DAILY SUMMARY OF JAPANESE PRESS 04/10/08

UNCLAS SECTION 01 OF 10 TOKYO 000989 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 04/10/08 INDEX: (1) Bank of Japan gets started under newly appointed Governor Shirakawa after three-week vacuum at top (Tokyo Shimbun) (2) Independence of BOJ to be tested (Mainichi) (3) Ozawa's top-down decision to disapprove Watanabe's nomination as BOJ deputy chief creates strong discontent among DPJ members (Yomiuri) (4) Politics malfunctioning: (Part 1): Takeshi Sasaki, professor at Gakushuin University: Political parties relying on numbers have reached a dead end (Nikkei) (5) U.S. military cop admits involvement in Okinawa robbery (Yomiuri) (6) Futenma relocation council session held; Defense minister clearly tells for first time that government will reconsider elimination of risk factors (Ryukyu Shimpo) (7) Akamine blasts U.S. response (Ryukyu Shimpo) (8) U.S. military sweeps under the rug the fact that there are seven more deserters (FLASH) (Corrected copy) USAID Administrator Fore: Good balance between democracy and economic growth important for African development (Hokkaido Shimbun) ARTICLES: (1) Bank of Japan gets started under newly appointed Governor Shirakawa after three-week vacuum at top TOKYO SHIMBUN (Page 9) (Full) April 10, 2008 At a cabinet meeting yesterday evening, the government decided to promote Deputy Bank of Japan (BOJ) Governor Masaaki Shirakawa (58) to the position of governor and formally appointed him to the post. His term of office will be five years. The absence of a BOJ governor for the first time since the war had continued for three weeks since March 20, when former BOJ Governor Toshihiko Fukui retired from the position, but now, this unusual situation has been settled. Governor Shirakawa is scheduled to leave for the United States today and attend the Group of Seven (G-7) Finance Ministers and Central Bank Governors meeting in Washington that starts tomorrow. After his investiture, Shirakawa held a press conference at the BOJ head office and expressed his aspirations: "I will fulfill the BOJ's mission of keeping prices stable and maintaining orderly credit conditions and contribute properly to Japanese economic growth." Shirakawa, after serving as deputy governor for three weeks, was promoted to the governor when two candidates hailing from the Ministry of Finance (MOA) were each rejected in the Diet. When asked about this circumstance, Shirakawa said: "I refrain from making any comment on individual appointments because they are matters the government and the Diet decide. However, I was perplexed by the rapidly changing situation." TOKYO 00000989 002 OF 010 The Policy Board is a panel to decide monetary policy. The government proposed to appoint former Vice Minister of Finance for International Affairs Hiroshi Watanabe (58),professor at Hitotsubashi University Graduate School, to the deputy governor, but this proposal was rejected in the Upper House plenary session; as a result, one of the two posts of the deputy governors will be left vacant. A successor to former Policy Board member Kiyohiko Nishimura, who has now assumed the post of deputy governor, has yet to be decided. The Policy Board consists of nine members, but at present, it is operating with two members lacking. Shirakawa wants to bring the Policy Board back to the normal condition as quickly as possible, saying: "A variety of views makes the Board powerful. I hope suitable persons will be appointed to the posts. Lack of communication channels with political circles With acting Governor Masaaki Shirakawa promoted to the governor's post yesterday, the BOJ ended an unusual three-week situation of having to tide over without anyone at the top. But of the two posts of deputy governors, one is still vacant. The Shirakawa-led BOJ is likely to face difficult tasks shortly, including building political ties. Important events await the BOJ governor, starting with the Group of Seven (G-7) Finance Ministers and Central Bank Governors meeting tomorrow. At the end of this month, the BOJ is scheduled to compile the "Outlook for Economic Activity and Prices," a report that shows the direction of monetary policy. In the Diet session yesterday, the government's proposal to appoint former Vice Minister of Finance for International Affairs Hiroshi Watanabe to the post of deputy governor was rejected by opposition from the major opposition Democratic Party of Japan (DPJ) and other parties. Although the governor's post has now been filled, this fact has led to concern over the lack of communication channels with political circles and the conformity of the BOJ's monetary policy with the government's fiscal policy, both of which are expected of the former Finance Ministry official. At his inaugural press conference, questions were focused on Shirakawa's lack of experience with Diet relations, as well as relations with the Ministry of Finance (MOF). Shirakawa frankly admitted, "In terms of external relations (for instance, relations with political circles),I don't have ample experience," but he indicated, "I will strive to make up for what I am lacking and move forward one or two steps at a time." How to secure the BOJ's independence is another important task, given that the BOJ was swayed by political motives over the appointment of its key positions. Shirakawa pointed out: "A correct policy decision will be more important than external communications." He said, "Confidence of the BOJ is supported by its correct policy decision. That will eventually improve relations with the government and politics." For that end, he revealed that he would step up the BOJ's ability to monitor matters. There is no mechanism to install an acting deputy governor to fill the vacancy, Shirakawa and Deputy Governor Kiyohiko Nishimura will TOKYO 00000989 003 OF 010 operate the BOJ in harness together for a while. The monetary market has yet to emerge from the chaotic situation caused by the subprime mortgage issue, and due to the soaring crude-oil prices, there is a growing sense of crisis that the economy will further slow down. Faced with important tasks for the domestic economy, Shirakawa, as the top leader of the BOJ with its some 5,000 employees, is expected to do well in steering the Japanese economy. (2) Independence of BOJ to be tested MAINICHI (Page 8) (Abridged slightly) April 10, 2008 At long last, the question of appointing new Bank of Japan governor and deputy governor was settled yesterday. Mainichi Shimbun interviewed former BOJ Deputy Governor Sakuya Fujiwara and University of Tokyo Professor Motoshige Ito to learn of their expectations of the new BOJ executive lineup and other matters. Former BOJ Deputy Governor Sakuya Fujiwara -- Absence of one deputy governor might hinder bank's operations The BOJ governorship was left vacant for some time, and for that, both the ruling and opposition parties should be held responsible. The BOJ governorship, which forms the foundation of the country's economic policy, was neglected because the state system is immature and dysfunctional. I cannot sense that politics and the economy will be easily improved. The Democratic Party of Japan has been calling for the separation of fiscal and monetary policymaking. An addition of retired Finance Ministry officials to the BOJ lineup will help the central bank change its thinking in a good sense. Monetary policymaking today requires both domestic and international insights. It is not appropriate to reject all former Finance Ministry officials. The Bank of Japan Law was amended in 1998, and the number of deputy governors has been increased to two as a result. The new law is characterized by the so-called troika leadership with the two deputy governors assisting the governor in dealing with the globalized monetary system. The absence of one deputy governor might undermine its significance. I am concerned that the spirit of the amended law is not being fully reflected. The BOJ's nine-member policy board is designed so that arbitrary decisions will not be made. Mr. Shirakawa is an impartial person with an extensive international network, so he is perfectly fit for the job. The bank's independence can be maintained by conducting thorough discussions at policy board meetings and fulfilling its accountability in defiance of occasional political interferences. The BOJ Law does not envision a divided Diet. Lessons learned from this episode must be used to enroot the amended law. University of Tokyo Graduate School Professor Motoshige Ito -- BOJ must transmit a clear message There is no doubt that the BOJ turmoil has undermined Japan's international credibility. Determining the central bank chief is tantamount to sending out an important message on directions of a country's monetary and economic TOKYO 00000989 004 OF 010 policies. Legislators toyed with such an important post, and that has given the impression that the central bank governorship is regarded lightly (in Japan). Mr. Masaaki Shirakawa, who has now become the new BOJ governor, and I have often discussed monetary policy. My impression of (Mr. Shirakawa) is that he is a person who discusses matters extremely enthusiastically. Mr. Shirakawa, a former BOJ official who has been at the center of monetary policymaking, will probably aim at a direction not much different from his predecessor, Toshihiko Fukui's normalization of interest rates. Nevertheless, the economic situation is significantly different from that of the five years of the Fukui era. Given a slowdown in the global economy resulting from the subprime crisis and growing concerns due to surging crude oil prices, the BOJ is naturally required to take different steps. Growing inflation worries might result in calls for defending prices, and the bank might also be pressed for lowering interest rates depending on the trend of the real economy. The central bank is required to adjust the country's monetary policy in accordance with moves of the market. The bank must set forth a clear direction so that the market does not waver. Amid financial turmoil at home and abroad, President Shirakawa is required to play the role like a lighthouse that sends out a clear message to the market. (3) Ozawa's top-down decision to disapprove Watanabe's nomination as BOJ deputy chief creates strong discontent among DPJ members YOMIURI (Page 4) (Full) April 10, 2008 Some lawmakers of the Democratic Party of Japan (DPJ) yesterday defied the party policy of opposing the government's nomination of Hiroshi Watanabe, a former vice finance minister for international affairs, as one of the two deputy governors of the Bank of Japan, at the plenary sessions of the two Diet houses. The DPJ exposed internal discord. As seen in the fact that some in the party are now openly criticizing President Ichiro Ozawa's decision to disapprove Watanabe's nomination, reversing the prevailing view in the party, dissatisfaction is growing in the largest opposition party. The dominant view in the party is that Ozawa's grip on the party will inevitably weaken as the September party leadership election approaches. Three House of Councillors members, including Hideo Watanabe, voted in favor of Watanabe's nomination. Four Upper House members, including Masaaki Sakurai, abstained from voting. Four House of Representatives members, including Motohisa Furukawa, failed to attend the Lower House plenary session. The party leadership intends to punish Watanabe and two other members who voted for the government's nomination of Watanabe. After the Upper House plenary session, however, Secretary General Yukio Hatoyama told the press: "It is regrettable that the three defied the party policy, but in consideration of the situation they had no choice but to do so." Hatoyama's remark indicates that many TOKYO 00000989 005 OF 010 party members are growing dissatisfied with the party's decision to reject Watanabe's nomination. "(As long as we oppose everything,) the public will not want to entrust the DPJ with the reins of government," Hideo Watanabe told reporters. Upper House member Takashi Morita, an independent and a member of the DPJ-led parliamentary group, who had absented himself from the plenary session, severely criticized (Ozawa's top-down approach), saying: "The chamber of wisdom will die if all common sense is rejected by the top-down approach." Even DPJ members who followed the party policy have mixed feelings. Former President Seiji Maehara made this comment: "The policy of rejecting the nominations of all retired senior bureaucrats should be reviewed. The public may see that the DPJ has no mind for taking over the helm of government." DPJ legislators are increasingly dissatisfied with Ozawa's top-down decisions on the nominations of BOJ executive posts, as well as with the low support rate for the party. The view is quickly prevailing in the party that such dissatisfaction will affect on the party's presidential election. Hatoyama and Azuma Koshiishi, chairman of the DPJ caucus in the Upper House, have already expressed their support for Ozawa being elected for a third term. However since Hatoyama and Ozawa were at odds over Watanabe's nomination, a mid-level member sees that the bad blood between the two will remain. Therefore, Ozawa's political footing in the party may weaken. One of the mid-level lawmakers, who have distanced themselves from Ozawa, made this comment: "This is the beginning of the end. Everything will start moving with an eye on September." (4) Politics malfunctioning: (Part 1): Takeshi Sasaki, professor at Gakushuin University: Political parties relying on numbers have reached a dead end NIKKEI (Page 1) (Full) April 7, 2008 Under the divided Diet, delays in making decisions are now starting to stand out. In order to prevent the political system from malfunctioning, the newspaper interviewed experts to hear their views. -- How do you see the present political situation? Sasaki: The entire political and administrative systems have moved backward or headed toward dismantlement. Before forward-looking policies can be issued, problems have come out one after another. Last year, Prime Minister Yasuo Fukuda and Democratic Party of Japan (DPJ) President Ichiro Ozawa held talks. They tried to resolve political issues by taking advantage of their superior numbers. It is true that decisions are made by a majority in democratic society. In Japan, however, lawmakers believe that if party numbers decrease, politics will not able to resolve issues. Forming a grand alliance was highly risky, and the talks ended in failure, as I had predicted. It seems to me that political parties have to pay the price for having been just satisfied with relying on numbers. TOKYO 00000989 006 OF 010 -- Do you mean that there are problems with the political parties themselves? Sasaki: Political parties are poor at management, including managing their own members. Their management abilities are extremely low in terms of personnel and organizational matters. They can solve matters by steamrolling them with their superior numbers, but their management capability to boil down the contents of policies and the like remain immature. They cannot work out good manifestos (set of campaign pledges) that we have advocated. This is an indication of their lack of maturity. -- Do you mean that political parties can only push bills through the Diet by using their superior numbers? Sasaki: They now have to change to a different know-how. Taking tax revenues currently earmarked for road maintenance and construction and converting them into general spending funds is not the only issue. Although they have a mountain of issues to deal with at the Diet, they have been just standing at the door arguing over one thing or another. Government agencies have been busy dealing with scandals involving their senior officials. If worst comes to the worst, the Japanese political and bureaucratic systems might fall into turmoil of having no administrators. Reform of the pension and public servant systems that are common issues for both the ruling and opposition parties should be vigorously discussed in the committees of the two Diet chambers. If the Democratic Party of Japan (DPJ) takes over the reins of government, it will face similar issues. It should not be the government offices but the Diet that should set up a body where both chambers can deliberate what measures to take. -- It is necessary to sort policies out, isn't it? Sasaki: Politics needs to be able to sort out problems. Since such a capability has weakened, politicians do not know what to do. When two top leaders hold a meeting, the most important thing is to coordinate issues. Under the divided Diet situation, the ruling camp needs to talks about that point with the opposition bloc." -- Some criticize the failure of political reform aimed at creating a two-party system. Sasaki: We are confident about having created certain suitable systems. The reason for the political party system not working well, if you research it, is that there remains the nature of a party having an aspect of being one's own organization. The personal support groups and other aspects of political parties that were cultivated under the multiple-seat constituency system remain the biggest obstacle for reorganizing political parties. (5) U.S. military cop admits involvement in Okinawa robbery YOMIURI (Page 35) (Full) April 10, 2008 In March, a taxi driver was hit and his money was stolen in Okinawa City, Okinawa Prefecture. In this incident, local police arrested four boys whose fathers are U.S. servicemen. The arrested teenagers told local police officers that they were masterminded by a 22-year-old U.S. Air Force airman first class assigned to the TOKYO 00000989 007 OF 010 military police at the Kadena base. This airman has now admitted to his involvement in the incident by telling the local police that he was there where the crime took place. The Okinawa Police Station will shortly send papers on the airman to prosecutors on suspicion of robbery resulting in inuring the taxi driver. The police will ask the U.S. military to hand over the suspect after he is indicted. However, the suspect has denied that he is not the mastermind, according to the police. The airman first class had totally denied his involvement, according to a senior official of the Okinawa prefectural police. However, the four boys told the police that the airman first class was waiting near the crime scene and drove his car to run away. The airman first class used to hang around with the four boys. One of the boys told the police that he could not refuse helping the airman first class' cab robbery attempt because he had "owed" the airman first class. (6) Futenma relocation council session held; Defense minister clearly tells for first time that government will reconsider elimination of risk factors RYUKYU SHIMPO (Page 1) (Full) April 10, 2008 Tokyo The consultative council (chaired by Chief Cabinet Secretary Nobutaka Machimura) to discuss between Okinawa and the government the relocation of Futenma Air Station met for the seventh time at the Prime Minister's Office (Kantei) on the evening of April 9. In the session, Governor Hirokazu Nakaima indicated that the Ministry of Defense's (MOD) plan, presented last August, to review the flight paths in order to eliminate the dangerous nature of Futenma Air Station was insufficient. In response, Defense Minister Shigeru Ishiba clearly expressed his intention for the first time to review measures to eliminate risk factors, saying, "We would like to study what is technically possible." Chief Cabinet Secretary Nobutaka Machimura also made a similar statement. Governor calls for venue to consider offshore option Nakaima urged the government to reveal its thinking about Okinawa's and Nago's request to move the planned replacement facility further offshore and called for establishing a framework to discuss the matter at the working level. In response, Machimura expressed the intention of discussing specifics possibly at the next council meeting, saying: "We would like to continue discussing the matter." In the fourth council session last November, Ishiba indicated difficulty considering additional measures to remove (risk factors), saying that a review of the flight paths "is the maximum step at this point in time." In a press conference after the council meeting, Nakaima underscored the need to establish a framework to discuss matters at the working level, with the offshore relocation option in mind. He said: "Although six ministers are lined up, working-level matters always remain ambiguous. In order to put matters together, involvement of engineers and working-level is necessary. The council is allowed to TOKYO 00000989 008 OF 010 set up an executive board, but I also feel such a thing (framework) is necessary." In reaction to Nakaima's request for a framework, many (government members) expressed views to leave the matter to future talks. Foreign Minister Masahiko Koumura, for instance, said, "We would like to consider it after hearing specifics." Ishiba noted, "It is also necessary to continue discussing how to proceed with future talks among participants." In regard to the MOD's review of the Futenma Air Station flight paths, Nakaima reiterated his call for improvements, saying: "Although some points merit high marks, we would like to see a desire to remove risk factors at an early date by the conducting of technical studies." (7) Akamine blasts U.S. response RYUKYU SHIMPO (Page 2) (Full) April 10, 2008 Tokyo In the wake of a series of incidents by U.S. service members, House of Representatives member Seiken Akamine of the Japanese Communist Party filed a protest with the U.S. Embassy in Japan on April 8. Receiving Akamine, Raymond Greene, chief of security affairs of the Embassy's political section, reportedly emphasized, "The United States will work closely with Japan in conducting investigations." In response, Akamine assailed, "You are just shifting the focus of the matter." The lawmaker also sought a fundamental review of the Japan-U.S. Status of Forces Agreement. In reply, Greene just repeatedly said, "It has been operated smoothly since its application was improved." Angry with the United States' response, Akamine later said, "Unlike Consul General for Okinawa Kevin Maher, (Greene's) response was tactful. Still, they share the same perception that incidents have been caused by a few bad apples among the U.S. soldiers." (8) U.S. military sweeps under the rug the fact that there are seven more deserters FLASH (pages 22-23) (Full) April 22, 2008 "I heard a voice in my brain saying, 'Stab him.' I intended to stab anyone." Seaman Olatunboson Ugbogu (22) assigned to the Yokosuka U.S. Navy Base reportedly made this remark with regret during interrogations by Kanagawa prefectural police after being arrested. The murder of a taxi driver in Yokosuka City has now been settled with suspect Ugbogu having been handed over to Japanese authorities and arrested. But it was found that since 2005, there have been nine more deserters from the U.S. armed forces like him who are holed up somewhere in Japan. An official from the National Police Agency (NPA) said in his Diet replies at a session of the Lower House Committee on Foreign Affairs in March: "It is our understanding that there have been nine cases on which the U.S. military have asked the NPA since 2005 to arrest seven U.S. deserters." Of the nine deserters, two have been arrested, but the NPA has no idea about the remaining seven's whereabouts: whether they were captured or are still at large. Given this situation, there is a possibility that a TOKYO 00000989 009 OF 010 second or third Ugbogu may emerge. Of the nine deserters, five belonged to U.S. military units in Okinawa. As for the remaining four, where they were assigned to is unknown, because the U.S. forces have yet to release information about them. In addition to those deserters, there seem to be a number of U.S. military personnel who continue to be AWOL or absent without leave or continue to leave their base without notice. It is unknown how many American military personnel are hiding out in the country. A foreign news agency correspondent said: "In the past, those who volunteered for military service (in the United States) were required as the minimum conditions to have an academic background of senior high school graduation or equivalent and have no criminal history of heinous crimes. However, with the prolonged Iraq war, anybody can volunteer for military service at present if they are green card holders. It is safe to say that a large number of rough characters from the cities have joined the U.S. military." In fact, suspect Ugbogu is a green-card holder of Nigerian nationality. Other deserters, as well, came from Mexico and other Latin American countries, Southeast Asia, and Africa. The U.S. military may be described in this sense as a multinational force. Tetsuo Maeda, a military critic, said: "Suspect Ugbogu is a deck hand on the Aegis-equipped USS Cowpens. His major job is to clean the deck, but most sailors of foreign nationality are low-level ranking, so their jobs are minor ones. Notwithstanding that, they are granted America's citizenship on a priority basis, so they volunteer for military service. Enrolling them as military personnel is an unavoidable choice for the U.S. to secure personnel, given that the U.S. has deployed 160,000 troops in Iraq." This weekly succeeded in making contact with one deserter on April ¶5. He responded to the weekly's interview under the condition of absolute anonymity. He said: "There are dozens of deserters." He has married a Japanese woman, and he works for a security-related company. He said: "I came here as a U.S. serviceman, but my job in the military was not being a soldier but in effect a clerk. It was bad to have deserted from the military, but if I had planned to revisit Japan after retiring from the military and returning home, I would have to pay a huge traveling expense. What I did was walk out. "'Formal deserters are those who come here on some kind of mission but desert from the military. I keep contact with my friends in the U.S. forces, and the military police can arrest me anytime. But I am not an important military officer who would be tried by court-martial, so the U.S. military seems to leave me alone." The U.S. forces in Japan not only leave their deserters alone, they also do not disclose any information about them. Their arrogant attitude endangers the Japanese people. (Corrected copy) USAID Administrator Fore: Good balance between democracy and economic growth important for African development HOKKAIDO SHIMBUN (Page 5) (Full) TOKYO 00000989 010 OF 010 April 9, 2008 The G8 Development Ministers' Meeting that took place on April 5-6 discussed the development of Africa that is enveloped in poverty. Newly industrializing countries also participated in the international conference. This newspaper interviewed the United States' representative to hear what the U.S. considers important in dealing with African development. Henrietta H. Fore, administrator of the U.S. Agency for International Development (USAID) and director of U.S. Foreign Assistance, responded as follows: In Africa in recent years, small-scale companies have become remarkably active. Unlike big companies, however, it is difficult for small to medium sized businesses to access international capital markets. The Group of Eight (G8) countries have a framework of cooperation between the public and private sectors. Through the private sector, the G8 countries can contribute to Africa's stability and prosperity. If doing so, young Africans, after graduating from school, should be able to stay in their own countries, start their own companies and carve out the future of their countries. Many countries on the African continent are now carrying out free, peaceful and democratic elections. Democracy brings about freedom, prosperity, and stability. Achieving economic growth and democracy simultaneously leads to building a stable world. It also provides a means to deal with terrorism and conflict. Everyone should be concerned about peace, security, and the fight against global terrorism. In order for African countries to protect their national security, activities that maintain peace through exercises are desirable. To that end, the role of international organizations, such as the United Nations, is important. President George W. Bush has placed special emphasis on the need for good (uncorrupted) governments, in addition to democracy and elections. To fight AIDS, the Bush administration has come up with a special program, and is asking Congress for a budget of 30 billion dollars over five years. I hope that priority will be given to health issues at the Hokkaido Lake Toya Summit in July. MESERVE