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P 101002Z OCT 08
FM AMEMBASSY TOKYO
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RUEHUL/AMEMBASSY SEOUL PRIORITY 1792
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RUEHNAG/AMCONSUL NAGOYA PRIORITY 8403
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RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
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RUEKJCS/JOINT STAFF WASHINGTON DC
RUEHKO/USDAO TOKYO JA
RHMFIUU/USFJ
RUEAIIA/CIA WASHDC
UNCLAS SECTION 01 OF 02 TOKYO 002845
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: PREL MOPS PARM OVIP JA PINR
SUBJECT: SCENESETTER FOR SENATOR HAGEL'S OCT 15-17 VISIT TO
JAPAN
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SUMMARY
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1. (SBU) The situation you will find in Japan is one of
continued political uncertainty, despite the recent election
of a new government. Newly-elected Prime Minister Taro Aso
is a strong supporter of the U.S.-Japan Alliance and appears
to favor a more robust Japanese contribution to international
issues. However, he and the ruling Liberal Democratic Party
(LDP) have their hands full as they balance the opposition's
calls to dissolve the Diet and hold early elections with the
need to address domestic economic problems and the growing
global financial crisis, as well as to gain passage of the
bill reauthorizing Japan's maritime refueling operations in
the Indian Ocean in support of Operation Enduring Freedom.
End Summary.
DOMESTIC POLITICS: ASO IS PM, ELECTIONS UNCERTAIN
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2. (SBU) Former LDP Secretary General Taro Aso became the
Prime Minister of Japan on September 24, succeeding Yasuo
Fukuda, who, like his predecessor, former Prime Minister Abe,
resigned unexpectedly amid considerable political
difficulties and declining support rates. Aso unveiled his
new Cabinet lineup the same day, re-appointing a handful of
ministers from the recently reshuffled Fukuda Cabinet and
appointing the remainder primarily from among his close
associates in the ruling Liberal Democratic Party (LDP).
Nearly all of the new ministers are well-known to the public
and have held ministerial portfolios in the past. However,
Aso's Cabinet encountered problems almost immediately. The
resignation of the Minister for Land, Infrastructure, and
Transportation only five days after his appointment for
repeated verbal missteps, along with allegations of political
funds scandals involving two other new ministers, dominated
the news during the initial weeks of Aso's administration.
3. (SBU) The main question being debated in Japan is whether
Aso's team can help the LDP prevail in potential Lower House
elections against the Democratic Party of Japan (DPJ), led by
Ichiro Ozawa. Support for Aso and his cabinet currently
ranges from a low of 45 to a high of 53 percent, with the
average approximately 10 points lower than former Prime
Minister Fukuda when he launched his first Cabinet in 2007
and 20 points lower than former Prime Minister Abe's ratings
in 2006. Aso out-polls DPJ leader Ozawa by a wide margin in
surveys on the public's choice for Prime Minister, but polls
also show the public would favor the DPJ over the LDP if
elections were held today.
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ECONOMIC POLICY UNDER NEW ASO TEAM
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4. (SBU) The country's economic situation is foremost in the
minds of Japanese voters and businesses. Accordingly, in
planning for the possibility of early Lower House elections,
Prime Minister Aso is developing an economic campaign built
around a central theme: "stimulating the stagnating Japanese
economy." He is pushing a three-stage approach: use a
supplemental budget to stimulate the economy in the
short-term (the Lower House passed a 1.808 trillion yen
supplementary budget on October 8); repair the country's
fiscal balance in the medium-term; and increase Japan's
potential economic growth rate through structural reform in
the long-term. Japan's weakening economy (-3.0% growth in
the second quarter annualized), slowing global growth, and
world-wide financial turmoil has restricted Japan's ability
to turn to its standard policy ) exporting its way out of
TOKYO 00002845 002 OF 002
the problem ) and as a result, Aso is putting a priority on
short-term economic stimulus.
5. (SBU) Aso has also put aside, at least for now, the
structural reform banner that former Prime Minister Koizumi
once held high. The need to reform the pension and
healthcare systems, to introduce greater competition into the
economy, and to raise productivity have not gone away.
However, the public is seen as being tired of structural
reform and needs to be reassured.
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FOREIGN POLICY
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6. (SBU) Prime Minister Aso has inherited a number of
important foreign policy challenges from the preceding
administration. As host and president of the G-8 Summit this
year, Japan has made a number of pledges to contribute to a
range of global issues, such as climate change and the
environment, as well as international development and
assistance. Responding to criticism both in and outside
Japan, the Japanese government has been exploring ways to
expand its contribution to Afghanistan beyond aid assistance
and the refueling operations in support of OEF. Cabinet
officials have expressed their intention to push for
continued OEF refueling operations and reports indicate that
the DPJ will not drag out debate, as they did last year, to
reauthorize and continue this mission. In the region closer
to home, relations with China and South Korea continue to
flare up periodically due to unresolved historical and
territorial disputes. North Korea's nuclear program and
achieving a resolution to the issue of Japanese citizens
kidnapped by the North remain at the top of Japan's foreign
policy priorities.
7. (SBU) Aso has called on his ministers to build a "bright
and strong" Japan. In response to DPJ leader Ozawa's
oft-repeated assertions that Japanese foreign policy should
be based on supporting UN sanctioned operations, Aso
pointedly asked the DPJ during his opening presentation to
the Diet where they believe Japan should put its trust -- on
the U.S.-Japan Alliance or on an organization often swayed by
a number of "small nations." His position is clear:
Japanese foreign policy should be based on the Alliance first
and foremost.
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SECURITY POLICY
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8. (SBU) As with foreign policy, the Aso administration is
expected to maintain a similar position on Japan' security
policy and the U.S.-Japan Alliance as did its predecessors.
The successful September 25 arrival of the U.S.S. George
Washington, the first and only nuclear-powered aircraft
carrier to be deployed outside the United States, is a
milestone in strengthening the Alliance. Prime Minister Aso
was one of the signatories of the May 1, 2006 roadmap for the
realignment of U.S. Forces in Japan.
SCHIEFFER