AMERICAN EMBASSY, TOKYO



AMERICAN EMBASSY, TOKYO

PUBLIC AFFAIRS SECTION

OFFICE OF TRANSLATION AND MEDIA ANALYSIS

INQUIRIES: 03-3224-5360

INTERNET E-MAIL ADDRESS: tokyoots@

DAILY SUMMARY OF JAPANESE PRESS

May 15, 2002

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INDEX:

(1) Poll on Koizumi Cabinet, political parties

(2) Poll: Public opinion in trouble; 49% see need for emergency legislation, 53% support premier's Yasukuni Shrine visit

(3) Editorial: 30th anniversary of Okinawa's return to Japan -- Okinawa should be independent, making use of geographical advantage

(4) Government to launch full-fledged study on ways to reform tax system; Gap in motives for revitalizing economy through reformed tax system? METI - "No restriction should be imposed on R&D activities"; MOF - "Areas eligible for preferential tax treatment should be boiled down to four"

(5) Our island – future of Okinawa (Part 1): Self-portrait painted by Okinawan people, regardless of political stance or generation

ARTICLES:

(1) Poll on Koizumi Cabinet, political parties

TOKYO SHIMBUN (Page 3) (Full)

May 3, 2002

(Figures shown in percentages. Parentheses denote results of the last telephone survey conducted in March.)

Q: Do you support the Koizumi Cabinet?

• Yes 43.4(44.8)

• No 45.1(39.3)

• Don't know (D/K) + no answer (N/A) 11.5(15.9)

Q: (Only for those who answered "yes" to the foregoing question) What's the primary reason for your approval? Pick only one from among those listed below.

• The prime minister is trustworthy 17.9(20.7)

• Because it's a coalition cabinet of the Liberal Democratic Party, New Komeito, and New Conservative Party 3.7(1.8)

• The prime minister has leadership 3.6(6.1)

• Something can be expected of its economic policy 3.5(2.1)

• Something can be expected of its foreign policy 1.2(0.8)

• Something can be expected of its political reforms 9.9(14.9)

• Something can be expected of its tax reforms 2.4(1.8)

• Something can be expected of its administrative reforms 7.5(6.0)

• There's no other appropriate person (for prime minister) 48.2(43.1)

• Other answers (O/A) 0.3(1.4)

• D/K + N/A 1.8(1.3)

Q: (Only for those who answered "no") What's the primary reason for you disapproval? Pick only one from among those listed below.

• The prime minister is untrustworthy 11.5(10.8)

• Because it's a coalition cabinet of the Liberal Democratic Party, New Komeito, and New Conservative Party 4.0(6.5)

• The prime minister lacks leadership 16.8(17.5)

• Nothing can be expected of its economic policy 34.7(30.2)

• Nothing can be expected of its foreign policy 1.5(0.7)

• Nothing can be expected of its political reforms 13.9(13.7)

• Nothing can be expected of its tax reforms 2.3(2.7)

• Nothing can be expected of its administrative reforms 7.1(5.4)

• Don't like the prime minister's personal character 2.6(7.3)

• O/A 3.7(3.1)

• D/K + N/A 1.9(2.1)

Q: It has now been a year since the Koizumi Cabinet came into office. What's your evaluation of Prime Minister Koizumi and his restructuring initiative over the past year? Pick only one from among those listed below.

• Appreciate very much 3.3

• Appreciate somewhat 41.0

• Don't appreciate very much 44.5

• Don't appreciate at all 10.3

• D/K + N/A 0.9

Q: How long do you think the Koizumi Cabinet will remain in office? Pick only one from among those listed below.

• About a half year 38.3

• About 1 year 41.9

• About 1 and a half years 7.1

• More than 2 years 7.3

• D/K + N/A 5.4

Q: Which political party do you support?

• Liberal Democratic Party (LDP) 29.9(27.9)

• Democratic Party of Japan (DPJ or Minshuto) 9.2(9.5)

• New Komeito (NK) 3.7(3.8)

• Liberal Party (LP or Jiyuto) 4.5(3.9)

• Japan Communist Party (JCP) 4.7(5.0)

• Social Democratic Party (SDP or Shaminto) 3.4(4.1)

• New Conservative Party (NCP or Hoshuto) 0.5(0.5)

• Independents Club (IC or Mushozoku no Kai) 3.0(0.8)

• Liberal Federation (LF or Jiyu Rengo) 0.2(0.1)

• Other political parties 0.2(0.9)

• None 38.8(40.4)

• D/K + N/A 1.9(3.1)

Method of survey: The survey was conducted [by Kyodo News Service] over a period of two days, May 1-2, on a random digit dialing (RDD) basis. The computer-aided RDD methodology, which makes and puts out telephone numbers at random for polling, can survey those who do not have their telephone numbers listed in telephone directories. Among those random-generated telephone numbers, those actually for household use with eligible voters totaled 1,775. Answers were obtained from 1,045 persons.

(02051405im)

(2) Poll: Public opinion in trouble; 49% see need for emergency legislation, 53% support premier's Yasukuni Shrine visit

TOKYO SHIMBUN (Page 1) (Excerpt)

May 4, 2002

Kyodo News conducted a telephone-based nationwide public opinion survey over a period of two days, May 1-2. According to the results, nearly half of those polled showed their understanding for a government-introduced package of emergency bills preparing Japan for foreign aggression, which is to become one of the points at issue during the latter half of the current Diet session. On the other hand, the percentage of answers cautious about its passage at the current Diet session topped that of positive answers. The poll thus shows a 'distorted' phenomenon.

In the survey this time, 49.8% answered that Japan needs emergency legislation, with 38.3% remaining negative about its necessity. The results of polls taken in the past cannot be simply compared due to different methodologies and questions. Even so, 23.4% of respondents to a face-to-face poll taken by the Japan Polling Organization in February—when the legislation's specific contents were not revealed—answered that the emergency legislation should be immediately enacted into law. Taking this into consideration, there is a further understanding for the necessity of legislating emergency measures.

However, in reply to a question asking about the propriety of enacting the emergency bills at the current Diet session, 39.1% of the respondents were positive, with 47.2% remaining negative. Even among those who showed their understanding for the need to legislate such emergency defense measures, 22.0% were opposed to their passage at the current Diet session.

In the same telephone poll, 53.0% of the respondents were in favor of Prime Minister Junichiro Koizumi's recent visit to Yasukuni Shrine. According to its results, 39.4% answered "it's good that the prime minister visited the shrine on April 21," and 13.6% answered "the prime minister should visit the shrine on August 15, which marks the end of World War II." On the other hand, those opposing the prime minister's Yasukuni visit accounted for no more than 40.3%.

(02051404im)

(3) Editorial: 30th anniversary of Okinawa's return to Japan -- Okinawa should be independent, making use of geographical advantage

SANKEI (Page 2) (Full)

May 14, 2002

Okinawa will commemorate on May 15 the 30th anniversary of its reversion to Japan. A special zone system under which financial and data-communications businesses receive preferential tax measures started in April. Taking geographical advantage of being situated in the center of East Asia, Okinawa should make the most of this system as a first step for becoming economically independent.

The central government has set up two special zones as measures to promote the economy of Okinawa whose jobless rate is about twice the national average and whose average income per capita is 70 percent the national average. For instance, if a financial firm starts its business in the special financial zone in Okinawa, the firm will receive preferential tax measures such as an income tax deduction and an investment tax deduction for ten years.

The special zone system is modeled after Dublin, Ireland, which came out well as a supplementary financial center to the United States and Europe by greatly cutting the corporate tax rate. The Finance Ministry at first opposed establishing such a system for the reason that there would be two tax systems in the country. The ministry, however, approved the establishment of the system in return for the relocation of the U.S. Futenma Air Station within Okinawa Prefecture.

Since Japan has introduced the system for the first time, domestic and international financial institutions are highly interested in the system. The system has, however, been criticized for being only half-finished because the government sets such conditions for the application of the system such as companies must have 20 or more employees.

The same thing happened in Dublin. For venture capital firms, which take on the outsourcing of financial and data-communications technology, the condition that firms should have 20 employees or more is an obstacle for venture firms to join the new system. In order to make the epoch-making system successful, it is necessary to review conditions for joining the special data-communications zone.

It is also significant that Okinawa is aware of becoming independent. Ever since Okinawa was returned to Japan, the central government has attached emphasis on the allocation of the budget for public works projects in the island prefecture. Tax revenue allocated to the Okinawa government accounts for 70 percent of Okinawa's general finances. In addition, the amount of general-account budget per head exceeds that for per capita in Tokyo.

Okinawa is in special circumstances with 75 percent of U.S. bases in Japan concentrated on the island prefecture, which equals 0.6 percent of Japan's total land area. However, excessive dependence on the central government is an obstruction for it pulling itself up by its own bootstraps. If structural reforms are pushed forward, the local economy will be revitalized. As a result, the capability of local governments may then be called into question.

Although the special zone system was set up in return for the U.S. bases problem, Okinawa is more fortunate than other regions. The call center in Okinawa has been working well. On the tourist front, Okinawa is geographically advantageous as it is located in the center of East Asia and rich in natural resources. The establishment of casinos might be one of the choices for Okinawa to boost its economy.

On the occasion of celebrating the 30th anniversary of its reversion to Japan, Okinawa is now being called to question how to draw the future of its economy, taking advantage of the special zone system.

(02051405kn)

(4) Government to launch full-fledged study on ways to reform tax system; Gap in motives for revitalizing economy through reformed tax system? METI - "No restriction should be imposed on R&D activities"; MOF - "Areas eligible for preferential tax treatment should be boiled down to four"

NIHON KEIZAI (Page 3) (Full)

May 13, 2002

The government will launch a full-fledged study on reforming the tax system that it hopes will lead to the revitalization of the economy. It is almost certain that measures to preferentially treat corporate research and development activities in terms of the tax system will be taken, based on proposals by private-sector members of the Council on Economic and Fiscal Policy (CEFP). However, concerned government agencies aim at revitalizing the economy but in a different way as witnessed by the fact that the Ministry of Finance (MOF) wants to boil down items eligible for a preferential tax measure due to the difficulty of maintaining tax revenues. The government wants to wrap up measures possibly by the end of the month. There is, however, concern that efforts to specify such measures may face hard going.

( At odds over ideals of reform

The CEFP will meet on the 13th to wrap up an interim report on strategies for revitalizing the economy. It will present the report, including a special deregulatory zone initiative to facilitate deregulation in designated areas, in the form of a set of proposals made by private-sector members. The outlook is that the package will include measures to stimulate the economy, including a reduction in the gift tax – money gifts in order to purchase a home -- and the extension of the period in which companies can carry over losses.

METI Minister Hiranuma also intends to come up with a set of proposals for reforming the tax system aimed at strengthening corporate competitiveness as an emergency proposal. The showcase of his package is a preferential tax measure for corporate R&D activities and the information and technology area. The CEFP will wrap up basic guidelines for reform of the tax system in June, based on those two sets of proposals.

The government's tax system research council (TSRC = advisory organ to the prime minister) and MOF have shown understanding toward preferential measures for corporate R&D activities. Under the current system, it is not possible to cut the corporate tax unless companies step up their R&D spending. Making a certain set amount of R&D expenses exempt from taxation, as is the case in the United States, is assumed to be the most likely option.

MOF's position is, however, to pick four priority R&D areas, including IT and nano-technology, as areas eligible for preferential tax measures, while METI insists that since R&D activities spread out to various areas, there should be no limitation on tax preferential areas. The reason why MOF has readily approved the adoption of tax preferential measures for corporate R&D activities is because it wants to prevent tax revenues from dropping by limiting items eligible for tax exemption to those four areas. Its position is at odds with private-sector members of the CEFP and METI right from the entry argument on ideals of reform: CEFP and METI are now considering broad-based tax system to assist business start-ups and redundant personnel as part of effort to bring out corporate vigor.

( Deadline is mid-June

In government circles, Finance Minister Shiokawa is leaning toward the idea of cutting taxes for the purpose of reinvigorating the economy. Finance Minister Shiokawa at the meeting of finance ministers and central bank governors of the Group of Seven nations (G-7) held last month announced that it would be possible to prioritize tax cuts. The U.S. side is beginning to assume a harsher stand in response to that remark: U.S. Treasury Secretary O'Neill stated that it is necessary to see the proof that structural reforms are in progress.

The deadline is mid-June, when the finance ministers of major industrialized countries meet in Canada. Finance Minister Shiokawa is concerned over whether it is possible to present economic revitalization measures at the meeting in such a short time

However, the likelihood is strong that the implementation of tax cuts before the year's end will lead to a revision of the 30 trillion yen cut on the issuance of national bonds. If priority is given to tax cuts, the Finance Minister's call for maintaining neutrality in tax revenues -- meaning prioritized tax cuts should be linked as a set with a tax hike in the future -- should be cleared, too.

Even if the outline of a revision of the tax system for the purpose of resuscitating the economy is set by the financial ministerial of the G-7, chances are high that schedules for tax cuts and hikes and the size of tax cuts will remain nebulous.

( TSRC

The TSRC will extensively hold meetings of the basic problems panel to discuss the way individual tax items, including the inheritance tax and the gift tax, should be. Chairman Hiromitsu Ishi at a press conference on the 10th categorically noted, "Revising the tax system in order to revitalize the economy is not in our job description." Prospects are that the panel will facilitate discussion of the tax system, including details that will consequently boost tax revenues with focus on dissolving the problem of the hollowing out of the tax system.

Major items up for consideration for reforming the tax system to revitalize the economy and points at issue

| |Opinions supporting reform |Opinions against reform |

|Tax rate reduction |Compatible with the purport|Tax rates have already |

|formula (for income tax |of reform aimed at making |been lowered to the level |

|and corporate tax) |tax burden wider and |of major industrialized |

| |thinner |countries |

|Preferential tax system |METI: Creation of a tax |Tax incentives should be |

|formula as a matter of |system aimed at promoting |totally abolished. Tax |

|policy (intensive type) |investment in IT |preferential measures for |

| |Finance Minister Shiokawa: |specific areas are against|

| |Tax cuts with focus on |the neutrality principle |

| |leading industry areas |and will mar the |

| | |impartiality of taxation |

| | |(TSRC). |

|" (general type) |Preferential tax measures |Preferential tax measures |

| |for boosting investment in |without priority areas |

| |R&D activities (METI and |will lessen results as a |

| |CEFP) |policy measure (MOF and |

| | |Finance Minister Shiokawa)|

|Formula of evading a drop|*Reduction in the gift tax |The proposed formula is |

|in tax revenues as much |imposed on the gifting of |not fair for it |

|as possible |money for home purchases |preferentially treats only|

| |(CEFP and ruling parties) |parents and children with |

| |*Reform of the inheritance |assets (TSRC, MOF) |

| |tax and gift tax aimed at | |

| |encouraging lifetime | |

| |gifting (ruling parties) | |

|Tax cut formula entailing|Consideration should be |Japan's national bonds |

|increased issuance of |given to tax cuts on a |could be demoted further |

|national bonds |priority basis starting |due to an increase in |

| |from this fiscal year |fiscal deficit. (MOF) |

| |without adhering to the | |

| |existing 30 trillion yen | |

| |national bond issuance | |

| |framework (some members of | |

| |the ruling parties) | |

(02051404yk)

(5) Our island – future of Okinawa (Part 1): Self-portrait painted by Okinawan people, regardless of political stance or generation

ASAHI (Page 1) (Slightly abridged)

May 13, 2002

By Hiroki Manabe of the Naha Bureau

In this April's mayoral election in Kin Town in Okinawa Prefecture, Katsuhiro Yoshida (57) ran, aiming at winning his third term, but he was defeated. Three candidates had a close fight in the race, but it was not a fight between conservatives and reformists. It was thus difficult to categorize Mr. Yoshida as either of these two forces. As a result of a hard-fought campaign, a candidate who is 17 years younger than Mr. Yoshida won the election by appealing for "moving away from the old structure."

Spellbound by subsidies

In his boyhood, Mr. Yoshida hoped to see "[Okinawa] revert to the United States." He was fascinated by sweets and dollars given by U.S. soldiers, which were the embodiment of America's affluence.

But when he grew up and was faced with the harsh realities of rule by U.S. forces, he hoped for reversion to Japan. The pacifist Constitution [of Japan] appeared glorious.

Now he sees 60 percent of the area of his hometown occupied by U.S. bases and 40 percent of the town finances dependent on income from base-related businesses. His town is a typical example of Okinawa where 70 percent of the U.S. bases in Japan are concentrated and in return 7 trillion yen or more has been given.

Money has been given in return for Okinawa to host bases. This is a kind of spell that has troubled Mr. Yoshida. His political career started as a reformist-minded secretary to a socialist lawmaker, but later he gradually turned around to get along with the realities. This might have been the cause of his failure in the recent election. Mr. Yoshida says:

"What we need is a little, but we have been compelled to swallow the whole. This is the way the Japanese government does things. To be sure, we have become financially well-off, but I wonder whether it is really so or a mere illusion …"

Undercurrent

In mayoral races in recent years such as Naha, Urasoe and Nago, conservative-affiliated candidates emphasizing the need for economic stimulation have won victory against reformist-affiliated candidates opposed to hosting bases. This is another reality in Okinawa. With the political situation in Okinawa resembling that on mainland Japan, the island prefecture appears in a lull.

But the question "Is it all right to leave Okinawa as it is?" occasionally comes across the minds of conservatives and reformists, regardless of their generation.

It was the beginning of the year when conservative political circles in the prefecture were shaken in preparation for the mayoral election in Okinawa City.

The trigger was that the reformist camp singled out a popular Okinawan disc jockey, Denny Tamashiro (42), as their candidate. Though Mr. Tamashiro was not an avid political activist, there was widespread speculation that he would win an overwhelming victory.

Denny Tamashiro and his mother remained in Okinawa, even after his father – a U.S. soldier – returned to the United States. He has blond hair. He told me that when he was a child, someone teased him by pointing at him and saying "America." His mother then stretched out her hands, telling him the Okinawan saying, "To nui biya yunutakiyanera" (Okinawa dialect), which means, "Ten fingers are not the same length" so this difference has a meaning.

Denny adds: "Okinawa has been so eager that it be integrated into mainland Japan. As a result, it has been spoiled by the central government's economic stimulus measures. Okinawa should change itself upon its own to an area where people can live calmly and peacefully, without relying on bases." Denny gave up the plan to run in the election as he was unable to get sufficient campaign funds and groups to back him, but he is bent on running in the next election.

Diet member Mikio Shimoji (40) from Okinawa says: "The framework of conservatives and reformists has already collapsed in Okinawa."

Mr. Shimoji is looking for ways to transfer the location of drills conducted by the Marines stationed in Okinawa to somewhere else by traveling to other countries such as the Philippines. His move comes from his question of which side the central government is placing emphasis, the United States or Okinawa. "Even I, who belongs to the Liberal Democratic Party, had to declare that I would change Okinawa into an area with no military presence."

Singing voice

It is mainland Japan that has charted the course Okinawa has followed so far. But from now on, Okinawa wants to decide its course on its own.

A band of Okinawan college students, "Mongol 800," released an album, one million copies of which have been sold across the country. The album is a set of songs that "tell what ordinary young people who were born and grew up in Okinawa are thinking," according to the record company the band belongs to. These songs capture the hearts of people.

One of the songs – "Flowers are in Bloom, Regardless of Contradictions" – has these lyrics:

Under the beautiful sky,

on a blue ocean,

This island lies, already tinged with the sadness of Japan

Flowers that are blooming, regardless of contradictions,

Should be uprooted.

Okinawa will celebrate the 30th anniversary of its reversion to Japan on May 15.

(02051404ku)

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