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UNCLAS SECTION 01 OF 08 TOKYO 000708 
 
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 02/08/06 
 
 
INDEX: 
 
(1) US Embassy unit chief states, "No decision yet on Kanoya" as 
destination for refueling tankers, revealing different perception 
than that of Japanese government 
 
(2) Prime Minister Koizumi taking tough stand in debate on social 
divide, stressing good aspect of "equal opportunity"; Some in 
ruling camp concerned about excessive reforms; Debate could have 
impact on LDP presidential race 
 
(3) Economic growth argument intensifying 
 
(4) Retired DFAA officials land jobs in 60 construction firms; 
90% of contracts for large projects awarded to firms employing ex- 
officials 
 
(5) Political insights from Hiroshi Hoshi - Koizumi 
administration now entering terminal stage; Was reform a whim? 
 
(6) Children in Tokyo go to bed and get up earlier but addicted 
to TV, according to surveys in five Asian cities 
 
ARTICLES: 
 
(1) US Embassy unit chief states, "No decision yet on Kanoya" as 
destination for refueling tankers, revealing different perception 
than that of Japanese government 
 
MINAMI-NIPPON SHIMBUN (Page 27) (Excerpt) 
February 8, 2006 
 
Kevin Maher, the security unit chief of the US Embassy in Japan 
who is responsible for US forces Japan realignment affairs, 
responded to news coverage by this newspaper on Feb. 7 in Fukuoka 
City.  He made this remark concerning the destination for the 
relocation of KC-130 air-refueling tankers: "The US and Japanese 
governments, as well as the US government and the US military are 
discussing which would be better, the Maritime Self-Defense 
Force's Kanoya Air Base or Iwakuni Air Station (Yamaguchi 
Prefecture). A decision has yet to be made."  His answer revealed 
a different view than that of the Japanese government, which is 
trying to persuade the local community, premised on a move to 
Kanoya. 
 
(2) Prime Minister Koizumi taking tough stand in debate on social 
divide, stressing good aspect of "equal opportunity"; Some in 
ruling camp concerned about excessive reforms; Debate could have 
impact on LDP presidential race 
 
MAINICHI (Page 5) (Full) 
February 8, 2006 
 
The question of whether the Koizumi reform drive may have 
expanded the "social divide" across Japan has now become a main 
issue in the ongoing regular Diet session. Seiji Maehara, 
president of the main opposition party Minshuto (Democratic Party 
of Japan), questioned Prime Minister Junichiro Koizumi about his 
views on the social divide at a House of Representatives Budget 
Committee session yesterday, saying, "Signs of social disparity 
remain strong." The prime minister initially denied that social 
disparity was widening in the country, but he has not denied such 
a social divide exists, in an attempt to prevent the opposition 
 
TOKYO 00000708  002 OF 008 
 
 
from getting further into the adverse effects of his reform 
initiative. He is now gradually underscoring the positive aspects 
of "equal opportunity." Voices concerned about his "excessive" 
reforms are now often heard in the ruling camp. Therefore, the 
social-divide issue will likely have an impact on the September 
LDP presidential race. 
 
Maehara questioned, "How do you deal with the situation where 
social disparity is spreading across even children in society?" 
 
Koizumi replied: "There is no need to be pessimistic about those 
performing poorly in school. However, I would like to give 
opportunities to those with a desire to study." 
 
Maehara: "You lack prudence in your answer." 
 
Although Maehara tried to engage in heated debate with Koizumi on 
the social-divide issue, Koizumi did not give him direct answers 
but keep using the word "opportunity." He responded to Maehara's 
question by saying, "I have said that opportunities should be 
provided." He recently stated at the Diet, "I don't think that 
having such a gap is a bad thing." He is concerned that the 
social divide issue would highlight the negative effects of his 
deregulatory measures, and as a result, that his reform drive 
would come under criticism. He stressed: "We should stop trying 
to drag down capable people." What he meant was that the social 
divide brought about by deregulation should not be dismissed, but 
providing opportunities is even more important. LDP Policy 
Research Council Chairman Hidenao Nakagawa, a supporter for 
Koizumi, stated in a Lower House Budget Committee meeting on Feb. 
6, "In order to correct the widening social gap, stopping the 
reforms would be the silliest thing to do." 
 
Maehara, however, linked the bid-rigging scandal involving the 
Defense Facilities Administration Agency (DFAA) to the issue of 
the widening social gap, posing this question: "The way money is 
being used is wrong. Too much tax money is spent for public works 
projects, but investment in human resources remains small." 
Koizumi denied the fact that poverty is increasing. Maehara has 
assumed that if a mood spreads that Koizumi is conducting 
politics unaware of the social reality, public support for 
Koizumi would decrease. In the committee meeting on the 6th, 
former labor minister Bunmei Ibuki indirectly warned Koizumi: 
"Unless we use (market principles) consciously and modestly, 
problems like a social divide will unavoidably emerge." 
 
Given the circumstance, the widening gap will likely become an 
important issue in the September LDP presidential race. The 
presidential election is a good opportunity to sum up the Koizumi 
structural reform. Post-Koizumi contenders will have to decide on 
which aspect -- the positive or negative effects of the reforms - 
- to place emphasis on in their campaigns. 
 
Foreign Minister Taro Aso is concerned about the words "social 
divide" having wings. He sought to check the mood denying the 
reforms in a press conference in January, saying, "I wonder 
whether the social disparity is really widening. Is it that 
serious? It is dangerous to talk in that sense." Chief Cabinet 
Secretary Shinzo Abe said, "We will not walk on a path that will 
 
SIPDIS 
lead to a Japan where the law of jungle prevails," but he 
stressed the achievements of the reforms. 
 
Finance Minister Sadakazu Tanigaki, meanwhile, pointed out the 
 
TOKYO 00000708  003 OF 008 
 
 
importance of creating a society that supports families and 
communities. He sounded the alarm the tendency of dividing 
society in two. Former Chief Cabinet Secretary Takeo Fukuda also 
expressed his concern about the widening gap, noting, "We must 
pay attention to the regional gaps." 
 
Senior LDP House of Councillors members, including Chairman Mikio 
Aoki, are becoming aware of the social divide issue with next 
year's Upper House elections in mind. The issue will likely have 
an impact on voting trends in the presidential election. 
 
(3) Economic growth argument intensifying 
 
ASAHI (Page 2) (Slightly abridged) 
February 7, 2006 
 
LDP counters pursuit by opposition camp: "A social divide has 
emerged as a result of Koizumi reform drive" - "Economic 
expansion is a good medicine" 
 
Taking advantage of the Livedoor incident, the opposition camp is 
now intensifying its pursuit of the emergence of a social divide, 
calling it the shady by-product of the Koizumi reform initiative. 
At the Lower House Budget Committee session in the Diet 
yesterday, Hidenao Nakagawa, chairman of the Liberal Democratic 
Party (LDP) Policy Research Council, whose pet argument is that a 
social divide can be prevented by achieving economic growth 
through reform, opened counter-offensives against the opposition 
bloc. Nakagawa, who calls himself a growth chairman, blasted the 
opposition camp: "It is important to make Japan out as a winner 
on the whole. The opposition parties are implicitly calling for a 
big government. There has now appeared the possibility of their 
pulling Japan back into the darkness and making it a loser in the 
world." 
 
He noted, "From the perspective of correcting the social divide, 
it is most foolish to set back the hands of the clock by stopping 
our reform efforts." As a reason for the need to speed up the 
Koizumi reform drive, he once again stressed, "Companies and 
people with growth potential will serve as an engine and pull the 
Japanese economy as a whole, as the reform progresses." 
 
When the prime minister fell in step with him, replying, "Our 
target is to attain a society where economic growth can be 
expected in order to make all people affluent." Proclaiming a 
goal of achieving a nominal economic growth rate of 4%, Nakagawa 
categorically said, "It is true that economic growth is a good 
medicine for the correction of a social divide." 
 
With the emergence of a set of three blunders, including the 
earthquake-proof data falsification scam, the government and the 
LDP are now acting on the defensive. A Diet reply given by 
Nakagawa over the US beef import issue has even stalled debates. 
As fiscal 2006 budget bill deliberations just started that day, 
both the government and the LDP were frantic about solidifying 
their footing. 
 
Availing himself of his display of closeness to the prime 
minister, Nakagawa later on the evening of the same day indicated 
his view on qualifications required from post-Koizumi contenders, 
"A person who supports a policy of attaining a nominal growth 
rate of 4% would be desirable as a candidate to succeed the prime 
minister." 
 
TOKYO 00000708  004 OF 008 
 
 
 
Deep gap within ruling camp: "Attaining a nominal growth rate of 
4-5% is possible" - "Steady efforts for fiscal reconstruction are 
needed" 
 
However, the views of the government and the LDP on the issue are 
not unanimous. 
 
There is a rift over the issue in terms of whether it is possible 
to achieve a nominal growth rate of 4-5% and whether there are 
any harmful effects in such a policy, if attained. There is no 
objection to the argument that it is important to raise a 
potential growth rate, the barometer for the real potential of 
the Japanese economy. However, the problem is inflation rates. 
 
During a meeting of the Council on Economic and Fiscal Policy 
(CEFP), held on Feb. 1, a fierce debate took place between 
Internal Affairs and Communications Minister Heizo Takenaka, who 
is close to Nakagawa, and Hiroshi Yoshikawa, professor at a Tokyo 
University graduate school, and a CEFP member, who supports Kaoru 
Yosano, State Minister in charge of Economic and Fiscal Policy. 
 
Takenaka: "In reconstructing national finances, it is a steady 
premise to target a nominal growth rate of 4% with a potential 
growth rate at 2% and inflation rate at 2%." 
 
Yoshikawa: "Raising a nominal growth rate too high is an 
inflation policy." 
 
A projected nominal growth rate, in particular, an inflation 
rate, will affect fundamental issues, such as fiscal 
reconstruction measures, including a hike in the consumption tax, 
and a timeline for the Bank of Japan (BOJ) ending its 
quantitative easing policy. 
 
Takenaka and Nakagawa insist that a target for a nominal growth 
rate be set, based on a somewhat high potential growth rate, 
expected to occur as a result of structural reforms, and a 
somewhat high inflation rate. They claim that a nominal growth 
rate, which determines tax revenues, should be set, taking into 
account a situation in which it exceeds a long-term interest 
rate, which is directly linked to government bond interest 
payment costs and they believe that it would then be possible to 
reduce the margin of a possible tax hike. They expect the BOJ to 
constrain a long-term interest rate by such means as continuing 
the monetary easing policy, such as the postponement of a 
timeline for removing the quantitative easing policy and 
introducing an inflation target after the removal of that policy. 
 
Yosano, however, told reporters after yesterday's cabinet 
meeting, "It is all right to challenge a high growth rate, but it 
would be a more responsible approach if fiscal reconstruction 
efforts are made based on a steady premise." He thus again 
criticized the Takenaka-Nakagawa policy. His stance of estimating 
a long-term interest rate higher than a nominal growth rate, 
which, therefore, necessitates a substantial tax hike remains 
unchanged. 
 
Finance Minister Tanigaki during the CEFP meeting backed Yosano's 
position on the raising of an inflation target, by pointing out, 
"Tax revenues are expected to increase, but at the same time, 
expenditures, such as government bond interest payments and 
social security payments, which will likely increase in 
 
TOKYO 00000708  005 OF 008 
 
 
conjunction with price rises, will increase." 
 
An argument calling for reforming expenditures and revenues as a 
package is gaining ground among government officials, looking 
toward June, when the government is expected to come up with a 
range of options for fiscal reconstruction measures, including a 
tax hike. On the other hand, the BOJ, which wants to lift the 
quantitative easing policy as early as this spring, is taking 
precautions against a call for introducing an inflation target 
with Vice Governor Toshiro Muto noting, "In financial monetary 
policy, it is difficult to clearly set an inflation rate to be 
aimed for." A settlement line in the growth rate argument will 
likely determine the fate of the fiscal and monetary policy as 
well. 
 
(4) Retired DFAA officials land jobs in 60 construction firms; 
90% of contracts for large projects awarded to firms employing ex- 
officials 
 
YOMIURI (Page 39) (Slightly abridged) 
February 7, 2006 
 
A total of 93 former Defense Facilities Administration Agency 
(DFAA) officials have landed jobs in at least 60 construction 
companies as of last November, according to the results of an 
investigation by the Yomiuri Shimbun. A number of these companies 
were allegedly involved in bid rigging for air-conditioning 
projects ordered by the agency. Of these firms, 15 have been 
investigated by the special investigation squad of the Tokyo 
District Public Prosecutors Office. The investigation revealed 
that the awarding of contracts is closely tied to amakudari, a 
practice in which bureaucrats land lucrative jobs in the private 
sector after retirement. 
 
The Yomiuri investigation targeted maritime construction firms, 
general contractors, and their affiliates, using a list of 
members of a group composed mainly of former agency officials, 
including former Self-Defense Force officers. 
 
Four companies have the largest number of ex-DFAA officials. The 
four are Penta-Ocean Construction Co., based in Bunkyo Ward, 
Tokyo; Wakachiku Construction Co. in Kitakyushu; and two 
affiliates of Kajima Corp., based in Minato Ward. The companies 
have employed three retired DFAA officials each. Another 25 
firms, including Toa Corp. and Maeda Corp., both in Chiyoda Ward, 
and Nissan Rinkai Construction Co. in Minato Ward, have hired two 
ex-agency officials each. The remaining 31 firms, including 
Konoike Construction Co. in Osaka, have one former official each. 
 
Since Jan. 31, prosecutors have raided about 20 companies, 
including leading general contractors. They found that 15 of the 
firms have offered high posts to former DFAA officials. 
 
Of the leading general contractors subjected to the prosecutors' 
probe, three firms - Taisei Corp. in Shinjuku Ward, as well as 
Shimizu Corp. and Obayashi Corp., both in Minato Ward - have no 
former agency officials on board, but their subsidiaries or 
affiliates have hired four ex-officials. 
 
Of the 60 firms employing amakudari, 54 received between one and 
seven orders, including contracts awarded to joint ventures, for 
construction or engineering projects placed by the agency's 11 
branches nationwide during the period between April 2004 and 
 
TOKYO 00000708  006 OF 008 
 
 
December of last year. In the case of a large-scale project worth 
more than 1 billion yen, 19 of the 21 projects were awarded to 
companies that have employed ex-officials. Of them, bidding was 
held for 18 projects. Three contracts were concluded for about 
99% of the target price, while five were awarded for 98%. The 
average rate was 97.63%. 
 
Former DFAA Technical Councillor Takayoshi Kawano, 57, and two 
other agency officials were arrested on suspicion of leading bid 
rigging for three air-conditioning projects. Prosecutors found 
that six ex-officials have been given executive posts at four of 
the nine successful bidders for these projects over the last 
decade. 
 
(5) Political insights from Hiroshi Hoshi - Koizumi 
administration now entering terminal stage; Was reform a whim? 
 
ASAHI (Page 15) (Abridged) 
February 7, 2006 
 
By Hiroshi Hoshi, senior staff writer 
 
My job is to get lawmakers and bureaucrats to talk about their 
real feelings. Some days ago, I met several members of the ruling 
coalition leadership (some from the Liberal Democratic Party and 
the rest from the New Komeito). One of them was bold enough to 
make this comment: "The administration is slipping away. It won't 
be able to revive its power." 
 
Backed by public support, Prime Minister Koizumi has kept his 
administration running smoothly for a long time, but his power 
seems to be declining. 
 
There are a number of symptoms. One is the case of Livedoor Co., 
which is being investigated by the Tokyo District Public 
Prosecutors Office. A government economic agency official offered 
an interesting comment: 
 
"Many lawmakers and bureaucrats considered former Livedoor 
President Horie's way of doing business to be risky. But there 
was no one who was brave enough to say something to the prime 
minister, because Horie was touted as a 'child of the Koizumi 
reforms.'" 
 
Regarding the US beef issue, a lawmaker affiliated with farm 
organizations told me: 
 
"Japan-US ties are the key to the Koizumi administration. Given 
that President Bush urged Prime Minister Koizumi to resume beef 
imports, neither lawmakers nor bureaucrats could directly call on 
the prime minister to be cautious about resuming imports." 
 
Immediately after a new cabinet comes into existence, it receives 
a lot of advice, given in consideration of the future of the 
cabinet or out of the political calculation to get a good post. 
The purposes differ. There may be advice that the administration 
does not want to hear. But the longer an administration stays in 
power, the fewer people there are who can provide it with candid 
advice, leaving it instead only receiving good reports. Koichi 
Kato has pointed out, "The Koizumi administration has suffered 
from what is called the 'Kantei disease,' which prevents an 
administration from listening to critical views." Kato's analysis 
is not an exaggeration. 
 
TOKYO 00000708  007 OF 008 
 
 
 
With his time in office nearing an end, it is natural that 
Koizumi cannot keep the same grip over the LDP as he did before. 
Koizumi aims to get a revision to the Imperial House Law enacted 
during the current Diet session, but objections are being openly 
raised by some LDP members. More than 30% of the LDP lawmakers 
are reportedly to have signed a statement opposing a revision 
that would allow an emperor from the female line of the imperial 
family to ascend to the throne. 
 
Turning my eye to the Diet, I see only a few LDP legislators 
busying bargaining with opposition party members. A mainstay 
lawmaker revealed his real feelings to me: "There won't be 
another cabinet reshuffle under Koizumi. Working hard in dealing 
with opposition parties is useless, given that there is no 
possibility of being chosen to a cabinet post." 
 
The right to dissolve the Lower House, the right to choose party 
executives and cabinet members, and the right to draft a budget 
bill are the three important rights of the prime minister. So a 
general rule for political watchers is to pay attention to how 
and when the prime minister exercise these three rights while in 
office. Koizumi exercised all three over the past six months. 
This fact, too, is a symptom that his administration is in its 
terminal stage. 
 
The Koizumi administration will mark its fifth anniversary in 
April. It has done a good job, for instance, in the area of 
disposing of bad loans. The concept of "no growth without 
structural reform" has resonated across the country. But many 
corrupt structures have been left in place. 
 
One of them is the recently exposed bureaucrat-led bid-rigging 
scandal involving the Defense Facilities Administration Agency 
(DFAA). 
 
The Koizumi reforms have been promoted under such banners as a 
shift to a small government and from the public sector to the 
private sector. But Koizumi has not made an effort to sketch out 
an overall picture of his reforms. He has focused on the areas he 
has a strong interest in, for example, postal privatization. In 
this sense, his reform drive may be described as whimsical. 
 
It is not too late and would actually be advisable to create a 
"Koizumi manifesto" now to spell out the significance and goals 
of his reforms. 
 
(6) Children in Tokyo go to bed and get up earlier but addicted 
to TV, according to surveys in five Asian cities 
 
SANEKI (Page 1) (Full) 
February 8, 2006 
 
Children in Tokyo go to bed and get up earlier than those in 
other Asian cities, but they are addicted to television. Benesse 
Education Research and Development Center presented this result 
of a survey of children in Tokyo, Seoul, Beijing, Shanghai, and 
Taipei to assess their daily lives. The education think-tank 
based in Tokyo also found that more parents or guardians in Tokyo 
than in the other cities wanted to see their children grow into 
"an adult who contributes to society" and "an adult who is 
respected by others, " while they also hope they will grow into 
"an adult who take good care of friends and family." 
 
TOKYO 00000708  008 OF 008 
 
 
 
What type of person parents expect to see children become 
 
% 
Take care of friends 
Don't bother others 
Take care of family 
Capable worker 
Respected by others 
Contribute to society 
Display leadership 
 
Tokyo      74.5   71.0   69.7   20.1   12.0   11.1    6.1 
Seoul      14.3   24.7   69.2   21.2   28.3   18.7   46.8 
Beijing    14.2    4.9   71.8   46.9   45.5   27.6   15.5 
Shanghai   11.3    4.6   75.7   39.0   43.0   23.1   25.6 
Taipei     13.9   25.1   84.1   48.9   23.2   26.7   22.4 
 
The surveys were conducted by direct interview with about 6,000 
parents or guardians of young children aged between three and six 
in the five cities. Those who replied that their child or 
children "go to bed before 9:00 p.m." accounted for 75.8% in 
Tokyo and 79.5% in Shanghai, but only 36.3% in Seoul and 26.4% in 
Taipei. Those who said, "They get up before 7:00 a.m." made up 
75.6% in Tokyo, 95.9% in Beijing, and 89.4% in Shanghai, but 
48.2% in Seoul and 56.1% in Taiwan. Regarding sleeping hours, the 
average hours were 10 hours and 6 minutes in Tokyo. In the other 
cities, the average time was less than 10 hours. 
 
On TV viewing, the reply "watch TV almost everyday" accounted for 
94.6% in Tokyo, followed by 79.2% in Seoul, 78.4% in Taiwan, 
74.3% in Beijing, and 64.3% in Shanghai. Asked about the average 
hours of watching TV a day, they were 3 hours and 43 minutes in 
Tokyo, also longer than in any other cities. In response to 
questions regarding the use of personal computers, 4.3% of 
respondents in Tokyo replied either "use it almost everyday" or 
"three or four times a day." This figure is remarkably low, 
compared with the 40% in Seoul. Concerning extra lessons, the 
survey showed that more than 50% of the children in all the five 
cities take some extra lessons. In particularly, English 
conversation lessons are popular, and those attending such 
classes account for 17.8% in Tokyo and 11.2% in Seoul. 
 
Asked "what type of person you expect to see your children become 
in the future," more than two-thirds guardians in all the five 
cities picked "a person who takes good care of family." Beside 
this reply, 74.5% in Tokyo also cited, "a person who takes good 
care of friends," and 71% said: "A person who do not bother 
others." 
 
The reply that "capable worker" made up 20.1% in Tokyo, 46.9% in 
Beijing, and 48.9% in Taipei. But those who picked this reply in 
Seoul accounted for a robust 46.8 % . 
 
Hours of watching TV, video or DVD a day 
 
Tokyo           3 hrs & 43' 
Seoul           2 hrs & 34' 
Beijing         1 hr  & 46' 
Shanghai        1 hr  & 43' 
Taipei          2 hrs & 50' 
 
SCHIEFFER