DAILY SUMMARY OF JAPANESE PRESS 06/24/09

UNCLAS SECTION 01 OF 09 TOKYO 001424 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 06/24/09 INDEX: (1) Japan, China hold strategic dialogue, discuss North Korea's nuclear issue (Jiji) (2) North Korea on verge of carrying out provocative act: What move will the Japan-U.S. alliance make? (Sunday Mainichi) (3) Report on U.S. military hospital in Afghanistan; endless fight for life; children caught in the fighting, traumatized soldiers (Mainichi) (4) Basic fiscal policy guidelines: Prime minister's identity oveshadowed (Mainichi) (5) Examining the Aso administration (Part 2): Response to once-in-a-century economic crisis; low support rating despite pork barrels (Tokyo Shimbun) (6) Report on back-door political donations involving Yosano (Asahi) (7) Prime Minister's schedule, June 23 (Nikkei) ARTICLES: (1) Japan, China hold strategic dialogue, discuss North Korea's nuclear issue JIJI.COM (Full) 11:20, June 24, 2009 Beijing, Jiji Press, June 24 Vice Foreign Minister Mitoji Yabunaka and his Chinese counterpart Wang Guangya held a Japan-China strategic dialogue at the Diaoyutai Guest House in Beijing on June 24, where they exchanged views on North Korea's development of nuclear arms and other issues. At the beginning of the meeting, Wang stated: "We would like to hold an in-depth exchange of views on China-Japan relations as well as international and regional issues." Yabunaka pointed out that "the North Korean issue is approaching a very critical stage in East Asia," indicating his expectations for productive discussions between the two countries on the North Korean situation. Yabunaka asked China to implement the UN Security Council sanction resolution against North Korea. He is also expected to request the start of negotiations to conclude an agreement on joint development of gas fields in the East China Sea at an early date. (2) North Korea on verge of carrying out provocative act: What move will the Japan-U.S. alliance make? SUNDAY MAINICHI July 5, 2009 issue (Pages 130 and 131) (Abridged slightly) The North Korean regime is wavering due to the deteriorating illness of the General. Hardening its stance in the wake of the UN Security Council's adoption of a resolution in response to its underground nuclear test, the North has even signaled the launch of a long-range missile. The country is on the verge of taking another provocative TOKYO 00001424 002 OF 009 action. How will the Japan-U.S. alliance, which has kept Japan away from war for over 60 years, react? On June 9, a Liberal Democratic Party (LDP) national defense joint meeting decided to propose that the country should possess capabilities to strike enemy bases ahead of the planned revision of the National Defense Program Guidelines (NDPG) with an eye on the increasingly tense situation in North Korea. In the meeting, former Prime Minster Ichiro Hatoyama's 1956 Diet reply "We should not sit and wait for our own destruction" was cited, according to a political journalist. Hatoyama went on to say (before the Diet in 1956),"If there is no other means, (attacking enemy bases) could be within the bounds of self-defense." Although Japan has left its offensive capability to U.S. forces under its pacifist constitution, Hatoyama's reply was intended to allow Japan to possess an offensive capability though under limited conditions. LDP National Defense Division chief and Lower House member Yasuhide Nakayama explained it this way: "North Korea is believed to have 200 - 300 Nodong missiles. This specifically means that when it has become clear that the North has begun preparing to turn and launch those missiles at Japan, our country will possess Tomahawk cruise missile and the like to attack its missile bases." Nakayama's explanation, given after the North's nuclear test that could lead to the miniaturization of its nuclear warheads, seems to have had deterrence against North Korean missile attacks in mind. Meanwhile, Selig Harrison, director of the Asia Program of the Center for International Policy, testified before the House Foreign Relations Committee on June 17, expressing this worrisome view: "In the event of another war with North Korea, in my view, it is Japan, not South Korea, that North Korea would attack, because nationalist younger generals with strong anti-Japanese sentiments now hold strong positions in the North Korean leadership following the deterioration of Kim Jong Il's illness." A foreign affairs journalist takes this view: "The accuracy of North Korean missiles is still low. It will take time for the North to downsize its nuclear warheads. Chances are slim for the North to attack Japan, which would involve North Koreans living in Japan." In the sense of underpinning the threat from North Korea, (Harrison's view) is likely to give momentum to the Aso cabinet which is playing up its ability to run the government regarding foreign and security affairs. Ukeru Magosaki, a former Foreign Ministry Intelligence and Analysis Bureau chief, a former National Defense Academy professor, and the author of Nichibeidoumei no Shoutai (True Picture of the Japan-U.S. Alliance),has this view: TOKYO 00001424 003 OF 009 "Since President Bush's second administration, the United States has reduced its own burden, calling its allies in East Asia for role-sharing. The recent argument on possessing strike capabilities can be said to be an extension of the pro-U.S. policy course in line with the United States' wishes to a certain extent rather than a call for nuclear armament and autonomous defense that might deviate from the Japan-U.S. security alliance. The basic stance will not change under the Obama administration." True, the United States, worn out by the two antiterrorism wars and also hit by the financial crisis, is giving up its sole superpower status. Is it safe to follow the wishes of such a country? A defense journalist, for instance, warned: "Striking an enemy base is basically tantamount to a preemptive strike. Most Nodong missiles, which have Japan in their range, are stored underground, so grasping everything in advance is difficult. The time required for preparing to launch Nodongs, such as fueling, is much shorter than that for the Taepodong missile that was launched in April. A preemptive strike can destroy only a small number of Nodong missiles. Following Japan's attack, the North would launch massive counterattacks by using remaining Nodongs." In other words, in the event Japan-U.S. alliance attacks began with Japan's preemptive strike, Japan alone would be exposed to the North's retaliatory attacks. Magosaki cited the following case: "During the 1970s, the United States tried to deploy Pershing II missiles in Europe to counter the Soviet Union's SS-20 mid-range nuclear missiles. But the public in West Germany reacted strongly to the plan at first. In short, they were alarmed at the risk of their country turning into a battlefield." The enemy-base strike argument has the risk of victimizing many Japanese people once the preemptive strike button is pressed. U.S. prefers a soft landing There is another problem, which is unique to Japan. Younger North Korean officers harbor anti-Japanese sentiment because they are angry with the fact that their country admitted to the abduction of Japanese nationals and apologized for it in the 2002 Japan-DPRK Pyongyang Declaration, according to Harrison. An LDP defense policy specialist also noted: "Needless to say, resolving the abduction issue is important. It can be said that of all the Six-Party members, Japan is the only country that is strongly hoping for the collapse of the North Korea regime for resolving the abduction issue. This might be used as the reason to expel (Japan) from the six-party framework." Japan needs to carefully observe other countries' orientation toward a soft landing. Magosaki added: "The Obama administration has sent both soft and hard messages that it will support the continuance of the (North Korean) regime if it TOKYO 00001424 004 OF 009 comes over to the U.S. side, while making it clear that the United States does not allow the North to possess nuclear weapons. The trend is common among the Six-Party member countries excluding Japan, and there is no denying that Japan's hard-line stance will stand out." There are indications, according to Magosaki, that the United States and other members are dealing with the North as a quasi nuclear state in order to prevent the country from carrying out another provocative act. Magosaki continued: "The United States occasionally shifts its diplomatic strategy significantly, so cautiousness is necessary. The hard-line argument in Japan followed the foreign policy of the first Bush administration that labeled North Korea a part of an 'axis of evil.' Falling behind changes, it has now lost touch with (the policies of other countries)." Although the Japan-U.S. alliance is dependable, the motives of the two countries do not always meet. The United States' intelligence-gathering capability defies conjecture. The aforementioned defense journalist explained: "It is said that a U.S. special force has a handle on General Secretary Kim Jong Il's dozen or so houses and that it is always keeping a watchful eye on them. (The United States) has the sufficient ability to implement an assassination operation. The North Korean leadership must be in a considerably tense situation. They must carefully watch for any signs of a provocative act." The series of provocative acts by North Korea has exposed the pitiful reality that Japan has to obtain information even on missile launches and nuclear tests from U.S. forces. A former diplomat noted: "Efforts must be made to have independent means to collect information. A country that solely relies on its ally cannot negotiate anything with other countries on equal footing." Is it the true meaning of not sitting and waiting for our own destruction? (3) Report on U.S. military hospital in Afghanistan; endless fight for life; children caught in the fighting, traumatized soldiers MAINICHI (Page 16) (Full) June 24, 2009 Tomoko Oji, Bagram Air Base, Afghanistan I visited the Bagram Hospital, the largest medical facility of the U.S. forces in Afghanistan. Children caught up in the fighting are brought here, and traumatized American soldiers also come here for counseling. The medical staff appeared to be exhausted. It looked to me that people were trying to find an "exit" from the endless fighting. TOKYO 00001424 005 OF 009 A tiny body was lying on a bed in the intensive care unit. He had numerous tubes attached to him. This boy had been hit by a bomb of the armed insurgents and had numerous metal fragments in his abdomen. But he had managed to survive. The nurse said: "We don't even know his name." Another boy was working hard on his rehabilitation, maneuvering his own wheelchair. He is Aziz Laha (as transliterated),10. He was caught in the fighting between the Taliban armed insurgents and the Afghan army in front of his house east of the Bagram Air Base and suffered bullet wounds in his hands and feet. He smiled and told me: "The Americans are nice." However, his big brother, 22, said: "They treated him, but I still don't like America. I also hate the Taliban for planting mines in children's playgrounds." Most of the beds in the hospital (32) are used by the locals. An average of 7-10 patients come for treatment each day. Eighty percent are Afghans and half of them are children below 12 years old. A nurse, Ms. Codington, 49, said tearfully: "Medical facilities are inadequate in Afghanistan. I think children are unable to receive rehabilitation treatment after they are discharged." I was told by one hospital official that: "Treatment of the locals cultivates pro-American sentiments. This also contributes to gathering information on the armed insurgents." American soldiers make up 20 percent of the hospitalized patients. There was no confined American soldier on the day I visited. A few injured armed insurgents a month are also brought here for treatment. Some 10 soldiers were seated in the waiting room that had a sign reading: "Combat Stress and Control." About 300 American soldiers suffering from post-traumatic stress disorder (PTSD) and other illnesses come here for counseling each month. With the protracted war against terrorism, nearly 40 percent of the soldiers have been on combat duty twice. Lt. Col. Smith, 48, a female military doctor pointed out that, "Multiple assignments increase the soldiers' stress level." (4) Basic fiscal policy guidelines: Prime minister's identity oveshadowed MAINICHI (Page 5) (Full) June 24, 2009 The government on June 23 adopted at a special cabinet meeting the 2009 basic fiscal policy guidelines. The Aso-led Kantei failed to make a visible move in the face of the Liberal Democratic Party's (LDP)'s last-hour effort to water down the fiscal policy guidelines. Failing to curb the ruling parties' call for greater spending, the prime minister, whose cabinet is suffering from sluggish support ratings, ended up giving the impression that he lacks leadership. Noting that the government effort to curb the increase in social security and welfare expenditures by 220 billion yen a year has just about reached its limit, the prime minister did not include curbing the natural increase in social security spending in the fiscal 2009 budget. It is urgent for the prime minister, whose pet slogans are "medium welfare and medium burden" and "secure society," to reconstruct the social security system. From the beginning, his TOKYO 00001424 006 OF 009 stance has been that given the present state of social security, virtually abandoning the government policy of constraining social security expenditures by 220 billion yen cannot be helped. Meanwhile, he was concerned that abandoning that policy could trigger pressure for spending for public works. If discipline to cut back on spending is relaxed, fiscal reconstruction will become further off. Constraining expenditures is a precondition for a future hike in consumption tax, which the prime minister will not yield on. It is also an aspect that differentiates the ruling parties from the Democratic Party of Japan (DPJ). In the LDP, there are those who are in favor of reforming expenditures, attaching importance to maintaining fiscal discipline. These people include former Secretary General Hidenao Nakagawa. As such, it was necessary for the prime minister to take into account that if he makes a drastic policy change, he will come under fire as having backpedalled on reform, as an aide to the prime minister put it. The Kantei appeared to have been unable to take action on its own initiative under such a situation. The prime minister told reporters on the 23rd: "(The constraint on an increase in social security spending by 220 billion yen) must be revised properly. Otherwise, its negative impact could spread." In the meantime, the government is responsible for fiscal reconstruction over the mid-term. As such, we will implement these two policies properly. I have told this to Mr. Yosano, who is has been in charge of economic and fiscal policy as well as financial services for a long time. Social security or fiscal reconstruction - the prime minister's message remained equivocal all the way. DPJ President Hatoyama says: "The basic fiscal policy guidelines (so-called big-boned guidelines) are full of holes." Democratic Party of Japan (DPJ) President Yukio Hatoyama during a press conference on the 23rd criticized the government's 2009 basic fiscal policy guidelines, noting, "They call the guidelines big-boned, but their bones are full of holes. I do not understand what leaving in documents but deleting verbally means." He stressed, "We will come up with our policies without regard to the public pledge made by the government, which is not functioning properly." (5) Examining the Aso administration (Part 2): Response to once-in-a-century economic crisis; low support rating despite pork barrels TOKYO SHIMBUN (Page 2) (Full) June 23, 2009 On September 29, five days after the inauguration of the Aso cabinet, the New York Dow Jones Industrial Average suffered its worst drop in history. On October 7, the Nikkei average of the Tokyo Stock Exchange went below 10,000 yen for a while for the first time in 4 years and 10 months. Prime Minister Taro Aso, who appeared to lack a sense of urgency when he first took office, finally went into a serious mode. He shelved his plan to dissolve the House of Representatives, which was once set for early October, and scrambled to take steps to boost the economy. What made the prime minister decide to give top priority to the TOKYO 00001424 007 OF 009 economy? For sure, the worsening of the economic indicators, such as the stock prices, was the main reason, but there were also political calculations. At that time, a survey conducted by the Liberal Democratic Party on the situation in the Lower House election showed that the ruling parties were uncertain of maintaining their majority control. It seems that the party had judged that if the prime minister "did not work seriously on economic measures, (the ruling bloc) could not win, once the Diet was dissolved." The government announced additional economic measures on October 30 and additional emergency economic measures on December 12. These were incorporated into the second FY08 supplementary budget and the FY09 budget, and they were characterized by bold steps to stimulate consumption. Fixed-amount cash handouts and drastic cuts in expressway tolls, worth a total of 2 trillion yen, were included in the second supplementary budget. Tax grants to the local governments were increased by 1 trillion yen in the FY09 budget, reflecting Aso's pet theory that "the local governments only need 1 trillion yen that they can use freely." In addition, another trillion yen was allocated as reserves for emergency economic measures. Although massive fiscal spending is supposed to bring about a rise in long-term interest rates and other harmful effects, Aso did not mind, thinking "one needs to respond in an unusual way in an emergency." The prime minister did have his own convictions about the fiscal spending. While the economic measures announced between late 2008 and this spring have been criticized as pork barrel largesse, there is no denying that they were put forth very quickly. The Nikkei stock average, which went down to 7,054 yen on March 10, has recently recovered to around 10,000 yen. In terms of the economic indicators, the coincidence index, which moves in parallel with economic trends, rose for the first time in 11 months in April. There have been signs of improvement in the economy. Even though the cynical view of some private sector economists is that, "The improvement in the economic indices is due to corporate efforts to adjust inventories" and has nothing to do with the Aso administration's economic policies, the pump-priming indeed helped resuscitate the economy. Chief Cabinet Secretary Takeo Kawamura stresses that, "This is founded on the Aso cabinet's strong emphasis on the importance of economic measures and its unprecedented policy action of formulating four budgets in a row (first and second FY08 supplementary budgets, FY09 budget, and FY09 supplementary budget)." However, the support ratings of the Aso cabinet have again been following a downward trend in the polls, in inverse proportion to the improvement in economic indicators. Support has dropped to 17.5 percent in a poll conducted by Kyodo News on June 13-14, which is, no doubt, in the danger zone. The Aso administration has proceeded at full speed, thinking that the improvement of the economic indices is the only way to buoy the administration. Perhaps the rise in economic indices and the drop in the cabinet support rating are two ironical lines in the graph TOKYO 00001424 008 OF 009 showing that the people are rejecting the Aso administration's pork barrel economic measures instinctively. (6) Report on back-door political donations involving Yosano Asahi.com (Full) 13:00, July 24, 2009 Commenting on Mainichi Shimbun's report that Finance Minister Yosano and former state minister for administrative reform Yoshimi Watanabe had received back-door political donations from a commodity futures company through a political organization, Yosano told reporters in Tokyo: "I have not received any petitions concerning commodity transactions from that company on legal or administrative terms. I believe there is in essence no problem either in accordance with the Political Funds Control Law or in formality terms." Watanabe on June 24 told reporters in Tokyo, "I have not heard about how that company collected the money. I have had a connection with it since my father was alive. My perception of that company is it is a political organization that collects donations from individuals." He also said that if it is found that the company had illegally collected the money, he would return it. Their accountability for the matter will likely be pursued amid a time when the way political funds are received has been brought into question, triggered by the illegal political funds donations made by Nishimatsu Construction to Ichiro Ozawa. Chief Cabinet Secretary Kawamura during a press conference the same day revealed that Yosano told him on the phone that he would take responsibility for explaining the matter on his own. Kawamura then said, "It is important to secure the transparency of political funds and manage it in strict fairness." Liberal Democratic Party (LDP) Secretary General Hiroyuki Hosoda said the same day, "We must investigate what really happened." According to their political funds reports, the political organization reported on by the daily is headed by the owner of a commodity futures trading company in Tokyo. The political organization's office was at one time located inside that company. It donated a total of 55.3 million yen to Shunzan-kai, Yosano's fund management organization, between 1992 and 2005 in the form of purchasing tickets for Yosano's fund-raising parties. Yosano served as minister of international trade and industry between 1998 and ¶1999. He was supervising commodity futures transaction. The political organization had also donated a total of 35.4 million yen to Onkochishin-no-Kai, Watanabe's fund management organization. (7) Prime Minister's schedule, June 23 NIKKEI (Page 2) (Full) June 24, 2009 08:25 Departed from Haneda Airport on JAL 903. 10:31 Arrived at Naha Airport. Received by Okinawa Vice Governor Katsuyo Asato and others. 11:17 Offered flowers at the National Okinawa Cemetery on the Peace Memorial Park in Itoman. Afterward attended the annual memorial ceremony for the war dead. 13:27 Met at Naha Airport Lower House Speaker Kono and Okinawa and TOKYO 00001424 009 OF 009 Northern Territories Issue Minister Sato. 14:09 Departed from the airport on JAL 910 seen off by Governor Hirokazu Nakaima and others. 16:10 Arrived at Haneda Airport. 17:20 Attended a Council on Economic and Fiscal Policy meeting held at the Kantei, followed by a special cabinet meeting. Education Minister Shionoya stayed on. 18:20 Filed away documents at his private office in Nagatacho. 18:43 Attended a pep rally for candidates running in the Tokyo assembly election, held at the Japan Education Center in Hitotsubashi. 19:17 Arrived at his official residence. 20:25 Met LDP Public Relations Headquarters chief Furuya. ZUMWALT