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UNCLAS SECTION 01 OF 08 TOKYO 001719 
 
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 06/23/08 
 
INDEX: 
 
(1) Pending issues in education, ODA put on back burner: 
Coordination of views on basic policy guidelines for fiscal 2008 
budget reaching final stage (Nikkei) 
 
(2) Regular Diet session adjourned, with key bills carried over to 
next session (Nikkei) 
 
(3) Japan, ASEAN expect to put EPA into effect this fall (Nikkei) 
 
(4) Two weeks before G8 summit: Lake Toyako area already on high 
alert (Sankei) 
 
(5) Nago education board to start cultural heritage probe next month 
at Camp Schwab (Ryukyu Shimpo) 
 
(6) "Objective data" prepared for U.S. on Futenma traffic pattern 
(Okinawa Times) 
 
(7) Schwab fit for Futenma relocation: USFJ chief (Ryukyu Shimpo) 
 
ARTICLES: 
 
(1) Pending issues in education, ODA put on back burner: 
Coordination of views on basic policy guidelines for fiscal 2008 
budget reaching final stage 
 
NIKKEI (Page 3) (Almost full) 
June 22, 2008 
 
Government coordination of views over the compilation of basic 
policy guidelines on economic and fiscal management for the fiscal 
2008 national budget is reaching its final stage. The focus is on 
the extent of restraints on social security expenditures and cuts in 
public works spending. However, the Council on Economic and Fiscal 
Policy (CEFP) has discussed little about expenditures in such areas 
as education, official development assistance (ODA), and the local 
allocation tax, where demand for more allocations is high. The basic 
policy guidelines call for maximum spending cuts. However, specific 
issues on those spending areas have been apparently put off until 
the year-end budget compilation. 
 
The basic policy guidelines for fiscal 2008 are to be adopted at a 
cabinet meeting on June 27, after going through discussions by the 
CEFP and the ruling parties on June 23. 
 
Though no discussions have taken place on education at official 
venues, a fierce clash over the specifics of descriptions is 
continuing behind the door. A proposal to make preschool free has 
newly been added to the draft, though it was not included in the 
rough plan. 
 
The Ministry of Education, Culture, Sports, Science and Technology 
(MEXT) had wanted to adopt at a cabinet meeting in June a basic 
education promotion program including a numerical target for 
investment in public education and a significant increase in 
teachers to have them reflected in the basic policy guidelines. 
However, the Finance Ministry has remained opposed to MEXT's 
proposal. Chief Cabinet Secretary Nobutaka Machimura on June 20 
expressed his hope to see a settlement reached through negotiations 
between the chiefs of the two ministries. However, decision-making 
 
TOKYO 00001719  002 OF 008 
 
 
at a cabinet meeting will most likely be put off, with the Finance 
Ministry taking the stance that there is no room for negotiations as 
long as MEXT sticks to a numerical target. 
 
The CEFP has also contained pressure for an increase in the ODA 
budget for the time being. The draft mentions that ODA for Africa is 
to be doubled, but it does not refer to aid types eligible for the 
increase. The Finance Ministry insisted that the volume of projects 
needed to be carried out should be secured through a revision of the 
contents of projects, noting that many projects financed by Japan's 
aid are costly in comparison with projects financed by international 
organizations. It is determined not to give in on the policy of 
cutting the ODA budget by 2 PERCENT -4 PERCENT , compared with the 
previous year's level over five years as stipulated in the basic 
policy guidelines for fiscal 2006. 
 
No discussions on the local allocation tax, whose increase local 
governments are strongly calling for, have been held thus far. There 
are indications that now that local governments' interest has 
shifted to the distribution of revenues from an increase in the 
consumption tax, taking into account  a debate on a consumption tax 
hike likely to occur in the fall, related sources are determined to 
see how things go. 
 
There are many crucial junctures to come before the year-end budget 
compilation, such as the compilation of guidelines for budget 
appropriation requests, talks on the reallocation of road 
construction revenues for other uses and discussion of the tax code 
reform to be held starting in the summer. Requests for an increase 
in expenditures are bound to emerge in other areas as well. 
 
One senior Finance Ministry official said, "It is impossible to 
envision a budget at the stage of drafting basic policy guidelines. 
 
Points of draft basic policy guidelines for fiscal 2008 
 
(Economic growth strategy) 
Promote 200-year housing. 
Realize flights connecting Haneda Airport with Asian hubs at an 
early date. 
Double the ODA budget to Africa. 
 
(Administrative, fiscal and political reforms) 
Overall check of special accounts 
Free up special-purpose road construction revenues starting in 
fiscal 2009. Review how revenues are reallocated from the 
perspective of working people. 
Carry out maximum spending cuts in compliance with the basic policy 
guidelines for fiscal 2006 and 2007. 
 
(Social security) 
Settle shortage of obstericians and pediatricians. 
Reduce the burden on low-income pensioners in implementing the new 
public health care system. 
 
(Education) 
Promote education, based on the basic education promotion program to 
be formulated anew. 
Consider free preschool in the future. 
 
(2) Regular Diet session adjourned, with key bills carried over to 
next session 
 
TOKYO 00001719  003 OF 008 
 
 
 
NIKKEI (Page 5) (Full) 
June 21, 2008 
 
The regular Diet session was adjourned yesterday. Given the 
opposition camp's control of the House of Councillors, such 
important pieces of legislation as a bill revising the Antimonopoly 
Law and one amending the National Pension law, without being 
discussed, were carried over to the next extraordinary Diet session 
to be convened after the summer. It is uncertain whether the bills 
will be enacted or not. Depending on their future course, a damper 
might be cast on the discussions on the government's structural 
reform and tax system reform. 
 
Of the bills that have been carried over to the next session, the 
bill amending the Antimonopoly Law and a bill to create local 
industrial revitalization corporations were drawing attention in 
promoting the government's structural reform. The first bill is 
intended to bolster competition among companies by introducing 
stiffer penalties on firms that take the initiative in bid-rigging 
or cartel cases in a drive to prevent illegal acts. The local 
revitalization corporation bill is aimed to help local governments 
reconstruct their finances. It is an imminent task for the 
government to write off bad loans held by the third sector. But the 
Democratic Party of Japan (DPJ) opposed the bill, on the grounds 
that standards for aid to be provided remain unclear. There was no 
scene in which the main opposition presented countermeasures in 
order for the ruling and opposition camps to reach a compromise 
version. 
 
In the health and labor sector, two important bills have been 
carried over. A bill amending the National Pension Law proposes 
adding about 130 billion yen to the state contribution amount of 
pensions, prior to the planned increase in the rate of the burden on 
the national treasury for basic pension benefit from 1/3 to 1/2 by 
FY2009. Finding revenues to fund the raised portion of state subsidy 
is a major theme in discussing drastic tax reform. But no conclusion 
on this fiscal revenue issue has yet to be reached. 
 
The government's goal for trimming spending will be affected by the 
future course of a bill to have major corporations' health insurance 
unions assume the burden that the government-managed health 
insurance program joined by small to medium-sized companies place on 
the national treasury. Over the opposition of the companies and 
labor unions to be pressed with the additional burden, the 
government submitted the bill to the Diet session as a pillar among 
the specific measures for FY2008 to reduce 220 billion yen in annual 
growth of social insurance spending. The government expects a 100 
billion yen spending cut with the measures in the bill. But if the 
bill is scrapped, it will become impossible to implement the planned 
spending cut for this fiscal year. 
 
A bill revising the law to promote the return of the so-called 
"buried money" of independent administrative corporations to the 
national treasury is also among those carried over to the next Diet 
session. The bill is designed to have independent administrative 
corporations return the income earned from selling their real assets 
such as land and buildings to the national treasury. Their assets 
are said to total more than 60 trillion yen. If this money is used 
effectively, it will become possible to streamline their business 
management 
 
 
TOKYO 00001719  004 OF 008 
 
 
(3) Japan, ASEAN expect to put EPA into effect this fall 
 
NIKKEI (Page 5) (Full) 
June 21, 2008 
 
An economic partnership agreement (EPA) between Japan and the 
Association of Southeast Asian nations (ASEAN) is likely to come 
into effect this fall after the countries concerned change their 
systems. Although the vote on a related bill was not taken in the 
House of Councillors as the opposition camp has control of the Upper 
House, the bill was automatically approved today under the relevant 
rule in the Constitution. This will be the first EPA involving more 
than one country for Japan. 
 
Japan will gradually remove tariffs on agricultural products, 
excluding rice and dairy products, and industrial products. The 10 
ASEAN countries will scrap tariffs on flat-TV sets and other 
products. In the next 10 years, Japan will repeal tariffs on 93 
PERCENT of imports from ASEAN, while ASEAN will scrap tariffs on 91 
PERCENT  of imports from Japan. An official of the Ministry of 
Economy, Trade and Industry said: "We can expect an expansion of 
exports to the Asian market." 
 
(4) Two weeks before G8 summit: Lake Toyako area already on high 
alert 
 
SANKEI (Page 5) (Full) 
June 23, 2008 
 
Only two weeks are left before the July 7 opening of the Group of 
Eight Toyako Summit in Hokkaido. An elaborate security setup has 
already been enforced in Toyako Town where The Windsor Hotel Toya, 
the venue for the Summit, is located. This is the second time for a 
local Japanese area to be chosen to host a G8 summit, following 
Okinawa. A source familiar with security affairs said: "Keeping 
guard in Toyako Town is more difficult than it was in Okinawa. A 
total of 1,200 police officers, more than double the number provided 
to the 2000 summit, have been deployed to guard world leaders. A 
Sankei reporter examined the Toyako area. 
 
It takes about one hour to travel from New Chitose Airport to Lake 
Toyo. 
 
"This area is on a heightened state of alarm. May I see your 
identification card?" said a police officer, who was checking 
passers-by. Check points for passers-by are located at two places on 
the mountain road leading to The Windsor Hotel Toya. Police are 
enforcing a tight security measure everywhere in the hot spring town 
of Toyako. 
 
A middle-aged man who runs marine-products processing company said: 
"What has been changed with the G8 summit coming closer is the fact 
that the number of police officers has increased." 
 
An elaborate security setup of about 22,000 police officers from 
across the nation, including Hokkaido, the Tokyo Metropolitan 
Department, and the Osaka Prefectural Police, has been enforced. 
Approximately 22,000 police officers were deployed also to the 
Kyushu-Okinawa summit. What is the major difference between the 
Hokkaido and Okinawa summits is the security system guarding world 
leaders having been enhanced. 
 
 
TOKYO 00001719  005 OF 008 
 
 
According to a person familiar with security protection, some 500 
police officers were mobilized to guard world leaders at the Okinawa 
summit, but more than 1,200 police officers will be responsible for 
guarding them at the summit in Hokkaido. In addition to the G8 
member countries, a total of 15 countries are invited to a meeting 
to discuss anti-global warming measures, as well as to an expanded 
meeting on African Development. The reason for the 1,200 police 
officers is that the leaders of a record high of 23 countries will 
attend the G8 Hokkaido Toyako Summit. 
 
Another reason for the 1,200 police is heightened concern about 
terrorist attacks because of the attacks on the United States in 
September 2001. 
 
The government is now constructing a heliport near The Windsor Hotel 
for the transport of world leaders. However, the United States 
demanded that a heliport be built in an area closer to the hotel 
than the planned site. After a field investigation by its officials, 
the U.S. government agreed to build a heliport at the planned site. 
A U.S. government official said: "The United States is particularly 
sensitive about terrorism." 
 
The special conditions of the weather in the Toyako area prevent the 
police from smoothly providing security. The Windsor Hotel is 
located on the top of the Mt. Poromoi which is 625 meters high, 
being surrounded by the Lake Toya and a crater lake. The hotel's 
geographical condition to make security easy was one of the reasons 
for it being chosen to be the venue for the G8 summit. But police 
officers are suffering from the unexpected enemy called "fog." Since 
the hotel is surrounded by the lake and sea, it is easily affected 
by fog. According to the result of statistics in the past five years 
by the Sapporo District Meteorological Observatory, the Lake Toya 
area was covered by fog the average of seven to eight days in July. 
 
If the visibility is poor, it will be unable to use helicopters and 
the transportation method will have to be changed to ground 
vehicles. The source familiar with security affairs said: "Since 
land transportation has a greater risk of terrorism, police are more 
sensitive." The government, therefore, is concerned about the 
weather of the Toyako area during the three days of the G8 summit. 
 
(5) Nago education board to start cultural heritage probe next month 
at Camp Schwab 
 
RYUKYU SHIMPO (Page 2) (Abridged) 
June 20, 2008 
 
NAGO, Okinawa Prefecture-Nago City's board of education will carry 
out an archeological survey in a barrack construction area of Camp 
Schwab for a period of four months from July through November in 
line with the government's plan to build an alternative facility for 
the U.S. military's Futenma airfield on Camp Schwab. 
 
A study team from the city's board of education conducted 
preliminary surveys at two points in Camp Schwab's hillside and 
seaside areas. As a result, the team discovered the remains of a 
paddy field in the seaside area, where fragments of earthenware were 
found. The survey this time will be conducted in the seaside area 
only. 
 
The board of education has asked the city's municipal assembly in 
its current session for its approval of an extra outlay from the 
 
TOKYO 00001719  006 OF 008 
 
 
city's budget to probe cultural properties. The board will start a 
full-fledged survey after the municipal assembly approves the 
budget. 
 
(6) "Objective data" prepared for U.S. on Futenma traffic pattern 
 
OKINAWA TIMES (Page 2) (Abridged) 
June 20, 2008 
 
The Defense Ministry's Okinawa Defense Bureau conducted a monitoring 
survey of aircraft flying to and from the U.S. military's Futenma 
airfield through June 17 in response to a request from the city of 
Ginowan, which had complained that the U.S. military does not follow 
an intergovernmental agreement reached between Japan and the United 
States on a traffic pattern set for Futenma-based aircraft to 
prevent crashes onto private land. However, the Defense Ministry 
will not make public the findings from the monitoring survey. "We'd 
like to think about how effectively we can show our findings to the 
U.S. military as objective data," Okinawa Defense Bureau Director 
General Ro Manabe said. The question is whether the data will 
reflect the facts noted by Ginowan and other base-hosting 
municipalities. 
 
The Okinawa Defense Bureau, according to its press office, started 
the aircraft monitoring survey on May 28. Its personnel checked the 
routes of aircraft flying near Futenma airfield between 7 a.m. and 7 
p.m., except on Saturdays and Sundays, and ended the 15-day 
monitoring period on June 17. 
 
The review of aircraft traffic patterns was touched off by the crash 
of a U.S. Marine Corps CH-53 helicopter into the campus of Okinawa 
International University in August 2004. The Japanese and U.S. 
governments held consultations and announced a safety plan in August 
last year. 
 
The U.S. Marines in Okinawa have told the Okinawa Defense Bureau 
that the U.S. military follows the bilateral agreement, in which 
Japan and the United States reviewed the traffic patterns of U.S. 
military aircraft to and from Futenma airfield, according to the 
bureau's press office. The bureau says the U.S. military has been 
sincerely taking various specific measures. 
 
"Local residents may wonder if the U.S. military follows the 
agreement, so we're studying how to obtain objective data," a bureau 
official said, explaining why the bureau conducted the monitoring 
survey. 
 
"Even if the U.S. military follows the traffic pattern, local 
residents will be in danger and will suffer from noise as long as 
helicopters fly." So saying, a senior official of the Okinawa 
prefectural government showed a cold response. 
 
Ginowan City takes a positive view of the Okinawa Defense Bureau's 
monitoring survey as a result of its request to the government. 
However, more than half of the Marine Corps' 27 Futenma-based 
midsize and heavy lift helicopters, such as the CH-46 and the CH-53, 
have been participating in the Cobra Gold exercise in Thailand since 
early this May, and their return has yet to be confirmed as of June 
¶19. The remaining six CH-53 helicopters have not been in training, 
with their rotor blades removed early this month. 
 
Shigeo Yamauchi, chief of the Base Policy Department at Ginowan 
 
TOKYO 00001719  007 OF 008 
 
 
City's municipal government office, noted that the frequency of 
Futenma-based aircraft training has decreased sharply since May. "We 
can't get accurate data from a survey at this point," Yamauchi said, 
adding, "We don't want the government to use such data for its 
consultations with the U.S. military." With this, the city 
government is asking the bureau to look again into the flight paths 
of Futenma-based choppers after their return. 
 
(7) Schwab fit for Futenma relocation: USFJ chief 
 
RYUKYU SHIMPO (Page 1) (Full) 
June 21, 2008 
 
U.S. Forces Japan Commander Lt. Gen. Edward Rice met the press 
yesterday at the U.S. Air Force's Kadena base in Okinawa Prefecture 
and stressed there that the United States would not negotiate 
Okinawa Gov. Hirokazu Nakaima's call for moving the relocation site 
of an alternative facility planned for Futenma airfield to an 
offshore area. "Camp Schwab is fit for the Futenma relocation. I 
hope the Futenma relocation will be carried out in accordance with 
our agreement," Rice said. He added: "We've agreed on the 
appropriate location, so we want to maintain this agreement as a 
package. The agreement is not with a local government; it is with 
the Japanese government." 
 
Referring to the early morning takeoffs of Kadena-based F-15 fighter 
jets, Rice underscored the U.S. military's efforts to alleviate 
Okinawa's base-hosting burden. "We're also making efforts (to reduce 
the impact of such early morning takeoffs)," Rice said. He went on: 
"In terms of frequency, there are now fewer takeoffs. I also know 
that each flight impacts on local residents." 
 
Rice also touched on the tactic of turning around via another base, 
saying: "You may simply think we can go to another place. But 
actually, it's more complicated. In the case of Guam, it depends on 
what kind of aircraft are already there." 
 
Meanwhile, Nakaima has been calling for eliminating the danger of 
Futenma airfield. "It's impossible to close down the base to remove 
the danger," Rice said. He added, "When the replacement facility is 
built and when we're ready to relocate the base, it will be 
operational." 
 
Rice also emphasized the importance of Okinawa's geographic 
location, saying: "I can now better understand the importance of 
Okinawa. Okinawa's location is very strategic. Futenma airfield's 
relocation to the northern part (of Okinawa's main island) is very 
important for our bilateral relations." 
 
Concerning the question of how to prevent U.S. military personnel 
incidents, Rice remarked that the U.S. military has been making 
various efforts since February. "We will continue to improve (the 
preventive measures)," he said. "Our efforts will continue as long 
as we are in Okinawa." 
 
This is the first time for Rice to visit Okinawa. He also visited 
Camp Schwab, a U.S. military base located at Henoko in the 
prefecture's northern coastal city of Nago, where Futenma airfield 
will be relocated. Rice said: "I needed to see the relocation site 
with my own eyes to understand how important the relocation plan is. 
That's one of my major purposes." 
 
 
TOKYO 00001719  008 OF 008 
 
 
SCHIEFFER