy lines from those of the
Democratic Party of Japan (DPJ). Since it is expected that the
budget request guideline system itself might be annulled, the
Finance Ministry is unable to enter full-fledged screening. It is
now waiting for the DPJ to come up with a decision.

The general account of budget request outlines for the government's
fiscal 2010 budget totaled the largest-ever amount of roughly 92.13
trillion yen, up about 3.58 trillion yen, compared with the fiscal
2009 initial budget. DPJ President Hatoyama indicated his stance of
substantively revising it, saying, "It is necessary to make efforts
to conduct a fundamental revision of it."

The total amount of general expenditures expanded to 52.67 7
trillion yen, up 940 billion yen from the fiscal 2009 initial
budget, due to a switch from the previous policy to curb social
security expenditures. Local allocation tax grants also increased to
17.5428 trillion yen, up 969.5 billion yen, due to a grim tax
revenue estimate. The amount of requests for debt servicing costs,
which is equivalent to the repayment of interest and principle of
government debts, reached 21.9158 trillion yen, up 1.6721 trillion

The Finance Ministry intends to press ahead with the screening of
compulsory expenditures that have to be appropriated under the
system. The DPJ's policy will likely require a substantive revision
to budget request guidelines themselves.

Battle over budget: Sources of contention in requests filed by
various government agencies

Kazunori Yamanoi of the DPJ, who was reelected in the Lower House
election, called Public Assistance Division chief Hiroyuki Mitsuishi
of the Ministry of Health, Labor and Welfare (MHLW) to his office.
The purpose of the meeting was to ask for his cooperation in
reinstating additional benefits paid to single-mother households
that are receiving welfare benefits, a system that was completely
abolished this year.

The MHLW did not include a request for additional benefits for such
households in its budget request guidelines in accordance with the
Aso administration's policy. Yamanoi asked Mitsuishi to start
looking into the reinstatement of such benefits in a positive
manner, saying, "There is a strong possibility of a new MHLW
minister ordering the reinstatement of such a benefit in about two
weeks' time." The division chief simply replied, "We will look into
such if we are ordered to do so." The reality is, however, that if
the DPJ formally issues such an order, the MHLW has to follow it.
Such sources of contention are visible among requests filed by the

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Ministry of Land, Infrastructure and Transport (MLIT), as well,
which the DPJ pointed out as a target of budgetary cuts.

Targets mentioned by name

Typical examples of such requests are the construction of the Yamba
Dam in Gumma Prefecture and the Kawabe River Dam in Kumamoto
Prefecture. The DPJ has singled out both projects as targets for
suspension. Vice MLIT Minister Hiroaki Taniguchi during a press
conference on the 31st said, "I would like to explain to the new
ministers the circumstances of the projects and our approach to
them." Essentially he wants to avoid a head-on collision with the
DPJ. However, his first move was to maintain the previous policy.
MLIT's budget requests, such as one for scrapping the provisional
gasoline tax rate, include a number of contentious issues.

The Ministry of Agriculture, Forestry and Fisheries (MAFF) has also
requested 2,475 billion yen for measures to strengthen its rice
acreage reduction policy, including the full utilization of paddy
fields for other purposes, taking no notice of the DPJ's showcase
policy of compensating individual farm households' income. Vice MAFF
Minister Michio Ide criticized the DPJ's policy. Hatoyama admonished
him, saying, "In Britain, he would have been fired." The DPJ and
MAFF are bound to face off in compiling the budget.

A senior Education, Culture, Sports, Science and Technology Ministry
(MEXT) official said, "The DPJ's stance is close to ours in the
sense that it intends to boost the education budget as a whole."
However, although MEXT shares the same stance with the DPJ in
outline, Vice MEXT Minister Toichi Sakata during a regular press
conference on the 31st cited the method of providing assistance as
an item up for consideration. He said: "Our stance is slightly
different from that of the DPJ, which intends to pay benefits to all
children regardless of their economic conditions. Will the benefits
be paid to children's households or to the schools? A simple and
speedy method is desirable since the system will involve
administrative costs."

(3) Column article: "Think carefully, Mr. Hatoyama. Differentiation
in foreign policy makes no sense"

SANKEI (Pages 1, 2) (Full)
September 1, 2009

Yukio Okamoto, foreign affairs commentator

The article contributed by Mr. Hatoyama (Democratic Party of Japan
President Yukio Hatoyama) to The New York Times before the election
took the world by surprise. Let me translate some passages from it:

"In the post-Cold War period, Japan has been continually buffeted by
the winds of market fundamentalism in a U.S.-led movement that is
more usually called globalization... Consequently, human dignity is

"The global economy has damaged traditional economic activities and
destroyed local communities."

His position on security issues, which I will discuss later, is also
radical. This article, which heaps criticism upon the United States
and negates the foundation of Japan's own existence, has created a
stir. One American expert was quick to react to this article:

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"Hatoyama is no different from Chavez (the Venezuelan president)."

Why had no one checked this English-language article that would hurt
Mr. Hatoyama? Never mind Chavez. Another person who, like this
article, blamed American unilateralism for what went wrong in the
world is (then) Russian President Vladimir Putin, in his speech in
Munich in February 2007. But even Putin did not criticize globalism.
What Hatoyama said in his article is closer to the U.S. and European
NGOs that protest against globalism and continually obstruct the G-8

Japan is not a victim of globalism. It is rather a beneficiary of a
world economy where people, money, and goods move freely. We would
prefer to see Mr. Hatoyama argue for international cooperation.

In the past two weeks, I have traveled to many constituencies
talking to voters. It is evident that the outcome of the election is
not a landslide victory for the DPJ, but rather a crushing defeat
for the Liberal Democratic Party (LDP), which self-destructed.
One-time LDP supporters had rebelled. That is why there was great
dissatisfaction with Mr. Aso, who during the campaign kept up a
barrage of criticism of the DPJ. In response the voters cried out,
"We are saying you and the LDP are no good. Tell us how you will
change the LDP rather than criticize other parties!"

The people have not thrown their support behind DPJ's policies.
Therefore, I would like to ask Mr. Hatoyama to have the DPJ study
realistic policies at full speed. Foreign policy is particularly
important. Unlike domestic policies, it is hard to start all over
again when a mistake is made in foreign policy.

Take, for example, the revision of the Japan-U.S. Status of Forces
Agreement (SOFA). During the election campaign, the DPJ focused only
on the provision by which Japanese are not given custody of a
suspect before indictment and asserted repeatedly that SOFA is
unequal. The U.S. will probably be reluctant to revise SOFA because
of the impact of such revision on the nearly 100 SOFAs it has
concluded with various countries around the world. This will lead to
growing discontent among the Japanese people, who have been
indoctrinated into believing that the SOFA is "unequal."

The Japan-U.S. SOFA is not particularly "unequal." Some of its key
provisions actually benefit Japan. For example, except for crimes
committed while performing official duties, offenses by U.S.
soldiers are tried by Japanese courts. In Germany, they are tried by
the U.S. forces. This provision on judicial jurisdiction is more
fundamental than the technical issue of custody of the suspect
pending indictment.

Furthermore, assuming that negotiations for SOFA revision are
initiated, what will happen? U.S. forces, who have long wanted to
revise SOFA provisions for greater freedom of movement and freedom
to conduct exercises, will probably also present demands for
revision. In diplomacy, one cannot say, "We reject all your demands
but we want you to accept all our demands." So what will happen?

If the Self-Defense Forces (SDF) ships are to be withdrawn from the
Indian Ocean, alternative plans should be drawn up. Japan provides
economic aid to Afghanistan, and JICA (Japan International
Cooperation Agency) officials and experts are engaged in selfless
activities there. However, the refueling mission in the Indian
Ocean, which is in essence a sharing of the risk in the war against

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terrorism, is different in nature. Japan's "war against terrorism"
currently solely consists of dispatching two Ministry of Foreign
Affairs officials who are constantly guarded by the army of a small
country, Lithuania. It is not America, but Europe, that is watching
what Japan is doing. If Japan is unable to meet the international
community's demands to share the risk on the ground and is even
withdrawing its ships from Indian Ocean, this will amount to
dropping out from the society of international mutual aid.

However, the basic thinking on the Japan-U.S. alliance is much more
important than policies on specific issues.

Hatoyama wrote in his article: "How should Japan maintain its
political and economic independence ... when caught between the
United States, which is fighting to retain its position as the
world's dominant power, and China, which is seeking ways to become

The article did have a sentence reading "the Japan-U.S. security
pact will continue to be the cornerstone of Japanese diplomatic
policy," but there is no indication of the recognition that Japan is
an ally of the U.S.

The U.S. is a country with the legal obligation to protect Japan
from aggression under the security treaty. On the other hand, China
is a country that has declared the Senkaku Islands to be its
territory under its Territorial Sea Law of 1992, that has stipulated
the main mission of its navy is to protect its maritime interests
under the 1997 National Defense Law, and that is building a strong
blue water fleet. Hatoyama regards America and China as equal and
talks about maintaining independence from these two countries.

The answer Hatoyama offers in his article is regional integration
and a collective security framework in Asia. Can a foundation for
collective security be built in an Asia where countries have
different political systems, embrace different values, and differ
also in terms of military power? This will probably only be possible
in the distant future.

If Japan chooses to maintain equal distance from the U.S. and China,
it has only one option: independent defense capability, in other
words, armed neutrality. For this purpose, the size of the SDF will
have to be increased at least several times, and Japan will have to
possess a nuclear capability. If that is not acceptable, the only
alternative is unarmed neutrality, which was once advocated by the
left wing of the (defunct) Japan Socialist Party.

If the DPJ talks about "keeping an appropriate distance from the
U.S.," this will only please the pro-China groups in the U.S. They
will say, "Why should we have any qualms about Japan? Japan itself
is saying that it should keep distance from the U.S." If Japan helps
enhance such an atmosphere, in the worst case, the fate of the
Pacific will be decided by "G-2," consisting of the U.S. and China,
without Japan's input. We pin our hopes on the DPJ's diplomacy with
Asia, particularly with China. However, this should be based on a
solid Japan-U.S. relationship.

The LDP made many mistakes. That is why it suffered a debacle in the
election. However, it is an undeniable fact that the foreign policy
consisting of the Japan-U.S. security alliance and light armament
upheld consistently by conservative politics in the postwar period
has been instrumental for Japan's security and prosperity.

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Differentiation from the previous foreign policy just for the sake
of differentiation does not make any sense.

This is what we want Mr. Hatoyama to ponder as he prepares to launch
his administration.

(4) Editorial: LDP achieves overwhelming victory in Lower House
election; people have changed Japan; change of administration
requires new spirit

MAINICHI (Page 4) (Full)
August 31, 2009

An angry wave swept through (the House of Representatives). Veteran
Liberal Democratic Party (LDP) lawmakers and factional leaders were
defeated by unknown candidates one after another. The people clearly
opted for change. Their decision on a change of government will go
down in history.

In the Lower House election (yesterday), the Democratic Party of
Japan (DPJ) garnered over 300 seats, paving the way for a DPJ-led
administration. Meanwhile, the LDP not only lost its status as the
leading party in the Lower House for the first time but also saw its
strength diminished to one-third of its reelection power, putting an
end to the LDP-New Komeito administration.

True democracy in which the leading party changes through an
election has long been absent from the Japanese political scene. The
new administration will be launched for the first time in the
postwar period after a head-on battle between the two major

A historic power shift

Although they had some anxiety about the DPJ, the public felt an
urgent need to find a breakthrough to the deadlocked political
situation. That sense of urgency resulted in the tremendous
political upheaval. A rocky road lies ahead for the new
administration to be launched by "Prime Minister Yukio Hatoyama."
(The new DPJ administration) must demonstrate to the general public
its spirit and determination to change politics completely without
resorting to brute numerical strength.

More than simply the winds of political change, the outcome
represented a revolution and a clear farewell to the LDP-New Komeito
administration. Voter turnout, which reached nearly 70 percent,
demonstrates the public's strong will to change politics. The
collapse of LDP strongholds were symbolic events. Popular will
seeking change developed into a generational change in lawmakers.

The Hosokawa cabinet that was launched after the 1993 Lower House
election was also a non-LDP administration, but the LDP was still
the largest party and political reform was a point at issue. In 1955
the Liberal Democratic Party was established and began its long
period of single party rule.

That system was finally ended in the fifth Lower House election
since the single-seat constituency system was introduced to choose
the party best suited to take up the reins of government.
Democracy's original function of a power shift by means of an
election has been restored, and that deserves a positive assessment
as political progress.

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Although it is said that single-seat constituencies tend to have a
snowball effect, this sea change cannot be explained fully without
mentioning changes in the political and social structures.

The LDP's power rested on the rigid structure of distributing gains
to industrial circles and organizations and of administrative
management by bureaucrats. The Koizumi reform initiative emerged
when the nation's economy was in the doldrums and its fiscal deficit
was snowballing. The LDP, advocating a small government, achieved an
overwhelming victory in the 2005 Lower House election, and the party
seemed resuscitated as a result.

But the medical system, the pension system, socioeconomic
disparities, and the battered local regions rapidly exacerbated
people's anxiety about their livelihoods, and the LDP's reform
policy course spiraled out of control. Two incumbent prime ministers
walked off the job during the lopsided Diet (control of the Lower
House by the ruling party, and of the Upper House by the opposition)
after the LDP's serious setback in the (2007) House of Councillors
election, exposing the party's lack of ability to govern. Public
discontent with the Aso administration, which continually postponed
dissolution of the Lower House without reexamining Koizumi's
politics, crescendoed .

Further, vote-collecting machines underpinning industrial circles,
rural areas, and local assemblymen hewing to the Koizumi policy
course also rapidly declined and turned their backs on the LDP. With
second- and third-generation lawmakers reigning supreme, the LDP
lacked able personnel as well. It can hardly be said that Prime
Minister Taro Aso had what it takes as a leader to make a
breakthrough in the impasse. Suffering from institutional fatigue,
the LDP was on the verge of disintegration.

In stark contrast to the LDP, which remained focused on industries
and unable to break away from bureaucrat-led policymaking, the DPJ
successfully presented points at issue by advocating
livelihood-oriented policies and a departure from
bureaucratic-controlled policymaking in its manifesto under the
slogan of regime change. The voters' selection of the DPJ after the
40-day campaign period carries great significance.

But a ship that set sail after winning a large number of seats
carries many risks. Great expectations go hand in hand with deep
disappointments. Needless to say, the administration must not be run
solely on the basis of numerical strength. An Upper House election
is scheduled for next summer. (A DPJ administration) will be pressed
to show evidence for political change.

LDP urged to make a fresh start

A politician-led decision-making system must be built swiftly. It is
essential to put an end to the bureaucrat-led cabinet system
epitomized by bureaucratic sectionalism so as not to follow the bad
example of the Hosokawa cabinet, which failed to control

The DPJ also must clarity its ambiguous foreign and security
policies in the process of forming a coalition with other parties.
People voted for the DPJ in the knowledge of risks associated with
the party, such as its insufficient explanation of funding sources.
The DPJ must not have too much confidence in its victory by

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interpreting it as public trust in its ability to govern.

The LDP's role, too, will be incredibly important as an opposition
party. The party continued to remain in power even after its very
presence was questioned following the collapse of the Cold War and
the bursting of the Japan's bubble economy, and that led to its

It is too early to conclude that yesterday's election has ushered in
a two-party system composed of the DPJ and LDP. Nevertheless, the
rule for deciding the administrative framework through an election
must be established in the country.

There are many pressing issues, such as the economic crisis, fiscal
deficit, the pension system, and medical services. The new
administration must by all means deliver on its campaign pledges.

Voters who have entrusted the helm of government (to the DPJ), too,
bear responsibility. Japan has now entered a new era in which voters
will take part in and monitor politics more actively than before.

(5) Change of government: Rapture and anxiety of "Prime Minister

SANKEI (Page 1) (Abridged slightly)
August 31, 2009

With his assumption of the prime minister's post becoming certain,
Democratic Party of Japan (DPJ) President Yukio Hatoyama probably
has mixed feelings now. He said just after midnight on Aug. 31 at a
multiuse facility in the Roppongi district, where the DPJ set up a
vote-counting center, "I thank voters for choosing a change of
government in a courageous manner." It was his second press
conference, during which he attempted to wear a severe expression.

There were scenes in which Hatoyama was chatting pleasantly with
Deputy President Naoto Kan and Azuma Koshiishi, chairman of the DPJ
caucus in the House of Councillors. However, he tried not to smile
during televised press conferences on which the eyes of the public
were on him. At the press conference in Roppongi he said, "I would
like to carry out politics without becoming arrogant about our
numerical power."

Appearing on TV programs reporting the results of the election,
Deputy Secretary General Yoshihiko Noda, too, had a fixed expression
on his face and said, "Circumstances are such that we are sure to
seize power." The fact that the DPJ won more than 300 seats means
that the public has high hopes for the party. For Hatoyama, who will
steer the new government, the people's high expectations for his
party are a source of encouragement but also a source of pressure.

The DPJ's victory had already been taken into consideration,
however. Yesterday morning, Hatoyama told a lawmaker, a close aide
of his, who was visiting his constituency, "You don't have to come
to Tokyo, because I will not announce a roster of the party's new
key executives."

In creating the new roster of DPJ executives the focus will be on
what post Deputy President Ichiro Ozawa, who was in charge of the
election, will be given. Appearing on a Fuji TV program last night,
Hatoyama revealed that he would give Ozawa a key party post with an
eye on next year's Upper House election. "As leader of Team DPJ," he

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said "I want Mr. Ozawa to pave the way for all members to play
ball." Asked by reporters last night about consultations on the
formation of a coalition government, he said:

"I think Mr. Ozawa will probably say that it is inappropriate to
answer such a question under circumstances in which it has yet to be
decided that we will assume the reins of government."

Hatoyama mentioned Ozawa's name on purpose. It was a moment that
hinted Ozawa was still playing the leading role in the DPJ.

On Aug. 28, a senior LDP member with close ties to Ozawa reportedly
sought to constrain Hatoyama's aide, saying, "I have heard that you
are talking about an administrative concept and new executives as if
we seized power. It is not that easy to control the political

On NHK and other TV programs last night, Ozawa was often asked about
the possibility of expanding his influence in the DPJ owing to the
large number of successful candidates, the so-called "Ozawa
children." Even some DPJ members are worried about the prediction
that Ozawa will strengthen his control of the administration from
behind the scenes and establish a dual power structure.

However, Ozawa said, "Your thinking of politics at such a level is a
problem of you people in the mass media."

Ozawa on TV programs stressed that he "will support the party with
an utmost effort as a member of the DPJ." There is no doubt that
Ozawa's any move will control the future political situation.

Appearing on an NHK program, Secretary General Katsuya Okada said,
"I am filled with deep emotion" about the results of the election.
That was the only time he showed any emotion, and he immediately
pulled himself together.

Okada said, "A rocky road lies ahead" for the DPJ. Therefore, DPJ
leaders' remarks appear to indicate their awareness that it will be
difficult for them to steer a Hatoyama administration.

(6) DPJ to review Defense Ministry's budget request

TOKYO SHIMBUN (Page 30) (Full)
September 1, 2009

The Defense Ministry decided yesterday to earmark 116.6 billion yen
in its budget request for next fiscal year to build a destroyer of
the flattop type, which will carry helicopters and will be the
largest of all vessels for the Maritime Self-Defense Force. The
newly planned destroyer can carry nine helicopters against China's
naval buildup. The new destroyer's blueprint, if translated into
reality, will become a symbol of the arms race in East Asia and will
inevitably become controversial. The Democratic Party of Japan has
asked central government ministries and agencies to go over their
respective budget requests. However, the MSDF brass is interested in
acquiring the new destroyer.

The new helicopter destroyer has a continuous flat deck and looks
like an aircraft carrier. This helicopter destroyer has a
displacement of 19,500 tons at full load and has an overall length
of 248 meters, a size larger than the Hyuga and the Ise, which are
helicopter destroyers and will be commissioned soon.

TOKYO 00002010 012 OF 014

A helicopter destroyer of the Hyuga class can be loaded with up to
four helicopters for patrol and other purposes. Meanwhile, the newly
planned helicopter destroyer can carry up to nine helicopters on
board. The MSDF plans to build this new vessel "to meet the naval
buildup of neighboring countries," an MSDF staff officer explained.
In the past five years, China has built 17 submarines and 10
destroyers. In addition, China is now aiming to acquire aircraft
carriers. The new destroyer is intended to cope with such a naval

The new destroyer will have dual functions to play the roles of a
supply ship and a destroyer currently sent to the Indian Ocean.
Furthermore, the new vessel will also play the role of a transport
ship to sealift about 40 vehicles and about 300 troops from the
Ground Self-Defense Force on a mission to strengthen the defense of
Japan's outlying islands.

The Defense Ministry positions the new destroyer as a replacement
for the Shirane, a helicopter destroyer to be mothballed. However,
the new vessel is a multipurpose ship that is far more capable than
the Shirane.

Under the current plan, the new destroyer cannot carry fighter or
attack planes. The new destroyer therefore does not come under the
category of an "attack carrier," which the government's
constitutional interpretation does not allow Japan to possess.
However, the Osumi, an MSDF transport ship, has its bridge on the
starboard, and the Hyuga has a continuous deck. The new destroyer is
designed to have a longer flat deck. This could pave the way for
building an aircraft carrier.

(7) LDP, New Komeito's Fall (Part 2): Internal policy conflicts;
path toward party's regeneration not in sight

SANKEI (Page 5) (Full)
September 1, 2009

At his news conference on the ninth floor of the Liberal Democratic
Party (LDP) headquarters at 2:00 p.m. on August 31, Prime Minister
Taro Aso (LDP president) began, "We lost many comrades, and this is
extremely regrettable. I apologize deeply to the voters who
supported us and I am painfully aware of my responsibility as the
party president." He reiterated his intention to resign, but he
appeared to have gotten over what happened and looked calm.

Aso made the following analysis of the cause of the defeat: "There
was discontent with the atmosphere of despair in society, with
social disparities, and other issues. Due to the Koizumi reforms, we
have not paid enough attention to our traditional support base."
Then he added with emphasis, "We need to hold a presidential
election promptly and regenerate the party in order to take back
political power."

Nevertheless, the shock from the historic debacle is tremendous.
Many LDP Diet members simply do not know how to deal with the fact
that the party has gone into opposition. Most of the elected Diet
members are making courtesy calls in their constituencies and only a
few are in Tokyo. Many factions watched their leaders go down in
defeat and have been unable to even set a schedule for their
executive meetings.

TOKYO 00002010 013 OF 014

The ad hoc LDP executive meeting held at noon decided to schedule
the start of official campaigning for the presidential race on
September 18 and hold the election on September 28 after heeding the
views of local officials at the national meeting of secretaries

Based on this plan, the election of the new president will not take
place before the special Diet session that will elect the new prime
minister. LDP lawmakers will have to vote for Taro Aso as prime
minister. Although Secretary General Hiroyuki Hosoda remarked, "We
will explain the situation at a general meeting of members of both
houses of the Diet to seek their understanding," this is indeed odd.
Former Secretary General Bunmei Ibuki burst into the party
headquarters in the afternoon to object to voting for somebody who
is going to resign, but was told that this schedule is "inevitable."

It is true that rushing the presidential election will give rise to
a situation where the prime minister and party president are two
different persons until the new prime minister is elected. "You have
to grope in the dark for everything once you stop being the number
one party," lamented one party executive.

The shock is even greater in New Komeito, where its leader Akihiro
Ota and secretary general Kazuo Kitagawa both lost in the election.

Ota held a news conference at the party headquarters in
Minami-motomachi in Tokyo before noon on August 31 to announce his
resignation. "We take the outcome of the election seriously and will
work for a comeback," he said. "We will exert every effort to make
the party capable of winning under any circumstances," indicating
his bitter disappointment.

However, the party has not decided on any concrete plans except for
holding an executive meeting on September 3 and electing a new
leadership before the special Diet session is convened. Ota and
other senior party officials made a courtesy call on the Soka Gakkai
headquarters in Shinano-machi in Tokyo on the morning of August 31.
Senior Gakkai officials tried to console them, saying, "The party
and the Gakkai both campaigned really hard. It's too bad that the
result turned out like this," but there was no discussion on how to
manage New Komeito from now.

Kitagawa, who was also present at Ota's news conference, was as
timid as could be. He only said, "I agree with Mr Ota." Since last
fall, Kitagawa had been urging the prime minister to dissolve the
Diet, but his request was rejected by Aso. New Komeito members still
resent Aso's delaying the election. When Kitagawa was asked about
this, he looked into the distance, saying "I don't really remember
what happened in the past. Since the reality is what it is, it is
useless to say this and that about the past."

The rehabilitation of the party is an urgent issue for both the LDP
and New Komeito. However, this is easier said than done. The prime
minister asserts that "the reason why support for the LDP dropped
was because the merits of conservatism had not been fully conveyed."
He has announced that the LDP will make a new start as a
conservative party. This is because he reckons that the new
administration, which will include the Social Democratic Party, is
bound to be more liberal, so projecting a stronger conservative
color will be a shortcut to recapturing political power.

TOKYO 00002010 014 OF 014

Former Prime Minister Shinzo Abe, an ally of Aso, also claims the
party "should underscore our difference with the DPJ on foreign
affairs, security, education, and other policies." However, the
liberals say they are fed up with hearing the Abe-Aso line. There is
no consensus in the party.

Spreading its ideological wings too widely both on the left and on
the right to meet the people's needs is a distinctive characteristic
of the LDP. If it respects the opinion of one side, it ends up
facing opposition from the other side; and if it chooses to
compromise, it is accused of eviscerating policies. All past prime
ministers have had to grapple with this tricky problem.

The upcoming presidential election may further sharpen policy
conflicts. Aso stressed that "the LDP is an open party. It is okay
for members to voice various opinions. We are not a political party
that suppresses discontent." But he added, "The most important thing
is for us to unite after the final conclusion is reached. We will
not be able to fight any battle unless we are united."

Will the LDP be able to unite and act as one as an opposition party?
This might be the most difficult problem for the LDP, which has
evolved through a process of continual realignments.


© Scoop Media

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