Identifier
Created
Classification
Origin
06TOKYO675
2006-02-07 07:48:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tokyo
Cable title:
CAN THE KOIZUMI GOVERNMENT MANAGE HIS ECONOMIC
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UNCLAS SECTION 01 OF 02 TOKYO 000675
SIPDIS
SENSITIVE
SIPDIS
PLEASE PASS TO USTR JOHN NEUFFER/MICHAEL BEEMAN.
E.O. 12958: N/A
TAGS: ECON EFIN PGOV JA
SUBJECT: CAN THE KOIZUMI GOVERNMENT MANAGE HIS ECONOMIC
AGENDA IN THE DIET?
REF: A. REF A: TOKYO 399
B. REF B: TOKYO 597
C. REF C: TOKYO 325
D. REF D: TOKYO 408
E. REF E: TOKYO 441
F. REF F: TOKYO 533
UNCLAS SECTION 01 OF 02 TOKYO 000675
SIPDIS
SENSITIVE
SIPDIS
PLEASE PASS TO USTR JOHN NEUFFER/MICHAEL BEEMAN.
E.O. 12958: N/A
TAGS: ECON EFIN PGOV JA
SUBJECT: CAN THE KOIZUMI GOVERNMENT MANAGE HIS ECONOMIC
AGENDA IN THE DIET?
REF: A. REF A: TOKYO 399
B. REF B: TOKYO 597
C. REF C: TOKYO 325
D. REF D: TOKYO 408
E. REF E: TOKYO 441
F. REF F: TOKYO 533
1. (SBU) Summary. The economic debate in this Diet session
is shaping up to be more contentious than we anticipated, due
to the convergence of five issues the opposition party has
exploited to criticize government handling of the economy.
Some observers believe the Prime Minister has emerged with a
weakened mandate for economic reform but the Embassy expects
Koizumi to remain determined to press on with his reform
agenda. With firm control over two-thirds of the Diet Lower
House and a history of emerging stronger after adversity, we
should not discount his prospects too much despite his rocky
beginning. Septel reports on the individual economic bills
before this Diet session and the prospects for each. End
Summary
2. (SBU) This year,s Ordinary Diet session began badly for
Prime Minister Koizumi due to the unfortunate convergence of
five issues -- the earthquake building code scandal, the
Livedoor mess (see Ref A),allegations of bid-rigging at the
Defense Facilities Administration Agency (DFAA) (see Ref B),
the suspension of U.S. beef imports (see Refs C, D, E, and
F),and an unexpected surge in opposition within the ruling
Liberal Democratic Party (LDP) to the amendment of the
Imperial House Law over succession.
3. (SBU) The earthquake building code scandal broke in late
2005 when a Japanese architect admitted falsifying quake
resistance data in designs for at least 71 buildings in
Japan. The Livedoor debacle began with a raid on the
Internet company in January followed by the arrest of its
colorful CEO, Takafumi Horie, and several other top managers.
They are accused of falsifying accounts and misleading
investors. In addition, three current and former
high-ranking officials of the DFAA have been arrested on
suspicion of colluding with manufacturers over projects worth
billions of yen.
4. (SBU) The government's ability to manage the docket of
economic legislation in this Diet session became even more
complicated on the Diet's opening day on January 20 when
Japan suspended processing of U.S. beef imports because a
U.S. company mistakenly shipped a cut of beef banned in Japan
under our bilateral agreement. The opposition party has
blamed the government for too hastily allowing importation to
resume. Agricultural Minister Shoichi Nakagawa further
inflamed the controversy by first accepting responsibility
for not sending Japanese inspectors to U.S. plants prior to
lifting the ban and then reversing himself.
4. (SBU) Finally, after several months of study and
relatively smooth sailing, the government's succession
amendment to the Imperial House Law has encountered
unexpected LDP opposition, including among some new members
who owe their election to endorsement of the Prime Minister's
reform agenda. This likely will become a distraction for the
ruling party but with very little impact on its economic
agenda.
5. (SBU) The opposition DPJ had already begun calling this
session the &Safety8 Diet. With plans to pursue the
Livedoor scandal, the earthquake building code scandal, and
the bid-rigging accusations at DFAA already in place, the
suspension of U.S. beef imports further emboldened the
opposition party. After successfully delaying the passage of
the supplementary budget with acrimonious questions over
beef, the DPJ seemed to be finding its voice again and likely
will be reluctant to allow the LDP to pass all of the
government economic bills without careful scrutiny and
debate. However, the arrests of lower house member Yoshitake
Kimata -- the third DPJ arrest since late last year -- will
likely hobble the DPJ in future Diet confrontations with the
LDP.
TOKYO 00000675 002 OF 002
6. (SBU) The Prime Minister has labeled this Diet session the
&administrative reform8 Diet to emphasize his continuing
commitment toward the structural reform of Japan's economy.
Important economic bills include an administrative reform
bill, to be submitted by the Cabinet Office after the passage
of the budget (see septel for a discussion of this and other
economic bills.). It provides a general framework for reform
that should prevent the restructuring achieved thus far from
stalling or moving backwards after Prime Minister Koizumi
leaves office, as expected, in September. In addition,
Koizumi has identified the consolidation of the eight
government-affiliated financial institutions, included in the
administrative reform bill, as his next goal after postal
privatization.
7. (SBU) Comment. Despite the fact that some observers
believe the Prime Minister has emerged with a reduced mandate
to devote his remaining time in office to sustaining economic
reform, we should not discount his prospects too much. The
ruling coalition still boasts a two-thirds majority in the
Lower House and the Prime Minister has a history of emerging
from adversity with renewed determination to pursue his
reform agenda.
SCHIEFFER
SIPDIS
SENSITIVE
SIPDIS
PLEASE PASS TO USTR JOHN NEUFFER/MICHAEL BEEMAN.
E.O. 12958: N/A
TAGS: ECON EFIN PGOV JA
SUBJECT: CAN THE KOIZUMI GOVERNMENT MANAGE HIS ECONOMIC
AGENDA IN THE DIET?
REF: A. REF A: TOKYO 399
B. REF B: TOKYO 597
C. REF C: TOKYO 325
D. REF D: TOKYO 408
E. REF E: TOKYO 441
F. REF F: TOKYO 533
1. (SBU) Summary. The economic debate in this Diet session
is shaping up to be more contentious than we anticipated, due
to the convergence of five issues the opposition party has
exploited to criticize government handling of the economy.
Some observers believe the Prime Minister has emerged with a
weakened mandate for economic reform but the Embassy expects
Koizumi to remain determined to press on with his reform
agenda. With firm control over two-thirds of the Diet Lower
House and a history of emerging stronger after adversity, we
should not discount his prospects too much despite his rocky
beginning. Septel reports on the individual economic bills
before this Diet session and the prospects for each. End
Summary
2. (SBU) This year,s Ordinary Diet session began badly for
Prime Minister Koizumi due to the unfortunate convergence of
five issues -- the earthquake building code scandal, the
Livedoor mess (see Ref A),allegations of bid-rigging at the
Defense Facilities Administration Agency (DFAA) (see Ref B),
the suspension of U.S. beef imports (see Refs C, D, E, and
F),and an unexpected surge in opposition within the ruling
Liberal Democratic Party (LDP) to the amendment of the
Imperial House Law over succession.
3. (SBU) The earthquake building code scandal broke in late
2005 when a Japanese architect admitted falsifying quake
resistance data in designs for at least 71 buildings in
Japan. The Livedoor debacle began with a raid on the
Internet company in January followed by the arrest of its
colorful CEO, Takafumi Horie, and several other top managers.
They are accused of falsifying accounts and misleading
investors. In addition, three current and former
high-ranking officials of the DFAA have been arrested on
suspicion of colluding with manufacturers over projects worth
billions of yen.
4. (SBU) The government's ability to manage the docket of
economic legislation in this Diet session became even more
complicated on the Diet's opening day on January 20 when
Japan suspended processing of U.S. beef imports because a
U.S. company mistakenly shipped a cut of beef banned in Japan
under our bilateral agreement. The opposition party has
blamed the government for too hastily allowing importation to
resume. Agricultural Minister Shoichi Nakagawa further
inflamed the controversy by first accepting responsibility
for not sending Japanese inspectors to U.S. plants prior to
lifting the ban and then reversing himself.
4. (SBU) Finally, after several months of study and
relatively smooth sailing, the government's succession
amendment to the Imperial House Law has encountered
unexpected LDP opposition, including among some new members
who owe their election to endorsement of the Prime Minister's
reform agenda. This likely will become a distraction for the
ruling party but with very little impact on its economic
agenda.
5. (SBU) The opposition DPJ had already begun calling this
session the &Safety8 Diet. With plans to pursue the
Livedoor scandal, the earthquake building code scandal, and
the bid-rigging accusations at DFAA already in place, the
suspension of U.S. beef imports further emboldened the
opposition party. After successfully delaying the passage of
the supplementary budget with acrimonious questions over
beef, the DPJ seemed to be finding its voice again and likely
will be reluctant to allow the LDP to pass all of the
government economic bills without careful scrutiny and
debate. However, the arrests of lower house member Yoshitake
Kimata -- the third DPJ arrest since late last year -- will
likely hobble the DPJ in future Diet confrontations with the
LDP.
TOKYO 00000675 002 OF 002
6. (SBU) The Prime Minister has labeled this Diet session the
&administrative reform8 Diet to emphasize his continuing
commitment toward the structural reform of Japan's economy.
Important economic bills include an administrative reform
bill, to be submitted by the Cabinet Office after the passage
of the budget (see septel for a discussion of this and other
economic bills.). It provides a general framework for reform
that should prevent the restructuring achieved thus far from
stalling or moving backwards after Prime Minister Koizumi
leaves office, as expected, in September. In addition,
Koizumi has identified the consolidation of the eight
government-affiliated financial institutions, included in the
administrative reform bill, as his next goal after postal
privatization.
7. (SBU) Comment. Despite the fact that some observers
believe the Prime Minister has emerged with a reduced mandate
to devote his remaining time in office to sustaining economic
reform, we should not discount his prospects too much. The
ruling coalition still boasts a two-thirds majority in the
Lower House and the Prime Minister has a history of emerging
from adversity with renewed determination to pursue his
reform agenda.
SCHIEFFER