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UNCLAS SECTION 01 OF 10 TOKYO 000907 
 
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 02/21/06 
 
 
INDEX: 
 
(1) Minshuto head Maehara hints at the existence of "secret 
account" 
 
(2) Foreign Minister Aso says "I'm only saying what I believe is 
right," although his hawkish remarks come under criticism from 
overseas 
 
(3) Second-generation war-displaced Japanese man found to have 
been imprisoned in China for seven years; The man says, "At the 
Foreign Ministry's request, I was gathering information"; Despite 
the promise to "help him," no helping hand was extended to him 
 
(4) Efforts to find breakthrough in Iran's nuclear development 
issue encountering complications; Russia to continue talks to act 
as mediator; US considering applying sanctions with Russia, China 
 
(5) Political commentary by Satoshi Morimoto, director, 
International Affairs Research Institute, Takushoku University: 
We must not let another crisis occur in the Japan-US alliance; 
Japan must be resolved to bear risk and sacrifice 
 
(6) Dark clouds hanging over Koizumi's plan to finish up his 
reform drive; Opposition growing stronger to specifics 
 
ARTICLES: 
 
(1) Minshuto head Maehara hints at the existence of "secret 
account" 
 
SANKEI (Page 4) (Full) 
February 20, 2006 
 
Appearing on the Fuji TV program "Hodo 2001" on Sunday morning, 
Minshuto (Democratic Party of Japan) President Seiji Maehara 
stated on his party member's claim that former Livedoor President 
Takafumi Horie had ordered his staff to send 30 million yen to 
the second son of Liberal Democratic Party (LDP) Secretary 
General Tsutomu Takebe: 
 
"Mr. Takebe has said that he searched the bank accounts of his 
son and son's company, but generally speaking, no one uses 
regular accounts for such transactions. We have obtained 
information about financial institutions." 
 
Maehara indicated in his remark the possibility that a "secret 
bank account" had been used for the transfer of the 30 million 
yen. 
 
Touching on the copy of an e-mail his party revealed on Feb. 17, 
Maehara said, "I believe the copy of the e-mail is highly 
credible." He then stressed again that his party would call for 
the exercise of the right of a Diet member to investigate state 
affairs so that parties concerned will submit documents. "We 
haven't brought on many issues to argue with the ruling 
coalition." He indicated that his party got information on a 
specific bank. 
 
Toranosuke Katayama, secretary general of the LDP caucus in the 
House of Councillors, strongly reacted, arguing, "If we use the 
administrative investigation rights for every issue, the rights 
will lose its authority." He called on the largest opposition 
 
TOKYO 00000907  002 OF 010 
 
 
party to present specific evidence such as the sender and 
recipient of the e-mail. 
 
(2) Foreign Minister Aso says "I'm only saying what I believe is 
right," although his hawkish remarks come under criticism from 
overseas 
 
YOMIURI (Page 3) (Full) 
February 19, 2006 
 
Foreign Minister Taro Aso's hawkish remarks on historical 
perceptions of the war, as well as on visits to Yasukuni Shrine 
by Prime Minister Junichiro Koizumi, have created controversy 
overseas and within the government. But he continues not to give 
heed to the criticism, just saying, "I'm saying what I believe is 
right." Many in the government and ruling parties have been 
negative toward Aso's stance, with one member saying, "His 
remarks have had a serious impact on Japan's Asia diplomacy. If 
he was in any other administration than the Koizumi government, 
he would have had to resign." 
 
Aso is known for plain speaking. Referring to the northern 
territories issue, he said at a public meeting held by his 
ministry on Feb. 18 in Tokyo: 
 
"I want the residents (of the four northern islands) to feel it's 
good to be a part of Japan. For example, since they are on 
Japanese territory, Japanese TV programs should be broadcasted to 
them." 
 
A mid-level Liberal Democratic Party (LDP) member, who is close 
to Aso, supported Aso's stance, saying, "Mr. Aso's comments are 
far more interesting and easy to understand than the recitations 
of what's prepared by bureaucrats." 
 
However, Aso's remarks about history have come under criticism. 
 
The New York Times in an editorial on Feb. 13 severely criticized 
Aso's remarks that said the Emperor should visit Yasukuni Shrine, 
and that Japan's policies during its colonial rule of Taiwan 
helped raise Taiwan's education standard. The editorial said, 
"Mr. Aso's sense of diplomacy is as odd as his sense of history." 
 
China last December criticized as "very irresponsible" remarks 
made by Aso that called China a "threat." 
 
Complaints about Aso's remarks also have been heard within the 
Foreign Ministry. A senior official said: "The foreign minister's 
remarks always scare us. We want him to stop making remarks that 
cause needless diplomatic trouble." 
 
Aso, however, has shown no inclination to stop making hawkish 
remarks. Instead, he has said, "It's up to them (mass media) if 
they want to criticize me." 
 
Aso is the grandson of Shigeru Yoshida, who was prime minister in 
the late 1940s and early 1950s. His upbringing has built in him a 
keen insight into politics, which many say makes him feel proud 
that he his own unique view of foreign policy. 
 
Some LDP members believe Aso wants to make his presence felt 
strongly before the LDP presidential election in September. Since 
Chief Cabinet Secretary Shinzo Abe is the most popular candidate 
 
TOKYO 00000907  003 OF 010 
 
 
to succeed Koizumi as LDP president and become prime minister, 
Aso probably feels he needs to stir public debate to get 
attention. But if he continues making such controversial remarks, 
his qualifications to be LDP president and prime minister could 
be questioned. 
 
Aso's controversial remarks 
 
    (At press conference on Dec. 22.), China, Japan's 
neighboring country with the population of 1 billion people, 
possesses nuclear weapons and its military spending has continued 
to rise by double digits for 17 years in a row. The contents of 
its military spending are extremely unclear. China is becoming a 
threat to Japan. 
 
    (In a speech on Jan. 28 in Nagoya City), (regarding Prime 
Minister Koizumi's visits to Yasukuni Shrine), those who were 
killed in the war shouted 'Banzai' for the Emperor or long live 
the Emperor; no one did it for the prime minister. It is best for 
the Emperor to visit the shrine. 
 
    (In a speech on Feb. 4 in the city of Fukuoka), when Taiwan 
belonged to Japan, What Japan did first for the Taiwanese people 
was offering them a compulsory education system. Japan made a 
bold decision. With the introduction of compulsory education, 
Taiwan's education standard was raised. Since the island still 
maintains high education standards, the people of Taiwan have 
kept up with their previous education level. 
 
(3) Second-generation war-displaced Japanese man found to have 
been imprisoned in China for seven years; The man says, "At the 
Foreign Ministry's request, I was gathering information"; Despite 
e 
the promise to "help him," no helping hand was extended to him 
SANKEI (Page 1) (Full) 
February 21, 2006 
 
A Japanese man was arrested in China in 1996 for acquiring state 
secrets, and the man had been imprisoned for about seven years 
 
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until 2003, the Sankei Shimbun learned. In an interview with the 
Sankei Shimbun, the man said: "I was asked by a Japanese diplomat 
to gather information. I was told that if I were arrested, I 
would have been rescued through diplomatic channels. But I was 
never rescued. Even after I returned home, I've never received a 
word of apology from the Foreign Ministry." If his story is true, 
the ministry's exploitation of a private citizen to gather 
information would depart from the sphere of diplomatic 
activities. The ministry's poor response to intelligence 
gathering, including its failure to protect a Japanese national, 
is again called into question, following the suicide of a 
Japanese diplomat at the Shanghai Consulate General. 
 
The man who was imprisoned is Hirofumi Hara, 40, now a Tokyo- 
based company manager. Hara, along with his mother, a Japanese 
orphan left behind in China, and other family members, returned 
to Japan in 1991. He worked at publishing a magazine and other 
jobs in Tokyo. 
 
According to a Chinese court's ruling obtained by the Sankei 
Shimbun, Hara was arrested in June 1996 by Chinese authorities on 
suspicion of possessing secret information belonging to China. 
The following year, he was sentenced to a jail term of eight 
years for stealing state secrets. Several Chinese officials who 
 
TOKYO 00000907  004 OF 010 
 
 
allegedly were Hara's accomplices were sentenced to five to seven 
years in prison. 
 
According to the ruling, Hara obtained state-run New China News 
Agency's internal secret materials, such as economic policy 
information, internal reference, international reference and 
videotapes recording internal reference audio images. 
 
According to Hara, he was first contacted in 1994 by a senior 
diplomat of the Foreign Ministry's Bureau of Intelligence and 
Analysis. At the initial stage, Hara and the diplomat simply 
exchanged views, but soon after, he was asked to gather Chinese 
information. Hara gathered information in China, taking advantage 
of such occasions as visiting China on business, and provided the 
material to the Foreign Ministry official a dozen times. He 
received 100,000 to 200,000 yen compensation every time he 
provided information. 
 
During this period, Hara, out of fear of being charged by Chinese 
authorities, told the Foreign Ministry official that he wanted to 
end his cooperation with the ministry. But the official persuaded 
him to continue gathering, telling him: "Do it for Japan's 
national interests" and "If you should be arrested by Chinese 
authorities, we'd rescue you through diplomatic channels." 
However, the reality was that when Hara was arrested and 
imprisoned, the ministry did nothing but let an official at the 
Japanese Embassy in Beijing visit him in prison. 
 
 After serving his prison term, Hara returned home and searched 
out the Foreign Ministry official he once was in contact with. 
The official told him: "What's done is done," and, "If you are 
hard up for money, why not apply for social security?" 
 
Hara restarted his publishing business and he now works as a 
consultant on doing business in China. 
 
Hara cited the news reports on the suicide of a Japanese diplomat 
at the Shanghai Consulate General as the reason he agreed to an 
interview this time. He stated: "The moment I was arrested, the 
Foreign Ministry official who been my contact until then was 
quick to dump me to avoid trouble. I was a victim of the Foreign 
Ministry's ostrich policy. The Shanghai suicide incident was 
essentially the same case as mine." 
 
Regarding this case, the Foreign Ministry told the Sankei Shimbun 
yesterday: "We cannot answer anything concerning a certain 
individual. We'd like to refrain from offering specifics about 
our ministry's information-gathering activities." 
 
The Foreign Ministry is irresponsible; Protection is requisite 
 
Remarks by Mitsuhiro Suganuma, former director-general of the 
Second Investigation Department in the Public Security 
Investigation Agency 
 
Real confidential information is treated as classified material, 
so gathering such information is out of reach of the Foreign 
Ministry, which is not an intelligence agency. In addition, 
diplomats are not trained to do so. Even if diplomats get 
information via someone like the private citizen described in 
this article, such information would be practically worthless. If 
the testimony given by that private citizen is true, it is 
irresponsible that the Foreign Ministry to have asked that person 
 
TOKYO 00000907  005 OF 010 
 
 
to gather information by telling him, "If you were arrested, we 
would help you." 
 
The ministry also told the man, "Do it for your country," but 
when he was in a pinch, it failed to help him. This kind of 
behavior leaves Hara with the impression that he was betrayed by 
the state. Protecting information sources is the lifeline of an 
intelligence agency. 
 
There is an active debate on the need for an intelligence 
organization. But an intelligence agency is unnecessary if it 
analyzes only disclosed information. The intelligence agency's 
role is to get classified information that the other side does 
not want to be known by others. It also needs to do 
counterespionage. 
 
When it comes to the suicide of a Japanese official at the 
Shanghai Consulate General, the post of communications official 
at each embassy is usually assumed by not diplomats but officials 
sent by the intelligence agency. It is impossible in other 
nations to see a communications officer visit a karaoke bar 
alone. 
 
In this sense, the Foreign Ministry is an immature organization 
in both gathering and protecting information. The ministry as a 
whole has weakened. Rebuilding it is a pressing need, indeed. 
 
(4) Efforts to find breakthrough in Iran's nuclear development 
issue encountering complications; Russia to continue talks to act 
as mediator; US considering applying sanctions with Russia, China 
 
NIHON KEIZAI (Page 3) (Excerpts) 
February 21, 2006 
 
Diplomatic bargaining over Iran's nuclear ambitions will soon 
reach a climax. On Feb. 20, Iran started talks with Russia, which 
proposed to act as a broker. Though negotiations fell through, 
the two countries agreed to continue the talks. In the meantime, 
Secretary of State Rice of the US, which aims to apply sanctions 
 
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against Iran, left for the Middle East the same day. Concerned 
countries have agreed to put off sanctions discussions until a 
board meeting of the International Atomic Energy Agency (IAEA) on 
Mar. 6. However, a path for finding a breakthrough is not in 
sight. Tensions in the international community are mounting. 
Japan, which has a close relationship with Iran through imports 
of crude oil, will likely be pressed to make a difficult 
decision. 
 
Setback to Japan's oil interests: Difficult to oppose US, if it 
comes up with hard-line approach; Limit in what Japan can do in 
persuading Iran 
 
The Japanese government is doing its utmost for a peaceful 
settlement of Iran's nuclear development issue. It intends to 
urge Iranian Foreign Minister Mottaki, who is scheduled to visit 
Japan on Feb. 27, to immediately suspend his country's uranium 
enrichment activities. Ahead of this meeting, Japan will also 
confirm the continuation of diplomatic efforts at a foreign 
ministerial meeting with Germany to be held in Tokyo on Feb. 21. 
However, since there is limit in what Japan can do by using its 
influence, prospects for finding a breakthrough have yet to come 
into view. 
 
 
TOKYO 00000907  006 OF 010 
 
 
For Japan, Iran is the third largest oil supplier, following 
Saudi Arabia and the United Arab Emirates. Japan relies on Iran 
for about 14% of its total oil imports. It also has a 75% stake 
in the development of the Azadegan oil field, which is estimated 
to have reserves of 5-26 billion barrels. Japan is now preparing 
to independently develop the Azadegan oil field into a major oil 
field. 
 
Japan's position over Iran's nuclear development issue is that in 
the end, it has to act in concert with the US. It will have to be 
prepared for the impact of a possible hard-line approach by the 
US regarding Japan's interests in the Azadegan oil field. That is 
why the Japanese government is trying to act as a mediator, 
taking advantage of its good relationship with Iran. 
 
However, it is difficult to foresee the future development of the 
issue. Vice Foreign Minister Shotaro Yachi during yesterday's 
press conference pointed out, "I do no think that the problem an 
be settled smoothly, because there are difficult issues 
involved." It would not be too bad, if sanctions were applied by 
the UN Security Council with the US, acting in unity with China 
and Russia. The worst-case scenario for Japan is that it gets 
caught between the US and Iran in their diplomatic bargaining 
process. 
 
Crude oil projects in which Japan takes part 
 
¶1.   Azadegan oil field: 260,000 barrels a day 
¶2.   Sakhalin 1 (Russia): 250,000 barrels a day 
¶3.   Sakhalin 2 (Russia): 160,000 barrels a day 
¶4.   Rang Dong oil field (Vietnam): 50,000 barrels a day 
¶5.   Mubarras oil field (United Arab Emirates): 20,000 barrels a 
day 
 
(5) Political commentary by Satoshi Morimoto, director, 
International Affairs Research Institute, Takushoku University: 
We must not let another crisis occur in the Japan-US alliance; 
Japan must be resolved to bear risk and sacrifice 
 
SANKEI (Page 15) (Full) 
February 20, 2006 
 
Two crises in alliance occurred in the past 
 
We continue to exist in an age of instability where the future 
seems bleak, but despite these conditions, people have no choice 
but to live on. States, too, must bear the responsibility of 
protecting the safety and prosperity of their people. 
 
Looking at the international community, I would not rule out 
conditions to exist allowing a hegemonic struggle between Russia 
or China and the United States, whose overwhelming power is 
likely to decline in relative terms in the future. 
 
Japan remains unable to sweep away the constrictive elements of 
the Constitution, which was created under conditions of Japan 
having had lost its sovereignty, and remains as a negative policy 
remnant of the postwar period. In Asia, China is steadily rising, 
and although I do not think it can sustain the momentum, we 
cannot ignore the military threat that is spreading across the 
neighboring region. Japan must move closer to the US in the 
alliance, and it must play a mutually complementary role in the 
US' Asia strategy. There is no other way to effectively pursue 
 
TOKYO 00000907  007 OF 010 
 
 
stability that would benefit the nations of Asia. 
 
However, the Japan-US alliance now is beginning to slip into a 
quiet crisis.  It brings to mind the times during the Cold War 
when the Japan-US alliance faced a crisis at least twice. 
 
The first occurred during the outbreak of the Iran revolution of 
¶1979. The US broke off diplomatic relations with Iran when its 
embassy staff was held hostage in Teheran. At the time, when 
Japan continued to buy crude oil from Iran, it set off a crisis 
in its relations with the United States. 
 
The second time occurred at the time of the North Korea nuclear 
crisis in 1994. Japan was asked to cooperate with maritime ship 
searches and a blockade of North Korea as a response against the 
turmoil caused by the North. Japan, citing its constitutional 
restrictions, refused to cooperate. 
 
Withdrawal from Iraq is in neither Japan's nor Iraq's interests 
 
The most pressing issue right now for the international community 
is Iran's nuclear development program. For the United States, now 
heading into an off-year election, the issue has top priority 
attention. Not only does this issue put the NPT regime in 
jeopardy, it also is a matter of national security for Israel. 
There is also the problem of the potential for Islamic- 
fundamentalist terrorists possibly getting their hands on Iran's 
nuclear weapons. Although it will be difficult to resolve the 
criminal intent of Iran's nuclear program, Iran, which has the 
second largest oil and gas reserves in the world, has been taking 
lightly so far the responses of the international community. 
Although it is difficult to conceive that the United Nations 
Security Council will quickly pass a sanctions resolution, if the 
price of oil rises any higher, it would have a sharp impact on 
the world economy. 
 
Japan imports approximately 15% of its crude oil from Iran. It 
also in involved in the Azadegan oil field development project. 
Japan should think seriously about how it is being seen by the 
US, and should try to avoid a repeat of the alliance crisis of 
the past. 
 
According to the QDR (quadrennial security review issued by the 
Pentagon), the US-led war on terror is likely to last for a long 
time. Japan has sent Self-Defense Forces (SDF) units to Iraq and 
the Indian Ocean in direct and indirect support of the war on 
terror, but Japan should think how this might look not only to 
the US but to the international community as well when Japanese 
troops are withdrawn this year. 
 
The US is in no position to welcome Japan's withdrawal; nor is 
the Iraqi's new government. It is just too regrettable that 
Japan's contributions and accomplishments in Iraq through the 
presence of the SDF will just disappear. Consideration should at 
least be given to building a humanitarian and reconstruction 
assistance center in southern Iraq, so that the SDF can leave 
their mark there. 
 
Handling of base issues greatly disappoint US 
 
I would like now to turn to the talks continuing between Japan 
and the US on realignment of the US forces in Japan that are 
heading for a final report in March. Role sharing in order to 
 
TOKYO 00000907  008 OF 010 
 
 
strengthen the Japan-US alliance cooperation is going smoothly. 
 
However, the US takes the stance on base issues that the 
substantive talks were wrapped up with the interim report, and 
that now all that needs to be done is for the Japanese government 
to implement the contents. However, the implementation situation 
of the Japanese government has been much too inadequate. Local 
communities are solidly against the agreement, and the effort to 
persuade Okinawa has not even approached the level of horse- 
trading yet. The DFAA scandal is also weighing the situation 
down, and there has been no progress. The US is greatly 
disappointed. 
 
In Japan's relations with China and with the Republic of Korea, 
as well, there is a mood of impasse over the Yasukuni Shrine 
issue. The US' attitude is one of perplexity toward the way Japan 
has been handling the issue, and China has been vigorously 
sucking up to the US. The US on the issue of Japan's bid for a 
permanent seat on the UN Security Council has a strong feeling of 
not going along with Japan's request. On the beef import issue as 
well, although there are problems with the way the US handled it, 
Japan's approach, too, is unconvincing to the American society. 
At any rate, nothing seems to be going well with the Japan-US 
relationship. 
 
The reason why such problems have arisen stem from the nation's 
foreign, security, and defense policies not being coordinated in 
a comprehensive way. In order to resolve the crisis, I would 
suggest the establishment of a national security, foreign 
affairs, and defense advisory council that would draft and 
coordinate policy from a strategic point of view. 
 
The alliance relationship must be one in which both sides share 
the risks and bear the sacrifices, while pursuing common 
interests. If the situation is left to progress as is, the US 
will begin to have doubts about Japan's desire to pursue those 
goals and put them into practice. That indeed is where the risk 
to the alliance lies. It is the responsibility of politics to get 
through such a situation. That is a large responsibility to 
fulfill. 
 
(6) Dark clouds hanging over Koizumi's plan to finish up his 
reform drive; Opposition growing stronger to specifics 
 
NIHON KEIZAI (Page 2) (Abridged) 
February 20, 2006 
 
Dark clouds have begun gathering over Prime Minister Junichiro 
Koizumi's plan to complete his reform drive in the current Diet 
session. His administration is faced with a set of four issues, 
including the Livedoor scandal. In addition, many Liberal 
Democratic Party policy cliques with ties to special interests 
and bureaucrats have begun putting up stiff opposition to 
reforming specific areas although they had agreed to pursue 
structural reform reforms in principle. Koizumi has charted a 
clear policy to privatize the nation's postal services and the 
government-affiliated financial institutions, but he has only 
about six months to complete his reform drive before leaving 
office in September. Will he be able to keep his grip on the LDP 
and bureaucrats? 
 
CEFP puts discussions ahead of determining policies 
 
 
TOKYO 00000907  009 OF 010 
 
 
In a meeting of the Council on Economic and Fiscal Policy (CEFP) 
held on Feb. 15, a private-sector member presented a simulation 
of the reform of revenues and expenditures. Apparently displeased 
with the simulation, Prime Minister Koizumi only said: "I found 
the explanation insufficient. The general public would not 
understand it." 
 
Koizumi has rarely spoken up at CEFP meetings this year, serving 
strictly as a listener in debates on economic growth between 
State Minister in Charge of Economic and Fiscal Policy Kaoru 
Yosano and Internal Affairs and Communications Minister Heizo 
Takenaka. 
 
Until last year when Takenaka led the CEFP, Takenaka used to 
coordinate views with private-sector members before the council 
produced proposals. In many cases, such proposals were used in 
CEFP meeting to induce Koizumi's instructions and set the tone 
for reforms. At present, CEFP is used for cabinet ministers' 
debates on simulations worked out by administrative officials 
rather than to determine policies. 
 
Determining options for the reform of revenues and expenditures 
and an implementation timetable is the CEFP's main objective for 
the first half of this year. But Koizumi does not seem to take a 
great interest in discussions on simulations, according to a 
person close to Koizumi. Last year, Koizumi occasionally rebuked 
cabinet ministers for implementing reforms. But in the eyes of 
some CEFP-connected members, such zeal is visibly absent from 
Koizumi today. 
 
Opposition to reducing the number of national public servants 
 
The government plans to submit to the current Diet session an 
administrative reform promotion bill so as not to allow the 
reform trend roll back even after Prime Minister Koizumi steps 
down. But the government's efforts to produce concrete plans have 
hit rocky ground. A net reduction of civil servants by more than 
5 % over the next five years is the government's basic plan. But 
government agencies have begun openly voicing opposition to 
reducing personnel in specific areas on a priority bases. 
 
The Justice Ministry, for instance, has reacted fiercely to the 
Cabinet Secretariat Administrative Reform Promotion Office's 
decision to deeply cut the number of personnel at punitive 
facilities, such as prisons, with the exception of prison guards. 
 
Four government agencies, including the Ministry of Justice and 
the Ministry of Agriculture, Forestry and Fisheries (MAFF), are 
scheduled to submit their personnel reduction plans to the 
Administrative Reform Promotion Office later this month. The 
Reform Promotion Office is most likely to trim their plans even 
further. Other government agencies are watching closely a tug-of- 
war between the Reform Promotion Office and the four agencies. 
"Once an exception is made, the principle would collapse," a 
Reform Promotion Office official said defensively. 
 
Future of regulatory reform also murky 
 
The future of regulatory reform, which Prime Minister Koizumi has 
been pursuing since assuming office, is also becoming unclear. 
The government's Regulatory Reform and Private Sector 
Liberalization Promotion Council has produced a set of 
recommendations in December in recent years. This year, the 
 
TOKYO 00000907  010 OF 010 
 
 
council intends to map out recommendations in June on 11 priority 
items, including the reform of NHK (Japan Broadcasting Corp.) and 
the education system, to reflect them on the government's "big- 
boned policy" with a view to nailing down a conclusion before 
Koizumi steps down. 
 
At the same time, the council, reversing its priority until last 
year, has decided to give up tampering with the agriculture 
sector, such as reforming agricultural cooperatives. The 
administration was forced last year after the Sept. 11 Lower 
House election when its foundation was rock-solid to forgo 
agricultural reform due to stiff resistance from MAFF and LDP 
agricultural policy specialists. In view of such developments, 
the council has judged it difficult to reform the agricultural 
sector without Koizumi's backing. 
 
Koizumi's reform calendar 
 
Late February 
Four government agencies submit priority personnel reduction 
plans to the Administrative Reform Promotion Office. 
 
March 10 
A cabinet decision on an administrative reform promotion bill; 
sends the bill to the Diet. 
 
Late March 
The government produces an interim report on a design of 
institutional arrangements for the reform of the government- 
affiliated financial institutions. 
 
Late March - Early April 
The Council on Economic and Fiscal Policy produces an interim 
report on options for a revenue-and-expenditure   reform. 
 
June 
CEFP maps out recommendations on 11 priority items. 
Government agencies to produce plans to reduce their payrolls---- 
------------------------------------- 
CEFP compiles a lit of options for a revenue-and-expenditure 
reform and an implementation timetable. 
 
Late June 
The government makes a cabinet decision on 2006 big-boned policy. 
 
SCHIEFFER