DAILY SUMMARY OF JAPANESE PRESS 11/21/07

UNCLAS SECTION 01 OF 15 TOKYO 005320 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 11/21/07 INDEX: (1) US needs to see progress in nuclear, abduction issues for N. Korea delisting: Bush (Sankei) (2) Fukuda diplomacy takes first step toward "synergy": Premier Wen reacts favorably (Asahi) (3) Leaders of Japan, China, South Korea play up friendly mood, laying aside pending issues (Nikkei) (4) Nukaga treated by Mitsubishi (Akahata) (5) Editorial: Do we want to entrust the compilation of the state budget to Finance Minister Nukaga? (Asahi) (6) Ruling, opposition parties to find way to reach agreement on bills (Asahi) (7) US N-flattop unsettles local host communities (Tokyo Shimbun) (8) US system of screening visitors: mistakes, contradictions found in 38 PERCENT of those cited on monitoring list (Asahi) (9) Policy watch: Face up to the economy slipping (Sankei) (10) TOP HEADLINES (11) EDITORIALS ARTICLES: (1) US needs to see progress in nuclear, abduction issues for N. Korea delisting: Bush SANKEI (Top play) (Abridged) November 21, 2007 On Nov. 16, Japan and the United States held a summit meeting of their leaders. On that occasion, US President Bush cited requirements for the issue of striking out North Korea's name on its terror list, sources familiar with Japan-US relations revealed yesterday. In this regard, Bush told Prime Minister Yasuo Fukuda that the United States, before delisting North Korea, would need to see progress in three areas: 1) North Korea's nuclear disablement; 2) nuclear nonproliferation; and 3) abductions. In the summit meeting, Fukuda did not set forth a strong stance against delisting North Korea. That is presumably because Fukuda, based on such remarks from Bush, judged that the United States would not delist North Korea for the time being. So far, the government has not revealed details about what was discussed at the Japan-US summit. When it comes to the abductions issue in particular, the fact that Bush told Fukuda that the United States "will never (sic) forget" the abductions issue was revealed. However, the government has remained equivocal about the possibility of the United States delisting North Korea as a terror sponsor while there is still no progress in the abductions issue. For this reason, abductees' kin voiced dissatisfaction with Fukuda who did not strongly oppose delisting North Korea. According to the sources familiar with Japan-US relations, however, Bush actually cited the need to see "progress" in the abductions issue as a requirement for North Korea to be delisted. TOKYO 00005320 002 OF 015 Gov't optimistic with "no delisting for the time being" President Bush, in his meeting with Prime Minister Yasuo Fukuda, revealed three preconditions for the United States to strike out North Korea's name on its list of terror sponsors. For this reason, there are optimistic views arising from within the government. "The North has yet to satisfy the three requirements," a senior official of the Foreign Ministry said. "So," the official added, "there will be no delisting for the time being." However, one who has experienced the post of chief cabinet secretary surmises that US Assistant Secretary of State Hill, who is the chief US chief delegate to the six-party talks, might have already promised North Korea the UA would cross out its name from the terror list. Only Japan could be left out of the loop while taking an optimistic view of things. As it stands, there is no predicting how things will turn out. In the meeting, Bush declined to say the United States would not delist North Korea. Nevertheless, the government's sense of crisis remains weak. That is primarily because North Korea is now suspected of backing up the construction of nuclear-related facilities in Syria, which, according to a diplomatic source, is "a country that holds the key to the Middle East situation." This is clearly against Bush's requirement of North Korea's nuclear nonproliferation. "The United States is focusing its tenfold attention to the Middle East over North Korea," a Foreign Ministry source said. The source also said, "The United States is now concerned about the issue of North Korea's nuclear proliferation to Syria, so the United States cannot take action to delist North Korea at this time." As a matter of fact, Hill and his supervisor, Secretary of State Rice, are now turning reconciliatory toward North Korea. "But," the source said, "the US government and Congress are not in such a situation." (2) Fukuda diplomacy takes first step toward "synergy": Premier Wen reacts favorably ASAHI (Page 2) (Slightly abridged) November 21, 2007 Winding up the Japan-US summit in Washington, Prime Minister Yasuo Fukuda on Nov. 20 started full-fledged Asia diplomacy in Singapore. His talks with the Chinese and South Korean leaders were enveloped by a friendly atmosphere. However, no in-depth talks on individual pending issues, such as exploration of gas fields in the East China Sea, took place. It will likely take time for his pet theory of diplomatic synergy of combining efforts to strengthen the Japan-US alliance and pursuing Asia diplomacy to take on concrete form. Chinese Premier Wen during the talks said, "I talked with Prime Minister Fukuda right after he took office as prime minister." Chinese leaders have thus far had telephone talks with US presidents, but this is presumably the first time for any Chinese leader to have a telephone dialogue with a Japanese prime minister since ties between the two countries were normalized 35 years ago. The two leaders also had a luncheon in Singapore, the first time for any leaders of the two countries to have a luncheon in a country other than their own. Former Prime Minister Abe had in a way kept himself at arm's length with China. However, touching on Abe's reviving reciprocal visits by Japanese and Chinese leaders, a practice that had been suspended due TOKYO 00005320 003 OF 015 to former Prime Minister Koizumi's repeated visits to Yasukuni Shrine, Wen made a considerate remark, "Mr. Abe's visit to China last fall turned out to be a journey to thaw the ice between the two countries, and my visit to Japan this spring also thawed the ice. I will never forget my old friend." He then expressed expectations for progress on strategic and mutual-beneficial relations during the Fukuda administration. Since Prime Minister Fukuda expressed his intention not to visit Yasukuni Shrine, China and South Korea are reacting favorably to him. Wen during the talks said, "Prime Minister Fukuda is popular in China." South Korean President Roh Moo Hyun praised Fukuda, noting, "South Korean people have great expectations of Prime Minister Fukuda." In particular, China has a favorable impression of Fukuda because of his father Takeo Fukuda, former prime minister who signed the Japan-US Peace and Friendship Treaty. Some Japanese government officials have even tried to score points for the Fukuda administration by proposing a new Fukuda doctrine coinciding with Prime Minister Fukuda's debut in Asia diplomacy. There are remnants of the Fukuda Doctrine, guidelines for Asia diplomacy late former Prime Minister Takeo Fukuda advocated, in Southeast Asia. The idea is to create heart-to-heart relations of mutual trust on an equal footing with Asian countries, abandoning the path of becoming a military power. However, the idea was put on hold this time with some saying that the prime minister's proposal would not draw attention at a forum where many top leaders gather. Instead, the prime minister at the Japan-China summit declared his Asia diplomacy policy, saying, "Our country will promote cooperation, based on self-support and coexistence, in order to realize an affluent, stable and open East Asia." The prime minister included "self-support and coexistence" in his policy speech given right after taking office. He has now used that policy ideal in the international arena. One senior Foreign Ministry official explained that the prime minister has in his mind a concept of acknowledging sustainable growth of Asian economies and diversity. Concrete image has yet to come into sight; Pending issues left unattended Wen: "I hope to see both of our countries bravely tackle the issue to realize joint development." Fukuda: "I would like Premier Wen to display leadership for an early settlement." Joint exploration of gas fields in the East China Sea between Japan and China, the issue that has made little progress since Wen visited Japan in April, was also on the agenda of the Japan-China summit. Both leaders indicated a positive stance and played up their readiness to cooperate. However, efforts to find a concrete settlement measure have been put off until Fukuda visits China, regarding which coordination is underway to set a visit for either the end of the year or early next year. TOKYO 00005320 004 OF 015 With gaps in views of the two countries on the issue remaining unfilled even after 11 rounds of bureau-director-level talks, the judgment was reached that making concessions is premature due to Japan's unstable political situation and with the Taiwanese presidential election close at hand next March, according to the same source. According to a senior Japanese government official, Fukuda during the meeting with Wen sought cooperation from China in order to realize the return of abduction victims. Wen expressed understanding and sympathy and offered necessary cooperation. However, Foreign Minister Koumura, who was present at the meeting, got the impression that the talks went all right, but what cooperation China will extend in concrete terms will depend on future talks." Regarding ever-expanding China's military expenditures, Fukuda reportedly did not seek transparency in concrete terms. Concerning Burma, one key issue at the series of summits this time, the Japanese side simply sat still and watched China and Burma try to cancel a debriefing session by Special Advisor to the US Secretary General Gambari slated to be held at the East Asia Summit SIPDIS on the 21st. China overtly tried to defend Burma's military junta, fearing that the situation in that nation would spill over and affect its own humanitarian issues. However, Fukuda did not refer to Burma at all during the meeting with Wen. Former Prime Minister Abe stressed the importance of sharing values, such as freedom and democracy. He advocated value-based diplomacy, which was taken as a policy of encircling China while attaching importance to India. Fukuda is trying to strengthen relations with China, marking a clear departure from Abe's policy. However, the whole image of his Asia diplomacy has yet to be fixed. (3) Leaders of Japan, China, South Korea play up friendly mood, laying aside pending issues NIKKEI (Page 2) (Full) November 21, 2007 A series of summit talks between Japan, China and South Korea, between Japan and China, and then between Japan and South Korea were held on Nov. 20, in which expressions suggesting their willingness to establish future-oriented relations were frequently used, such as "cooperation" and "development." Both the leaders of China and South Korea were eager to build personal ties with Prime Minister Yasuo Fukuda, who is emphasizing a policy of placing importance on relations with Asia, unlike when Japan's relations with these two Asian countries became strained over former Prime Minister Koizumi's annual visit to Yasukuni Shrine. The series of summits were held outwardly in a friendly mood, but pending issues were laid aside. In the summit of Japan, China and South Korea in the morning, the three leaders agreed to hold another round of trilateral summit separately from an international conference, which had so far been postponed many times. The decision to hold one might be representing the leaders' eagerness to improve trilateral relations. In the Japan-China summit held in the afternoon, China also gave a cordial reception to Fukuda. The two leaders had lunch together for the first time since Fukuda assumed office, at the request of Japan. TOKYO 00005320 005 OF 015 In the bilateral summit, Chinese Premier Wen Jiabao gave consideration to Fukuda by mentioning the name of his father, former Prime Minister Takeo Fukuda, who signed the Japan-China Peace and Friendship Treaty, saying: "Chinese people know you very well." A participant from Japan uttered, remembering the days of the Koizumi administration: "I am moved that we've come this far." But Premier Wen also said: "Japan-China relations are at an important turning point. It is necessary to seize opportunities and move relations forward." Wen's remarks are indisputably a message that China will never make concessions on past accounts and territorial issues, though maintaining favorable relations with Japan is indispensable in order for China to continue economic growth. In the series of summits, Chinese Premier Wen and South Korean President Roh Moo-Hyun did not refer to themes that could upset Japan, such as the issue of whether the United States would delist North Korea as a state sponsor of terrorism. China and South Korea are keeping close watch on future changes in the unstable power base of the Fukuda administration under the situation of the opposition bloc having control of the House of Councillors. China's cautious stance about a settlement of the dispute over gas exploration rights in the East China Sea might represent its willingness to cool-headedly explore the best timing to find a point of contact in a way advantageous to it. Key points in summits Japan-China-South Korea summit ? Agreed to hold another trilateral summit separate from the ASEAN summit. ? Confirmed the importance of North Korea steadily disabling its nuclear facilities and declaring its nuclear development programs. ? Agreed to accelerate negotiations on concluding a trilateral investment treaty. Japan-China summit ? Agreed on a visit to China by Prime Minister Fukuda by the end of this year or early next year. ? Fukuda asked Wen to demonstrate his leadership in resolving the East China Sea gas dispute, and Wen expressed his determination to make efforts to that end. Japan-South Korea summit ? Agreed on the importance of developing future-oriented Japan-South Korea relations. ? Roh quoted North Korean leader Kim Jong Il as saying: "I clearly acknowledge the need for normalizing diplomatic ties between Japan and North Korea." (4) Nukaga treated by Mitsubishi AKAHATA (Top play) (Full) November 21, 2007 Finance Minister Fukushiro Nukaga, a former director general of the Defense Agency, is now suspected of having been wined and dined by the Mitsubishi group (that includes Mitsubishi Heavy Industries, Ltd. and Mitsubishi Electric Corporation),with the group footing TOKYO 00005320 006 OF 015 the bill. The Mitsubishi group annually received more than 30 PERCENT of all orders placed by the Defense Agency, now the Defense Ministry. This suspicion was pursued by Mikishi Daimon, a House of Councillors member of the Japanese Communist Party, in a House of Councillors Audit Committee meeting yesterday. Nukaga, sitting in on the Financial Affairs Committee on Oct. 30, asserted that he had never been to Kantokaku, which is a "guesthouse" of the Mitsubishi group. Daimon asked whether Nukaga paid membership dues there. Nukaga stated, "There were cases where I paid, and there were also cases where they paid." He also stated, "There's no need to comment on each case." With this, Nukaga admitted that he was entertained. Daimon stated: "You did not pay membership dues there, did you? To begin with, that is not a place to pay such money." With this, Daimon asked Nukaga to recheck whether he paid membership dues. Nukaga also is on the board of directors for a public-interest corporation called the Center for Japan-U.S. Peace and Cultural Exchange. Daimon took up the fact that this entity was subsidized from the state coffers when Nukaga and several other lawmakers visited Washington to attend a Japan-US security strategy conference held there. Daimon further noted that it takes each person at least one million plus several hundred thousand yen to cover travel expenses and to stay at a gorgeous hotel. In this regard, Daimon quoted Naoki Akiyama, a permanent director of the center, as explaining that each lawmaker only received 200,000 yen. Daimon revealed that more than one million yen was covered by subsidies from the government and donations from the munitions industry. Nukaga is a member of a public-interest entity's board of directors, and he made as many as three foreign trips subsidized by the government through that body. Raising a question about such junkets, Daimon pursued Nukaga's responsibility not only as a minister of state but also as a member of the Diet. Nukaga stated, "I paid money to join and worked for the public good." In this way, Nukaga sounded as if to say "so what?" Daimon bitterly criticized Nukaga, saying, "You should pay your way when you go." (5) Editorial: Do we want to entrust the compilation of the state budget to Finance Minister Nukaga? (Asahi) ASAHI (Page 3) (Full) November 21, 2007 Everything so far has been unconvincing. We are talking about the explanation of Finance Ministry Nukaga about his relationship with Yamada Yoko Corp., the trading firm specializing in defense procurement, and its former executive manager. The trigger was the sworn testimony of former Administrative Vice Defense Minister Takemasa Moriya, who served under Nukaga during the two times he was defense chief. He also said that he had attended the same dinner as a former Japan desk director at the Pentagon and the former executive director. In replying, Nukaga said that he had no recollection or record of such a dinner, making the two sets of testimony completely opposite. There is a possibility that one or the other told a lie, but if what TOKYO 00005320 007 OF 015 Moriya said was untrue, it is serious for he, as a sworn witness before the Diet, committed perjury. We also cannot give the nod to Nukaga's explanation that he had neither recollection nor record of such a matter. Regarding the relationship of Nukaga to Yamada Yoko Corp., little by little it is become clearer that he had close ties, as seen in the following information. A total of 2.2 million yen in party tickets were purchased from Nukaga by Yamada Yoko. He also received as carfare 200,000 yen from the former executive director when he attended the wedding of that person's daughter. His wife, who attended as a proxy, returned it as a congratulatory gift. He also played golf with the former executive director and attended a luncheon study group. Nukaga has denied it, but there also was testimony in connection with a construction order put out by the Sendai Defense Facilities Administration Bureau that Nukaga put in a good word for the company. Politicians always meet many people. It is probably inevitable that mixed among them may be some dishonest types. Nukaga probably wanted to say something like that. However, his relationship with Yamada Yoko went over the boundary line, no matter how you think about it. There is still another problem, for Nukaga's relations with a company that lacked common sense did not stop with Yamada Yoko. Nukaga, during his two times as defense chief between 2005 and 2006, held parties four times in the form of breakfast study groups, and reportedly, the ticket purchases that included the portion bought Yamada Yoko totaled 57.1 million yen. Politicians in important government positions such as a cabinet post are supposed to practice self-constraint in holding large-scale political fund-raising parties. That is because if they receive favors from certain firms in the form of political contributions, it will lead to suspicions about their administrative fairness. Despite that, why did he repeatedly hold such parties? Nukaga has explained that they were small scale of about 100 persons and not large scale. But is selling party tickets for one occasion to the tune of 10 million yen plus "small scale"? It only strains our ears. Nukaga, when he was defense director general in 1998 for the first time, had to resign to take responsibility for an excessive payment of charges for equipment. Prior to his resignation, Nukaga tackled the task of reforming the equipment procurement system by strengthening the checking function. The same Nukaga has had a strong inclination to having what might be called collusive ties with a company that has had over five years 17.4 billion yen in transactions with the Defense Agency and later the Defense Ministry. What a terrible state of affairs. The compilation of next year's national budget is almost here. In case Nukaga as the finance minister is the one tackling the budget compilation, which includes the defense budget, can he obtain the understanding of the public? The situation has become that severe. (6) Ruling, opposition parties to find way to reach agreement on bills ASAHI (Page 4) (Excerpts) TOKYO 00005320 008 OF 015 November 21, 2007 It has been two months since the main opposition Democratic Party of Japan (DPJ or Minshuto) became the largest party in the House of Councillors, while the ruling Liberal Democratic Party (LDP) is the largest in the House of Representatives. The LDP and DPJ are continuing their efforts to find a way to create rules to reach agreement on bills. The ruling camp is trying to listen to proposals by the opposition camp. If the largest ruling and opposition parties make compromises behind closed doors, many bills will smoothly clear the Diet. Whether they can find a third path -- neither confrontation nor a grand coalition -- depends on their efforts. "If the present Diet situation continues, we have to discuss what rules are needed," Chief Cabinet Secretary Nobutaka Machimura said in a press conference yesterday. He indicated that this topic would be discussed in one-on-one meetings between Prime Minister Yasuo Fukuda and other party leaders. The ruling and opposition parties have begun looking for a way to create Diet rules for consensus-building. Hideaki Omura of the LDP said: "We can't consult (kyogi-suru) on a bill after deliberating (shingi-suru) it." Kazunori Yamanoi of the DPJ stated: "We will accept deliberations (shingi) but not consultations (kyogi). In a meeting on Nov. 16 of the Lower House Committee on Health, Labor and Welfare, Omura and Yamanoi, who are in charge of managing the panel, had the above exchanges over anti-hepatic measures. The DPJ has submitted to the Upper House an anti-hepatitis measures bill, while the LDP has submitted its own hepatic bill to the Lower House. The committee members had different views on how to find common ground on the hepatitis issue. The LDP's Omura proposed holding consultations (kyogi) of working-level officials (committee members) from the ruling camp and the DPJ, not in the committee. The DPJ's Yamanoi, however, insisted on the need for deliberations (shingi) at the Diet. One committee member stressed: "It is important to hold an open debate on good and bad points of the two views. Otherwise, the Diet will lose substance." If placing importance on an easy way to reach a consensus, a consensus will be built behind closed doors. If open discussions are held, it will be difficult to build a consensus. Although they share the view that they should compromise, they have separate views on how to make a compromise. The revised law to support disaster victims' livelihoods enacted on Nov. 9 is an example that was made speedily. With the Diet divided, the opposition party-proposed bill finally saw the light of day, after their previous bills had been scrapped. Genichiro Sata of the LDP, who chairs the Special Committee on Disaster Victims, proudly said on Nov. 6: "Since doing things for the sake of the people is the basis for politics, the ruling and opposition parties talked about various matters." The DPJ submitted its own bill to support disaster victims to the Upper House, while the ruling LDP-New Komeito coalition presented TOKYO 00005320 009 OF 015 its own bill to the Lower House. After launching deliberations on the bill at the special committee on Nov. 2, they immediately began consultations behind closed doors. Kazuyoshi Akaba of New Komeito, who has long been involved in the issue, and Takeaki Matsumoto of the DPJ took the initiative in revising the law, and Sata managed the consultations and deliberations. The DPJ proposed supporting the costs of disaster victims' reconstruction of their houses. The government had opposed to this idea, citing that tax money should not be used for personal assets. The main opposition party also asserted that the revised law should be applied also to four disaster cases occurred this year, including the Chuetsu Offshore Earthquake. Although conflict points affected the basis of law and fiscal system argument, the ruling and opposition parties searched for a way to make a compromise. As a result, the revised law was not applied to the four disaster cases, but the LDP and DPJ compromised to make the four cases as an exception. The diversion of gift money for use to rebuild housing was tacitly allowed. After holding six sessions in five days, the two sides came up with a revised bill. There was no question-and-answer session on Nov. 8 and 9 of the Upper and Lower House committees, to which the revised bill was submitted. The bill was put to a vote after each party expressed its approval of it, and it cleared the Diet immediately. LDP Diet Affairs Committee Chairman Tadamori Oshima proudly told the press: "It was a symbolic policy decision. It was a result of our humble discussion, overcoming narrow party interests." (7) US N-flattop unsettles local host communities TOKYO (Page 3) (Full) November 14, 2007 Hirohito Saito, Yokosuka bureau In August next year, the USS George Washington, a US naval nuclear-powered aircraft carrier, will arrive for deployment at the US Navy's Yokosuka base in the city of Yokosuka, Kanagawa Prefecture. Late last month, the nuclear flattop was opened to the press for the first time when she was on a training voyage in Atlantic Ocean waters off the US East Coast. However, her nuclear reactors and relevant facilities were barriered off as military secrets. Local citizens, saddled with the base, have been calling SIPDIS for dispelling their anxieties about nuclear disasters. However, there is still nothing better for their concerns. Again, the deep gulf became clear over safety. "We cannot show you the reactor compartment. If we reveal its high technologies, our strategic superiority will collapse. That's why. The nuclear propulsion system (of US warships) is classified in the US Navy, so we cannot show it." On the flight deck were training carrier-borne fighter jets. They were catapulted to take off and hooked up to halt. Their shock sounds reverberated to the commanding officer's cabin on the bridge. There, US Navy Cdr. Silkman, who is in charge of the USS George Washington's nuclear reactors, stressed the reasons why the reactor compartment is not open to the public. TOKYO 00005320 010 OF 015 Silkman explained the USS George Washington's nuclear reactors, saying each reactor's generating power is about one-sixth of a commercial power plant's reactor. However, he refused to answer a question about its size, reasoning that it would disclose reactor data. This shows the US Navy's stance of giving top priority to information security. The USS George Washington is currently homeported at a naval base in the city of Norfolk, Virginia. The city has a population of about 240,000. The base there is the largest of all naval bases in the United States. Warships based there include five nuclear-powered aircraft carriers, nuclear-powered submarines, and Aegis ships. In the Norfolk area, there are relevant facilities, such as an air station for carrier-borne aircraft and a shipyard that can build flattops. The city has a large population of people in the US Navy and their dependents. That is probably why people living in the city do not seem to feel uneasy about nuclear reactor accidents. "We've been living here for years, but I've never felt nuclear-powered aircraft carriers and nuclear-powered submarines are dangerous," said a 75-year-old man, who was on a walk with his wife in a Norfolk park. "The nuclear reactor is the kind of propulsion," he went on, "and it's not a bomb." He added: "There's no need to replace fuel for a long time. That's good." In his words, there was nothing negative about nuclear power. A 53-year-old Japanese woman, who is married to a US serviceman and lives in Norfolk, having a US citizenship, said: "There are also many complaints about noise around the air station, but many of the citizens are not concerned about that. However, Japanese people feel uneasy about nuclear power. I can understand their feelings well." The United States released a "fact sheet" on its planned deployment of a nuclear-powered aircraft carrier to Yokosuka. In this report, the US government explains that the US Nuclear Regulatory Commission and an advisory committee review each of the US Navy's nuclear reactors. With this, the US government stresses that the US Navy's nuclear reactors are authorized. The USS George Washington's Captain Dykhoff also said proudly, "We have been operating aircraft carriers and nuclear-powered submarines in a safe way over the past 50 years." Gov't hesitant about safety check Meanwhile, at the US Navy's Yokosuka base, seabed dredging work is now under way for a nuclear-powered aircraft carrier. "If a nuclear reactor accident should take place, Tokyo and its metropolitan environs will sustain immense damage that is irrecoverable." With this, a group of about 1,000 local residents, including those from the Tokyo metropolitan area, has instituted a class action lawsuit against the government trying to get an injunction to stop the dredging work in order to halt the deployment of a nuclear flattop to Yokosuka. The plaintiffs are concerned about a response shown by the government, which should be in a position to protect public safety. A review of nuclear reactors may ensure the American public's safety. Even so, it does not include the Japanese public. In its parliamentary reply, however, the government only says it has TOKYO 00005320 011 OF 015 no right to review the reactors of US nuclear-powered warships. Moreover, the government generally admits that the United States does not provide Japan with information about the design and operation of US nuclear-powered warships. The government is hesitant to demand information from the United States, citing the US military's secrecy as a reason. "It's also possible to verify the nuclear reactors with their technical data in private," Masahiko Gotoh, a lawyer for the plaintiffs, noted. "But," Gotoh said, "the government will try not to do anything." He added: "The government must verify safety. We're going to pursue the government's accountability in court." So saying, he was ready to square off with the government. (8) US system of screening visitors: mistakes, contradictions found in 38 PERCENT of those cited on monitoring list ASAHI (Page 2) (Excerpts) November 19, 2007 Arriving foreign visitors form a long line at the immigration section at John F Kennedy Airport in New York to have their fingerprints taken from the index finger of each hand. Visitors have to wait for more than one hour when a number of flights arrive. The US-visit system was introduced in 2004. The system is almost the same as Japan's. Anna Hinken, an officer of the US Department of Homeland Security, proudly said: "We have rejected the entry of more than 2,000 persons who were considered a security risk since the system was introduced." But a US government agency poses questions about the system's technology and credibility. This July, the US General Accounting Office criticized the US-visit system as seriously fragile in view of information control. He pointed out the possibility that personal data, including fingerprint data, might be altered or copied by someone from the outside due to insufficient security measures. In September, an auditor of the Justice Department emphasized how inaccurate US blacklists are. The auditor said that as a result of a sampling check of the terrorism-affiliates included in a monitoring list, mistakes or contradictions were found in 38 PERCENT of those checked, with the names of some terror suspects left out of the list or innocent persons appearing on it. The monitoring list was compiled by integrating those of such government agencies as the FBI and the Transportation Security Administration, and the list is not open to the public. As of April this year, the number of those listed was 700,000. The number reportedly increases by 20,000 per month. American Civil Liberties Union member Barry Steinhardt said: "There should not be so many terrorists. The list is unreliable. In addition, since the list is classified and not publicized, it is impossible to check how effectively it has worked to prevent terrorism." The monitoring list has also affected civic life. There are cases in which citizens unrelated to terrorism appeared on the list or in which a person who has the same family and personal name as a certain suspect was stopped at an airport security check. TOKYO 00005320 012 OF 015 The US-visit system also tends to give travelers an unpleasant impression about the nation. A group formed with the aim of improving the image of the US conducted a survey of travelers from foreign countries last year. Asked about which they think is the most unfriendly country or region in terms of immigration officers' response and necessary immigration procedures, the largest number of respondents cited the US. A member of this group commented: "Travelers have a feeling that the US has not welcomed them and has set up barriers." (9) Policy watch: Face up to the economy slipping SANKEI (Page 1) (Full) November 19, 2007 By Heizo Takenaka It has become clear that the Japanese economy is slipping. A spot report for the July-September quarter this year, released on Nov. 13, noted that gross domestic product (GDP) increased 2.8 PERCENT (in annual terms) from the preceding quarter. Since the April-June quarter marked a negative 1.2 PERCENT increase, there had been expectations that GDP would achieve a clear recovery from that level. Though the GDP in the July-September quarter resulted in a positive figure, two-thirds of the growth was due to external demand, confirming that the deflationary trend has yet to be overcome. The Subprime loan issue of the US is grabbing headlines. Stock prices have plunged in industrialized countries this year. However, it is Japan that is experiencing the largest stock plunges, despite the fact that it has not directly felt the impact of the Subprime loan flap. The government needs to face up to this point. While political circles have gotten into a mess, causing a possible Lower House dissolution and snap election to dominate the agenda, the deterioration of the economy caused by domestic factors has begun to come within sight. There are two factors that are attributable to the worsening of the economy. One is that with market players having determined that economic structural reforms having clearly become stagnant, the expected rate of growth is in a slump. The other is that the impact of mistaken financial policies has become obvious. Let's examine the stagnant reform drive and the slump in the expected rate of growth. The Japanese economy has recovered an ordinary growth level of about 2 PERCENT since 2004, when the amount of non-performing loans clearly dropped. As a result, companies have reported all-time high earnings and profits. The economic expansion outdoing the Izanagi economic boom (1965-1970) has continued. However, no major organizational reforms have been carried out since decisions were made to privatize postal services and to consolidate government-affiliated financial institutions. Rather, a stance of overtly going against the reform drive is visible as can be seen in the recent proposal made by the Land, Infrastructure and Transport Ministry for using up road-construction revenues without reallocating them for other usage, and a request filed by the Association of Prefectural Governors for an increase in tax allocations. In the meantime, the Finance Ministry is taking the lead in discussions of tax hikes. In other words, people are seeking money from the state, and the state is seeking money from the people. The economy cannot be stimulated under such a situation. TOKYO 00005320 013 OF 015 Overseas investors have apparently lost interest in Japan. Foreign funds have begun pulling out of Japan. The Japanese economy, which has been maintained thanks to the aftereffects of the Koizumi reform drive, is clearly beginning to undergo changes. A questionnaire on corporate behaviors carried out by the Cabinet Office indicates companies' expected rate of growth. According to the outcome of the survey, an expected rate of growth in Japan gradually rose from 1.0 PERCENT recorded three years ago to 1.8 PERCENT marked this fiscal year. However, the result indicates that the expected growth rate would slightly decline in the future. Personal consumption and capital investment will become active only when an expected rate of growth rises. The US has absorbed money from all over the world, because it has kept a high expected rate of growth. With the economy clearly deteriorating, the government must positively deal with what the survey results have indicated. Of course, it does not mean taking economy-spurring measures in fiscal terms. The government must carry out drastic reform that can make people believe that the Japanese economy would grow, that is to say, it must reform frameworks matching postal privatization. However, the new administration has yet to indicate a menu for such a reform. Economy has yet to emerge from deflationary phase Another reason why Japan is experiencing the largest dip in stock prices among advanced countries is that its fiscal policy is inappropriate. The government has pledged to overcome deflation in fiscal 2006, but it has failed to deliver on that commitment. It is also hopeless for it to contain deflation in fiscal 2007, either. While crude oil prices are soaring to this level and concern about inflation felt by all over the world, Japan alone remains unable to emerge from deflation. Government officials need to seriously reflect on this fact. Their responsibility for the fiscal policy is immense. Biased discussions calling for a substantive consumption tax hike have recently been taking place. This is the result of Japan having accepted its failure to overcome deflation and an extremely low nominal growth rate as a matter of fact. The average nominal growth rate among members of the Organization for Economic Cooperation and Development (OECD) was 5.2 PERCENT last year. However, Japan's rate was only 1.2 PERCENT . Given the fact even Germany, which marked the second lowest rate, achieved 3.2 PERCENT , Japan's blunder in the management of the economy is outstanding. Under such circumstances, the Bank of Japan (BOJ) has raised interest rates for the past year. The BOJ's job is, however, to fulfill its original responsibility of countering deflation first through an increased money supply. What is important is not who will head BOJ but what must be sought from BOJ governor In connection with the trading of places between the ruling and opposition camps in the Upper House, how to obtain approval for the appointment of the next BOJ governor has become a subject of discussion. The media is always interested in personnel affairs. What is important from the perspective of policy arguments is what TOKYO 00005320 014 OF 015 should be expected of BOJ governor, instead of who will become its governor. The opposition camp reportedly plans to hold a hearing, inviting candidates for the post to the Diet. In view of the fact that the bureaucracy has thus far taken the lead in selecting personnel for posts that require Diet approval, it is very meaningful for the Diet to proactively examine personnel matters. On that occasion, the Diet should make it clear what it will seek from a BOJ governor. In a word, what they should be sought from a BOJ governor is that he should prevent the economy from inflating or deflating. This is indeed the goal the BOJ should attain. We should urge candidates for a BOJ governor to raise prices by between 1 PERCENT and 2 PERCENT . Taking into account that the prices of crude oil would continue rising, bringing about a potential inflationary risk, this would be extremely meaningful. If that happens, a nominal growth rate between 3 PERCENT -4 PERCENT can be hoped for, even if a real growth rate remains at around 2 PERCENT as it is now. This would also help correct the current Finance Ministry-led tax hike discussions that are biased toward a tax hike. The aftereffects of the structural reforms have already vanished. In order to live up to the wary eyes of the international community, too, a stance of seriously tackling the economic deterioration is sought from politicians. (10) TOP HEADLINES Asahi: Government's tax panel recommends reducing income tax deductions Mainichi, Yomiuri & Tokyo Shimbun: Kyoto University team succeeds in producing iPS stem cells from human skin Nikkei: Government's tax panel proposes using income tax revenues to cover social security expenses Sankei: US president in meeting with Fukuda presents progress on nuclear and abduction issues as conditions for delisting North Korea Akahata: Nukaga gave favors to construction company, according to former Sendai Defense Facilities Administration Bureau director (11) EDITORIALS Asahi: (1) Prime Minister Fukuda should utilize Japan-China-ROK resonance (2) We cannot commission Finance Minister Nukaga to compile the state budget Mainichi: (1) Foreign policy toward China and ROK: Top leaders' mutual visits should be continued (2) Consumption tax hike: Government should be one that the public can support Yomiuri: TOKYO 00005320 015 OF 015 (1) Japan-China summit: Japan-China relations at turning point (2) Government tax council's recommendations: Ruling and opposition parties should quickly find common ground Nikkei: (1) Curb on growth and expenditures preconditions for a consumption tax hike (2) Japan should determine to set "post-Kyoto" target to cut greenhouse gas emission Sankei: (1) Japan-China-ROK summit: Prime Minister Fukuda must maintain Japan's basic stance of resolving pending issues (2) IPCC report: No time for preventing global warming Tokyo Shimbun: (1) Government tax council's proposals: How will the government secure public understanding? (2) National Consumer Affairs Center: The center should be strengthened rather than scaled down Akahata: (1) Government tax council's recommendations: Government, ruling coalition should give up consumption tax hike SCHIEFFER