JAPANESE MORNING PRESS HIGHLIGHTS 04/28/06

UNCLAS SECTION 01 OF 10 TOKYO 002322 SIPDIS 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: JAPANESE MORNING PRESS HIGHLIGHTS 04/28/06 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule Abductee kin on Capitol Hill: 4) Abductee Megumi Yokota's mother asks Congress for help 5) President Bush to meet with abductee kin USFJ realignment: 6) JDA sets ceiling at 2.8 billion dollars in Japan's cost sharing for Marine relocation to Guam 7) Japan to outlay 6 billion dollars in 6 years for Guam relocation 8) USMC to move Okinawa-based troops to Guam in 6 years 9) Ruling, opposition parties upset about Japan's 3-trillion- yen force realignment cost 10) Boos, woes over 3 trillion yen 11) Diet to debate 3 trillion yen cost Political topics, etc.: 12) Prime Minister Koizumi to go on African trek, China on his mind 13) Prime Minister Koizumi declines retirement money, urges local governors to give up as well 14) JDA to disband DFAA 15) GOJ, ruling coalition to work out growth strategy 16) Japan hesitant about "more kids": GOJ poll Articles: 1) TOP HEADLINES Asahi: Health, Labor, and Welfare Ministry-affiliated company provides money to ministry officials under mask of manuscript fees, regional taxation bureau discovers Mainichi: Sankei: Sales of derivatives by Sumitomo-Mitsui Bank suspended; Financial Services Agency criticizes former executives Yomiuri: Special private corporation under Health, Labor, and Welfare Ministry's jurisdiction reports false purchases of stocks worth 300 million yen, also hides income in profitable businesses; 25 officials, including former vice minister, disciplined Nihon Keizai: FSA considering injecting public money into Howa Bank; First case since reimposition of cap on deposit insurance Tokyo Shimbun: Sakie Yokota speaks in US House of Representative public hearing; Seeks cooperation from US 2) EDITORIALS Asahi: (1) Conspiracy bill: Do not leave room for abuse (2) Protect greenery: Ways to revitalize forest industry TOKYO 00002322 002 OF 010 Mainichi: (1) Japan to pay 3 trillion yen in USFJ relocation: Do not let figures take on a life on their own (2) Unification of public pension systems: No change in preferential treatment of bureaucrats Yomiuri: (1) Unification of public pension systems: Is the government ready to drastically reform the pension system? (2) Nepal now has to make democratization effort from scratch Nihon Keizai: (1) Fifty years of Minamata disease: Government must keep tragic memory from fading (2) Prime minister should show presence in African diplomacy Sankei: (1) Takeshima islets issue: We want South Korea to keep its pledge (2) Sumitomo-Mitsui Bank should treat its customers right Tokyo Shimbun: (1) Unification of public pension systems rendered toothless due to opposition from bureaucracy (2) New Iraq administration: Overcome religious and ethnic conflicts 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, April 27 NIHON KEIZAI (Page 2) (Full) April 28, 2006 09:56 Met Vice Foreign Minister Yachi at Kantei. 10:35 Met Deputy Minister for Foreign Affairs Nishida, European Affairs Bureau Director General Harada, and others. 11:00 Met Thai Prime Minister Thaksin 13:51 Attended the spring garden party at the Akasaka Imperial Palace. 15:16 Met Secretary General Takebe at Kantei. Followed by METI Minister Nikai, METI Trade Policy Bureau Director General Kitamura, and Energy Agency Director General Kodaira 16:12 Met Chief Judge Machida. Later met National Public Safety Commission Chairman Kutsukake, Deputy Chief Cabinet Secretary for Crisis Management Noda, and National Police Agency Director General Uruma. Followed by Director of Cabinet Intelligence Mitani, JDA Defense Bureau Director General Ookuchi, and Defense Intelligence Headquarters head Mukunoki. 17:00 TOKYO 00002322 003 OF 010 Met Minister of Internal Affairs and Communications/State Minister for Postal Services Privatization Takenaka. Attended a meeting of the Council on Economic and Fiscal Policy. 19:24 Had a hair cut at Muragi Barbershop in the Capital Tokyo Hotel. 20:26 Returned to his official residence. 4) Japanese abductee's mother calls for US help in US Congress TOKYO SHIMBUN (Top Play) (Excerpts) April 28, 2006 Takashi Matsukawa, Washington Sakie Yokota, 70, the mother of Megumi Yokota, who was abducted by North Korean agents when she was 13 years old, testified in a US congressional hearing on April 27. She called for US cooperation to resolve the issue, speaking with emotion of how she has been feeling as a mother since her daughter was abducted. Yokota is the first relative of Japanese abductees to testify before Congress. Yokota attended the second session of hearings with Fukui Prefecture University Professor Yoichi Shimada, vice chairman of the National Association for the Rescuing of Japanese Kidnapped by North Korea. Yokota explained how her daughter was kidnapped and frankly expressed her feeling as the mother of an abductee. She said: "It saddens me profoundly and I feel so humiliated whenever I think about why we cannot rescue her. . . . We must rescue those people from 12 countries who were victimized by outrageous state terrorism." Yokota then called for tough steps to be taken against North Korea, saying: "I plead for all countries to join us in saying that we will never forgive the abductions and that all the victims must be returned immediately or we will impose economic sanctions." Professor Shimada disclosed that North Korea had also abducted citizens of Lebanon, France, and Thailand. 5) President Bush to meet Sakie Yokota TOKYO SHIMBUN (Page 1) (Full) April 28, 2006 Takashi Matsukawa, Washington The White House announced on April 27 that President Bush would meet Sakie Yokota, 70, and other members of the Association of the Families of Victims Kidnapped by North Korea at 11:00 am on April 28, local time. South Korean abduction victims who testified before Congress on April 27 will also attend the meeting with the president. 6) Guam relocation; Ceiling for fiscal spending set at 2.8 billion dollars; Japan-US agree on USFJ realignment; Relocation will be completed in fiscal 2012, says JDA TOKYO 00002322 004 OF 010 YOMIURI (Page 2) (Full) April 28, 2006 The Defense Agency (JDA) yesterday revealed that Japan and the US had agreed that the ceiling of government spending from the general account, so-called real water spending, to cover the cost of relocating US Marines from Okinawa to Guam as part of USFJ realignment be set at 2.8 billion dollars or 310.8 billion yen in terms of the exchange rate adopted in the fiscal 2006 budget, even if the total amount increases in future calculations by the US side. It was also agreed during the talks that the relocation be completed in fiscal 2012. The JDA explained that since the US has yet to finalize a plan to consolidate a Guam base, the total amount of 10.27 billion dollars, or 1.14 trillion yen, could change. The Japanese side has limited any increase in its fiscal spending by setting the ceiling on it. There is a possibility that the 3.29 billion dollars, or 365.2 billion yen, for investment and loans could increase. The US side reportedly did not reveal the cost of building such facilities as a headquarters, training grounds, barracks, and school buildings, saying, "Estimates for such costs could change in the future." The construction of those facilities is expected to begin in late 2007 after an environmental assessment and completed over the next five years. Of 2.55 billion dollars, or 283 billion yen, in the cost of housing for families of Marines to be paid by Japan, 1.5 billion dollars, or 166.5 billion yen, paid from the national treasury will be provided as interest-free loans. Loans worth 1.37 billion dollars, or 152.1 billion yen, to cover the construction of family housing, power generation, water supply, and sewage systems on the base will be with interest. It is assumed that complete repayment by the US would take 30 to 35 years. For family housing, the US will provide land at a low price, and a special-purpose company to be set up by the Japanese side will rent houses to US servicemen. 7) Guam relocation; Outlay of 6 billion dollars over six years; 1.5 billion dollars as interest free government loans MAINICHI (Page 2) (Slightly abridged) April 28, 2006 The Defense Agency yesterday released a plan for the relocation of a US Marine Corps Command from Okinawa to Guam as part of USFJ realignment. According to the plan, the relocation will take six years. The construction work will start late next year and the relocation will be over in 2012. Japan and the US have recently agreed that of the total relocation cost of 10.27 billion dollars, or approximately 1.19 trillion yen, Japan will bear 59%, or 6.09 billion dollars (approximately 710 billion yen). Japan will start paying its share, including loans, from the next fiscal year. For the cost of constructing base-related facilities, such as a TOKYO 00002322 005 OF 010 headquarters building and barracks, up to 2.8 billion dollars, or approximately 325 billion yen, in grants will be disbursed from the general account. The cost of constructing family housing and on-base infrastructure will be covered in the form of investment and loans. In constructing family housing, the government will set up a special-purpose company (SPI),by investing 1.5 billion dollars, or approximately 175 billion yen, through the Japan Bank for International Cooperation (JBIC). Banks and construction companies will also invest in this plan. The SPC will construct and manage housing facilities, receiving another 1.05 billion dollars, or approximately 122 billion yen, in loans from the JBIC. It will collect rent from US military servicemen to recover the investment. Government loans will be interest free. Interest-free loans and loans with interest total 2.55 billion dollars, or approximately 296 billion yen. The JDA explained that the construction work will be efficient with the participation of private companies, saving about 420 million dollars, or approximately 49 billion yen, in construction costs. Another SPI will be established for the consolidation of on-base infrastructure, such as power generation, water supply, and sewage systems. The company will construct and manage power- generation facilities, using approximately 740 million, or approximately 86 billion yen, in loans through the JBIC. The contract will be concluded with the US Navy. The company will collect the invested money via monthly electricity, water, and sewage expenses added with a portion of the construction cost. 8) Japan, US in accord on completing Guam relocation in six years NIHON KEIZAI (Page 2) (Full) April 28, 2006 The Defense Agency explained yesterday that an agreement has been reached between Japan and the United States to complete relocating Okinawa-based US Marines to Guam by 2012, as was announced by US Deputy Defense Under Secretary Richard Lawless. For the Guam relocation, Japan aims to begin environmental surveys in the current fiscal year and construction work in the second half of 2007. The Defense Agency, however, maintains that there is no clear agreement on deadlines for completion of other realignment projects, such as the relocation of Futenma Air Station to Camp Schwab. The agency thinks the Futenma relocation will take eight to ten years. The government will begin coordination with the United States. It is unclear if the two countries can reach an agreement easily on relocating US Marines to Guam in six years and Futenma Air Station in eight to ten years. The US is certain to be on alert against Japan prioritizing the Guam relocation alone. 9) Ruling and opposition blocs dissatisfied with Japan's share of 3 trillion yen for US force realignment NIHON KEIZAI (Page 2) (Abridged) TOKYO 00002322 006 OF 010 April 28, 2006 The US presentation of Japan's share totaling 2.6 billion dollars, or 3 trillion yen, for the realignment of US forces in Japan, has sent shockwaves through the country's political community. The figure came as a surprise for Japan, although it had also informally estimated the realignment cost. Ambiguous factors also remain about the realignment completion deadline of 2012, except for the relocation of Okinawa-based US Marines to Guam. With the presentation of US force realignment promotion legislation and local coordination coming up, the opposition bloc is set to pursue the issue. Asked about the grounds for US Deputy Defense Under Secretary Richard Lawless's estimate of Japan's share of 3 trillion yen, Chief Cabinet Secretary Shinzo Abe told a press conference yesterday: "Concerned government offices will first discuss the matter thoroughly and then finalize details with the US." As early as March, a person connected with the government revealed that Japan's total share would run to 3 trillion yen. Speculation is afoot that the government kept the figure secret for over a month in order to avert a strong public backlash in the process of bilateral talks. The dominant view about Lawless's announcement is that he underlined the enormous amount of Japan's share to downplay America's share. Although Japan's share is huge, 3 trillion yen would not necessarily require new fiscal resources. The Defense Agency is considering such means as dissolving the SACO framework and using Japan's host nation support. The agency aims to prevent the 3 trillion yen from taking a toll on other defense-related outlays. Some government and ruling party members have also come up with such ideas as using the Okinawa promotion budget and the Land, Infrastructure, and Transport Ministry's public works spending. In a press conference yesterday, Minshuto (Democratic Party of Japan) Deputy President Naoto Kan criticized the government's response, saying, "It's a problem that we learned about Japan's 3- trillion-yen share from the United States." Perhaps due to a lack of spadework, even ruling party members are complaining, "We have no idea about what 3 trillion yen signifies." In the meantime, Prime Minister Junichiro Koizumi told reporters last night, "We are going to have many discussions on Japan's share. It'll take time." The government aims to submit to the current Diet session a US force realignment promotion bill incorporating a plan to create a system to extend subsidies to base-hosting municipalities. The opposition bloc, on the other hand, intends to grill the ruling coalition on the ambiguous basis for the estimate. It could trigger a new clash between the two blocs. 10) Cabinet ministers also voice questions about 3 trillion yen in Japan's cost sharing for USFJ realignment MAINICHI (Page 2) (Full) April 28, 2006 TOKYO 00002322 007 OF 010 US Deputy Under Secretary of Defense Lawless has clarified an estimate of approximately 3 trillion yen in Japan's cost sharing for the realignment of US forces in Japan. This estimate, however, is not based on the Japanese government's calculation, Defense Agency Director General Fukushiro Nukaga explained in yesterday's meeting of the House of Councillors Foreign and Defense Affairs Committee. "I think the deputy under secretary showed a rough estimate in his mind," Nukaga stated before the committee. "But," Nukaga went on, "we've yet to work out a detailed estimate of the cost in Japan." He also stated, "After reaching a final agreement, we will have to make a clear-cut estimate of our own to show in public." With this, Nukaga indicated that the Defense Agency is ready to make public its estimate in concrete terms after reaching a final agreement with its US counterpart. In the meantime, Finance Minister Sadakazu Tanigaki raised a question about the Pentagon-estimated amount in a general meeting of his faction in the ruling Liberal Democratic Party yesterday. "We will have to scrutinize the estimated cost," Tanigaki said. Japan and the United States have now agreed to move US Marines from Okinawa to Guam. "We'll have to back up Guam relocation, but there's a big figure from them," Tanigaki said, adding: "I think it might be something for their own accountability at home." With this, he noted that the Pentagon might have overestimated Japan's share of the realignment cost out of consideration for public opinion in the United States. 11) US estimate of Japan's overall share at 3 trillion for US force realignment likely to take center stage in latter half of Diet session MAINICHI (Page 5) (Full) April 28, 2006 US Deputy Defense Under Secretary Richard Lawless recently announced that the US estimates Japan's share of the US force realignment cost at about 3 trillion yen. In reference to the announcement, Minshuto (Democratic Party of Japan) Acting President Naoto Kan sharply criticized the government in a press conference yesterday, saying: "The estimated amount of money Japan should pay was shown by the US. This represents a lack of accountability by the (Japanese) government and is a serious problem. We will strongly criticize the government for such a stance." He then called for intensive deliberations at the current Diet session. The Japanese Communist Party (JCP) and the Social Democratic Party (SDP) are also gearing up to sharply attack the government. The cost-sharing issue is thus likely to take center stage in the latter half of the Diet session. In a meeting yesterday of Minshuto's foreign and defense departments, many participants reiterated the need for the government to disclose the basis for the cost estimate. One senior member of the Policy Research Council claimed: "It remains unclear how much money will be needed to reduce the current base burden on Okinawa. The presence of Marines has almost nothing to do with protecting Japan," implying that the US is trying to imposed a heavy burden on Japan without any adequate justification. Japan and the US have agreed that Japan will pay 6.09 billion dollars, or about 710 billion yen, of the total cost of TOKYO 00002322 008 OF 010 relocating Okinawa-based Marines to Guam. On this agreement, as well, SDP Secretary General Seiji Mataichi said: "We cannot understand why Japan has to finance part of the cost for the US military to construct a base in the US." JCP Secretary General Tadayoshi Ichida also said: "The US should pick up the full tab." The Lawless statement has added fuel to their criticism. Minshuto President Ichiro Ozawa said in a press conference yesterday: "Giving priority to the US military strategy, the Koizumi administration is about to use taxpayer money in response to US demands. Its approach is questionable." He indicated his readiness to grill the Koizumi administration over this issue while focusing also on its stance of blindly following the US. 12) Prime Minister Koizumi off for Africa tomorrow TOKYO SHIMBUN (Page 2) (Excerpts) April 28, 2006 Prime Minister Junichiro Koizumi will leave tomorrow for a seven- day trip to Ethiopia, Ghana, and Sweden. Koizumi will be the second Japanese prime minister, following then Prime Minister Yoshiro Mori, to visit sub-Saharan Africa without attending an international conference. The aim is to counter China, which has carried out active diplomacy in Africa for the purpose of gaining their support to prevent Japan from securing a permanent United Nations Security Council seat, as well as for purchasing resources. In Ethiopia, Koizumi is expected to meet with Prime Minister Meles Zenawi and African Union Commission Chairman Alpha Oumar Konare. He plans to hold talks with Ghana's President John Agyehum Kufuor. He will explain to these African leaders Japan's positive stance of supporting African countries' efforts for economic development and for measures against infectious diseases. A government official said, "(The purpose of the prime minister's trip to Africa) is to strengthen Japan's diplomatic base, by deepening relations with the AU, which is made up of 53 countries, more than one-fourth of the UN membership." However, Koizumi is apparently aware of China. 13) Prime Minister Koizumi: "I don't need retirement payment. Governors, too, should decline" TOKYO SHIMBUN (Page 2) (Full) April 28, 2006 "Retirement payments for governors and mayors are too much. I don't need it. So why don't we ask them to give them up?" Koizumi asked this at a meeting yesterday of the Council on Economic and Policy. He proposed a plan to abolish retirement benefits for the heads of local municipalities. He seems to be thinking that those retirement payments are no longer sacred given the financial difficulties of the central and local governments. Governors and mayors receive a retirement payment at the end of every term. If they serve several terms, they can get several hundred million yen. Some local governments decided this year to scrap such a system. TOKYO 00002322 009 OF 010 Koizumi will receive 6-7 million yen if he steps down from office this fall. 14) Defense Agency produces basic policy to dismantle Defense Facilities Administration Agency; Services to be split among Defense Agency internal bureau and new organs TOKYO SHIMBUN (Page 3) (Excerpts) April 28, 2006 The Defense Agency announced yesterday its basic policy of dissolving the Defense Facilities Administration Agency (DFAA) in the wake of a bid-rigging scandal to reform the organization, a set of issues for discussion, and an outline of its final report on a set of measures for preventing a similar incident. The plan is mainly designed to split the DFAA into a Defense Agency internal bureau and a new organization and establish a totally independent inspection organ directly under the defense chief. As a means of preventing amakudari (golden parachuting),the outline also calls for an immediate halt to measures promoting early retirement of senior DFAA officials. A study panel on organizational reform chaired by Defense Agency Director General Fukushiro Nukaga yesterday presented the basic policy and a set of issues for discussion. Based on them, the Defense Agency intends to draft a concrete reform plan by late June to reflect it in its fiscal 2007 budgetary request in August. The plan is designed to: (1) allow an Defense Agency internal bureau to absorb the DFAA's general affairs departments, such as personnel affairs and accounting; (2) establish a new bureau in the Defense Agency that will be responsible for planning on matters directly connected with local governments and the public, such as incidents and accidents and base issues; and (3) establish a new organ responsible for procurement services for the US military, such as land, goods, and services, except for planning. 15) Government, ruling camp to compile growth strategy outline as early as next month; Specific plan to include reform of tax system NIHON KEIZAI (Page 2) (Full) April 28, 2006 The government and the ruling camp yesterday decided to map out an economic growth strategy outline intended to achieve a high economic growth rate. They will come up with a specific plan that will involve reform of various systems, including the tax system in wide-ranging areas, such as tourism and welfare services. The government will incorporate the outline in the 2006 basic policy guidelines on economic and fiscal management and structural reforms for the fiscal 2007 national budget. Liberal Democratic Party (LDP) Policy Research Council Chairman Hidenao Nakagawa proposed the plan during a meeting with Minister of Economy, Trade, and Industry Toshihiro Nikai. Since an agreement had already been reached with State Minister for Economic and Fiscal Policy Yosano, the three ministers will map out the outline in cooperation. TOKYO 00002322 010 OF 010 In March, METI compiled a strategy of aiming for a real growth rate of 2.2%. The envisaged outline will be a package of policy proposals covering not only areas under METI's jurisdiction but also areas under other agencies' jurisdiction, such as agriculture and education. The package will mention mid- to long- term policies, including timetables for implementing them, as well as specific plans to be included in the fiscal 2007 budget. Nakagawa has indicated his intention to minimize tax hikes with a view to increasing tax revenue through thorough spending cuts and the realization of nominal growth of 4%. He wants to ensure an outlook for high economic growth through the joint drafting of the outline between the government and the ruling parties. 16) Five-country survey on child-rearing: Only 40% of Japanese respondents -- lowest rate among five countries -- say they want to have more children MAINICHI (Page 1) (Full) April 28, 2006 The Cabinet Office conducted a survey in five countries -- Japan, the United States, South Korea, France, and Sweden -- to obtain data that will help the countries tackle their falling birthrates. The survey found that about 40% of Japanese respondents -- the lowest among the five countries -- said that they wanted to have more children. The figures are half the 80% in Sweden. In Japan and South Korea, more than half of the respondents said they did not want any more children because too much money is needed to raise an educate them. The survey points out to a severe situation in the two countries, with people regarding children as a financial burden. To the question of whether they want to have more children, 42.6% of the Japanese pollees said yes and 53.1 said no. In South Korea, 43.7% said yes. Of the Japanese and South Koreans who said no, 56.0% of the Japanese and nearly 70% of the South Koreans cited financial difficulties. Meanwhile, 81.1% of Swedish respondents said that they wanted to have more children; in the United States, 81.0% said yes; and in France, 69.3% said yes. The Cabinet Office noted that those three countries provide sufficient daycare services and tax breaks, as well as financial support for raising children, which have boosted birthrates. Asked if they think husbands should work while wives stay at home, 57.1% of Japanese respondents said yes, the highest among the five countries. In Sweden, only 8.6% said yes. Asked whether they find it easy to have children in their countries, 47.6% of Japanese pollees were positive. In South Korea, 18% -- the lowest rate -- said yes. The survey was conducted between October and December in 2005 on 1,000 men and women aged 20 to 49. DONOVAN