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UNCLAS SECTION 01 OF 06 TOKYO 003228 
 
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 06/12/06 
 
INDEX: 
 
(1) US diplomat visits Nemuro to have firsthand look at Japan- 
Russia relations 
 
(2) Government, ruling coalition submit defense ministry bill to 
Diet to demonstrate their eagerness to settle outstanding bills; 
Next extraordinary Diet session holds key 
 
(3) Spydrone: Pie in the sky? 
 
(4) LDP to enter home-stretch coordination on spending cuts, 
plans to include elastic clause in response to criticism in party 
 
ARTICLES: 
 
(1) US diplomat visits Nemuro to have firsthand look at Japan- 
Russia relations 
 
YOMIURI (Page 31) (Full) 
June 9, 2006 
 
A diplomat from the US Embassy in Japan visited Nemuro City on 
June 7 in order to have a firsthand look at Japan-Russia 
relations, including the issue of the (Russian-held) Northern 
Territories. 
 
The diplomat is Kathleen Szpila (second secretary) in the 
political section of the embassy in Tokyo. Szpila made a tour of 
the city hall, the Nemuro Chamber of Commerce and Industry, and 
Cape Nosappu. She looked at some of the Northern Islands from the 
cape and also met with islanders at Chishima Hall. She eagerly 
asked questions about the issue of the northern islands and 
relations between Japan or Nemuro and Russia. 
 
At the city hall, Szpila received explanations about the brief 
profile of the city, the history and background of the 
territorial issue, and exchanges with the four Northern Islands 
from administrative department head Masatoshi Ishigaki on behalf 
of the mayor and the deputy mayor, who were out of town on 
business. When she visited Cape Nosappu, it was unfortunately 
cloudy, but she enjoyed looking at the barely visible shape of 
Suisho Island. At Northern Hall, Szpila, while going over through 
documents on relations between Japan and Russia over the Northern 
Territories, earnestly listened to an explanation from Hall 
Director Takashi Yonetani. 
 
Szpila stated: 
 
"When I thought I would like to look at relations between Japan 
and Russia from a local level ahead of the upcoming G-8 summit, 
Hokkaido came across my mind immediately. ... I visited here for 
the first time, but it was significant for me because I was able 
to listen to the views of local residents. I would like to convey 
my experience to the members of the political section in the 
embassy." 
 
(2) Government, ruling coalition submit defense ministry bill to 
Diet to demonstrate their eagerness to settle outstanding bills; 
Next extraordinary Diet session holds key 
 
YOMIURI (Page 4) (Abridged) 
June 10, 2006 
 
TOKYO 00003228  002 OF 006 
 
 
 
On June 9, the government and the ruling coalition submitted to 
the ongoing Diet session a bill to upgrade the Defense Agency to 
ministry status, though knowing its slim chance of clearing the 
Diet. With the heads of the Liberal Democratic Party and the New 
Komeito scheduled to step down in the fall, the bill's submission 
reflects the two parties' eagerness to settle outstanding bills 
under the current leadership. Although the government and the 
ruling coalition intend to aim for the bill's enactment in the 
next extraordinary Diet session, the opposition camp is 
determined to block it. The fate of the "defense ministry bill," 
along with other important bills that are likely to be carried 
over to the next Diet session, remains unclear. 
 
Next year's election a concern 
 
Asked by a reporter about the significance of cabinet approval of 
the "defense ministry bill," Prime Minister Junichiro Koizumi 
said on June 9: "It was a long-standing issue. Thanks to the New 
Komeito's cooperation, at long last we were able to submit it to 
the Diet following cabinet endorsement. I am certain that the 
bill's presentation at this point will lead to good results in 
the next Diet session." 
 
The LDP's strong desire to quickly realize a defense ministry 
coincided with the New Komeito's wish to speedily settle the 
issue in order to minimize the bill's negative impact on the 
unified local elections and the Upper House election next year. 
 
Last November, the New Komeito came up with a policy to enact the 
defense ministry bill in this year's regular Diet session, 
reversing its previous heel-dragging stance. The about-face 
reflected a growing sense of urgency in the New Komeito that a 
different approach to national security would rock the foundation 
of the coalition with the LDP, which had just achieved a 
landslide victory in the Lower House election. The New Komeito 
also wants to pave the way for settling outstanding issues under 
its current leadership, who will retire in October. 
 
The New Komeito leadership was more attentive to siding with the 
LDP than to hearing objections in the party and its support base. 
Some New Komeito members voiced objections to raising the Defense 
Agency to ministry status even at the June 8 Policy Research 
Council meeting that endorsed the bill. In an effort to dispel 
concerns associated with the defense ministry legislation, New 
Komeito Representative Takenori Kanzaki listed three conditions: 
1) the Self-Defense Forces must strictly adherence to Article 9 
of the Constitution when conducting activities; 2) the right to 
collective self-defense must not be exercised; and 3) defense 
spending must not be bloated. 
 
The LDP was eager from early on to turn the Defense Agency into a 
defense ministry when highly popular Prime Minister Koizumi is in 
office. But the New Komeito hardened its stance following the 
revelation of a bid-rigging scandal involving the Defense 
Facilities Administration Agency. The LDP patiently waited for 
the New Komeito to soften its stance until now, days before the 
adjournment of the ongoing Diet session. 
 
Contrary to calculation by defense ministry advocates, Prime 
Minister Koizumi also adamantly refused to extend the ongoing 
Diet session. 
 
 
TOKYO 00003228  003 OF 006 
 
 
Advocates are bent on getting the dense ministry bill approved in 
the next extraordinary Diet session. 
 
Important bills carried over to next Diet session; Order of 
importance not clear 
 
Diet approval may slit to after Upper House lection 
 
A gloomy outlook also hangs over the passage of the defense 
ministry bill. 
 
In addition to the defense ministry legislation, a number of 
important bills are likely to be carried over to the next extra 
Diet session, such as a bill to amend the Fundamental Law of 
Education and a national referendum bill stipulating a set of 
procedures required for amending the Constitution. The order of 
importance of bills and the period of the next extra Diet session 
are unclear, which will be the first Diet session under the 
successor to Koizumi. 
 
Minshuto (Democratic Party of Japan) Secretary General Yukio 
Hatoyama said in a press conference on June 9: "Nobody has taken 
responsibility for the bid-rigging scandal involving the DFAA. 
The stage has not been set to make the Defense Agency into a 
defense ministry." 
 
A Defense Agency official expressed hope for upgrading the agency 
to ministry status in the current fiscal year. One opinion also 
being heard in the New Komeito is that Diet approval should wait 
until after the unified local elections and the Upper House 
elections so as not to taint the party's image. 
 
(3) Spydrone: Pie in the sky? 
 
SANKEI (Page 4) (Full) 
June 9, 2006 
 
The Defense Agency has studied the feasibility of introducing 
unmanned reconnaissance aircraft. This spydrone initiative, 
however, is now up in the air. Unmanned aircraft reconnaissance 
is one of the areas specified for Japan's cooperation on the 
planned realignment of US forces in Japan. The agency has already 
set forth a plan to introduce a US skybird model for spying 
missions with its next fiscal year budget. The initiative, in a 
way, is a commitment to the United States. The agency's 
bureaucrats have their own operational plans for unmanned 
reconnaissance activities. However, the Self-Defense Forces' 
uniformed staffs are raising objections to such civilian plans. 
Some in the agency are now beginning again to insist on the 
option of developing an indigenous model of Japan's own. The 
agency's feasibility study is now about to collapse. 
 
In January this year, Defense Agency Director General Fukushiro 
Nukaga visited the United States. On his way to the United 
States, Nukaga stopped over in Britain, where he announced the 
idea of introducing US unmanned reconnaissance aircraft. In 
October last year, the Japanese and US governments released an 
interim report of their talks over the US military realignment, 
incorporating their agreements on specific realignment plans. The 
interim report also specified unmanned reconnaissance activities 
for bilateral defense cooperation to be strengthened. 
 
The planned spydrone is of high-altitude, long-endurance 
 
TOKYO 00003228  004 OF 006 
 
 
airworthiness for flight missions in the skies above the altitude 
of commercial jet airliners. The Defense Agency plans to 
introduce this robot spydrone in order to: 1) detect North 
Korea's ballistic missile launches; 2) conduct warning and 
surveillance activities in waters around Japan, such as spotting 
and tracking unidentified vessels; 3) grasp the movements of 
enemy troops in their incursions on Japan's outlying islands; and 
4) gather intelligence in the event of natural disasters. 
 
In fiscal 2003, the Defense Agency began to study the feasibility 
of developing a robot scouting plane of Japan's own. However, it 
will take more than 10 years to deploy the first indigenous one. 
Given the threat of North Korea's ballistic missiles, the agency 
plans to introduce an actually operational model from the United 
States for early deployment. For another, the US government has 
urged Japan to buy a US model, according to an SDF brass officer. 
 
The candidates have now been narrowed down to two US models. One 
is the Global Hawk, which can fly at altitudes up to 20 
kilometers for as long as 35 hours. The other model is the 
Predator, which can fly at altitudes up to 14 kilometers and is 
durable for 40 hours in the skies. The Global Hawk is priced at 
approximately 6.4 billion yen, and the Predator at about 1.4-1.8 
billion yen. 
 
The Defense Agency's civilian officials have worked out 
operational plans for unmanned reconnaissance activities. In that 
process, however, the SDF brass raised strong objections to the 
agency's plans. 
 
First of all, SDF officers wondered if a robot plane would be 
effective enough to detect a ballistic missile. At present, Japan 
depends on US early warning satellites for detection in boost 
phase. However, Defense Agency bureaucrats stressed that Japan, 
if it has a drone, would be able to conduct intelligence- 
gathering activities in its own way. In concrete terms, an 
unmanned plane-which is loaded with a synthetic aperture radar 
system and a high-performance sensor like reconnaissance 
satellites-will fly over the Sea of Japan. The aircraft will 
photograph missile sites in North Korea, and its infrared sensor 
can detect heat that is given off when a missile is launched, 
according to agency officials. 
 
"It's possible to photograph crossly," said one SDF officer. 
"But," he added, "the aircraft has to get close to North Korea's 
territorial airspace, or you can't get a clear-cut image." His 
rebuttal went on: "It's difficult to do so in the skies over 
international waters." 
 
The unmanned airplane is also supposed to spot and track 
suspicious ships at sea. This airborne scouting task, however, 
overlaps with P-3C patrol aircraft missions. For this reason, the 
Maritime Self-Defense Force, now developing a follow-on model 
(PX) to replace the P-3C, is angry, thinking its PX project could 
be junked. The MSDF has even boycotted a meeting with the Defense 
Agency's bureaucracy, according to one MSDF officer. 
 
The government has cut down on defense spending over the past 
four years. Meanwhile, the unmanned aircraft's cost efficiency is 
foggy, according to one MSDF staff officer. The MSDF therefore 
does not want its manpower and hardware acquisition affected as a 
result of introducing the unmanned aircraft. As it stands, the 
three SDF branches are all reluctant to undertake the unmanned 
 
TOKYO 00003228  005 OF 006 
 
 
scouting task, according to a senior official of the Defense 
Agency. Another official said, "The government has already spent 
more than 2 billion yen to develop Japan's own model, so Japan 
should go on with its own development project." 
 
The Japanese and US governments will shortly hold a working-level 
meeting of senior officials to talk about reconnaissance 
activities. However, the government will likely forego its 
planned acquisition of the skybird for next fiscal year. 
 
(4) LDP to enter home-stretch coordination on spending cuts, 
plans to include elastic clause in response to criticism in party 
 
NIHON KEIZAI (Page 2) (Full) 
June 12, 2006 
 
The Liberal Democratic Party (LDP) starts last-minute 
negotiations today to draft a plan for spending cuts. The party 
leadership would like to win understanding from party members by 
setting up an elastic clause to enable the government to review 
its reforms in accordance with changes in the economic situation. 
With an eye on the House of Councillors election next summer, 
though, some LDP members have strongly reacted to future spending 
cuts for public works projects and social insurance. It remains 
to be seen to what extent the LDP will be able to reduce 
expenditures. 
 
Up to 13 trillion yen in spending cuts 
 
The government and the ruling coalition will hold working-level 
talks of the Fiscal and Economic Reform Conference this morning. 
The participants will set about 15.5 trillion yen as the amount 
of fiscal resources necessary to turn the primary budget into the 
black by fiscal 2011. To achieve this goal, the panel plans to 
reduce spending by up to 13 trillion yen. 
 
In the LDP, too, the spending reform project team, chaired by 
Policy Research Council Chairman Hidenao Nakagawa, and the budget 
division held a joint meeting this afternoon to discuss an 
interim plan drafted by the project team. The plan lists sector- 
specific items up for spending cuts, and the proposed measures 
are all implemented, the government's initially projected 
revenues needed for policy-related expenditures will be slashed 
by about 13 trillion yen. 
 
Upper House Secretary General Toranosuke Katayama, however, 
criticized the plan in a press conference on June 9: "It is a 
mistake to feel satisfied about piling up numbers like a house of 
cards." In an informal meeting with construction-related 
associations on June 7, Upper House LDP caucus head Mikio Aoki 
also emphatically said that public works spending "should not be 
slashed every year." 
 
Upper House election kept in mind 
 
On the ballot in the Upper House election next summer will be 
those who were elected in the 2001 election, helped by the 
Koizumi boom. Upper House LDP members anticipate that the 
election will be a hard battle for the LDP. In a move to find 
ways to regain organized support, they are cautious about 
spending cuts. A senior Upper House caucus member categorically 
said: "We will oppose" the spending-cut plan now under 
consideration. 
 
TOKYO 00003228  006 OF 006 
 
 
 
Floating under such circumstances is an idea of incorporating an 
elastic clause in the plan. Since such rules are not included in 
the Fiscal Structural Reform Law, enacted in 1997, the government 
was unable to flexibly respond to an economic stagnation, so it 
had to freeze the law. Reflecting on this experience, State 
Minister in Charge of Economic and Fiscal Policy Kaoru Yosano and 
Nakagawa, who were engaged in enacting the law, are reportedly 
positive about including an elastic clause. 
 
In reforming spending and revenue, it will become necessary to 
increase tax revenues to cover the portion worked out by deducing 
the amount of spending cuts from the 15.5 trillion yen in revenue 
shortage. Based on the perception that "thoroughly reducing 
spending is indispensable in order to minimize an increase in the 
burden on the public," Nakagawa and other officials intend to 
give priority to securing major spending cuts. 
 
SCHIEFFER