Identifier
Created
Classification
Origin
09TOKYO1165
2009-05-22 00:36:00
UNCLASSIFIED
Embassy Tokyo
Cable title:  

JAPANESE MORNING PRESS HIGHLIGHTS 05/22/09

Tags:  OIIP KMDR KPAO PGOV PINR ECON ELAB JA 
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UNCLAS SECTION 01 OF 12 TOKYO 001165 

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: JAPANESE MORNING PRESS HIGHLIGHTS 05/22/09

Index:
UNCLAS SECTION 01 OF 12 TOKYO 001165 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: JAPANESE MORNING PRESS HIGHLIGHTS 05/22/09 Index: 1) Top headlines 2) Editorials 3) Prime Minister's daily schedule (Nikkei) 4) U.S. Embassy hosts conference on international child abductions, asks Japan to sign Hague Convention (Tokyo Shimbun) 5) Prime Minister Aso in speech pledges 6.7 billion dollars in aid to Asia for projects, including development of the Mekong Delta (Nikkei) 6) Meeting of G-8 energy ministers: Japan to propose regulating speculators (Mainichi) 7) Ambassador-designate Roos seen as someone who can pick up the phone and call President Obama on the issues (Yomiuri) 8) Government delegate Yachi denies making statement about reversion of 3.5 northern islands (Yomiuri) 9) North Korea issues warning about danger zone where missiles would be tested (Nikkei) Diet agenda: 10) Upper House enters deliberation on anti-piracy bill (Sankei) 11) Democratic Party of Japan attacks wasteful projects in the supplementary budget bill, including plan to build anime cartoon arcade (Yomiuri) 12) DPJ deepening ties with labor federation Rengo (Sankei) 13) DPJ President Hatoyama already on a stumping tour of local areas in preparation for the upcoming Lower House election (Sankei) 14) Restrictions on hereditary Diet seats being considered by LDP, but this could affect even former Prime Minister Koizumi's son, who is running for his seat (Sankei) 15) Government readying 4 trillion yen in emergency financing for businesses hit hard by the economic recession (Nikkei) 16) Prime minister orders Council on Economic and Fiscal Policy to include measures on falling birthrate in "big-boned" policies (Sankei) Articles: 1) TOP HEADLINES Asahi, Yomiuri, Sankei & Tokyo Shimbun: Ex-student arrested for killing Chuo University professor Mainichi: Contractor Kumagai Gumi suspected of providing politicians with 30 million yen in donations from 1995 through 2000 via dummy entities Nikkei: Aso vows 67 billion
dollars in aid for Asian economic development 2) EDITORIALS Asahi: (1) Ban on inheriting seats: Make efforts to gather able personnel in Diet TOKYO 00001165 002 OF 012 (2) Kanji testing body must reform itself Mainichi: (1) Hatoyama DPJ urged to present measures to realize slogan "avert bureaucratic meddling" (2) Japan Post President Nishikawa's staying on: More explanation needed Yomiuri: (1) Reorganize Health Ministry to regain public trust (2) Obama policy may contribute to bringing about peace in Middle East Nikkei: (1) Japan must make efforts to boost demand in Asia (2) Japan needs to take lead in curbing greenhouse gas emissions Sankei: (1) Cool response imperative to prevent expansion of new flu infections (2) Circumstances for indictment of Suu Kyi incomprehensible Tokyo Shimbun: (1) Agreement urgently needed to ban nuclear testing (2) Give priority to consumers in working out agriculture policy 3) Prime Minister's Official Residence (Kantei) Prime Minister's schedule, May 21 NIKKEI (Page 2) (Full) May 22, 2009 07:25 Met deputy chief cabinet secretaries Matsumoto and Asano at the Kantei. Matsumoto stayed on. 09:01 Attended an Upper House Budget Committee session. 12:04 Returned to the Kantei. 13:00 Attended the Upper House Budget Committee session. 16:34 Met Finance Minister Yosano, Administrative Reform Minister Amari, and Chief Cabinet Secretary Kawamura. 17:19 Attended a Council on Economic and Fiscal Policy meeting held at the Kantei. 18:30 Attended a dinner party held at the Imperial Hotel by the Future of Asia, an international exchange council. 19:26 Dined with his secretary at a restaurant in Toranomon. 21:39 Returned to his official residence. 4) Allow visitation of children across national borders: U.S., Canadian, French, British ministers urge Japan to sign Hague treaty TOKYO SHIMBUN (Page 23) (Full) May 22, 2009 Norio Noro A symposium on finding a solution to the problem of Japanese citizens married to foreigners bringing their children back to Japan after divorce and denying the other parent visitation rights was heard at the U.S. Embassy in Tokyo on May 21. The ministers of the U.S., Canadian, French, and British embassies in Japan held a joint news conference where they asked that the "Japanese government sign the Hague treaty at an early date." TOKYO 00001165 003 OF 012 Appeal by U.S., Canadian, French, and British ministers U.S. Deputy Assistant Secretary of State Michele Bond spoke earnestly about the "tragedy" of the affected parents and children: "There have been 73 cases, affecting 104 children, of Japanese parents, mostly mothers, bringing their children to Japan and refusing visitation rights to the American parents. This is the largest number among non-members of the treaty." The Hague treaty protects children from the harmful effects of being brought across borders unlawfully, returns them to the country where they previously lived, and protects the right of parents to see their children. There are 81 members of this treaty, and Japan and Russia are the only G-8 countries that have not signed the treaty. Japanese citizens are involved in the largest number of disputes among the East Asian countries, but the government has been unreceptive to the treaty. Minister David Fitton of the British Embassy said: "There have been 36 disputes since 2003, and 11 of them remain unresolved. There had been no progress in the other cases and the British parents have given up." French minister Christophe Penot reported that, "The mother would not even accept the letter sent by the father to his daughter in Japan, and he was devastated. This may develop into a political issue between Japan and France." Canadian minister Donald Bobiash also noted that "the protection of children under treaty is also in the interest of Japan." Maura Harty, senior policy director for the International Center for Missing and Exploited Children in the United States, called for "doing what is best for the children." At the end of the news conference, U.S. Embassy Charg d'Affaires James Zumwalt said: "Disputes are expected to increase from now on, so this is an urgent and important issue." The joint press statement issued strongly urges the Japanese government to "implement measures such as facilitating parental visits." 5) Prime Minister Aso pledges 6.7 billion dollars for economic development in Asia at 15th International Conference on the Future of Asia NIKKEI (Top Play) (Full) May 22, 2009 Prime Minister Taro Aso on May 21 gave a speech at a dinner party for the 15th International Conference on the Future of Asia, hosted by Nihon Keizai Shimbun. In the speech, he announced that Japan would take every measure to double Asian countries' gross domestic product (GDP) by 2020. He then revealed a plan to extend financial assistance totaling 6.7 billion dollars in the form of official development assistance (ODA),trade insurance, etc. He also revealed a plan to hold the first Japan-Mekong summit before year's end in order to confer on the issue of developing five Southeast Asian nations in the Mekong River Basin. The speech given was titled "Toward Asia's Renewed Progress, Overcoming the Economic Crisis." It embodies the prime minister's "Initiative to Double Asian Economies" not only for Southeast Asian TOKYO 00001165 004 OF 012 countries to surmount the current economic crunch but also for all Asian countries to achieve mid- to long-term growth. The prime minister noted that Asia should first regain its vitality and spread it around the world. He stressed that in order to overcome the economic crisis at an early date, it is very important for various countries to fall in step toward expanding domestic demand. He welcomed economic the stimulus measures taken by various Asian countries and also called for continued cooperation with measures to expand domestic demand. He stressed that Asia's growth power should be strengthened from the mid- to long-term perspective in order for its potential to be realized. The speech also included a plan to back efforts to consolidate wide-area infrastructure, including goods distribution systems, and expand the middle class through improved social security and education. The speech especially placed importance on the correction of disparities in the region of the Association of Southeast Asian Nations (ASEAN). The Japan-Mekong summit will focus on discussions regarding economic cooperation to Thailand, Vietnam, Cambodia, Laos and Burma, which are still underdeveloped, and development issues. The prime minister also stressed that he considers Russia could become an important partner in achieving regional stabilization and prosperity. He thus indicated his view that Russia, which is focusing on the development of East Siberia and the Far East, will play a role in the economic development of East Asia. Concerning the pending Northern Territories issue, Aso said, "I am determined to do my utmost to eliminate barriers between Japan and Russia." The prime minister also said, "In order to maintain sustainable growth, an environment where people can engage in activities with safety and peace of mind is necessary." He then indicated his intention to cooperate with various countries on cross-border issues, such as measures to deal with the new influenza strain; measures to curb global warming; and North Korean nuclear, missile, and abduction issues. Gist of prime minister's speech He aims to double the GDP of Asian regions by 2020 Q In order to overcome the current economic/financial crisis, it is important for various countries to fall in step toward expanding domestic demand. Q Further promote trade and capital transactions in the Asian region. Use intraregional currency. Double the size of Asian economies by 2020 through strengthened growth power. Propose formulating a comprehensive development plan with private-public sector cooperation in mind. Q Japan will host the first Japan-Mekong summit to confer on the development of five nations in the Mekong River Basin before year's end Q Possibility of Russia becoming a key partner in developing Asian economies. Make utmost efforts to settle the territorial issue. Q Call on various countries to cooperate in tackling health, TOKYO 00001165 005 OF 012 environment and regional security issues in order to maintain sustained growth. Q Help Asian countries stockpile antivirus medicines as a measure to deal with the new influenza strain 6) G-8 energy ministers meeting: Japan to propose controls on speculators MAINICHI (Page 6) (Full) May 22, 2009 The Group of Eight (G-8) major nations will hold a two-day meeting of their energy ministers in Rome from May 24. In the G-8 energy ministerial, Japan will point out that speculative market players have brought about excessive fluctuations in the prices of crude oil and other natural resources. Japan will suggest the need to strengthen transactions and oversights in order to ensure market transparency. However, the U.S. and British governments remain cautious about excessive market intervention. The ministerial is therefore likely to have difficulties in its coordination. The energy ministerial is expected to agree to set up an "International Partnership for Energy Efficiency Cooperation," or IPEEC for short, in the International Energy Agency for the spread of energy-saving technologies. It will also discuss measures to cope with climate change, including the feasibility of low carbon society. 7) Who's Roos? YOMIURI (Page 7) (Full) May 22, 2009 Tatsuhito Iida, San Mateo, California U.S. President Obama has decided to appoint John Roos, 54, as the next ambassador to Japan. According to his law firm's website, Roos is an able lawyer who shored up Obama's election campaign as one of Obama's top fundraisers. He has little to do with Japan and his ambassadorial capabilities are unknown. However, Roos is a confidant of Obama who can call the president directly by phone. Roos lives in the California county of San Mateo, which is situated in the neighborhood of San Francisco. His residence is located in an exclusive area where the average home price is one million dollars (approx. 94 million yen). On the morning of May 20, Roos, dressed casually in a white shirt and navy blue pants, got into a Toyota Prius with his son. I shot a question at him about his ambassadorial appointment. "I'm sorry," Roos responded, "but I can't make any comment." My next question was when he would be formally designated. "I don't know," Roos said. He added: "I really can't say anything. I'm now going to take my son to school." So saying, Roos took the wheel and left his home. According to a legal journal issued by Stanford University, Roos graduated from its law school and then started to work at a Los Angeles-based law firm. Later, with an eye on the future, Roos moved on to a law firm in Silicon Valley. He distinguished himself in corporate finance and has been the law firm's chief executive officer since 2005. His law firm's clients include Google and many TOKYO 00001165 006 OF 012 other well-known businesses. In the 1984 presidential election, Roos took leave from work for a year to join the campaign staff of Walter Mondale, who was a presidential candidate of the Democratic Party. In last year's presidential election, Roos held a fundraising party at his home shortly before Obama announced his candidacy and promoted Obama to entrepreneurs and investors from Silicon Valley. Some of the U.S. media have called him an "amazing fundraiser." 8) Yachi points out need to have new viewpoint on Northern Territories, denying 3.5 islands remarks YOMIURI (Page 4) (Abridged slightly) May 22, 2009 Former vice foreign minister and currently government representative Shotaro Yachi attended yesterday's House of Councillors Budget Committee session as a government unsworn witness. There, Yachi denied the Mainichi Shimbun's report that he had expressed a willingness to accept the return of just 3.5 of the four Russian-held islands off Hokkaido. It is the first time Yachi has offered an explanation in public. Before the committee, Yachi said: "I did not say that the (return) of 3.5 islands would do. (The Northern Territories issue) needs a new viewpoint, a new approach. The issue must be resolved in a way that is acceptable to the public. We must put our heads together. There is a need to draw up a big strategic design, including nuclear energy, pipelines, the environment, the development of Far East Siberia, and the integration of Russia into the Asia-Pacific." Meanwhile, Prime Minister Taro Aso offered the following explanation about the government's basic policy toward the Northern Territories issue: "Once Japan's ownership over the four islands is confirmed, we will deal with the question of when to actually return the islands in a flexible manner. Japan's stance has been consistent." The 3.5 islands approach is designed to evenly divide the disputed Russian-held northern territories between Japan and Russia and to return to Japan three islands -- Kunashiri, Shikotan, the Habomai islet group -- plus part of Etorofu. The Mainichi Shimbun reported last month that Yachi had referred to the return of 3.5 islands in an interview. This has created a stir in Japan and in Russia. 9) N. Korea warns of another red zone for missile launches NIKKEI (Page 2) (Full) May 22, 2009 North Korea warned that it has set up another danger zone near its coast for missile launches and other purposes, sources said yesterday. The Japan Coast Guard picked up a radio warning that prohibits sea traffic within waters 137 kilometers south of Musudanri on May 15-30 between 10 a.m. and 6 p.m., Japan time. A high-ranking official of the government explained: "A small rocket won't get into international waters. That will have no impact on Japanese fishing boats." Another high-ranking official said, "It's part of their military training exercises." 10) Yachi points out need to have new viewpoint on Northern Territories, denying 3.5 islands remarks TOKYO 00001165 007 OF 012 YOMIURI (Page 4) (Abridged slightly) May 22, 2009 Former vice foreign minister and currently government representative Shotaro Yachi attended yesterday's House of Councillors Budget Committee session as a government unsworn witness. There, Yachi denied the Mainichi Shimbun's report that he had expressed a willingness to accept the return of just 3.5 of the four Russian-held islands off Hokkaido. It is the first time Yachi has offered an explanation in public. Before the committee, Yachi said: "I did not say that the (return) of 3.5 islands would do. (The Northern Territories issue) needs a new viewpoint, a new approach. The issue must be resolved in a way that is acceptable to the public. We must put our heads together. There is a need to draw up a big strategic design, including nuclear energy, pipelines, the environment, the development of Far East Siberia, and the integration of Russia into the Asia-Pacific." Meanwhile, Prime Minister Taro Aso offered the following explanation about the government's basic policy toward the Northern Territories issue: "Once Japan's ownership over the four islands is confirmed, we will deal with the question of when to actually return the islands in a flexible manner. Japan's stance has been consistent." The 3.5 islands approach is designed to evenly divide the disputed Russian-held northern territories between Japan and Russia and to return to Japan three islands -- Kunashiri, Shikotan, the Habomai islet group -- plus part of Etorofu. The Mainichi Shimbun reported last month that Yachi had referred to the return of 3.5 islands in an interview. This has created a stir in Japan and in Russia. 11) DPJ attacks "Anime Hall of Fame" in Upper House Budget Committee session YOMIURI (Page 4) (Abridged slightly) May 22, 2009 The major opposition Democratic Party of Japan (DPJ) fiercely attacked in yesterday's House of Councillors Budget Committee session the government's plan to use part of the fiscal 2009 supplementary budget to build what is called the National Media Arts Center. The envisaged center will be a base facility to collect, exhibit, and study animated films, comic strips and cartoons, and games. The center is also dubbed the "anime hall of fame." The concept has been studied since last August by a blue-ribbon panel of the Cultural Affairs Agency. Tokyo's Odaiba district has been cited as the potential site for center. About 11.7 billion yen, the amount equivalent to the cost of the construction of the center, is incorporated in the supplementary budget. DPJ lawmaker Kohei Otsuka criticized the plan during the session, saying, "(The government) has decided to build the center after only six meetings in six months." Otsuka also revealed the fact that Cultural Affairs Agency Director-General Tamotsu Aoki had said during the panel's last meeting on April 21, "There would not be an opportunity to budget funds like this in the next 50, 100 years." Aoki admitted that he had made such a statement. Perceiving the center as a facility symbolizing the wasteful TOKYO 00001165 008 OF 012 spending of budgets in the name of additional steps to shore up the economy, DPJ President Yukio Hatoyama has also condemned it as a huge government-run comic caf. Shozaburo Jimi of the People's New Party, too, said before the committee, "It is bureaucrats' product to please Prime Minister Taro Aso, who loves comics." The prime minister rebutted, "Animated films and TV games will become a new growth area in the Japanese economy." Finance Minister Kaoru Yosano, too, reacted strongly, calling it a "longstanding pending issue." At the same time, there is the view in the ruling bloc that if the cost had been included in the fiscal 2009 budget, criticism to this degree would not have emerged." 12) Rengo, DPJ to promote dialogue with residents from June SANKEI (Page 5) (Full) May 22, 2009 The Japan Trade Unions Confederation (Rengo),the largest support body of the main opposition Democratic Party of Japan (DPJ),decided yesterday that Rengo Chairman Tsuyoshi Takagi together with senior DPJ members will hold a dialogue with residents in nine places across the nation in June and July. The new DPJ leadership has now launched following the resignation of Ichiro Ozawa as DPJ president over the indictment of his chief secretary for accepting alleged illegal donations from Nishimatsu Construction Co. Therefore, Rengo intends to strengthen cooperation between itself and the DPJ with an eye on a victory in the new House of Representatives election. It is expected that such DPJ leaders as President Yukio Hatoyama, Deputy President Ichiro Ozawa and Secretary General Katsuya Okada will join Takagi. With the next general election in mind, the planned sessions will be held in urban areas in which there are many unaffiliated voters. They will play up the Rengo and DPJ connection. Since there were mixed views among Rengo leaders on whether Ozawa should resign from the DPJ's top post or not, the distance between Rengo and Ozawa widened. However, the support rates for the DPJ then rose in the polls conducted by the media, even though Hatoyama picked Ozawa as his deputy in charge of election strategy. With this in mind, Rengo is determined (to step up its cooperation with the DPJ). "We can push forward with strong election strategy along with Mr. Ozawa, who enjoys the confidence of Rengo's local chapters." 13) DPJ President Hatoyama sets out on stumping tour in Saitama SANKEI (Page 5) (Full) May 22, 2009 Democratic Party of Japan (DPJ) President Yukio Hatoyama yesterday visited Saitama City to give a speech to support the mayoral campaign of a candidate backed by the DPJ's Saitama chapter. The Saitama mayoral election will take place on May 24. Hatoyama's stumping tour is the first since assuming the party's presidency. Hatoyama delivered the speech in front of the JR Omiya Station. The incumbent mayor, who is a candidate backed by the ruling Liberal Democratic Party (LDP) and New Komeito, is seeking a third term. With this in mind, Hatoyama emphasized: "Any long-term administration becomes corrupt. We want to bring about a change in administration to Saitama City." Regarding "a fraternal society," TOKYO 00001165 009 OF 012 creation of which is his argument, Hatoyama explained: "(The society that I want to create) is a society in which the baby boomers are not treated as burdens, but where they are happy with doing volunteer activities." The mayoral election is contested between the candidate backed by the DPJ Saitama chapter and the incumbent mayor. According to a source familiar with the DPJ, it is unusual for the party head to go stumping for a candidate supported by a prefectural chapter. Hatoyama went to Saitama have the candidate win the race and to bolster his party's strength for the next Lower House election. 14) LDP mulling restrictions on hereditary candidates from next Lower House election; Koizumi's second son running as independent? SANKEI (Page 2) (Slightly abridged) May 22, 2009 The Liberal Democratic Party (LDP) began considering the introduction of restrictions on the candidacy of new hereditary candidates from the next House of Representatives election on May ¶21. This was revealed by a senior official of the Election Strategy Council. This official indicated that former prime minister Junichiro Koizumi's second son, Shinjiro (11th district of Kanagawa) and former justice minister Hideo Usui's eldest son, Shoichi (first district of Chiba) will not be designated as the party's official candidates. If such a decision is made, the two will most probably run as independents. There is a proposal for the LDP not to field a rival candidate in these districts and to recognize them as party members after they get elected. However, there are also dissenting opinions in the party, so the final decision will be left to the president, Prime Minister Taro Aso. There is opposition in the LDP to restrictions on hereditary candidates, especially among the second-generation Diet members. The reason restrictions are going to be imposed despite such opposition is because this is meant to counter the plan of the Democratic Party of Japan (DPJ) to apply restrictions on new hereditary candidates from the next Lower House election and make this a point of contention in the election. However, only Shinjiro and Shoichi will be affected. It is reported that Election Strategy Council Vice Chairman Yoshihide Suga, who is the head of the LDP Kanagawa chapter, and former secretary general Tsutomu Takebe, who is close to former prime minister Koizumi, are coordinating on this. A senior LDP official pointed out: "The party will not field an official candidate. Shinjiro and Shoichi will be elected even if they run as independents. We can just recognize them after the election." If they are recognized ex post facto, they will become LDP official candidates in subsequent elections, so this may not sit well with the idea of restricting hereditary candidates. Therefore, the DPJ is criticizing this as "indirect recognition (as official candidate)," (says a senior DPJ official). At the first meeting on May 21 of the "Association for Pioneering New Politics," (chaired by Lower House member Taro Kono) a parliamentary union working for restrictions on the hereditary system, Suga stressed that, "The LDP, a party of the people, should TOKYO 00001165 010 OF 012 take in a great variety of talented people. We should put a stop (to the hereditary system) through self-purification." Some 50 lawmakers, including former secretary general Hidenao Nakagawa and junior Diet members, attended the meeting. They agreed that restrictions on hereditary candidacy should be written into the party's manifesto for the Lower House election. At a meeting of the party's Reform Implementation Headquarters (chaired by Takebe) on the same day, a proposal for a new party rule that prohibits direct descendants of Diet members running in the same constituency from being recognized as official candidates from the next Lower House election was presented. The recommendation with be made to Aso before the end of May. 15) Government, banks to launch emergency lending program of 4 trillion yen NIKKEI (Page 1) (Full) May 22, 2009 The government and Development Bank of Japan (DBJ) have decided to introduce an emergency lending program possibly in June for large and mid-sized companies, with the government and private-sector banks each contributing 50 percent of the financing burden in principle. The government aims to make commercial banks more willing to lend by having the DBJ shoulder half of the financing and also to avoid official loans from being exposed to excessive risks. The government envisions a program worth up to 4 trillion yen, with 2 trillion yen to be shouldered by the DBJ and to come from the 15 trillion yen earmarked for emergency lending in its additional economic stimulus package and 2 trillion from commercial banks. Given that companies have found it difficult to raise funds, the government will take full measures to facilitate money to flow into companies. Because a rise in corporate bankruptcies and other factors have caused many loans to sour, banks remain cautious about lending. The government has judged it necessary to make banks more willing to lend in order to promote the smooth inflow of money into corporations by having the DBJ shoulder half of the lending burden. In this new program, companies' main lenders, which could be major or regional banks, present lists of potential borrowers to the DBJ. These banks will select candidates based on such conditions for lending as credit ratings and capital ratios, simplifying the DBJ's loan approval process. Under this system, it will become possible for the DBJ to screen applications for loans from companies, based on their financial data, even if it has no business dealings and knows nothing about their asset components. Companies eligible for loans under the program will be sound mid-sized firms capitalized at 1 trillion yen or less, with several hundred million yen to several billion yen to be provided in each case. Large firms will also be allowed to apply for loans. If these loans become unrecoverable, taxpayers might be pressed to foot a portion of the bill, because the DBJ will be able to ask the government to guarantee half of the loan amount. For the loans offered by private-sector banks, however, there will be no government guarantees. The DBJ has said that it will carry out strict screening in order to prevent defaults. TOKYO 00001165 011 OF 012 Companies will be able to use the borrowed funds only for newly needed operating funds and capital investment. Regarding the period of emergency lending, many of the loans are expected to be for about a year. 16) Prime minister orders Council on Economic and Fiscal Policy to include measures on falling birthrate in "big-boned" policies; health minister to draw up new road map SANKEI (Page 2) (Full) May 22, 2009 Prime Minister Taro Aso ordered relevant ministers to include measures to deal with the falling birthrate in the basic policies for FY2010 economic and fiscal management ("big-boned" policies) at the Council on Economic and Fiscal Policy on May 21. Minister of Health and Labor Yoichi Masuzoe announced at the meeting that he would draw up a new road map for the reinforcement of social security functions up to 2015 and will introduce a new system for unified provision of services to support child rearing. On the measures to arrest the declining birthrate, Aso indicated that, "bold measures comparable to the economic stimulation package should be taken." He also pointed out that, "So far, we have focused our social security measures on the aged. However, support for young people and child rearing households has emerged as the most important issue that the country needs to work on as a whole." The prime minister is advocating the strengthening of measures to deal with the falling fertility rate because there have been strong demands at the government's "Council for the Realization of a Society of Peace of Mind" for the reinforcement of such measures, and these will constitute the main component of the Council's final report to be issued in mid-June. This is also meant to counter the proposal of the Democratic Party of Japan for a monthly "child allowance" of 26,000 yen in the forthcoming House of Representatives election. Private-sector members of the Council have also proposed the use of consumption tax revenues for measures to rectify social disparities, such as free preschool education and welfare payments to low-income earners. They asked for the measures to remedy social disparities to be included in the social security measures which have been designated as the budget allocation that consumption tax revenues will pay for in the "mid-term program" for tax reform. Specifically, there was a proposal for the creation of "tax deduction with welfare payments," using consumption tax money for funding, to help low-income earners and others. Meanwhile, in the new road map proposed by Masuzoe, the following interim measures to deal with low birthrate will be implemented: 1) building of more day care centers and after-school facilities by 2011; 2) expansion of the system of home nurseries; 3) expansion of free maternity checkups; and 4) requiring employers to allow shorter working hours for employees with small children. In addition, longer-term measures will include the creation of a new unified system of providing child rearing support services by 2015, uninterrupted day care services to help parents cope with both work and family life, and a plan to allow the use of "temporary day care" of up to 20 hours even by full-time housewives. TOKYO 00001165 012 OF 012 ZUMWALT

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