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UNCLAS SECTION 01 OF 14 TOKYO 001214 
 
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 05/29/09 
 
INDEX: 
 
(1) Editorial: We welcome new ambassador Roos (Nikkei) 
 
(2) Appointments for ambassadorship in Japan, China reflect Obama 
administration's emphasis on economy (Nikkei) 
 
(3) "World Watch" column: End of era of relying on "Japan experts"? 
(Sankei) 
 
(4) U.S. special envoy to visit four countries; Yamasaki, others 
call for "effective UNSC resolution" (Tokyo Shimbun) 
 
(5) North Korea's nuclear test connected with Kim's successor issue 
(Mainichi) 
 
(6) Behind the scenes of the crisis - North Korea's nuclear test 
(Part 3): Japan wary of being "left in the dark" (Mainichi) 
 
(7) Okinawa Prefecture consents to installation of marine life 
monitors (Okinawa Times) 
 
(8) Defense Bureau chief: 'Removal of danger' completed (Okinawa 
Times) 
 
(9) Draft report on "society of peace of mind" shifts from 
structural reform policy, also hints at raising consumption tax 
(Yomiuri) 
 
(10) Ruling parties considering postponement of establishing rules 
for constitution examination committee due to DPJ's opposition 
(Asahi) 
 
(11) Russia seeks aid on 180 projects including infrastructure, 
plant construction; Presents list of projects to GOJ worth over 2.5 
trillion yen (Nikkei) 
 
(12) Argument that Lower House can be dissolved any time is 
incorrect (Tokyo Shimbun) 
 
(13) Government decides to shelve complete privatization of 
Development Bank of Japan (Sankei) 
 
(14) TOP HEADLINES 
 
(15) EDITORIALS 
 
(16) Prime Minister's schedule, May 28 (Nikkei) 
 
(17) Political Cartoon (Sankei) 
 
ARTICLES: 
 
(1) Editorial: We welcome new ambassador Roos 
 
NIKKEI (Page 2) (Full) 
May 29, 2009 
 
U.S. President Barak Obama has appointed John Roos as the new 
ambassador to Japan. 
 
Although Harvard University Professor Joseph Nye had been regarded 
 
TOKYO 00001214  002 OF 014 
 
 
as a promising candidate, (the President) has settled on a lawyer 
who is little known in Japan. We hope to see (Mr. Roos) play the 
role of conveying the voices of the inner circle of the U.S 
government to Japan and directly transmitting Japan's voices to the 
U.S. side by drawing on his close ties with the President. 
 
Mr. Roos reportedly played a central role in fundraising for the 
Obama camp. The post has been given as a reward. Such an explanation 
is not necessarily pleasing. Nevertheless, in view of the fact that 
this is part of America's political culture, Japan has no other 
option but to accept the appointment. 
 
Given his lack of experience in foreign affairs, including 
Japan-U.S. relations, what Mr. Roos can achieve as ambassador is 
unknown. We are certain that (Mr. Roos) will do his homework 
thoroughly before assuming the Tokyo post. Even so, the lawyer 
specializing in corporate legal affairs is expected to encounter 
many surprises in handling foreign affairs that cannot be settled by 
legal logic alone. 
 
What we particularly want him to understand is the gravity of the 
Japan-U.S. alliance. The bond (between the two countries) has a 
scope and depth that cannot be described in words. We want him to 
visit sites related to national security and experience them 
firsthand. Even if there are matters that differ from economic and 
legal theories, that is the reality of the situation. 
 
If the Japanese political situation were stable and if the prime 
minister were a strong leader who could swiftly deliver on his 
diplomatic promises, serving in the post of U.S. ambassador to Japan 
would be enjoyable. In reality, that is not the case. If he presses 
(Japan) with Washington's logic, it might have the opposite effect. 
The job in Tokyo might not be very pleasant. 
 
According to former ambassador Thomas Schieffer, the most important 
function of the U.S. ambassador to Japan is public diplomacy. That 
involves striving to reduce points of conflict between Japan and the 
United States, aiming for agreement by working directly upon not 
only the Japanese government but also public opinion. 
 
In the past, career diplomats, scholars, heavyweight lawmakers, and 
others were appointed as ambassadors to Japan. Mr. Roos is a friend 
of the President, as was Mr. Schieffer. Compared to Mr. Nye, who is 
an internationally renowned scholar, Mr. Roos is relatively unknown. 
The current Japanese ambassador to the United States is also a 
low-profile career diplomat. The question is what he can 
accomplish. 
 
We welcome our new friend. We hope he will blow a fresh breeze onto 
(Japan-U.S. relations). 
 
(2) Appointments for ambassadorship in Japan, China reflect Obama 
administration's emphasis on economy 
 
NIKKEI (Page 6) (Full) 
May 29, 2009 
 
The Obama administration's appointments of ambassadors to Japan and 
China reflect its stance of placing emphasis on economic issues. 
Saddled with the ongoing economic crisis and trade disputes, the 
administration hopes to promote dialogue with Japan and China, which 
are respectively the world's second and third economic powers. 
 
TOKYO 00001214  003 OF 014 
 
 
 
The administration nominated John Roos as the next ambassador to 
Japan on May 27. Roos is a lawyer with information technology (IT) 
companies as his clients. He has been involved in mergers and 
acquisitions of IT businesses, producing satisfactory results. He is 
also a close confidant of President Barack Obama. This selection is 
quite different from most past cases, in which influential 
politicians were picked as ambassadors to Japan. 
 
Meanwhile, the Obama administration has selected Jon Huntsman as 
ambassador to China. He served as deputy US trade representative 
(USTR) and then ambassador to Singapore. In the Office of USTR, he 
addressed the issue of whether China should participate in the World 
Trade Organization (WTO). Based on these experiences, he is expected 
to demonstrate his skills in dealing with issues pending between the 
U.S. and China, including the protection of intellectual property 
rights. 
 
(3) "World Watch" column: End of era of relying on "Japan experts"? 
 
SANKEI (Page 7) (Full) 
May 28, 2009 
 
Kunihiko Miyake, former diplomat, visiting professor at Ritsumeikan 
University, president of AOI Foreign Policy Institute 
 
A rather shocking contributed op-ed on the Japan-U.S. alliance was 
published on the May 14 issue (sic - it was the May 15 issue) of the 
International Herald Tribune (IHT) at a time when the whole of Japan 
was in panic over the new strain of influenza and the name of the 
leading candidate for the next U.S. ambassador to Japan had finally 
emerged. As expected, the op-ed was reported only briefly by some 
newspapers and was not given much attention in Japan. 
 
The two co-authors (Jim Foster and Robert M. Orr) are both seasoned 
American experts on Japanese affairs, and I know them both 
personally. So I read the article several times. In short, after 
predicting, "There will be further deadlock in Japanese domestic 
politics, and frustration will rise on both sides regarding the 
Japan-U.S. alliance... U.S. policymakers may need to scale down 
their ambitions for the role they wish to assign Japan," the authors 
argue that the U.S. Marines in Okinawa should be reduced, 
Japan-U.S.-ROK relations should be strengthened, and the Japan-U.S. 
alliance should be updated. 
 
One of the authors also made a speech at a prestigious think tank in 
Washington at about the same time, warning: "With the current 
domestic political divisions and discord, Japan will probably be 
unable to play an appropriate role in Asia and the world for the 
next few years, or even the next decade... The problem is that the 
situation over the past 15 years, when domestic political processes 
in Japan were unable to make any decisions nor implement them, will 
continue." 
 
What was said was nothing new in itself. The three real reasons why 
I was shocked are as follows: 
 
First, even American experts on Japan are beginning to worry about a 
lesser role for Japan. 
 
It is wrong to think that the so-called experts on Japan are soft on 
Japan. But it is true that many of them have supported Japan within 
 
TOKYO 00001214  004 OF 014 
 
 
the U.S. government. When they complained about Japan, they used to 
do so in private gatherings with close acquaintances in the form of 
friendly advice. I was astounded by this case, where two Japan 
experts voiced strong criticism in public on Japanese politics being 
"brain dead." Such criticism probably would not have been surprising 
if it had come from a "Japan basher" during the era of bilateral 
trade frictions. 
 
Second, the number of people in the United States, particularly 
Washington, who share concern about Japan's diminishing importance 
is decreasing rapidly. 
 
The next shocking thing was that such an important article had not 
been published in a major U.S. paper. Some people may argue that the 
IHT is a newspaper published by the New York Times (NYT), but the 
fact is that the article came out only in the online edition of the 
IHT and the NYT means that it was not read by subscribers in the 
U.S., and that the editors of the hardcopy NYT did not show much 
interest in it. The era of relying on pro-Japanese Americans or 
Japan experts may be coming to an end. 
 
Third, Japanese policymakers do not even see this crisis situation 
as a problem. 
 
The current "political situation" that is reported prominently in 
Japan is practically ignored by the world media. How aware are the 
Japanese politicians of the marginalization of Japan in 
international politics due to its consistent failure to make 
political decisions or implement them? 
 
A typical example of this is the internal strife in the Democratic 
Party of Japan (DPJ) and its foreign and security policy. This party 
did not even issue a single statement on North Korea's nuclear test 
and missile launches. If Japan's failure to make important political 
decisions is causing a rapid decline in its international status, 
what is the point of the political maneuvering? This is simply 
beyond my comprehension. 
 
Regardless of the outcome of the next House of Representatives 
election, I would like to see a "cabinet of national salvation" 
founded on solid national unity. This will be a real service that 
politicians can do for the Japanese people. 
 
(4) U.S. special envoy to visit four countries; Yamasaki, others 
call for "effective UNSC resolution" 
 
TOKYO SHIMBUN ONLINE (Full) 
12:57, May 29, 2009 
 
Washington, Kyodo, May 28 
 
It was learned on May 28 that Department of Defense officials and 
uniformed officers of the U.S. Forces will accompany Deputy 
Secretary of State James Steinberg on his trip to Japan, China, and 
other countries starting this weekend to discuss response to North 
Korea's nuclear test. This was disclosed by a senior U.S. government 
official to former Liberal Democratic Party vice president Taku 
Yamasaki and his group, who are currently visiting the U.S. 
 
According to a source related to this matter, the participation of 
Under Secretary of Defense for Policy Michele Flournoy and James 
Cartwright, vice chairman of the Joint Chiefs of Staff, and others 
 
TOKYO 00001214  005 OF 014 
 
 
in this tour is being considered. It is believed that the 
participation of not only diplomats, but also military officers, is 
meant to apply strong pressure on North Korea, which has recently 
embarked on a nuclear test. 
 
The U.S. delegation will come to Japan first, then go on to the ROK, 
China, and Russia - all participants in the Six-Party Talks - 
starting this weekend. 
 
Yamasaki met with Flournoy, Under Secretary of State for Political 
Affairs Nicholas Burns, and other officials in Washington on May 28 
during his visit to the U.S. He argued that this is a situation 
where a UN Security Council resolution needs to be adopted promptly 
in order to stop North Korea's nuclear arms development efforts. The 
U.S. side agreed with him. 
 
According to Yamasaki, U.S. special envoy for the Six-Party Talks 
Sung Kim is also considering a trip to Japan, China, and other 
countries separate from Steinberg's trip. 
 
(5) North Korea's nuclear test connected with Kim's successor issue 
 
MAINCHI (Page 7) (Full) 
May 29, 2009 
 
Toshihiko Kasahara, London 
 
This newspaper interviewed Mark Fitzpatrick, a senior fellow at the 
International Institute for Strategic Studies (IISS) of Britain and 
a former U.S. Department of State deputy assistant secretary for 
non-proliferation, who is an expert on the situation in North Korea, 
about the background behind North Korea going ahead with a nuclear 
test. 
 
The view that North Korea has carried out a nuclear test in order to 
attract the attention of the U.S. is superficial. That could be the 
third biggest reason. The major reason is that the Kim Jong Il 
regime, now faced with the successor issue, was trying to show off 
its strength because of its weak power structure. 
 
The hard-line argument is dominant in North Korea, with those who 
call for a flexible policy line toward foreign countries being 
driven out of the political arena. The North Korean regime's stance 
of not hesitating to close the Kaesong Industrial Complex despite 
the nation's economic situation reflects that it is leaning toward 
military-focused politics. 
 
The nuclear explosion was relatively small in scale - 4 kilotons in 
terms of trinitrotoluene (TNT). Provided that the yield was as 
anticipated, one can say that it was fairly small as a weapon. Given 
the fact that the North has continued to develop nuclear arms for 
the past 20 years, there is a possibility that it possesses the 
capability to fit a nuclear warhead on a missile. 
 
Japan should take the nuclear test this time as a warning that it 
should reconsider what is most important for its security. The 
abduction issue has dominated Japan's (North Korea) policy. However, 
the situation involving the nuclear test by that nation is very 
serious. Japan should understand that the situation holds the 
potential risk of leading to war. 
 
Japan is urged to display ingenious diplomatic power. In order for 
 
TOKYO 00001214  006 OF 014 
 
 
it to gain the international community's consensus (through 
cooperation with China), it is necessary for it to more clearly 
define its presence in Northeast Asia. 
 
I am pessimistic about the idea that it is possible to make North 
Korea abandon its nuclear ambitions through talks. The best way to 
settle that nation's nuclear issue is through a regime change. The 
nuclear test will probably speed up the end of the present regime. 
 
(6) Behind the scenes of the crisis - North Korea's nuclear test 
(Part 3): Japan wary of being "left in the dark" 
 
MAINICHI (Page 1) (Full) 
May 29, 2009 
 
Naoyuki Inukai, Hirohiko Sakaguchi 
 
On May 25, the day North Korea conducted its second nuclear test, 
Prime Minister Taro Aso expressed his genuine surprise to his aides: 
"They fired a ballistic missile in April. I wouldn't have expected a 
nuclear test at this time. I don't understand North Korea." 
 
The Ministry of Foreign Affairs (MOFA) had expected a nuclear test 
after North Korea fired its ballistic missile on April 5. MOFA had 
thought that this would come in June or July, considering that the 
DPRK might have been preparing for the test even before the missile 
launch. Aso reacted in the above manner because Vice Foreign 
Minister Mitoji Yabunaka had briefed him on this analysis. With 
regard to the reason why the test took place earlier than expected, 
a senior MOFA official pointed out: "There are uncertainties about 
General Secretary Kim Jong Il's health, and they probably needed to 
raise the level of tension to get favorable results from U.S.-DRPK 
talks quickly." 
 
There had been predictions in the government that U.S.-DPRK talks 
would take place in June even before the nuclear test. This is 
because Japan had been told that U.S. special envoy for North Korea 
policy Stephen Bosworth was considering visiting the DPRK to 
negotiate the release of the two detained American reporters. 
 
Bosworth came to Japan on May 11 and met Director General Akitaka 
Saiki of MOF's Asian and Oceanian Affairs Bureau and other officials 
to seek Japan's understanding. He said that, "I am prepared to visit 
North Korea in the near future, but we do not intend to link this 
question with the overall issues (of nuclear arms, missiles and so 
forth)." Saiki replied with: "It is fine to have dialogue, but this 
is meaningless unless you can set down concrete conditions (on the 
North Korean nuclear issue)," thus conveying his concern about 
stepping up U.S.-DPRK talks without prior consultations with Japan 
and the ROK. Japan was wary of repeating the nightmare of being 
"left in the dark" when the U.S. negotiated directly with the DPRK 
during the last days of the Bush administration and removed it from 
the list of state sponsors of terrorism. 
 
Japan's only "fragile link" with North Korea is through the embassy 
in Beijing, and it has lost the means to talk directly with the 
DPRK. When Japan protested the recent nuclear test, the North 
Koreans would not even answer the phone; and Japanese embassy 
officials could only deliver a protest letter. 
 
There are now misgivings in the government and the ruling parties 
toward the United States, which is being treated as a direct 
 
TOKYO 00001214  007 OF 014 
 
 
negotiating partner by the DPRK. There is a view that, "The Obama 
administration is advocating the abolition of nuclear weapons. It 
will find itself in a very awkward position if (the DPRK) sets off a 
nuclear bomb. We hope it will pull itself together" (Liberal 
Democratic Party Secretary (LDP) General Hiroyuki Hosoda). On the 
other hand, there is also an opinion that if the Japanese government 
sets the abduction issue as its top priority, it may have an adverse 
effect on U.S.-DPRK negotiations. A senior LDP official met a senior 
government official on May 26. This LDP official said: "If Japan 
brings up the abductions, it will get in the way of the U.S. and 
China," urging the Japanese government to exercise restraint and not 
raise this issue too aggressively. 
 
(Last of three-part series) 
 
(7) Okinawa Prefecture consents to installation of marine life 
monitors 
 
OKINAWA TIMES (Page 2) (Full) 
May 29, 2009 
 
The Okinawa Defense Bureau, an outlet of the Defense Ministry, plans 
to conduct a fact-finding survey of marine life in connection with 
constructing an alternative facility for the U.S. Marine Corps' 
Futenma Air Station. The bureau needs to consult with the Okinawa 
prefectural government to install equipment for that survey. 
Accordingly, the Okinawa prefectural government yesterday informed 
the bureau of its consent to enter into consultations with the 
bureau for its use of public waters. The prefectural government 
asked the bureau to thoroughly oversee the planned sea life 
monitoring survey with consideration given to the environment, such 
as dugongs and their seaweed beds, corals, and birds. 
 
The monitoring survey is to cover waters ranging from Nago City's 
Kayo district to the city's Kushi district and will use a total area 
of about 2,800 square meters. The survey will be conducted until 
March 31, 2010. The bureau will set up passive sonar systems and use 
79 other kinds of equipment for underwater videotaping to record 
coral egg-laying and dugongs eating seaweed as well as their 
voices. 
 
(8) Defense Bureau chief: 'Removal of danger' completed 
 
OKINAWA TIMES (Page 2) (Full) 
May 29, 2009 
 
In August 2007, the Japanese and U.S. governments concurred on 
measures to remove the danger of the U.S. Marine Corps' Futenma Air 
Station. In this regard, the Defense Ministry's Okinawa Defense 
Bureau Director General Ro Manabe announced yesterday that all those 
measures were implemented by May 21. Aircraft warning lights were 
all installed near the runway's northern end, Manabe told reporters, 
adding that the airfield started to use the lights on May 22. 
 
"Concerning further steps to remove danger," Manabe said, "I think 
it's important to meet the local expectations." He also said, "We'd 
like to continue to discuss what we can do through a working team." 
 
In order to study additional measures, the Defense Ministry will 
conduct a fact-finding survey of flight paths from this fiscal year. 
Concerning this fact-finding survey, Manabe went no further than to 
explain that: "We're now going through procedures to place orders 
 
TOKYO 00001214  008 OF 014 
 
 
for equipment." The Defense Ministry has yet to decide on when to 
start the survey. 
 
The government plans to build an alternative facility for Futenma 
airfield in a coastal area of Camp Schwab in Nago City. Along with 
this plan, the Defense Ministry is looking into the present state of 
the construction site. In this regard, Manabe said: "The assessment 
law requires an ex post facto survey as well as an environment 
monitoring survey. In order to carry out these surveys in an 
effective way, we are now collecting data on our own. At this point, 
we don't think we'll have to reflect them in the assessment paper." 
 
On May 15, the Okinawa Defense Bureau closed its acceptance of 
public comments from local residents on its preliminary report of 
environmental assessment for Futenma relocation. The bureau is to 
send in an outline of these public comments to the Okinawa 
prefectural government. In connection with this, Manabe indicated 
that the bureau would do so in around mid-June if possible. 
 
(9) Draft report on "society of peace of mind" shifts from 
structural reform policy, also hints at raising consumption tax 
 
YOMIURI (Page 4) (Full) 
May 29, 2009 
 
The draft report compiled by the Council on the Realization of a 
Society of Peace of Mind on May 28 is characterized by its shift 
from the structural reform policy line under former Prime Minister 
Junichiro Koizumi, and its goal to achieve a new "Japanese-style 
market economy" with "peace of mind" as the keyword. Prime Minister 
Taro Aso intends to include the substance of this report in the 
manifesto of the Liberal Democratic Party for the next House of 
Representatives election. 
 
At the meeting on May 28, Hisashi Hieda, chairman of Fuji Television 
and chair of the Council, stressed that, "A social system based only 
on efficiency and market principles will inevitably produce the 
extremely rich and the extremely poor. There can be no peace of mind 
in society without safety nets in place." 
 
The "structural reforms without sanctuary" promoted by Koizumi 
avoided tax hikes and attempted to realize fiscal restructuring by 
cutting expenditures. The draft report acknowledges this point: 
"With the expanding competition in the global market, strong 
advocacy of radical reform of the systemic structures was quite 
natural." However, it states that, "Reforms should not undermine 
peace of mind, which forms the basis of vitality." 
 
It says that in order to build a "society of peace of mind, "the 
inevitable cost should be debated openly with the policy-related 
spending and revenue sources being clearly laid out," hinting at the 
need to increase the consumption tax rate. 
 
At the May 28 meeting, Council member Toshiro Muto (director of 
Daiwa Institute of Research Holdings) presented an estimate of 
government funding and consumption tax revenues, and called for tax 
reforms at an early date. He said: "If the increase of the 
consumption tax rate is moved forward, (a tax rate of) 15-16 PERCENT 
 will be sufficient, but if we procrastinate, it may need to be 20 
PERCENT  under certain circumstances." 
 
Minister of Economic and Fiscal Policy and Financial Services Kaoru 
 
TOKYO 00001214  009 OF 014 
 
 
Yosano, who presided over the discussions, is known to favor a 
consumption tax hike. He has so far advocated tax increases not only 
for fiscal restructuring, but also for social welfare expenditures 
for the aged, such as pension and nursing care. The draft report 
points out that, "Government expenditures relating to children and 
families are 0.8 PERCENT  of GDP, which is behind the average of 2 
PERCENT  among OECD (Organization for Economic Cooperation and 
Development) members," indicating that consumption tax will also be 
used for investment in the younger generation. 
 
However, the report avoids using the word "consumption tax," and 
concrete plans for securing revenue sources are deferred to future 
discussions by the government and the ruling parties. 
 
(10) Ruling parties considering postponement of establishing rules 
for constitution examination committee due to DPJ's opposition 
 
ASAHI (Page 4) (Abridged slightly) 
May 29, 2009 
 
Masahiro Tsuruoka 
 
It has become difficult to establish during the ongoing Diet session 
a set of "rules" specifying, among other things, the number of 
directors of the House of Representatives Examination Committee on 
the Constitution. Given the unyielding stance of the major 
opposition Democratic Party of Japan (DPJ), the ruling bloc has 
concluded that it would be inadvisable to forcibly establish a set 
of rules ahead of the next general election. 
 
Before the Lower House Steering Committee, Yukio Edano, a former 
chair of the DPJ Research Commission on the Constitution, criticized 
yesterday a forced vote in 2007 on national referendum by the then 
Abe administration. He made clear the stance of not responding to 
the ruling bloc's call for setting up rules unless Abe and other 
persons responsible for destroying the relationship of trust offer 
apologies. Diet Affairs Committee Chairman Kenji Yamaoka, too, 
slammed the ruling parties during a DPJ Lower House lawmakers' 
meeting, saying, "The attitude to use (the Constitution) for the 
sake of the election and the political situation is not 
permissible." 
 
Based on the former Abe administration's crushing defeat in the 
previous House of Councillors election, the Liberal Democratic Party 
(LDP) is cautious about making a constitutional matter a point at 
issue for the next general election. LDP Steering Committee 
principal director Hachiro Okonogi implied that his party has no 
intention of establishing rules in defiance of the DPJ's opposition. 
Some in the LDP are still hopeful that DPJ President Yukio Hatoyama, 
an advocate of constitutional amendment, will make concessions. But 
Hatoyama underscored the need to select the right timing in order to 
give the envisaged rules "soul." Chances are slim that the DPJ will 
give the nod to the ruling bloc's plan to establish such rules. 
 
(11) Russia seeks aid on 180 projects including infrastructure, 
plant construction; Presents list of projects to GOJ worth over 2.5 
trillion yen 
 
NIKKEI (Page 1) (Full) 
May 29, 2009 
 
Details of the economic aid projects that Russia presented to Japan 
 
TOKYO 00001214  010 OF 014 
 
 
during Premier Vladimir Putin's visit in mid-May were revealed on 
May 28. There are a total of some 180 projects, mostly related to 
infrastructure and the construction of plants, worth over 2.5 
trillion yen. The two countries are expected to consider setting up 
a government level committee on trade and economic affairs, which 
will strengthen "mutually beneficial cooperation" and contribute to 
creating the environment for signing a peace treaty, which remains a 
pending issue. 
 
The list of projects obtained by Nihon Keizai Shimbun is titled 
"Proposals of Local Governments of the Russian Federation for the 
Implementation of Investment Projects Open to Japanese Companies." 
This is a compilation of the proposals from the various Russian 
republics, oblasts, and other administrative units, listing specific 
projects and required funding. It was handed over to the Japanese 
government through diplomatic channels before the Japan-Russia 
summit on May 12. 
 
In addition to industrial parks and recreational facilities, there 
are also projects to build lumber and food processing plants, fish 
culture farms, and facilities for resource development. The Russian 
economy has been hard hit by the world financial crisis, and the 
list clearly indicates its desire to woo capital and technology from 
Japanese companies for the construction of regional infrastructure 
and the modernization of production equipment. 
 
On the other hand, big national projects, such as the joint 
development of oil and natural gas, are not included. Proposals for 
expanding the scope of cooperation, such as using nanotechnology for 
material development and the production of ceramic construction 
materials, are also prominent. 
 
Trade volume between Japan and Russia reached $30 billion in 2008, 
tripling in three years. Membership in groups of Japanese companies 
doing business in Russia has also increased rapidly to 184, almost 
three times the number in 2003. These companies have tended to 
concentrate in big cities on the European side, such as Saint 
Petersburg. The list has more projects in the Far East, which is 
close to Japan and suffering from harsh economic conditions, and the 
Volga area in the south. This shows Russia's desire to diversify in 
terms of the location of the projects. 
 
Japanese companies are likely to show interest in the building of 
roads in the Far East where infrastructure is underdeveloped, the 
building of power plants, the production of new construction 
materials where their technology can be utilized and where there are 
potentials for growth in demand, and other projects. However, there 
is also an opinion that, "This is a widely varied list, and there 
needs to be a rigorous selection process to pick the promising 
projects." There is some uncertainty about how feasible these 
projects are. 
 
The government will brief selected private companies on the list on 
May 29, and the projects will be discussed at the subcommittee on 
regional exchanges of the bilateral governmental committee on trade 
and economic affairs expected to convene in the next six months. The 
government-affiliated Japan Bank for International Cooperation 
(JBIC) is also poised to discuss financial assistance with the 
Japanese companies. 
 
(12) Argument that Lower House can be dissolved any time is 
incorrect 
 
TOKYO 00001214  011 OF 014 
 
 
 
TOKYO SHIMBUN (Page 2) (Full) 
May 29, 2009 
 
Many people say that the prime minister can dissolve the House of 
Representatives any time as he likes. But this argument is not 
correct. 
 
In the Constitutions, Article 7 and Article 67 refer to dissolution 
of the Lower House. Article 7 states that dissolution of the Lower 
House shall be performed by the Emperor as an act of matters of 
state on behalf of the people, with the advice and approval of the 
cabinet. Article 69 stipulates that if the Lower House passes a 
non-confidence resolution against the cabinet, or rejects a 
confidence resolution, the cabinet shall resign en masse. 
 
There are conflicting views on how to interpret these provisions. 
Some say that because only Article 69 gives specific conditions for 
Diet dissolution, the Lower House can be dissolved only when a 
non-confidence resolution against the cabinet is adopted. Others 
interpret, focusing on the part "with the advice and approval of the 
cabinet" in Article 7, that the Diet can be dissolved any time, 
based on an advice by the cabinet. 
 
The cabinet now interprets that the Lower House can be dissolved any 
time, based on the argument focusing on Article 7. But just after 
the Constitution was established, the GHQ took the argument based on 
Article 69. In 1948, then prime minister Shigeru Yoshida planned to 
dissolve the Lower House, but Yoshida advised ruling party members 
to vote for a non-confidence resolution against the cabinet 
submitted by opposition parties and dissolved the Lower House in 
line with the argument based on Article 69. 
 
Given these circumstances, it seems improper to say that the Diet 
can be dissolved any time. Some Liberal Democratic Party (LDP) 
members also insist that certain conditions should be attached to 
the right to call a general election. The new constitution plan - 
unofficially produced by the LDP's Constitutional Research 
Commission - requires a concrete reason for Diet dissolution. 
 
Reading the articles, we find that it is not the prime minister but 
the cabinet that decides to dissolve the Lower House. Strictly 
speaking, it therefore is not correct to say that the prime minister 
has the right to dissolve the Lower House. In 2005, then prime 
minister Junichiro Koizumi decided to dissolve the Lower House, but 
cabinet ministers opposed the plan. Koizumi dismissed the rebellious 
members and then dissolved the Lower House. This procedure was 
necessary, because it was not the prime minister but the cabinet 
that dissolved the Lower House. 
 
(13) Government decides to shelve complete privatization of 
Development Bank of Japan 
 
SANKEI (Top Play) (Full) 
May 29, 2009 
 
The government and the ruling parties on May 28 decided to shelve 
the complete privatization of the Development Bank of Japan (DBJ). 
This decision had been reached in general at a meeting between the 
ruling and opposition camps held earlier on the same day. The 
government will continue to possess more than one-third of the 
bank's stocks so that it can exert its influence. Consideration has 
 
TOKYO 00001214  012 OF 014 
 
 
been given to the fact that demand is building for emergency loans 
from government-affiliated financial institutions, as the credit 
crunch becomes serious with private-sector financial institutions 
losing financial stability. However, the structural reforms to move 
services from government to the private sector as advocated by the 
Koizumi administration have now been derailed. Criticism that the 
DBJ is weighing on private businesses is still lingering. 
 
The plan to fully privatize the DBJ has been scrapped due to the 
agreement reached in general at a meeting of ruling and opposition 
party members of the Lower House Financial Affairs Committee that a 
revision plan presented by the opposition camp be reflected in an 
amendment to the DBJ Law. 
 
The DBJ was made a joint-stock company wholly owned by the 
government, based on the premise that it is to be fully liberalized 
in the future. The original plan had envisaged the company being 
fully liberalized 5-7 years after it became a joint-stock company 
with the government gradually selling the stocks it holds. 
 
However, following the economic slump stemming from the financial 
crisis, the government has started operations that cannot be carried 
out by private financial institutions, including emergency 
low-interest financing to companies. Accordingly, the DBJ's role has 
once again come into focus. 
 
The related bill that has been submitted to the Lower House enables 
the government to extend additional financing to the DBJ to make it 
easier for it to extend additional emergency financing. It also sets 
a time frame for full-scale privatization between April 2017 and 
April 2019, by extending the time frame to three years and six 
months from the original plan. 
 
However, the DPJ insisted that the planned privatization be 
completely scrapped in order to deal with the serious economic 
slump. The ruling parties accepted the DPJ's policy. It has thus 
been decided that the government will continue to hold more than 
one-third of the DBJ's stocks so that the bank can continue to play 
a public role. 
 
However, some ruling party members are negative toward this decision 
with a former economic minister noting, "The policy switch does not 
rule out complete privatization after the crisis is over." The DBJ 
could be criticized as weighing on private financial institutions, 
once the economy turns around. Such an issue was discussed at the 
meeting on the 28th. However, no decision was reached on this issue. 
Chances are that the revision plan may be annulled, depending on the 
steering of the Diet in the future. 
 
(14) TOP HEADLINES 
 
Asahi: 
Government-arranged reduction in rice cultivation to cost double in 
10 years 
 
Mainichi: 
Pre-privatized Japan Post suspected of failing to pay out insurance 
money to 220,000 policy holders 
 
Yomiuri: 
Government to enhance measures to prevent leakage of technological 
information into that can be used for military purpose 
 
TOKYO 00001214  013 OF 014 
 
 
 
Nikkei: 
Financial Services Agency to abolish legal classifications dividing 
"shinkin" banks and credit associations 
 
Sankei: 
Government decides to shelve overall privatization of Development 
Bank of Japan 
 
Tokyo Shimbun: 
Prime minister gives up on splitting up welfare and labor ministry 
due to opposition from government, ruling parties 
 
(15) EDITORIALS 
 
Asahi: 
(1) Lawsuit filed by A-bomb victims: Government should speed up 
effort to relieve all victims 
(2) Split-up of welfare and labor ministry: Administration again 
goes astray 
 
Mainichi: 
(1) Relieving A-bomb victims: Political decision urged 
(2) Extra budget to secure Diet approval: Establish sustainable tax 
system 
 
Yomiuri: 
(1) Economic Revitalization Round Table: Invest in education to fill 
income disparities 
(2) Lawsuit filed by A-bomb victims: It is necessary to revise 
recognition guidelines 
 
Nikkei: 
(1) Come up with new effective fiscal reconstruction goal 
(2) We welcome new U.S. Ambassador to Japan John Roos 
 
Sankei: 
(1) P3C dispatch: Contain piracy through information-sharing 
(2) Lawsuit in pursuit of recognition as A-bomb victims: Reach 
settlement to relieve patients 
 
Tokyo Shimbun: 
(1) Recognition of A-bomb victims: Speed up efforts to revise 
recognition guidelines and relieve victims 
(2) Fall in land prices: Good opportunity to enhance trustworthiness 
of real estate industry 
 
(16) Prime Minister's schedule, May 28 
 
NIKKEI (Page 2) (Full) 
May 29, 2009 
 
07:16 Met deputy chief cabinet secretaries Matsumoto and Asano. 
09:00 Attended an Upper House Budget Committee meeting. 
11:58 Met Upper House Budget Committee chief director Iwanaga. 
12:45 Met Cabinet Intelligence Director Mitani. 
14:00 Attended a meeting of the Upper House's special committee on 
consumer problems. 
16:12 Met Finance Minister Yosano at the Kantei. Followed by Vice 
Foreign Minister Yabunaka. 
17:03 Internal Affairs & Communications Minister Hatoyama and 
Administrative Management Bureau Director General Hashiguchi. Later 
 
TOKYO 00001214  014 OF 014 
 
 
met Okinawa Governor Nakaima and others, with Chief Cabinet 
Secretary Kawamura present. 
18:15 Attended a meeting of the committee on building safety 
society. 
19:31 Met Secretary General Hosoda, Policy Research Council Chairman 
Hori, and Kawamura. 
20:27 Arrived at his official residence. 
21:50 Called British Prime Minister Brown. 
 
ZUMWALT