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UNCLAS SECTION 01 OF 09 TOKYO 001653 
 
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 03/29/06 
 
 
INDEX: 
(1) Okinawa problem yet to be dissolved; It's time for premier to 
break the ice 
 
(2)  Focus on whether Mori faction will field single candidate 
for LDP presidential race 
 
(3)  Former Prime Minister Mori remains silent as to whether he 
supports Abe or Fukuda, concerned about bringing out the jealousy 
of other factions 
 
(4)  Polarizing Japan (Part 1): People unable to feel the 
economic recovery 
 
(5) Editorial: Integrated command of SDF - Reform needed to break 
sectionalism 
 
(6) Prime Minister's daily schedule 
 
(7)  (Corrected copy)  Household assets decrease 11% over five 
years, according to survey by Internal Affairs Ministry 
 
ARTICLES: 
(1) Okinawa problem yet to be dissolved; It's time for premier to 
break the ice 
 
ASAHI (Page 13) (Full) 
March 28, 2006 
 
Hiroshi Hoshi, senior writer 
 
There's an unfamiliar post officially titled "Ambassador 
Extraordinary and Plenipotentiary for Okinawa" or "Okinawa 
Ambassador" for short. The post was established in 1997 for the 
role of bridging the Japanese government and Okinawa over US 
military base issues. Toshinori Shigeie was appointed to fill the 
post of Okinawa ambassador this month, becoming the sixth 
incumbent. Shigeie is now busy making a round of courtesy calls 
in Okinawa Prefecture. Many of his shipments have yet to arrive 
in Japan from South Africa, where he was previously posted. 
 
In Okinawa, Shigeie paid courtesy calls on a number of local 
authorities and business leaders. On such occasions, they would 
never fail to ask the Japanese government to make efforts in 
earnest to reduce US military bases. The atmosphere would then 
tend to become standoffish. But even then, Shigeie could break 
the ice in a moment. That would be when Shigeie introduced 
himself by saying, "I was once a secretary to Chief Cabinet 
Secretary Keizo Obuchi during the Takeshita cabinet." Then, most 
 
SIPDIS 
of his meeting counterparts smiled with this reaction: "Oh, Mr. 
Obuchi? That's good." 
 
Obuchi visited Okinawa when he was a student at Waseda 
University. Since then, Obuchi long worked for Okinawa's return 
to Japan and later took part in its economic development. When 
Obuchi was prime minister, he made up his mind to host the 2000 G- 
8 summit in Okinawa. Obuchi's popularity stands out in Okinawa 
probably because the residents of that island prefecture know 
what he had on his mind. 
 
I had an opportunity to interview Obuchi when he was prime 
minister. 
 
 
TOKYO 00001653  002 OF 009 
 
 
I remember him saying things like this: If Okinawa hosts the G-8 
summit, its base problems would raise concerns not only in Japan 
but also in the United States. Okinawa accounts for only 0.6% of 
Japan but is home to 75% of all US military bases in Japan. 
There's no end to incidents and accidents involving US military 
personnel. People would realize that we've got to do something 
about Okinawa's excessive burden, and there would be a rise of 
such public opinion in and outside Japan. In response, the United 
States would reduce its military presence on the island. Japan 
would take over some base functions at its mainland locations. 
I'm thinking of asking Okinawa to remain patient for a while. 
That's the very best way to share the pain among the three 
parties... 
 
"Japan has enjoyed peace and prosperity under its security 
arrangements with the United States," Obuchi told me. "We must 
not force that burden on Okinawa alone," he added. He also said, 
"We must equalize benefits and burdens not only in the area of 
social security but also in the area of national security, and 
that's a political role." 
 
Obuchi later collapsed with a stroke, never to host the Okinawa 
summit and never to see any base reductions. 
 
And now, Japan and the United States are in the final phase of 
talks over the realignment of US forces in Japan. The Japanese 
and US governments are about to push ahead with their planned 
relocation of Futenma airfield-a symbol of the US military 
presence in Okinawa-to the island's coastal area in defiance of 
local outcries. There is also an idea being floated from within 
the government to make an ad hoc law in order for the government 
to transfer the governor's land reclamation clearing authority to 
the state and push for construction work. The government is 
projecting such a strong attitude in order to press Okinawa to 
give in. 
 
"If we try to force our way through, we'll only bring about 
strong backlashes. Prime Minister Obuchi took the time to listen 
to local voices. But now, things have changed in our way of 
getting along with Okinawa." This grumbling came from a 
government official engaged in Japan-US relations. 
 
In the meantime, the United States has now concurred on 
relocating some of the Okinawa-based US Marine troops to Guam. 
The US government estimates the total cost of this Guam 
relocation at approximately 10 billion dollars or 1.16 trillion 
yen and asked the Japanese government to pay about 7.5 billion 
dollars or 870 billion yen. 
 
Should Japan reject any cost-sharing proposal, the Pentagon may 
substantially downscale the Marine relocation plan. It wouldn't 
cost so much money to move and base those troops somewhere else 
in Japan. In that case, however, those troops would not be 
welcomed anywhere in Japan. Instead, it has become a realistic 
option for Japan to bargain with the United States for cost 
sharing... Most of the government and the ruling parties have the 
same outlook. 
 
This time around, Prime Minister Koizumi-the top leader in charge 
of Japan's foreign and defense policies-should make the first 
move to break the ice on Okinawa's problems. 
 
If he did, Japan would tenaciously call on the United States to 
 
TOKYO 00001653  003 OF 009 
 
 
realize Okinawa's actual circumstances. The prime minister would 
persuade the mainland population to understand that government 
spending is unavoidable if they cannot take over Okinawa's base- 
hosting burden. He would ask Okinawa to remain patient for a 
while. Instead, he would promise to alleviate Okinawa's base- 
hosting burden in the future. That's the way I would like him to 
commit himself with his own words to Okinawa's base issues. 
Actually, however, Koizumi cares little about Okinawa's base 
issues unlike his initiative to carry out postal privatization, 
according to one of the ruling Liberal Democratic Party's 
executive officers. 
 
On May 11, the seventh anniversary of Obuchi's death will be 
remembered. Time has passed, but the Okinawa problem remains as 
unresolved as ever. 
 
(2)  Focus on whether Mori faction will field single candidate 
for LDP presidential race; 
 
MAINICHI (Page 1) (Slightly abridged) 
March 28, 3006 
 
With the passage of the fiscal 2006 budget (general account of 
totaling 79.686 trillion yen) on March 27 after the House of 
Councillors approved it, the Liberal Democratic Party (LDP) will 
start moving full-scale in preparing for the September party 
presidential election to determine a successor to Prime Minister 
Junichiro Koizumi, who is also president of the LDP. The main 
focus of attention will be on whether the Mori faction will be 
able to field only one candidate for the presidential race, since 
it has two possible candidates -- Chief Cabinet Secretary Shinzo 
Abe and Yasuo Fukuda, a former chief cabinet secretary. 
Meanwhile, Foreign Minister Taro Aso and Finance Minister 
Sadakazu Tanigaki will move fast, too, in their preparations to 
enter the party leadership race. 
 
Largest faction is quaking 
 
A reporter at a press conference on March 27 asked Abe his 
impression of having secured the highest support rate in an 
opinion poll deeming him the most suitable person to succeed 
Koizumi as the next prime minister. Abe only responded, "As a 
politician, I feel very honored." 
 
A senior Mori faction member, however, advised Abe to refrain 
from playing up his political identity in order to avoid 
objections from veteran lawmakers who do not want to see a 
generational change now. However, many young LDP lawmakers are 
calling for Abe to become the next prime minister. 
 
If Abe runs in the presidential election backed by junior and mid- 
level lawmakers, veteran lawmakers would field Fukuda in the 
race. Faction head Mori is strongly concerned that such moves 
would likely lead to a factional split and a generational clash. 
Mori is even looking into the possibility of changing the name of 
the faction to the Fukuda faction should Abe be chosen as a 
candidate in a bid to avoid a generational clash that would split 
the faction, according to a senior faction member. There is 
concern that if Koizumi nominates his successor, the faction's 
response would fall behind the curve. 
 
There is in fact a move to tighten the noose around Abe with an 
eye on his candidacy. Former LDP Vice President Taku Yamasaki and 
 
TOKYO 00001653  004 OF 009 
 
 
former Secretary General Koichi Kato have expressed sympathy for 
Fukuda. "Both Mr. Makoto Koga and Mr. Bunmei Ibuki would support 
Mr. Fukuda," said a senior Mori faction member. 
 
Income disparity and Asia 
 
There is a sharp contrast between Abe and Fukuda in the approach 
to Asia diplomacy. Abe takes a hard-line policy toward China, 
supporting Koizumi's visits to Yasukuni Shrine. Fukuda, however, 
stresses the need for changing Koizumi's policy line toward 
China, noting Japan's responsibility for the past war. 
 
Aso and Tanigaki plan to release their campaign pledges in May 
and June separately. All the more because the two are far behind 
Abe and Fukuda in the polls, they are now being forced to display 
their own political identities. Tanigaki is not trying to draw a 
line with Koizumi, placing emphasis on the need for fiscal 
reconstruction and halting the widening social disparity. Aso is 
playing up his capabilities to the public by stating that the 
Emperor should visit Yasukuni Shrine and by calling Taiwan a 
country. 
 
Prime Minister Koizumi stated in a press conference on March 27 
that he wanted his successor to push ahead with the reform drive 
by following the path created by the Koizumi cabinet. He added, 
"I hope that a person who armed with a sense of mission, insight, 
and passion will become my replacement." 
 
(3)  Former Prime Minister Mori remains silent as to whether he 
supports Abe or Fukuda, concerned about bringing out the jealousy 
of other factions 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
March 29, 2006 
 
All eyes are now being focused on moves of former Prime Minister 
Yoshiro Mori, who heads the largest faction in the Liberal 
Democratic Party (LDP), to which potential successors to Prime 
Minister Junichiro Koizumi -- incumbent Chief Cabinet Secretary 
Shinzo Abe and former Chief Cabinet Secretary Yasuo Fukuda -- 
belong. Mori has forbid his faction members from mentioning the 
post-Koizumi candidate matter. He has remained cautious about his 
remarks even in Moscow, where he is now visiting. What is the 
real reason for his attitude? 
 
Mori told reporters accompanying him to Moscow on March 28, "Our 
group (Mori faction) should not take any action since neither Mr. 
Abe nor Mr. Fukuda have said that they will run (in the LDP 
presidential race)." In his remarks, Mori called on his faction 
members for restraint. 
 
Mori has urged faction members to be cautious in their remarks. 
He especially demanded that aides to Abe, who is regarded as most 
likely successor to Koizumi, abstain from hasty action. He has 
reiterated that Abe should wait for the next chance, skipping the 
September leadership race. He assumes that if Abe becomes prime 
minister, his term in office will be short since the LDP may face 
an uphill battle in next summer's House of Councillors election. 
 
Mori is, however, worried that if Abe obtains the LDP's top post, 
factional balance might be undermined. If junior members support 
Abe, mid-level and veteran lawmakers would be unhappy. In order 
to avoid such a situation, Mori cautioned young lawmakers about 
 
TOKYO 00001653  005 OF 009 
 
 
calls for Abe to become the next prime minister. 
 
Mori told Fukuda that business leaders pinned their hopes on him, 
implying his support for Fukuda. This is Mori's hidden motive of 
wanting to keep factional balance by giving support to Fukuda. 
This does not mean that he actually supports Fukuda. 
 
Mori revealed yesterday another reason for his cautious remarks 
about the presidential race, saying, "I do not know whether other 
factions agree to an idea that the next government will again be 
led by a member of our faction, following me and Mr. Koizumi." He 
is concerned that if the next prime minister is chosen from his 
faction, such will create jealousy among the other factions. 
 
Of course, Koizumi's successor will not be decided by Mori's view 
alone. However, Mori's remark is important since LDP Upper House 
Chairman Mikio Aoki said, "If Prime Minister Junichiro Koizumi 
and Mr. Mori talk about the issue, they will set the direction." 
 
(4)  Polarizing Japan (Part 1): People unable to feel the 
economic recovery 
 
ASAHI (Page 1) (Abridged) 
March 29, 2006 
 
In the March 24 Upper House Budget Committee session, Prime 
Minister Junichiro Koizumi said proudly, "There may be are all 
sorts of strains in it, but our society has never been this 
prosperous." Koizumi was responding to a Minshuto (Democratic 
Party of Japan) lawmaker, who asked on behalf of those people who 
think that income and regional economic disparities are growing, 
"Is that what you wanted for Japan?" 
 
The ongoing economic expansion that started in February 2002 will 
be the longest in the postwar period if it surpasses the economic 
bubble (Dec.1986 - Feb. 1991) this May and the Izanagi boom (Nov. 
1965 - July 1970) in November. Koizumi's confidence comes from an 
envisaged declaration that Japan has overcome deflation. 
 
In late January, Koizumi said, "Growing social disparity has not 
been confirmed." Hearing this, ruling party executives ridiculed 
Koizumi for his ignorance of the nation's concern. 
 
Putting forward his logic that the strong would be able to 
protect the weak, the prime minister has eased labor regulations 
and put the scalpel to skyrocketing social security spending, all 
in the name of the Koizumi reform drive. In the prime minister's 
defense, Internal Affairs and Communications Minister Heizo 
Takenaka and LDP Policy Research Council Chairman Hidenao 
Nakagawa kept making supportive comments, such as, "Economic 
development is the best medicine for correcting social 
disparity," and, "The results of reforms will bring about 
economic growth." 
 
Encouraged by their assistance, Koizumi declared before the Lower 
House Budget Committee in late February: "Japan is potentially 
capable of achieving far greater than today's economic growth, 
which is still low. We will continue with reforms." 
 
Less fulltime jobs, no savings 
 
Will the majority of the people be able to actually feel 
affluence if the ongoing economic recovery continues and fear 
 
TOKYO 00001653  006 OF 009 
 
 
about the growing disparity subsides as a result? A comparison of 
various data warrants no optimism. 
 
Corporate profits, mostly those of large firms, have set new 
records, while disposable household incomes have decreased. The 
number of salaried workers making over 20 million yen annually 
increased 18,000 between 2000 and 2004, according to the National 
Tax Agency. At the same time, the number of people earning less 
than 3 million yen also increased 1.6 million during that period. 
During the economic recovery, industries cut back on fulltime 
workers and increased low paying part-time jobs. Although the 
unemployment rate has dropped, the overall job market has become 
unstable. 
 
Disparity in savings also increased. According to Internal 
Affairs and Communications Ministry statistics, the average 
household savings was 16.92 million yen in 2004, and two-thirds 
of all the households were below average. Another poll showed a 
sharp increase in the rate of those who said they had no savings. 
The number of households on welfare also topped 1 million. 
 
Regional disparities are also noticeable. Shortly after the 
establishment of the Koizumi administration, Sapporo's average 
household income marked 95 against the base 100 for Tokyo. 
Sapporo's figure dropped to 83. The difference had shrunk during 
the Izanagi boom and slightly expanded during the economic 
bubble. The job-offers-to-seekers ratio also dramatically 
improved in Tokyo from 0.68 to 1.58 during the four-year period 
in contrast to Hokkaido's slight improvement from 0.47 to 0.66. 
 
Also noteworthy is the seriousness of such problems as the high 
unemployment rate for young people, NEET (young people not in 
education, employment or training), and job-hopping part-time 
workers. Koizumi, who had indicated that disparity was not bad in 
itself, has recognized the need to take countermeasures. The 
government has been playing up its efforts for resolving such 
problems. 
 
Fear of repeating US trend that took toll on young people 
 
Resolving those problems will not be easy. 
 
Less than 60% of the college graduates have found fulltime 
employment since 2000. A 36-year-old male Yokohama call center 
operator making 1,200 yen an hour described his male part-time 
worker-dominated workplace as a "dead end." A 30-year-old man of 
Tokyo, a son of a board member of a large corporate group, also 
noted, "I may be able to find employment at a company, but it is 
smaller and more unstable than my father's corporation." 
 
Koizumi has urged society to give people a second chance. But the 
above-mentioned person said, "Once a person leaves the 
mainstream, it is extremely difficult to get back on track." 
 
Nakagawa, a dedicated Koizumi supporter, is calling for a rising- 
tide economic policy, which is intended to pour personnel, money, 
and commodities into growing fields on an extension of structural 
reform in order to overcome deflation aimed at a high growth 
rate. 
 
In the 1960s, US President John F. Kennedy said, "A rising tide 
lifts all boats." But in 1997 at the height of the US economy 
under President Clinton, the Council of Economic Advisers 
 
TOKYO 00001653  007 OF 009 
 
 
produced an annual report, which concluded: 
 
"Income disparity shrank during the ten years each before and 
after the Kennedy administration. But the trend has changed 
drastically since the late 1970s, and the social divide expanded 
regardless of economic conditions." 
 
The report also pointed out the difficulty to turn around the 
ongoing trend. 
 
How will the Koizumi administration respond to such an alarm? 
Nihon University Prof. Yoji Inaba, who is knowledgeable about the 
US economy's job recovery, is paying attention to some 
similarities between the US of the 1990s, which took a toll on 
young people, and today's Japan. He said apprehensively, "If this 
situation persists, Japan would repeat the US trend." 
 
(5) Editorial: Integrated command of SDF - Reform needed to break 
sectionalism 
 
MAINICHI (Page 5) (Full) 
March 29, 2006 
 
The Self-Defense Forces (SDF) came under the joint operation 
system of integrating the chain of command starting on March 27. 
With the introduction of this system, the previous Joint Staff 
Council was scrapped and replaced by the Joint Staff Office 
(JSO), an organization that plays a leading part in mobilizing 
SDF troops. 
 
This is the first drastic reorganization of the SDF since they 
were established in 1954. 
 
The integrated operations are intended for the SDF to engage in 
operations swiftly and effectively in the event of emergencies, 
for instance, terrorism, contingencies and large-scale disasters. 
In the past, the chiefs of each branch of the SDF - Ground, Air, 
and Maritime Self-Defense Forces - assisted the Defense Agency 
director-general separately and issued orders to their respective 
troops. Under the integrated operations, the chain of command is 
put in the hand of the chief of JSO. The first chief of JSO, Gen. 
Hajime Massaki, bears grave responsibility in this sense. 
 
The three chiefs of staff are no longer involved in troop 
operations but instead are responsible for such matters as 
personnel matters, budget, education, and training. 
 
Affected by the extensive changes of the international situation, 
the duties and missions of the SDF have also changed 
significantly. The National Defense Program Guideline stresses 
the need for missile defense (MD) programs and defense of remote 
islands. 
The efficacy of the MD system is determined by a quick action. 
This system requires the MSDF's Aegis ships and the ASDF's 
intelligence system to be linked to each other so that they can 
deal well with contingencies. 
 
If a remote island of Japan were to be occupied by, for example, 
terrorists, troops from the three forces must team up under a 
landing operation; otherwise Japan could not recover the island. 
 
The transition to the integrated operations is the need of the 
times, as evidenced by the military movements of other nations, 
 
TOKYO 00001653  008 OF 009 
 
 
including the United States. 
 
Joint operations and joint disaster prevention drills have been 
already carried out. For instance, in order to deal with the 
aftermath of the Sumatra Earthquake and Indian Ocean Tsunami, 
Japan dispatched a joint unit to the quake-hit area, envisaging 
the planned transition to the joint operation system. 
 
However, the three organizations of the SDF have their respective 
traditions and cultures. They use different computer software and 
radio frequency. The terminologies they use are also different. 
The SDF therefore have three hurdles to clear for the 
transmission of important intelligence. 
 
The GSDF, MSDF, and ASDF, in view of their good and bad points, 
are described below: good preparations and institutional 
sclerosis for the GSDF; traditionalist and self-centeredness for 
the MSDF; and fortitude and inconsistency for the ASDF. This may 
be the result that each organization has fostered its own 
culture. 
 
The just established JSO is a motley collection of 500 personnel 
from the three forces. If they stick to the usual sense of 
sectionalism, it would be difficult to attain the goal of 
effective operations.  Sour relations between the three forces 
and the JSO must not be created. Uniformed officials and 
administrative officials (in the Defense Agency (JDA)) need to 
build a good relationship. 
 
In the process of promoting the most drastic reorganization ever 
since the foundation of the SDF, the JDA saw a succession of 
scandals occur, for instance, the Defense Facilities 
Administration Agency (DFAA) officials-led bid-rigging cases and 
the MSDF officials-caused leakage of secrets via the Internet. 
 
The introduction of the joint operation system may be viewed as 
an opportunity to reform the structure of the SDF. Given this, it 
is also necessary to reform the SDF, reflecting on those 
scandals. We hope to see the SDF, taking advantage of this 
opportunity, grapple with various reforms, let alone tackle the 
job of changing their troops' previous mentality. 
 
Japan appears to be aiming at boosting its military functions, 
but doing so requires politicians to assume a much heavier 
responsibility. We again want to emphasize the importance of 
civilian control in this transition. 
 
(6) Prime Minister's schedule, March 28 
 
NIHON KEIZAI (Page 2)  (Full) 
March 29, 2006 
 
09:01Cabinet meeting in the Diet building. Chief Cabinet 
Secretary Abe remained. 
 
SIPDIS 
09:42Arrived at the Prime Minister's Official Residence. 
10:05Met with Deputy Chief Cabinet Secretary Nagase and Assistant 
Deputy Chief Cabinet Secretary Saka. Then met with Ambassador to 
South Korea Oshima. 
11:02Met with Mongolian Prime Minister Enkhbold. Then attended 
signing ceremony for yen loans extension. 
13:56Met with the Kuwaiti ambassador to Japan. 
14:30Met with Ambassador to China Miyamoto, followed by Chairman 
Hieda of the National Association of Commercial Broadcasters in 
 
TOKYO 00001653  009 OF 009 
 
 
Japan. 
15:23Met with State Minister in charge of Administrative Reform 
Chuma and Administrative Reform Promotion Office executive 
director Matsuda. 
16:05Met with Vice Foreign Minister Yachi, followed by the former 
Sudanese ambassador to Japan. 
17:24Met with State Minister for Financial Affairs Yosano, 
followed by Environment Minister Koike. 
18:299Met with Deputy Chief Cabinet Secretary Futahashi. 
19:03 Dined at Imperial Hotel with Defense Agency Director 
General Nukaga, LDP Security Research Commission Chairman 
Yamasaki and Administrative Vice Minister Moriya. 
20:39Arrived at the official residence. 
 
(7)  (Corrected copy)  Household assets decrease 11% over five 
years, according to survey by Internal Affairs Ministry 
 
YOMIURI (Page 2) (Full) 
March 28, 2006 
 
The Internal Affairs and Communications Ministry yesterday 
released the results of the fact-finding survey on national 
consumption the ministry conducts every five years. The total 
amount of assets held by one household as of the end of November 
2004 was 39 million yen on average, down 11.1% from the previous 
survey (1999). The decline in land prices has brought down 
residential land equity, which accounts for 56% of all household 
assets, by 18.6% and home equity by 2.3%. Financial assets grew 
6.1% due to increased savings reflecting the recent economic 
recovery. 
 
Classifying all households into 10 groups according to annual 
income, the ministry found that the average amount of all assets 
held by those in the highest-income group, with an average annual 
income of 16.68 million yen, was 81.61 million yen. Families in 
the lowest-income group, with an average annual income 
 
of 2.12 million yen, possessed 24.34 million yen in assets on 
average, making a 3.4 fold differential in assets between the 
groups. The asset differential between the rich and the poor was 
5 fold in 1989, when the survey was started. The gap was 3.4 fold 
in 1994, and 3.1 fold in 1999, showing a tendency to narrow, but 
it widened in the latest survey for the first time. 
 
SCHIEFFER