DAILY SUMMARY OF JAPANESE PRESS 02/13/07

UNCLAS SECTION 01 OF 07 TOKYO 000619

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SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 02/13/07


INDEX:

(1) Six-party talks: How can "progress" on abduction issue be
defined? Government facing dilemma over aid to Pyongyang in return

(2) NSC initiative: Many problems in store for secretariat's
staffing, intelligence gathering

(3) Political advisors, experts make appeals to Prime Minister Abe

(4) Seiron (Opinion) column by Tadae Takubo, guest professor at
Kyorin University: Return to the starting point for resolution to
the Northern Territories issue: February 7 is "Northern Territories
Day"

(5) Toray to step up carbon fiber production: Oligopoly by Japanese
companies continue

ARTICLES:

(1) Six-party talks: How can "progress" on abduction issue be
defined? Government facing dilemma over aid to Pyongyang in return

MAINICHI (Page 2) (Full)
February 10, 2007

How Japan defines what constitutes progress on the abduction issue,
a premise for extending aid to North Korea, likely will
significantly affect the fate of the six-party talks on North
Korea's nuclear ambitions now going on in Beijing. The reason is
that the draft agreement presented by China, the host country,
mentions that the five participating countries will extend economic
and energy assistance to the North in exchange for it taking initial
measures toward abandoning its nuclear development programs. If
Japan were to set a strict condition, it could prevent the five
countries from reaching a consensus, but a less stringent condition
could deal a blow to the administration, causing the government's
principle to collapse.

Regarding the potential reward to North Korea for giving up its
nuclear programs, a Foreign Ministry source said: "If the framework
for an agreement collapses as a result of Japan refusing to get
involved, it would be difficult for it not to get involved at all.
It will be an issue for the political arena." However, the abduction
issue is the top priority for the Abe administration. It cannot
afford to make concessions without regard to principles. On the
other hand, since Japan is responsible for complex multilateral
negotiations, it could encounter situations in which it has to
determine a settlement line regarding progress on the abduction
issue.

One Foreign Ministry official said that an ideal form of progress
would be confirming the survival of even one or two abductees and
returning them to Japan, but there is no conceivable measure to
realize that at the present stage. Such being the case, some
government officials intend to regard the establishment of a
taskforce on Japan-DPRK relations as incorporated in the draft
agreement to be progress. That is because a taskforce could be the
best venue for Japan to directly urge North Korea to settle the
abduction issue.

However, even senior Foreign Ministry officials are perplexed, with
one noting, "If Japan acknowledges that progress has been made based

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only on talks, it would give the impression that the Japanese side
has made great concessions." The actual situation is that progress
depends on the North actually taking a step forward to settle the
abduction issue, but with such a situation unlikely to occur, it is
difficult even to work out what constitutes progress on the
abduction issue, as a government source put it. All Japan can do is
to make a decision in a comprehensive manner while monitoring the
moves of other countries.

(2) NSC initiative: Many problems in store for secretariat's
staffing, intelligence gathering

SANKEI (Page 5) (Abridged)
February 9, 2007

The government plans to establish a national security council (NSC).
Its aim is to make diplomatic and security policy decisions under
the prime minister's direct control, thereby improving Japan's
readiness for eventualities. The NSC gives priority to flexibility
with cabinet ministers to be added depending on the theme, and it
will have a secretariat with planning functions. The NSC can work
out mid- and long-term strategies under the prime minister's office
or Kantei. However, there are also many operational problems, such
as what to do about its secretariat's staffing and authority and how
to build an intelligence-gathering structure. There is no denying
that the NSC may not function as envisaged.

For its powers, the NSC is modeled after the one in the United
States. However, its structure is modeled after the one in Britain,
which is under a parliamentary cabinet system just like Japan's. The
NSC is envisioned as "a support organization for the prime minister
to make the best decisions," according to former Deputy Chief
Cabinet Secretary Nobuo Ishihara, who presides over a working group
under a government panel to consolidate the Kantei's functions
regarding national security. To that end, the NSC is designed to
work flexibly with more cabinet ministers joining in for various
issues to be discussed. If climate change is on the agenda, for
instance, the environment minister will be seated in on the NSC. If
the NSC needs to discuss bird flu, the agriculture and fisheries
minister will be called in. The NSC is thus enabled to meet
wide-ranging national crises.

The NSC's secretariat is to be tasked with analyzing information
that comes in from various ministries and agencies, and the
secretariat provides the NSC members with options for them to

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discuss mid- and long-term diplomatic and security policies. The
Kantei wants to make speedy policy decisions under its initiative by
vesting the secretariat with planning functions.

The NSC's subject matters, however, are wide-ranging from climate
change to security in East Asia. In addition, there are also many
challenges in store for the NSC. Chief Cabinet Secretary Yasuhisa
Shiozaki, meeting the press yesterday, suggested the need for the
NSC to be ready with its "powerful backup" of the prime minister so
that the premier can make appropriate decisions in order to protect
the people's lives and properties. However, the NSC's secretariat,
which will be tasked with planning counteractions, is to be staffed
with only 10-20 personnel for the time being, according to Yuriko
Koike, a special advisor to the prime minister.

The NSC's secretariat is also to be staffed with experts from within
and outside the government as political appointees. However, one of
the ruling Liberal Democratic party's defense policy clique wonders

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if the government can recruit the cream of the crop for the NSC's
secretariat. The Kantei is also likely to face difficulties in

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screening and developing human resources for the NSC's secretariat.
There are also objections from within the Foreign Ministry and the
Defense Ministry to the Kantei against its initiative, insisting on
their reason for existing.

Furthermore, the NSC's secretariat is not vested with powers to have
various government ministries and agencies provide information it
needs. This is also a matter of concern. "We need a manual that
requires government offices to provide information as required,"
says Minoru Terada, deputy chair of the LDP's national defense
division.

(3) Political advisors, experts make appeals to Prime Minister Abe

SANKEI (Page 5) (Full)
February 7, 2007

Set off by a series of controversial remarks by cabinet ministers,
the Abe cabinet has been ridiculed as "tensionless and
free-wheeling." Health, Labor and Welfare Minister Hakuo Yanagisawa
said, "Women are baby-making machines." Defense Minister Fumio Kyuma
criticized the United States' decision to launch the Iraq war, and
Foreign Minister Taro Aso also called the US' Iraq-occupation policy
"naive." The public support rate of the cabinet continues to
plummet, with the nonsupport rate now outpacing the support rate in
some opinion polls. Political advisors and experts advise what Prime
Minister Shinzo Abe should do to overcome the current crunch
situation.

Isao Iijima, secretary to former Prime Minister Koizumi: Skillfully
make use of bureaucrats and ruling parties

The Koizumi administration also found itself in a fix over
controversial remarks by cabinet ministers or sharp drops in the
cabinet support rate many times. But it managed to get through such
difficulties by making use of superior bureaucrats and moving all
the government offices skillfully.

I hope Prime Minister Abe will also demonstrate his leadership more
in order to have officials in the policymaking and political areas,
that is, the bureaucracy and the ruling camp join hands.

What is required most in managing the government is unity among the
Kantei staff under the chief cabinet secretary, in whom the prime
minister must place full confidence. The cabinet sometimes faces an
adverse wind, but it is necessary for the Kantei staff on such an
occasion to closely band together.

Needless to say it is important to use the right person in the right
place, and the original point of reform is this principle: "Don't be
afraid of pain, don't flinch when confronting vested interests, and
don't always stick to your past experiences." I expect Prime
Minister Abe to push ahead with reforms, always keeping this
principle in mind.

The opposition bloc's recent strategy of boycotting Diet
deliberations is tantamount to their negligence of duty as
lawmakers. Such tactics will only lead to deepening public distrust
in politics and never contribute to regaining public confidence. I
hope that the Abe administration will continue to do its best to
turn its reform plans into action, without fearing such a

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high-handed approach by the opposition bloc, being discouraged by
individuals' critical comments, and without being gripped by
conventional practices and mores in the political world.

Yasunori Sone, professor at Keio University: Dismissal of Yanagisawa
should be an option

There is no decisive means to recover cabinet approval ratings,
which are continuously plummeting. People expected the Abe
administration, when it was launched, to clearly speak for them.
However, Prime Minister Abe has only apologized profusely. There is
a wide gap between the public expectation and the real Mr. Abe.

Although it has been reported that Prime Minister Abe is an advocate
of conservatism, but what he advocates as "conservatism" remains
ambiguous. While trying to promote reforms based on market-oriented
neo-liberalism, Abe also takes the stance of placing emphasis on the
nation's reactionary traditions and cultures. It's hard to
understand what he places emphasis on. I think Prime Minister Abe
wants to give priority to the latter policy stance. If that is the
case, the prime minister should give an explanation with words
easily understandable by the people, instead of citing such an
abstract expression as "a beautiful country."

In addition to the series of political gaffes by or scandals
involving cabinet ministers, the prime minister's murky policy
stance is behind the recent slide in cabinet support rates. The Abe
administration is now urged to reorganize itself from its
foundation. If the prime minister aims to establish a long-term
government, the government should initially go through a baptism of
general elections, but it is considered to be actually difficult to
do so. Instead of only apologizing over Yanagisawa's controversial
remark, he must come up with a clear-cut message to the people on
how to stop the falling birthrate and what measures should be taken
to help women. There is the option of having Yanagisawa step down. A
resignation by Yanagisawa would deal a serious blow to the cabinet,
but would it be better for him to stay on and be continuously
exposed to attacks from the opposition camp?

Kiyoshi Sasamori, former Rengo (Japanese Trade Union Confederation)
chairman: Prime minister should resign if he fails to present
measures to rectify social disparity

Cabinet ministers have made controversial remarks in succession.
Some critics say that the cabinet is going slack, but in my view,
there is a substantial problem inside the cabinet. Looking at the
happy faces of the cabinet ministers posing for photos just after
the Abe cabinet was launched last fall, I wondered if this cabinet
would be able to properly manage the government. I doubted if it
were possible for those awarded cabinet posts as a reward for
supporting Abe in a Liberal Democratic Party presidential race to
carry out politics for the sake of the public. My apprehensions came
true.

Such katakana words as "innovation" and "white collar exemption" are
found in the policies advocated by Prime Minister Abe. Policies must
be conveyed to the people in the Japanese language in a more
understandable way. Most members of many government councils are
those who are unfamiliar with the lives of working people or their
working conditions. This is also an extremely serious problem.
Public popularity of the cabinet has been on the decline. That is
because people have begun to notice that although Prime Minister Abe
is good-looking, he lacks substance.

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Unified local elections and the House of Councillors election will
be held this year. A revision of the Constitution, a proposal by
Prime Minister Abe, is expected to take center stage in Diet debates
over the long run, but this issue should not be made a major issue
of contention in the upcoming elections. In casting their ballots,
the voters will focus on whether the current administration has the
capabilities to correct the widening social discrepancy and to
revitalize local communities.

Although Minshuto (Democratic Party of Japan) has stressed the
importance of reforming people's livelihood, Prime Minister Abe
seems to be unaware of the importance of people's daily lives.
Unless he comes up with measures convincing to the public about
redressing the social disparity and revitalizing families and local
communities, the Prime Minister will have to step down.

(4) Seiron (Opinion) column by Tadae Takubo, guest professor at
Kyorin University: Return to the starting point for resolution to
the Northern Territories issue: February 7 is "Northern Territories
Day"

SANKEI (Page 11) (Abridged)
February 7, 2007

Last Dec. 13, when Foreign Minister Taro Aso attended a meeting of
the Lower House Committee on Foreign Affairs, he made a comment that
could give the wrong impression that the Japanese government might
be considering resolving the Northern Territories issue by equally
splitting in acreage terms the four disputed northern islands
between Japan and Russia. Given his long career as a lawmaker, I
presume he made that comment intentionally to test someone's true
intentions.

Government's attitude toward Russia somewhat strange

What made me feel even more strange was when I saw Aso and the
questioner, Seiji Maehara of the opposition Democratic Party of
Japan (DPJ or Minshuto),share the same view that it was high time
to break the stalemate on the Northern Territories issue. It was as
if the two were on the same wavelength. Do they believe that if only
President Putin is convinced to go along, objections in Russia would
subside? This scene made me worry that Japan might again suffer the
same humiliation as it did when Russia took away its valuable
"weapons" and "musical instruments."

It appears to me that the goal of Japanese diplomacy, instead of
addressing the territorial issue, is to realize a visit to Japan by
Putin and try to please him.

I think now is the worst time for Japan to engage in territorial
negotiations with Russia. One reason is that because of the soaring
prices of oil and natural gas, Russia is flourishing, so economic
aid is no longer attractive. Moreover, the Putin administration is
currently in a phase of exclusionist nationalism, as seen in its
slogan "Strong Russia". For instance, taking advantage of the
ceremony marking the 60th anniversary of the victory against Nazi
Germany in May 2005, influential Russians came our with statements
treating Japan in the same way as Nazi Germany.

Mayor of Moscow Luzhkov, who heads the Russian team for the
Japan-Russia Forum --, though I don't know exactly what the forum is
like -- stressed (at the ceremony): "The Soviet Union's joining the

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war against Japan was an international obligation based on mutual
assistance among the Allies." In addition, according to a Russian
newspaper, Russian Duma Speaker Gryzlov was bold enough to say:
"Japan's loss of the northern territories came as punishment for its
invasion of its neighbors." Why did they say such words at the
ceremony, which had Prime Minister Junichiro Koizumi as a guest?

Wisdom of former German Chancellor Kohl

The Ministry of Foreign Affairs (MOFA) is ready to rebut American
journalism's criticism of Japan, but for some reason or other, it
remains mum about absurd comments made by influential Russians. To
make matters worse, some ruling and opposition party lawmakers and
experts on Russia, as if claiming to be a group of wise men, came up
with what they called a "compromise proposal" to give to the
Russians. They are too excited to measure the situation to look for
a best time for negotiations.

The unification of two German states in 1990 might have come thanks
to an overlapping of a number of events by chance, but the clincher
for the unification was presumably former Chancellor Kohl's proposal
for the adoption of an equivalent exchange system for the two German
currencies, upon reading the situations in the Soviet Union and East
Germany. Japan has taken a short view of things and lacks wisdom
like Kohl's.

What is conspicuous in present-day Russia is President Putin's words
and actions that are undermining democracy. The international
community has cast doubts on him due to a stream of gruesome
incidents, such as the assassination of a female Russian journalist
and poisoning of a former ranking official of the Federal Security
Bureau. I think it is a good time for Prime Minister Abe and Foreign
Minister Aso to push for "values diplomacy," something they are good
at, in dealing with Russia. They should admonish anyone on the staff
making thoughtless remarks, and return to the starting point in the
search for a resolution of the territorial issue.

(5) Toray to step up carbon fiber production: Oligopoly by Japanese
companies continue

NIHON KEIZAI (Page 13) (Full)
February 9, 2007

Toray, Toho Tenax, a subsidiary of Teijin, and Mitsubishi Rayon
command an approximately 70% share on the global carbon fiber
market. The product is serving as a profit-yielding engine for the
three companies. Toray plans for an extensive production increase
with the intention to further boost income from the manufacturing of
the material. Toho Tenax also plans to start operating large-scale
production facilities in April 2008. Since there is a high access
barrier to the production of carbon fiber, as it requires advanced
technology, the prevailing view is that domestic companies will
continue to have the leading edge.

The major reason for Toray's decision to step up its carbon fiber
production is to prepare itself for demand for Boeing's B787. The
company has concluded an exclusive contract with Boeing. The weight
of carbon fiber is a quarter of that of iron, but it is ten times as
strong as that of iron. Lightweight solution through the use of
carbon fiber will lead to improved fuel efficiency.

Carbon fiber application areas have expanded from aircraft to
general industrial usage. It is also used for driving parts of

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automobiles. Carbon fiber is now on the threshold of full-fledged
wide spread use.

Toray estimates that carbon fiber demand will grow at an annual rate
of about 15%, reaching 45,000 tons in 2010, about 1.7 times greater
than the demand in 2006.

Toray's operating profit in the carbon fiber-related section for the
term ending in March 2007 is projected to expand to 18 billion yen,
1.5 times greater than the preceding term. Among the company's six
production sections, its operating profit rate takes the first place
at 25% far ahead of the second earner.

Toho Tenax has also revised upward its outlook for profits for the
current term. The parent company Teijin has increased the investment
ratio in Toho Tenax by 13 points to 70% in this term alone. It is
increasing its involvement in the management of the carbon fiber
business.

Behind high profitability of carbon fiber is the industrial
structure, in which three companies are monopolizing the market.
They are focusing on fields of their specification without
contending for shares. The three companies have developed their own
technologies for manufacturing original yarns, the key to quality,
barring easy access by other competitors. The high access barrier is
also contributing to the stability of this industry.

SCHIEFFER