JAPANESE MORNING PRESS HIGHLIGHTS 06/12/06

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E.O. 12958: N/A TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/12/06 Index: 1) Top headlines 2) Editorials Prime Minister's weekend schedule: None US-Japan relations: 3) Three tough issues for Prime Minister Koizumi going into the end of June summit with President Bush: Iran, USFJ realignment, and Burma 4) Koizumi to announce at summit meeting with President Bush Japan's support for US' cooperative nuclear agreement with India 5) Treasury Secretary Snow in meeting with Finance Minister Tanigaki presses Japan to consider financial sanctions on Iran for continuing nuclear program 6) Tanigaki, Snow meet for the last time as finance ministers Aso diplomacy: 7) Foreign Minister Aso in meeting with Iran's vice foreign minister urges Iran to accept proposed package of rewards for ending nuclear program 8) Japan, Russia to hold first strategic dialogue at foreign minister level at G8 summit 9) Foreign Minister Aso: Cautious decision made to extend yen loans to China beyond fiscal 2006 10) Foreign Ministry is toughening counter-intelligence measures, including personnel training, following Shanghai suicide incident 11) Japan, South Korea start EEZ negotiations today but Takeshima issue likely to be a stumbling block 12) RENK official says US sanctions on Pyongyang working: Glut of counterfeit bills that North Korea cannot circulate overseas 13) As anti-terrorist measure, METI this year to expand ban on export of military-use materials, including precious metals Minshuto President Ozawa in action: 14) Ozawa will definitely run for reelection this fall as president of Minshuto (Democratic Party of Japan) 15) Ozawa supports raising JDA to ministry status, complains about bill being submitted at end of current Diet session Opinion polls: 16) Political opinion poll: 54% of party supporters admit to voting for another party in past election 17) Yomiuri poll shows an alarming 80% of public see weakening of "human relations" in Japan Articles: 1) TOP HEADLINES Asahi: Colleges struggling to accept retired baby boomers Mainichi: Active fault zone detected near Shimane atomic power plant Yomiuri: 2004 tsunami ODA aid bids were 'murky' TOKYO 00003219 002 OF 011 Nihon Keizai: Poll on 400 companies: 90% say child-care packages help companies keep top workers Sankei: Flu outbreak Tokyo Shimbun: Retirement payments for public servants to expand 130% 2) EDITORIALS Asahi: (1) Second chance for failures: A more moderate market society should be built Mainichi: (1) Intellectual property plan: Create a system where people can benefit by their wisdom (2) "Heart-to-heart communication also needs rules (by Yuri Aono, editorial committee member) Yomiuri: (1) Don't slacken efforts to fiscally reconstruct state finances (2) Local governments should make efforts to slash expenditures Nihon Keizai: (1) Intellectual property strategy now at stage of moving from defense to offense (2) Hope for G-8 cooperation to stabilize oil prices Sankei: (1) Reform of Basic Education Law: Minshuto's (Democratic Party of Japan) response intangible (2) Energy strategy: National security viewpoints needed Tokyo Shimbun: (1) Terrorism in Iraq: Illusion about mastermind's death (2) Baby boomers will narrow distance between the food we eat and agriculture 3) After Prime Minister Koizumi steps down, what will become of three outstanding Japan-US issues: Iran, force realignment, and Burma? NIHON KEIZAI (Page 2) (Abridged) June 12, 2006 With the end to Prime Minister Junichiro Koizumi's term in office approaching, Japan and the United States remain saddled with three tough issues to resolve. The US has urged Japan to impose financial sanctions on Iran. Washington has also repeatedly urged Tokyo to implement the bilateral agreement on US force realignment plans. Japan and the US are also wide apart on Burma (Myanmar),with Washington even prepared to call for UN sanctions. Iran "Can't you do something about Iran financially?" In his talks with Finance Minister Sadakazu Tanigaki on the sidelines of the TOKYO 00003219 003 OF 011 G8 financial summit in St. Petersburg on June 9, US Treasury Secretary John Snow took up the Iranian nuclear issue. SIPDIS At present, the Iran nuclear issue hinges on Teheran's response to a package of incentives presented by the five permanent UN Security Council members plus Germany. Should Iran refuse the package, the US intends to push the issue toward talks at the Security Council. However, with China and Russia remaining reluctant to impose sanctions, a UN resolution is unlikely. In anticipation of such a consequence, the US is searching for ways to impose sanctions by a "coalition of the willing." The position of Tokyo, which has strong economic ties to Teheran, is that Iran is not an imminent threat to Japan and that sanctions require a UN resolution. If this situation persists, the policies of Japan and the US would clash. "The Iranian issue could test the Japan-US alliance," an American specialist noted. US force realignment US Defense Secretary Donald Rumsfeld held talks with his Japanese counterpart Fukushiro Nukaga on June 4 in Singapore in which the former repeatedly asked, "Are you going to set up a separate budget slot, or can you finance the project with your defense spending, which is 1% of GDP?" Given Tokyo's decision to give up on presenting US force realignment-related bills to the ongoing Diet session, Rumsfeld was trying to win Japan's assurance of bearing the cost of relocating Okinawa-based US Marines to Guam. In a speech, Nukaga referred to US force realignment as the most significant event for the history of the Japan-US alliance of several decades. But that, too, is based on the implementation of the bilateral US force realignment agreement. A Futenma Air Station relocation plan that followed a zigzag path created strong discontent among US officials. Washington is closely watching Tokyo's efforts to come up with the necessary funds, enact related bills, and convince affected communities. Washington is likely to press Tokyo harder for the implementation of the agreement, as necessary. Burma The US is considering a UN resolution regarding the situation of Aung San Suu Kyi, the pro-democracy leader who continues to be under extended house arrest by decision of the Burmese junta. Japan intends to oppose such a step, thinking that forcible action would make her situation even worse. The US sought to constrain Japan by informally inquiring about Tokyo's true intention. The US Congress also raised an objection to Japan's stance. The US is increasingly dissatisfied with Japan, for it regards the abduction issue involving North Korea and Burma's case are similar violations of human rights. 4) Japan to express its support for US-India nuclear cooperation agreement during upcoming Japan-US summit NIHON KEIZAI (Page 1) (Slightly abridged) June 11, 2006 TOKYO 00003219 004 OF 011 Prime Minister Junichiro Koizumi has decided to express his support for the US-India agreement on cooperation on civilian nuclear power. The US, which is brandishing the threat of sanctions against Iran, a party to the Nuclear Non-Proliferation Treaty (NPT),for its nuclear development, has decided to cooperate with India, a nuclear power that is not an NPT member. The government of Japan, the only country on which nuclear weapons have been used, has strongly called for nonproliferation. Chances are that if it makes clear its support for the US and India out of consideration for the US, it could come under fire from within and from outside. Prime Minister Koizumi during his upcoming talks with US President Bush in Washington intends to convey support for cooperation between the US and India instead of indicating common understanding. He made this decision taking into account the fact that India has indicated that it will accept inspections of its civilian nuclear facilities by the International Atomic Energy Agency (IAEA). Tokyo's decision is also motivated by the desire to strengthen ties with India with the rise of China in mind. However, in response to the deep-rooted international opposition to the US having approved India's vague position, Japan intends to continue to call on India to accept inspections of its nuclear facilities, including military facilities. Washington had sought understanding from Japan for its agreement with India in March, as well as to place the issue on the agenda of the upcoming bilateral summit. Tokyo has thus far held off clarifying its stance toward the US-India agreement, with Foreign Minister Taro Aso noting, "We would like to carefully consider the possible impact of the agreement on international nuclear disarmament and the nuclear nonproliferation regime." 5) US Treasury Secretary calls for Japan's cooperation on financial sanctions against Iran TOKYO SHIMBUN (Page 3) (Full) June 10, 2006 Hitoshi, St. Petersburg Finance Minister Sadakazu Tanigaki and US Secretary of the Treasury Snow held a bilateral meeting on the sidelines of the G- 8 financial ministers meeting in St. Petersburg, Russia, on June ¶9. In reference to Iran's nuclear program, Snow called on Japan to discuss the possibility of imposing financial sanctions on Iran, such as a imposing a freeze on funds, saying: "Is it possible for Japan to express its concerns in the financial area?" This was the first time for a senior US government official to ask a key Japanese cabinet minister line up with the US on sanctions against Iran. Japan is now likely to be under even more intense pressure to respond. Tanigaki replied that Japan would determine its response upon holding discussions with European and other countries concerned. Japan has been cautious about joining sanctions against Iran, given its deep economic relations with that country through such TOKYO 00003219 005 OF 011 economic activities as the development of the Azadegan oil field. On his country's nuclear problem, President Ahmadi-Nejad has indicated a willingness to look into the package of rewards proposed by the US, Europe, China, Russia and other countries. The US has indicated that if the Iranian president rejected this proposal, Washington would slap economic sanctions against Teheran. In the bilateral talks, Tanigaki also stressed the importance of stabilizing the international exchange market, saying: "Violent fluctuations on the market are undesirable." 6) Last meeting between Finance Minister Tanigaki and US Treasury Secretary Snow SIPDIS SANKEI (Page 7) (Full) June 10, 2006 Shogo Otsuka, St. Petersburg June 9 was the last time for Finance Minister Sadakazu Tanigaki and Secretary of the Treasury John Snow to meet since Snow announced in late May his resignation. After Snow steps down from his post, Tanigaki will be the second most senior financial minister in the Group of Eight industrialized nations, following British Chancellor of the Exchequer Gordon Brown, who is widely expected to succeed Prime Minister Tony Blair. With the Liberal Democratic Party (LDP) presidential election coming up in September, there will be a few chances for Tanigaki to attend other international conferences. The meeting yesterday was the 12th for Tanigaki and Snow. Before departing for St. Petersburg, Tanigaki told a Sankei Shimbun reporter, "Mr. Snow is a gentleman. We get along well." The first meeting between Tanigaki, who assumed his post in 2003, and Snow was held in February 2004 when Japan was continuing its largest ever exchange intervention. Since then, the economic situations of both countries have improved, and they dined privately as "good friends" whenever they visited each other's country. 7) Foreign Minister Aso in meeting with Iranian vice foreign minister calls for Iran's acceptance of compromise proposal TOKYO SHIMBUN (Page 3) (Full) June 10, 2006 Foreign Minister Taro Aso met with the Iranian vice foreign minister at the Foreign Ministry yesterday to urge Iran's acceptance of the package of incentives proposed (by six countries): "We would like your country to fully study the proposal and then sit down at the negotiating table." The vice minister replied: "Although there are positive elements in the proposal, it also contains dubious, vague parts. We will thoroughly look into it and present our reply at a proper time. .... Iran would like to avoid the precondition (of suspending its uranium enrichment TOKYO 00003219 006 OF 011 activities). I believe, though, that there is some leeway between Iran's position and the rewards proposal." 8) Japan, Russia to hold first strategic dialogue on sidelines of G8 foreign ministerial NIHON KEIZAI (Page 2) (Excerpts) June 11, 2006 The Japanese and Russian governments have decided to hold their first strategic dialogue on the sidelines of the Group of Eight (G8) foreign ministerial in Moscow on June 29, ahead of the G8 Summit in St. Petersburg. Foreign Minister Taro Aso will meet with Russian Security Council Secretary Ivanov (former Foreign Minister) and again praise the way Russia is tacking with Iran's nuclear issue. Japan intends to reiterate the need to discuss the North Korean abduction issue as a major subject at the G8 Summit. In the strategic dialogue, Japan and Russia are expected to confirm the need to urge North Korea to return quickly to the six- party talks. Based on the results of the recent foreign ministerial meeting between Japan and Central Asian nations held in Tokyo on June 5 and the Summit Conference of the Shanghai Cooperation Organization (SCO) between Russia, China, and four Central Asian nations slated for June 15, the two countries will also discuss steps against terrorism and narcotics to bring stability to Central Asia. As the SCO Summit Conference will be joined also by Iranian President Ahmadinejad as an observer, Japan and Russia in their strategic dialogue will also discuss the outlook for Iran's response on the nuclear issue. The establishment of a strategic dialogue was agreed on during the Japan-Russia summit talks held in last November. 9) "Cautious judgment needed for continuing yen loans to China after fiscal 2006 as well," says Aso YOMIURI (Page 2) (Full) June 12, 2006 Commenting on the government decision on June 6 to lift the suspension of yen loans to China for fiscal 2005, Foreign Minister Aso during a town meeting held in Kitakyushu on June 11 noted: "(The government has agreed to suspend yen loans to China until fiscal 2008). Whether the lifting of the suspension should be continued into that year will be determined depending on the development of future talks between Tokyo and Beijing." During a press conference held later, he gave high marks to Chinese President Hu Jintao's indication of his wish to visit Japan, if conditions are met. 10) Foreign Ministry to give favorable consideration to diplomats who report leaks ASAHI (Page 3) (Full) June 12, 2006 The Foreign Ministry has decided to strengthen counterespionage measures for diplomats stationed overseas. The decision stems from its reflection on the suicide of an official at the Japanese TOKYO 00003219 007 OF 011 Consulate General in Shanghai. In this case, the official killed himself, leaving a suicide note reading that he was blackmailed by Chinese authorities to hand over classified information. The ministry will inform all members of the basic policy that if a ministry official is threatened to provide clasified information, the organization will deal with the case. If the official files an accurate report without concealing anything, the ministry will give that official favorable consideration in terms of personnel decisions, even if that person leaked information. The ministry plans to provide training to inform all its personnel of the counterespionage measures, as well as to strengthen information control at missions overseas. 11) Japan-ROK EEZ talks today likely to run into difficulties over Takeshima issue NIHON KEIZAI (Page 2) (Excerpts) June 12, 2006 Japan and South Korea will hold the 5th round of senior working- level boundary demarcation talks on both countries' exclusive economic zones (EEZs),starting today at Japan's Foreign Ministry starting today and running for two days. The talks will be the first in six years since June 2000. The negotiations, though, are likely to run into snags, given the issue of Takeshima/Dokdo islets claimed by both Japan and South Korea. On the border demarcation issue, Japan intends to propose that the EEZs should be determined by an equidistant line between Takeshima and Ullundo as before, with Japan's base point starting from Takeshima and South Korea's from Ullungdo. South Korea's previous assertion was to set the border by an equidistant line between Ullungdo and Okinoshima Island, with South Korea's base point starting from Ullundo and Japan's from Okinoshima Island. But South Korea is likely to revise its previous assertion to make its base point Takeshima. In the talks today, Japan intends to discuss demarcation after reaffirming the 1996 agreement reached by the top leaders of both countries. Given the recently heightened tensions over a marine survey around Takeshima, Japan intends to propose establishing a prior notification system on scientific surveys in this area. The participants include Japan's Foreign Ministry International Law Bureau Director General Ichiro Komatsu and South Korean Foreign Ministry Treaties Bureau Director General Park Hui Kwon. 12) NGO survey: North Korea saturated with counterfeit bills because can't circulate them overseas due to US sanctions SANKEI (Page 2) (Excerpts) June 12, 2006 An interview survey conducted in North Korea by a Japanese nongovernmental organization, Rescue The North Korean People/Urgent Action Network (RENK),found that counterfeit bills, including US dollars, Chinese yuan, and Japanese yen, were circulating in massive amounts in North Korea and regions bordering between China and North Korea. The survey results also revealed that North Korea is saturated with the bogus bills due to US-imposed financial sanctions and its strict crackdown on that country for its money laundering and the circulation of the counterfeit currency it has printed. TOKYO 00003219 008 OF 011 This April, a RENK member interviewed five men and women in their 30s-60s living in Pyongannamdo, Hamgyongpukdo, Hamgyongnamdo, or Hwanghaenamdo in North Korea about bogus bills and other matters. With the departure of this member from North Korea to China, RENK tabulated the results of the survey. A male drug smuggler in his 30s said that he had sold stimulant drugs at the price of 610,000 yen to someone in a place near the China-North Korea border and afterwards he had found the money he received in yen was all counterfeit. In a stimulant drug deal, there is no practice to make sure whether money or drugs are fake or genuine at the time of their exchange. So this man was unable to make sure whether the money was real. According to this man, a North Korean defector now living in South Korea sent 20,000 dollars via a secret remittance channel last December to his relative living in North Korea, but his money was converted into fake 100 dollars by a North Korean border guard. In the case of a trader in his 40s, he crossed the border to meet with his relative living in China, but he was detained by Chinese security authorities and was handed over to an organization affiliated with North Korea's People's Security Ministry (police organization). An official from the organization seized the 5,000 Chinese yuan the trader had before questioning and after the questioning returned the money to him, but he found that of the 5,000 yuan returned to him, 3,000 yuan had been switched to fake bills. Kansai University Professor Lee Young Hwa, director of RENK, gave this analysis about the recent survey results: "No doubt North Korea has had a hand in making and circulating fake bills as a national project, but it seems to be becoming difficult to circulate fake bills outside the country because of the impact of America's sanctions on that country. There seems to be a considerable number of poorly-made counterfeit bills mixed with sophisticated ones." 13) Antiterrorism measures; METI plans to expand items subject to embargo to precious metals ASAHI (Page 3) (Excerpts) June 12, 2006 The Ministry of Economy, Trade, and Industry (METI) plans to reinforce its trade control system, including increasing the number of items subject to the export ban, as part of measures to prevent terrorism. Following a series of illegal exports of equipment that can be converted for military use, METI has decided to revise the government ordinance regarding the Foreign Exchange and Foreign Trade Control Law in compliance with a UNSC resolution that seeks stronger antiterrorism measures. The existing domestic law prohibits exports of weapons of mass destruction and materials that are convertible for military use and money transfers to international terrorist organizations and terrorists designated by the UNSC and other organizations. The revised law will ban exports of general cargo as well. It will thus become impossible to send precious metals, which can easily be converted into money. TOKYO 00003219 009 OF 011 Under the revised law, control of exports to Iran, Iraq, North Korea, and Libya, which are suspected of developing weapons of mass destruction, will also be tightened. It has thus far been possible to export even items that are convertible for military use if the value of such cargo was below 50,000 yen. The revised law will require permission for exports of such goods. This is designed to prevent exports of second-hand electronic equipment, such as sonar, which detect the movements of submarines, at low prices. 14) Minshuto head Ozawa certain to be reelected as many party members call for his remaining in presidency MAINICHI (Page 1) (Full) June 12, 2006 It has now become certain that Minshuto (Democratic Party of Japan) President Ichiro Ozawa will be reelected in the leadership election slated for September. Ozawa is determined to keep the present executive lineup, including Acting President Naoto Kan and Secretary General Yukio Hatoyama. Given that, many junior and mid-level lawmakers in the main opposition party are now supporting the maintaining of the present unanimous party arrangement. Attention is now on whether a rival candidate will run for the race, but chances are that Ozawa will be reelected without going through an election. Ozawa said yesterday in Aomori City that he would make public a basic policy of the party before the presidential race. Ozawa's term will expire at the end of September since he assumed in April after his predecessor Seiji Maehara had stepped down. He has secured a certain level of appreciation from the party members because of the party's victory in the April Lower House by-election for Chiba No. 7 constituency and the success in preventing controversial bills from being passed during the current Diet session. Therefore, in addition to the pro-Ozawa group, including Kan, Hatoyama and lawmakers coming from the former Social Democratic Party, junior lawmakers, who have distanced themselves from Ozawa, have gradually called for Ozawa's staying at the helm. In addition to its Diet members, the largest opposition allows its rank-and-file members and supporters to vote in the presidential election. Some party members are working on fielding a rival candidate against Ozawa. Even if a rival candidate is fielded, it will be difficult for the candidate to compete with Ozawa. 15) Ozawa favors upgrading Defense Agency to ministry ASAHI (Page 3) (Full) June 12, 2006 Ichiro Ozawa, president of the leading opposition Democratic Party of Japan (Minshuto),has expressed his approval of upgrading the Defense Agency to the status of a ministry. "The obligation of national defense should properly assigned to an organization of the state," Ozawa said in a speech he delivered in the city of Aomori yesterday. "We should make (the defense agency) into a proper ministry," Ozawa added. However, Ozawa TOKYO 00003219 010 OF 011 criticized the government for its introduction of relevant bills to the Diet at the final stage of its current session. He said: "It's irresponsible that the government suddenly presented the bills, without even debate on security policy. I can't support the Koizumi cabinet's way of doing things." 16) Poll: 54% of political party supporters voted for different party TOKYO SHIMBUN (Page 11) (Full) June 11, 2006 An estimated 54% of those who support a particular political party say they have voted for a different political party or its candidate, it was learned from a nationwide public opinion survey conducted by the Japan Polling Organization on June 3-4 to probe into the political awareness of the nation's voting population, including unaffiliated voters who are said to affect the outcome of elections. The poll found that the core of public support for political parties was actually about half of what it seems, and the findings also show that the trends of those moderate in their support for political parties and those with no particular party affiliation hold the key to the outcome of elections. A public opinion survey of the nation's unaffiliated voting population was last conducted in December 1998 when the Obuchi cabinet was in office. Among those who have no political party to support, the proportion of those who are interested in politics has increased from 56% in the last survey to 62% in the latest survey. In the latest survey, 78% answered "yes" when asked if they were interested in politics. Respondents were also asked which political party they supported. In response to this question, a total of 77% gave the names of specific political parties, such as the Liberal Democratic Party and the Democratic Party of Japan. Among them, 54% answered "yes" when asked if they have ever voted for a political party other than the one they used to support or if they have otherwise voted for a candidate on the ticket of a political party other than the one they used to support in recent elections for the House of Representatives and the House of Councillors. Note:percentages rounded off. Polling methodology: For the survey, a total of 3,000 persons were sampled out of males and females aged 20 and over at 250 locations throughout the country on a stratified two-stage random- sampling basis, so as to epitomize the nation's voting population of more than a 100 million. The survey was conducted over a period of two days, June 3-4, on a face-to-face interview basis. Answers were obtained from 1,787 persons, excluding those who could not be interviewed because of their having moved away or being on a trip, or for other reasons. The retrieval rate was 59.6%. 17) Poll: 80% feel interpersonal connections weakening YOMIURI (Page 2) (Abridged) June 12, 2006 In a recent nationwide face-to-face public opinion survey TOKYO 00003219 011 OF 011 conducted by the Yomiuri Shimbun, 80% answered "yes" when asked if they thought of themselves as becoming less sociable or if they thought their interpersonal ties were weakening, up 7percentage points from the previous survey taken in July 2000. The proportion of those who answered "yes" marked a rapid increase in medium-size cities, small cities, towns, and villages, rather than in big cities. The poll shows that an increasing number of people are feeling a lack of human relationships not only in big cities but also throughout the country. The survey was conducted May 13-14. In the survey, 80% answered "yes" when asked if they thought their interpersonal ties were becoming weaker, with 19% saying "no." "Yes" answers accounted for 81% in medium-size cities with a population of more than 100,000, excluding Tokyo's 23 wards and government-designated cities. Among other city categories, the "yes" proportion was 80% in small cities with a population of less than 100,000; 78% in big cities (i.e., Tokyo's 23 wards and government-designated cities); 75% in towns and villages. The figure in big cities was up 3percentage points from the last survey. However, there were substantial increases in other city categories as thepercentage was up 6 points in medium-size cities, towns, and villages, and up 10 points in small cities. In the breakdown of reasons, 49% said that was because many more people feel it troublesome to keep in touch with others. Among other reasons, 48% said that was because many more people cannot understand the positions of others, with 48% saying many more people spend time playing video games alone or using a personal computer. SCHIEFFER