DAILY SUMMARY OF JAPANESE PRESS 01/18/08

UNCLAS SECTION 01 OF 20 TOKYO 000145 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 01/18/08 INDEX: (1) New Vice Foreign Minister Yabunaka: Effective dialogue with North Korea necessary (Asahi) (2) Soka Gakkai urges New Komeito to be cautious about introducing a permanent law to allow SDF overseas deployments (Asahi) (3) Former Vice Foreign Minister Yachi: I failed to resolve abduction issue (Asahi) (4) Chief Cabinet Secretary Machimura gives special lecture on gas tax, with pointer in hand (Asahi) (5) Central, local governments concerned about effect of provisional high tax rates' expiration on financial sources for road construction (Asahi) (6) Industrial circles worry about possible confusion in distribution process in case of abolishment of current provisional taxes (Asahi) (7) Regular Diet session to open today; Inward-looking political babble must end (Nikkei) (8) Government trying to dodge criticism about resubmitting human rights protection legislation (Asahi) (9) Economic panel approves guideline on economic management aimed at growth, focusing on environment measures (Nikkei) (10) Nikkei economic symposium: Slowing Japanese economy: Will U.S. stave off recession? (Nikkei) (11) Okinawa Prefecture Environmental Impact Assessment Council strongly calls for rewriting of plan for how to conduct assessment of facilities replacing Futenma Air Station; More in-depth recommendation report compiled (Ryukyu Shimpo) (12) One month after U.S. Army sets up forward-deployed command for 1st Corps at Camp Zama in Kanagawa; Local communities concerned about base buildup with no info (Akahata) (13) It's unrealistic to call SDF troop dispatch based on U.N. resolution constitutional: Japan's U.N. envoy (Akahata) (14) Deputy Foreign Minister Kono: Focus to be on setting mid-term goal for greenhouse gas emissions cuts at G8 summit (Yomiuri) (15) G8 Hokkaido Toyako Summit in 2008: When will G8 leaders arrive at New Chitose Airport? Hokkaido government in stew over 
transportation, measures against aircraft noise (Hokkaido Shimbun) (16) CIRO employee fired for info leaks (Sankei) ARTICLES: (1) New Vice Foreign Minister Yabunaka: Effective dialogue with North Korea necessary ASAHI (Page 4) (Full) January 18, 2008 TOKYO 00000145 002 OF 020 New Administrative Vice Foreign Minister Mitoji Yabunaka said yesterday: "An effective dialogue is needed for the North Korea issue." Referring to the abduction issue, talks on which have been stalled, he stated: "It is important to let that country understand that resolving the issue will benefit it as well. Yabunaka held yesterday a press conference and responded to questions by media companies. As director general of the Asian and Oceanian Affairs Bureau, he dealt with the North Korean nuclear problem for two years from December 2002. Asked about his view on North Korea, he said: "Negotiations with Pyongyang are never easy. Japan has taken a policy of giving priority to dialogue and pressure. However, we must have an effect dialogue with that country." With regard to the 4th Tokyo International Conference on African Development to be held in May, and the July Group of Eight summit in Hokkaido, Mitoji pointed out: "It is extremely important for Japanese diplomacy to conclude the two conferences successfully." He also stated: "It is important for Japan, China and South Korea to cooperate over Africa assistance even though Beijing has carried out resource diplomacy." (2) Soka Gakkai urges New Komeito to be cautious about introducing a permanent law to allow SDF overseas deployments ASAHI (Page 4) (Full) January 18, 2008 The New Komeito, the junior coalition partner of the ruling Liberal Democratic Party (LDP),held a meeting yesterday at its headquarters with the religious sect Soka Gakkai, its main backer. In the session, the Soka Gakkai urged the New Komeito to carefully respond to the idea of introducing a permanent law to allow overseas deployments of the Self-Defense Forces, on which the religious sect is concerned that the LDP and the largest opposition Democratic Party of Japan (DPJ or Minshuto) might make a decision on it without broad-based debate. New Komeito Secretary General Kazuo Kitagawa explained his party's position: "Our party will not approve a permanent law without public consensus." Soka Gakkai Deputy Director Harada also asked the New Komeito to be cautious about taking advantage of the two-thirds override vote in the House of Representatives in enacting a bill on the budget for 2008 and its related bills after they are voted down in the House of Councillors. He told Kitagawa: "Although the two-thirds override vote in the Lower House, which is stipulated in the Constitution, is a legal procedure, abusing it should be avoided. As political parties, the ruling and opposition camps must make efforts to reach an agreement." (3) Former Vice Foreign Minister Yachi: I failed to resolve abduction issue ASAHI (Page 4) (Full) January 18, 2008 Shotaro Yachi, who resigned as administrative vice foreign minister yesterday, held a press briefing yesterday, in which asked about TOKYO 00000145 003 OF 020 events he had dealt with during his tenure as vice minister, he responded: "What I left unfinished is the abduction issue." He described his achievements, quoting Douglas MacArthur's expression, "The old soldier never dies, he just fades away." He became an advisor to the Foreign Ministry as of yesterday. He expressed bitterness, saying: "What I left unfinished or what I failed to make achievements is probably the abduction issue. Although there are many difficult issues, including the Northern Territories issue, it is extremely regrettable that results were not made on the abduction issue." (4) Chief Cabinet Secretary Machimura gives special lecture on gas tax, with pointer in hand ASAHI (Page 4) (Full) January 4, 2008 Countering the DPJ's call for abolition of the provisional gas tax rate, Chief Cabinet Secretary Machimura in an unprecedented move during a regular press conference yesterday gave a lecture on the gas tax, using three panels. He noted with a pointer in one hand: "The DPJ is claiming that gasoline prices would drop 25 yen per liter if the provisional tax is abolished. However, I want you to understand the problems with the idea." He cited the following as problems: (1) a drop in tax revenues of both the central and local governments up to 2.6 trillion yen; (2) adverse effects on the installation of guardrails for school roads, measures for railroad crossings that rarely open, and snow-removal; and measures to prevent global warming. In particular, he stressed that gasoline prices in Europe are higher than those in Japan. He said, "Would the international community see Japan as being enthusiastic about preventing global warming if it cuts the gasoline tax at a time when it is going to make a public appeal on environmental issues at the G-8 summit?" He then joked, "Perhaps the DPJ believes money will fall from the sky." (5) Central, local governments concerned about effect of provisional high tax rates' expiration on financial sources for road construction ASAHI (Page 2) (Full) January 17, 2008 Financial sources for road constructions come from revenues from six taxes, including the gasoline tax and the local road tax. The total amount of annual revenues from these taxes is 3.3 trillion yen for the central government and 2.1 trillion yen for local governments. Of these taxes, their provisionally high rates of five taxes are to expire at the end of March and at the end of April. If the hiked rates expire, the central and local governments will lose revenues of 1.7 trillion yen and 0.9 trillion yen, respectively. Given this, the central and local governments are increasingly concerned about the effect on their finances. In the case of Shimane Prefecture, if the provision tax rate is removed, the 43.4 billion yen allocated for road-construction projects in the fiscal 2007 budget will reduce to 18.8 billion yen. Meanwhile, the Democratic Party of Japan also has come up with a TOKYO 00000145 004 OF 020 tricky scheme. Under this, the main opposition party proposes having the central government pay the total amount of costs for projects under the direct jurisdiction of the central government. To do so, however, about 600 billion yen will be needed. (6) Industrial circles worry about possible confusion in distribution process in case of abolishment of current provisional taxes ASAHI (Page 2) (Slightly abridged) January 17, 2008 In a press conference yesterday, Petroleum Association of Japan Chairman Bunmei Watari, chairman of Nippon Oil Corporation, said: "It is imprudent even to think about the premise of expiration of the current provision tax rates. I am not considering any measures, assuming such a case, at the present point of time." If the provisional high gasoline rate expires, the current regular gasoline price, now at about 155 yen per liter, will drop by 25 yen. This change will benefit drivers, but executives in the petroleum industry are worried about possible confusion in the process of distribution. Since the gasoline tax is imposed at the stage of shipment, even if the high rate is to expire on April 1, the current rate will be applied to all gasoline to be shipped by the end of March. This means that consumers will find different prices for gasoline marketed at the same time due to differences in shipment timeframe. In the case of diesel oil, though, the tax is imposed at the stage of marketing. Once the high rate expires, high-rate diesel oil will no longer be placed on the market. A petroleum company executive complains: "If the government does not formulate and distribute guidelines to drivers to let them know what will change (if the high tax rates are not maintained),we will not be able to cope with the situation." If the ruling camp's bill is enacted in April or later, "the low tax rate" will be applied for a short period of time. In such a case, there may be a last-minute rise in demand. If gasoline is out of stock, drivers might think that refiner-marketers are unwilling to sell low-priced gasoline. Adversely, there may be a case in which many consumers avoid purchasing gasoline before and after the rate is lowered. Some voice concern about the negative effect of an abolishment of the current provisional tax rates on the environment. According to the research group of the National Institute for Environmental Studies, assuming that fuel prices drops by about 20 PERCENT as a result of discontinuation of the current high gasoline and diesel fuel tax rates, carbon dioxide (CO2) emissions may increase about 8 million tons annually on average during the period between 2008 and ¶2012. (7) Regular Diet session to open today; Inward-looking political babble must end NIKKEI (Page 1) (Excerpts) January 18, 2008 TOKYO 00000145 005 OF 020 The divided Diet is now set to enter the hardest stage yet: deliberations on the fiscal 2008 budget bill. At the worst timing, the Japanese economy has been hit by the global financial woes resulting from America's subprime loan crisis. DPJ holds the key Although a budget bill can clear the Diet with the power of the House of Representatives alone, if budget-related bills are rejected by the House of Councillors, they must be readopted in the Lower House by two-thirds overriding votes. But the Lower House stands on equal footing with the upper chamber when it comes to key government posts that require Diet endorsement, meaning the Bank of Japan governor cannot be determined without cooperation between the ruling parties and the main opposition Democratic Party of Japan (DPJ or Minshuto). The fate of Diet deliberations could be determined by the DPJ, the largest party in the Upper House. In the previous extraordinary Diet session, a personnel appointment bill was rejected in the Upper House for the first time in 56 years. Major confusion in selecting a successor to BOJ Governor Toshihiko Fukui would deal a blow to the financial market, which fears an unstable political situation. A number of bills, including one amending the Special Taxation Measures Law governing the provisional tax rates on gasoline and other things must be enacted by the end of March so as not to hamper the revenues of the central and local governments. The DPJ contends that the price of gasoline will drop 25 yen per liter with the abolition of the provisional tax rates. The matter is not that simple. The party needs to present solid financial resources logic to support it. An idea is circulating in the DPJ not to take a vote on the bill in March in the Upper House with the aim of invalidating the provisional tax rates temporarily. It is the Diet's responsibility to reach a conclusion within a given fiscal year. The DPJ's posture of maneuvering for its own interests is unacceptable. Prime Minister Fukuda's responsibility is also heavy. In a Nikkei opinion poll in January, the rates of support and non-support for his cabinet stood at 42 PERCENT and 46 PERCENT , respectively, with the non-support rate outpacing the support rate for two consecutive months. Since assuming office last September, Prime Minister Fukuda has yet to present a clear national vision. His management of the administration lacks speed under heavy pressure from the divided Diet. Discontent with his leadership has also been preventing Fukuda from painting a picture of buoying up his administration. The political battle in part comes from different desires for Lower House dissolution. With a view to regime change, the DPJ is focused on this spring when the budget-related bills will be handled and the question of pension mismanagement is likely to become a breach of the campaign pledge. The prime minister, on the other hand, has expressed his desire to dissolve the Lower House after the G8 Lake Toya Summit in July. Reforms must be carried out In order to enact the budget-related bills by the end of March, the prime minister must seek DPJ President Ozawa's cooperation with a TOKYO 00000145 006 OF 020 determination to dissolve the Lower House, if necessary. The pension and taxation systems must be reformed fundamentally regardless of a fear of an election. This year, South Korea will have a new president and the presidential election will also take place the United States. It is desirable for the LDP and DPJ to come up with their respective manifestos (campaign pledges) clearly specifying their policies regarding pension reform and other matters and receive the people's verdict at an appropriate time. If the Lower House is dissolved and the ruling bloc wins a majority as a result, chances are that the ruling camp would lose a two-thirds majority that can override Upper House rejections of bills. Looking at the period beyond the next Lower House election, calls for forming a grand coalition between the LDP and DPJ and for political realignment are likely to continue simmering at the bottom of in the political community. In 1993, the so-called 1955 framework, symbolized by the LDP dominated system dating back to 1955 when the party was formed, collapsed, and the non-LDP Hosokawa administration was launched. The political world remained in turmoil until the Murayama administration was launched in 1994 by the LDP, Social Democratic Party of Japan, and Sakigake (Harbingers). In the political season after the bursting of the bubble economy, a sense of alarm regarding the country's economy was weak. The Hosokawa administration's one of the economic challenges was to ease the land tax system, but it did not go any further than a limited review due to stiff opposition of the SDPJ and other parties that insisted that the bubble economy would flare up again. It was only one example of a delayed measure by the government. Japanese politics might again follow the wrong path unless it puts an end to the inward-looking political battle and come up with solid and correct measures to deal with the economic situation. The first regular Diet session under the Fukuda administration opens today with four government speeches, including Prime Minister Fukuda's policy speech. The session will run for 150 days through June 15. Interpellations are expected to take place on Jan. 21-23. (8) Government trying to dodge criticism about resubmitting human rights protection legislation ASAHI (Page 3) (Excerpts) January 18, 2008 Human rights protection legislation was scrapped in 1993. A move is underway in the government and ruling parties to submit a renewed bill to the regular Diet session that opens today. The bill that originated from antidiscrimination measures and that includes contents transcending the original ideals, such as media regulations, has drawn objections from conservative members in both the Liberal Democratic Party and opposition parties. Proponents in the LDP and the Justice Ministry are eager to review the contents with the aim of obtaining the support of the two sides. "Not many bills are hated to this extent by both the right- and left-wing groups. In order to win their support, the splinters must be removed," a Justice Ministry official studying the new bill TOKYO 00000145 007 OF 020 said. The scrapped old bill drew objections from both the conservatives fixated on Japanese traditions and culture and those proponents of giving consideration to human rights organizations. To the LDP conservatives, the definition of human rights violations and the nationality clause are the particularly irritating splinters. The group to protect tradition and culture, composed of junior members and chaired by Lower House member Tomomi Inada, is studying an opposition position paper focused on those two points. The old bill specified concrete cases subject to the special relief procedures applicable to serious human rights violations. It also specified that the voluntary general relief measures were applicable to humanitarian rights violations in general. The conservative group criticized the definition of human rights violations was vague. The Justice Ministry is considering listing in the new bill specific cases subject to the general relief measures. "Although human rights violations cannot be defined, presenting specific types would help dispel the concern that the scope would expand endlessly," a senior member said. The old bill also did not specify nationality for the regional human rights counselors that number about 20,000 nationwide. The conservative group, with the General Association of Korean Residents in Japan (Chongryon) in mind, condemned the bill, saying that it might end up increasing the influence of special groups. The government and ruling parties have presented a policy to specify nationality as residents with the right to vote for municipal assemblymen, a substantial step to limit to Japanese nationals. Asked about this review, one said: "Foreigners would be allowed to serve as counselors. The significance of the legislation would be become weaken." At the same time, there is deep-seated opposition to granting suffrage to foreign residents to allow them to become counselors. Also under study are plans to insert the wording that relief measures are not subject to religious and historical problems and to protect those received complaints. Elimination of media regulations under study The DPJ clearly opposed the old bill due to media regulations. The bill included a clause allowing the government to take special relief measures against media violations of human rights of crime victims and others. The clause drew fire that it might end up restricting the media's news-gathering activities, and the ruling bloc decided in 2005 to freeze it until an implementation date is determined under a separate law. Further, the government and ruling camp began studying eliminating the clause altogether, thinking that it would be unfrozen someday. The opposition camp, which wants to swiftly enact the legislation based on the removal of the media regulations, has also begun showing signs of softening its stance. A DPJ lawmaker responsible for the matter said: "Human rights issues must not be politicized. We could go on complaining about specifics, but first of all we need TOKYO 00000145 008 OF 020 to implement the new system." The DPJ criticized the option of establishing a human rights committee in the Justice Ministry's external organ as surveillance by power. Reversing its stance, the largest opposition party plans to approve it based on a condition that it be reviewed in five years. For this reason, once a new bill is submitted to the Diet, it is likely to be enacted. (9) Economic panel approves guideline on economic management aimed at growth, focusing on environment measures NIKKEI (Page 5) (Full) January 18, 2008 The government's council on economic and fiscal policy approved a mid-term guideline on economic management in its meeting yesterday. Given the recent sluggish growth of wages and consumption, as well as the delay in recovery of small companies' business performance, the panel also decided to hammer out a new strategy by this spring to keep the nation's real economic growth rate at more than 2 PERCENT . For a new strategy, private-sector members made a number of proposals, but many of them lack specifics, giving no clear roadmap to turn into practice. The keywords in the mid-term report as a new growth strategy are "connective power and environment power." This expression reflects Prime Minister Fukuda's policy of pursuing "independence and coexistence." In the meeting, the prime minister said: "I want the panel to also keep in mind that our policy will be dispatched to the international community when it maps out a new strategy." With an eye also to the July Lake Toya Summit, in which environmental issues will take center stage, the panel will work out specific measures. A private-sector member said: "It is necessary for Japan to make a strong showing." He meant that Japan should make use of its superiority in the environment and energy-conservation areas, such as the production of hybrid cars and plant management whereby hazardous materials are not released, in order to promote its economic growth. Regarding connective power, a private-sector member proposed improving medical and nursing services. Given that the nation is turning into aging society with a declining birthrate, this proposal is aimed to create a new market by easing regulations in the nursing and daycare service areas and encouraging private entities to enter the business. As measures to enhance productivity at small businesses, one member suggested that a tie-up between different types of business will lead to improvement in their corporate values. But a roadmap to implementing the proposed measures is nowhere in sight. Included among the proposals made for the environment area are those to develop a new material that uses less energy and to install more solar panels at public facilities, and they are nothing new. It is not specified how the aid for Asian countries in the energy sector should be connected to Japan's economic growth. The proposed measures to deal with the ongoing economic globalization seem to be just desk ones and are difficult to put into practice. The guideline proposes introducing a training system to accept high-skilled foreign trainees, but no timeframe and other TOKYO 00000145 009 OF 020 specifics are not included. The guideline also refers to economic partnership agreements (EPA) with Australian and the United States, but a person related to the advisory panel grumbled: "With no specific roadmap, that is a strategy without strategy." Discussion has already been conducted on agricultural reform at an expert committee of the advisory panel, but the mid-term guideline does not refer to this theme. The issue of decentralization, which is viewed indispensable to revitalize local communities, is not taken up, either. Prime Minister Fukuda gives priority to consumer affairs administration. Reflecting this, the guideline notes: "Consumer affairs administration should be reformed from its foundation" as one of the tasks for this year. The prime minister also said: "I want you to discuss future options for consumer affairs administration." In response to the ongoing global-scale financial market turmoil, the panel also agreed to set up an expert body tasked with analyzing in detail the world and Japanese economic structures. (10) Nikkei economic symposium: Slowing Japanese economy: Will U.S. stave off recession? NIKKEI (Page 3) (Excerpts) January 18, 2008 Yoshikawa - risks stemming from soaring crude oil prices will become clear; Harada - drop in housing starts will affect employment; Kojima - wage should be raised to shift income to household sector; Okuda - consumers will increasingly exercise thrift Nihon Keizai Shimbun (Nikkei)and the Japan Center for Economic Research yesterday held a New Year economic symposium at Nikkei Hall in Otemachi, Tokyo. Participants unanimously agreed that the Japanese economy is gradually slowing down due to the sinking U.S. economy, soaring crude oil prices and a decline in investment in housing. A cautious view was prevalent about the future of the economy. Participants also agreed that the U.S. economy, the focus of attention, would slow for sometime to come, but a recession could be avoided with the Federal Reserve Board (FRB) raising interest rates. -- Disturbing factors, such as the issue of subprime loans for individuals with low creditworthiness and the soaring crude oil prices, are increasing. Yoshikawa: The U.S. and the Chinese economy, high crude oil prices and exchange rates have been pointed out as risk factors. Of the three, a yellow light has been flashing on and off on the U.S. economy. But now, a red light is flashing on. As risks became obvious, we have no other choice but to become more cautious in projecting the future of the Japanese and global economies. Okuda: Personal consumption has been sluggish since last summer. The abolition of a fixed-rate tax break and the transfer of tax revenue resources have increased a sense of tax burden. An increasing number of consumers are tightening their purse strings with prices of daily necessaries going up as a result of soaring crude oil prices. We will have a considerably severe year this year. TOKYO 00000145 010 OF 020 Harada: The subprime loan issue originates in the U.S., and yet, the scope of the fall of Japanese stocks is greater. Domestic companies have increased profits mainly because they raised profit shares. Profits gained by enhancing added value are small. The housing sector is in a slump following the amendment to the construction standards law. Distrust in Japan is reflected in stock prices. Kojima: GDP's dependence on foreign demand was about 10 PERCENT in 2002, but the ratio now has risen to about 15 PERCENT . If the U.S. economy slows sharply, the global economy would inevitably lose steam as well. The Japanese economy, which has grown, relying on exports, will require significant adjustment. -- How do you see the domestic economy, close to home? Okuda: Small- and medium-sized companies' business confidence is bad. Since it is difficult for them to shift a rise in the prices of raw materials to sales prices, a performance gap with major companies is widening. Compared with urban areas, where major companies are concentrating, sales of department stores in regional areas are sharply dropping. Harada: One reason for the sluggish labor income is a housing recession. The impact of the housing recession on employment of construction workers is significant. However, since demand for houses and building has not declined, positive effects would appear, once the situation gets back to normal. Yoshikawa: The point is personal consumption. It accounts for 60 PERCENT of GDP. However, personal consumption has grown only 1 PERCENT . Upgrading part-timers to a permanent status holds the key. Another point at issue is the movement of wage hikes, which an increasing number of business leaders have begun to accept. Kojima: The household income has continued to fall with income shifted to the corporate sector. Corporate profits have reset a new high. I think companies that can afford should raise wages, looking ahead. An increase in family income would lead to sustainable consumption, albeit mild. -- What about overseas economies? Harada: China's domestic demand is important. Unlike Japan, there is actual demand for public works in China. Some are concerned about the Chinese economy after the Beijing Olympic Games in August. There are not so many public works related to the Olympic Games, compared with the total number of overall public works. No recession would come after the Olympic Games. Kojima: Growth of the U.S. economy would be no more than 1 PERCENT -2 PERCENT . However, once major adjustment is over, it could grow again next year. Demand for the construction of infrastructure is brisk in China, India and the Middle East. It will serve as a plus factor for the global economy. Yoshikawa: The U.S. will presumably cut interest rates again. However, since the housing sector, where demand is expected to increase as a result of an interest rate cut, has already suffered a blow, monetary easing might not produce effects. Okuda: There will remain a risk of the U.S. economy losing steam. If TOKYO 00000145 011 OF 020 investment in housing declines, consumption of housing-related goods, such as domestic houseware, would drop. The end-of-the-year sales in the U.S. significantly declined. Discount stores are doing well, but department stores and clothing stores are suffering a decline in income. -- What about an outlook for a real growth rate and Nikkei Stock Average? Yoshikawa: It would be difficult for the Japanese economy to attain 2 PERCENT growth. I would say that a real growth rate would be 1.8 PERCENT or so. Okuda: I would say 1.3 PERCENT for fiscal 2007 and 1.5 PERCENT for fiscal 2008. Stock prices would be between 13,000 yen and 16,000 yen. Harada: My projection is that a growth rate for fiscal 2007 would be 1.5 PERCENT and 2 PERCENT for fiscal 2008. Stock prices at the end of the year would be 17,000 yen. Kojima: In my view, a growth rate for fiscal 2007 would be 1.3 PERCENT and around 2.0 PERCENT in fiscal 2008. Yen exchange would be between 100 and 110 against the dollar. Participants: Akira Kojima: Chairman of the Japan Center for Economic Research Yutaka Harada: Chief economist at the Daiwa Institute of Research Tsutomu Okuda: President and CEO of J. Front Retailing SIPDIS Hiroshi Yoshikawa: Professor at Tokyo University (11) Okinawa Prefecture Environmental Impact Assessment Council strongly calls for rewriting of plan for how to conduct assessment of facilities replacing Futenma Air Station; More in-depth recommendation report compiled RYUKYU SHIMPO (Page 1) (Full) January 17, 2008 In response to the governor's commission, Okinawa Prefecture's Environment Impact Assessment Council (chaired by Masamitsu Tsukayama, honorary professor at Ryukyu University) has been SIPDIS examining a plan to recover land from the sea included in the government notice specifying the outline of environmental impact assessments on the construction of facilities replacing the U.S. forces' Futenma Air Station. The panel on the evening of Jan. 16 held its second meeting at the prefecture's Welfare Center of the Prefecture. Participants mapped out a recommendation report that seeks reexamination of environmental assessments of reclamation of the sea area in question, mentioning that the plan should be rewritten at the present stage, where specifics of the construction project can be assumed to some extent. The panel in its recommendation report on the assessment of the construction of an airfield, issued in December last year, employed the wording "Research for environmental assessments should be conducted, once specifics of the project have been decided to some extent." The report this time employed more in-depth wording than that. Policy report to be submitted to governor tomorrow The panel will submit the report to the governor on the 18th. The TOKYO 00000145 012 OF 020 report calls for measures to preserve the environment when conducting assessments of barrack relocation work following the construction of alternative facilities and extracting soil used to recover land from the sea. When the panel deliberated on the draft report on the 16th, the notice carried only seven pages for the purpose and specifics of the project. However, 150 pages of additional data were later provided. The Okinawa Defense Bureau has thus revealed new facts each time the panel asked for explanations, drawing a flurry of criticism as disrupting the original procedures for inviting opinions on the project plan from residents, by letting them know its details. In view of such a situation, one panel member said, "It would be most desirable to let the government undergo the procedures once again." However, the prefecture's environmental policy division took the stand that in terms of the interpretation of the assessment law, it would be difficult to have the plan rewritten in such a way as to give it legally binding power,. However, some panel members strongly called for the rewriting of the plan, whether it will have legally binding power or not. They proposed that examination procedures similar to the method of letting residents know details of the plan, including inviting opinions from persons sitting in the public gallery during open examinations, should be taken. As a result of efforts to explore a method of having the plan written so that the Defense Bureau will not start the project without considering objections, participants agreed to directly mention in the panel's report their request for rewriting the plan. Regarding the reexamination of the environmental assessment and construction project plan, Environmental Policy Division Director Hiroshi Shimoji revealed his perception that he assumes that explanations, including an investigation method matching the specifics of additional data of as many as 150 pages, should be provided in a manner that can convince the panel and the prefecture. (12) One month after U.S. Army sets up forward-deployed command for 1st Corps at Camp Zama in Kanagawa; Local communities concerned about base buildup with no info AKAHATA (Page 4) (Full) January 17, 2008 The U.S. Army has now set up a forward-deployed command for its 1st Corps, also known as I Corps ("eye core"),at Camp Zama, a U.S. military base straddling the cities of Zama and Sagamihara in Kanagawa Prefecture. The new command will now see its first full month on Jan. 19. The U.S. Army is now steadily building up its base functions without providing sufficient information to local communities. There is also something unknown about the new command's scale and task. "We're developing our operational capabilities that differ from the control capabilities we have had here." With this, I Corps Commander Jacoby, posted to the U.S. Washington State city of Fort Lewis, explains the forward-deployed command and its nature in an electronic version of the Stars & Stripes dated Dec. 21, 2007. In 1995, the U.S. Army abolished the headquarters of its 9th Corps TOKYO 00000145 013 OF 020 (IX Corps),which used to keep tabs on the Korean Peninsula for a potential emergency. Since then, Camp Zama has only functioned as a base with control capabilities, namely logistics, and welfare for GIs. With the forward-deployed command's establishment, Zama has now become a linchpin of the U.S. Army's war command again and liaises with I Corps that is ready to send 100,000 troops to the Asia-Pacific region. Moreover, the I Corps forward-deployed command at Zama is a combat command that is "modernized to meet the world situation," according to Public Affairs Officer Crawford at the headquarters of U.S. Army Japan. According to the U.S. Department of Defense's budget for fiscal 2008-2009, the U.S. Army plans to upgrade the "Sensitive Compartmented Information Facility" (SCIF) at Zama. In addition, the U.S. Army also plans to build a "combat command training center" on the neighboring premises of Sagami Depot, starting construction work in March 2009. However, the government has not provided local communities with sufficient information about these functional buildup plans. On Jan. 15, Sagamihara City held a meeting of local residents to promote the reversion of U.S. military bases. One participant there voiced concern about a base buildup with no local consent. "I will strongly request the government to provide information," Sagamihara Mayor Toshio Kayama said in the meeting. Meanwhile, there is also something unclear about the new Zama command. At first, the Defense Ministry explained that the new command would be staffed with about 300 personnel. In December last year, however, the Defense Ministry said the new command would be staffed with about 90 personnel by September 2008 and that the U.S. Army was studying what to do about the new command's staffing after that. The U.S. Army is also planning to deploy 300-400 military vehicles to Camp Zama and Sagami Depot. However, the Defense Ministry says the plan has yet to be finalized at this point. Fort Lewis-where I Corps is headquartered-has sent troops to Iraq since 2003. There are still several thousand troops in Iraq from Fort Lewis. With the Iraq war being protracted, I Corps headquarters is now troubled in its operation before reinforcing its forward-deployed commands. Furthermore, there is also something unknown about the new command's task. The U.S. Department of Defense, in its budget program, explains that the buildup of U.S. Army Japan is linked to a global bottom-up review of the U.S. military presence (U.S. military transformation). Zama is an advance position of the U.S. Army for a global antiterror preemptive war. This is the Bush administration's initial goal, and there is no change in this However, this Bush strategy has fallen through. The future course of the United States' antiterror war is invisible. There are also changes in the Korean Peninsula situation, such as dialogue between the United States and North Korea. Meanwhile, the United States TOKYO 00000145 014 OF 020 needs to look strong against China, according to a U.S. Army Japan source. Japan and the United States are now certain to integrate their military forces. "I Corps has done a number of training exercises with the Ground Self-Defense Force. From now on, we will also be able to develop our relations with them throughout the year, not only to conduct training exercises." With this, Jacoby stressed that the U.S. Army would step up its cooperation with the GSDF's Central Readiness Command, which will move its headquarters to Zama by fiscal 2012. (13) It's unrealistic to call SDF troop dispatch based on U.N. resolution constitutional: Japan's U.N. envoy AKAHATA (Page 4) (Full) January 18, 2008 Jiji Press, New York Japanese Ambassador to the United Nations Yukio Takasu spoke to a Jiji Press seminar in New York City on Jan. 15. In his speech there, Takasu indicated that it is unrealistic to conclude that sending troops from the Self-Defense Forces on an overseas mission-if that is based on a U.N. Security Council resolution-does not conflict with the Constitution's Article 9, which prohibits Japan from using armed force overseas. Takasu cited peacekeeping operations (PKO) as U.N. activities that are based on a UNSC resolution. He said, "This includes tasks to be conducted along with military operations to a considerable extent." He added, "It is not realistic to say this does not correspond to the use of armed force stipulated in Article 9. (14) Deputy Foreign Minister Kono: Focus to be on setting mid-term goal for greenhouse gas emissions cuts at G8 summit YOMIURI (Page 4) (Full) January 18, 2008 The main topics of discussion at the Group of Eight summit that Japan will host in July in Hokkaido will be such political issues as the environment, climate change, support for African development, and nuclear nonproliferation. The global economy will be another major item on the agenda at the G8 summit. I am sure that Afghanistan and Pakistan will be taken up as regional issues. Many prominent figures such as national political leaders and top business leaders from the world will attend the annual meeting of the World Economic Forum (WEF or Davos Conference),which will start on Jan. 23. The participants are wondering what this year's G8 host country will talk about. Prime Minister Yasuo Fukuda will send messages responding to their expectations. Japan will kick off the G-8 summit at the WEF meeting. On the climate change issue, the highlight of the Summit is how to set a mid-term goal for cutting greenhouse gas emissions in a post-Kyoto Protocol international pact. In that regard, the G8 shared the same view in the first Sherpa meeting held this month. The unprecedented heated discussion was held in the two-day Sherpa meeting. TOKYO 00000145 015 OF 020 Until July, Japan wants to link the G8 debate and the America-hosted conference of major emitters. Linking the two discussions is important because China is a member of the conference. The U.S. will host the next meeting of the major emitters in late January in Honolulu, and it is also expected to hold monthly meetings. Washington is trying to consider the issue of setting a mid-term goal in a responsible way. Although the United Nations is the main venue to discuss climate change, the Japanese government wants to make the upcoming G8 a springboard for creating a mid-term goal. If the G8 fails to reach a consensus, clashes of opinions will become more serious at the UN. Therefore, Japan assumes a heavy responsibility. (15) G8 Hokkaido Toyako Summit in 2008: When will G8 leaders arrive at New Chitose Airport? Hokkaido government in stew over transportation, measures against aircraft noise HOKKAIDO SHIMBUN (Page 27) (Full) January 17, 2008 The Hokkaido government and municipalities affected by the Group of Eight (G8) industrialized countries summit conference in Lake Toyo, Hokkaido (G8 Hokkaido Toyako Summit) are fretting about when the G8 leaders will arrive at New Chitose Airport, Hokkaido, and whether they will arrive late at night or early morning. If they arrive late at night or early morning, one problem is how to transport them. Moreover, in order to deal with airplane noise if landing slots from 10:00 p.m. through 07:00 a.m. are set, it is necessary to discuss the noise issue with local residents. Given the past discussions between the Hokkaido government and residents on the noise problem, it is difficult to forecast whether they can reach a conclusion if they hold discussions. According to the Hokkaido government's G8 Summit Promotion Bureau, as of Jan. 16, no information about the schedule showing arrivals and departures of the G8 leaders has been released by the Ministry of Foreign Affairs' (MOFA) G8 Summit Preparation Office. In the case of the 2000 G8 Okinawa Summit, all G8 leaders arrived in Narita Airport instead of small Naha Airport. So no problem occurred. But given New Chitose Airport's broad aircraft parking apron, it is expected that some G8 leaders will directly arrive in New Chitose Airport, says an official at the Hokkaido government's Summit Promotion Bureau. The bureau is consulting with MOFA ways to transport G8 leaders, if they arrive in the airport daytime, to the area near the G8 Summit venue Windsor Hotel Toya by carrying them by helicopter from the airport to Lake Toya. However, no consultations have been held concerning what to do about arrivals or departures late at night or early morning. Depending on circumstances, G8 leaders may be asked to stay one night at a hotel near the airport. Another major pending question is related to the agreement made with residents. Regarding arrivals and departures late at night and early morning in New Chitose Airport, the Hokkaido government and the governments of Chitose City and Tomakomai City agreed on six departure-and-arrival slots a day. These slots are always all used by cargo and passenger planes. The Hokkaido government's G8 Summit Promotion Bureau said that now is not the right time to hold TOKYO 00000145 016 OF 020 discussion with residents, but it added that it may seek residents' understanding toward creating special landing slots. Residents, however, are nervous that the agreement might be turned a mere scrap of paper, given that during last year, there were nearly 300 landings after 10:00 p.m. because of equipment trouble and unseasonable weather. Residents still harbor the ill feeling toward the Hokkaido government over the question of whether to extend the airport runway. Hidenori Niwa, chair of the Uenae Block Association in Tomakomai City, noted: "In terms of national interests, I feel it necessary for us to show understanding toward creating special landing slots if they are necessary. But (the Hokkaido government) tends to ignore the voices of residents. I hope the Hokkaido government will fully exchange views with residents so that they can convey their views to the central government." In the case of the Okinawa G8 Summit, it was four months before the G8 Summit that none of the G8 leaders would arrive directly in Naha Airport. The Hokkaido government's Summit Promotion Bureau noted that given the need to hold discussion with residents, we need to know early..., until spring...." Hotel employees enthusiastic about learning English conversation Noboribetsu Onsen The Noboribetsu Grand Hotel (at Noboribetsu Onsen Town in Noboribetsu City),which has been informally chosen as accommodations for the U.S. government delegation, offer its employees an English conversation class. Since last fall, when the United States inspected the hotel, the hotel side has held the English conversation class for its 100 or so employees working at the reception desk and gift shops. After the hotel was chosen as a facility to accommodate the U.S. delegation, the English conversation class has focused on practical expressions. The teacher of the class is Managing Director Yutaka Fukushima, who has worked for an overseas hotel for eight years. On Jan. 16, nine employees attended the class, which was held at a karaoke room in the hotel. In the one-hour class, Fukushima played the role of a visitor and taught employees how to respond to a visitor who lost his wallet in a dressing room or how to explain to a visitor the way to go to Sapporo. Aika Saito (20),who has attended every class, said with enthusiasm: "I want to study hard English so that I can respond well to visitors from the United States." The class will continue just before the start of the G8 Summit. (16) CIRO employee fired for info leaks SANKEI (Page1) (Abridged) January 18, 2008 Chief Cabinet Secretary Nobutaka Machimura took disciplinary action yesterday under the National Public Service Ethics Law to discharge a 52-year-old employee of the Cabinet Intelligence and Research Office (CIRO or Naicho for short) for receiving money from a member of the staff of the Russian Embassy in Japan in return for providing information. This is the first disciplinary dismissal of a CIRO TOKYO 00000145 017 OF 020 employee since the organization was established in 1986. The prime minister's office (Kantei) has just taken the initiative to enhance the counterintelligence setup of central government offices. In addition, the Kantei has also set up a panel to reform the Defense Ministry in order to secure information in a thoroughgoing way. However, a government body under the Kantei's control is now involved in a scandal. The bureaucracy exposed a laxity of moral fiber from within the government's center. CIRO, a government organization under the Kantei, has brought about such an unheard-of scandal. This event greatly shocked the Kantei, which is particularly nervous about intelligence. Prime Minister Yasuo Fukuda was apparently upset on Jan. 16 when the media reported the alleged leakage of information. "This kind of problem occurred right under my office," Fukuda said later in the day. "It's very regrettable-out of the question," Fukuda added. Machimura, meeting the press yesterday, said in a hard tone of voice: "There was such an event in a government office that must be most sensitive to intelligence. I don't know what to say to the people. It's an unforgivable act." In the past, a diplomat posted to the Japanese Consulate General in Shanghai committed suicide. In the wake of that incident, the government set up a counterintelligence promotion panel under the then Abe cabinet. In August last year, the counterintelligence panel worked out a basic course of action to enhance the government's counterintelligence functions. In April this year, the government set up a body, called the Counterintelligence Center, under the CIRO. The Counterintelligence Center is tasked with collecting and analyzing information about foreign intelligence agencies and their activities. In April next year, the center is expected to work out guidelines for all government personnel in order to prevent classified information about national security and diplomatic affairs from being leaked. In December last year, after the Fukuda cabinet's inauguration, the government set up an advisory panel at the Kantei to discuss an overhaul of the Defense Ministry due to Maritime Self-Defense Force personnel's leakage of classified information about an Aegis ship and other scandals. The government was studying measures to step up information security. Above all, Machimura lost face with the CIRO scandal. He presided over the ruling Liberal Democratic Party's project team to strengthen Japan's intelligence functions before assuming his current cabinet post. He has emphasized the importance of intelligence as chief cabinet secretary. (Corrected copy): Poll on Fukuda cabinet, political parties, MSDF refueling mission SANKEI (Page 5) (Full) January 16, 2008 Questions & Answers (Note) Figures in parentheses denote the results of the last survey conducted Nov. 10-11 last year. Q: Do you support the Fukuda cabinet? TOKYO 00000145 018 OF 020 Yes 36.6 (41.1) No 47.3 (40.3) Don't know (D/K) + Can't say which (CSW) 16.1 (18.6) Q: Which political party do you support? Liberal Democratic Party (LDP) 32.1 (32.2) Democratic Party of Japan (DPJ or Minshuto) 25.0 (26.5) New Komeito (NK) 4.0 (3.6) Japanese Communist Party (JCP) 3.5 (3.1) Social Democratic Party (SDP or Shaminto) 2.1 (2.6) People's New Party (PNP or Kokumin Shinto) 0.6 (0.7) New Party Nippon (NPN or Shinto Nippon) 0.3 (0.1) Other answers (O/A) 0.9 (1.3) None 30.6 (28.2) D/K + Can't say (C/S) 0.9 (1.7) Q: Do you appreciate Prime Minister Fukuda and his government on the following points? His personal character Yes 58.0 (62.3) No 33.4 (22.6) D/K+CSW 8.6 (15.1) His leadership Yes 24.4 (28.5) No 62.7 (43.1) D/K+CSW 12.9 (28.4) Foreign policy Yes 30.9 No 48.8 D/K+CSW 20.3 Economic policy Yes 17.0 No 64.7 D/K+CSW 18.3 North Korea policy Yes 14.0 (15.5) No 70.2 (60.3) D/K+CSW 15.8 (24.2) Response to Defense Ministry scandals Yes 17.5 (13.3) No 73.2 (66.9) D/K+CSW 9.3 (19.8) Response to pension issues Yes 28.0 (31.2) No 64.0 (53.9) D/K+CSW 8.0 (14.9) Response to hepatitis C infections Yes 74.1 (43.5) No 20.1 (37.5) D/K+CSW 5.8 (19.0) TOKYO 00000145 019 OF 020 Q: What do you think about those listed below in connection with the newly enacted antiterrorism law intended to resume the Maritime Self-Defense Force's refueling mission for multinational forces in the Indian Ocean? The new antiterror law was enacted Good 45.1 Questionable 43.8 D/K+CSW 11.1 The Diet took time to deliberate, and the MSDF pulled out Good 52.5 Questionable 35.2 D/K+CSW 12.3 The opposition-dominated upper chamber took time to deliberate Good 48.8 Questionable 42.0 D/K+CSW 9.2 The ruling parties took a second vote in the lower chamber with a majority of two-thirds Good 39.4 Questionable 48.4 D/K+CSW 12.2 DPJ President Ozawa abstained from voting in the lower chamber's last plenary sitting Good 12.1 Questionable 77.0 D/K+CSW 10.9 Q: The ruling coalition holds a majority of the seats in the House of Representatives, and the opposition bench dominates the House of Councillors. What do you think about this lopsidedness in the Diet? Pick only one from among those listed below. That's good because there's political tension 13.8 (13.9) The ruling and opposition parties should compromise 40.1 (41.3) The House of Representatives should be dissolved at an early date for a general election 43.7 (41.3) DK+C/S 2.4 (3.5) Q: Do you support a "grand coalition" of the LDP and the DPJ? Yes 33.7 No 54.6 D/K+CSW 11.7 Q: The Fukuda cabinet has taken over almost all of the former Abe cabinet's ministers. Do you think the Fukuda cabinet should be shuffled substantially at an early date? Yes 44.0 (41.1) No 51.1 (49.2) D/K+CSW 4.9 (9.7) Q: When would you like the House of Representatives to hold its next election? During the first half of this year 23.6 (35.8) After this July's G-8 summit in Japan and during the latter half of TOKYO 00000145 020 OF 020 this year 45.9 (29.9) Upon the current term's expiry or early next year 29.0 (19.9) D/K+C/S 1.5 (4.8) Q: Which political party's candidate would you like to vote for in the next election for the House of Representatives? LDP 34.4 DPJ 33.9 NK 4.1 JCP 3.9 SDP 2.6 PNP 0.5 NPN 0.3 O/A 9.2 D/K+C/S 11.1 Q: What form of government would you like to see after the next election for the House of Representatives? LDP-led coalition government 28.5 (29.7) DPJ-led coalition government 32.5 (32.1) LDP-DPJ grand coalition 34.4 (29.3) D/K+C/S 4.6 (8.9) Q: How long do you think the Fukuda government will continue? Until around the next election for the House of Representatives 46.7 (56.2) Until the fall of next year 34.0 (21.9) Continue until after the fall of next year 15.8 (10.3) D/K+C/S 3.5 (6.9) Q: A gasoline tax law is due to expire this spring. What do you think about this? Extend the gasoline tax for local traffic networks 28.6 Abolish the gasoline tax in view of rising oil prices and other circumstances 66.2 D/K+C/S 5.2 Polling methodology: The survey was conducted Jan. 13-14 by the Sankei Shimbun and Fuji News Network (FNN) over the telephone on a computer-aided random digit dialing (RDD) basis. For the survey, a total of 1,000 persons were sampled from among males and females, aged 20 and over, across the nation. DONOVAN