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P 070142Z JAN 09
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9847
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 4064
RUEHFK/AMCONSUL FUKUOKA 1713
RUEHOK/AMCONSUL OSAKA KOBE 5500
RUEHNAG/AMCONSUL NAGOYA 9633
RUEHKSO/AMCONSUL SAPPORO 2273
RUEHBJ/AMEMBASSY BEIJING 7087
RUEHUL/AMEMBASSY SEOUL 3102
RUCNDT/USMISSION USUN NEW YORK 3153

UNCLAS SECTION 01 OF 07 TOKYO 000023 
 
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: JAPANESE MORNING PRESS HIGHLIGHTS 1/07/09 
 
Index: 
 
Afghan reconstruction: 
1) With eye on incoming U.S. administration, Japan and South Korea 
at bilateral summit meeting to agree to jointly assist Afghanistan's 
reconstruction efforts (Nikkei) 
2) Democratic Party of Japan (DPJ) reveals Afghan peace initiative 
(Asahi) 
 
Pirates: 
3) Government to submit bill to Diet on dispatching MSDF warships to 
waters off Somalia for anti-piracy operations (Yomiuri) 
4) Bill to be submitted on dispatching MSDF for anti-piracy mission 
may shake up the usually uncooperative DPJ (Yomiuri) 
5) Government readying program to assist former soldiers in Africa 
in returning to civilian society, starting in Sudan (Nikkei) 
 
Political merry-go-round: 
6) Regular Diet session deliberations start with clash between 
ruling and opposition camps on jobs issue (Mainichi) 
7) Despite prime minister's earlier remarks about cash handout 
program limited to low to modest income earners, high income earners 
eligible for free money, too (Tokyo Shimbun) 
8) LDP separating into competing anti-Aso and pro-Aso groups 
(Yomiuri) 
9) Prime Minister Aso orders drafting of Japan-version "Green New 
Deal" that would create 800,000 jobs by investing in the environment 
(Sankei) 
10) Forty failing regional banks to receive infusions of public 
money to keep them stable (Mainichi) 
 
Articles: 
 
1) Aso, Lee to agree on joint assistance to Afghanistan 
reconstruction with eye on next U.S. administration 
 
NIKKEI (Page 2) (Abridged slightly) 
January 7, 2009 
 
In their meeting on Jan. 12, Prime Minister Taro Aso and South 
Korean President Lee Myung Bak are expected to reach an agreement on 
reconstruction assistance to Afghanistan that envisages joint 
projects involving the Japan International Cooperation Agency (JICA) 
and the Korea International Cooperation Agency (KOICA). The 
prevailing plan is to jointly cover the costs in the medical and 
educational fields, such as building schools and hospitals, by their 
official development assistance (ODA) budgets. The two countries 
will explore ways for cooperation in humanitarian contribution, as 
well. 
 
There is almost no precedent for Japan and South Korea to cooperate 
on aid diplomacy. It is likely that the administration under 
President Barack Obama to be launched later this month will place 
high priority on Afghanistan. For that reason, Japan and South Korea 
intend to demonstrate their eagerness to contribute to the 
reconstruction of that country. 
 
Owing to their respective domestic circumstances, Japan and the 
Republic of Korea find it difficult to provide bold reconstruction 
support. The two countries for the time being will have to center 
their assistance on technological and financial assistance through 
aid organizations. With the Diet divided into two camps, Japan has 
 
TOKYO 00000023  002 OF 007 
 
 
yet to pave the way for the dispatch of the Self-Defense Forces to 
Afghanistan since such would require new legislation. 
 
South Korean troops were once dispatched to Afghanistan for 
reconstruction assistance. But the country withdrew from Afghanistan 
after a hostage incident involving a Korean. It seems politically 
difficult for South Korea to send its troops back to Afghanistan, 
where security is deteriorating. 
 
2) DPJ's idea for bringing peace to Afghanistan 
 
ASAHI (Page 4) (Full) 
January 7, 2009 
 
Tadashi Inuzuka, senior vice foreign minister of the Democratic 
Party of Japan's (DPJ) "Next Cabinet," revealed yesterday at a press 
conference that the DPJ would host dialogue between the leaders of 
Afghanistan and Pakistan in Tokyo. During his recent trip to the two 
countries, Inuzuka reportedly proposed this dialogue to the 
governments of the two countries on the condition that the DPJ would 
assume the reins of government. 
 
The DPJ's aim is to improve environments in Afghanistan in 
cooperation with Pakistan, in order to bring about an agreement to 
end conflict as a condition for Japan to dispatch its Self-Defense 
Forces. 
 
3) Government to present to current Diet session bill on dispatching 
MSDF to waters off Somalia for anti-piracy mission 
 
YOMIURI (Top play) (Excerpts) 
January 7, 2009 
 
The government plans to submit to the current Diet session a bill, 
tentatively called the Piracy Punishment Enforcement Law, in order 
to respond to the harm being caused by pirates operating in the 
waters off Somalia and other locations. Under existing law, it is 
not clear that the act of piracy is a crime, but the new law would 
make such a crime. It would give the Japan Coast Guard (JCG) and 
Maritime Self-Defense Force (MSDF) authority to crack down on the 
pirates, and when the incidents are more than the JCG can handle, 
the MSDF would handle it. The law would allow protection of 
commercial ships other than Japanese flag carriers, and 
consideration is being given to allowing firing of weapons at pirate 
vessels in carrying out duties. The Liberal Democratic Party (LDP) 
and New Komeito are now coordinating on the bill for presentation to 
the regular Diet session by March. The aim is have the bill passed 
this session. 
 
The new law is expected to have approximately six articles. In 
accordance with the United Nations Law of the Sea, acts of piracy 
are defined under the provisions as "illegal, violent acts, and acts 
of internment and plundering." The JCG and MSDF will enforce the 
law. 
 
4) Need for anti-piracy legislation widely recognized in ruling and 
opposition blocs; DPJ may come under pressure to concur 
 
YOMIURI (Page 2) (Abridged slightly) 
January 7, 2009 
 
The government plans to submit to the current Diet session what is 
 
TOKYO 00000023  003 OF 007 
 
 
tentatively called a bill on piracy punishment and control. Although 
the legislation contains many challenges that must be finalized by 
the Liberal Democratic Party and the New Komeito, the need for the 
law is widely recognized in both the ruling and opposition camps in 
view of international calls. The Aso cabinet might be able to use it 
to apply pressure on the move in the ruling bloc to rebel against 
the budget-related bills, as well as on the major opposition 
Democratic Party of Japan. 
 
Although the New Komeito is circumspect about the overseas dispatch 
of the Self-Defense Forces, the party agrees that a new anti-piracy 
law is necessary. In yesterday's government-ruling coalition liaison 
meeting, New Komeito Policy Research Council Chairman Yamaguchi made 
this comment regarding anti-piracy: "Establishing a new law is the 
job of the legislature and the government and the ruling parties." 
 
The LDP and the New Komeito are ready to decide today to establish a 
project team on measures against piracy in waters off Somalia, 
Africa. They are eying a general law not restricted to piracy off 
Somalia. 
 
If the bill is presented to the current Diet session after things 
are worked out in the ruling bloc, the most crucial phase is 
expected to come after the fiscal 2009 budget clears the Diet. In 
the event the fiscal 2009 budget-related bills are slipped to April 
or later due to prolonged deliberations in the Upper House, 
deliberations on the anti-piracy legislation might coincide with a 
major face-off between the ruling and opposition parties. The 
anti-piracy legislation might make it difficult for anti-Aso forces 
to work closely with the DPJ regarding the budget-related bills. 
 
Forces in the DPJ calling for anti-piracy measures would be caught 
between their party's policy and the government/ruling bloc's policy 
to put up do-or-die resistance. Still, the legislation contains many 
challenges to overcome, such what to about weapons use. 
 
5) Government to engage in DDR in Sudan as first case in Africa 
 
NIKKEI (Page 2) (Excerpts) 
January 7, 2009 
 
The government will begin providing assistance for the social 
rehabilitation of former soldiers in war-torn areas in Africa. As a 
first step, the government will contribute about 15 million dollars, 
or 1.4 billion yen, to Sudan later this month. The framework will be 
expanded gradually to include Liberia, Burundi and other areas. As a 
country holding a nonpermanent seat on the UN Security Council 
starting this year, Japan intends to play up its eagerness to become 
actively involved in African issues and to make international 
contributions. 
 
Disarmament, demobilization and reintegration projects are called 
the DDR for short. Japan has implemented such a project in 
Afghanistan since 2003. Japan's support for Africa has been centered 
on the improvement of infrastructure and agricultural assistance. 
This is going to be Japan's first DDR in Africa. 
 
Japan will contribute funds to Sudan via the UN Development Program 
(UNDP) to set up job-search offices to provide vocational training 
and offer jobs and counseling. The project is led by the UN Mission 
in Sudan (UNMIS) that is carrying out activities in the country's 
southern part. 
 
TOKYO 00000023  004 OF 007 
 
 
 
6) Fierce battle starts between ruling and opposition camps over 
employment issues at Lower House; Aso reiterates previous position 
 
MAINICHI (Page 2) (Full) 
January 7, 2009 
 
Each party's representative interpellations started yesterday at the 
House of Representatives regarding the government-presented second 
supplementary budget for fiscal 2008. From the outset of the 
session, both the ruling and opposition parties geared up to go on 
the offensive in criticizing each other over such issues as the 
firing of non-permanent workers and the flat-sum cash-payout plan. 
Although Prime Minister Aso Taro said with a confidence that his 
administration and the ruling coalition would be able to swiftly 
implement effective economic measures and steps to improve the 
livelihoods of the people, he just reiterated his previous 
explanations in replying to questions by party representatives. 
 
Representatives from the opposition parties first questioned the 
employment issue, criticizing the government and ruling parties. 
Yukio Hatoyama, secretary general of the Democratic Party of Japan 
(DPJ), stressed: "The crisis in people's livelihoods is both a human 
disaster and a political disaster brought about by the Aso cabinet." 
Aso, however, rebutted: "We have come up with the largest-scale 
economic package in the world." As such, the debate did not go 
anywhere. 
 
Kensho Sasaki of the Japanese Communist Party (JCP) asserted: 
 
"The fundamental cause for bringing about the serious situation is 
the labor law that allows companies to fire non-permanent workers. 
The Labor Dispatch Law should be revised to one that was amended in 
1999 (when the law allowed manpower agencies to dispatch workers 
only to special areas of occupations)." 
 
Aso, however, took a negative position toward Sasaki's assertion, 
saying: 
 
"If the register-type worker dispatch system is banned, it will 
create disadvantage for workers instead. It is not appropriate to 
return the law to the one was amended in 1999 to make the labor 
market free in principle." 
 
Aso then said that the government would deal with matters by 
applying its bill amending the law to ban the labor dispatch of 30 
days or less. 
 
Under the government-drafted revision bill, there is no change in 
the occupations that would be allowed labor dispatch. Therefore, the 
government bill and a ban to dispatch workers to manufacturers, 
which the JCP, Social Democratic Party (SDP) and People's New Party 
(PNP) have called for, are completely different. Hatoyama of the 
DPJ, in which there are lawmakers who are cautious about revising 
the law, pointed out: "The government's bill is completely 
mismatched." Liberal Democratic Party (LDP) Policy Research Council 
Chairman Kosuke Hori posed a question focusing on the creation of 
jobs, saying: "It is necessary to take every possible measure to 
erase employment uncertainty." 
 
All opposition parties demanded that the flat-sum cash-payment 
program be scrapped. Hatoyama called it, "The ultimate stupid 
 
TOKYO 00000023  005 OF 007 
 
 
policy." "The program is tantamount to vote-buying for a future 
election using public funds," said Sasaki. Aso, however, reiterated 
the same reply: 
 
"I have no intention to cut it off (from the extra budget) because 
some people are saying that they are waiting for it. (The 
cash-benefit program) is an emergency measure to protect livelihoods 
and it will have an economic effect to increase consumption." 
 
7) Cash benefits to high income earners as well 
 
TOKYO SHIMBUN (Top Play) (Abridged Slightly) 
January 7, 2009 
 
Referring to the issue of limiting the income of recipients eligible 
for cash handouts totaling 2 trillion yen, Chief Cabinet Secretary 
Takeo Kawamura during a press conference on the afternoon of January 
6 noted, "The economic situation has significantly changed. It is 
now believed that expansion of domestic demand would produce maximum 
effects for the economy. We must take this viewpoint." He then 
revealed the government's intention to urge the distribution of cash 
benefits to high income earners as well from the perspective of 
expanding domestic demand. 
 
Prime minister leaves open option for his receiving cash handout 
 
Concerning the possibility of his receiving cash benefits, Prime 
Minister Taro Aso told reporters at the Kantei on the evening of the 
same day: "I have not made up my mind yet. I would like to consider 
the matter (when the cash benefit bill secures Diet approval)." 
 
The prime minister has so far taken the stand that it would be 
desirable for high income earners, including himself, to voluntarily 
decline such benefits, saying, "It is the matter of a person's 
dignity." Now that the government has switched its stance, the prime 
minister has also changed his response. Erratic struggles in the 
government and the ruling parties over the distributing of cash 
benefits have flared up again. 
 
Liberal Democratic Party Secretary General Hiroyuki Hosoda during a 
meeting of the government-ruling party liaison council held on the 
morning of the same day pointed out, "Since cash benefits are an 
economic stimulus measure, lawmakers should receive and spend such, 
instead of declining." The prime minister also indicated 
understanding to lawmakers receiving such money, saying, "Cash 
handouts are significant in the sense of stimulating consumption. I 
want people to spend distributed benefits." 
 
8) Pro- and anti-Aso groups hold study sessions 
 
YOMIURI (Page 4) (Full) 
January 7, 2008 
 
In the ruling Liberal Democratic Party (LDP), two study groups -- 
one supporting Prime Minister Taro Aso and the other distancing 
themselves from Aso -- were formed yesterday. The two groups are led 
by junior and mid-level lawmakers. Some observers view that the two 
groups are preparing for a future political situation. 
 
Six LDP members -- House of Representatives members: Kenichi Mizuno, 
Masahiko Shibayama, Koichi Yamauchi, Kenichiro Ueno and Hideki 
Makihara and House of Councillors member Ichita Yamamoto -- held the 
 
TOKYO 00000023  006 OF 007 
 
 
first meeting of their group. Upper House member Kotaro Tamura, a 
group member, did not show up for the meeting. 
 
The Aso administration stipulated in its mid-term program including 
the roadmap for the drastic tax system reform that the consumption 
tax would be increased in 2011. The group, however, criticized the 
government's plan, with Yamamoto saying: "There is possibility that 
the plan will undermine the effect of the economic stimulus 
package." The group confirmed that it will call on the government 
not to include a consumption tax hike in the party's manifesto for 
the next Lower House election but to stipulate a cut in the number 
of Diet members and timeframe for the administrative reform 
program. 
 
The pro-Aso group headed by Lower House member Hiroshi Imazu held an 
inaugural meeting at party headquarters. 
 
The meeting was attended by 54 Diet members, including Lower House 
members Keiji Furuya and Toshiaki Endo, and 36 lawmakers' proxies. 
The group decided to support Aso's policy of fiscally stimulating 
the economy and come up with an economic stimulus package to expand 
domestic demand. The group will present its proposals to the prime 
minister. 
 
9) Prime Minister orders Japanese version of Green New Deal: 
Investment into environment to create 800,000 jobs 
 
SANKEI (Top Play) (Excerpts) 
January 7, 2009 
 
Prime Minister Taro Aso on January 6 met with Environment Minister 
Tetsuo Saito at the Kantei and ordered him to compile a Japanese 
version of the Green New Deal initiative designed to achieve a 
balance between measures to combat global warming greenhouse gases 
and economic stimulus measures, the idea which President-elect Obama 
advocates. Under the initiative, carbon emissions will be 
constrained with the promotion of investment into the development 
and dissemination of energy-saving technologies and products. Jobs 
will also be created through the promotion of environment-related 
industries. The government will expand the market size from the 
current 70 trillion yen to over 100 trillion yen over the next fiver 
years or so. It will compile a concrete plan by the end of March 
under the slogan of creating more than 800,000 jobs. 
 
Environment Minister Saito has looked into the compilation of the 
Japanese version of the initiative. He presented a draft plan to the 
prime minister during the meeting. The prime minister ordered him to 
boldly expand the plan in cooperation with various government 
agencies so that people will find the initiative easy to 
understand. 
 
Emerging from the meeting, Saito told reporters about the aim of the 
initiative: "Reform of society and economic stimulus measures will 
be implemented concurrently. Fiscal disbursements should be used to 
build an ideal society. I want to expand market scale in cooperation 
with various government agencies." 
 
The draft plan includes the development and dissemination of 
energy-saving electronic appliances and next-generation vehicles, 
such as electric vehicles, and the promotion of intensive investment 
for the effective use of new energies, such as solar energy 
generation and wind force power generation. 
 
TOKYO 00000023  007 OF 007 
 
 
 
To be precise, the draft includes an interest-free loan system for 
investment into environment-related projects by companies and 
assistance for a car-sharing system and environmental activities by 
neighborhood shopping districts, such as giving eco-points to 
purchasers of energy-saving electronic appliances. 
 
10) Government to inject public money into 40 regional banks, using 
revised Special Measures Law for Strengthening Financial Functions 
 
MAINICHI (Top Play) (Excerpts) 
January 7, 2009 
 
The Financial Services Agency (FSA) on January 6 started making 
preparations for concurrently injecting public funds into more than 
40 of 108 regional and second-tier regional banks at the end of the 
current fiscal year. This is a measure in response to a significant 
decline in their net worth due to increased bad loans caused by 
stock plunges and the economic downturn. The revised Special 
Measures Law for Strengthening Financial Functions (SMLSFF) that 
enables preventive injection of public funds into financial 
institutions will be used. The FSA intends to dispel financial 
uncertainties, by raising targeted banks' capital-asset ratios to 
about 8 PERCENT , double the minimum sound level of 4 PERCENT , and 
make the rise in such a ratio lead to the easing of credit 
crunches. 
 
The injection of public funds will be the first in about two years 
and three months since 9 billion yen was injected into Howa Bank, a 
second-tier regional bank in Oita Prefecture, based on the former 
SMLSFF, in December 2006. 
 
The old law, which became null and void at the end of March 2008, 
mandated financial institutions that applied for the injection of 
funds to clarify management responsibility and effectively sought 
corporate reorganization. As such, only two banks applied for the 
injection of public money with many avoiding excessive intervention 
into their management by the authorities. As such, the amended law, 
which was put into force on December 17 last year, gives top 
priority to addressing credit crunches, by modifying application 
barriers, such as that though applicants will be obligated to 
achieve a numerical target attached to loans extended to small- and 
medium-size companies, their management responsibility will not be 
questioned, in principle. 
 
The FSA has determined that in order to prevent the financial system 
crisis from occurring and address credit crunches, too, it would be 
necessary to inject funds at an early date, using the revised law. 
Since late last year, it has individually approached regional banks 
and second-tier regional banks with low capital-asset ratios and 
urged them to apply for the injection of public money. 
 
However, there is deep-rooted concern among regional banks that if 
they apply for the injection of such funds on their own, depositors 
would harbor concern about their management status. For this reason, 
the FSA set standards regarding capital-asset ratios in order to 
make regional and second-tier regional banks that fall under the set 
standards automatically apply for the injection of public money. It 
then decided to hurry coordination with the possibility of the 
concurrent injection of public money at the end of March. 
 
SCHIEFFER