DAILY SUMMARY OF JAPANESE PRESS 06/08/09

UNCLAS SECTION 01 OF 17 TOKYO 001281 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 06/08/09 TOKYO 00001281 001.3 OF 017 INDEX: (1) Poll on Aso cabinet, political parties (Yomiuri) (2) Hurdles to Japan's sanctions on North Korea; Government rushing to consider specific policies (Nikkei) (3) High-level economic dialogue: Japan, China to cooperate to overcome financial crisis (Nikkei) (4) Cabinet Office estimates restoration of fiscal health delayed to 2020 or beyond even with 10 PERCENT consumption tax rate (Asahi) (5) Policy emphasis to shift to Secure Society Council (Nikkei) (6) Resumption of JICA aid to support private sector infrastructure projects in Asia mulled (Sankei) (7) Nago City, local firms planning to form new organization to promote 700-billion-yen new base-construction project in Okinawa, probably eyeing contracts (Akahata) (8) Anatomy of DPJ: U.S. distrustful of DPJ's foreign and security policies (Sankei) (9) "Seiron" column: Policies that the DPJ wants to implement are unclear (Sankei) (10) TOP HEADLINES (11) EDITORIALS (12) Prime Minister's schedule, June 6 (Nikkei) ARTICLES: (1) Poll on Aso cabinet, political parties YOMIURI (Page 6) (Full) June 8, 2009 Questions & Answers (Figures shown in percentage) Q: Do you support the Aso cabinet? Yes 29.5 No 61.0 Other answers (O/A) 3.8 No answer (N/A) 5.7 Q: (Only for those who answered "yes" to the foregoing question) Pick only one from among the following reasons for your approval of the Aso cabinet. Something can be expected of its policy measures 22.1 The prime minister has leadership ability 10.3 There's something stable about the prime minister 10.1 His cabinet's lineup is good 6.6 Because it's a coalition of the Liberal Democratic Party and the New Komeito 39.8 O/A 1.1 TOKYO 00001281 002.3 OF 017 N/A 9.9 Q: (Only for those who answered "no" to the foregoing question) Pick only one from among the following reasons for your disapproval of the Aso cabinet. Nothing can be expected of its policy measures 28.5 The prime minister lacks leadership ability 28.2 There's nothing stable about the prime minister 20.8 His cabinet's lineup is not good 4.1 Because it's a coalition of the Liberal Democratic Party and the New Komeito 15.0 O/A 0.4 N/A 3.0 Q: Which political party do you support now? Pick only one. Liberal Democratic Party (LDP) 28.5 Democratic Party of Japan (DPJ or Minshuto) 27.7 New Komeito (NK) 2.8 Japanese Communist Party (JCP) 2.4 Social Democratic Party (SDP or Shaminto) 1.0 People's New Party (PNP or Kokumin Shinto) 0.1 Reform Club (RC or Kaikaku Kurabu) --- New Party Nippon (NPN or Shinto Nippon) --- Other political parties 0.1 None 35.2 N/A 2.0 Q: When comparing Prime Minister Aso and DPJ President Hatoyama, who do you think is more appropriate to be prime minister? Prime Minister Aso 32.9 DPJ President Hatoyama 44.0 N/A 23.1 Q: Do you think the DPJ will be able to take the reins of government in the next election for the House of Representatives? Yes 40.5 No 48.8 N/A 10.7 Q: It has been three weeks since Mr. Yukio Hatoyama became DPJ president. What's your impression of DPJ President Hatoyama? Improved 14.2 Worsened 2.8 Unchanged 78.1 N/A 4.9 Q: Mr. Ichiro Ozawa of the DPJ resigned as DPJ president in the form of taking responsibility for illicit political donations to his fund-managing body. He has now become the party's deputy president under its new leadership. Is this acceptable? Yes 30.9 No 62.2 N/A 6.9 Q: The ruling and opposition parties are discussing the issue of hereditary candidates running from their parents' home TOKYO 00001281 003.3 OF 017 constituencies. Do you think such hereditary candidates should be restricted? Yes 48.5 No 46.2 N/A 5.3 Q: North Korea carried out a second nuclear test in May and has also repeated its missile launches. Do you think the international community should impose stronger sanctions on North Korea? Yes 88.1 No 6.0 N/A 5.9 Q: Do you think the international community's imposing stronger sanctions on North Korea will work to stop North Korea from developing nuclear weapons and missiles? Yes 45.9 No 45.0 N/A 9.1 Q: Do you think the government has been dealing appropriately with the new influenza? Yes 68.2 No 26.4 N/A 5.4 Q: Do you think the House of Representatives should be dissolved for a general election right away, or do you think there's no need to hurry? Right away 38.4 No need to hurry 52.2 N/A 9.5 Q: If an election were to be held now for the House of Representatives, which political party would you like to vote for in your proportional representation bloc? LDP 28.7 DPJ 39.1 NK 2.6 JCP 3.2 SDP 1.4 PNP 0.1 RC --- NPN --- Other political parties 0.0 Undecided 19.2 N/A 5.6 Q: What form of government would you like to see after the next election for the House of Representatives? LDP-led coalition government 14.2 DPJ-led coalition government 20.0 LDP-DPJ grand coalition government 25.2 Government under new framework after political realignment 34.1 O/A 0.1 TOKYO 00001281 004.3 OF 017 N/A 6.3 Polling methodology: The survey was conducted June 5-7 across the nation on a computer-aided random digit dialing (RDD) basis. Households with one or more eligible voters totaled 1,734. Valid answers were obtained from 1,057 persons (61.0 PERCENT ). (Note) In some cases, the total percentage does not add up to 100 PERCENT due to rounding. (2) Hurdles to Japan's sanctions on North Korea; Government rushing to consider specific policies NIKKEI (Page 2) (Slightly abridged) June 7, 2009 Negotiations among members of the UN Security Council (UNSC) on the sanctions resolution against North Korea for conducting its second nuclear test have entered the final stage. Beginning this week, the Japanese government will study the implementation of specific sanctions. The DPRK is certain to react fiercely to the UNSC resolution as it did to the previous presidential statement, so the situation is dangerously close to a further heightening of tension. The government will make a decision based on an overall assessment of various factors, including North Korea's reaction, the effectiveness of the sanctions, and domestic legal provisions. Inspection of cargo on North Korean ships has emerged as one of the key sanction measures in the UNSC resolution. The purpose of this is to halt the flow of materials relating to nuclear weapons and missiles. A similar measure was included in the UNSC resolution adopted after the DPRK's nuclear test in 2006. If cargo inspections are implemented rigorously under the new resolution, this will be the provision to which North Korea will react most strongly. But it will be difficult for Japan to conduct cargo inspections in international waters under existing laws. Even though it can do so by designating an "emergency situation in areas surrounding Japan" or a "quasi-contingency," the government maintains its position that the recent nuclear test has not given rise to such an "emergency situation." The government therefore is considering either of the following: (1) amending the law on ship inspection operations; or (2) legislation of a new law. There are also moves in the Liberal Democratic Party to look at the possibility of submitting a bill by Diet members, because "it is ridiculous if Japanese domestic laws make it impossible (to inspect ships)." However, since this will also involve a discussion on relaxing the rules on the use of weapons by the Self-Defense Forces (SDF) and such other issues, there is a view in the Ministry of Defense (MOD) that senior official explained "Japan does not have the capability or the legislation needed for conducting ship inspections in international waters. We will end up with just stricter inspections at ports and providing information on North Korean ships to other countries." Meanwhile, the U.S. is pushing strongly for financial sanctions, which is the other main element in the additional sanctions on the DPRK, because the financial measures it took in 2005 against the Banco Delta Asia in Macau were effective. For now, the specific TOKYO 00001281 005.3 OF 017 steps have not been decided upon, but the Japanese government is prepared to cooperate with the U.S. and other countries in implementing financial sanctions. In April, as one of its own additional sanctions, the Japanese government lowered the amount of cash that requires reporting if transferred to North Korea. This time, it is expected to consider a complete ban on transactions with the DPRK's settlement banks. However, "the actual effectiveness is said to be unclear." The impact of the above sanctions on North Korea is unpredictable. There are already signs that the DRPK is preparing to launch another long-range missile. The situation in that country has become increasingly volatile, partly in relation to the question of succession to General Secretary Kim Jong Il. Japan must consider what comes after the sanctions. (3) High-level economic dialogue: Japan, China to cooperate to overcome financial crisis NIKKEI (Page 3) (Abridged slightly) June 8, 2009 Tokyo and China at the 2nd high-level economic dialogue, held in Tokyo on June 7, reached an agreement to protect intellectual property rights and assist Japanese and Chinese companies in advancing into various Asian countries. Both countries, the second- and third-largest economies in the world, took a stance of cooperating with each other in order to overcome the ongoing financial and economic crisis. However, with no major progress achieved regarding a system of obligating disclosure of technical information on their information and technology (IT) products (China Compulsory Disclosure - CCC - system) and food safety, these pending issues have been carried over to the next session, leaving unfinished tasks for the future. Among participants in the economic dialogue from Japan were Foreign Minister Hirofumi Nakasone, Finance Minister and State Minister for financial Services, Economic and Fiscal Policy Kaoru Yosano and Economy, Trade and Industry Minister Toshihiro Nikai. Vice Premier Wang Qishan, Foreign Minister Yang Jiechi and National Development and Reform Commission Chairman Zhang Ping took part from China. Yosano and Zhang explained economic measures of their respective countries. They agreed to cooperate to undergird their domestic economies with proactive fiscal measures as well as to turn around the global economy. Various government agencies and related organizations signed 11 documents of cooperation, including protection of intellectual property rights and financial cooperation in various Asian countries. Assistance to companies advancing into developing countries As cooperation in the financial area, the Development Bank of Japan (DBJ) and the Export-Import Bank of China (EIBC) will provide necessary funds when companies of their respective countries advancing into third countries in Asia. Since the Asia region is expected to serve as an economic engine of the global economy after the ongoing financial and economic crisis is over, Japan and China see backing companies advancing into that region is very meaningful. Both countries also agreed to set up a forum for dialogue between next-generation leaders of their respective countries and promote TOKYO 00001281 006.3 OF 017 research into earthquakes. They also agreed to launch talks for promoting energy conservation, improving water quality of lakes, ponds and rivers and streamline goods distribution in China, although this was not put in writing. However, talks on issues, such as the compulsory disclosure of technical information on IT products and poisoning incidents involving frozen Chinese-made gyoza dumplings did not go beyond Japan conveying its interest, according to Nakasone. Nikai called on China to reconsider the CCC system of mandating companies to disclose technical details of their IT products expected to be introduced in May next year. Japanese, U.S. and European companies are concerned that secret information on their products could be leaked as a result. No progress achieved in gas field talks Japan suggested China takes part in the international mutual recognition framework joined by 26 countries. The aim is to rein in the moves of Beijing, which is calling for the disclosure of technical information for reasons of safety concern. Japan conveyed to China that it is ready to cooperate with it on the technical front. However, China stressed that it had forgone the introduction of the CCC system for a year at the request of Japan, the U.S. and Europe and boiled down the scope of products subject to the system to those procured by the government. It simply indicated a stance of continuing to hear views of various countries. Japan intends to continue to ask China to take a second look at its policy. The situation is, however, unclear. Concerning the greenhouse gas emissions issue, too, the two countries failed to reach an agreement with China indicated its view that how industrialized countries will respond first is important, when Japan asked it, a large emitter, to make a responsible response. No major progress was achieved over the joint development of gas fields in the East China Sea. Gist of economic dialogue (Global economy and financial situation) Q Steadily implement the agreement reached at the financial summit held in London in April. Cooperate for the recovery of the global economy. Q Recognized the need to constrain protectionism (Trade and Investment) Q Japan asked China to take a second look at the CCC system, which it is looking into introducing. Q Set up a forum for bureau director-level dialogue to promote cooperation in the goods distribution area. Q Promote mutual advance by financial institutions of respective countries Q Set up a taskforce joined by responsible government officials of both countries concerning intellectual property rights, such as measures against copied products. Q Reaffirmed that it is important to secure the safety of foods and products. Japan asked China to settle at an early date poisoning incidents caused by Chinese-made gyoza dumplings. TOKYO 00001281 007.3 OF 017 (Environment, energy) Q Japan insisted that both emerging and developing countries need to take responsibility regarding greenhouse gas emissions cuts. The Chinese side stressed the responsibility of industrialized countries. Q Strengthen measures on industrialized wastes and the disposal of drainage water. (Regional and international economic issue) Q Reaffirmed the need for an early settlement of multilateral trade liberalization talks (Doha Round) at the WTO Q The DBJ and the EIBC will assist the advance of Japanese and Chinese companies' into third countries through concerned financing Q Cooperation on the new influenza strain through information sharing (Others) Q Hold the next round of the economic dialogue in China by the end of 2010 (4) Cabinet Office estimates restoration of fiscal health delayed to 2020 or beyond even with 10 PERCENT consumption tax rate ASAHI (Page 1) (Full) June 6, 2009 The Cabinet Office has run estimates showing that even if the consumption tax rate is raised in stages to 10 PERCENT from FY2011, fiscal balance can only be achieved in the early 2020s. Its estimates in January had shown that the goal would be met in FY2018. This delay is due to the ballooning of debts for the economic stimulation packages and the decline in tax revenues as a result of the economic downturn. The government has decided on a consumption tax hike from FY11 in late 2008 on condition of economic recovery but has not clarified the margin of increase. The latest estimates clearly show that an increase in consumption tax of over 5 PERCENT will be necessary for fiscal restructuring, so the margin of increase will be the focus of the debate from now on. The Cabinet Office will report to the meeting of the government's Council on Economic and Fiscal Policy (CEFP) early next week. Its fiscal estimates were based on the assumption of an economic recovery and a consumption hike from FY11. According to the projection, a surplus in the primary fiscal revenues and expenditures - funding expenditures other than the repayment of debts with tax revenues - can only be achieved in the early 2020s. The January estimates had projected the achievement of a surplus by FY08 by increasing the consumption tax by 1 PERCENT each year from FY11. The government had set the goal of achieving a surplus in FY11 in 2006, but due to the worst minus growth in postwar history and the 15 trillion yen economic package in response to this, the achievement of the goal will be delayed significantly. The private sector members of the CEFP will come up with new goals for fiscal restructuring based on the above. They will first demand reducing the deficit in the primary balance by half in about five years from FY09. Beyond FY09, the ratio of government debt to GDP will be reduced steadily to a level befitting the size of the TOKYO 00001281 008.3 OF 017 economy. The new goals will be incorporated in the basic policy for economic and fiscal reforms, the so-called "big-boned policies, 2009" to be drawn up by the government by the end of June. However, with the general election approaching, the ruling parties are keen on avoiding any discussions on increasing the consumption tax. Actually, there is even pressure for increasing social security spending. It is uncertain whether a specific goal for achieving fiscal restructuring will be written into the "big-boned policies, 2009." (5) Policy emphasis to shift to Secure Society Council NIKKEI (Page 2) (Full) June 8, 2009 The central stage of making government policy measures aimed to demonstrate the leadership of the Prime Minister's Official Residence (Kantei) is now gradually shifting from the Council on Economic and Fiscal Policy to the Council to Realize a Secure Society (anshin-kaigi),which is a government advisory panel studying how to dispel people's anxieties about the future. With the next House of Representatives general election coming closer, the priority of such social issues as correcting income disparity has relatively heightened because the role of the Economic and Fiscal Policy Council, which was called "an engine to promote reforms," has been diminished. There is an observation that a report the Secure Society Council will release in mid-June would become a clear distinction for political realignment after the general election. "How should we explain the policy of aiming for a moderate level of social welfare with a moderate public burden?" Such questions flew when Kaoru Yosano, who concurrently serves as finance minister, state minister of financial services, and state minister of economic and fiscal policy, Chief Cabinet Secretary Takeo Kawamura, and experts of the advisory panel held a hot discussion on the contents of the report for more than two hours. Yosano is the person who suggested forming the panel. He called on Prime Minister Taro Aso in January to persuade with the list of panel members in his hands. He told Aso: "The Council on Economic and Fiscal Policy is a permanent panel responsible for designing institutional arrangements. We need one more panel made up of experts from outside the government." Aso then responded, saying: "I think that's a good idea." The Council on Economic and Fiscal Policy was formed based on the Cabinet Office Establishment Law. The Secure Security Council was set up based on a decision by the prime minister. It will hammer out policy to ease people's anxieties about such issues as widening disparities and growing unemployment. In order to cover public burden by such policy, a consumption tax hike is inevitable. Since many in the ruling and opposition camps have strong distrust in the Council on Economic and Fiscal Policy, a panel replacing it was needed. The government office district of Kasumigaseki is susceptible to chemical change. A senior official of the Ministry of Education, Culture, Sports, and Science and Technology was in contact with almost all Secure Society Council members in April and explained to them the need to provide free infant education. The senior ministry TOKYO 00001281 009.3 OF 017 official told panel members: "The education-related budget ranks at a low-level among the industrialized countries." The ministry appears to have predicted that funds would be provided on a preferential basis to policy issues the Secure Society Council presented in case the consumption tax rate was increased. The Council on Economic and Fiscal Policy seems to have lost the leading role. The work on drawing up a fresh goal for fiscal reconstruction, the biggest task, is running into difficulties. A senior Cabinet Secretariat official said: "The possibility is strong that a goal will not restrict annual budgetary request guidelines" The big-boned economic policy guidelines for fiscal 2006, a basic policy for economic and fiscal management, which the Koizumi cabinet adopted in its last days, stipulated the reduction amounts of the items of expenditures for annual fiscal year, in order to bring the basic budget for fiscal 2011 back into the black. The Aso cabinet, which put that on the back burner, will unlikely to set forth a strong message, although Aso's aide said: "Some sort of a banner is needed." There is also a view in the ruling camp that the formation of the new council "is a strategic move by Yosano and others for political realignment or a grand coalition after the Lower House election" (senior member of the Liberal Democratic Party (LDP)). "It would be ideal if the Council's report becomes one of the banners when the political parties are realigned," a source said. The prediction is that if an LDP-led government is formed after the general election, the policy of the Council, which places importance on narrowing disparities, will become the glue holding it together. (6) Resumption of JICA aid to support private sector infrastructure projects in Asia mulled SANKEI (Page 2) (Full) June 8, 2009 A growing number of Japanese companies plan to participate in infrastructure projects in Asian countries, not only by winning construction contracts, but also in terms of offering management and operational knowhow. Their common aim is to secure stable supplies of resources. The government has begun to consider the resumption of investments and loans by the Japan International Cooperation Agency (JICA) to give support to these private companies. Itochu Corporation is planning on becoming involved with a project to construct and operate freight railways on the Central Kalimantan island of Indonesia that is rich in high quality coal being mined. This company says: "We would like to make this a stable source (of coal) in the Asian market. This will also secure a supply for Japan." There is also great demand for infrastructure in India with a fast growing economy. NEXCO East Japan (East Nippon Expressway Company) has formed a group with consultancies and other firms to market Japanese style ETC (electronic toll collection) systems. Right now, the Japanese group is eyeing the outer ring road around the city of Hyderabad in southern India. Tomoyuki Fujino, overseas operations team leader of NEXCO East Japan, says confidently that: "The Japanese system has high expandability and flexibility. It is the most advanced in the world. It will be appropriate for India, TOKYO 00001281 010.3 OF 017 which is planning to start building expressways." Plans are also afoot for participation in water supply projects. Metawater Company, which is the first company in Japan to win a contract to operate a water filtering plant from Yokohama City, is going into the Asian market. Vice President Hiroshi Komaki is very excited about this. He says: "We would like to embark on Japanese-style participation by cooperating with the local government and private companies in projects suitable for the situation in each country." In light of such moves in the private sector, the government is considering the resumption of investments and loans by JICA, which have been frozen since the reform of special public corporations in 2001, to enable investments and loans for various infrastructure projects in Asia. (7) Nago City, local firms planning to form new organization to promote 700-billion-yen new base-construction project in Okinawa, probably eyeing contracts AKAHATA (Page 15) (Slightly abridged) June 6, 2009 Nago Municipal Government and local companies are planning to launch a private-sector organization that would promote a plan of the Japanese and U.S. governments to construct a new U.S. military base in the Henoko district in Nago City, Okinawa Prefecture. The new organization will also call on the government to place orders with local companies on a priority basis. Critics claim that they intend to earn benefits from the construction project and bring the citizens to their side, with an eye on the mayoral election next year. A plan to establish the private-sector organization called "Camp Schwab support association" was unveiled for the first time in a meeting on April 29 of the administration committee that has been expanded to include the heads and administration committee members of the Kube area, centering on the Henoko, Kushi and Toyohara districts. Vice Mayor Bunshin Suematsu and Policy Promotion Department Head Masamitsu Tamaki of Nago City explained the plan about the new body. This idea was first proposed by some executive members of the Henoko administration committee last December. Tamaki said: "If Henoko takes action independently, it will not be able to exert enough influence. Given the strong image that a corporate intends to pursue profits, we instructed persons concerned to form an incorporated organization involving the city as a whole." According to its organization chart and rules, the planned organization will be composed of five groups - the three districts in Kube, the northern region promotion council to promote the new U.S. military base, and the Nago fishermen's cooperative. Nago City will join the organization as an observer. With "smooth promotion of the relocation project" as the slogan, they have already asked the Defense Ministry (Okinawa Defense Bureau) to give orders to local firms, use their materials, and place orders for projects in Okinawa. They have decided to ask major general contractors in the Japanese mainland and Okinawa to use local firms as subcontractors and procure materials from local firms. TOKYO 00001281 011.3 OF 017 Even after the construction work is completed, the new body will continue to be involved in the management, operation and maintenance of facilities on the base, as well as in the placement of personnel, such as guards. According to the rules, a local company that receives an order directly from the Okinawa Defense Bureau will contribute to the organization a commission according to the amount of the contract it receives. A subcontractor will be required to pay a commission of a certain amount calculated by the organization. In responding to criticism of the planned body as an organization intended to pursue bid-rigging and profits from the new base project, Tamaki in Nago City said: "The association will use profits earned as contributions and commissions for regional promotion projects. But the brochure of the association notes: "The relocation project begins on a full scale, business opportunities will be created for local firms as the entire project is estimated to cost 500 to 700 billion yen." Tamaki emphasized that the new association will be launched as soon as each group's participation is confirmed. Vice President Tsujimura of the Non-profit Organization Institute for the Study of Construction Policy, who is well-versed in the details of large-scale public works projects, said: "Major offshore engineering companies in the mainland of Japan are expected to win contracts for reclamation and dredge work in the new base construction project, leaving no room for local firms. Even if local companies undertake subcontracted work, such work will probably be temporary." Association of Commerce and Industry Chairman Nakamoto criticized the plan to set up the new organization: Of the people of Okinawa, 70 percent are against the construction plan, and a number of citizens voted against the plan. The government is aiming to build a town that allows the new base by mobilizing people in commerce and industry, while citing economic development in Okinawa as the reason for the envisioned organization. People in favor of the construction plan are aiming to proceed with the campaign for the mayoral election next year in their favor." (8) Anatomy of DPJ: U.S. distrustful of DPJ's foreign and security policies SANKEI (Page 3) (Abridged slightly) June 6, 2009 United States' interest A group of representatives of the Association of the Families of Victims of Kidnapped by North Korea (AFVKN),the National Association for the Rescue of Japanese Kidnapped by North Korea (NARKN),and the parliamentary league on the abduction issue visited the United States in late April to exchange views with the Obama administration officials in charge of North Korea policy and concerned congressional members. During the visit, a research fellow responsible for security at an American think tank connected with the Democratic Party posed the following question to Democratic Party of Japan (DPJ) abduction issue taskforce deputy head, Jin TOKYO 00001281 012.3 OF 017 Matsubara: "What would happen to U.S.-Japan relations if the DPJ were to take the reins of government?" Earlier, in Mid-April, a group of individuals, including journalist Yoshiko Sakurai, visited Washington to feel out the United States on its foreign policy. Receiving the group, former Deputy Secretary of State Richard Armitage who is knowledgeable about Japan, asked, "How is (former DPJ President) Ichiro Ozawa doing?" Matsubara felt that the United States' interest in the DPJ was growing. Sakurai thought speculation was growing in the United States that a DPJ administration would be launched in Japan. At the same time, there are concerns and doubts in the United States about the DPJ's security and foreign policies. Several individuals connected with the former Bush administration asked the AFVKN and others the following question, citing the names of DPJ Secretary General Katsuya Okada and Vice President Seiji Maehara: "The two of them recently made a statement in the United States to the effect that Japan's insistence on the abduction issue is an impediment to a solution to the nuclear issue. Has Japan shifted its policy of prioritizing the abduction issue over the nuclear issue?" On May 14, the day he announced his candidacy for the DPJ presidency, Okada met with AFVKN Secretary General Teruaki Nasumoto and others and explained that he had not said such a thing. Meanwhile, Maehara has not tried to explain anything. Masumoto takes this view: "Prioritizing the nuclear issue is Mr. Maehara's stock argument, so he has probably said something close to (the abduction issue being an obstacle)." A policy turnaround The DPJ has opposed almost all government security policies, including a new antiterrorism special measures law authorizing the Maritime Self-Defense Force's refueling operation in the Indian Ocean, antipiracy legislation, and a Japan-U.S. agreement on the relocation of U.S. Marine Corps from Okinawa to Guam. The major opposition is also opposed to the Japan-U.S. agreement reached in 2006 to relocate the U.S. Marine Corps' Futenma Air Station from Ginowan to Nago. The DPJ's "Okinawa Vision" calls for the air field's relocation to a site outside Okinawa (preferably outside Japan). DPJ President Yukio Hatoyama clearly indicated in his inaugural press conference on May 16 that his party has no intention of changing the view. Initially many in the DPJ had thought that the policy shift, which can said to be a violation of the agreement with the United States, would not make the party's manifesto (campaign pledges) for the next House of Representatives election, saying that the party would end up being criticized as vowing unrealistic matters. But at a May 26 news conference, Hatoyama signaled that his party would specify (the policy shift) it in its manifesto, saying, "Our manifesto should naturally specify that (Futenma Air Station) should be moved outside Japan." DPJ shadow cabinet defense minister Keiichiro Asao also indicated that if his party takes power, the MSDF's refueling operation in the Indian Ocean wil be discontinued, noting, "It would be illogical (for the new administration) to continue with something which (our TOKYO 00001281 013.3 OF 017 party) has opposed twice at the Diet and which former President (Ichiro Ozawa) described as a violation of the Construction." U.S. Deputy Secretary of State James Steinberg held talks with Okada at DPJ headquarters on June 1, during which Okada developed his stock argument that Japan should urge the United States to abandon the preemptive use of nuclear weapons. In reply, Steinberg reportedly rebutted Okada, "Many countries declare in their doctrines the abandonment of the preemptive use of nuclear weapons, but that is only doctrine." Decisions postponed Security policy is the most controversial issue for the DPJ, which encompasses members from conservatives to former Japan Socialist Party ranks. For this reason, decisions have often been postponed or discussions have not been held at all. During the extraordinary Diet session in October last year, Deputy Secretary General Akihisa Nagashima (sic) said it would be quite effective for Self-Defense Force vessels to escort (Japan-related vessels). This prompted the government and the ruling parties to advance discussion on the option of dispatching the SDF to waters off Somalia. The DPJ, however, did not discuss it earnestly until February this year, four months after Nagashima made the proposal. Further, the DPJ did not produce its own plan amending the government's antipiracy legislation until April 14, the day the Lower House began discussing the government-presented legislation. The DPJ is also split over North Korea policy, a top priority for the nation's security. On April 1, the DPJ's foreign and defense departments held their executive meeting in which the party's abduction issue taskforce chaired by Hiroshi Nakai called for reinforced sanctions against the North in reaction to the emergence of signs showing the North's preparations for launching ballistic missiles. The North conducted its second nuclear test on May 25, but the departments have yet to make their conclusion. Nakai expressed his strong discontent in his blog on May 28: "I am aware that there are lawmakers in the DPJ who are associated with the pro-Pyongyang General Association of Korean Residents in Japan (Chongryon) and those who support North Korea. It is the same in the Liberal Democratic Party, and I don't care about them." How is the DPJ going to deal with its foreign and security policies? The party's ability to run the government is being tested. (9) "Seiron" column: Policies that the DPJ wants to implement are unclear SANKEI (Page 7) (Full) June 8, 2009 Keio University Professor Heizo Takenaka Strong reaction expected With the election approaching, the Democratic Party of Japan (DPJ) has elected Mr. Yukio Hatoyama as its president and put in place a TOKYO 00001281 014.2 OF 017 new leadership. It is believed that there are an increasing number of voters who want to give the DPJ a try at running the government because of the significant decline in the Liberal Democratic Party (LDP)-centered administration's ability to govern. President Hatoyama has declared that the main campaign issue in the next election will be whether there will be a change in government. Like in America, "change" is also needed in Japan. However, a change of government should only be a means. By logic, a party should define a clear set of policies that it wants to implement and call for a change of government to realize them. For sure, the DPJ has come up with new "viewpoints" for steering the administration, such as breaking away from bureaucratic control, but the substance of the policies it wants to implement remains vague. That is why the support rate for the DPJ remains surprisingly low. Even if it is able to capture power based on a passive choice by the people, thinking it is probably better than the present LDP, it will soon face a strong public reaction. The DPJ has the responsibility to come up with robust policies for the healthy growth of the Japanese economic society. I would like to raise three specific points regarding the problem with the DPJ's economic policies: Macroeconomic picture also vague First, a "macroeconomic" picture is completely absent from the DPJ's policy debate so far. For example, by how many percent is the Japanese economy capable of growing and how can this growth rate be raised through its policies in the future? The process of restoring fiscal health cannot be determined without such a macroeconomic scenario. In the past few years, the DPJ has proposed the restructuring of the budget, which means substituting certain items on the assumption of the same macroeconomic scenario and overall budget as the government and the ruling parties. For sure, it is meaningful to rearrange budget items, but is the overall framework of the government's budget appropriate? Is its economic outlook correct? The DPJ has never come up with any counterproposals on such questions. The DPJ will most probably argue that the ruling parties have the support of the bureaucracy while the opposition does not. If so, this contradicts the DPJ's core policy of independence from the bureaucrats. If the party is unable to discuss macroeconomics without relying on the bureaucrats, then it will still be controlled by them, even if it takes over the reins of government. Second, the substance of its main policy proposals remains vague. The DPJ has proposed some interesting policies on pension reform and other issues, some of which are commendable. However, its position on a number of major issues is unclear. First, what is the party's stance on postal privatization? At first, the DPJ had opposed privatization per se. After losing in the 2005 general election, it presented proposals to the Diet on the privatization of parts of the banking and insurance operations, while keeping government control on the postal services. But now, it advocates the freezing of the sale of Japan Post shares together with the People's New Party. What will be its position after taking over power? Another issue on which the DPJ is unclear is the proposed course for fiscal restructuring. Its policy choice of not debating the consumption tax for now is understandable. If Japan indulges in generous fiscal outlays, like what the LDP is doing now, while also increasing the consumption tax rate, it will unmistakably become a TOKYO 00001281 015.2 OF 017 country of low welfare and high cost. That is also the reason why many pin their hopes on the DPJ's policy. Yet, the DPJ's proposed fiscal picture is unclear. Without an administration transition team Third, if the DPJ is serious about a change of government, why has it not formed an administration transition team right now? If a DPJ administration does come into existence, it is expected to have an extremely tough time in steering the administration because it will be taking over the Japanese economy and finances literally in their worst state. That is, it needs to make preparations now on the assumption of taking over the government in a scorched earth condition. For sure, the outcome of the election is unpredictable until the votes are counted. However, such preparations will be useful for the DPJ whether it becomes the ruling party or remains to be the opposition. For the past few years, the succeeding cabinets have been cabinets without a clearly-defined goal which have been criticized by the people for not having an "agenda." But come to think of it, such criticism also applies to the DPJ. A change of government is a means for implementing desired policies. The point of contention in the election should not be a change of government but should be the policy agenda set as the goal of the various political parties. (10) TOP HEADLINES Asahi: Three local elections to be held in run-up to Lower House general election Mainichi: National health insurance premiums differ 3.6 times by municipality Yomiuri: Sugaya says he made false murder confession to police officers after 13 hours of denial Nikkei: Corporations to cut capital spending 15.9 percent in FY2009 Sankei: Maritime Self-Defense personnel on antipiracy mission backed by their families and the public Tokyo Shimbun: Poll on Tokyo election: 32 percent for DPJ, 20 percent for LDP; 80 percent to go to the polls Akahata: Labor bureau issues more than 20 guidances and advices to correct employment conditions (11) EDITORIALS Asahi: (1) Fertility rate of 1.37: Make our society a place where people do not have worry about having children and raising them (2) Japan qualifies for 2010 World Cup in South Africa TOKYO 00001281 016.2 OF 017 Mainichi: (1) Bill managing official document: Still entrance for reform (2) Soccer World Cup: Thank "Oshimu effect" Yomiuri: (1) Reliance on Chinese money U.S. weak point (2) Hope Japan's soccer players will perform brilliantly in 2010 World Cup Nikkei: (1) More social spending for children Sankei: (1) Postponement of restrictions on hereditary candidates: Has LDP given up self-purification effort? (2) Japan qualifies for 2010 World Soccer Cup: Look forward to seeing players' good performance Tokyo Shimbun: (1) It is too early to say the recession has bottomed out (2) Japanese soccer players to participate in 2010 World Cup Akahata: (1) Don't expand scope of Japan's host-nation support for USFJ (12) Prime Minister's schedule, June 6 NIKKEI (Page 2) (Full) June 7, 2009 10:25 Sent off the Emperor and the Empress leaving Haneda Airport to visit Fukui Prefecture to attend the 60th National Tree Planting Ceremony. 11:35 Isetan Shinjuku Store. 12:13 Tailor Moriwaki in North Aoyama. 12:44 Tani Shirt Shop in Hotel Okura. Then had lunch with his secretary at Cameria at the same hotel. 13:48 Had a haircut at Barber Sato at Hotel Pacific Tokyo in Takanawa. 15:23 Arrived at the official residence. 15:49 Went to mass in memory of late former Japan Telework president Koichiro Noda, his relative, held at Tokyo Cathedral St. Maria Cathedral. 16:46 Attended a ceremony for the first anniversary of the death of Noda held at Chinzanso. 18:59 Visited a house of his friend at a time when he was studying in the U.S. 23:11 Arrived at the official residence. Prime Minister's schedule, June 7 NIKKEI (Page 2) (Full) June 8, 2009 07:36 Took a walk around the official residence. 10:19 Inspected fire drill and solar energy generation panel at the No. 4 Primary School in Hachioji. 11:01 Visited the office of a person expected to run for the Tokyo Metropolitan Assembly election in Hachiman-cho, Hachioji City. 11:16 Visited the office of a person expected to run for the Tokyo Metropolitan Assembly election in Minami-cho, Hachioji City. TOKYO 00001281 017.2 OF 017 11:34 Met with Parliament Secretary Hagiuda and Hachioji Mayor Kurosu at Hachioji L-City, a banquet hall in Hachioji City. 12:38 Visited the office of a person expected to run for the Tokyo Metropolitan Assembly election in Akishima City. 13:20 Visited the office of a person expected to run for the Tokyo Metropolitan Assembly election. 13:55 Visited the office of a person expected to run for the Tokyo Metropolitan Assembly election in Kokubunji Station. 14:54 Made sidewalk speech at the North entrance of JR Kichijoji Station. 16:07 Arrived at the official residence. 16:46 Sorted out documents at Imperial Hotel. 19:00 Met with Secretary General Hosoda and Chief Cabinet Secretary Kawamura. 21:18 Arrived at the official residence. ZUMWALT