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Viewing cable 06TOKYO2662, DAILY SUMMARY OF JAPANESE PRESS 05/15/06
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 06TOKYO2662 | 2006-05-15 08:38 | 2011-08-25 00:00 | UNCLASSIFIED | Embassy Tokyo |
VZCZCXRO4208
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #2662/01 1350838
ZNR UUUUU ZZH
P 150838Z MAY 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 2047
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 8801
RUEHFK/AMCONSUL FUKUOKA 6173
RUEHOK/AMCONSUL OSAKA KOBE 9387
RUEHNAG/AMCONSUL NAGOYA 6140
RUEHKSO/AMCONSUL SAPPORO 7338
RUEHBJ/AMEMBASSY BEIJING 2238
RUEHUL/AMEMBASSY SEOUL 8420
RUCNDT/USMISSION USUN NEW YORK 0243
UNCLAS SECTION 01 OF 14 TOKYO 002662
SIPDIS
SIPDIS
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST
DIVISION; TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS
OFFICE; SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY
ADVISOR; CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.
E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/15/06
INDEX:
(1) Poll on Koizumi cabinet, political parties
(2) Poll on Constitution
(3) Government, ruling parties waiting to see how US
congressman's concern expressed about prime minister's Yasukuni
visit will develop; Some speculate Yasukuni issue likely to be
major issue in the presidential election campaign this fall
(4) Yasukuni issue: LDP's Koga, chairman of the bereaved families
association, proposes giving consideration to separating Class-A
war criminals from rest of war dead
(5) Cabinet approval for US force realignment plans: Prime
Minister Koizumi: "No need to hurry. It would be fine if cabinet
approval obtained by late June"
(6) US Consul General Reich: Rejects possibility of heliport
construction at Futenma alternate facility; MCAS Futenma will be
in use until 2014
(7) UN contributions: Government may defer paying contributions,
determined to press Annan for breakthrough in reform plans
(8) Gov't mulls expanding economic aid to Iraq
(9) Government to establish "highly skilled workers" framework
for foreign workers; Ministries, agencies also looking for ways
to stem expansion
(10) Yuko Kawamoto, professor at Waseda University Graduate
School, calls for reestablishment of financial discipline in run-
up to removal of near-zero-interest-rate policy; Lessons Japanese
economy has learned from the past to be brought into question
ARTICLES:
(1) Poll on Koizumi cabinet, political parties
NIHON KEIZAI (Page 2) (Full)
May 15, 2006
Questions & Answers
(Figures shown in percentage. Parentheses denote findings from
the last survey in March.)
Q: Do you support the Koizumi cabinet?
Yes 49 (48)
No 39 (40)
Can't say (C/S) + don't know (D/K) 12 (12)
Q: Which political party do you support or like now?
Liberal Democratic Party (LDP) 44 (44)
Democratic Party of Japan (DPJ or Minshuto) 24 (19)
New Komeito (NK) 5 (3)
Japanese Communist Party (JCP) 2 (4)
Social Democratic Party (SDP or Shaminto) 2 (3)
People's New Party (PNP or Kokumin Shinto) 0 (0)
New Party Nippon (NPN or Shinto Nippon) 0 (0)
Other political parties 1 (1)
TOKYO 00002662 002 OF 014
None 18 (21)
C/S+D/K 5 (5)
Polling methodology: The survey was taken May 12-14 by Nikkei
Research Inc. over the telephone on a random digit dialing (RDD)
basis. For the survey, samples were chosen from among males and
females, aged 20 and over, across the nation. A total of 1,499
households with one or more voters were sampled, and answers were
obtained from 867 persons (57.8%).
(2) Poll on Constitution
ASAHI (Page 10) (Full)
May 3, 2006
Questions & Answers
(Figures shown in percentage, rounded off. Bracketed figures
denote proportions to all respondents. Parentheses denote the
results of a previous survey conducted in April 2005 unless
otherwise specified.)
Q: Which political party do you support now?
Liberal Democratic Party (LDP) 36
Democratic Party of Japan (DPJ or Minshuto) 15
New Komeito (NK) 3
Japanese Communist Party (JCP) 2
Social Democratic Party (SDP or Shaminto) 1
People's New Party (PNP or Kokumin Shinto) 0
New Party Nippon (NPN or Shinto Nippon) 0
Liberal League (LL or Jiyu Rengo) 0
Other political parties 1
None 37
No answer (N/A) + don't know (D/K) 5
Q: Are you aware of the Constitution in your daily life, or do
you think about it? (One choice only)
Often 6 (6)
Sometimes 34 (37)
Not very often 43 (44)
Not at all 17 (12)
Other answers (O/A) + N/A 0 (1)
Q: How much do you know about the Constitution?
Very well 4
Somewhat 43
Little 52
O/A+N/A 1
Q: The Diet and political parties are debating the advisability
of amending the Constitution. To what extent are you interested
in the issue of constitutional revision? (One choice only)
Very interested 16 (14)
Somewhat interested 49 (51)
Not very interested 27 (27)
Not interested at all 7 (6)
O/A+N/A 1 (2)
Q: Article 9 in the Constitution consists of two paragraphs that
declare Japan's war renunciation and its maintenance of no war
TOKYO 00002662 003 OF 014
potential. To what extent do you think this article has helped
with Japan's peace and prosperity? (One choice only)
Very much 25
Somewhat 49
Not very much 18
Not at all 2
O/A+N/A 6
Q: The Constitution describes nothing about the Self-Defense
Forces. The government, in its constitutional interpretation, has
so far taken the position that the SDF does not fall under the
status of "land, sea, and air forces, as well as other war
potential" in Article 9-2. Do you think it was good?
Yes 42
No 40
O/A+N/A 18
Q: Do you think the Constitution should be amended to expressly
stipulate the SDF's existence?
Yes 62
No 28
O/A+N/A 10
Q: (Only for those who answered "yes") What do you think is the
best way to expressly stipulate the SDF's existence? (One choice
only)
Rewrite Article 9-1 or Article9-2
31 (19)
Leave Article 9's provisions intact and add a new provision
64 (40)
O/A+N/A 5 (3)
Q: (Only for those who answered "yes") Are you in favor of
defining the SDF as a military entity?
Yes 38 (23)
No 54 (34)
O/A+N/A 8 (5)
Q: (Only for those who answered "no") What do you think should be
done about the SDF? (One choice only)
Maintain its current status 66 (18)
Downscale 27 (8)
Abolish 4 (1)
O/A+N/A 3 (1)
Q: The Diet and political parties are debating problems about the
right of collective self-defense over the Japan-US Security
Treaty and the SDF's overseas activities. The right of collective
self-defense is that if and when an ally or its armed forces are
attacked, Japan will regard the attack as an attack against Japan
and will fight with the ally against the enemy, even though Japan
is not attacked. The government's interpretation is that Japan
has the right but is not allowed to use the right according to
Article 9 in the Constitution. What do you think about the right
of collective self-defense? (One choice only)
Japan should continue its prohibition against the right of
TOKYO 00002662 004 OF 014
collective self-defense 53
Japan should be allowed to use the right of collective self-
defense 36
O/A+N/A 11
Q: What do you think should be done about the SDF's overseas
activities from now on? (One choice only)
The SDF should not be engaged in any overseas activities
11 (8)
The SDF should be allowed to participate in United Nations
peacekeeping operations like those in Cambodia
46 (45)
The SDF should be allowed to help disputed countries like Iraq
with their nation-rebuilding efforts 22 (27)
The SDF should be allowed to use armed force if the SDF needs to
do so in Japan's national interests 15 (15)
O/A+N/A 6 (5)
Q: What do you think about amending Article 9 in the
Constitution? (One choice only)
Leave both paragraphs intact 42
Rewrite the first paragraph only 9
Rewrite the second paragraph only 16
Rewrite both paragraphs 18
O/A+N/A 15
Q: Which opinion is closest to yours about the emperor system?
(One choice only. Parentheses denote the results of a survey
conducted in 2004.)
Define the emperor as Japan's head of state 4 (4)
The emperor should remain a symbol 84 (83)
The emperor system should be abolished 10 (10)
O/A+N/A 2 (3)
Q: Do you think the Constitution should be amended?
Yes 55 (56)
No 32 (33)
O/A+N/A 13 (11)
Q: (Only for those who answered "yes") Why? (One choice only)
Because new rights and systems should be incorporated 38
(21)
Because it's better to incorporate more of the people's
obligations 17 (9)
Because there are problems about Article 9 9 (5)
Because the Constitution has never been revised since its
establishment 13 (7)
Because we want to create a new constitution of our own, instead
of the current postwar constitution the US imposed on Japan
21 (11)
O/A+N/A 2 (2)
Q: (Only for those who answered "yes") Do you think it is
urgently necessary to amend the Constitution?
Yes 56 (31)
No 39 (21)
O/A+N/A 5 (3)
TOKYO 00002662 005 OF 014
Q: (Only for those who answered "yes") Is that because you would
like Japan to change substantially?
Yes 38 (21)
No 57 (31)
O/A+N/A 5 (3)
Q: (Only for those who answered "no") Why? (One choice only)
Because the Constitution helps guarantee freedom and rights
17 (5)
Because the Constitution has taken root in the nation
21 (10)
Because Article 9 may be rewritten 17 (6)
Because the people's obligations will likely be heavier
6 (2)
Because there's no need to revise the Constitution though it has
some problems 23 (7)
O/A+N/A 6 (2)
Q: Amendments to the Constitution require the affirmative vote of
a majority of all voters through a national referendum. However,
Japan still does not have a law that stipulates procedures for
it. What do you think about legislation for a national
referendum? (One choice only)
It would be better to establish the law at an early date because
it is necessary to go through such procedures 32
There's no need to establish the law because the Diet has yet to
fully debate whether to revise the Constitution 53
The law should not be established because it will lead to
constitutional revision 8
O/A+N/A 7
Q: Do you think it would be all right to let Dietmembers debate
the issue of constitutional revision?
Yes 22
No 72
O/A+N/A 6
Q: Would you like to take part in the discussion of
constitutional revision?
Yes 43
No 49
O/A+N/A 8
Polling methodology: The survey was conducted April 15-16 on a
face-to-face basis along with a survey of public attitudes over
war responsibility. A total of 3,000 persons were chosen from
among the nation's voting population on a stratified two-stage
random-sampling basis. Valid answers were obtained from 1,730
persons (58%). In the breakdown of respondents, males accounted
for 47% and females at 53%.
(3) Government, ruling parties waiting to see how US
congressman's concern expressed about prime minister's Yasukuni
visit will develop; Some speculate Yasukuni issue likely to be
major issue in the presidential election campaign this fall
ASAHI (Page 2) (Full)
TOKYO 00002662 006 OF 014
May 14, 2006
A senior member of the US Congress has expressed concern about
Prime Minister Koizumi's visits to Yasukuni Shrine. Japanese
government and ruling coalition officials are taking this message
quietly, with one aide to the prime minister remarking: "Only one
person at present has spoken out." A senior Foreign Ministry
official emphasized that the Bush administration has never
indicated any intention to meddle in the Yasukuni issue. In the
ruling Liberal Democratic Party (LDP), as well, many take the
view that it will not have an immediate effect on the Japan-US
alliance. But some in the party have begun speculating that it
will give impetus to the tendency of making the Yasukuni issue
and Asia diplomacy major issues in the upcoming LDP presidential
election campaign in September.
The congressional concern was revealed in a letter sent by Henry
Hyde, chairman of the US House Committee on International Affairs
to Speaker of the House of Representatives Dennis Hastert. The
letter urged Prime Minister Koizumi to make clear he will not
visit Yasukuni Shrine if he wishes to address the Congress during
his planned visit to the United States in late June.
A Japanese government official gave this analysis yesterday:
"Such a comment doesn't represent American public opinion. The
relationship between President Bush and Prime Minister Koizumi is
in good shape. The prime minister's speech before Congress could
give rise to applause but it will never be something despised."
So far, Koizumi has explained in his Diet replies: "The true
intention of my shrine visits is understood among US government
officials."
One foreign policy expert in the LDP yesterday commented: "The
House speaker is unlikely to stand in the way of the prime
minister's desire to address the Congress." Several Japanese
government officials, pointing out that the prime minister's
itinerary for his US tour has yet to be fixed, rejected as
speculation the rumor that the Japanese government was sounding
out the US government about the prime minister addressing the US
Congress.
The number of Japan experts in the US critical of the prime
minister's Yasukuni visits has been on the increase. Their
primary concern is that the fallout from reactions in China and
South Korea to such shrine visits may destabilize Asia. They fear
that such visits could lead to conflict between Japan and the US
over perceptions of the past war.
A senior Foreign Ministry official, however, said firmly: "The US
government has no intention of poking its nose into the Yasukuni
issue." LDP lawmakers who traveled to the US earlier this month
said although White House and Department of State officials, as
well as members of the Congress, all brought up the Yasukuni
issue, they did so only because they thought "it would not be
wise for Japan and China to heighten tensions between them."
However, former LDP Secretary General Koichi Kato said yesterday:
"The logic of the so-called 'Koizumi diplomacy' is that having
good relations with the US ensures good relations with other
countries, but Koizumi now has been hit from behind by the US. He
has made a diplomatic blunder."
Another LDP lawmaker remarked, "Just because other countries tell
TOKYO 00002662 007 OF 014
us to do so, we should change our stance: that trend will
continue." He then added, "Because of this, the Yasukuni issue
will likely be on the list of campaign issues in the LDP
presidential race."
(4) Yasukuni issue: LDP's Koga, chairman of the bereaved families
association, proposes giving consideration to separating Class-A
war criminals from rest of war dead
TOKYO (Page 3) (Full)
May 13, 2006
It was learned on May 12 that former Liberal Democratic Party
(LDP) Secretary General Makoto Koga, who is also the chairman of
the Nippon Izokukai or association of the bereaved families of
the nation's war dead, has urged as a policy proposal for the LDP
presidential election campaign in September that the separation
of Class-A war criminals enshrined at Yasukuni Shrine be "subject
to consideration." The reason for such would be in order to find
a breakthrough in Japan's relations with China and South Korea
that have been strained by Prime Minister Junichiro Koizumi's
visits to that shrine. Yasukuni Shrine has strongly rejected
such a separation. Views within the bereaved families association
also are split into pros and con, but given Koga's strong
influence in the association, his bringing up the issue of
separation is likely to spark debate within and outside the
organization.
The proposal will be vetted during the compilation of a policy
platform in June by the Niwa-Koga faction, of which Koga is co-
chairman. Although Koga, as chairman of the Izokukai, has taken
a position of urging the prime minister to pay homage at
Yasukuni, the proposal is generally critical of such visits to
Yasukuni by Prime Minister Koizumi. It points out: "Relations
with China have become strained to the extent that summit
exchanges have been frozen, and a sense that Japan's diplomacy
has reached an impasse is rapidly building."
In addition, the proposal clearly states: "Views are split within
Japan and abroad over whether all the souls of the war dead
should be made subject (to enshrinement (at Yasukuni)). In order
to make it possible for many more people, including foreigners,
to pay homage (to the war dead at Yasukuni), the possibility of
separating some of the souls of those who did not die in battle
should be made subject of consideration."
Regarding the treatment of Class-A war criminals, the Izokukai
takes the position based on the principle of the separation of
state and religion that: "this is a judgment that should be made
by Yasukuni Shrine, and politics should not intervene." However,
China and the Republic of Korea are criticizing the Prime
Minister's Yasukuni visits because Class-A war criminals are
jointly enshrined there. Koga's view is that the cause of China
and South Korea's objections must be removed.
(5) Cabinet approval for US force realignment plans: Prime
Minister Koizumi: "No need to hurry. It would be fine if cabinet
approval obtained by late June"
TOKYO SHIMBUN (Page 2) (Full)
May 13, 2006
Prime Minister Junichiro Koizumi met late yesterday with Defense
TOKYO 00002662 008 OF 014
Agency (JDA) Director-General Fukushiro Nukaga and senior ruling
coalition members to exchange views on plans for the realignment
of US forces in Japan. Although the government is gearing up to
obtain by early next week if possible cabinet approval for
matters relating to US force realignment plan, Koizumi said,
"There's no need to hurry. It would be fine if cabinet approval
were obtained by the time of the Japan-US summit meeting (slated
for late June) is held."
Cabinet approval will confirm the government's policy for
implementing the realignment plan contained in the final report
agreed to by Japan and the United States. In the meeting
yesterday, the participants agreed to stipulate in the cabinet
decision the government's intention to enhance efforts to develop
the northern part of Okinawa Prefecture, including Nago City,
where the US Marine Corps' Futenma Air Station is to be relocated
from Ginowan City.
(6) US Consul General Reich: Rejects possibility of heliport
construction at Futenma alternate facility; MCAS Futenma will be
in use until 2014
RYUKYU SHIMPO (Page 1) (Abridged)
May 12, 2006
With the signing of a final agreement between Japan and the
United States on the realignment of US forces in Japan, Thomas
Reich, consul general at the US Consulate in Okinawa, responded
to an interview request from this newspaper. In it, he denied the
possibility of implementing a plan for a temporary heliport, as
requested of the central government by Okinawa Prefecture. Reich
noted: "The US and Japan agreed to a plan that has a V-shaped
runway; it does not include a heliport." He also stressed that
until the runway is completed by 2014, as planned, Futenma Air
Station would continue to be used. "The agreement reached between
the US and Japanese governments on finding a means to eliminate
the danger of Futenma involves the construction of a new
alternate facility as quickly as possible." This is the first
time for the US government to formally reject the construction of
a heliport (at the Nago site).
He also gave his impression of the memorandum of confirmation
signed by Okinawa Governor Keiichi Inamine and Defense Agency
Director General Fukushiro Nukaga: "The governor signaled that
there has been visible progress in the reduction of the burden on
Okinawa and that he is cooperating with the central government.
This is good news for the people of Okinawa, don't you think?"
Answering the objections of the City of Nago to the length of the
runway on the planned new alternate facility for Futenma, he
stated: "There will be no change in the length of the runway; the
length of the runway must be 1,800 meters."
Asked about the elimination of the danger of Futenma Air Station
prior to the completion of the alternate facility, Reich
stressed: "We realize it will take time (until the alternate
facility if built). During that time, although various aircraft
will continue to fly over Futenma, they will fly overhead,
observing the same safety measures as before. The best way to end
the flights is to complete the alternate facility quickly.
(7) UN contributions: Government may defer paying contributions,
determined to press Annan for breakthrough in reform plans
TOKYO 00002662 009 OF 014
SANKEI (Page 3) (Abridged slightly)
May 15, 2006
Japan is likely to put off its financial contributions to the
United Nations in the event talks on the scale of assessment of
member states for the period starting 2007 fail to reach a
conclusion before the end of this year. UN reform plans produced
by a number of countries, such as Japan and the United States,
have drawn objections from China and Russia. There is a
possibility that the UN Committee on Contributions will begin
talks in June before a decision is made on reform plans. The
government plans to urge UN Secretary General Kofi Annan, who is
scheduled to arrive in Japan tomorrow, to display strong
leadership in producing a conclusion at the upcoming talks.
This year the dues of member states will be assessed, something
that occurs every three years. Japan presented to the UN General
Assembly Fifth Committee a plan to set the floor for permanent UN
Security Council members at 3% or 5% of the total. The United
States has also come up with a scheme to determine each country's
share based on GNP calculated according to purchasing power
parity. Altogether, eight reform plans have been tabled.
Currently, Japan's share is 19.5%, the second largest following
America's 22.0%. Japan's share is greater than the remaining four
permanent UNSC -- Britain, France, China, and Russia -- combined
(15.3%).
Japan's bid for a permanent UNSC seat last year ended in failure
due partly to China's maneuvering. There are growing calls in the
government for permanent members with special privileges to make
financial contributions befitting their status. Based on this
view, Japan presented a plan to markedly increase the shares of
China and Russia.
During the period between 1971 and 1979, China contributed 4.0%
to 5.5% of the total, and the Soviet Union 11.33% to 14.18%. "In
view of their past contributions, there is every reason to seek
greater contributions of China and Russia," a Foreign Ministry
source said.
It is customary for the Fifth Committee to pass a resolution to
order the Contributions Committee to calculate member states'
contributions based on reform plans presented by member countries
and for the Contributions Committee to report the results back to
the Fifth Committee before discussing calculation methods. But
the Fifth Committee has been unable to pass a resolution due to
strong opposition from China and Russia.
The Contributions Committee will meet in June even if the Fifth
Committee fails to pass a resolution. "The Fifth Committee has
never failed to pass a resolution; how the Contributions
Committee will conduct discussion is totally unpredictable," a UN
source noted.
Usually the UN General Assembly begins discussion on specific
ways to reform the scale of assessment of member states in late
September following the Fifth Committee's discussion of
calculation methods to reach a conclusion in late December.
Customarily a decision is made unanimously on new shares of
financial contributions of member states. Fiscal 2007 may roll in
before a decision is made on the new scale of assessment of
TOKYO 00002662 010 OF 014
member states.
In such a case, the government will have to defer paying Japan's
financial contributions.
Current shares and projected shares (in %)
Current Floor at 3% Floor at 5% US plan
Japan 19.5 15.7 14.8 7.2
US 22.0 22.0 22.0 21.5
UK 6.1 6.6 6.2 3.5
France 6.0 6.1 5.8 3.3
China 2.1 3.0 5.0 13.0
Russia 1.1 3.0 5.0 2.5
(8) Gov't mulls expanding economic aid to Iraq
NIHON KEIZAI (Page 2) (Abridged)
May 13, 2006
Japan will prepare an additional aid package for Iraq, which will
shortly launch a permanent government. The government has already
announced an Iraq aid plan that features yen loans totaling
approximately 76.5 billion yen. In addition, the government is
also considering another package of financial aid to Iraq. Prime
Minister Junichiro Koizumi will call Iraq's Prime Minister-
designate Maliki after his cabinet is inaugurated to tell him
about Japan's new aid plan. Japan currently deploys Ground Self-
Defense Force troops in Iraq. After their pullout of Iraq, Japan
will instead expand the scope of Air Self-Defense Force
activities in that country. The ASDF will therefore strengthen
the equipment of its transport planes. The government is also
planning to send a special envoy to Iraq, if the political
situation in that country permits, in order to find out what kind
of assistance the Iraqi government needs.
Japan has suspended its yen loans to Iraq since 1985. In
February, however, the government announced a plan to resume its
loan aid to Iraq. In concrete terms, the government has pledged
to cooperate on three projects, such as renovating berth
facilities at the southern Iraqi port of Umm Qasr and irrigating
land around the country. After the Iraqi government takes office,
Koizumi will tell Iraq that Japan will consider additional aid to
Iraq for its reconstruction. The prime minister is expected to
show a plan to expand Japan's financial assistance, envisioning
the pullout of GSDF troops.
The ASDF, currently stationing its troops at Ali Al Salem Air
Base in Kuwait, airlifts supplies to Taril Airport for the
detachment of GSDF troops deployed in the southern Iraqi city of
Samawah. The government has plans to expand the scope of ASDF
airlift missions as far as Baghdad. The ASDF will equip its C-130
transports with a traffic collision avoidance system, or TCAS for
short. The skies over Baghdad are overcrowded with US military
and multinational force helicopters, so the government deemed it
necessary to equip ASDF C-130s with TCAS. The government would
like to recall the GSDF troops along with the pullout of Samawah-
based British and Australian security troops.
(9) Government to establish "highly skilled workers" framework
for foreign workers; Ministries, agencies also looking for ways
to stem expansion
TOKYO 00002662 011 OF 014
ASAHI (Page 2) (Abridged)
May 15, 2006
The government has begun considering adding a "highly skilled
worker" framework to the general manufacturing sector for
accepting more foreign workers. The aim is to expand the existing
framework while stemming the growing acceptance of foreign
workers to a certain extent. The government plans to incorporate
the new category in the "big-boned policy guidelines" to be
produced in June by the Council on Economic and Fiscal Policy
(CEFP). Fierce maneuvering is likely to occur between the CEFP
private-sector members eager to expand the framework for foreign
workers and government offices reluctant to open up the door any
further.
The CEFP discussed the approach as a means to increase Japan's
international competitiveness. To reflect government offices'
view, senior vice ministers of concerned offices, such as the
Health, Labor and Welfare Ministry and the Justice Ministry, also
discussed the matter since March and confirmed the policy course
in April not to accept unskilled foreign workers. In the May 11
meeting, they discussed the definition and the scope of "highly
skilled workers," as proposed by the Economy, Trade and Industry,
and decided to study sectors that can accept such workers.
The government has granted residence status only to aliens with
special skills, such as chefs who cook foreign foods. The
category of "highly skilled workers" will expand residence status
to include the general manufacturing sector.
The economic community has been eager to accept more foreign
workers, while ministries and agencies have been reluctant to do
so for fear of an adverse effect on employment and security.
The four private sector CEFP members -- two business leaders and
two economists -- insisted on the need to accept more foreign
workers for enhancing Japan's international competitiveness. They
are aiming for relaxed requirements for residence status and
expanded acceptance of foreign workers outside traditional areas,
such as nursing care.
The Health, Labor and Welfare Ministry opposed expanding the
framework for accepting nursing care providers. The four private-
sector CEFP members proposed getting help from foreign workers to
make up for declining labor force. Health, Labor and Welfare
Minister Jiro Kawasaki rebutted, "We should first consider
employing a large number of young Japanese men and women (out of
work)."
Prime Minister Junichiro Koizumi, chair of the CEFP, holds a
positive view about accepting more foreign workers, but he is
also reluctant to open the door fully.
(10) Yuko Kawamoto, professor at Waseda University Graduate
School, calls for reestablishment of financial discipline in run-
up to removal of near-zero-interest-rate policy; Lessons Japanese
economy has learned from the past to be brought into question
SANKEI (Page 11) (Full)
May 12, 2006
Meaning of normalization should be understood
TOKYO 00002662 012 OF 014
The Bank of Japan (BOJ), the watchdog of the financial market, is
expected to change its present zero-interest-rate policy by the
early fall.
The zero-interest-rate policy is intended to settle the non-
performing loan issue that has stemmed from the bursting of the
bubble economy and to prop up the economic slump. It has been
said that this policy was an experiment unprecedented in the
world's financial history. Though it was an emergency measure the
government has unavoidably adopted, because economic stimulation
measures by means of fiscal outlays were not in the cards, its
after effects have been of concern.
For instance, a near-zero interest rate means that borrowing
money costs virtually nothing, and the burden of interest
payments is only minimal. Under such a policy, companies in bad
shape and heavily indebted companies tend to be preserved and
protected. Banks tend to slacken their efforts to monitor
borrowers' business management and urge them to become more
efficient. The same holds true of the management of the state.
The government can afford to leave its fiscal deficit unattended,
taking advantage of the situation in which it can borrow money
(issuing government bonds) at low interest rates.
It has now become possible for the BOJ to shift from the near-
zero-interest policy, which has such unsound elements, because
the Japanese economy is about to emerge from its long-standing
slump. What is to happen is the normalization of financial policy
as a result of the recovery of the financial services sector.
This may basically be a good thing.
However, being long accustomed to the zero interest rate and the
fall of the prices of such assets as stocks and real estate, the
Japanese economy has had no opportunities to experience the works
of financial functions. All economic entities must understand
what the normalization of interest rate policy means and be
prepared for it. The key phrase is the reestablishment of
financial discipline.
Banks still strapped with excessively competitive structure
If the zero-interest rate policy is removed, the market will
regain its function to discover appropriate prices. Should that
occur, potential risks of business undertakings would be assessed
and priced. Low interest rates will be set for business with high
potential income and future prospects, and rather high interest
rates would be imposed on risky projects, discounting potential
risks. The financial system will thus display its original
function of bringing about a favorable cycle for the efficient
management of the economy.
On the other hand, a rise in interest rates would increase the
burden of economic entities with a large amount of debts. Medium
to small-size businesses' ratio of borrowings to capital is twice
as much as that of leading companies. The prices of government
bonds, which banks hold in bulk, may fall, causing latent losses
to them.
The government's debts are extremely huge. They are twice as much
as those held by British, German or US governments in ratio to
gross domestic production (GDP). Raising interest rates would be
hard now when the primary balance is in the red and the nation's
debts are continuing to snowball. Both the government and medium
TOKYO 00002662 013 OF 014
to small-size businesses must speed up efforts to make their
balance sheets sound and reestablish discipline.
Some are expected to oppose the move to remove the zero-interest-
rate policy, citing such reasons as that the burden of interest
will become heavy for medium to small-size businesses, that the
government's fiscal reconstruction process will become slow or
that it will usher in a strong yen.
However, if we ride on the currents of such an argument, it will
mean that we have learned nothing from the past. To begin with,
some have even pointed out that the delay in the raising of
interest rates for fear of ushering in a strong yen caused the
excessive liquidity that gave rise to the bubble economy in the
1990s.
It is not that higher interests rates are more favorable for the
economy. how to steer financial policy and keep a good balance
are always important. As the economy picks up, many projects are
now about to be implemented. At such a time, there will appear a
mountain of non-performing loans, if there is no financial
discipline.
As a matter of fact, Japan's banking sector is still strapped
with excessively competitive structure, and efforts to set
interest rates on a par with potential risks involved in business
undertakings has made little progress. Cases of regional banks
can be well imagined. Even a proposal has recently been made to
inject public money into one of those banks.
Risk of expansion without disciplines
In order to normalize the financial services system, banks need
to speed up their efforts to pay off the public money they have
received. At present, leading banks still have to repay 6
trillion yen. Unless this money is paid back to the state
coffers, freedom of managing the economy would be constraint.
Fortunately, it has been reported that mega banks are expected to
complete repayments before the end of fiscal 2006. In 30
prefectures out of 47, bank lending in the term ending March this
year exceeded the previous year's level. Banks are thus receiving
a boost, but they should not neglect efforts to reform their
profit-making structure.
The greatest challenge in reestablishing financial discipline is
how to handle privatized postal services companies. The objective
of postal savings was to correct the distorted cycle of state
funds. Privatized postal services companies will be run by
managers from the private sector, while the companies will
continue to be protected by the government with their entire
stocks held by it for the time being. It will take a decade
before they are completely privatized.
Differences between the public and private sectors are whether
they can continue business without regard to profitability.
Chances are high that as long as privatized postal services
companies remain under government control and protection, they
might act contrary to rational economic activities. For instance,
they might excessively extend loans to highly risky businesses.
What would happen, if Japan's private banks were involved in such
competition? The financial services industry is struggling to
emerge from the non-performing loan problem. An expansion of the
privatized postal services companies without discipline at such a
TOKYO 00002662 014 OF 014
time would pose a major risk to the Japanese economy.
DONOVAN