DAILY SUMMARY OF JAPANESE PRESS 02/07/06

UNCLAS SECTION 01 OF 10 TOKYO 000691 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: DAILY SUMMARY OF JAPANESE PRESS 02/07/06 INDEX: (1) Poll: 74% see income gap as widening (2) Interview with constitutional research commission chairmen from LDP, New Komeito, Minshuto; LDP to formulate second draft constitution in latter half of the year, New Komeito to come up with proposals to add to the Constitution, Minshuto to sort out amendment proposals for the public (3) Japanese, US governments drawing fire over discontinued US beef imports (4) Americans less interested in anti-BSE measures; USG still enjoying consumer confidence (5) US security unit chief Maher, US Embassy official responsible for USFJ realignment states that without relocation of Futenma, reduction of Marines not possible (6) Editorial: Gov't must explore strategy for Iraq-based GSDF troops to exit with applause (7) Shaky Japan-US-China relations - the light and shadow of Koizumi diplomacy (Part 5): Foreign Ministry cringes, unable to determine attitude toward China (8) Entire picture of reorganization of government-affiliated financial institutions: Yen loans to be integrated into JICA in reforming ODA system; JBIC to be dismantled ARTICLES: (1) Poll: 74% see income gap as widening ASAHI (Page 1) (Full) February 4, 2006 A total of 74% of the public think the income gap in Japan is expanding. Among them, 70% see problems about such a trend. A total of 81% feel uneasy about being pinched for money. In the meantime, a total of 58% have a sense of resistance to the trend that is dividing society into winners and losers. Such public awareness of disparities and money stood out in a mail-based nationwide public opinion survey conducted by the Asahi Shimbun from December last year through January this year. In the survey, respondents were also asked if they thought competition would heighten vitality. In response to this question, "yes" accounted for 60%. In addition, respondents were further asked if they thought Japan was a society where it is impossible to recover, and "no" accounted for 60%. As seen from these figures, the general public is taking a positive view of competitive society in itself. The Diet is also debating economic disparities in society in connection with Prime Minister Koizumi's structural reform initiatives. In the survey, respondents were asked if they thought the income gap was widening. In response to this question, 74% answered "yes," with 18% saying "no." Among those who answered "yes," 69% regarded the widening of the income gap as a problem. Similarly, 51% of all respondents saw the widening of the income gap as problematical. TOKYO 00000691 002 OF 010 In the breakdown of those thinking the income gap was widening, males accounted for 77%, and females 71%. Males in their 40s and males in their 50s accounted evenly for 83%, topping all other age brackets. Those not satisfied with their household income have strong feelings about it. In the case of those thinking the widening of the income gap was a problem, 54% of them ascribed the gap to factors other than individual capability and diligence. Among those seeing no problem about the widening of the income gap, 72% attributed it to individual capability and diligence. As far as money is concerned, 3% thought of themselves as winners, while 21% categorized themselves as losers. A total of 72% answered that they did not belong to either group. Respondents were also asked if they had a sense of resistance to such dichotomy. In response, "yes" accounted for 58%, with "no" at 35%. In the survey, respondents were also asked about competition. "Do you think if competition will heighten social vitality?" This question drew "yes" from 59%. They were further asked if they thought Japan was a society where they could not recover once they fell behind. In response to this question, 60% answered "no." (2) Interview with constitutional research commission chairmen from LDP, New Komeito, Minshuto; LDP to formulate second draft constitution in latter half of the year, New Komeito to come up with proposals to add to the Constitution, Minshuto to sort out amendment proposals for the public YOMIURI (Page 4) (Full) February 7, 2006 The ruling Liberal Democratic Party (LDP),its coalition partner New Komeito, and the main opposition party Minshuto (Democratic Party of Japan) will continue internal debate on a revision of the Constitution this year, as well. How far have their constitutional debates been boiled down? LDP Constitutional Research Commission Chairman Hajime Funada: The LDP released its draft constitution last November. Some assume, however, that the pace of speed to expedite constitutional debate might slow down because of the formulation of the draft constitution. Our task for this year is to maintain enthusiasm among party members on the draft constitution. We want to hold symposiums in 11 regional blocs across the countries. In an attempt to maintain a mood of expectation about constitutional reform, we would like presidential candidates to talk about their views on Article 9 of the Constitution, as well as on the rights and obligation of the people during their campaigns for the September presidential race. The new president's opinion will affect constitutional debate in the LDP. We expect to hear views not only from Diet members but also from rank-and-file LDP members. We want to redefine the rights and obligations of the people in the draft constitution so that public cooperation with the government will be highlighted. This means to formulate a second draft constitution. We want to hammer out the definition of the right to collective self-defense in the TOKYO 00000691 003 OF 010 process of discussing a fundamental law on national security. New Komeito Constitutional Research Commission Chairman Akihiro Ota: With an eye on the fall this year, the New Komeito will work out a set of proposals for the Constitution in some form. We would like to come up with our draft constitution before constitutional debate begins after a bill to hold a referendum on a revision of the Constitution clears the Diet. The commission will hold as many meetings as possible so that it will boil down views in the party. The common perception among the people is that the present Constitution is excellent. The continuity of the principles of a constitution is important. Since the people decide on a constitution through voting, the process for creating a constitution should be careful. Our party's position is as follows: the three basic principles of the Constitution -- popular sovereignty, respect for fundamental human rights, and pacifism -- should be firmly upheld; and the first paragraph (war renunciation) and second paragraph (not possessing military power) of Article 9 should be also kept intact. Our party then calls for adding such new rights as an environment right and privacy right to the existing rights. If possible, we would like to stipulate them in an article. Regarding Article 9, we are now discussing as to whether the existence of the Self-Defense Forces (SDF) and ways of international contribution should be added to the present Constitution. Many people see our party as "peace party" that thinks a great deal of Article 9. We take that image seriously. Minshuto (Democratic Party of Japan) Constitutional Research Commission Chairman Yukio Edano It is not necessary to discuss all subjects in constitutional reform all at once. Subjects on which a national debate is over and an agreement is reached at the Diet should be first discussed. We have finished discussions on a review of the security, decentralization, and the cabinet system. The set of proposals our party presented last October was too long in terms of quantity. Therefore, we want to sort out them so that the public will find it easy to judge or discuss them. Setting aside the question of whether it is right to call it "itemization," which (President Seiji Maehara took a position of looking into),it is irresponsible to call on the public to read it all. I want party headquarters to host symposiums in 11 regional blocs nationwide. (3) Japanese, US governments drawing fire over discontinued US beef imports ASAHI (Page 4) (Full) February 7, 2006 The public is growing increasingly distrustful of the government's steps to deal with US beef imports. The cabinet released a statement last November saying that the government TOKYO 00000691 004 OF 010 would inspect US meatpackers before resuming beef imports, but the government failed to do so. Japanese Communist Party Executive Committee Chairman Kazuo Shii pointed out the irresponsibility of the Japanese and US governments, saying: "In resuming exports to Japan, the US neither had an intention to abide by a set of requirements, such as removing specified risk materials, or rules. In addition, Japan had no serious intention to conduct inspections." Minshuto (Democratic Party of Japan) Secretary General Yukio Hatoyama also criticized the government, noting: "The US was sloppy, but the Japanese government, which failed to detect its sloppiness, was sloppier than the US. The government's premature decision to resume imports was clearly wrong." Hatoyama also revealed his party's plan to continue pursuing the government's accountability as one of the most serious issues in Diet question-and-answer sessions on the fiscal 2006 budget that stared yesterday. Meanwhile, Liberal Democratic Party Upper House Secretary General Toranosuke Katayama shrugged off the opposition bloc's call for the resignation of Agriculture, Forestry and Fisheries Minister Shoichi Nakagawa. But Katayama also commented, "Japan has to check the procedures thoroughly before resuming imports." (4) Americans less interested in anti-BSE measures; USG still enjoying consumer confidence NIHON KEIZAI (Page 7) (Full) February 6, 2006 Since the Japanese government imposed a second ban on US beef imports, the sloppiness of the safety procedures being taken by the US to prevent BSE has been in the spotlight. American consumers, however, have shown little interest in the beef safety issue. Speculation is that the difference in reactions of Japanese and American consumers is attributable to differences between the two countries in media coverage of the BSE problem and in consumer confidence in government handling of food safety issues. Japan decided to re-impose a ban on US beef imports on Jan. 20 in reaction to the discovery of backbones, designated as a specific risk material (SRM),in a US beef shipment to Japan. At that time, leading US newspapers and TV news took up Japan's decision, but few have made follow-up reports. The US Department of Agriculture (USDA) released on Feb. 2 an inspectors' report on anti-BSE measures pointing out the sloppiness of management at most of the 12 meat-processing facilities in the US inspected. The report cited that nine facilities, three-fourths of them, did not properly keep records on SRM removal. All Japanese newspapers covered the USDA report in evening editions on Feb. 3. In contrast, leading American newspapers did not give prominently coverage to the story. The Washington Post and the Wall Street Journal on Feb. 3 gave inside-page play to the report, but the New York Times and USA Today ignored the story. A major trading house spokesman said: "There has been no major change" in demand TOKYO 00000691 005 OF 010 for US beef, "even after Japan's re-imposition of a ban." Michael Hansen, a member of the Consumers Union, a major American consumer group critical of Washington's anti-BSE measures, commented: "Many consumers in the US have little interest in anti- BSE measures, so the US media have not prominently covered the issue. ... Even so, it is not true to say that the American people's interest in food safety is low." For instance, in the US, given that the volume of tuna consumed has skyrocketed due to the recent sushi boom, more attention has been paid to the issue of mercury-tainted large-size fishes and shellfishes than in Japan. The Food and Drug Administration of the US issued notice earlier than Japan warning that pregnant women should limit the intake of large fishes and shellfishes. The Chicago Tribune carried an article concerning an investigation report on mercury- contaminated tuna late last year. An executive of a leading US meatpacker grumbled: "I wonder why only beef has become the focus of attention in Japan." David Roppek (TN: phonetic),a lecturer of the Community Hygiene Faculty at Harvard University who is an expert on the BSE issue, gave this analysis: "The difference in Japanese and American consumer confidence in government handling of food safety has been reflected in their different reactions to the BSE issue." The first case of BSE in Japan in the fall 2001 completely deprived consumers of confidence in the Japanese government, because the government had always said, "Japanese beef is safe." The government's continued authorization of the use of meat-and- bone meal also undermined consumer confidence in the government further. Meanwhile, the US government has prohibited farmers from using meat-and-bone meal four year earlier than Japan. Regarding the potential risk of BSE infection in the US, as well, Washington has said: "The possibility is low, but it is not zero." According to Roppek, when the first case of BSE was reported in the US late in 2003, "the US government did not lose consumer confidence and prevented a panic because it had taken safety measures several years earlier than Japan and also continued to offer necessary information." Americans still place high confidence in USDA-quality-guaranteed US beef. Unless a sensational incident, like a discovery of a number of BSE-infected cows, takes place, it is likely that American consumers will continue to remain calm about the BSE issue. (5) US security unit chief Maher, US Embassy official responsible for USFJ realignment states that without relocation of Futenma, reduction of Marines not possible OKINAWA TIMES (Page 2) (Full) February 7, 2006 Kevin Maher, the US Embassy in Japan's chief of the security unit, who is responsible for US force realignment, briefed reporters in Fukuoka City yesterday on the realignment report. He said: "The relocation of Futenma Air Station and realignment as a whole are a package. If the relocation is not carried out, it would not be possible to lessen the security burden, including reducing 7,000 Marines stationed in Okinawa." TOKYO 00000691 006 OF 010 Maher stressed, "Just reducing will lead to weakening the US- Japan alliance." "I would like to ask the residents of Okinawa Prefecture for their calm consideration and understanding," he added. However, Maher also referred to the opposition of Governor Keiichi Inamine and Nago City to the plan to relocate Futenma to the coastal portion of Camp Schwab, as agreed by the Japanese and US governments: "There will likely be some technical changes by the time the final report comes out in late March." He indicated a flexible stance toward such revisions as the specific site for the relocation and the direction of the runway. Turning to the US Marine Corps' Iwakuni base (Yamaguchi Prefecture),which is to be the site for the relocation of carrier-borne jets no at Atsugi Air Station (Kanagawa Pref.),he explained: "Iwakuni, being close to North Korea, is a strategic point for military units rapidly responding to a contingency in the Far East. The decision to transfer carrier jets there will make response more effective by integrating the operations of the US Marines and Navy." (6) Editorial: Gov't must explore strategy for Iraq-based GSDF troops to exit with applause SANKEI (Page 2) (Full) February 4, 2006 The government is now reportedly preparing to complete the withdrawal in May of Japan's Ground Self-Defense Force troops currently deployed in the southern Iraqi city of Samawah. British and Australian forces, tasked with Samawah's public security, are planning to pull their troops out of Iraq this spring. In that case, the government is worried about how to ensure the safety of the Samawah-based GSDF personnel. This seems why the government is preparing to recall the unit. If that is the case, however, we cannot but wonder if the GSDF troops will be applauded by the Iraqi people and the international community as they leave. The GSDF's program of Iraq reconstruction assistance is now in its third year. In Samawah, the GSDF has been hiring up to 1,100 locals a day, offering jobs like repairing public facilities. The GSDF wrapped up its water supply as water purifiers went into operation. However, the GSDF remains on its missions, such as repairing schools and roads. In mid-January, findings from a poll of local residents in the province of Muthanna, where Samawah is situated, were released. According to the poll, 66% do not want the GSDF to pull out this year. As seen from this figure, a majority of local communities there want the GSDF to continue its reconstruction aid. If the GSDF unilaterally discontinues these job offerings and assistance projects, its withdrawal might be fraught with risk. The government has already pledged a total of 5 billion dollars in aid for Iraq reconstruction. Japan has already distributed or decided on grant aid amounting to 1.5 billion dollars. Japan also aims to provide yen loans equivalent to 3.5 billion dollars. Iraq probably wants Japan to continue its assistance with such loan TOKYO 00000691 007 OF 010 aid. The government should explore an exit strategy in order to facilitate such local coordination. In the beginning there was nothing. The government said, "Let there be a withdrawal schedule, and there was a withdrawal schedule." That is probably not the case. The problem is that Self-Defense Forces personnel on overseas missions may use weapons to protect themselves but are not allowed to engage in public security. This is because the government interprets the act of fighting back when involved in a battle as falling under the use of force, prohibited by the Constitution of Japan's Article 9. However, the constitutionally prohibited use of force as a means of settling international disputes is for aggressive wars. Article 9 is also interpreted as not prohibiting Japan from participating in the United Nations' policing. The government, however, does not recognize this interpretation. Japan does not accept even the United Nations' global standard rules of engagement that allow using armed force to repel armed attacks disturbing the execution of duties. As it stands, Japan is a far cry from being a country acting in concert with the international community and fighting against terrorism. In his recent policy speech before the Diet, Prime Minister Junichiro Koizumi said, "Japan will assist Iraq with its nation- rebuilding efforts as a responsible member of the international community." Japan should be able to ensure such resolve. That is the job of the premier, isn't it? (7) Shaky Japan-US-China relations - the light and shadow of Koizumi diplomacy (Part 5): Foreign Ministry cringes, unable to determine attitude toward China MAINICHI (Page 2) (Almost full) February 3, 2006 "Even if you tell me not to visit, I will do so." So Prime Minister Junichiro Koizumi revealed his intention to continue visiting Yasukuni Shrine during a meeting with President Bush on Nov. 16 at the Kyoto State Guesthouse. This conversation was excluded from a press release, thereby leaving Ministry of Foreign Affairs (MOFA) officials feeling impotent. "Such a statement from the prime minister," a senior MOFA official lamented, "made us feel that there is no role for us to play." Three weeks later, an essay written by former Ambassador to the United States Takakazu Kuriyama, 74, appeared in the New Year's issue of the MOFA-affiliated journal Gaiko Forum. The essay created a stir among foreign policy watchers at home and abroad, because Kuriyama, who also served as vice minister, defined his position as "not supporting the prime minister's visits to Yasukuni Shrine," albeit with conditions attached. Beginning with this line, "My assertions do not stem from a masochistic view of history," and based on the conviction that acknowledging the mistakes of the past would help strengthen the moral standpoint of the nation, the long essay urges the necessity of rapprochement with neighboring countries. The journal carried the essay in two installments - one in its New TOKYO 00000691 008 OF 010 Year's issue and one in its February issue. When asked what compelled him to write it, Kuriyama said: "Japan's nationalism appears to be getting out of control. I'd like those who are in responsible positions in the political world to be aware of this point." Many in the Foreign Ministry, though, are furious with Kuriyama's essay or perplexed by it. One official said, "I feel like we've been stabbed in the back." Another official noted, "It'd be troublesome if the public regarded it as the ministry's position." Prime Minister Koizumi, who has seen his clout grow since winning a landslide victory in last fall's Lower House election, has authority over every government office in Kasumigaseki, to say nothing of his Liberal Democratic Party (LDP). MOFA has become notably nervous about the Yasukuni issue. The general consensus right now among MOFA officials is that the less is said, the better. "Wasn't it the liberals and the pro-China officials like Kuriyama who created the causes of the criticism heaped on the Foreign Ministry today?" So asked a ministry official who has lost hope due to a string of unfavorable incidents involving the ministry, including the misappropriation of secret diplomatic funds, the ministry's inappropriate links to House of Representatives member Muneo Suzuki, and public criticism of the inefficient and opaque official development assistance (ODA) policy. The so-called China school (the diplomats who received Chinese language training in MOFA) have been criticized for bringing about the diplomatic stalemate with China. Until recently the position of director of MOFA's China and Mongolia Division had essentially been reserved for members of the China school. But MOFA is likely to appoint someone outside of the group to the post for the first time in 32 years this spring. This appointment is said to reflect the strong desire of Administrative Vice Foreign Minister Shotaro Yachi, who aims to shape a resolute foreign policy full of great aspirations. Some in the China school welcome this appointment as a good opportunity to break the impasse, but some are objecting to it, suggesting that Yachi may be trying to blame the group and should be aware of the harsh views on the matter heard even in the United States. There is also a story behind the selection of an ambassador to China. Back on October 11, 2005, late in the day, former LDP Secretary General Hiromu Nonaka, who has enjoyed the strong SIPDIS confidence of the Chinese government, and Ambassador to China Koreshige Anami were both invited to the Diaoyutai Guest House in Beijing and dined with Vice President Zeng Qinghong, Chinese Communist Party Central Committee member Zhao Qizheng, and other Chinese officials at a special room for state guests. At the time, back in Japan, a plan to choose Ambassador to Indonesia Yutaka Iimura, who studied French, to replace China school alumnus Anami was being discussed. In the dinner party, however, Zhao made this comment: "It's not a good idea to select a person who isn't good at Chinese at a time when relations are so chilly." Set off by this remark, Japan gave up on the idea and instead of Iimura, chose Ambassador to Okinawa Yuji Miyamoto, who comes from the China school. Iimura has been informally designated as ambassador to France. TOKYO 00000691 009 OF 010 This choice of ambassador to China may be seen as a well-balanced selection in that it reinforces a firm stance toward China while keeping open a channel for dialogue. But some have criticized it as a manifestation of MOFA's drift between foreign policy and domestic politics due to its inability to chart a roadmap for diplomacy toward China. (8) Entire picture of reorganization of government-affiliated financial institutions: Yen loans to be integrated into JICA in reforming ODA system; JBIC to be dismantled NIHON KEIZAI (Top Play) (Slightly abridged) February 4,2006 The overall picture of privatization and integration of government-affiliated financial institutions was firmed up yesterday. The government's expert council, which has looked into ways to reform the official development assistance (ODA) system, will issue a recommendation report late this month. The report is expected to include a policy of separating the yen loans section and the international financing section from the Japan Bank for International Cooperation (JBIC) and integrating the yen loan function into the Japan International Cooperation Agency (JICA), which is in charge of technical cooperation under the ODA system. The international financing section will be integrated into a new entity into which four public financial corporations will be unified. The JBIC will be specialized in corporation revitalization and investment activities. For the time being, it will not engage in the banking business. The government's study group on external economic cooperation (chaired by Akio Harada, former attorney general) has proposed the breakup of the JBIC. There has been a call to maintain the independence of the JBIC, but the proposed plan is aimed to establish an efficient ODA implementing system, by integrating reimbursable financial cooperation (yen loans) and technical cooperation. The Foreign Ministry will continue to be responsible for grant aid. A huge financial institution in charge of broad-based business operations will come into existence, if the international financing section of the JBIC is integrated into an entity to be newly created, combining four existing government-affiliated financial institutions. The government plans to introduce to the current Diet session an administrative reform promotion bill, which sets basic guidelines for the privatization and integration of public financial institutions. It will aim to get through an extraordinary Diet session likely to be convened this fall a set of policy financing reform bills that set concrete proposals for the management form of the new organization. As a vehicle to be in charge of the planning and formulation function of the ODA system, a cabinet council responsible for compiling comprehensive aid strategy at the initiative of politicians will be newly established under the Cabinet. The prime minister will chair the panel, and its member will consist of the chief cabinet secretary, the foreign minister, the finance minister and the minister of economy, trade and industry. The Foreign Ministry will continue to play a leading role in the selection of specific project items. TOKYO 00000691 010 OF 010 JBIC will not engage in banking business after privatization: It will instead be specialized in investment and loan business The JBIC has started considering business activities after privatization in fiscal 2008 with a view to being specialized in the investment and loan business and not pursuing the banking business for the time being. With a view to getting listed on the Tokyo Stock Exchange, the bank will boost earning power, by concentrating its resources on business areas in which it has experience, including extending loans for corporate revitalization and the consolidation of social infrastructure. It intends to appoint management personnel from the private sector in preparation for competition with private companies. The JBIC's outstanding investment and loan balance as of the end of Mar. 2005 stood at approximately 14 trillion yen. The number on the payroll is 1,300, which is smaller than leading regional banks, which employ around 3,000. Its view is that it would be difficult to do business with petty enterprises and individual customers as regional banks do. Since it is absolutely necessary to invest an enormous amount of money into the building of a computer system in order to take part in banking operations, it will not go into this business for the time being. Chances are that since it will not deal with banking and trade account settlement operations, it may not obtain a bank license. The JBIC will focus its business operations on highly profitable areas, targeting existing customers, such as leading companies, mid-tier companies and local governments even after privatization so as to constrain business cost. In specific terms, the bank will focus its business operations on assistance for corporate revitalization, in which it will invest in seriously troubled companies so as to gain on sale of their shares once they are regenerated, and assistance for privatization of public sectors, including water-supply services. It will procure resources for investment and loans from private banks or through the issuance of corporate bonds. It could face an increased procurement cost, as it will lose state guarantee after privatization. At present, it only issues ten-year bonds with state guarantees, but it intends to issue 15-year bonds before the end of fiscal 2006. It thus plans to secure long-term funds in view of fund management shortly after privatization. The JBIC will work out a basic privatization plan and explain details to investors possibly in late February. SCHIEFFER