DAILY SUMMARY OF JAPANESE PRESS 01/23/09

UNCLAS SECTION 01 OF 08 TOKYO 000150

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 01/23/09

INDEX:

(1) Secretary of State Clinton in telephone conversation with
Foreign Minister Nakasone: "I attach importance to the abduction
issue and share your thinking" (Nikkei)

(2) Changing U.S foreign policy: To what extent will new
administration apply pressure to North Korea? (Yomiuri)

(3) Shaky Japan-U.S. alliance: Obama and Japan (Part 1) - Like an
old couple (Yomiuri)

(4) Futenma working teams to report flight survey results (Ryukyu
Shimpo)

(5) Sales tax hike issue settled in ambiguous way due to concern
about its impact on upcoming Lower House election: LDP adopts
two-stage formula, giving priority to avoid creating gap in party
(Mainichi)

(6) Editorial: We concerned about insufficient debate on MSDF
dispatch to Somalia (Tokyo Shimbun)

ARTICLES:

(1) Secretary of State Clinton in telephone conversation with
Foreign Minister Nakasone: "I attach importance to the abduction
issue and share your thinking"

NIKKEI (Page 2) (Full)
Eve., January 23, 2009

Foreign Minister Hirofumi Nakasone on the morning of the Jan. 23
talked for approximately 15 minutes by phone with U.S. Secretary of
State Clinton. Secretary Clinton expressed her understanding of the
issue of Japanese having been abducted by North Korea, saying: "I
attach importance to the abduction issue and share the thinking of
the Japanese people. I would like the U.S. to cooperate with Japan
in resolving this issue." Foreign Minister Nakasone replied, "The
abduction issue is highest on our agenda, and I would like to see
its resolution carried out together with the nuclear issue." This
was the first cabinet-level discussion between the two countries
since President Obama's inauguration.

Both leaders agreed to cooperate toward maintaining the peace and
prosperity of the Asia-Pacific region. Secretary Clinton stressed
the importance of the alliance relationship by saying, "The
U.S.-Japan alliance is the cornerstone of America's Asia policy, and
together we will deal with the various challenges the international
community is facing."

The two agreed to closely cooperate in such broad areas as
stabilizing and assisting Afghanistan and Pakistan, the financial
crisis, and climate change. On the realignment of U.S. forces in
Japan, they confirmed the policy course of steadily implementing
such parts of the agreement as the relocation of U.S. Marines on
Okinawa to Guam, which will start in earnest in fiscal 2009.

(2) Changing U.S foreign policy: To what extent will new
administration apply pressure to North Korea?

YOMIURI (Page 7) (Full)

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January 23, 2009

"To those who cling to power through the silencing of dissent, know
that we will extend a hand if you are willing to unclench your
fist." U.S. President Barack Obama in his inaugural address on Jan.
20 sent a message calling for dialogue even to dictators of
oppressive states. He apparently had North Korea in mind.

On the North Korean nuclear development issue, the situation became
worse during the eight years of Bush administration. North Korea
reportedly now possesses more plutonium to produce nuclear warheads
and admits that it already has nuclear bombs. It is also suspected
of pursuing a uranium-enrichment program. The Obama administration,
which takes the view that the Bush administration's hard-line
prompted the North to carry out a nuclear test, intends to pressure
North Korea to eliminate its nuclear weapons programs based on a
policy of dialogue.

In a speech before the Senate Foreign Relations Committee during her
confirmation hearing on Jan. 13, Secretary of State Hillary Clinton
lauded the six-party talks as "a means to apply pressure to North
Korea," adding: "We will give a chance (to North Korea) for
bilateral talks."

Eager to improve relations with the U.S., North Korea must be
welcoming the new administration's policy of dialogue. Immediately
after Obama was elected to be president, North Korea unofficially
proposed sending its national symphony orchestra and Vice Foreign
Minister Kim Gye Gwan to the U.S. Before starting bilateral talks,
however, many scenes were witnessed in which they tried to apply
pressure to each other through external statements.

Clinton emphasized in the hearing: "We will promptly impose
sanctions if the North does not respond to our call for its
denuclearization." She indicated that if the North refused to accept
a verification plan, the U.S. would continue the suspension of heavy
oil assistance. On the renewed website of the White House, this
message is posted: "In order to urge North Korea to abandon its
nuclear weapons programs in a complete and verifiable way, we will
use diplomacy backed by real incentives and real pressure,"
indicating the new administration will take a carrot-and-stick
approach.

Meanwhile, North Korea revealed through the media that it would not
respond to Washington's call for denuclearization until the U.S.
nuclear threat was removed, implying that economic aid and
normalization of relations alone would be insufficient.

A negotiator said: "If the U.S. stopped offering aid, North Korea
would resume the operation of its disabled nuclear reactor." The
source is paying close attention to whether the Obama administration
would take a resolute approach to the North. The new administration
includes many members in the Clinton administration, which was about
to realize a presidential visit to North Korea. Given this, many
observers take the view that North Korea might get only "carrot."

According to a source close to North Korea, Pyongyang has welcomed
the new administration's policy of dialogue, not because it aims to
establish diplomatic ties with the U.S. but because it aims to play
for time. The source said: "There will be no military option until
the negotiations end. During that time, North Korea will be able to
concentrate on forming a successor regime to that of President Kim

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Jong Il with health problems. The nation will also be able to
improve its missile technology and earn income by selling products
to other countries."

If the policy of dialogue reaches a stalemate due to North Korea's
delay strategy, "the Obama administration might take a hard-line
policy one year after assuming office, with an eye on the off-year
elections in 2010," according to an informed source.

Even if the U.S. decides to slap sanctions against the North,
though, its effect will be limited unless it falls in step with
Japan, China and South Korea. The focus of attention is on how
effectively the Obama administration's carrot-and-stick approach
will work to persuade the North to unclench its fist.

(3) Shaky Japan-U.S. alliance: Obama and Japan (Part 1) - Like an
old couple

YOMIURI (Page 1) (Almost full)
January 23, 2009

The air in Washington D.C. was freezing cold on the morning of
January 20. Japanese Ambassador to the U.S. Ichiro Fujisaki, 61,
while distributing disposable hand warmers to other ambassadors
around him, waited patiently for the arrival of (Barack Obama) for
his swearing-in ceremony that took place outdoors.

Fujisaki's seat was number 130 in the diplomatic corps section. The
seating was determined in the order of arrival at post. The seat of
Fujisaki, who arrived at post last May, was about 100 meters away
from Obama, who was to deliver his inaugural address.

All countries were extremely eager to build close ties with the new
U.S. Democratic administration that was launched after an eight-year
hiatus. Contrary to the physical distance between his seat and the
new U.S. President, Fujisaki, who had served as a minister-counselor
at the embassy in Washington during the Clinton administration, felt
a sense of closeness, thinking, "I have long known many officials
responsible for Japan policy."

Japan is not allowed to be totally consumed with optimism, however.
"Self-centered 'me-ism' used to be prevalent in the United States,
but the new President has now called for 'we-ism," Fujisaki noted.
Japan-U.S. relations would not be immune to such change.

Finding itself internationally isolated, the Bush administration in
some respects gave special consideration to Japan that supported the
Iraq war and other matters. The call for "we-ism" that can be
rephrased as "international cooperation" could be taken to signify
the new U.S. administration's intention to make greater demands of
other countries, especially its allies.

In reaction to the outcome of the U.S. presidential election, the
Foreign Ministry has come up with five challenges that must be
addressed by Japan in cooperation with the United States: (1)
deepening of the bilateral alliance, (2) securing peace and
stability in the Asia-Pacific region, (3) the financial crisis, (4)
the war on terror, and (5) global challenges (climate change,
nuclear arms reduction, African aid). Those challenges have been
conveyed to the United States. Japan made the move before being hit
by a tough nut to crack.


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Prime Minister Taro Aso, whose political base is weak due to
frequent changes of prime ministers, remains unable to demonstrate
strong leadership in security policy, over which the ruling bloc is
split. Aso failed to make his presence felt in formulating measures
against piracy in waters off Somalia, Africa. If the Democratic
Party of Japan led by Ichiro Ozawa who advocates an "equal
Japan-U.S. alliance" takes power, the country's security policy
might change drastically. The government is half-hearted when it
comes to security affairs, which constitutes the foundation of the
bilateral alliance. This can partly explain why the Aso
administration is eager to address such policy issues as the
financial crisis and climate change, in which it takes pride.

Engrossed in the transition of power, the United States is expected
to be ill-prepared for the creation of a post-Kyoto Protocol
framework which would come to a head in December this year. Japanese
lawmakers are on their toes for this year's Lower House election.
This makes it difficult to generate a path for Japan-U.S.
cooperation.

Center for Strategic and International Studies President John Hamre
took this view about the current state of Japan-U.S. relations:
"They are good but not exciting. They can be likened to the
relationship between and old husband and wife who do not talk to
each other even at a restaurant."

The establishment of a new administration can provide a golden
opportunity for reinvigorating an alliance. But Japan's ruling and
opposition parties have constantly been at loggerheads and worn
themselves out as a result.

(4) Futenma working teams to report flight survey results

RYUKYU SHIMPO (Page 2) (Full)
January 23, 2009

Regarding the planned relocation of the U.S. Marine Corps' Futenma
Air Station, the government will hold a third meeting of its two
working teams at the Cabinet Office on the afternoon of Jan. 27 with
Okinawa's prefectural and municipal officials. One of the working
teams is tasked with verifying the government's plan to build an
alternative facility for Futenma airfield and assessing the newly
planned facility's potential impact on its environs. The other
working team is to discuss ways to remove the danger of Futenma
airfield. The two working teams will meet for the first time in
three months since they met at the Cabinet Office's Okinawa branch
in OCTOBER last year. In the scheduled meeting, the working teams
will report the results of a fact-finding survey the government
conducted last summer to look into the flight paths of U.S. military
helicopters around Futenma airfield.

The Okinawa Defense Bureau has set monitoring equipment at five
points around Futenma airfield and looked into the flight paths of
Futenma-based helicopters from August through September last year.
The working team on Futenma's danger will report the results of its
survey analysis.

The working team on the government's construction plan and
environmental assessment will explain the current state of an
environmental impact assessment being conducted at the relocation
site.


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The working teams are positioned under a consultative body on the
relocation of Futenma airfield. The consultative body is made up of
cabinet ministers from the government and officials from Okinawa
Prefecture, including the governor and the heads of municipalities
in the prefecture's northern districts. Meanwhile, the working teams
are made up of working-level officials from the central government
and Okinawa's prefectural and municipal governments, with the
Defense Ministry Local Cooperation Bureau director general
presiding.

(5) Sales tax hike issue settled in ambiguous way due to concern
about its impact on upcoming Lower House election: LDP adopts
two-stage formula, giving priority to avoid creating gap in party

MAINICHI (Page 3) (Abridged slightly)
January 23, 2009

The Liberal Democratic Party (LDP) settled an internal battle over a
sales tax hike, by adopting a two-stage formula of specifying in a
supplementary provision of fiscal 2009 tax system reform-relate
bills that necessary legal measures are to be taken by fiscal 2011,
while stipulating the time of the increase in the tax in a separate
bill. The settlement was reached in an ambiguous way as a result of
priority having been given to the avoidance of internal discord.
However, the outcome has exposed a growing trend of members
maintaining a distance from Aso. It also gave the impression that
Prime Minister Aso, who advocates a hike in the sales tax in fiscal
2009 with an economic turnaround as the precondition, has given in.
The path for a hike in the sales tax has now become unclear.

Policy Research Council Chairman Kosuke Hori said at a meeting of
the LDP Fiscal and Financial Affairs Commission held at the LDP
headquarters on the morning of the 22nd, "I believe there are
various objections to the decision. However, this is the result of
full discussions. Please understand." Participants burst into
applause. Former Chief Cabinet Secretary Yasuhisa Shiozaki, who has
been opposing specifying a hike in the sale tax in three years'
time, praised the decision after the meeting, "The adoption of a
two-stage formula has considerably wiped away our concern."

The two-stage formula of separating a process for preparations for
the hike and the implementation of such surfaced when former Chief
Cabinet Secretary Nobutaka Machimura, chief organizer of the
Machimura faction, and Ibuki faction Chairman Bunmei Ibuki conferred
on the issue on the 15th. Hori compiled a compromise plan, based on
that formula and hastily underwent final coordination.

On the government's side, State Minister for Economic and Fiscal
Policy Kaoru Yosano and several others called for the removal of the
two-stage formula. However, Machimura has overcome the opposition,
saying, "We cannot contain moves of mid-ranking and junior members."
Former Prime Minister Shinzo Abe tried to persuade opponents. As
part of such efforts, he met with former Special Advisor to the
Prime Minister Hiroshige Seko.

In the end, lawmaker's fear of an adverse effect of protracted
internal confrontation on the upcoming election served as the
decisive element in settling the issue.

The government and the ruling camp are making all-out efforts for
early passage of the fiscal 2008 second extra budget and the fiscal
2009 budget in their effort to stimulate the economy. Amid the

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economic crisis growing even more serious, if the LDP engages in
hurley-burley, people would turn their back on it. One senior member
of a faction opposing the sales tax hike revealed, "If we had
pressed further, the administration would have collapsed. Since now
is not the time to do so, we stopped to do so."

Lawmakers' anxieties over the upcoming election that they cannot go
into the election on the basis of hiking the consumption tax
triggered the battle over the consumption tax hike. However, it was
also such anxieties that ended it.

No path for recapitalizing nation's fiscal base in sight

Now that the supplementary provision incorporates a two-stage
formula for a hike in the sales tax, a path for hiking the sales tax
starting in fiscal 2011 as advocated by Prime Minister Aso, has
become even more difficult.

Subcommission Chairman Hakuo Yanagisawa of the LDP Tax System
Research Commission at a meeting of the LDP Fiscal and Financial
Affairs Division on the 22nd said, "Whether tax system
amendment-related bills and a consumption tax hike can be handled as
a package or a two-stage formula, meaning putting off the actual
increase of the tax, can be handled as a package depends on the
economic situation." He stressed that there still remains a slim
chance of hiking the sales tax in fiscal 2011.

However, it is clear that the government has substantively
backpedaled from the mid-term program, in which it strongly hinted
at a sales tax hike in fiscal 2011, noting that legal measures
necessary for drastic reform of the tax system, including the
consumption tax, should be taken.

If the mid-term program is to be implemented, it would be possible
to consolidate related laws as a package, including a law
stipulating a range of a hike before the end of fiscal 2010, so that
a new consumption tax rate can be introduced in April 2011. Prime
Minister Aso and the Finance Ministry had intended to deal with a
case in which the economy continues to worsen, by establishing a
flexible article.

Under the two-stage formula, it may be possible to amend related
laws necessary to raise the consumption tax within fiscal 2010.
However, that is not enough to realize a consumption tax hike in
fiscal 2011. That is because the formula is attached with a "fetter"
that the timing and the range of the increase should be legislated,
after the trend of the domestic and global economies are
determined.

Move to oust Aso still remains

Following the settlement, Aso on the evening of the 22nd stressed to
reporters, "My initial plan has been adopted. I am glad my proposal
obtained understanding." However, there is no change in the fact
that the prime minister is unpopular, which is the primary cause of
concern felt by lawmakers in connection with the upcoming election.

Members of the Group of Voluntary Lawmakers who Are Seeking
Immediate Policy Realization, including former State Minister for
Administrative Reform Toshimitsu Motegi, who is cautious about a
consumption tax hike, met with Secretary General Hiroyuki Hosoda.
They asked him to immediately launch a project team for

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administrative reform as a premise for a tax hike in parallel with
Diet deliberations on bills related to amendment to the tax system.

Radical-minded mid-ranking and junior LDP members want to oust Aso
before the Lower House election. Such thinking will not go away.

(6) Editorial: We concerned about insufficient debate on MSDF
dispatch to Somalia

TOKYO SHIMBUN (Page 5) (Full)
January 23, 2009

The ruling parties approved a proposal to dispatch the Maritime
Self-Defense Force (MSDF) to take part in anti-piracy efforts off
Somalia under the present law. As gunfights can be expected, the
decision should have been made in a more cautious manner. There
seems to be no doubt that thorough discussion was not conducted. In
a normal situation, the Diet should have thoroughly vetted the
issue.

The ruling Liberal Democratic Party (LDP) and its coalition partner,
New Komeito yesterday gave the green light to send MSDF destroyers
to waters off Somalia, in the eastern part Africa, based on a
maritime police action provision in the Self-Defense Forces (SDF)
Law. They say that this is a stopgap measure until a new law is
enacted. Defense Minister Yasukazu Hamada will soon order the MSDF
to prepare for the mission.

A total of 20,000 vessels, including 2,000 Japanese ships, annually
pass through Somalian waters, a main artery. Attacks by pirates with
rockets and other artilleries have rapidly increased in these years,
causing damage to 111 vessels.

The international community has desperately tried to crack down on
piracy based on a resolution adopted by the United Nations. China
dispatched late last year warships to waters off the coast of
Somalia. South Korea has decided on a dispatch. It is understandable
for Japan to hurry to take such action, considering that it cannot
just sit on the fence.

However, is it possible to dispatch MSDF personnel under the present
law?

An order for maritime patrols is issued to the SDF when the Maritime
Security Agency (MSA) cannot carry out a policing action. Two orders
were issued in the past for maritime patrols in the Sea of Japan.
The law does not stipulate any geographical restrictions. If the SDF
can be dispatched to Africa, the SDF's scope of activity becomes
unlimited.

The ruling camp approved the action before thoroughly verifying the
reasons for the MSA being unable to conduct policing action. We
cannot help saying that a decision on the dispatch of MSDF ships was
made beforehand. Cautious and sufficient argument is required for
the SDF dispatch, which involves human lives.

MSDF destroyers will protect Japanese-registered vessels and foreign
ships with Japanese nationals and goods on board. Reportedly, the
MSDF personnel will be allowed to use arms only for legitimate
self-defense and emergency evacuation.

There seemed be an atmosphere in the ruling camp that the case of

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the Indian Navy having sunk a Thai fishing trawler captured by
pirates was regarded as emergency evacuation. We can't help feeling
this is a rough-and-ready argument.

Moreover, the Defense Ministry will formulate specific criteria for
the use of arms. It is questionable to dump such specific issues as
how to deal with situations that cannot be identified as legitimate
self-defense or emergency evacuation on the lap of the Defense
Ministry. It is not desirable in terms of civilian control.

Besides the MSDF dispatch, there must be a variety of contributions
Japan can provide such as offering know-how regarding anti-piracy
measures and funding to neighboring countries. There remain many
aspects of the pirate situation that we still do not know. These
matters should be discussed at the Diet first.

SDF personnel will find it troublesome if they are sent without
these checks.

ZUMWALT