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Cablegate: Daily Summary of Japanese Press 01/20/10

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
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RUEHNAG/AMCONSUL NAGOYA 5491
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RUEHUL/AMEMBASSY SEOUL 9373
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UNCLAS SECTION 01 OF 13 TOKYO 000118

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 01/20/10

INDEX:

(1) Editorial: Japan-U.S. Security Treaty marks 50th anniversary in
the midst of a cold front (Nikkei)

(2) Japan-U.S. Security Treaty marks 50th anniversary:
Transformation to be tested (Asahi)

(3) Japan's future course - 50th anniversary of revision of
Japan-U.S. Security Treaty (Part 2-1): Foundation of alliance faces
turbulent times (Yomiuri)

(4) Arrested Lower House member Ishikawa, former aide to DPJ's
Ozawa, testifies that Ozawa approved of false political fund report;
prosecutors to pursue Ozawa's criminal liability (Yomiuri)

(5) If Ozawa loses his post, the government will immediately go
along with existing Futenma relocation plan (Mainichi)

(6) Four days until Nago mayoral election: Construction company
president thinks military bases are no good (Asahi)

(7) Five days until Nago mayoral election: New "adults" want to see
the results first (Asahi)

(8) Six days until Nago mayoral election: Sugarcane farmer says
harvest more important than bases now (Asahi)

(9) SDP Okinawa base issues project team chairman views Saga Airport
as "best location" for Futenma relocation site (Asahi)

(10) U.S. government plan to collect special tax: Japanese financial
institutions bewildered (Nikkei)

ARTICLES:

(1) Editorial: Japan-U.S. Security Treaty marks 50th anniversary in
the midst of a cold front

NIKKEI (Page 2) (Full)
January 18, 2010

The current Japan-U.S. Security treaty was signed on January 19,
1960, at the White House by then Prime Minister Nobusuke Kishi and
President Dwight Eisenhower. Unlike the previous day which was cold
and sleety, it was sunny and bright that day in Washington,
according to the Nikkei on January 20, 1960.

Now, the Japan-U.S. alliance faces a cold wind as it marks its 50th
anniversary under Prime Minister Yukio Hatoyama and President Barack
Obama. The Japan-U.S. relationship has had its ups and downs over
the last half-century, but it has never been this icy.

Gap in views on Japan-U.S. mutual dependence

The reason for the cold front lies in Prime Minister Hatoyama's
stance toward the United States. His goal of achieving an equal and
close Japan-U.S. alliance is not a problem in and of itself. The
problem is that the Hatoyama administration has presented no vision
on security, the core of the Japan-U.S. alliance, including Japan's
role. Although the administration is calling for independence from
the United States, it might actually end up increasing Japan's

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dependence on the United States.

The Nikkei, which reported on the signing of the security treaty,
headlined its front page story, "Japan clearly joins the free
world." The signature by Prime Minister Kishi in 1960 at the height
of the Cold War meant that Japan opted for the U.S.-led Western bloc
rather than for the Soviet-led Eastern bloc.

Symbolized by the collapse of the Berlin Wall in 1989, the Cold War
ended with the victory of the Western bloc. The so-called 1955
system composed of the Liberal Democratic Party and Japan Socialist
Party (JSP), which was a Japanese version of the Cold War, ended
with the decline of the JSP, along with the end of the Cold War.

Twenty years later, the chilly Japan-U.S. relationship today is
partly ascribable to the Social Democratic Party - a party derived
from the JSP, a party that lost power - which has strong influence
on the security polity of the Hatoyama coalition administration. At
this point, the domestic political situation offers little hope for
climbing out of the chilly relationship with the United States.

In 1960, Japan's gross domestic product (GDP) accounted for 4.2
percent of the global total, and the United States' GDP was 11.5
times greater than Japan's. Washington probably did not recognize
anything illogical about the operation of the one-sided security
treaty that is not premised on the exercise of the right to
collective self-defense by Japan because the global GDP shares of
Japan and the United States were both growing.

The Japan-U.S. security relationship was reaffirmed in 1996 after
the end of the Cold War. That year, the two countries released a
joint security declaration to cope with changes in the security
environment resulting from the proliferation of threats, including
North Korea's suspected nuclear programs. The move also reflected a
change in economic power -- Japan and the United States were moving
closer to each other in terms of economic might.

The latest data in 1994 showed that Japan's GDP was 18.2 percent of
the global total - more than a four-fold increase since 1960. The
United States' GDP was 1.4 times Japan's. The difference between the
two countries had shrunk noticeably, and the United States urged
Japan to play a role befitting its economic strength.

Following the issuance of the joint security declaration, Japan and
the United States began reviewing their security cooperation
guidelines and produced a new set of guidelines. The Law Concerning
the Measures for Peace and Safety of Japan in Situations in Areas
Surrounding Japan was also enacted. In addition, people began
vocally calling for a review of the constitutional interpretation
that prohibits the exercise of the right to collective
self-defense.

The current situation is cumbersome. In 2008, the United States' GDP
was 23.4 percent of the world's total, while Japan's was 8.1
percent. The United States' share decreased slightly compared with
14 years ago and Japan's dropped sharply. The difference between the
two countries increased to 2.9 times.

The shares of both Japan and the United States have suffered
setbacks, albeit in differing degrees, due to the rise of emerging
powers, including China. Although they will explore ways for mutual
dependence, the two countries are susceptible to sentiments of not

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wanting to be relied on by another. These sentiments will become an
important factor that influences the bilateral alliance over the
next 50 years.

If there is some degree of support in Japan for the Hatoyama
administration's departure from the United States, that must be a
reflection of such sentiments. Even if such sentiments are
acceptable in peacetime, the Japan-U.S. alliance will become
dysfunctional if a crisis occurs. An alliance that does not function
during a crisis is nothing but a pie in the sky.

Toward a larger alliance

On Jan. 7, The New York Times published an op-ed contribution by
Harvard University Professor Joseph Nye, known for the Nye
initiative that enable the shift to a Japan policy that attached
importance on the economy and made light of security under the
Clinton administration that was launched in 1993. In his
contribution titled "An Alliance Larger Than One Issue," Nye sounded
an alarm for the United States about the current situation in which
the Japan-U.S. alliance could be undermined by the Futenma issue
alone.

Although this seems like a helping hand for the Hatoyama
administration, it is not. For a larger alliance to function, China,
for instance, must be integrated into the international community to
prevent it from posing threats. Can we expect that of the Hatoyama
administration, which is being supported by a ruling party that sent
143 lawmakers to China at a time when the Japan-U.S. alliance is
deteriorating?

"Now let's have some questions on matters other than the Futenma
issue," the moderator said during a seminar held in Washington on
Jan. 15 commemorating the 50th anniversary of the signing of the
security treaty. This is the reality of the Japan-U.S. alliance at
this point in time.

The Hatoyama administration has successfully turned Washington's
interest to Japan for the first time since the 1980-1990s when
economic conflicts were intense. But this accomplishment does not
serve the interests of Japan. This anomalous Japan-U.S. relationship
must come to an end at the earliest possible time.

(2) Japan-U.S. Security Treaty marks 50th anniversary:
Transformation to be tested

ASAHI (Page 3) (Full)
January 19, 2010

By Yoichi Kato, Editorial board member

The Japan-U.S. Security Treaty marks the 50th anniversary of its
conclusion on Jan. 19. The pact has survived for half a century
because the Japan-U.S. alliance based on the pact has changed with
the international situation. Whether the pact will continue to be
valid depends on whether it can maintain its flexibility.

The former security treaty was signed in 1951 as a treaty to
legitimatize the U.S. occupation of Japan, according to a
Self-Defense Forces (SDF) officer. It was turned into a new treaty
in 1960 with such revisions as the U.S. obligation to defend Japan,
etc., added to it. The basic structure of the pact is that Japan

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provides military bases to the U.S. military (Article 6) in return
for the U.S. defending Japan (Article 5). This has not changed even
today.

The pact carried its own strategic meaning, transcending the mere
extension of the occupation during the Cold War period. Since the
Japanese Archipelago is located in a position capable of blocking
the entry of the U.S.S.R. Far East forces into the Pacific Ocean,
defending Japan automatically contributed to the U.S. strategy of
containing the U.S.S.R.

However, after this raison d'etre of the Japan-U.S. Security Treaty
vanished with the collapse of the U.S.S.R., the alliance temporarily
lost its direction. The alliance was redefined from 1995 through
1996 to reconstruct its significance.

The Japan-U.S. Joint Declaration on Security, released in April
1996, acknowledged that the Japan-U.S. alliance is the basis of the
stabilization and prosperity of the Asia-Pacific region, going
beyond the defense of Japan. Both countries also agreed to
strengthen measures to deal with contingencies in areas surrounding
Japan, with contingencies on the Korean Peninsula in mind.

That was 14 years ago. Japan and the U.S. now intend to redefine and
re-acknowledge the pact on the occasion of the 50th anniversary.
Major changes have occurred in the world's security environment
since it was redefined previously, including the 9/11 terrorist
attacks on the U.S. and the rise of China.

The Japan-U.S. alliance is now faced with three challenges - changes
caused by the rise of China, a regional-level challenge of how to
deal with the buildup of China's naval power in particular, and a
transnational threat as symbolized by the war against terrorism - as
well as the defense of Japan.

Furthermore, as envisaged in Article 5 of the treaty, as the
probability of a contingency in Japan decreases, the importance of
duties other than engaging in battles and deterrence, such providing
humanitarian assistance, rescue operations in the event of
disasters, and anti-piracy operations, has increased, bringing yet
another change to the alliance.

In addition, in the U.S., the idea of streamlining its involvement
in the world by reducing its role as a global police force through
having its allies, such as Japan, take over this role, has surfaced
in recent years. President Obama in his acceptance speech for the
Nobel Peace Prize stressed, "The U.S. cannot act alone in the world
now, where threats are more diffuse and duties to ensure security
are becoming more complex."

In order to cope with these changes, the Japan-U.S. alliance has
already been globalized and its tasks have become diversified. The
Japan-U.S. alliance is about to become the Japan-U.S. alliance for
the world (as agreed at the bilateral summit in 2003). The problem
is whether the two countries will continue to proceed in that
direction.

In Japan, Prime Minister Yukio Hatoyama has come up with an
initiative for an Asian Community designed to build regional
confidence. The U.S. is recently showing interest in new
multilateral frameworks, such as Japan-U.S.-Australia,
Japan-U.S.-South Korea and Japan-U.S.-India frameworks. These are

TOKYO 00000118 005 OF 013


multilayered security networks. Some researchers have pointed out
that making an issue over Japan-U.S. relations itself is outmoded,
as Professor emeritus Akira Irie of Harvard University noted in the
February edition of the monthly journal Sekai.

Even if the alliance is to be strengthened and expanded within the
existing framework, there is a paradox in that the revised
interpretation of the treaty has significantly transcended the role
of the alliance as prescribed in the treaty.

The next 50 years will be a test of how to use the Japan-U.S.
alliance in a world in which the process of transnationalization is
in full swing and how the Japan-U.S. Security Treaty should be
transformed to achieve that end.

(3) Japan's future course - 50th anniversary of revision of
Japan-U.S. Security Treaty (Part 2-1): Foundation of alliance faces
turbulent times

YOMIURI (Page 1) (Full)
January 16, 2010

The Republic of Djibouti, an arid country in the northeast part of
Africa, is located about 10,000 kilometers from Japan. In that
country, where the movie "Planet of the Apes" was filmed,
Self-Defense Force (SDF) troops have stayed with U.S. troops at a
U.S. base facing Gulf of Aden and worked alongside them in
antipiracy operations off Somalia.

Two P-3C patrol planes of the Maritime Self-Defense Force (MSDF)
started engaging in antipiracy operations last June. The two
aircraft take turns patrolling to spot pirates' boats from about 900
meters and take photos of unidentified ships, such as ships
transporting ladders. The photos are promptly analyzed, and the
results of this analysis and other details are promptly conveyed to
the U.S. military and other concerned parties.

The two aircraft have made 126 flights and identified about 8,700
ships so far. About 820 cases have been reported to the concerned
parties. A U.S. government source said: "(The MSDF) has contributed
the most to cracking down on piracy in this region."

About 160 members of the Maritime Self-Defense Force and the Ground
Self-Defense Force on a mission of guarding MSDF personnel and
patrol aircraft are living under the same roof with U.S. soldiers. A
SDF member said: "Burgers are served every day, so we sometimes
offer buckwheat soba (noodles)."

For Japan, which greatly depends on the Middle East for its oil
imports, the Gulf of Aden is a vital sea lane. But Japan has
entrusted the task of ensuring the safety of Japanese commercial
ships to other countries since the end of World War II as Japan has
long been hesitant about allowing the SDF to engage in overseas
operations. The members of the coalition government - the Democratic
Party of Japan (DPJ), the Social Democratic Party, and the People's
New Party - now indicate their understanding about Japan's
involvement in antipiracy operations, but they were all opposed to
an antipiracy bill that was enacted into law last June when they
were opposition parties.

The Hatoyama administration terminated the MSDF's refueling mission
in the Indian Ocean on Jan. 15. The refueling operation was Japan's

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symbolic manpower contribution to the U.S.-led war on terror. In
addition, Prime Minister Yukio Hatoyama has declared the government
would review the existing plan agreed on in 2006 between Japan and
the U.S. the relocation of the U.S. Marine Corps' Futenma Air
Station. Due to such circumstances, the foundation of the Japan-U.S.
alliance is now facing turbulent times.

In Djibouti, Japan and the U.S. continue to conduct joint antipiracy
operations. The SDF's antipiracy efforts have made Japan's presence
more strongly felt in that country. The MSDF's withdrawal from the
Indian Ocean showed that a political decision can easily destroy
such a cooperative relationship.

The Japan-U.S. alliance is based on the revised Japan-U.S. Security
Treaty in 1960. In Article 5 of the treaty, the United States'
obligation to defend Japan is specified. Article 6 provides for the
presence of the U.S. military in Japan, and these are the core
elements of the treaty. In recent years, Japan and the U.S. have
actively carried out joint military operations overseas, but such
activities are not core elements of the alliance even though they
have contributed to indirectly solidifying the bilateral alliance.
It is also true that it is impossible for the SDF alone to protect
Japan's safety.

The U.S. has already started studying what to do if Japan becomes a
"less trustworthy ally," as former deputy undersecretary of defense
Richard Lawless put it, and if the U.S. cannot regard Japan-U.S.
relations as a cornerstone of U.S. foreign policy. Behind this move
in the U.S., there is apparently a political motive to fill in the
gaps created by "Japan's eclipse" by giving priority to negotiations
with China over Japan and strengthening relations with South Korea.

Given that China has rapidly grown in the economic and military
areas and North Korea's nuclear development is ongoing, the U.S. has
become skeptical about the reliability of the Japan-U.S. alliance.
It is still uncertain what course the Hatoyama administration is
going to select for the alliance in the 21st century.

(4) Arrested Lower House member Ishikawa, former aide to DPJ's
Ozawa, testifies that Ozawa approved of false political fund report;
prosecutors to pursue Ozawa's criminal liability

YOMIURI (Top play) (Lead paragraph)
Evening, January 20, 2010

It was learned from an informed source that in connection with the
violation of the Political Funds Control Law involving the money
used to purchase land by Rikuzan-kai, the fund management
organization of Democratic Party of Japan (DPJ) Secretary General
Ichiro Ozawa, House of Representatives member Tomohiro Ishikawa
(DPJ), 36, who has been arrested, testified during the investigation
of the Tokyo District Prosecutors Office's Special Investigation
Division that he reported to Ozawa in October 2004, shortly before
the time of the land purchase, that he would not record the 400
million yen used to purchase land in the political fund accounting
report for that year and obtained Ozawa's approval. The Special
Investigation Division suspects that Ozawa conspired with Ishikawa
and others in advance with regard to falsifying the political fund
report and is conducting the investigation with a view to pursue
Ozawa's criminal liability.

(5) If Ozawa loses his post, the government will immediately go

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along with existing Futenma relocation plan

MAINICHI (Page 2) (Abridged slightly)
January 18, 2010

"There might be forces that are maneuvering to destroy (DPJ
Secretary General Ichiro) Ozawa," Denny Tamaki said with a concerned
look on his face on the morning of Jan. 17, the day the official
campaign for the mayoral election in Nago, Okinawa Prefecture,
opened. Tamaki, a Democratic Party of Japan (DPJ) House of
Representatives member representing the Okinawa No. 4 constituency,
was attending a kick-off ceremony for the race.

Nago is the relocation site for the U.S. Marine Corps' Futenma Air
Station (in Ginowan, Okinawa Prefecture) in accordance with a
Japan-U.S. agreement. All eyes are on moves by Ozawa who has strong
influence on the ruling bloc regarding the Futenma relocation issue
on which the three ruling parties have different views.

Tamaki held talks with Ozawa at DPJ headquarters on Dec. 28. In the
session, Tamaki asked for the party's support for a new candidate
calling for moving Futenma outside Okinawa, highlighting the need to
play up the change of government. DPJ headquarters sent Deputy
Secretary General Koji Sato, who is close to Ozawa, to a meeting to
explain how to make petitions, held in Nago on Jan. 13. "I sensed
the force of the ruling party," said a 51-year-old agricultural
organization executive who attended the meeting.

The DPJ heavily relies on Ozawa's "divine power" for elections. What
will happen if Ozawa has to leave the post of secretary general? "It
is a matter that concerns only one lawmaker. There will be no impact
(on the Futenma issue)," Tamaki noted as if to dispel concerns.

The Nago race is also causing a stir in the Social Democratic Party
(SDP), which wants to see Futenma moved outside Okinawa or even
outside Japan. "What decision are the citizens of Nago going to make
on the plan to build a huge offshore base?" SDP head Mizuho
Fukushima said to reporters in Tokyo on Jan. 17 regarding the Nago
mayoral election. "It is of great significance. We cannot afford to
lose this election." Another SDP executive also noted: "We have been
able to get our point (to search for options other than the existing
plan) across, thanks to the Hatoyama-Ozawa leadership."

Ozawa, who leads the Hatoyama administration's pledge to build a
close and equal Japan-U.S. alliance, abhors the idea of Japan
blindly following the United States, a policy course pursued under
the previous administration led by the Liberal Democratic Party.
Ozawa held a year-end party with executives of the SDP and the
People's New Party on Dec. 29 in which Ozawa mentioned Shimoji
Island as a possible Futenma relocation site.

The Shimoji Island option immediately spread throughout the
government, and Chief Cabinet Secretary Hirofumi Hirano visited the
island on Jan. 10. This gave momentum to the view that there will be
no settlement under the existing plan. "If Mr. Ozawa loses his post,
the Futenma issue will immediately proceed with a resolution under
the existing plan," a senior SDP lawmaker said. "I want the storm to
pass as soon as possible."

(6) Four days until Nago mayoral election: Construction company
president thinks military bases are no good


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ASAHI (Page 34) (Full)
January 20, 2010

Hisatoshi Tanaka

The mayoral election candidates are rarely seen on the streets of
Nago City in Okinawa. On Jan. 19, the incumbent mayor was busy
visiting his supporters and local companies. The neophyte candidate
was also visiting companies until he came out on the streets on a
bicycle in the afternoon.

At a construction company with its office in an old building in the
center of the city, the president of the company in his 60s sighed
as he looked at the fliers of both candidates.

The leaflet of the incumbent mayor shows the image of a fishing port
with an outlet for fishery products in the shape of a spaceship. The
neophyte's leaflet calls for a train line from Nago to Naha. The
president murmured: "It would really be nice if these could be
realized."

This is a small company with only a handful of employees. It handles
projects such as replacing street signs at the port or repairing
roads. It has survived so far by receiving contracts from the
prefectural or city government.

Although the government is supposed to have spent a total of 77
billion yen in 10 years for economic development in return for
accepting the relocation of the U.S. forces' Futenma Air Station,
this company does not feel that it has profited from this. A few
years ago, the company was at the brink of bankruptcy. "Where has
all the money gone?"

In the 1997 referendum on whether to accept Futenma's relocation,
the president followed the example of other people in the
construction industry and voted for "yes" after agonizing. He also
voted for the candidate endorsed by the construction industry in the
three subsequent mayoral elections.

However, a U.S. military helicopter crashed onto the campus of the
Okinawa International University next door to the Futenma base in
August 2004. The children of his acquaintances went to that
university. He came to conclude that "bases are no good." In the
general election last August, he voted for the Democratic Party of
Japan, in the hope that it might be possible for Futenma to be moved
out of Okinawa.

The company president is in doubt about the forthcoming mayoral
election. While the neophyte candidate is opposed to Futenma
relocation, he used to be a senior city official who accepted the
relocation. It is unclear to what extent he will really oppose the
relocation. The incumbent mayor appears to be likely to try to get
work for the local companies, but he accepts Futenma's relocation.
This president is unable to decide whom to vote for.

He did not attend the gathering in support of the incumbent mayor
organized by the local construction companies on the evening of Jan.
18. He was invited but he did not go. He was afraid that if he
participated, he might get carried away. The president stated
repeatedly: "I am opposed to the bases." However, what should he do
about his company and his livelihood? He cannot help thinking about
that.

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(7) Five days until Nago mayoral election: New "adults" want to see
the results first

ASAHI (Page 38) (Full)
January 19, 2010

Satoshi Okumura

On the morning of Jan. 18, pre-election day voting started for the
Nago mayoral election. Groups of people in working clothes riding in
minivans, mothers holding the hands of their kids, elderly couples,
and other voters arrived at the prefabricated shed opposite city
hall that served as the polling station. A total of 1,413 people
cast their votes on the first day, which is 1.5 times the number for
the last election.

Shoki Matsuda, 20, a new "adult" who has recently reached the legal
voting age, has no intention to cast his vote. He woke up just
before noon and then went to town in central Okinawa. He passed by
an election campaign van but just glanced at it. "Nothing will
change even if the mayor changes. They should first show us the
results."

Three years ago, Matsuda went to the Japanese mainland with the
ambition of becoming a professional martial artist. In late 2008, he
came back to Nago to become the organizer of the coming-of-age
event. He says he talks about the issue of the relocation of the
U.S. forces' Futenma Air Station with his classmates.

His parents told him to vote for the incumbent mayor, who accepts
Futenma relocation, but there are people who are agonizing, thinking
it's not right to reclaim the sea, and there are those who were
recruited by the construction companies they worked for to
participate in rallies... "Bonds in the local community are not
necessarily beneficial."

At 6:00 p.m. a Chinese character formed by light bulbs shined from
halfway up the mountain overlooking the center of Nago. This is an
annual event organized by young people turning 20 in that year that
is taking place for the 15th time. The character chosen right after
the referendum in 1998 which sharply divided the Nago citizens was
"wa (harmony)." This year, "on (debt of gratitude)" was chosen.
Matsuda suggested it to "express gratitude to our parents, friends
and the local residents who have given us support."

Matsuda will return to the mainland in late January. He just quit
the resort hotel that he had been working for for a year on Jan. 7.
The hotel is in a location that overlooks Henoko, Futenma's
relocation site. He said: "The sea in Nago is like my backyard.
However, Okinawa cannot survive without the bases. Things have been
at a standstill for over 10 years. If there is ever a mayor who can
settle the base issue, he will be loved for life."

Voter turnout for mayoral elections has been declining. The turnout
last time was 74.98 percent, which was lower than the turnout for
1998 by about 7 percentage points.

(8) Six days until Nago mayoral election: Sugarcane farmer says
harvest more important than bases now

ASAHI (Page 38) (Full)

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January 18, 2010

Masaki Kono

On the afternoon of Jan. 17, the incumbent mayor and the neophyte
candidate gave speeches at different times in Henoko in Nago City,
Okinawa, the relocation site of the U.S. forces' Futenma Air
Station.

"All of you have suffered for a long time."

"This is an important election both for Nago and for Okinawa."

This is harvest time for sugarcane in the Makiya district north of
Nago City, about 10 kilometers from Henoko on the other side of the
mountain. The sound coming from the loudspeaker on the election
campaign van can be heard from the other side of the sugarcane
field.

Seiichi Nagata, 60, who had been cutting down sugarcane with his
wife since morning, told us without stopping his work: "They pass by
everyday recently." He is not uninterested in the election, but
right now, the harvest is more important. Machines are not used.
Sugarcane is cut down carefully by hand. The relocation issue in
faraway Henoko rarely comes up in conversation.

In October 2008, a light aircraft carrying U.S. soldiers belonging
to the aviation club on the U.S. forces' Kadena Air Base (straddling
Okinawa City and the towns of Kadena and Chatan) about 40 kilometers
away from Makiya crashed onto Nagata's sugarcane field and went up
in flames. The field was sprayed with fire-extinguishing chemicals
and it cost Nagata 300,000 yen to remove the unsalable sugarcane.
His negotiations with the Ministry of Defense for compensation have
not been concluded. There is an elementary school just 200 meters
from the crash site, and Nagata's parents' home is also in that
area.

Nagata lived in Ginowan City, where the Futenma base is located,
when he was young. He said: "The public safety situation will
worsen, so basically, it's better not to have military bases."
However, what he is hoping for from this election is employment and
economic development.

As his main occupation, Nagata is the owner of an auto repair shop.
He is barely able to pay the wages of his employees, and he himself
does not gain anything from the business. He started to plant
sugarcane 15 years ago just to keep fit, but now he relies on it for
his living. He said: "The harvest this year is 30 percent less than
last year due to the drought" and his income this year is likely to
be less than 2 million yen.

In the afternoon, the community emergency broadcasting system
announced the official filing of candidacy for the mayoral election.
In a settlement of some 600 residents, it is very easy to find out
who is voting for whom. Although Nagata says, "Actually, it would be
better if we could think and vote more freely," he cannot help
paying attention to what the customers at his auto repair shop would
think of him.

(9) SDP Okinawa base issues project team chairman views Saga Airport
as "best location" for Futenma relocation site


TOKYO 00000118 011 OF 013


ASAHI ONLINE (Saga edition) (Full)
January 20, 2010

Yuki Ichikawa

House of Representatives member Kantoku Teruya (second district of
Okinawa), chairman of the Social Democratic Party (SDP) project team
on Okinawa base issues, which is considering alternative relocation
sties for the U.S. forces' Futenma Air Station (in Ginowan City,
Okinawa), toured the Saga Airport on Jan. 19. Teruya said that based
on his personal impression, "this is the best location, in terms of
initial impression" because of its geographic conditions, since
there are no houses in the area, and the airport is surrounded by
vast farmland and the sea. The three ruling coalition parties are
supposed to submit their proposals on the relocation site by the end
of the month. Teruya said that "this has not been discussed in the
party," but it is possible that Saga Airport may be included in the
SDP's proposal.

The Hatoyama administration set up an "Okinawa base issues
examination committee" (chaired by Chief Cabinet Secretary Hirofumi
Hirano) of the three ruling parties in late 2009. Discussions have
begun aiming at deciding on Futenma's relocation site by May. Teruya
visited the Saga Airport with the vice chairman of the SDP project
team, House of Councillors member Tokushin Yamauchi (elected on the
proportional representation ticket; former treasurer general of
Okinawa) as part of the party's research efforts.

After arriving at the airport in the afternoon of Jan. 19, Teruya
and Yamauchi received a briefing from Yoshiro Setoguchi, chief of
Saga Prefecture's airport and transportation section. When told that
the areas around the airport consist of farmland, that there are no
houses within a radius of 3 kilometers, and that the airport
operates the only night cargo flights in Kyushu, Teruya asked if
there is any noise problem and if the ground is strong enough since
the airport is built on reclaimed land. Later, Teruya and Yamauchi
viewed the area around the airport from the rooftop of the terminal
building.

Later, Teruya told reporters: "Compared with the situation in
Futenma, which is called the most dangerous military base in the
world by both the Japanese and U.S. governments, this is the best
location, in terms of initial impression." In response to the
question of whether the Saga Airport will be included in the SDP's
proposal, Teruya said: "The party will not propose Saga and this has
not been discussed within the party." He added, "The SDP will not
ignore the wishes of the governor and the people of Saga and impose
a relocation plan on Saga, so don't worry."

Teruya had requested a meeting with Governor Yasushi Furukawa but he
ended up meeting only with working level officials. At a news
conference on the same day, Furukawa explained, "I understand that
it was a personal visit, so I thought dealing with it at the working
level would be appropriate."

Teruya visited the Maritime Self-Defense Force base in Sasebo and
the Omura air base in Nagasaki Prefecture on Jan. 12. He will visit
Iwo Jima (Tokyo) and the U.S. territory of Guam this month before
drafting the SDP's proposal.

When reporters asked: "Why did you come to Saga Airport?" on Jan.
19, Teruya answered: "Because I heard that Saga Airport came up

TOKYO 00000118 012 OF 013


during the Japan-U.S. talks under the old administration."

The "Japan-U.S. talks" refers to the U.S. Forces Japan (USFJ)
realignment talks from 2005 to 2006. Futenma relocation was also
discussed, and the old administration agreed to relocating the
Futenma base to Henoko in Nago City, Okinawa. During the
negotiations, the U.S. government cited the Saga Airport as a
possible relocation site, but the Japanese government did not agree.
A local paper in Okinawa reported on this in 2008. Teruya is
reexamining the negotiation process under the old administration,
including verifying facts.

Teruya explained that his purpose in visiting the Saga Airport was
that he "wanted to see the actual site with his own eyes in order to
find out what was the reason for the USFJ's proposing the Saga
Airport and how the old administration dealt with this proposal." He
asked prefectural officials if the Japanese government had made
inquiries in 2005-2006 during the time of the negotiations, and the
answer was "no."

As for whether Saga will be included in the discussions of the three
ruling parties on the relocation site, where a decision is due by
May, Governor Furukawa stated at his news conference on Jan. 19 that
there had not been any inquiries from the government so far. He
added: "If there are official inquiries from the government, I will
inform you while I deal with the matter."

(10) U.S. government plan to collect special tax: Japanese financial
institutions bewildered

NIKKEI (Page 4) (Full)
January 16, 2010

An increasing number of Japanese financial institutions operating in
the U.S., including the Mitsubishi UFJ Financial Group and Nomura
Holdings, are bewildered by the White House's announcement on a
policy of collecting a special tax from major financial
institutions. The specifics of the system are unclear at the moment.
However, because of the observation that some financial institutions
might have to pay 1 billion yen or so, all financial institutions
are rushing to collect information.

The aim of the special tax - the financial crisis responsibility fee
- is designed to make up for losses of public funds used to
stabilize the financial system. The envisaged tax targets major
financial institutions whose assets exceed 50 billion dollars or
roughly 4.5 trillion yen. The targeted financial institutions will
be charged with fees worth 0.15 percent of a portion of their
debts.

Union Bank, a regional U.S. bank that is under the wing of Bank of
Tokyo-Mitsubishi UFJ has total assets of 70 billion dollars. There
is a strong possibility that it will be subject to the special tax.
There is reportedly a possibility of the bank being asked to pay 20
million dollars or approximately 1.8 billion yen. However, an
official of the bank said that since Union Bank's annual before-tax
profit is usually about 1 billion dollars or so, there would be no
major impact on it. An executive of Nomura Holdings said, "Since it
is totally unclear at present whether our company will become
subject to the taxation, all we can do is just to wait and see."
Mizuho Securities and Sumitomo Mitsui Banking Corporation are also
dismayed, with one source saying, "We don't know whether we will

TOKYO 00000118 013 OF 013


become subject to the policy, because the guidelines for determining
assets are unknown."

To begin with, foreign financial institutions are not eligible to
receive injections of public funds in the U.S. As such, they are
strongly displeased with the new policy, with one executive of a
megabank noting, "Why do we have to shoulder the same burdens that
U.S. banks do?"

ZUMWALT

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