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UNCLAS SECTION 01 OF 12 TOKYO 000876 
 
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 02/17/06 
 
 
INDEX: 
 
(1) Intensive debate on Livedoor scandal; What is Horie's real 
intention of sending 30 million yen to Takebe's son? Opposition 
to pursue accountability of Koizumi; LDP may submit disciplinary 
motion against Nagata 
 
(2) Livedoor shock: Market fundamentalism destroys morals, ethics 
 
(3) Minshuto (Democratic Party of Japan) leader Maehara firm 
about describing China as a threat, despite possible objections 
in the party; Prelude to party presidential race? 
 
(4) Calls for hard-line measures against North Korea growing 
stronger; Government studying ways to apply pressure 
 
(5) Interview with University of Shizuoka Prof. Hajime Izumi on 
North Korea: Pyongyang paying close attention to Tokyo's intent 
for normalization; North wants to confirm Pyongyang declaration 
as a cornerstone of bilateral ties 
 
(6) Final ODA reform plan calls for continued use of the name 
JBIC 
 
(7) Interview with former Ambassador to US Kuriyama, Kyorin 
University Prof. Takubo on Prime Minister Koizumi's visit to 
Yasukuni Shrine, soured Japan-China ties 
 
ARTICLES: 
 
(1) Intensive debate on Livedoor scandal; What is Horie's real 
intention of sending 30 million yen to Takebe's son? Opposition 
to pursue accountability of Koizumi; LDP may submit disciplinary 
motion against Nagata 
 
YOMIURI (Page 3) (Slightly Abridged) 
February 17, 2006 
 
At a House of Representative Committee session yesterday, 
lawmaker Hisayasu Nagata of the largest opposition party Minshuto 
(Democratic Party of Japan) charged that former Livedoor Co. 
President Takafumi Horie had sent an internal e-mail directing 
his staff to pay 30 million yen to the second son of Liberal 
Democratic Party (LDP) Secretary General Tsutomu Takebe. Nagata's 
claim is now creating a stir. It is certain that this issue will 
become a main subject at an intensive deliberation today at the 
Budget Committee. 
 
At yesterday's Budget Committee session, Nagata, who was posing 
questions on relations between the LDP and Horie regarding last 
year's Lower House election, suddenly started reading out a memo 
that said: 
 
"I want you to arrange for me to transfer 30 million to (the son 
of Mr. Takebe) by the 29th if possible, but by the 31st at the 
latest. I want you to list" in the company's account book "as 
consulting fee for campaigning." 
 
Nagata claimed that the memo was Horie's e-mail on Aug. 16 
instructing his staff to send money to the second son (of 
Takebe). Citing the real name of Takebe's son, Nagata criticized 
Takebe, stating in a strong tone, "I assume that he supported 
Horie's campaign since he had received the money. He might sell 
 
TOKYO 00000876  002 OF 012 
 
 
his soul for money." The session was thrown into a commotion as 
LDP lawmakers jeered at Nagata. 
 
Committee Chairman Tadamori Oshima urged Nagata "to be careful 
about referring to the name of a private citizen." Nagata, 
however, insisted, "I have the information on where the money 
came from and the bank account to which it was sent, as well as 
when the money was transferred to that account." He then 
continued, saying, "If you question the credibility of the 
information, I want someone to prove it." He then demanded that 
Takebe and his son be summoned before the Diet as unsworn 
witnesses. 
 
Minshuto has stepped up the offensive against the government and 
ruling coalition regarding the so-called "set of four issues," 
including the bid-rigging scandal involving the Defense 
Facilities Administration Agency (DFAA). The largest opposition 
party is now, however, focusing at the intensive deliberations on 
a relationship between Horie and Takebe, which has come under 
criticism from some LDP members. The party intends to pursue the 
accountability of Prime Minister Junichiro Koizumi, who is also 
president of the LDP. That's why Nagata brought up the e-mail 
issue yesterday. Reportedly only some senior Minshuto members, 
including party head Seiji Maehara, knew the contents of the memo 
in question. 
 
Soon after the committee session took a break, Takebe called 
committee director Toshimitsu Motegi in the office of LDP 
secretary general at the Diet building. Takebe then telephoned 
 
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his son and was told by him "there was no such fact." Motegi then 
talked with Takebe's son on the phone, and he received the 
explanation from him. 
 
Takebe's son once operated a restaurant, an Internet securities 
firm and other businesses. He now runs an apparel shop in Tokyo. 
Horie reportedly was one of his business associates who run 
Internet companies. 
 
If Nagata's accusation is proved, "Mr. Takebe will not be 
forgiven as a politician," said Minshuto policy chief Komei 
Matsumoto. Such a view will unavoidably become stronger. Some say 
that Takebe would have no choice but to resign. However, the view 
is strong questioning the credibility of Nagata's information. If 
Nagata's information is not credible, will be put in a difficult 
position. As a result, Minshuto would have to weaken its pursuit. 
 
Nagata said, "I've got the information through a freelance 
reporter." He reiterated that he was unable to reveal the details 
about the details because of the safety of the news source. For 
the same reason, he distributed to the press corps the notes 
describing the contents of the e-mail, but did not give out 
copies. 
 
All the more because Nagata stirred up a controversy with his 
radical words, LDP lawmakers are suspicious about his 
information. Nagata is serving in his third-term in the Lower 
House, after working at the former Finance Ministry. In 2000, the 
LDP submitted to the Diet a disciplinary motion against him for 
having wrestled with LDP Upper House lawmakers at a session to 
deliberate the election system reform. Recently a New Komeito 
lawmaker criticized Nagata at a Diet session, "Mr. Nagata made an 
unforgivable remark that victims of the earthquake-resistance 
data calcification scam want to set a fire." 
 
TOKYO 00000876  003 OF 012 
 
 
 
The LDP intends to urge him to present the grounds for the 
accusation. 
 
If 30 million yen was really paid to Takebe's son, there are 
problems in terms of the election law and the tax code 
 
According to the Ministry of Internal Affairs and Communications, 
under the Public Offices Election Law, the ceiling for an 
election campaign expense is decided based on the number of 
voters in an electoral district. The ceiling for the Lower House 
Hiroshima No. 6 district, from which Horie ran in the election, 
is about 24.2 million yen. If he violates the election law, the 
person in charge of accounts will be sentenced to three years or 
a fine up to 500,000 yen and the guilt-by-association system will 
be applied to the candidate. But no one has been charged so far. 
 
Depending on who paid the 30 million yen to Takebe's son -- 
Livedoor or Horie -- different taxation problems will come out. 
 
If prosecutors find that Livedoor sent the money to Takebe's son, 
the money will be recognized as "loan" to Horie or "director's 
bonus." If prosecutors find the company entered the money into 
its account book as expenditure, tax authorities will not 
recognize the money as a "loan" or "director's bonus." If 
prosecutors find Takebe's son did not declare the money to a tax 
office, a taxation problem will occur. 
 
A source connected with Minshuto pointed out, if election 
campaigns are including in the consulting job for campaigning, 
there is a possibility that both Horie and Takebe's son will be 
charged with bribery. 
 
(2) Livedoor shock: Market fundamentalism destroys morals, ethics 
 
SANKEI (Page 1) (Slightly abridged) 
February 8, 2006 
 
By Masahiko Fujiwara, professor at Ochanomizu University 
 
I wrote this passage in my book Kokka no Hinkaku (The Dignity of 
the State), published last year: 
 
"Americanization, including the market fundamentalism that has 
been the basis for Japan's ongoing economic reforms, knows no 
bounds. It has swept across the country, profoundly affecting not 
only Japan's economy but also its society, culture, and 
nationality. The present-day Japanese, who are obsessed by 
mammonism, do not look on a law-bending takeover attempt backed 
by financial strength - which may be described as a money game - 
as dirty trick or crassness." 
 
I wrote this, with Livedoor Co. President Horie's words and deeds 
in mind. 
 
Later, prosecutors raided Livedoor. Mr. Horie was arrested. I 
think Horie's arrest itself is of no significance. 
 
What should be called into question with the arrest of Mr. Horie? 
Is it the Securities and Exchange Law or the Securities and 
Exchange Surveillance Commission? Or is it a problem that the 
Liberal Democratic Party (LDP) in effect backed Mr. Horie as an 
"assassin" candidate in last year's Lower House election? Yes, 
 
TOKYO 00000876  004 OF 012 
 
 
backing him was a problem, but I can say a more serious problem 
is that many Japanese gave support and favored someone like Mr. 
Horie. 
 
When Mr. Horie attempted to take over Nippon Broadcasting System 
last year, the company employees declared their objections to the 
idea of becoming a subsidiary of Livedoor. Mr. Horie, however, 
paid no attention to their wishes and coolly pursued the takeover 
attempt. Many Japanese viewed the attempt as a battle between a 
crafty, seasoned old man and a reformist-minded younger man 
trying to break the stifling atmosphere in Japan. They rooted for 
Mr. Horie. 
 
Society losing stability 
 
Why did this sort of thing happen? The reason lies in market 
fundamentalism. 
 
For example, based on the logic that a company belongs to its 
stockholders, should the corporate manager fail to achieve a good 
result in a short run, that manager would be dismissed. To avoid 
this, corporate restructuring and a performance-based salary 
system become important, even though Japanese management had not 
used them in the past. The performance-based pay system would 
bring the opportunity for pay increases to competent personnel on 
the one hand, while average people would surely see their 
salaries decrease on the other. In addition, the number of 
permanent employees would be cut and the number of nonpermanent 
employees, whose labor cost is half that of permanent employees, 
would increase instead. The lifetime employment system - the most 
excellent working system in the world that has ensured employees' 
loyalty to the company - is being abandoned. 
 
Even if you study hard and graduate from a good school, you will 
find it difficult to get a job because new hiring is limited. 
Even if you are hired by a big company, that does not ensure job 
security, and you could be fired at any time. If that is the 
case, it is of no use studying hard or continuing to stay in an 
ordinary job. Instead of this, it is wiser for you to become an 
information technology (IT) "hero." This tendency is prevailing 
in Japan. All this considered, I would say it is only natural 
that young people adored Mr. Horie. 
 
Additionally, the declining birthrate is a major issue. The root 
cause is that our society has lost its stability under the 
influence of market fundamentalism. The public surely feels that 
this society cannot make children feel happy. Raising children 
requires huge labor from women as well as men. But this kind of 
labor is taken as a disadvantage under the performance-based pay 
system. Young people eventually become reluctant to have 
children. 
 
Winners and losers 
 
Market fundamentalism seeks to eliminate regulations, calling 
them obstacles to free competition. But regulations are 
definitely necessary to protect the weak. 
 
Market fundamentalism polarizes the nation into a small group of 
winners and a large group of losers and does not allow people to 
exist outside of one of these two categories. 
 
In this sort of society, the public focuses solely on how to back 
 
TOKYO 00000876  005 OF 012 
 
 
the winner. In other words, every citizen of the nation becomes a 
fence sitter. Recently I've come to realize there are some who 
hold a critical view of a military general of the Nagaoka clan in 
the last days of the Tokugawa shogunate, Tsuginosuke Kawai, and 
the Aizu clan, describing them as not being quick at seizing an 
opportunity. This would mean that one Japanese virtue, remaining 
loyal, is now seen as something stupid. 
 
Widening disparity in wealth 
 
Imagine what would happen to society if it were trampled down by 
market fundamentalism. The United States is a good example of 
this. The average annual income of corporate managers in that 
country is 1.3 billion yen, while that of the rank and file is 
three million yen. The US infant mortality rate is higher than 
that of even the autocratic state Cuba. The reason is that many 
Americans cannot afford health insurance. In the US, citizens 
have to somehow survive cutthroat competition. For this, the US 
has dozens of times as many lawyers and psychotherapists as 
Japan. Their businesses are thriving. 
 
Of the 13 members of the Organization for Economic Cooperation 
and Development (OECD), Mexico has the largest disparity in 
wealth, followed by the US. Where do you think Japan ranks? 
Japan, which was once a country in which everyone was said to be 
middle class, now ranked number five. 
 
Shedding the national character that had been its pride in the 
world, Japan is running on the path to becoming a vulgar and 
coarse society like the US. 
 
The Japanese public, albeit obscurely, is in fear of living in 
such a society. This fear leads to a sense of impasse felt by the 
Japanese. The root cause lies in market fundamentalism, but the 
people, unaware of this, supported Mr. Horie, who is the child of 
(market fundamentalism). 
 
When incidents like the Livedoor case occur, legal measures are 
quickly prepared. Doing so may be unavoidable, but a country that 
is ruled by a broad range of laws is shameful, I think. The 
essence of the incident this time is that market fundamentalism 
hurts not only the economy and society but also the beautiful 
virtues of the Japanese. The most wonderful country, in my view, 
is a country where the people discipline themselves with their 
strong awareness of morals and ethics, as Japan did in the past. 
 
Masahiko Fujiwara: Born in Manchuria in 1943 and is a 
mathematician. Graduated from University of Tokyo Faculty of 
Science and is now a professor at Ochanomizu University after 
holding such posts as research fellow at the University of 
Michigan and associate professor at the University of Colorado. 
Majored in indefinite equations. Is the author of such books as 
Wakaki Suugakusha no America (The America of a Young 
Mathematician), Harukanaru Kenburijji (Far Away Cambridge), and 
Sokoku to wa Kokugo (The National Language is the Homeland). Was 
awarded the Seiron Shimpu Prize for his writing. 
 
(3) Minshuto (Democratic Party of Japan) leader Maehara firm 
about describing China as a threat, despite possible objections 
in the party; Prelude to party presidential race? 
 
NIHON KEIZAI (Page 2) (Almost full) 
February 16, 2006 
 
TOKYO 00000876  006 OF 012 
 
 
 
Minshuto will give shape to its unified view about China's 
military strength before the end of the month. The party 
leadership, including President Seiji Maehara, intends to specify 
in the unified view that China is a "real threat," but they also 
intend to express their desire to strengthen friendly relations 
with China by removing concerns through continuing dialogue. This 
would be the first hurdle Maehara has to clear before unifying 
the party view next on foreign and security policy in June, a 
challenge on which he has staked his presidential post. It is 
also likely to be a prelude to the presidential race slated for 
September, given possible objections to Maehara's attitude from 
his party members. 
 
The party's next cabinet's Foreign Minister Keiichiro Asao and 
Defense Agency Director-General Akihisa Nagashima will soon 
prepare a rough draft of the unified view and present it to the 
party's joint foreign and defense affairs meeting. The draft is 
likely to continue Maehara's view of looking on China as a threat 
as he had stated in a speech in the United States last December. 
 
The government does not recognize China as a threat at present. 
In the written government reply approved at a cabinet meeting in 
January, "threat" is defined as coming to the fore when a 
capability of invading other countries and an intention to invade 
other countries join hands. This written reply indicates that 
Japan does not think China has any intention to invade. 
 
But the Minshuto leadership's basic position is that China could 
be recognized as a threat, given its capabilities, including "its 
increased military spending at the pace of 10% or more annually, 
its deployment of missiles to cover Japanese territory and its 
nuclear weapons," according to Maehara, even though it does not 
have any intention to invade. By recognizing that country as a 
threat, the party intends to highlight the importance of 
diplomatic efforts to avoid disputes. 
 
The party's unified view is likely to mention the need to promote 
cooperation (with China) in such areas as energy and the 
environment, as well as to enhance the  transparency (of China's 
military spending) via military exchanges. It also aims to cast a 
critical eye on Prime Minister Junichiro Koizumi who as a result 
of his continued visits to Yasukuni Shrine, has almost failed to 
have a top-level exchange with China. 
 
This tone is gaining a certain degree of understanding among the 
party's conservative lawmakers. If he succeeded in getting a 
consensus also on the view of allowing the exercising of the 
right to collective defense but with conditions attached by 
containing objections from former socialists in the party, 
Maehara could strengthen his cohesive power in the party, thereby 
possibly gaining an advantage in fighting the presidential race 
in September. 
 
"Your thinking is behind the times," Maehara told Yoshio Hachiro 
on Feb. 14. Hachiro is a former socialist and an aide to Lower 
House speaker Takahiro Yokomichi. Hachiro advised Maehara not to 
rush to get a consensus on foreign and security policy, but 
Maehara did not listen to him. 
 
Secretary General Yukio Hatoyama held talks with Ichiro Ozawa in 
 
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Tokyo on Feb. 8. Hatoyama told Ozawa: "Our party is pursuing the 
shadow of the Koizumi cabinet. I'd like you to support President 
 
TOKYO 00000876  007 OF 012 
 
 
Maehara." Ozawa remained silent. 
 
(4) Calls for hard-line measures against North Korea growing 
stronger; Government studying ways to apply pressure 
 
NIHON KEIZAI (Page 2) (Abridged) 
February 17, 2006 
 
Calls are growing stronger for a hard line against North Korea 
following the Japan-North Korea intergovernmental talks earlier 
this month that failed to bring progress to the issue of Japanese 
nationals abducted to North Korea. The Liberal Democratic Party 
(LDP) decided yesterday that if the abduction issue fails to see 
a settlement, the party would draft North Korean human rights 
legislation obligating the government to impose economic 
sanctions on North Korea. The government also decided at its 
director general-level meeting to study using pressure by 
strictly applying existing legislation to the North. 
 
At yesterday's LDP abduction issue taskforce meeting, many 
members criticized local governments' preferential tax treatment 
for facilities connected with the pro-Pyongyang General 
Association of Korean Residents in Japan (Chongryon). 
 
The meeting also decided to approve an outline of the North 
Korean human rights legislation to get it approved in the current 
Diet session. 
 
The LDP characterizes it as the third sanction against the North 
following the revised Foreign Exchange and Foreign Trade Control 
Law and the Law Banning Specific Ships from Entering Japanese 
Ports. 
 
The major opposition Minshuto (Democratic Party of Japan) is also 
planning to submit to the current Diet session legislation to 
rescue victims of crimes against human rights, with North Korean 
defectors in mind. The Diet may pass a new sanctions law in the 
current session on the back of growing public opinion critical of 
North Korea. 
 
A group of lawmakers, including Upper House member Ichita 
Yamamoto, has briefed Chief Cabinet Secretary Shinzo Abe on the 
outline of the North Korean human rights bill. Abe was visibly 
pleased with their efforts to establish new legislation. The 
government's position is to keep channels for dialogue with the 
North alive and do away with economic sanctions legislation for 
the time being. A person close to Abe explained: "If the LDP 
hardens its stance, it will help the government elicit 
compromises from the North behind the scenes in intergovernmental 
talks." 
 
The government will speed up its efforts to come up with ways to 
apply pressure on the North by strictly applying existing 
legislation under the initiative of the Prime Minister's Official 
Residence (Kantei). In yesterday's abduction issue expert council 
meeting of senior officials of concerned government offices, the 
Internal Affairs and Communication Ministry reported that some 
local governments have been considering reexamining preferential 
tax treatment to Chongryon-related facilities. 
 
The expert council also appointed Cabinet Office Parliamentary 
Secretary Eriko Yamatani as officer in charge of support for 
 
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abductees and their families. The group also decided to improve 
 
TOKYO 00000876  008 OF 012 
 
 
the abduction issue corner in the Kantei website. 
 
The outlook for the next round of government-to-government talks 
looks gloomy, as such a trend in Japan is certain to draw a 
fierce reaction from the North. 
 
(5) Interview with University of Shizuoka Prof. Hajime Izumi on 
North Korea: Pyongyang paying close attention to Tokyo's intent 
for normalization; North wants to confirm Pyongyang declaration 
as a cornerstone of bilateral ties 
 
ASAHI (Page 15) (Full) 
February 16, 2006 
 
Hajime Izumi, a professor at the University of Shizuoka, is well 
informed on the Korean Peninsula situation. The Asahi Shimbun 
interviewed him on what will come out of the recent talks between 
Japan and North Korea and what challenges are in store. 
 
-- What's your view of the talks this time? 
 
Izumi: It was the first round, so we'll have to wait for the 
talks to go through several more rounds to see what kind of 
results they can produce. The Japanese delegation was willing to 
go on with the talks. But it's difficult to continue them if the 
North does not take any action on the abduction issue. That's the 
atmosphere in Japan, and North Korea understands that. The North 
wonders if Japan really wants to normalize diplomatic relations. 
They suspect that Japan might not be interested in anything but 
the abduction issue. They will not show their card on the 
abduction issue until they see if Japan is serious about 
normalization. 
 
-- How do you think Japan should respond on the abduction issue? 
 
Izumi: The most important thing is the abduction issue. At the 
same time, however, Japan will need to tell them that Japan will 
also work hard to normalize diplomatic relations if the abduction 
issue and security issues are settled. Otherwise, North Korea 
won't respond. There's no problem as far as the government 
applies the current law even more strictly to put the screws on 
the North. They might stiffen their attitude, but they won't call 
off the talks. 
 
-- In the normalization talks, too, North Korea called for 
compensation. There's a gap with Japan. 
 
Izumi: That's what North Korea has claimed time and again. If the 
bilateral talks boil down to a certain extent, they might even 
retract that claim, I think. But speaking from their way of 
thinking, they will say whatever they like to say, even while 
knowing that may not go well. 
 
-- How do you think North Korea will come out? 
 
Izumi: I still have no idea. (Korean Workers Party) General 
Secretary Kim Jong Il doesn't have to attain diplomatic 
 
SIPDIS 
normalization while Prime Minister Koizumi is in office, so he's 
free from pressure. But General Secretary Kim is probably 
conscious of his age. There are five years or so left before he 
turns 70. I wonder how much he can do during that time. They've 
had nothing remarkable in their relations with Japan and the 
United States since the 1990s. After the Soviet Union's collapse, 
 
TOKYO 00000876  009 OF 012 
 
 
they only accomplished something in their ties with China and 
South Korea. That's all they've got. If they think of trying to 
rebuild or develop their country, there's no choice but to 
improve their relations with Japan and the United States. That's 
the only way left for the North. 
 
-- In the talks, Japan delivered Prime Minister Koizumi's message 
to General Secretary Kim. 
 
Izumi: Japan can tell them that the Japan-DPRK Pyongyang 
declaration is a cornerstone of bilateral relations between Japan 
and North Korea. If we do so, North Korea can go ahead. That's 
because the Pyongyang declaration is a very important document 
that was signed by General Secretary Kim himself. North Korea 
fears the case where the post-Koizumi government scraps the 
Pyongyang declaration. I'm not saying the bilateral relationship 
between Japan and North Korea will be undermined. It will hurt 
the justifiability of General Secretary Kim. The North probably 
wants to confirm while the Koizumi government is in office that 
the Pyongyang declaration will remain the foundation of bilateral 
relations between Japan and North Korea. 
 
-- What about reactions from the US, China, and South Korea over 
the Japan-DPRK talks? 
 
Izumi: In the past three years, Japan has talked with North Korea 
about the abduction issue only. Now, unlike before, Japan is 
ready to negotiate various other issues in wide-ranging areas. 
This stance gets high marks not only from China and South Korea 
but also from the United States. That's because the United States 
can share most security issues with Japan. 
 
-- Will the bilateral talks affect the suspended six-party talks 
over North Korea's nuclear programs? 
 
Izumi: It was important for Japan to tell the North that security 
is a matter of serious concern to Japan. They think Japan is 
better than China to get things transmitted to the United States. 
The six-party talks could resume late this month at the earliest 
if the moneylaundering issue is settled. But even if the six- 
party talks were resumed, they would only set up working groups. 
North Korea will probably assume a wait-and-see attitude until 
this November's off-year election in the United States. 
 
(6) Final ODA reform plan calls for continued use of the name 
JBIC 
 
MAINICHI (Page 1) (Abridged slightly) 
February 17, 2006 
 
The government and the Liberal Democratic Party (LDP) have 
crafted their final plan to reform the official development 
assistance (ODA) program. The plan is designed to dissolve the 
Japan Bank for International Cooperation (JBIC) to integrate its 
yen loan department into the Japan International Cooperation 
Agency (JICA) and its international financial department into the 
new government-affiliated financial institution to be established 
by absorbing all state-run financial institutions. The government 
and LDP have also decided to continue to call the new financial 
institution's international department the JBIC and keep its top 
post in line with the LDP Policy Research Council's view. 
 
The Council on Overseas Economic Cooperation (chaired by former 
 
TOKYO 00000876  010 OF 012 
 
 
Public Prosecutor General Akio Harada), established under Chief 
Cabinet Secretary Shinzo Abe, is expected to unveil the plan 
today. 
 
The government has decided to continue to use the name JBIC in 
consideration of business circles putting importance on the 
JBIC's high international recognition. The JBIC will serve as the 
international department in the government's new financial 
institution, which is likely to be placed under the jurisdiction 
of the Finance Ministry. A retired government official may assume 
its top post, as before. 
 
Currently, 13 government agencies, including the Foreign 
Ministry, are responsible for planning ODA projects; the JBIC and 
JICA are responsible for implementing yen loans and providing 
technological cooperation, respectively; and the Foreign Ministry 
for grant aid. Under the new system, what is tentatively called 
the External Economic Cooperation Council will handle the ODA 
exclusively. 
 
(7) Interview with former Ambassador to US Kuriyama, Kyorin 
University Prof. Takubo on Prime Minister Koizumi's visit to 
Yasukuni Shrine, soured Japan-China ties 
 
SANKEI (Page 5) (Full) 
February 17, 2006 
 
Japan and China are at a deadlock in their ties. Beijing has been 
refusing to hold a summit meeting of the two countries' leaders, 
and Tokyo remains unable to find a way out of the impasse. Some 
deem it difficult to fundamentally improve the relations all the 
more because China is exploiting Prime Minister Junichiro 
Koizumi's annual practice of paying homage at Yasukuni Shrine as 
a diplomatic card. In the meantime, Takakazu Kuriyama, a former 
ambassador to the United States, wrote an essay, 
"Reconciliation-Challenges facing Japan's diplomacy," for Gaiko 
Forum in its January and February issues, calling for Koizumi to 
stop visiting the shrine. However, Tadae Takubo, a visiting 
professor at Kyorin University, wants the premier to continue his 
Yasukuni visit. The Sankei Shimbun interviewed both of them. 
 
Stop visiting the shrine: Kuriyama 
 
-- You urge Prime Minister Koizumi to stop visiting Yasukuni 
Shrine. What's your real motive? 
 
Kuriyama: Prime Minister Koizumi has said he visits Yasukuni 
Shrine to "mourn for people who died in the war" and to "renew a 
pledge not to fight a war." There's not the slightest doubt about 
the prime minister's sentiment. Also, half of the responsibility 
rests with China for the two countries' failure to reconcile 
well. However, Japan, as a country that victimized its neighbors, 
should face up to history and self-reflect on that, and Japan 
must continue its efforts to have that reflected in its foreign 
policy and in its Asia policy. We can't attain reconciliation 
until China and South Korea see Japan as differing from what it 
used to be in the prewar days. It's important for Japan's 
national security to stabilize relations with South Korea, and I 
think Japan will look different in its state and dignity 
depending on whether Japan can be well reconciled with these two 
countries. 
 
-- The prime minister has noted that compromising on the Yasukuni 
 
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issue is one thing and getting along well with each other, that 
is, between Japan and China, is another. 
 
Kuriyama: It's difficult to reconcile Japan and China. The 
biggest reason for that is nationalism on the side of China. The 
Communist Party of China justifies its existence at home. They 
say they won in their war of resistance against Japan. That's the 
biggest reason for them to assert the party's justifiability. 
Indeed, I can't expect China to stop raising history issues even 
if a Japanese prime minister refrains from visiting Yasukuni 
Shrine. It's unrealistic to expect China's policy toward Japan to 
change in a visible way when it comes to oil and gas exploitation 
in the East China Sea, territorial claims over the Senkaku 
islets, or Japan's bid for a permanent seat on the United Nations 
Security Council. If that is why Japan does not make efforts for 
reconciliation, that's wrong as a matter of diplomatic stance. 
Reconciliation is not just between Japan and China. That's the 
question of how to get along with the international community as 
a whole. 
 
-- Since the war ended, many Japanese prime ministers have paid 
homage at Yasukuni Shrine. Is this also wrong? 
 
Kuriyama: I think so. When I was a bureaucrat of the Foreign 
Ministry, I kept from saying anything that differs from the 
political judgment at the time. However, I thought to myself that 
Japan's policy during the first half of the 20th century was 
consistently wrong. I think the greater part of those who were 
victimized in the war fought purely for Japan and lost their 
lives. It's only natural and not strange for the Japanese people 
to mourn for their souls. However, in the case of the prime 
minister and government officials bearing responsible positions, 
their visits to Yasukuni Shrine will undoubtedly cause the 
international community to wonder if they're really doing so 
purely for that. 
 
-- What made you write that essay at this point of time? 
 
Kuriyama: I have a very serious sense of crisis about the rise of 
nationalism. Former Chinese President Jiang Zemin irritated 
Japanese nationalism when he visited Japan in 1998. That 
deteriorated Japanese sentiment toward China. In recent years, 
Japanese nationalism has been growing strong. The international 
community might have a feeling of vague anxiety, probably 
wondering where Japan is going. 
 
-- The international community's feeling of anxiety comes from 
misunderstanding, doesn't it? 
 
Kuriyama: That's where my view differs a little. Unlike Germany, 
Japan has made no appropriate overview of its conducts during the 
first half of the 20th century when Japan took imperialistic 
policy and expansionism. That's the problem remaining left 
behind. 
 
-- History has yet to come up with a definite evaluation of the 
past war. 
 
Kuriyama: When I was director general of the Treaties Bureau at 
the Foreign Ministry, I stated before the Diet that the 
international community regards that as a war of aggression. The 
Japanese people might disagree to that view. However, the 
international community has already handed down its judgment. If 
 
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a Japanese prime minister tells the United States that that war 
was a war for self-defense, Japan and the United States can't get 
along with each other. Unfortunately, the history of mankind has 
seen a number of wars. Most of those histories were written by 
those who won wars. Those who lost wars might think that is 
unfair. However, histories written by winners have been accepted 
as histories. The Japanese people must accept that. 
 
Continue to visit the shrine: Takubo 
 
Mr. Kuriyama sounds as if to say Japan's foreign policy toward 
China and South Korea is in a fix. However, Japan was somewhat 
abnormal before Prime Minister Koizumi's visit to Yasukuni 
Shrine. After the war, Japan made unnecessary apologies over the 
comfort women and school textbook issues. Its total settlement 
was the Murayama statement of 1995 with "deep remorse and 
heartfelt apology." The prime minister is on that track. But I 
think the Yasukuni issue is a chance to get it back on the right 
track. We should exactly tell them that we can't apologize even 
for their interventions in Japan's internal affairs. By doing so, 
we can get along with each other as sovereign nations over the 
mid- to long-term. 
 
In his view of history, Mr. Kuriyama seems to say things only 
about the Manchurian Incident and Japan-China relations in the 
days a little before the Manchurian Incident and up until Japan's 
defeat in the war in 1945. What led Japan to the war? Why did the 
Manchurian Incident break out? We must look into history before 
that. We must take an overall view of history from the spectrum 
of Japan-China relations, the United States' policy toward Asia, 
and the former Soviet Union's policy toward Asia. That war is 
multifaceted and is too complicated to simplify countries as 
parties that victimized others and as parties that were 
victimized. 
 
In his essay, Mr. Kuriyama says the Self-Defense Forces is 
"obviously a kind of military muscle." But he takes a look only 
at hardware or weapons. The SDF is a far cry from the now-defunct 
military. The SDF Law corresponds to the police law system. Even 
when sending SDF personnel overseas, Japan will have to make a 
special law, or Japan can do nothing. People in the Diet are now 
working to amend Japan's postwar constitution in order to turn 
the SDF into the status of a normal military entity. I don't know 
why this motive is nationalism. 
 
We should gradually shape our Japanese view of history. It's all 
right to make it a principle to take omnidirectional diplomacy. 
But it's only natural that there are priorities. The most 
important thing is the Japan-US alliance. China is becoming a 
military threat, and it's only natural to make the Japan-US 
alliance even closer. 
 
SCHIEFFER