(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00367R000201070002-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: January 12, 2017
• Document Release Date: April 1, 2010
• Sequence Number: 2
• Publication Date: January 5, 1984
• Content Type: MEMO

Office of East Asian Analysis
DIRECTORATE OF INTELLIGENCE
NJIE FOR: The Honorable Paul Wolfowitz
The Assistant Secretary for
East Asian and Pacific Affairs
Department of State
Attached is our assessment~of the second
Nakasone administration. We prepared this
paper at the request of Under Secretary of
Camnerce for International Trade Lionel
Olmer, but I thought you might also be
interested in our first look at Nakasone's
second Cabinet and the. prospect for progress
on bilateral issues. If' Du hnvp. any
questions, please Chief,
Japan Branch,
(This note was sent to the following:) ...
Paul Wolfowitz Doug Mulholl.and
Gaston Sigur Martin Feldstein
Richard Armitage
Ambassador Michael Smith
James Kelly
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Central Intelligence Agency
wsseingunuczosos
DIRECTORATE OF INTELLIGENCE
5 January 1984
Japan: The Second Nakasone Administration
Although Prime Minister Nakasone fell far short of winning
the 'popular mandate he had hoped for in-the lower house election,
he has pieced together a coalition government that should lessen
Liberal'Democratic Party (LDP) infighting for several months. If'
former Prime Minister Tanaka,decides,that it-is no longer in his
interest to remain?in'the"background or if lower house elections
are called this summer, the current truce within the party could
end by spring. In any event, the LDP presidential election next
November is certain to'set off a new round.of factional
maneuvering.' We believe that Nakasone's Cabinet choices should
help Tokyo fulfill at least some of the pledges it has made to
Washington over the past year, although progress in such
politically sensitive areas as agriculture almost certainly will
be less than the United States hoped for.
New,Liberal Club Alliance
Nakasone's move to bring the eight-member New Liberal Club
This memorandum, requested by Lionel Olmer, Under Secretary for international
Trade, Department of-Commerce, was prepared by Japan Branch,
Northeast Asia Division, Office of East Asian Analysis. 1 ::1
Information
available as of 3'January 1984 was used in its prem.. Comments and,
queries are welcome and may be directed to the Chief, Japan Branch,' Northeast
Asia Division, OEA,
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(NLC) into an alliance with the LDP gives the conservatives a
majority of 267.of the 511 seats in the lower house and control
over: 15 of the 18 standing committees, including the key budget
committee. The Prime Minister's ties to the NLC and the
similarity of LDP licy views should help ensure continued 25X1
cooperation.
LDP.. Of the four NLC'members who formerly belonged to the LDP, """
three--including leader Seiichi Tagawa--were Nakasone' faction
members F- ~ Pail- 25X1
positions on oreign a airs,
administrative reform, and education are compatible with those of 25X1
The NLC left the LDP in 1976 ostensibly to protest the
failure of old-line party leaders to carry out internal reform
af'te,r, former Prime Minister Tanaka's scandal-linked resignation
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Achieving Factional Balance
~,I By far the more important coalition in the new government is
that within the LDP itself. On 24 December Nakasone set the
stage for renewed party unity by making the ritual, acceptance of
responsibility for the 18 December election setback and pledging
to "eradicate" Tanaka's influence over the LDP. He backed his
words with actions when appointing Cabinet and top party
officials.
-- Tanaka lost the Justice portfolio=-which could have been
,useful during the appeal of his bribery conviction--and
the Construction post--one of the major.pork barrel
ministries, long controlled by'the Tanaka faction.
--'Nakasone replaced 'a Tanaka faction leader as secretary
general of the party.
-- Tanaka faction members hold six posts in the new Cabinet
as they did in the last, but the portfolios are much less'
prestigious.
In addition to placating his major factional opponents by
reducing Tanaka s influence in the party, Nakasone was careful to
balance top party and Cabinet posts among all factions. He even
brought one of his chief rivals--Toshio Komoto--into the
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creating discord that could spill- to wider factional 25X1
relations.
the LDP. during the postelection maneuvering. Former Finance
Minister Michio Watanabe has rejoined the Nakasone faction,
bringing along.seven of his followers. As a result, the Prime
Minister's faction is now equal in size to that of Suzuki's--both
are,now second only to Tanaka. By working out the coalition with
the,NLC, and giving NLC leader Tagawa a Cabinet post, Nakasone
has added to his list of potential supporters. Some of
Nakasone's Cabinet choices could also work to his advantage.
Komoto, Abe and Takeshita are all potential rivals for the prime
ministership. By naming them to the Cabinet, Nakasone has tied
them to his government, leaving them less'room to criticize him
and:less time to prepare to challe pire him in na-ri y presidential
elections scheduled for November.
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Stress Points in the Coalition
How long the current stability within, the LDP will last
depends to a large degree on Tanaka's assessment of the nolitienl
party. If the Prime Minister appears to base decisions on advice
from Tanaka--including whether to hold lower house elections
again in early summer--a period of debilitating factional
infighting could resume. 25
Trouble within-the factional coalition could also come from
Suzuki's followers. Suzuki pressed Nakasone, to name Kiichi
Miyazawa party secretary general. Miyazawa is heir apparent of''
the Suzuki faction, but he has never held the secretary
generalship, a key c'redential for the party presidency and an
essential post from ?which to broaden support within the nerty.
uzu i is undoubtedly bitter that Miyazawa was shut out. His
faction-is.divided between supporters of Miyazawa and Tanaka
Impact on the United States
''Despite the current stability of the Nakasone government,
the election results have weakened the LDP and limited Nakasone's
ability to lead. Japanese officials have already suggested that
the election setback will slow progress on solving US-Japanese
problems, but we believe the new Nakasone administration should
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be able to- follow through on some pledges made to Washington.
The return of.Komoto to the Cabinet may also encourage
maintaining a strong US-Japanese relationship. He has exchanged
views with Treasury Secretary Regan on financial issues and
probably will try to their scheduled meeting in
February goes well. 25X1
The Prime Minister has retained two key Cabinet ministers 25X1
who have worked with him on bilateral issues over the past year,
and who could be instrumental in supporting negotiations on
topfcs_ of importance to the United States. Foreign Minister Abe
plans to come to Washington early this year to discuss bilateral
issues.. According to the Embassy in Tokyo, Finance Minister
Takeshita has demonstrated a consistent, long-term interest in
Komo'to favors strengthening. a yen in order to remove a key'
irri:tant in bilateral relations., Nakasone has included'other
major rivals and critics in his government. .As a-result, if the
Cabinet agrees to take action on bilateral issues, he should not
face criticism from within the LDP for caving into Washington.
Finally, with Tanaka in the background, Nakasone was able to name
more' men of his-own choice to the Cabinet and top LDP posts,
which could give him a--larger voice in managing-the Diet and the
J t+ Th ? t
ar
l
.p
y. iS, in urn, cou
d all ush for fulfillment of
pledges to Washington. 25X1
Movement on agricultural issues is likely to be most
difficult. Having lost:34 seats, party members will'be reluctant
to risk antagonizing traditional supporters by making. concessions
on beef and.citrus. Foreign Minister Abe has publicly emphasized
that Japan cannot promise ltural quotas. 25X1
the powerful
agriculture lobby has begun to court the newly strengthened
opposition parties in an ff ck concessions.to the 25X1
United States.
Nonetheless, we believe at least some increase in
agricultural quotas is possible. 25X1
Tanaka has said that with .coopera ion from the Democratic
Socialists and Komeito--to which his faction has close ties--
Tokyo will be able to increase import quotas on farm goods. The
Minister of Agriculture -. is one of Tanaka's men, and he may be'
able to use. the influence of the LDP's most powerful faction to
'convince the Agriculture Ministr to go along with some 25X1
concessions.
Early signs suggest' that. progress on Japan's defense effort
 d during'nis IICa~.,~ after he
on this issue he displayeln a press conference shortly omise
more cautious approaMi he said he would keep his pr
1 'cted Prime Minister, , fense efforts but added
was ree e
toPresident Reagan to boost Japan s e ht not be as much as
thatmmilitary spending should
that the increase in defensearnepending
with enditures
Washington would like:
fined closely to gee ala so balance
beyex by the
am
under an austere budg aihan 11 seats
Cabinet guideline limiting miltherSocialists, whosg than
percent of GNP- In add tsoken opponents of increased defense
in the elec ion are outspoken outp
spending;
Nakasone has named several officials to his new government--
including the LDP secretary general the chief cabinet. secretary,
and the Minister of International Trade and Industry--who are
osit,ion. Their negotiating.at
ekis ced in working with the of in compromises,
skills and contacts should asitionul that arranging al low ome
least with the moderate opP
h controversial issues as defense. 1 :1
progress on suc
h
Movement on liberalisation of the'capital markets as
probably been least affected by the election results, and we
expect the momentum that has built for progress on. that issue to
u
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Key Cabinet Posts
Position
Chief Cabinet Secretary
Takao Fujinami
Nakasone
Minister of Finance
Noboru Takeshita
Tanaka
Minister of Foreign Affairs
Shintaro Abe
Fukuda
Minister of International Trade
and Industry
Minister of Agriculture,
Forestry and Fisheries
Minister of Home Affairs
Seiichi.Tagawa
New Liberal Club
Minister-of Posts and
Telecannunications
Keiwa Okuda
Tanaka
Director General, Japan Defense
Agency
Yuko Kurihara
-Suzuki
Director General, Economic
Planning Agency
Toshio Konnto
Karroto
Key LDP Posts
Secretary General
Chaiiman, Executive Council
Shin Kanemaru
Tanaka
Chairman, Policy Affairs
Research Council
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1.- D/OEA
1 - C/OEA/NA
1 - C/OEA/NA/J
1 - C/Production/OFA
l.- Executive Director
1 - IDI
1 - 17DI Registry
1 C/NIC
1 NIO/EA
5 - CPAS/INU/C8
2 - OCR/ ISG
1 -
1 -
1 - Lionel O1rrer, Commerce
1- Donald Gregg, Office.of the Vice President
1 - The Honorable Paul Wolfowitz
1 - Gaston Sigur, NSC
1 - Richard Childress, NSC
1 - Richard Armitage, Department of Defense
1 - Ambassador Michael Smith, USTR
1 - Doug Mulholland, Department of Treasury
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