DAILY SUMMARY OF JAPANESE PRESS 08/13/08

UNCLAS SECTION 01 OF 10 TOKYO 002225 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 08/13/08 INDEX: (1) Reinvestigation of abduction incidents "to conclude by autumn"; Japan-DPRK agreement, sanctions to be partially lifted (Asahi) (2) LDP, New Komeito secretaries general agree to submit large supplementary budget bill to next extraordinary Diet session (Yomiuri) (3) Prime minister positive about making dividends tax-free: "Capital investment should be made duty-free, too" says Aso (Tokyo Shimbun) (4) Waning of LDP in Upper House: Losing power as votes from industrial circles decrease; Persons recommended unable to secure ministerial posts (Tokyo Shimbun) (5) DPJ policies (part one): Funding resources finds party split (Asahi) (6) Can Fukuda display his policy imprint? Second Fukuda cabinet already running into snag over information sharing (Mainichi) (7) Defense Ministry to request budget for post-cluster munitions (Akahata) (8) Global warming prevention: All industries broadly classified into three categories (Mainichi) (9) TOP HEADLINES (10) EDITORIALS (11) Prime Minister's schedule, Aug. 12 ARTICLES: (1) Reinvestigation of abduction incidents "to conclude by autumn"; Japan-DPRK agreement, sanctions to be partially lifted ASAHI ONLINE (Full) August 13, 2008 (Toru Tamakawa, Yoshihiro Makino, in Shenyang) Japan and North Korea agreed during a formal meeting of their foreign ministry working-level officials in the predawn hours of August 13 in Shenyang, China that North Korea will set up a reinvestigation committee on abduction victims at an early date and finish the investigations by this fall. Upon the establishment of the committee, the Japanese Government will lift its sanctions on travel by people between the two countries and operation of chartered flights. The Japanese Government considers that the agreement on specific ways to conduct the reinvestigations marks a certain level of progress, but it remains uncertain whether this will lead to the discovery and return of abduction victims. Akitaka Saiki, director general of the Foreign Ministry's Asian and Oceanian Affairs Bureau, from Japan and Song Il Ho, North Korea's ambassador for normalization talks with Japan, participated in the TOKYO 00002225 002 OF 010 meeting. According to the Japanese briefing, the subjects of the investigations include all abduction victims, including those who are missing, in addition to the victims officially recognized by the Japanese Government. Japan and North Korea also agreed that appropriate authority will be given to the investigation committee; progress in the investigation will be reported to the Japanese Government as needed; and the Japanese Government will be allowed to confirm the results of the investigations by interviewing relevant officials and visiting related sites. At the latest meeting, no agreement was reached on the repatriation of people connected to the hijacking of the Japan Airlines "Yodo-go" jetliner (in 1970) and on allowing North Korean ships to enter Japanese ports for transporting humanitarian goods. Up until reaching the agreement, Kyoko Nakayama, minister in charge of the abduction issue, called for exercising caution in making decisions, according to several Japanese Government officials. When Prime Minister Yasuo Fukuda was consulted for the final decision, the Prime Minister reportedly gave the following instruction: "Proceed cautiously. Also, exert utmost efforts so that survivors can be found." After the meeting, Saiki told reporters, "We sincerely hope that the investigation committee will be set up as soon as possible and that it will lead to the return of the victims." Song said, "Should there be any betrayal of the agreement (by Japan),or should the agreed contents do not move in the determined direction, everything will break down." It remains uncertain how far the "investigation committee that has been given authority" will be able to pursue the truth. In addition, in response to an interview by Asahi Shimbun, a North Korean government authority indicated that regardless of the outcome of the investigation, North Korea intends to bring the abduction issue to a close once and for all, saying, "Once the results of the reinvestigation comes out, the rest is a matter of how the Japanese Government accepts the results." On August 13, Nakayama welcomed the latest Japan-DPRK agreement, saying: "If North Korea will conduct investigations once again from the beginning (by withdrawing its conventional assertion),there is a good possibility that survivors will be found. It could lead to new developments." However, Nakayama also stressed the need to carefully discern North Korea's moves before Japan partially lifts its sanctions. (2) LDP, New Komeito secretaries general agree to submit large supplementary budget bill to next extraordinary Diet session Yomiuri Online 13:45, August 13, 2008 Secretaries general, Policy Research Council chairmen, and Diet Affair Committee chairmen of the Liberal Democratic Party (LDP) and the New Komeito on the morning of August 13 met at a Tokyo hotel. Participants agreed that a fiscal 2008 supplementary budget bill that includes an economic stimulus package and other proposals should be submitted to the Diet at the outset of the next extraordinary session. The envisaged budget will likely be large, topping at least several TOKYO 00002225 003 OF 010 hundred billion yen. Participants put off a decision on when to convene the extraordinary Diet session. However, it will likely be convened in or after early September. Participants also confirmed that LDP Secretary General Aso will shortly meet with Prime Minister Fukuda and confer on bills to be handled in the extraordinary session. When to convene the session and the duration of such will then be decided next week. (3) Prime minister positive about making dividends tax-free: "Capital investment should be made duty-free, too" says Aso TOKYO SHIMBUN (Page 2) (Full) August 13, 2008 Liberal Democratic Party (LDP) Secretary General Taro Aso has proposed a measure to make dividends less than 3 million yen tax-free. Prime Minister Fukuda on August 12 indicated a positive stance to the proposal, saying, "I do not see why not, if many opinions can be taken into account, while a good balance is achieved with other tax codes." Commenting on Aso's proposal, the prime minister said, "Japan's stock market has no vigor. I think he made that proposal to encourage more people to buy stocks." In this connection, Aso in a speech given in Kitakyushu City revealed his view that a tax cut measure should be taken for capital investment by companies as a tax stimulus measure." He said, "It would be effective to think about a tax cut policy in a manner of channeling money for investment. I do hope to see my proposal implemented in the tax code revision in December." He also repeatedly stressed the importance of making dividends tax-free. He said, "I am not calling for a pork-barrel policy. A tax cut policy does not mean the government spends money. I would just like to change the tax code." (4) Waning of LDP in Upper House: Losing power as votes from industrial circles decrease; Persons recommended unable to secure ministerial posts TOKYO SHIMBUN (Page 2) (Abridged slightly) August 13, 2008 The Liberal Democratic Party (LDP) in the Upper House has become a minority ruling party in the Upper House election last summer. This summer, it suffered a setback in the cabinet shuffle, which Prime Minister Yasuo Fukuda carried out on August 1, with lawmakers whom it had recommended unable to secure even one ministerial post. The LDP in the Upper House, which had been holding the reins of power because of its influence on governments of the day, is visibly declining. The LDP in the Upper House has thus far recommended persons for ministerial posts on the basis of seniority, including such elements as how many terms candidates have served as lawmakers and party executives. This time, it recommended Tetsuro Yano and Gotaro Yoshimura -- both second-term Upper House members. However, the recommendation by the Upper House was ignored, though it has maintained three seats -- TOKYO 00002225 004 OF 010 Health, Labor and Welfare Minister Yoichi Masuzoe, Defense Minister Yoshimasa Hayashi and State Minister for Abduction issue. The successive chairmen of the LDP in the Upper House had been reigning the government, displaying independence of the Upper House, as can be seen in the cases of former Chairman Mikio Aoki, who was called the don of the Upper House, and former Chairman Masakuni Murakami, convicted of bribery, who was called the emperor of the Upper House. Even former Prime Minister Junichiro Koizumi, who adhered to a top-down approach for the selection of cabinet ministers, was unable to ignore the Upper House's wishes and accepted its list of recommendations of politicians for cabinet posts. Former Prime Minister SHINZO ABE openly pledged to revise the Upper House framework for ministerial posts when he formed his cabinet. However, he had to rescind his pledge, meeting fierce opposition from the Upper House. The LDP in the Upper House was easily deprived of its sanctuary in the cabinet shuffle this time, which is attributable to the decline in the power of industrial organizations, which it has protected and solidified. Both sides have built a close relationship with the LDP in the Upper House reflecting the wishes of industrial associations, by making candidates affiliated with such organizations elected in the proportional representation portion. However, the solidarity of industrial associations has gradually weakened due in part to the impact of structural reforms. Many incumbent Upper House members and new candidates recommended by the Japan Medical Association, the Japan Nursing Federation and other industrial organizations were not elected, allowing the Democratic Party of Japan (DPJ or Minshuto) to make a big leap. The LDP in the Upper House has lost numbers and influence on personnel selections. One senior lawmaker said weakly, "The weight of recommendations by the Upper House has collapsed just as the weight of recommendations by party factions did. It means that the recommendation system has been replaced with a merit system." (5) DPJ policies (part one): Funding resources finds party split ASAHI (Page 4) (Full) August 13, 2008 "Hula Girl," a movie that was a big hit in 2006, is a story about the hardships that people living in a town built around a coal mine went through when they faced the crisis of the closing of the coal mine and faced the need to reconstruct the town. On July 24, the Democratic Party of Japan (DPJ) held a public hearing on its manifesto in Iwaki city in Fukushima Prefecture, the very setting of this story. The problem that Iwaki city now faces is a lack of doctors. Approximately 350,000 people live in the city, which has an area about twice as large as that of the 23 special wards of Tokyo combined. After experiencing exhausting duties, physicians assigned to local hospitals have resigned one after another, resulting in limited availability of medical services not only in the pediatric and obstetric departments, but also in the internal medicine, urology, and cardiovascular surgery departments. In 2006, there were TOKYO 00002225 005 OF 010 78 cases of "musical ambulances" (i.e., musical chairs or "tarai-mawashi") in Fukushima Prefecture, in which emergency patients in ambulances were rejected at more than10 hospitals before they were finally admitted. Of these cases, 76 happened in Iwaki city. In response to the emotional appeal of people in the audience at the public hearing who called for resolving the problem of the shortage of physicians, Masahiko Yamada, minister of health, labor, and welfare in the DPJ's "Next Cabinet," proclaimed: "There is a shortage of 100,000 physicians (in Japan). The government's plan to reduce social security spending is as big problem. We would set measures related to medical and healthcare services as our top priority and allocate a budget of 3-4 trillion yen!" However, Norio Hasegawa, vice chairman of Iwaki Medical Association, who participated in the public hearing, had mixed feelings. He sensed that the situation would not improve if things were left as is. He also heard colleagues in the association talk about seeking "a change of administration at least for once." Nevertheless, Hasegawa felt uncomfortable about the DPJ's explanation, saying: "They have no understanding of medical services. All they talk about is reviewing the special budget and eliminating wasteful spending." Three days later, Hasegawa went to a lecture given by DPJ Vice President Katsuya Okada, who visited Fukushima Prefecture. Okada talked about breaking down bureaucratic domination and reviewing budget allocations. This impressed Hasegawa, who said to himself, "He's pretty good." He then handed Okada a document explaining measures for resolving the problem of shortage of physicians that he and his colleagues had worked out. However, Hasegawa has yet to discern whether it would be acceptable to him if the DPJ were to take over the reigns of government. Reform of the pension system, creation of a child benefit program, a system of income security for individual farming households, making public senior high school charge-free...These are some of the policies included in the manifesto drawn up by DPJ President Ichiro Ozawa for the Upper House election that advocated "giving priority to the people's livelihood." Revenues worth 15.3 trillion yen are needed to implement these policies. Presuming that medical reforms would be carried out and the provisional tax rate put in place for road-specific revenues would be scrapped, the cost of implementing all these policies would add up to around 20 trillion yen. The DPJ's policies have often been criticized as not being supported by revenue sources. However, Ozawa has not changed his position on keeping the consumption tax rate at the current level and does not seem to be bothered by this matter at all. In late June, Ozawa held an informal meeting with women in Gifu City. Asked about the revenue source issue, Ozawa feverishly replied: "The first thing is to completely eliminate patronage and corruption among politicians and bureaucrats. Wasteful spending is rooted in patronage. We will completely eliminate them through thorough cleaning. We will stop wasteful spending of the budget and tax money. Then we will have the necessary revenues." If the DPJ takes over the reigns of government and conducts self-inspections, it will find latent revenue all over the place. That is why a change of administration is necessary.... This is the Ozawa-style "break-through-a-single-point policy (itten toppa TOKYO 00002225 006 OF 010 shugi)." Around the same time, Ozawa tapped on the shoulder of a senior DPJ official who came to consult him on the revenue source (for the policies) in the manifesto for the upcoming general election and whispered to him: "It's all right, it's all right. You many not have done it (manage the government),so you might feel uneasy, but things will work out. Don't worry." Hirohisa Fujii, chairman of the DPJ Research Commission on the Tax System, who hails from the former Finance Ministry and has experience serving as a finance minister, told a DPJ official in charge of policy: "A 10 PERCENT change in the way that the central and local governments spend their administrative costs that total 200 trillion yen will give us 20 trillion yen to work with. That should do it." The DPJ's top priority is to take over the reigns of government through a general election. That appears to be the air predominating over the party leadership. (6) Can Fukuda display his policy imprint? Second Fukuda cabinet already running into snag over information sharing MAINICHI (Page 5) (Full) August 12, 2008 Ten days have passed since the second cabinet of Prime Minister Yasuo Fukuda was launched. Fukuda calls his shuffled cabinet, one "to realize peace of mind." This newspaper probes into whether Fukuda can display his policy imprint by examining five policy issues. On June 6, there was an incident that poured cold water on Fukuda's policy of unifying consumer affairs administration, his showcase theme. The incident was the revelation that people in China had been poisoned by domestic frozen gyoza dumplings in June. Consumer Administration Minister Seiko Noda frankly told reporters that the Cabinet Office had never received the information: "Actually, I got the information this morning through media reports. I told the Foreign Ministry and National Police Agency (NPA) that since the Cabinet Office is in charge of consumer administration, we should have had their cooperation. They gave their assurances." Following a rush of falsifications of food products, Prime Minister Fukuda announced in a policy speech delivered in January a plan to unify consumer affairs administration. He entrusted a consumer affairs council of experts to study creating a new organization. However, he ordered the creation of a Consumer Agency without waiting for the council to reach its conclusion in a meeting on April 23. The government intends to submit to the upcoming extra Diet session four bills related to the establishing of a Consumer Agency, aiming to launch it in 2009. Fumio Kishida, Noda's predecessor at state minister, pushed forward with coordination on such issues as the transfer of jurisdiction over 29 consumer-related laws and regulations to a Consumer Agency, but he lacked the ability to publicize the plan. Noda, a former postal rebel who until recently chaired the Liberal Democratic Party's Consumer Issues Research Commission, is a TOKYO 00002225 007 OF 010 suitable person to head the Consumer Agency. In fact, she often appears on TV programs. This has delighted Cabinet Office officials, with one saying: "I wonder how many times the name Consumer Agency was reported." The issue of food poisoning from Chinese-made frozen dumplings has thrown doubt on Fukuda's stance of placing importance on consumers. It also has shed light on the lightness of the post in charge of consumer affairs. The principle of sharing information has already undermined by the dumpling incident. In order to launch the Consumer Agency in 2009, it will be necessary to enact relevant bills during the next extra Diet session. All the more because consumer issues are the opposition camp's area of expertise, Noda took the offensive, saying: "They will never oppose our plan." The main opposition Democratic Party of Japan (DPJ), however, has come up with a counterproposal of setting up the post of protecting the rights of consumers for the reason that the Consumer Agency will not be able to take measures to protect consumers. The focus will be on whether consultations on revising the bills will be moved forward between the ruling and opposition parties. The government has yet to come up with a concrete plan on how the Consumer Agency will operate. The agency will likely have the recommendation right to urge such related ministries as the Health, Labor and Welfare Ministry and the Agriculture, Forestry and Fisheries Ministry to take measures to protect consumers, but the right has no teeth. The Ministry of Land, Infrastructure and Transport will establish a Tourism Agency and abolish the Marine Accident Inquiry Agency in October. Like this, the scrap-and-build is the basis for creating a new organization. In order to avoid criticism for bloating the administration, sufficient coordination among relevant ministries and agencies is indispensable. If the structure of regional consumer affairs centers and other local organizations are not reinforced, it would be difficult for a Consumer Agency to function properly. Although the government plans to upgrade the status of the consumer affairs centers that were set up by local governments based their ordinances, securing fiscal resources for an increase of agency staff will likely become an issue. (7) Defense Ministry to request budget for post-cluster munitions AKAHATA (Page 2) (Full) August 13, 2008 In the wake of an international convention's adoption in May of a draft treaty that prohibits cluster munitions, the Defense Ministry will procure alternative weapons instead of cluster munitions, officials said yesterday. In this connection, the Defense Ministry seems to be earmarking multibillion yen in its budget estimate for next fiscal year, including costs for research intended to scrap cluster bombs that Japan currently has. The government possesses four-type cluster munitions, explaining that its possession of such weapons is intended to repel airborne and seaborne landing enemy troops at the water's edge. Once the TOKYO 00002225 008 OF 010 cluster ban treaty comes into effect, all cluster munitions will be prohibited. The Defense Ministry therefore decided to make a budget request for alternative weapons. "There will be a hole in our defense to block enemy landings," a Defense Ministry official said. "Our deterrent capability will go down," the official added. In its white paper for last year, however, the Defense Ministry also admits that a full-scale invasion is less likely to take place against Japan. The possibility of operations against enemy landings is low, so the meaning of deploying alternative weapons will likely be called into question. The government has so far spent 28 billion yen to procure cluster munitions, and the cost of scrapping the cluster munitions Japan currently has is also estimated at about 20 billion yen (as reported in detail by the Akahata dated July 28). The cluster ban treaty will be signed in December and will come into effect with 30 countries ratifying it. Japan, following the United States' stance against prohibiting cluster munitions, was reluctant about joining the treaty. But Japan has now agreed to adopt it. At present, Japan has four-type cluster munitions: 1) M-26 rockets for firing from the multiple-launch rocket system (MLRS) mounted on vehicles; 2) CBU-87B bombs for dropping from fighter jets; 3) 155m multipurpose howitzers for firing from guns; and 4) 70m antitank rockets for launching from helicopters. The Defense Ministry is now considering single-warhead bombs with no bomblets as alternatives for the M-26 and the CBU-87B. (8) Global warming prevention: All industries broadly classified into three categories MAINICHI (Page 1) (Full) August 9, 2008 Eve. By Hajime Eguchi The Japanese Government plans to propose its so-called "sector-specific approach" at UN negotiations scheduled to begin on 21 August for creating a new framework for reducing greenhouse gas emissions beyond 2013, which is not stipulated by the Kyoto Protocol. The details of the "sector-specific approach," a method of reducing greenhouse gas emissions based on industries and sectors, were revealed on August 9. Under this method, all industries are to be classified into three categories. In order to maintain fairness between industrialized nations and developing countries, which have no reduction obligations, Japan's proposal calls for quickly formulating a unified international standard for reducing greenhouse gas emissions in sectors with particularly high volume of emissions, such as the iron and steel industry. Under Japan's method, reduction targets will be set for each country by adding up the potential volume of emissions reductions according to industries and sectors. By positioning this method as a "fair method that enables making comparisons with other countries," Japan intends to seize the initiative in negotiations on the next framework for reducing greenhouse gas emissions. In its proposal, Japan classified all industries into the following categories: 1) sectors (iron and steel, cement, and aluminum) in which industry organizations can take concerted action to reduce TOKYO 00002225 009 OF 010 emissions by working on international countermeasures and continuing to uphold common reduction targets, among other things, in the future; 2) sectors (power generation and road traffic) in which international cooperation is possible, but making simple comparisons is difficult due to differences in policies, among other things; and 3) sectors (office, homes, and waste materials, among other things) in which setting common reduction targets is difficult and will be centered on individual countries' domestic countermeasures. Among these sectors, Japan's proposal calls for giving priority to studying concrete reduction measures in such sectors as iron and steel, where international cooperation that includes developing countries, which have no emissions reduction obligations, are expected to produce results. Japan will also call on each country to study specific reduction measures appropriate for each sector and assistance measures to developing countries that have concerns that they "may be subject to the same reduction obligations as industrialized countries." The negotiations, which are in preparation for the COP-14 UN Climate Change Conference to be held late this year, will be held in Accra, Ghana until August 27 (9) TOP HEADLINES Asahi: Mainichi: Yomiuri: Sankei: Tokyo Shimbun: Tanimoto wins second gold medal Nikkei: CO2 emissions of electric power companies up 14 PERCENT due to suspension of nuclear power plant operation Akahata: CO2 emissions by TEPCO up 1.3-fold in fiscal 2007 (10) EDITORIALS Asahi: (1) Keep wasteful expenditures firmly in mind when discussing whether or not to hike consumption tax (2) Japanese-made silk: Make full use of last opportunity Mainichi: (1) Peace of mind realization cabinet: Do not imperil fiscal reconstruction (2) Foreign nurses: Who will take care of elderly people? Yomiuri: (1) Cutting back on airline routes: Make more efficient flight network (2) Exploration of life in space Nikkei: (1) Deepen discussion for unified taxation on financial gains (2) Agony of South Korea as it marks 60th anniversary of the founding of the nation Sankei: (1) Russia announces ceasefire: Russia should completely pull out of Georgia (2) Precious metals: Strengthen resource recovery system TOKYO 00002225 010 OF 010 Tokyo Shimbun: (1) Delisting of North Korea: Don't be impatient (2) Recommendation by National Personnel Authority: Use resourcefulness when conforming to standards of private sector Akahata: (1) Integration of SDF counterintelligence units: We will not allow reinstate of military police politics (11) Prime Minister's schedule, Aug. 12 NIKKEI (Page 2) (Full) August 13, 2008 10:34 Met at Kantei with Minister for Declining Birthrate Nakayama. 11:04 Met with Minister for Consumer Administration Noda. 14:23 Met with incoming and outgoing Tokyo Metropolitan Commissioner Yonemura and Yashiro. Met afterwards with Special Advisor to the Cabinet Okuda. 16:30 Met with Kyushu International University Next Generation System Institute President Okamoto and the Land, Infrastructure and Transport Ministry's Housing Bureau Director General Izumi. 18:36 Met at his official residence with Defense Minister Ishiba. SCHIEFFER