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UNCLAS SECTION 01 OF 11 TOKYO 000580 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA 
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION; 
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE; 
SECDEF FOR JCS-J-5/JAPAN, 
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA 
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR; 
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA. 
 
E.O. 12958: N/A 
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA
SUBJECT:  DAILY SUMMARY OF JAPANESE PRESS 02/08/07 
 
INDEX: 
 
(1) Poll on Abe cabinet, political parties, Yanagisawa's gaffe, 
Kyuma's criticism of US Iraq policy 
 
(2) LDP to strengthen measures to win "floating voters" based on 
uphill battle in Aichi gubernatorial race 
 
(3) Editorial: Don't easily make compromise for sake of success in 
six-party talks 
 
(4) Uruma City assembly resolves to protest against F-22 deployment 
 
(5) Advisory panel suggests Japanese-version NSC draw up annual 
foreign and security policy guidelines 
 
(6) Bombing in Baghdad occurs in absence of Shiite militia; 
Sectarian strife may further intensify 
 
(7) US President Bush assuming low profile after dispatch of 
additional troops to Iraq 
 
(8) Potential uses of base land after reversion in Okinawa's 
central, southern parts (Part 3): Futenma site utilization plan; 
Process lacks reality; Young successors to landowners relate dreams 
on Futenma airfield 
 
(9) Economic forecast: How government officials map out projections 
(part 1): Second-ranked in terms of accuracy rate, but only 
temporarily? 
 
ARTICLES: 
 
(1) Poll on Abe cabinet, political parties, Yanagisawa's gaffe, 
Kyuma's criticism of US Iraq policy 
 
TOKYO SHIMBUN (Page 2) (Full) 
February 5, 2007 
 
Questions & Answers 
(Figures shown in%age. Parentheses denote the results of the last 
survey conducted Jan. 12-13.) 
 
Q: Do you support the Abe cabinet? 
 
Yes                                      40.3       (45.0) 
No                                       44.1       (38.9) 
Don't know (D/K) + no answer (N/A)       15.6       (16.1) 
 
Q: (Only for those who answered "yes" to the previous question) 
What's the primary reason for your approval of the Abe cabinet? Pick 
only one from among those listed below. 
 
The prime minister is trustworthy 
25.1       (28.2) 
Because it's a coalition cabinet of the Liberal Democratic Party and 
the New Komeito 
5.6       (5.4) 
The prime minister has leadership ability 
2.1       (2.0) 
Something can be expected of its economic policies 
2.4       (5.0) 
Something can be expected of its foreign policies 
 
TOKYO 00000580  002 OF 011 
 
 
15.5       (10.6) 
Something can be expected of its political reforms 
5.1       (4.6) 
Something can be expected of its tax reforms 
2.0       (2.8) 
Something can be expected of its administrative reforms 
4.3       (5.1) 
There's no other appropriate person (for prime minister) 
33.3       (33.6) 
Other answers (O/A) 
4.0       (0.8) 
D/K+N/A 
0.6       (1.9) 
 
Q: (Only for those who answered "no" to the first question) What's 
the primary reason for your disapproval of the Abe cabinet? Pick 
only one from among those listed below. 
 
The prime minister is untrustworthy 
9.8       (10.7) 
Because it's a coalition cabinet of the Liberal Democratic Party and 
the New Komeito 
5.5       (7.9) 
The prime minister lacks leadership ability 
30.4       (21.9) 
Nothing can be expected of its economic policies 
14.5       (17.9) 
Nothing can be expected of its foreign policies 
1.7       (2.8) 
Nothing can be expected of its political reforms 
10.7       (10.3) 
Nothing can be expected of its tax reforms 
4.5       (12.2) 
Nothing can be expected of its administrative reforms 
10.3       (3.4) 
Don't like the prime minister's personal character 
8.0       (5.7) 
O/A 
4.2       (1.5) 
D/K+N/A 
0.4       (5.7) 
 
Q: Welfare and Labor Minister Yanagisawa's recent gaffe, in which he 
called women "baby-making machines," is creating a stir in and 
outside the Diet. Do you think he should resign to take 
responsibility? 
 
Yes                   58.7 
No                    20.2 
Can't say which       20.8 
D/K+N/A                0.3 
 
Q: In addition to Welfare and Labor Minister Yanagisawa's gaffe, 
Defense Minister Fumio Kyuma criticized the United States. Do you 
think Prime Minister Shinzo Abe has appropriately dealt with these 
controversial remarks made by his cabinet ministers? 
 
Yes          16.5 
No           74.7 
D/K+N/A       8.8 
 
Q: It has been over four months since the Abe cabinet started. What 
do you think about Prime Minister Abe's leadership? 
 
TOKYO 00000580  003 OF 011 
 
 
 
Up to expectations                   16.2       (21.1) 
Beyond expected                       2.0        (1.2) 
Short of expectations                42.8       (39.5) 
No expectations from the start       34.5       (32.5) 
D/K+N/A                               4.5        (5.7) 
 
Q: Do you trust politics now? 
 
Yes                            4.5 
Yes to a certain extent       29.0 
Not very much                 42.5 
No                            23.3 
D/K+N/A                        0.7 
 
Q: Would you like the LDP-led coalition government to continue, or 
would you otherwise like it to be replaced with a DPJ-led coalition 
government? 
 
LDP-led coalition government       43.0       (47.8) 
DPJ-led coalition government       33.5       (31.7) 
D/K+N/A                            23.5       (20.5) 
 
Q: Which political party do you support? 
 
Liberal Democratic Party (LDP)                 35.1       (41.9) 
Democratic Party of Japan (DPJ or Minshuto)    15.4       (15.4) 
New Komeito (NK)                                2.9        (4.4) 
Japan Communist Party (JCP)                     2.6        (3.9) 
Social Democratic Party (SDP or Shaminto)       2.0        (1.9) 
People's New Party (PNP or Kokumin Shinto)      0.5        (0.3) 
New Party Nippon (NPN or Shinto Nippon)         0.1        (---) 
Other political parties, groups                 ---        (---) 
None                                           39.8       (30.3) 
D/K+N/A                                         1.6        (1.9) 
 
Polling methodology: The survey was conducted Feb. 3-4 by Kyodo News 
Service on a computer-aided random digit dialing (RDD) basis. Among 
randomly generated telephone numbers, those actually for household 
use with one or more eligible voters totaled 1,486. Answers were 
obtained from 1,053 persons. 
 
(2) LDP to strengthen measures to win "floating voters" based on 
uphill battle in Aichi gubernatorial race 
 
NIHON KEIZAI (Page 2) (Full) 
February 8, 2008 
 
With an eye on the April unified local elections and the July House 
of Councillors election, the ruling Liberal Democratic Party (LDP) 
has launched a review of its election strategy. Based on the results 
of the Aichi gubernatorial race and other local elections, the LDP 
has determined that it needs to strengthen measures to capture 
unaffiliated voters. It will look into issues of individual 
electoral districts of the House of Representatives and focus on 
those districts. 
 
The candidate backed by the ruling parties narrowly won the Aichi 
gubernatorial election on Feb. 4, which was held after the LDP was 
shocked by the victory of Hideo Higashikokubaru in the Miyazaki 
gubernatorial race, who won without support from any major political 
parties. The ruling-coalition-backed candidate was faced a battle 
that was tougher than the controversial remarks by Health, Labor and 
 
TOKYO 00000580  004 OF 011 
 
 
Welfare Minister Hakuo Yanagisawa would have suggested. And the 
ruling coalition backed candidate was defeated (by a candidate 
supported by opposition parties) in the Feb. 4 Kitakyushu mayoral 
election. 
 
LDP Secretary General Hidenao Nakagawa called seven Lower House 
members, including Asahiko Mihara and Yosuke Shibata, whose 
constituencies are in Kitakyushu City and Aichi Prefecture, 
respectively, into his office in LDP headquarters. The number of 
votes obtained by the ruling coalition's candidates in the 
constituencies of the seven lawmakers were less than that secured by 
the opposition backed candidates. 
 
Nakagawa gave a pep talk to them: "Thinking of the unified local 
elections and the Upper House election as your own, I want you to do 
your best." He took the unusual move of demanding that they look 
into what went wrong in their districts. He told the young 
lawmakers: "I want you to try to find ways to capture nonaligned 
voters." 
 
The LDP has determined that the reason behind the uphill battle in 
the Aichi race was that many unaffiliated voters distanced 
themselves from the party. Nakagawa and LDP Upper House Caucus 
Chairman Mikio Aoki on Feb. 5 came up with a strategy of securing 
"floating voters" and confirmed a policy to dig up votes. 
 
Regarding a strategy for the unified local elections, the party's 
Election Strategy Headquarters Chief Yoshio Yatsu said: "It is 
better for us not to bring polarizing national issues into the local 
elections." The LDP has changed its existing policy and adopted one 
of downplaying the confrontation between the ruling and opposition 
camps as much as possible. Regarding the upcoming Kanagawa 
gubernatorial election, the LDP plans not to give party 
headquarters' endorsement to Tadashi Sugino, who has been 
recommended by the LDP Kanagawa prefectural chapter and is running 
against incumbent Kanagawa Governor Shigefumi Matsuzawa, a former 
Lower House member belonging to Minshuto (Democratic Party of 
Japan). 
 
Schedule of upcoming major elections 
 
Mar. 22 
Starting date of official campaign for 13 gubernatorial elections - 
Hokkaido, Iwate, Tokyo, Kanagawa, Fukui, Mie, Nara, Tottori, 
Shimane, Tokushima, Fukuoka, Saga, and Oita. 
April 5 
Starting date of official campaign for Upper House by-elections for 
Fukushima and Okinawa. 
April 8 
Voting day for the first half of unified local elections (including 
13 gubernatorial races). 
April 22 
Voting day for the second half of unified local elections and for 
Upper House by-elections for Fukushima and Okinawa. 
July 5 
(Scheduled) announcement of campaign for Upper House election 
July 22 
(Scheduled) voting day for Upper House election 
 
(3) Editorial: Don't easily make compromise for sake of success in 
six-party talks 
 
SANKEI (Page 2) (Slightly abridged) 
 
TOKYO 00000580  005 OF 011 
 
 
February 8, 2007 
 
The six-party talks on North Korea's nuclear ambitions will resume 
in Beijing on Feb. 8. Since it has been reported that the United 
States and North Korea were able to produce a certain level of 
achievements in their preliminary talks in January, expectations 
have been growing high for the coming six-party talks. 
 
The other five nations must not make easy compromises with the North 
in order to hastily bring about success only for form's sake. In 
such a case, the result will only be allowing North Korea to buy 
time to further develop nuclear weapons, eventually raising the 
nuclear risk. 
 
It is imperative for Japan to persist with the stance of neither 
offering financial support nor lifting its sanctions unless progress 
is made on the abduction issue. Kidnapping citizens in another 
country is a grave problem that the government cannot compromise on. 
If the government makes a compromise, it will inevitably lose public 
confidence. 
 
In the coming talks, the five countries reportedly aim to take 
"measures at the first stage" toward the North's nuclear 
dismantlement and later to phase in more measures. This idea is 
somewhat odd. 
 
A joint statement in September 2005 stipulated "the Korean Peninsula 
should be free of nuclear arms in a verifiable way," and "North 
Korea has promised to dismantle its nuclear weapons and nuclear 
development programs." 
 
In exchange for Pyongyang's dismantlement of its nuclear program, 
the statement also noted that the United States would not launch a 
military attack on the North and that the five members of the 
six-party talks would promote economic cooperation to the North in 
the energy, trade, and investment areas. 
 
North Korea, however, easily broke the promise one year later. Last 
October, it carried out its first nuclear test. Calling itself a 
"nuclear power," the North has loudly called for greater 
compensation. 
 
The North did not observe the statement adopted in the six-party 
talks, so it might be meaningless to continue the talks. 
 
North Korea reportedly has demanded more than 500,000 tons of heavy 
oil and the construction of light-water reactors. These demands are 
similar to those made in the 1994 Agreed Framework between the US 
and North Korea. 
 
The Agreed Framework was canceled in the fall 2002 as North Korea 
was found to have developed uranium-based nuclear weapons. We must 
not make the same failure. In order to solicit a substantive 
agreement with North Korea, it is necessary to prepare a mechanism 
to guarantee an agreement. 
 
As long as North Korea intends to possess nuclear weapons, it might 
be necessary for the five nations to study the possibility of 
discontinuing the six-party talks or referring the issue to the UN 
Security Council. 
 
(4) Uruma City assembly resolves to protest against F-22 deployment 
 
 
TOKYO 00000580  006 OF 011 
 
 
RYUKYU SHIMPO (Page 2) (Full) 
February 8, 2007 
 
URUMA, Okinawa-Uruma City's assembly, in its ad hoc sitting 
yesterday, adopted a resolution and a statement unanimously, 
protesting against the temporary deployment of F-22A Raptor jets, 
which are state-of-the-art stealth fighters, to Kadena Air Base and 
against the takeoffs of F-15 fighters from the base during early 
hours in early January. 
 
In addition, the city assembly unanimously adopted another set of a 
resolution and a statement to protest against US military paradrop 
training conducted in a zone of training waters near Tsukenjima 
Island on Jan. 16, another US military parachute drill carried out 
at Kadena Air Base on Jan. 26, and the US military's dumping of 
ammunition and the like at Fukuji Dam and Arakawa Dam. 
 
The protest resolutions will be addressed to the US ambassador to 
Japan, the US Forces Japan commander, and others, and the statements 
to the prime minister, defense minister, and others. 
 
(5) Advisory panel suggests Japanese-version NSC draw up annual 
foreign and security policy guidelines 
 
NIHON KEIZAI (Page 2) (Full) 
February 8, 2007 
 
The Conference on Strengthening the Kantei's Functions Related to 
Security, a government advisory panel chaired by Prime Minister 
Shinzo Abe, has decided to incorporate in its final report due out 
this month a proposal suggesting that the planned national security 
council (Japanese-version NSC) should draw up annual foreign and 
security policy guidelines. This suggestion stems from a desire to 
demonstrate the nation's medium- to long-term basic strategy at home 
and abroad. The prime minister and other key members will meet 
regularly. With this, a close liaison system will be set up for 
dealing with diplomatic and security issues. 
 
The proposed policy guidelines will specify the role of the Japan-US 
alliance in coping with the international situation and measures to 
build peace, including those to promote nuclear nonproliferation. By 
transmitting its basic policy stance to the rest of the world, the 
government aims to strengthen ties with other countries. Draft 
guidelines that will be worked out in accordance with the prime 
minister's policy speech under the lead of the NSC executive office 
will first be approved in its meeting and then adopted in a cabinet 
meeting. 
 
NSC key members will meet about twice a month in principle on a 
regular basis. Since it will make it possible for the prime minister 
to call a meeting based on his judgment, it will become possible to 
swiftly take measures even in times of emergency. In regular 
meetings, wide-ranging themes will be discussed, including energy, 
climate change, bird flu, and national security issues. 
 
The advisory panel has decided to reorganize the Security Council of 
Japan into the Japanese version of the NSC. It is also close to 
agreement on (1) designating the prime minister, the chief cabinet 
secretary, the foreign minister, the defense minister, and the 
 
SIPDIS 
special advisor to the prime minister for national security as NSC 
members; (2) allowing other cabinet ministers to join if the prime 
minister gives approval; and (3) letting the eight cabinet ministers 
who are members of the current security body join NSC meeting when 
 
TOKYO 00000580  007 OF 011 
 
 
the themes addressed in the body are discussed. 
 
The advisory panel plans for the executive office to have 10 to 20 
members, including some from the private sector, and to take the 
lead in policy planning. The panel aims to finalize a draft of the 
final report in a meeting today and release the final report on Feb. 
¶27. 
 
Following the announcement of the report, the government expects to 
submit related bills, including a bill amending the NSC 
Establishment Law, to the Diet by mid-March. 
 
The current security panel, which has the prime minister and eight 
cabinet ministers as regular members, specifies nine items, 
including a basic national defense policy and the Defense Program 
Outline, as topics for deliberations. The panel calls meetings on an 
irregular basis to discuss these issues. But coordination on such 
agenda items is made in prior negotiations. Given this, some have 
pointed out that the panel has become an empty shell. 
 
(6) Bombing in Baghdad occurs in absence of Shiite militia; 
Sectarian strife may further intensify 
 
ASAHI (Page 4) (Almost full) 
February 5, 2007 
 
Hajime Yoshioka, Cairo 
 
"We must defend ourselves," said Shiite citizens standing near the 
scene of a bomb attack that occurred in Baghdad on Feb. 3, erupting 
with anger. The deadliest terrorism killed 135 persons in a single 
attack, the largest since the opening of the Iraq war. Sunnis 
attacked Shiites, taking advantage of the absence of the Shiite 
Mahdi Army as a result of its stopping its activities under pressure 
from US forces, which are redeploying to Baghdad. If US troops fail 
to put a halt to terrorist acts, the Mahdi Army will again take 
charge of maintaining security, making it more likely that the 
sectarian strife will intensify even further. 
 
The target of the attack this time was a busy market in Baghdad, 
where people can buy vegetables, eggs, and meat cheap. Sunni 
shoppers were seen in the market until last summer, but the market 
is now visited only by Shiites because of the intensified sectarian 
conflict. 
 
This same market was also bombed last Dec. 12, which killed 54 
persons and injured over 100. In order to restore security, the 
Mahdi Army set up four checkpoints on highways leading to the 
market. It banned access to the market by large trucks and doubled 
its efforts to monitor suspicious individuals. No terrorism had 
occurred until that day. According to a 32-year-old Mahdi Army 
member whom the Asahi Shimbun interviewed on Feb. 4, the Mahdi Army 
Headquarters instructed its members in mid-January to remove the 
checkpoints, citing the possibility that the Mahdi Army might be 
attacked by US troops, who were being deployed again to Baghdad. 
 
Deeming the Mahdi Army a threat exceeding that of Al Qaeda, US 
forces announced that they would go forward with a full-fledged 
cleanup operation. In fact, they have held 600 Mahdi militiamen and 
senior Mahdi officers in custody.  The Mahdi Army's leader, cleric 
al-Sadr, instructed his militiamen not to carry weapons and ordered 
other leading members to flee the country. 
 
 
TOKYO 00000580  008 OF 011 
 
 
After the removal of the checkpoints, no measures other than 
patrolling by Iraqi security forces had been taken by the Iraqi 
government and US troops. Mahdi militiamen, while continuing 
monitoring activities in the market, were worried that an act of 
terror might occur, given large trucks' free access to the market. 
In the Shiite district after the Mahdi Army left, armed Sunni forces 
have repeatedly conducted bombings. According to Reuters, 70 persons 
were killed in one bomb attack on Jan. 16, 88 persons in another on 
Jan. 22, and 61 in another on Feb. 1. 
 
The Mahdi Army member said, "We have the right to defend our 
families and towns. Neither US troops nor the Iraqi government has 
the capability or will to do so. We can't wait any longer." A senior 
Mahdi Army officer, 30, also commented: "We are waiting for Grand 
Ayatollah al-Sadr to give us orders." 
 
(7) US President Bush assuming low profile after dispatch of 
additional troops to Iraq 
 
ASAHI (Page 4) (Full) 
February 5, 2007 
 
Yoshiyuki Komurata, Washington 
 
US President George W. Bush on Feb. 3 attended the House Democratic 
Caucus Issues Conference in Williamsburg and sought understanding 
for his dispatch of additional troops to Iraq. 
 
Being aware that the battle in Congress is intensifying over his 
Iraq policy, Bush sought cooperation in a more humble manner than 
ever in the meeting. Democrats, however, are unlikely to stop 
raising objections. 
 
Bush remained provocative until the midterm election last fall, 
criticizing the Democratic Party's Iraq policy as "something like a 
dog sneaking away with its tail between its legs." But that day, 
Bush was different. He asked for cooperation: "Even in wartime, I 
welcome debate. Even though you may happen not to agree with me, 
both of us are patriotic." 
 
Speaking before House Speaker Nancy Pelosi and other Democrats, Bush 
highlighted points of agreement with the speaker, noting: "The Iraqi 
government needs to show its leadership." 
 
(8) Potential uses of base land after reversion in Okinawa's 
central, southern parts (Part 3): Futenma site utilization plan; 
Process lacks reality; Young successors to landowners relate dreams 
on Futenma airfield 
 
RYUKYU SHIMPO (Page 2) (Full) 
February 2, 2007 
 
US military transport planes are buzzing with heavy sounds in their 
approach to Futenma airfield, or the US Marine Corps' Futenma Air 
Station. Right under their approach path from the airfield's 
southern end is a populated area stretching across a small hill. On 
the hilltop is the residence of Kevin Maher, US consul general in 
Okinawa. 
 
Maher said: "Helicopters are flying right over my house, too. I know 
well about the concerns of local residents." He then underscored the 
advantages of realigning US forces in Japan, maintaining that the US 
military's realignment will work in the interests of people in 
 
TOKYO 00000580  009 OF 011 
 
 
Okinawa as well. However, he reiterated that the United States could 
not close down or return Futenma airfield until an alternative 
facility is completed. 
 
Ginowan City and Okinawa Prefecture are now working together to 
create an "action program," which will show a phased schedule to 
create a land utilization plan for the site of Futenma airfield. On 
Jan. 25, Okinawa Prefecture and Ginowan City held a second meeting 
of their study committee, in which they confirmed the process of 
working out the land utilization plan at least three or four years 
before the year Futenma airfield will be returned. 
 
According to an intergovernmental agreement on the US military's 
realignment, a replacement for Futenma airfield will be completed by 
2014, and Futenma airfield's functions will be secured at the 
alternative facility. After that, Futenma airfield will be closed 
down and returned. Calculating back from that year, Okinawa 
Prefecture and Ginowan City will have to work out their land 
utilization plan by 2010. To do so, their authorities need to enter 
the base for an environment assessment. However, that is still 
infeasible. 
 
The study committee explained the process of utilizing the site of 
Futenma airfield after its return into local hands. However, the 
committee's explanation is still unconvincing. "I couldn't see it 
clearly," said Seizen Hanashiro, chairman of the Ginowan City 
Military Landowners' Association. 
 
Osamu Yamakawa, deputy chief of headquarters for military base land 
utilization at the Okinawa prefectural government office, is in 
charge of planning base land reutilization. In his impression, 
however, it is "unclear" when Futenma will be returned. 
 
It has been more than 10 years since the Japan-US Special Action 
Committee on Facilities and Areas in Okinawa (SACO) agreed to return 
Futenma airfield. Japan and the United States have now agreed to 
relocate Futenma airfield to another site in the process of 
realigning US forces in Japan. However, Okinawa Gov. Hirokazu 
Nakaima is opposed to the government's current relocation plan. The 
issue of relocating Futenma airfield has seen little progress in the 
past rounds of consultations between Tokyo and Okinawa. What lies 
ahead for Futenma airfield's return? That is still murky. 
 
"What's the concept for this large-scale park?" "How about the image 
of water with the underground limestone cave?" In December last 
year, a number of local residents gathered after work and began 
brainstorming in their periodic meeting. They are members of a group 
of young people thinking about how to reuse the site of Futenma 
airfield after it is returned and vacated. 
 
The group, led by Masahiko Okawa, started in 2003 as a gathering of 
Futenma airfield landowners' children and grandchildren. They meet 
once every month to discuss urban planning for the site of Futenma 
airfield after its return. The group has so far set forth opinions 
in two reports. Last year, its members visited base-hosting 
localities in mainland prefectures. 
 
The average age of landowners is over 60. With their aging, the next 
generation, including their young successors, will be entrusted with 
the actual uses of their landed properties on Futenma airfield after 
its return. "I don't know yet when Futenma will come back," Okawa 
said. "But," he added, "we want to prepare ourselves now so we don't 
have to be confused when the site is really back into our hands." 
 
TOKYO 00000580  010 OF 011 
 
 
Envisioning the future return of Futenma airfield, Okawa and his 
group are working for their dreams on the site of Futenma airfield 
that is as large as 480 hectares. 
 
(9) Economic forecast: How government officials map out projections 
(part 1): Second-ranked in terms of accuracy rate, but only 
temporarily? 
 
NIHON KEIZAI (Page 5) (Full) 
February 8, 2007 
 
When the government or the Bank of Japan (BOJ) maps out economic 
policies, they do so based on public projections of future economic 
trends, population and so on. Their projections are highly 
important. And yet it is difficult for outsiders to see how 
government offices or the BOJ actually compile economic projections. 
This newspaper looked into how they make economic forecasts. 
 
One public economic forecast has a high degree of accuracy, with its 
accuracy rate coming second, even including 18 private research 
organs. 
 
That forecast is unexpectedly the government's economic forecast for 
the coming year, which it releases every December. According to a 
survey by the Nikkei Research Center of the average degree of 
accuracy of forecasts for real growth for fiscal 2000 through fiscal 
2004, the government forecasts came second among 18 research 
organs. 
 
The Cabinet Office is responsible for compiling this government 
outlook, taking views of various government agencies into 
consideration. It releases forecasts for a real growth rate, prices 
and the unemployment rate. These are key figures in forecasting tax 
revenues for the next year. 
 
Lower-ranked in 1990s 
 
Asked about the high degree of accuracy, one senor Cabinet Office 
official said: "We do not have any know-how to raise the degree of 
accuracy. All we do is to elaborately analyze various statistics and 
make forecasts." An expert in the private sector said: "We must not 
take the real potential of economists belonging to government 
agencies lightly." 
 
One Cabinet Office official said, "To be honest, the accuracy rate 
of government forecasts was low up until the second half of the 
1990s." According to the Nikkei Center, the government's economic 
forecasts for fiscal 1982 through fiscal 1989 ranked ninth among 18 
institutions. In the 1990s, the degree of accuracy of the 
government's forecast slipped close to the bottom of 17 
institutions. That was because the government's economic forecasts 
of those days had a strong nature of being a target for the 
management of economic policy. The government's forecasts at the 
time were often far removed from projections made by the private 
sector with calculations of various government agencies, including 
the Ministry of International Trade and Industry (now the Ministry 
of Economy, Trade and Industry), which insisted on setting high 
growth rates as a target, intertwined in a complicated way. 
 
Taichi Sakaiya (71), who served as director general of the economic 
planning agency (now the Cabinet Office) from 1998 through 2000, 
drastically changed the method of compiling forecasts. Deeply 
dissatisfied with the way government forecasts were mapped out, he 
 
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right after assuming the post ordered working-level officials to 
correctly make forecasts instead of giving a false impression to the 
public by setting an elevated target. The accuracy rate of the 
government's forecasts ended up second as a result of excluding as 
much as possible their nature of being a policy target. 
 
Rising-tide policy affecting forecasts 
 
However, the government's forecasts are showing signs of going back 
to the old days of being a policy target due to the Abe 
administration's rising-tide policy of aiming at achieving high 
growth. 
 
State Minister for Economic and Fiscal Policy Hiroko Ota (53) led 
the drafting of the government's forecasts for fiscal 2007. 
Working-level officials of the Cabinet Office proposed that setting 
an outlook for real growth over 1% was appropriate, but Ota 
undertook coordination of views making some concessions with METI, 
which insisted on real growth of over 2%. 
 
The government's outlook for fiscal 2007, which Ota presented at a 
meeting of the Council on Economic and Fiscal Policy on Dec. 20 last 
year, carried forecasts for a real growth rate of 2.0% and a nominal 
growth rate of 2.2%. 
 
The average forecast for real growth for fiscal 2007 of 35 private 
research organs tallied by the Economic Planning Association is 
1.92%. The government's outlook is higher by 0.08 point. The 
government's outlook will likely waver back and forth, caught 
between the pursuit of accuracy and its role as setting a policy 
target. 
 
SCHIEFFER