Cablegate: Japanese Morning Press Highlights 12/16/08

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UNCLAS SECTION 01 OF 07 TOKYO 003409

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 12/16/08

Index:

Iraq assistance:
1) ASDF begins to pullout C-130s from Iraq, ending five years of
service (Tokyo Shimbun)
2) No casualties on record as the ASDF withdraws from flight
operations in Iraq (Sankei)

3) Former senior U.S. official in Clinton administration to meet
senior official in Democratic Party of Japan (DPJ) to discuss Obama
administration (Mainichi)

Political agenda:
4) DPJ shakes up government and ruling camp by proposing new job
legislation and urging cooperation (Yomiuri)
5) Tug of war between Prime Minister Aso and ruling camp over
raising consumption tax in three years (Yomiuri)
6) LDP Election Committee Chairman Koga in feud with New Komeito
over election cooperation (Sankei)
7) Prime Minister Aso on stumping tour makes more gaffes (Mainichi)

8) Government revises downward outlook for next fiscal year,
predicting zero grown (Yomiuri)

Articles:

1) ASDF begins withdrawal from Iraq

TOKYO SHIMBUN (Top play) (Full)
December 16, 2008

The Air Self-Defense Force has now wound up its airlift activities
conducted in Iraq under a law for special measures to assist with
Iraq's reconstruction. The ASDF airlift squadron in Iraq began to
withdraw on the afternoon of Dec. 15. The first one of the three
ASDF C-130 transport planes left Ali Al Salem Air Base in Kuwait for
Japan that day at 12:54 a.m. (6:54 p.m., Japan time). The
Self-Defense Forces' dispatch to Iraq started in 2004. Five years
later, the SDF mission in Iraq will end.

The C-130 transport will take five days on its way back home by way
of the Maldives, Thailand, the Philippines, and Okinawa. It will
arrive at the ASDF's Komaki base in Aichi Prefecture on Dec. 19.

The remaining two cargo planes will leave there on Dec. 16 and 17.
The ASDF's liaison personnel in the Iraqi capital of Baghdad will
leave there on Dec. 16.

There are about 210 ASDF members currently on the Iraq mission, and
about 150 of them will arrive at the Komaki base on Dec. 23 on a
government plane. The other ASDF members will be engaged in the work
of removing ASDF facilities. They are expected to return home around
March next year.

The ASDF squadron has carried out a total of 821 airlifts since its
airlift activities in Iraq started in 2004. The C-130's alarm, which
indicates a missile attack, was often activated, so the C-130s had
to turn around to evacuate. "It's miraculous that all can return
home safely," an ASDF staff officer said.

2) ASDF unit starts withdrawing from Iraq, with no casualties

TOKYO 00003409 002 OF 007

SANKEI (Top play) (Excerpts)
December 16, 2008

The Air Self-Defense Force (ASDF) transport unit began on Dec. 15
withdrawing from Iraq following the completion of its airlift
mission. One of the three C-130 cargo planes based in Kuwait took
off from Ali Al Salem Air Base. Five personnel who had been sent to
the coalition forces' headquarters in Baghdad to collect information
have also returned to Japan. During the transport mission in Iraq in
a remarkably dangerous state, the C-130 cargo planes were about to
be hit by a missile. A bill submitted by the Democratic Party of
Japan with the aim of abolishing the Iraq Special Measures Law
demoralized the Self-Defense Forces, and a competent pilot has left
the SDF. What happened behind the scenes during the five-year
airlift mission that has been completed with no casualties?

Former Chief Cabinet Secretary Nobutaka Machimura abruptly announced
on Sept. 11 a plan to pull the ASDF troops out of Iraq. The
announcement was made, based on an official telegram sent by the
U.S. government on the previous day.

The telegram noted: "The Iraqi government intends to keep only
troops from six nations (including the U.S., Britain, and Australia)
in the nation and to have the rest of the coalition forces withdraw
their troops." Washington also notified Japan of its plan to
announce that Japan was not among the six nations. The Japanese
government, which wanted to withdraw troops on its own judgment,
announced a withdrawal plan in haste, showing that Japan had not
prepared any exit strategy.

Dangerous scenes

There were scenes where SDF personnel were scared stiff. A U.S.
military plane that had taken off from Baghdad Airport 15 minutes
after an ASDF C-130 transport left the same airport was attacked
with an antiaircraft gun. In another case, four missiles flied over
a VIP-carrying C-130 plane readied on a runway of the airport.

According to an SDF officer, there were about 30 attacks on Baghdad
Airport when the security situation was growing worse, although it
was designated as a noncombat zone. Baghdad Airport was the most
dangerous place for the ASDF unit, which transported UN and U.S.-led
multinational force members, as well as goods, connecting the
Kuwaiti base with three Iraqi cities.

There was a case in which the pilot wondered if he should land the
plane because a missile attack on the airport had taken place just
before its landing. The SDF officer said: "Even one accident
involving personnel or a C-130 plane will give rise to arguments
calling for withdrawal from Iraq." The ASDF unit was expected to
play a "perfect game."

High evaluation

The SDF has been rated high by other multinational force members,
with one remarking, "They are well-regulated, though there is no
military law." Another said: "The C-130 aircraft is almost 100
PERCENT operational, and their credibility is outstanding." In
addition to their flight skills and reliability, their morale drew
much attention. About five out of the nine U.S. cargo planes are in
operation. ASDF unit members did maintenance on them all night, so

TOKYO 00003409 003 OF 007

three planes were always available.

Morale dampened

"Two events affected the morale of troops like a body blow," a
senior ASDF member said. What he pointed out was the bill submitted
by the DPJ calling for abolishing the Iraq special measures law and
a ruling handed down by the Nagoya High Court this April against the
ASDF airlift mission in Iraq. Set off by these developments, the
bases began to swarm with demonstrators, and fliers criticizing ASDF
activities were distributed at ASDF billets. Troops began to feel
uneasy, and their families started harboring doubts about the
operations carried out by their husbands or fathers.

"We appreciate the families for their devoted support of the
mission." This is a part of the message sent by U.S. Defense
Secretary Gates to Defense Minister Yasukazu Hamada last month. But
no words of appreciation were found in a statement issued by Prime
Minister Taro Aso following the announcement of a decision to end
the ASDF airlift mission. A senior Defense Ministry official,
recalling the five years of the mission, said: "If the government
keeps depending on the SDF's sense of mission, without offering
words of gratitude toward their families, their international duties
might end in failure."

3) DPJ execs to meet with ex-Pentagon officials affiliated with
Democratic Party

MAINICHI (Page 2) (Full)
December 16, 2008

Democratic Party of Japan (Minshuto) Secretary General Yukio
Hatoyama and other DPJ leaders will meet Dec. 19 with Kurt Campbell,
who was deputy assistant secretary of defense in the Clinton
administration, and they will also meet with other Democratic Party
affiliates who were in defense-related key posts. The DPJ proposed
meeting with them as they will visit Japan. The DPJ will seek their
understanding for the party's standpoint opposing the government's
plan to relocate the U.S. military's Futenma airfield in Ginowan,
Okinawa Prefecture, within Okinawa Prefecture. The party has been
calling for relocating the airfield elsewhere outside the island
prefecture.

In addition to Campbell, Joseph Nye, former assistant secretary of
defense, and Michael Green, former adviser on Asia-Pacific affairs
at the Department of Defense, will also attend the meeting. Those
attending from the DPJ include DPJ Deputy President Naoto Kan and
two DPJ vice presidents, Katsuya Okada and Seiji Maehara, in
addition to Hatoyama.

In the meeting, the DPJ will convey its stance against extending the
Maritime Self-Defense Force's refueling activities in the Indian
Ocean but will tell them about its idea of conducting humanitarian
and reconstruction assistance in Afghanistan premised on an
armistice agreement. The DPJ will also stress that there will be no
change in the party's stance of attaching importance to the alliance
between Japan and the United States.

4) DPJ rocking government, ruling camp with job security bills with
intention to press them to cooperate for their enactment

YOMIURI (Page 2) (Full)

TOKYO 00003409 004 OF 007

December 16, 2008

The Democratic Party of Japan (DPJ) yesterday submitted to the Upper
House four employment measures bills, including assistance for the
lives of temporary workers whose labor contracts have been
terminated, jointly with the Social Democratic Party (SDP) and the
People's New Party (PNP). The DPJ is pressing the government and the
ruling coalition to have the bills passed during the current Diet
session.

The four bills include an amendment to the Labor Contract Law, which
regulates cancellation of job offers to new graduates, and a bill to
secure housing and jobs, including lending houses or providing
livelihood assistance benefits up to 100,000 yen a month to
temporary workers who lost living places due to the termination of
labor contracts. Its aim is to impress its speedy approach to the
employment problem, while highlighting the government's lack of
policy as can be seen in the postponement of the submission to the
regular Diet session of the second supplementary budget bill for
fiscal 2008, which includes employment measures.

DPJ President Ozawa yesterday told reporters in Kyoto City: "How to
see the old year out and the new year in is a serious problem. The
government should have no objection to the idea of stabilizing the
employment situation." DPJ Secretary General Hatoyama at his
fund-raising party held in Tokyo appealed: "The extraordinary Diet
session is not over yet. The approach of the government and the
ruling parties are acting in a manner of making people think that
the curtain came down. That is wrong."

The DPJ's scenario is to adopt the bills in the Upper House before
this weekend, send them to the Lower House and then to have the
heads of the three opposition parties meet with Prime Minister Aso
and press him to cooperate for the enactment of the bills. In this
connection, the Upper House Diet Steering Committee, chaired by
Takeo Nishioka, decided to have 11 bills submitted by the DPJ
brought to the committee. Following the move, DPJ Diet Affairs
Committee Chairman Kenji Yamaoka and Upper House Diet Steering
Committee Chairman Susumu Yanase met and confirmed a policy of
having the Upper House Welfare and Labor Committee enter into
deliberations on the four employment measures bills on the 18th and
adopt them the same day.

5) Can Aso contain ruling bloc's opposition to specifying
consumption tax hike in mid-term program? Relies heavily on Economic
and Fiscal Policy Minister Yosano

YOMIURI (Page 4) (Excerpts)
December 16, 2008

The focus is now on whether Prime Minister Taro Aso can squelch the
ruling bloc's opposition to specifying his stock argument of raising
the consumption tax rate in fiscal 2011 in a mid-term tax reform
program to be drawn up by the government. The prime minister's
failure to demonstrate strong leadership is certain to weaken his
grip on power.

Before the House of Councillors Audit Committee yesterday, the prime
minister reiterated his view, saying: "The basic idea is that the
mid-term social welfare plan would not stand without considering a
hike in the consumption tax (rate)." The prime minister first
presented a plan to raise the consumption tax in three years' time

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in a press conference on October 30. On December 12, the ruling bloc
presented a tax reform outline that did not specify any specific
timing of raising the consumption tax. This promoted the prime
minister to comment, "(Raising the rate) is the basic principle of
the party of responsibility."

With the next House of Representatives election approaching,
opposition is strong in the New Komeito, with one senior member
saying, "If raising the tax in three years' time is specified, we
will have an uphill battle in the election." A cautious stance is
widespread in the Liberal Democratic Party as well in consideration
of the next Lower House election and relations with the New Komeito.
In a fund-raising party held in Tokyo yesterday, former LDP
Secretary General Hidenao Nakagawa said: "There are matters that
must be done before raising the tax. Speaking only of a tax hike is
utterly irresponsible."

Members supportive of specifying the tax hike include Tax Commission
sub panel chairman Hakuo Yanagisawa and Policy Research Council
Senior Deputy Chairman Hiroyuki Sonoda. The prime minister is
especially counting on Economic and Fiscal Policy Minister Kaoru
Yosano. Aso exchanged views with Yosano at the Prime Minister's
Office last evening. After the meeting, Aso expressed his
expectations to the press corps, saying, "Economic and Fiscal Policy
Minister Yosano is now coordinating views."

Yosano plans to call a Council on Economic and Fiscal Policy meeting
today to make a cabinet decision on the mid-term program on around
December 20 when the Finance Ministry's fiscal 2009 budget plan is
presented. Yosano reportedly takes a positive view about taking a
legislative step along with tax system-related bills in early
January.

6) LDP's Koga suggests review of cooperation with New Komeito in
proportional representation segment of Lower House election; Rift
may be widened between two parties

SANKEI (Page 5) (Full)
December 16, 2008

Liberal Democratic Party (LDP) Election Strategy Council Chairman
Makoto Koga met last night with the secretaries general of the
factions of the LDP. In the meeting, Koga referred to a review of
cooperative relationship with the New Komeito in the proportional
representation segment of the House of Representatives election,
although the LDP had promised to back the New Komeito's candidates
for the proportional representation segment in return for the New
Komeito's support for its candidates for electoral districts. There
is already strong resistance in the New Komeito, with one senior
member saying: "What is he talking about all of sudden?" The rift
between the two ruling parties will inevitably be widened.

According to participants in the meeting, one attendee pointed out:
"I was told by a religious sect official that the LDP should cut its
ties with the New Komeito. (If the LDP does so) former supporters
will go back to the LDP." In response, Koga was quoted as saying:

"I wonder if it is good for our party to let 180 proportional
representation seats go to the New Komeito. We must win both
electoral district and proportional representation seats or our
party will lose power."

TOKYO 00003409 006 OF 007

Koga also reportedly said:

"The question is how many votes the LDP can obtain in the
proportional representation elections. We should stop saying that
(LDP candidates) cannot win votes in the proportional representation
segment. I am not recommended by the New Komeito."

Following Koga, Election Strategy Council Deputy Chairman Yoshihide
Suga also said: "Neither Prime Minister Taro Aso nor I am
recommended (by the New Komeito)."

The LDP and New Komeito have agreed in principle not to call on
voters to vote for the New Komeito in their campaigning for the
proportional representation election. However, the LDP supported the
New Komeito candidates for the proportional representation segment
in return for the New Komeito's back for LDP candidates in electoral
districts. Koga's remarks appear to have been aimed at preventing
conservative voters from distancing themselves from the LDP.

Meanwhile, senior officials of the New Komeito and its chief backer,
religious sect Soka Gakkai, last night desperately tried to find out
Koga's true intention. One senior New Komeito member put his hands
on his head, saying: "I wonder whether we might have pressed the LDP
too hard to make concessions on such issues as the timing of a
general election and the consumption tax." Another senior member,
however, rebutted him: "Even if the LDP executive is considering
ending election cooperation in the proportional representation
segment, there are many LDP candidates who need our support."

7) Aso again makes controversial remark, saying, "I was mistaken for
an aged wanderer"

MAINICHI (Page 5) (Abridged slightly)
December 16, 2008

Prime Minister Taro Aso, who is prone to verbal gaffes, again made
controversial comments on December 14 and 15. On Dec. 14, Aso
visited the Kitakyushu Eco Town that houses many recycling
facilities. During the tour, Aso said: "It's amazing to see that the
private sector is trying to make money for shinogi (with
environmental measures)." The word shinogi connoting raising funds
is often used by gangsters. The use of the word by the prime
minister is likely to be criticized as lacking in disgrace.

The prime minister attended a House of Councillors Audit Committee
meeting yesterday. In the session, one asked Aso for his measures to
improve physical health. In response, Aso said while citing his
regular morning walk: "I take a walk early in the morning at my age.
Sometimes I was mistaken for an aged wanderer. I was also called to
stop many times." Later, Aso met reporters at the Prime Minister's
Office in which one reporter said, "Your statement sounded
inconsiderate." Aso replied: "Why? I don't understand what you
mean."

8) Government to downwardly revise economic growth estimate for next
fiscal year to 0 PERCENT for first time in seven years

YOMIURI (Page 2) (Full)
December 16, 2008

Concerning its economic outlook for fiscal 2009, the government on
December 15 entered into coordination to downwardly revise the real

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growth rate, excluding price fluctuations, to 0 PERCENT and the
nominal growth rate, which is close to the actual sentiments of
households and companies, to 0.1 PERCENT . It had estimated a real
growth rate for fiscal 2009 at 1.6 PERCENT as of July. However, in
view of the rapid deterioration of the economy, it will slash its
real growth rate forecast to 0 PERCENT for the first time in seven
years. It plans to adopt the revised forecasts at a cabinet meeting
to be held on the 19th.

The government will also significantly cut its forecast of growth
for fiscal 2008 from the level released in July -- 1.3 PERCENT for
real growth rate and 0.3 PERCENT for nominal growth rate. It had
projected 2.0 PERCENT for real growth and 2.1 PERCENT for nominal
growth as of January this year. However, with the impact of the
financial crisis becoming more serious than anticipated, it was
apparently baffled in its calculations.

The government's economic outlook projects feasible and desirable
figures that can be envisaged under its policy management. It is
different in nature from growth forecasts released by private-sector
economists.

SCHIEFFER

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