JPRS ID: 9426 JAPAN REPORT

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JPRS L/9426
4 Decernber 1980
= Japan Report
(FOUO 32/80)
F~IS FOREIGN BROADCAST INFORMATION SERVICE
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JPRS L/9426
. 4 December 1980
- JAPAN- REPORT
(FOUO 32/80)
CONTENTS
POLITICAL AND SOCIOLOGTCAL
,Japan's Vice Foreign Minister Interviewed on Policy
(Toshiya Kawahara, Masanori Tabata; THE JAPAN TTNIF'5, 31 Oct 80) , 1
'AKAIiATA' Cr.itical of Proposal To Revise Security Treaty
(JPS, 10 Nov 80) ........................o............. Lt
Japanese Socialist Splinter Party Seeks Conservative Coalition
- (TfiF, JAPAN TIMES, 17 Nov 80) .......................o.:..o..... 5
Iloavy Task P_wai.ts Suzuki Cabinet
(NIHON KEIZAI S'rTDMUN, various dates) ........o................ 6
Con;jncture on LDP Stability, Post-Suzuki Leadership _
(YOMIURI S1iMUN, various dates) ................d............. 22
Part 1. Hawkish Trend
- Part 2. Intraparty Factional Strife ~
- Part 3. Former Prime Ministers
Part 4. Time Bomb
Part 5. Succession Issue
J.Upanlo CP'o Miyamoto Inicerviewed by Italian Paper
- (JPS, 3 Nov 80) ................o........................... 35
= 'AKAHA'PA' Explains JCP's Nonparticipation in Berlin ConferencP
(.7PS,3 Nov 80) ...............................o.o...o..o...... 39
iiri.e1's
LDP Faction Resumes Activity
40
N:CONOMIC
Pnrceptions of Japan-U.S. Tz-ade War Examined
(Naohiro Amaya; THE., .JAPAN TINlTS, 9 rzov 80) ...o Ltl _
- a - [III - ASIA - 111 FOUO]
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IAKAHATA' Comments on U.S. ITCls Decision on Car Imports
(JPS, 12 Nov 80) ...e....o .............e..o................. 44
MITI To I?raft Long-Term Auto Industry Survival Strategy
(THE JAPAN TIMES, 15 Nov 80) ..............s�..������������� 45
Editorial on Petrodollar Investments
( Edi tori al; THE JAPAN TIlMES, 30 Oc t 80) . . , , . . . . . a . . . o 0 0 � � � � 47 -
SCZENCE AND TECHNOLOGY
NTT Develops New Optical Fiber Cable
(THE JAPAN TIlMS, 11 Nov 80) ..............o................. 49
- b -
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POLITICAL AND SOCIOLOGICAL
JAPAN'S VICE FOREIGN MINISTER INTERVIEWED ON POLICY
OW0I1150 Tokyo THE JAPAN TIMES in English 31 Oct 80 pp 1, 5
[Article by Toshiya Kawahara and Masanor.i Tabata]
[Text] The Soviet Union muet show ite itstention to improve relations with Japan
through action rather than worde should it really want to normalize bilateral rela-
tione, which have been etrained eince the Soviet military intervention into Afghanis-
tan laet December, saye Vice Foreign Minister Masuo Takashima.
In n recent interview with THE JAPAN TIMLS, Takaehima said, however, that Moscow
hng ao �nr flnehed no.signal of euch a poeitive move toward political rapprochement
_ with Tokyo. He etressed that the Soviets muet firet eit at the negotiating table
nver the long-pending territorial ieaue with Japan in accordance with the spirit of
the Japga-Soviet joint communique of 1973.
He digcueeed Japan's relationa with the Soviet Union, the U.N. and the Asaociation
of SauCheaet Asian Nations (ASEAN), and ite increasingly important role in the inter-
national community, among other topics.
Toucliing on Soviet-Japanese relatione, Takashima said emphatically that the Japaneae
C,overnment, in principle, regards the Soviez Union as an important neighboring
counCry, just like China, and is ready to improve ite relations with Moscow.
Aut he dented in a atrong tone a recent charge by the Soviet official organ Izvestiqa
that Japan is taking an anti-Soviet etance under the pressure of the United States
ead China to isolate Moscow in the international comaunity.
Takashima said that the Soviet Union has not changed its adamant attitude toward
_ Japan end still maintaina that there ie no territorial isaue exieting between the
two countries. He denounced the Soviet military buildup on the four Japaneee-claimed _
LaYands aff the coast of Kohhaido. "There ia no doubt that auch an attitude will
nnYy get on the nervee of the Japaaeee people," he eaid.
Under such circumetances, he said, the Japanese Government cannot accept the lateat
informal `Soviet c'ell on Japan'to promote economic relations by first aheYving
- political ieeuee, which was also the main theme of Soviet Preaident Leomid I.
Brezhnev'e recent speech. Brezhnev devoted a relatively large portion of it to
Soviet-?apaneee relations.
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As ustep f.o rward toward reaumptior of formal dialogue over bilateral political
issuee, the v ice foreign minieter saids he was looking forward to the realization
o� the pendiag visit to Japan by Soviet Foreign Miiister Andrey A. Groaaykc. With
it will be reapened negatiatione between the two countries over the territorial
ieeuc and conclueion of a peace treaty, he said.
"5o far, no p oeiCive sign of initiative on this sccsre has been seen in Moscow'e
moves," Takashima eaid. Streeaing the importance of Japan's relations with ASr,AN, he said that Japan has
canperuted wi.th ASEAN in supporting Cambodia's Pol Pot Regime in its campaign against
thp Vietnam-b ecked Phnom Penh-based Heng Samrin Government to retain its seat in
the Unlted Ne tione because of the need to etand up for the fundamental rules of the
internatiana 1 community.
Thg rnot of the CambodiAn problem, eccording to Takashima, is that fact that Vietnam
invnded the country and established a"government" to its liking and is now trying
to support i t by meane of military force. "We can never approve of such an act
which runs co unter to the principles of the interaaCional community which aspires
aEtier juatiee and order," he eaid.
Tgkaehimu aa id, however, that the government does not necessarily approve of the
paet pollc.teR or deeds of the Pol Pot Regime, which is now widely criticiZed by
many members of the international community for allegedly carrying out gei:ocide
when it wns e eated in Phnom Penh.
He actcnowled ged the fact that neither the Pol Pot Regime nor the Heng Samrin Govern-
ment effectively controle Cambosiia at present, with no capable thi.rd force emerging
yeC Ca rule the country.
The Cambodinn problem should be aolved on the basie of self-determination of the
peoplc of Caabodia by Vietnam withdrawing its troops, he eaid.
'I'akashima said that Japan would spare no sffort to use their cooperation with the
countrioa of: ASEAN to promote a political aettlement of the iesue. He said that the
world coramunity cannot 1et Vietnam impose ite intention to make the Cambodian
.Lnvasion a f aiC accompli. Just ae it cannot condone the Soviet military intervention
in Afghenietan.
On F'rime Minieter Zenko Suzuki'a planaed visit to ASEAN member nations next January,
Takaehima sa id the situation in Southeaet Aeia has changed greatly eince Former
Prime Mtnis*_er Takeo Fukuda viaited the region in 1977.
= Among the no table changeB he pointed out, is the new situation in Indochina where
the Soviet Un ion and Vietnam have forged strong ties based on a bilateral treaty
ot frietidehip, while Hanoi hae come to engage in an open confrontation with Beijing.
Bdth btdee armed to the teeth.
rakaehima said Japan ia determined to a*rive to further promote efforts for peace
and pr.oep,3ri ty of the countries of Southeast Aeia, namely the five ASEAN member
countries, the three Indochinese cauntries and Burma.
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"We muet perticularly keep open the channels of dialogue with a country whoae
political system differs from our own," Takaehima said, apparently indicating
Viatnam.
An a nr.wly elactad non-permanent member of the United Nations Security Council for
Ctie 1981-82 term, Japan will play e positive and conekxuctive role to uphold ororld
peaCe end eecurity, he eeid.
He eeid Japan w{11 eventually be asked to increaae ita contribution to U.N. peace-
keeping efforts, partieularly in texma of human resaurces, in addiCion to financial
suppott.
But Takaehima ruled out the posaibility that the government would send officers
gnd men of the aelf-defense forces to become membere of the U.N. peacekeeping forces,
on the ground that the present self-defenas forces lak� prohibits overseas deployment
of SDF pereonnel.
"Inetead, the government ie coneidering the sending of Japaneee civil servants to
Namibin to join the U.N. team there to aupervise free general elections in that
cauntry," he said.
The vice foreign minieter said that Japan'e atatus in the international community
hne been greatly enhanced in recent years in accordance with its expanded respon-
gihili.ties in the world body and the incxeasing expectations of other countries.
COPYEtIcIFlT s THE JAPAN TIMES, 1980
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POLITICAL AND 30CIOLOGICAL
'AKAHATA' C1tITICAL OF PROPOSAL TO REVISE SECURITY TREATY
OW101051 Tokyo JPS in English 0858 GMT 10 Nov 80
(Text) Z'okyo Nov 10 JPS--One of the brain trusters of Reagan, president-elect,
former admiral of the U.S. Navy William Middendorf, has sent lettera to secUrity-
related liberal democrats in late October, propo siag that,the iaeue of amendment
to the preaent Japan-U.S. security treaty ehould be placed on the subjects of
offtcial talke, it wae learned recently.
In hie letter sent to Noboru Minowa, acting chairman of the LDP Security 8esearch
Council, and other LDP Diet members, Middendorf wrote that the ieeue shall be taken
up ae one of afficisl ftema of agenda in the seGOnd Japan-U,S. aeminar on aecurity,
echadulod td be held in next May, ift Washington.
Minnwe told the press corpa on November 8, as followe: Middendorf raised ten-point
Ltnm of agenda �or the second eeminar, including (1) analysie of the military power
af ttic 5oviet Union, (2) analysis of the eituation of the Korean Peninaula, (3) on
mptting up e Pacific parliament, centering on Japan and the U.S., as well as the
iesiie o� revieing the security treaty. Saying that now ie the Cime to revise the
rreaty, Middendorf took up the queetione: (1) Japan's reeponeibility for 'defense'
of saalanes, (2) introduction of a provision calling fur a bilateral treaty, by
which Jgpan muet bear the reeponaibility of defending the U.S. He also reportedly
proposed to tiold diecussions on provieions of the Japanese constitution.
Tomoo [name ae received] Mihara, chairman of the LDP Security Reeearch Council,
241nowa and othere of the LDP are to visit the U. S. at the end di this month, in
~ which they plan to exchange viewe on how to treat the propoeal for amending the
tr.eaty.
AKAHATA on November 9 commented on this, saying:
"xiie Japan-U.S. seminar on security iteelf has been undertaken at the call of the
U.S Republican Party. Middendorf is one of [theJ members mapping out military,
dtplomatic and economic policies. All of these proviie ample evidencee that, with
khe inAquration o� the Reagan administration, there will be a etrong poaeibility
that tli~- isaue of revieion of security treaty and the conetitutional amendment will
ba p].aced on the eubjects of coming official talks between Japan and the U.S.
govcrnments."
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POLITICAL ANn 50CIOLOGICAL
JAPANESE SnCIALIST SPLINTER PA,RTY SEEKS CONSERVATIVE COALITION
OW180929 Tokyo THE JAPAN TIMES in English 17 Nov 80 p 2
[Text] The Social Democratic k'ederation (Shaminren), a 1978 spinoff from the Japan
Socialiet Party, adopted at ita partq convention Sunday poliriea calling for promo-
tion of a coalitioa with conservative forces and for joining handa in the diet with
the new Liberal Club, a mfnor coneervative garty, am3.d strong opposition from many
. mambere.
The party convention wae the firat to be held aince the garty's faunding in March
1978.
T.t aleo ra-elected as leader Hideo Den and ae eecretary-general, Yanoeuke Narazaki.
But Yutaka Hata, deputy secretary-general, who opposed the new party palicies
reeigned.
In his opening addrese, Den said that hie party should drop plana for noal3tion
wiCh tha JSP, Kumeito and the Democratic Socialist Party, and seek a new align.ment
of politie:nl forces by joining haads with "reformist conservatives" in order to
win public trust.
He thus indicaCed he favored a coalition between centrist and conservative forces,
rather than a coalition between the socialists and cenCriat partiea, exaluding
Conservatives.
Aen also criticized the JSP's interim report on the new JSP policy propoaing a
"damocretic socialiet" eociety.
But many rank-and-file members raised oppoaitionto the leadership's proposal by
arguing thaC the party ahould not drop its aocialist cauae by joining handa with
th@ NLC, a eplinter party of the ruling liberal-democratic party, and other con-
eervative forces.
The now party policiea were thue approved only with what the leadership claimed to
be Che applauee of a majority, but not by voting.
COPYRIGHT: THE JAPAN TIMES, 1980
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POL!'C'ICAL AND Sc)CIOT.OGICAI.
NEAVY 7'ASK AWATT5 StrZUKT CABINET
Tokyo NIIiON KEIZAI SHIMBUN i.n Japaneee 19, 20, 22, 23, 24 Jul 80
[Ar. r ir.le: "Suzuki Cabinet in Trying Period : Can It Carry Out Its Mission?" ]
(19 .1u1 E0, p 1]
['Cext] F3.nancia]. Reconetruction
'1'hm Sur.uki cabinet must conCinue the eerious polltical dialogues previously
ehauldered by the nhira cabinet. In short, the shadow of a world recession is
draw.ing near a Japanese economy which is barely maintaining equilibrium, and in
whicti the dep,ree of deficit financing hae increasPd alarmingly. Japan's responsi-
btlities warldwicle have also expanded. In any event, the country is carrying a
vcry tieavy load, and it doee not have all that many options to pursue. All this
will be a Aevere test of the political atrength of' the Suzuki cabinet.
"Cool off" Risl.ng Taxes
'Slir 5uzukl cabiner hae made "financial reconstruction" its number one policy
ah)arCive. At the same time it hae begun a program to "cool off" rising taxea.
'f'Yic clebares on higher taxes that helped lead to the LDP's defeat in the ge:neral
e1er.c:ians last year were canaidered "taboo" during rhis double elecCion. Partly
for that reason the LDP had an overwheLming victory. Following the election the
iasue waa revived, and prior to the formation of the cabinet it lonked as though
1,t wnuld be tgken up by a large chorue of new party leaders led by Chairman Abe
of eNe Poliey ttesearch CommiCtee. However, taking cue from a statement by Prime
Minisenr Suzuki that "we will not make 'easy' tax increasee," the matter once again
veGamc tgboa.
Reg$r.cling "cooling of.f of tax increases," in reality the general belief of the
Finance Minietry is t}iat higher taxes cannot be avoided. But if higher taxes are
brot,ght tip too often the peopl.e's "tax allergy" is aggravated. Higher taxes are
nor.epr.ed more easily if they are brought up from the angle of budgetary reatraint.
fdareo,.'or, it is eaeier to talk about budget restrainta after funda have already
beer gathered through higher taxes. In any event, this is only Che beginning of a
ennqervntive administration with an absolute majority in the Diet. There will be
at 1east 3 yeAra befora the next election. It is not necessary for the administration
Cn play ite trump cards at thia point. It is believed that there is no choice but
l:o Hhelve the tax increases that were the cenCerpiece of the general consumption
tax (tcmporary name). On the other hand, there is some fear that the entire subject
of hi.gher taxes will be dropped completely if the subjeet is constantly hushad up.
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Anywa,y, Mr Naehlko Kawamoto, who deve2oped the thearv of natural tax expansion which
Ht8tP.9 , "We ehnuld aim at f inancial reconstruction by taxea that 'oy nature increase
ne e reatilt of economic recoverya" hae been appointed director of Economic Planning
Agoncy, the agency responsible for economic policy. The Finance Ministry has a
"tetrible @xperienc e" in 1978 when it wae forced to accept large-ecale expansion of
gaverntnent expendituree by then MITI Minister Kawamoto and Director of the Economic
Planning Agency Miyazawa in their attempt for "7 percent growth." But judging
fram the c:aet oF th e new cabinet we should not be surprised if the natural expansion
~ theory goes forward.
Limies Co the Cffer.tiveness of. Administrative Keform
We11, since the adminietration is not presently considering higher taxes, where is
it attempting to accomplish economic reconstruction2 The Suzuki cabinet hasn't yet
dcterminpd ite etance. The phrases "administrative reform" and "budget supplementa
readjuatment are mentioned eo frequent2y it has grown tiresome. Administrative
reEorm ia the �irat precondition of financial reconatruction. That is to say,
xdminidtrative ref orm and reducing general administrative expenses will noC have rhat
bf.g gn effect on reducing total appropriationa. Because budget supplementa account
�ar a full one-third of the total general budget, cuts in that area are a major
eCop tiowards flnan cial reconstruction, but what is not widely known ia that theae
supplemente rsre mostly composed, of administrative expenses of auch policies as
- encial eecurity, education and public work programa. Implied in the worde
"ttdministrative reforme" is the idea that public o�ficials must firet correct
themselves. On th e other hand, also implied is that the government does not want
the peop:le Co feel any pa in from the reforms. However, present financial deficits
have Carr.rd the cnuntry into a poeition in which that cannot be easily done. The
omnunl: df qovernment bond iesue outatanding the end of this fiecal year will be
appraxi.mntely 71 trillion yen. ThaC works out to around 600,000 yen per perean.
Xn atCempt.tng to reduce annual expenditures, means are being sought to cut into the
' admini.straCive expenses of rel.ief programs for the people, but thia wi11 probably
- ciot he painleAS. Japaci's international economic role is increaeing and i.t muat
- nseiime the attendant reaponsibilities. In particular, internat:tonal tension is
increasing in the form of confrontation between the USSR and the United States. The
clueetian ia how to handle "security costa" such as defense expenditures, aid and
energy development. At the U.S.-Japanese Sunmit meeting in May the late Prime
Minl.Ater Ohira was requested by President Carter to move the completion date up a
- year an the Defens e Agency's "Mid-term Qperationa Forecast." Aa an ally, Prime
Minlgter Ohira promised to give it "serious thought." This will depend on how the
Finance Miniatry's ineiet ence Chat defense expensea not be handled separately ia
accepted by the conferenc e to be held the end of this month at which the framework
for next fiecel year bud getary requesta will be establiahed.
Governmenl Stiortcoming Which Creates Deficits
(.1n the or.her hand, there are other cloude casting a shadow cn economic recovery.
- nirecCar General Kawamoto of the Economic Planning Agetlcy has called for another
study on implement seion of public work projects with an eye towards fiscal rear.raint.
cht the other hand, he asserted that they would not try to revise the New Economic
SncieCy Seven-Year Plan. If that is the case, the backbone of the plan, a 240
- trillian yen public works investment program, will remain. The Finance Ministry,
which feels that public works ia one of the first areas that should be trimmed, will
be at wit' e end if pressure builds up in thie area of the budget again.
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,Japan is rapidL; becoming fx saciety of uld people. Ev,en if ar_nuities, etc. don't
rliange under thc= present social security syetem, after another 20 years the govern-
m@nl- will be ehauldering a welfare burden equal to those of the Weatern European
rountrieg.
"When chp gnvernment raiqes price eupporte to rice growers, and then makee up lhe
d1.fEarence tn consumers, it's obvious that the deflc:it is going to increase. ?'his
is a shortcoming of politicb." By this example Finance Minister Watanabe expresses
how a 3k def.iciti begiria from the government's tendencq of wastefully using the
surgeon'e hlade. At ro other time has there been a greater need to be able to
distinquiKh between these kinds of financial waste and true f.inancial need.
Moreover, it tA "time for the people to choose between higher welfare and higher
Caxes or fewnr government services." (Finance Minister Watanabe) This is because
in ordc:r to yubstantially increasa taxes we will have no choice but to use roundabout
meanH. Flowevcr, if you do that can you continue to declare that you are "cooling
nff" riainq taxee? C?ci the other hand, if it is decided that increased taxes. cannot
be r.voi.dc:cl entirely, wouldn't it be better to work to obr.ain underetanding at an
enrl.y stirigr? To aesign cYear priorities ta the annual budget and bravely ask the
penp1o for marca money--thiH wi11 be a big test of ehe leadership ability of the
5ua.uki cabinet.
"Procliiclri4; Lvi.den.r,e 'T'o Convince the Yeople," by Kenichi Tominga, professor,
i.fnivcrHl.ty of. '1'okyr, [in box]
('Ce. xC 3'1'he 1.iire pr. ime minister advocated higher taxes and, consequently, lost the
elect,ion, but tne big problem w'as in his presentation. The oppoaition partiea
opposed h1.gher taxes f.or opposition's sake, and because no matter that higher taxes
aire nat godcl newe to the people, the end rpsult was a great chorus of opposition.
llcyw to pCE?sP.11C the need for higher taxes is very diff.ieult, but some kind o�
(,vlcinnce to pereuade the people should have been preaented. One example is the
fclct rhut .lapan is not the only advanced country thgt is having to face higher taxes.
A berter job needs to be done in pereuading the people. One of the best ways is
co �sc> the txctic of: linking costs and benefite. Higher 2axea will not be welcomed,
btiC ya� muat at lefist convince the people that they are necessary.
11c1mini.qtrnCive teForm is certainly an important part of financial rt-.:onetruction, but
clU we nced to look ar_ thj.s in such a negative way? W2 should take a positive
firt;ittidc aricl be gl.ad this is all that is necessary, and once again we should also
spoc:iC'y boeh the costs und benefits. Tt is precisely for this purpose ttiat po'_itical
lracierNh.ip i4 sauf;ht:.
Ct)PYKC.t;HT: Nihon Keirai Shimbunsha 1980
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International Comparison of Taxes and Socfal Security
As a Percent of People's ?ncome
.
~r~�.'~,
Tax Rate
Socj.a7. Securl.ty Taa Rate
Japan On.3.ted Britain Weet France Sweden
� 3tetea Gereaany
NoCe: Figures for Japan are for 1980, other countries r.or 19l7.
(20 lul 80, p 11
(1'ext J Recovery--Prices
IuunedLately gfCer the inauguraCion of the new cabinet on the 18th, Bank of Japan
_ Yreeident Maegawn wae busy ruehing between the prime minister's residence and
_ several of the government ministriea. First he spent 5-6 minutes with the prime
minieter,. Then in turn he visited Finance Miniater Watanabe and Director General
Kawamoto of the Economic Planning Agency.
Now is tlie crucial moment of the tight money policy adopted f.ollowing the second
"oil ehock." WiCh only a little more patience Japan will reach the top of the
mountain. At th is crucial moment all would be r,uined if the government even
- menti.oned r.educing the official interest rate. Because the prime minister would be
heving e prese conf erence very shortly, Maegawa wanted to be eure to coordinate views
beforehend. 7t was with that in mind Chat he macie thesq visits.
9
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5] ight:l.y llisr.repant Statements
Nrver.tlieless, iL gppears tr.at everything did not go exactly as the Bank of Japan
_ tinped. Each of Che atatements made by the prime minister and the cabinet ministers
eo reporters an rhe tnpic of readjusting monetary policy had elight diacrepancies.
The prime minister said, "We want to move cautiously while watching the recovery
nnd prir.es carefully."
- The Flnanr.e Mi.nietex stated, "We wart co see how thinge go for a little while
longrr. "
'The dirpctnr of r.he ECOnomic Planning Agency eaid, "The quicker the better."
Why did these dfscrepanclea occuri Part of the reason is undoubtedly that they
did not have Qnougfi time to coordinate views fol'towing the inauguration, but that
iH nr;t the only reaaon. It also occurr2d because they each have different views on
the fo1l.owinK tlirce :najor points regarding the direction of the recover.y and price
polici.ee.
'T'he fir.st area is recovery forecasts. The raw materials production sector typified
by the eCeel i.nd petrachemical industries is already experiencing exceseive inventqries
gnd ie moving ta cut back production. Private investment in plant and equipment is
rldirtg a firIt; mi.d-tPrtn rising trend, but exports face a downturn because of the
t?nitwd Stetee receesion. Private consumption lacks strength, and the housing market
_ iw in a y1ur::p. Y1HCes like Hokkaido are f.eeling the full effects of restraints of
publlc wark projeces, arid Aome placee are beginning to develop �ull-fledged depres-
ston9, 1L f.oliosas f.rom Che foregoing that the recovery has lost speed since early
fnll, and we havc! entered into a readjuetment situation.
T}ic Tlank UF .Japart hae witndrawn ite once bu111sh recovery prediction, and is now
_ fdre^casting a "mi:ior receaelon withia the bounde expected." Some in government and
indi:otry c:.rcl.c.g ar.e worried that "the slump in the United States recovery was
grerxe.rr thnn anricipated, and thiH will have coneiderable impact or. exports."
_ Er,ar.omif.: Planning Age.ncy Director General Kawamoto is one of these people.
'I'lie 8oc�ot3d point,i.e prices. Oil inflation and wholesale prices have peaked for
t}le tf:r� bP?ng, buC coneumer pricee are expected to climb fairly sharply until at
1qasC AuKust. Ulhether "we have �een the end" or "not yet" is yet another argument.
Yen Mar. keC Confuees .ludgment
The Lhzrd r,reas that will make determining price policy very difficult will be the
yen market from this summer to the end of the year. The rieing qen Chat had been a
'oig farce in l.owered whol.eeale pricee in May and June has come tn a standstill.
l'rom t}ie erid of June to the mir-q3le of thig month the yen hae even dropped, and the
first 10 duys o� r_hf.s montil wholesale prices have climbed more than in the past 2
tnc,nthr> Forei.gn r.apital which up to the middle of June hae poured into the country
in 1ar.;- quantity hae also tapered oif. When exports don't increase, our
intern,iti.onal balence of paymente deficit also does not decrease. As a reault,
discoun[:.ng forward yen is Bpreading on the iokya Foreign Exchange Market. The
'1z Bank nf japran fear. e that if it hurriedly drops interest rates in this si.tuation, it
mighC prompt another drop in the yen.
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Row to handle recovery and price meaeures will be one of the iirst big tasks of the
new 5uxuki cribinet. Undoubtedly there will be alight differences of opi.nion within
the gover.nment and between the government and the Aank of Japan regarding how it
ehhuld be done. -
Hawever, bernuee that will be the case ie not reaeon enough to eay that there will
~ be conf.rontaCion of views about the baei.c overall direction of the economy and policy
implementaCion. Even the groupe calling for quick readjustment of the monetery
pollcy are not eaying there ehould be a oae-etep charegQ from a. "price priority" model
to a"recovery stimulus" model. Aleo, the Bank of Japan does not feel that it muat
de�end the 9 percent official rate at all costs. It has a flexible outlook saying,
"If we can, in the nea: future we would like to readjust the emergency-like high
intpreet rates and return to a normal tight money policy."
In tttat sense, it can be said that the government and the Bank of Japan are in
racit agreement on changing the "price priority" model to a"watching botiY recovery _
and prices" model when the time ie right. All that remains is selecting the right
' time. What they are looking for is a"go sign" that price srability has been
reached.
Ecnnnmic Planning Agency Director General Kawamoto is saping, "the end of August,"
and Finance Minieter Watanabe ia saying, "Let's look at *�_-he situation the beginning
af the fall." At preeent the movement of induetrial productiar. and inventoriee is
difficu.lt to gresp because of the reduced production--but eaz�Iy reaction during the
firsC quarter. However, by the end of Auguat we will knew the national QL (Quarterly
Earnings) for April-June, the Bank of Japan's ehort-ter.m economic foreca8t and the
Atiguat conAUmer price index (Tokyo). When will Weat-Ger.many, whose economic
- gituation cloeely resembleA Japan's, take the etep r_o lower its interest rates?
Ttiet will aleo become apparsnt, and in late fall it wi11 be eaeier to gauage the
inCernational money market as well as the yen market.
1.f Chie receeeion is not to become as aerious as those following the oil crises, we
muet mpve eoon to make policy changea after correctly ascertaining the key points
autlined nbove. In order to follow a path of long-term stable growth it will also
be neceeeary to keep inflation under firm control by holdinB next year's apring
wage offensive down to within the capabilities of industry much the same as thie _
year.
"Ftelax Monecary Policy, Tighten Financial Policy," by Hieao Kanamori, director of
the JaPan Economic Reeearch Center [in box]
[Text] Huginese cycles are not bad in and of themselveo. In part Chey act to
adjuet inventories, and they are a ahort-term adjustment to reduced first quarter
product2.on. The United Statee recession will alow future growth of exports there,
btit exports will still increase to the Middle Eastern oil countries. Plant invest-
ment is etrong, and if the "inveeCment recovery" continues warker incomes will
inCregse and individual cflneumption will also rally.
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However, currenr i.nterest levels are too high. If the commercial interest rate
temaine at 10 p,~rcent too long, firms will become excited about transferring
capital, to the :lioney market and stop making producta. There is no alternative to
increaeing the official interest rate in order tc restrain prices, but fundamentally
gpeaking low interest rates are desirable. Lower interest rates in the United States
led tn a rieing yen trend. Becauae wholesale prices have also peaked, how about
lowering the official rate 2 percent? If you have a policy combining relaxed
interest rates and tight financing, plant ivestment will not drop and financial
recanstruction will also be sided.
COPYRICNT: Nihon Keizai Shimbuneha 1980
Recent Price, Production and Yan Rate Trends
Note: Production figures
for June are estimated.
Mining and Manufacturing Production Index
(First of Month)
lesale Yrice Index
(First of Month)
200
Y c:n
RaCe
220
240
[Y!e!n! Ma=et
Ad 260
an W 1�iar Apr L Y W ~
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4
2
0
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[22 Jul 80, p 11
[Text j gnergy
"i,etI A make 1980 the first year of economic securtiy." This has come out of
gnvernment circlea ae the slogan of the Suzuki cabinet. Thia is because 1980 is
the tirot year of really trying to nail down an economic aecurity system.
Amiable F:nvironment
The nucleus of the syetem will ba energy security. At the time of the first energy
Crisis, very few people had ever thought that a faod shortage would develop because
ehips cnrrying f4odstuffs were unable to sail for lack of bunker oil. Now the
import.ence of a secure energy Rupply ie fully inetilled in the minda of everyone.
For that reason, it is believed this will be a much easier topic for the new
cabinet tn addrese than Chat of f inancf.al reconetruction.
More than anything, resource-poor Japan must hurry to develop alternate energy
sotircee to replace oil in order to achieve energy self-reliance. The time for
debate ig paet. The problem at hsnd is by what means to increase Japan's supplies
of a1Cernete energy forme euch as nuclear, coal an3 solar energy.
Preeently, ener.gy sources other than petroleum account for a little more than
25 percent of Japan's primary energy supplies. The goal in the government`s
],ang-trr.m forecast of energy supply and demand is to increase this to 37 pexcent
efter 5 yegre. However, thie forecaetwas formed on the basis of 6,300,000 barrels
of oi1 imported daily by 1985. There are some who feel thatt more thar. 40 percent
nf Jnpnn's energy muet come from alternate sources, becauee in reality world
conditione are euch that we do not know if we will be able to obtain even that
csmuunC. Many are eaying, "We must pueh for alternate energy resources as rapidly
ae poesible, and failing this we muet concentrate on energy conservation even more
becauae we have nn choice but to reduce our demand for primary energy resources."
Even so, the pace of developing alternatF energies has been very slow. Yutaro
Ikede, managing director of the Japan Reaearch Institute on Energy and Economy
aesertA, "Matters such as which area's oil-fired electricity generating plants should
be converted to cnal are specif ic policies that the goverament musfi promote. That
is a topic being coneidered by the cabinet."
nf, course, in increseing the number of atomic and coal-powered generating plants,
there ig Che problem of working thinge out with the local people in the areas of
ldcation. However, thie is an opportunity for the new cabinet to display just how
well they will be able to handle thia type of political problem.
Off.icinls Muet Get Along With Middle Eastern Countries
Even if Japan apeeds up development of alternate energies, for the time being it has
no choice but to rely on oil. "RegreCtably, if Middle East oil was dierupted by
nnother conflict, Japan's economy would have a heart attack." (head of MITI)
Thexefore, oae of the biggest tasks for the new cabinet is securing stable oil
euppl.ies.
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-J
Fnergy diplomacy, diversification of oil suppliers--of these two Japan has made
coneiderable pragress in diversifying oil supplies. Japanese oil companies and
tradin$ companic-.e have not been able to get Iranian oil aince the end of April,
but ehey hnve been ahle to make up that amount from other producing countries such
that we, hnve a syetem by which we can get by even without oil from Iran. Where we
do not campare t'nvor.ably with Europe and the United Statee is in the area of
energy dipLomacy. Amegaya Tadahiro, chief advisor on trade and induatry in MTTI,
recentl.y visieed Saudi Arabia and Iraq, and while in Iraq he was deeply impresse3
that Iraq wduld "like more viaita by Japanese ofiicials."
Arie of the primary qualifications for ministers dealing with energy is that they be
"someone who can get a:1ong with the oi1-p:oducing countriea." Former MITI Minister
Sasaki said in his farewell interview, 1`1^ former times the minister of commrerce '
and 3ndueCr.y met wi;.h industry leaders, and aa long as they got along with them
all righe everytliing was'fine, but lately they must work hard at negfltiations with
ttie ail-producing countries on such things as GG (government-to-government) oil
~ dc-a1H, eLc." New MiTI Minister Tanaka also notes, "Officials going overseas should
nnt have great expECtations."
Msny oilmcrI eay, If government officials will even just visit an oil-producing
cduntry frequently, that country's exports to Japan will increase by 100,000
barrel.g a clay," btit it'e obvious that Japan is not without aome bargaining power.
Japan's mOse c-Ffectfve bargaining power is probably economic assistance centered
arnund tarhnological help.
iiow 'i'o 't'r.riverqe e}tct ChaAm
A new rnergy cievelopment organization for promoting alternative energies will be
inau$urate.d on 1 November. Also, the new cabinet is making positive moves in the
area nC energ,y di.plomncy. In addition to its own eneigy canservation measurea,
.Tupan is ertqnged in talka on joint energy conservation measures with the United
States.
A r,ortfercncc of ,Jausinese and American experts has been aet as a fact-finding body
hy the gnvernments of both cotintries. This group .has been working on presentations
to hoth governments on eytablishing a cabinet level conference to discuss energy
coneervgtiott. This is doubtless due to a premonition of a future crisis in
abtaining Middle Eastern nil.
Fvrn if there wasn'k a drastic change in the Middle East aituation, a tapering off
oE ttle oil. suoply is not too distant. On the other hand, we will have to wait
unttl tha 21et century for, the development of new energies such as nuclear fusion
that are ttie Frontrunner.s to replace oil. The question is how we will traverse
ehis "energy chasm." The future of Japan hinges on how well the new cabinet acts
with regard to energy probleme.
"Publlc Corpo:-atLons To Also Import Oil," by Takeo Murakawa, Tokyn Gae Co. Ltd.,
T':esic. -nC tin box]
[`1'ext] qnc mvat be impatient with the government's alternative energy deveiopment
plAn. Tc is based upon coal and atomic energy, but with present moods it will be
impoeeible for the government to locate the projected number of atomic and
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Compoaition of Energy Reaources of Major Countries
(1978 OECD Survey)
Coal-powered generating plants by 1985. It's fine and well for the government to
diecuse 1?ow mucli energy alternate energies can supply, but they should also be
- coneidering moxe concrete problems auch as when and in what form they will locate
Cheee noal and atomic-powered plants. Since the government has made international
cotmnitmdnte to "reduce oil-fueled generating plants," the new cabinet needs to
devote a11 its energy to kesping this promiae.
Aecause the oil euppliee of the major oil companies are diminishing, in the future
we will aee more GG (government-to-government) teaneactions. DD (direct dealings)
trading companies and oil companies will atill be necessary, but we need to increase
the nil we obtain by direct negotiatione with the oil�producing countries.
Therefore, the new cabinet ahould develop an aggreasive poeture on energy diplomacy.
It would aleo be a good idea to make the necessary politicai changes so that the
public oiJ, companies will be able to izaport oil.
COPYRIGHT: Ni.hon Keizai Shimbunsha 1980
0 /e/\ 7n
.Japan
West Germany
Iiritain
France
FOR OFFICIAL U5E ONLY
40 60 80 100

~
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.
. ,

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� ~ � � f � 0
F~ X
OIL
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NATURAL GAS
~
~
.
United StaCes
Percentage of,0i1 Importe
Aercentage of Imports of Total Energy
15
rnv nrV-^T A* rrcA nMt.v
ATOMIC-J
GEOTHERMAL, ETC
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[23 Jul 80, p 11
[Text ) Forei.gn Po.licy Adjustment
"Domestic mACCere are in the hande of capable people, but foreign af.fairs remain an
area of concern." By thie comment it ie plain to see that the leadership of the
Federatior oE Fconomic Organizations (Keidanren) ie not hiding ixs uneasiness over
the Suzuki cabinet. This is an expreesion af aporehension over how well Prime
Minieter Suzuki, who hae little experience in foreign affairs, will be able to
operate in a world filled with many dynamic leaders.
neclining Economic Power of the United States
For a fact, f.oreign policy isaues facing the Suzuki cabinet have accumulated into a
big pile. Although there is a brief lull at the moment, big issues that must be
fnced eoon are how to handle the situations in Iran and Afghanistan, and how to
' mairltain relntionships with alliea in the Western camp. One more area is how to

solve internationAl trade dieputes over such things as opeMing procurement of
meterialA for the Nippon Telegraph and Telephone Public Corporation" and Japan's
rapid increa9e in automflbile exports.
In tespori,e to theae concerns, the Suzuki cabinet promptly announced continuation of
"pence diplomacy." It has taken a very positive attitude on "maintaining a7.liance
relatianel�sipe, particularly with the United States, and while etrengthening the
rountry al.,4o resolving the Nippon Telegraph and Telephone isaue by October if
pdantb.le." (T'orrign Mi.niater 7to) However, "adjusting foreign policy" is much
ensiar natc1 Ghan done. Moreover, the probleme confronting Japan now are not
necessari.7.y the sume as when they were received from the previous cabinet. Depending
upon future international circumstances, "problems similiar to Iran and Afghanistan
mny erttpe thrnughout many parts of the world." (Foreign Ministry leaders) A
mnjar ch.atige 3s believed occurring in the existing fram.ework of society, and Japan
is dir,ecLly in t:he path of that storm. The collapse of detente, the breakdown of
the advAne:ed countr.iea and chronic energy probleme--there are many faces of this
atruc�Cilre1 change. However, underlying thie current is the decline of the United
Statce, i3er_auee oC its overwhelming economic power, the United States spread dollars
and nrma nroLitid the world in gupporting the free world following World War II.
Y.owever, s1nce ttie 1970's that economic power has been declining rapidly.
't'wenty yeara rigo the United States had nearly hal� the total GNP of the free world,
hut todsy it has slipped to around 30 percent. The symbol of this decline occurred
in 1971 when Che conversion of dollars for gold was stogped, but the dollar hae
continued ta der.line, and eince the freezing of Iranian asaets transactione in other
r.urrc:nciea liave increased. On the international marketplace the United States has
fallen behi.nd West Germany in total exports, and Japan has caught up in many
indu8r.rial per.tors such as steel and sutomobiles.
'I'l.wct '1'a Sac:r.ificr.. Fconomi.c Intereste
'.Clie tJnLea.d StateK has also declined in other areas besides economic. The balance
of miliCary power between the Untted States and the Soviet Union following the war
reversed in the late 1970's, and many experts now believe that the Soviet 1Jnion is
strnnger. The Snviet Union and Saudi Arabia also unvei7.ed another important weapon
in rhe 1970's in the form of oil, and following the Iranian revolution the influence
of the United States in the Middle East as concentrated in the major oil companies
has begun eo waver.
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4
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There is no cioubt that behind the endleas trade discord and the United States'
heuvy-handed attempts to get Japan to go along with its trade sanctions in the Iran
dnd Afghanisl�an prohlems ie the decline in the United States' power. Moreover, the
doublc digit inflatton and minua growth rate of the United States economy since the
9pconci oil ehock is definitely not good. There will undoubtedly be increased demands
to "ns9ume oux fair ehare" in both political and economic affairs. Former Prime
MiniAGer ()hira always said it this way, "The United StaCes is no longer a auper
pnwer, only ane of the major powers." What he was saying waa that Japan's previous
Coreign policy of relying on the United Statea for military defense while it
puraued economic intereeta will no longer pay.
Ay evidence ot this, the phrase "a period of coexistence and mutual concerna between
Che UniCed 5tntes and Japan" wae used at the United States-Japan summit meeting in
May, and .Tapan tonk the first step away from its previous taboos on defense matters
when it promised to "deeply consider" inereased defense spending. In effect this
- annotined thet although Japan deeply reepecta the European aCtitudes on Iran and
Afghanietan, Japan is falling in line with the United States.
(?ne of the Suzuki cabinet's biggest concerns in this area will obviously be how to
gn :about implementing Ohira's policies. This is because they are being asked in
what way Japen, as one of the economic giants in the world, should shoulder the
c:oet af its g].liancee. Of courae, one of the best ways is for Japan to exert its
economi.c help, technology and trade. However, we may have to resign ourselves to
"eacrificing economic interesta from time to time to carry out our political role
in mriintaining peace." (Former Prime Minister Ohira)
'Che same iA also true in economic mattera. Regarding the automobile problems,
although eome in the United States hold the view that "Japan's way of doing things
is lagical" (Secretary of State Muskie), others feel, "It is time to ahow some
[e-mail] for the United Statea and give them some time (through export
delf-reetrainta, controlling factory expaneion, etr..) before the United States
ql3des into even more dif.ficult circumstances." (M1.TI X.eadexa) They believe that
_ in the long run this will be more beneficial to the Eree enter.priae syatem.
DomepCic Acceptance To Be Spurred
of r.o�rse, iE the government decides to pursue this foreign policy, it will be
necasdary to aptir domestic acceptance. They will also probably push policies of
itigher taxes and act.ive induetry coordination. On the 21et Prime Minister Suzuki
announced a"Ceneral Conference of Security," and now is the crucial moment on
whnC will bh incnrporat'ed in that conference.
"Separntion of. Politics and Economice Not Popu2ar," by Ushiba Nobuhiko, advisor to
the Minietry o� Foreign Affaira [in box]
['Cext] Separati.on of politics and economica is not a popular concept in the world
codny. The current period of armament expansion and severe confrontation will likely -
continue f.or eome time. Among all this, it is important that Japan declar and take
n Rtri.ct poeture regarding the rules and principles of international society. 'In
shor.r, Ghie is to eneure the peace and eecurity of .7apan, and also to protect the -
f.ree enterprise eystem.
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Mr c)}iirn eonk the first steps to try to change the up-to-now negative attitude of
.tapun on sar.tir.ity and defense matCere. It is essential that we do nnt slip back.
instead, we should cement our relationehipa with our alliee more firmly, and work
aut nur Eoreign policy in talks with their leaders.
'Cii1_H al.po applies tc, economic matters. We muet take a strong poaition on the United
5tatna Crend Cowarcie protectioniam, and in cases when they are truly diatressed such
no naw i.n Che casc: of sutomobilea, we muat act with ae much sympathy as poasible.
We want to take: tlie attitude of creaCing a calm atmosphere in which protectioniam
wil.l. not spread.
COPYRtCH`i' : Nihon KeizAi Shimbunsha 1980
Comparison of the Economic Strengths
of the United States and Japan
Year
Japan
United States
GNp
1960
3.8
45.0
cF tr.ur wor].d)
1978
12.0
30.5
Ctirrrncy--uold reserves
1960
24
194
(100 million's of cio]1Ars)
1979
206
189
F;xpc>r ts
1960
41
197
(1.00 mi.l] iom's nf dollars)
1979
1028
1816
tmpdrts
1960
45
164
(100 mi.llion'y o� dollars)
1979
1107
21$9
011 ImportH
1960
6
15
(100 mil.lion's oE clollara)
1979
335
586
Steel. Z'xodtiction
1965
41
119
(mil.:lions of tons)
1979
93
103
- i'aspenger Ve}sic:le9
7.965
70
934
(lO,nQp'e)
1979
617
843
(;avorctment Foreign Aid
1965
.27
.49
(X of GNP)
1979
.26
.19
[24 Jul 80, P 11
[Text ] NaC.tonxl Security
Wlien t'+w e1.FCtinns i'or both hou
ses of the Die
t last 23 June ended in a landslide
vicCory for the Taiberal Democra
tic Party (I.AP
an American special correspondent
in Takyo reportedly wired, "The
course toward
s greater milltary
strength has been
- uplielcl by the Jspanese people."
It would be
hard to say this was wrong if one
tookecl only a[ the aspect that
the LDP, which
favors a strnnger
defense, won big,
whereae the oppoaition parties
that oppoae a
stronger military
loet. Howeuer, the
quQation persiats of how the go
vernment will
work out iticreaeed
military spending
Ear aatronger military on the
one hand, and
its promisos of financial reconstruction
on the ather. The election reaulte notwithstanding, thN outcome ia still. not clear.
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Ar.celerneed DemandA From the United States
At the time thaC the new adminietration wae inaugurated, Prime Miniater 5uzuki
gave national securi.ty and defense as one of seven policy topica. This ie only
- naturgl, ag the United States hae bean presaing for greater defense epend ing and
_ defense eooperation tise become a major point of focus in Japaneae-U.S. relations.
President Carter and Defense Secretary Brown have been taking every opportunity to
demsnd that Japan increase its defense spending. At the Japaneae-United States
eummit conf erence, in talka with then Prime Minister Ohira, President Carter referred
to thc "Mid-term Operations Forecast (Equipment and Organization plan for the
- FY 1980-1984)," an internal study by the Defense Agency being done without official
qovernment sanction, and asked that it be finished quickly. Prime Minister Ohira
promiAed that Japan would give it "serious study."
- T1i1g dr.smatic change in the United States' previous stance of not pushing Japan for
grester defense epending firat appeared laet year. It corresponded with a growing
r.ea1.izstinn of the incr.eased worldwide etrength of the Soviet Union. It may be
- t}lat ktie United Stntes ia not able to greatly expand its defense spending because
af f inanc:ial limitations and ao it has no chotce but to appeal to its allies in order
to counter this Soviet strength. The United States ia caeting off its role as
"wnrld policeman" because it can no longer do so, and it is having to demand that
,Tapan and Western Curope take more of the burden.
Altt3ough thera are some political angles tied to this fall`s U.S. preaidential
rlection, if you look at the platform of the Republican Party, which has Mr Reagan
as ite presidential candidate, and at the statements of the U.S. side at the recent
Jrtpanese-United States Security Working Level Con�erence, there appeare to be no
lited given to the political vacuum in Japan cauaed by the political upheaval over
thA past couple oE months with a double election and the emergence of ehe Suzuki
admirii.stration. On the contrary, the ilnited Statea' demande to Japan to increase
ir.s defense spendi.ng have accelerated.
Now Mr Stizuki can promote national security and defense policies is a political
problem deeply affecCing the ally relationship of Japan and the United StaCes.
Shortly afCer Che inauguration of the new cabinet, U. S. Ambassador to Japan
ManH�l.eld promptly called upon Foreign Minister Ito and reemphasized the United States'
poeition on increased defense spending. This quick move also indicates juet what the
United StateR expects of the new administration regarding defense polic y. U.S.
defense of �icials have reportedly thronged to Japaaese Defenae Agency leaders asking,
"What kind of a man iA Mr Suzuki?"
A Nervous flefenee Agency
"'Cotally unfamiliar with national aecurity and defense matters," Defense Agency
officials are at a loas with the advent of Mr Suzuki. Although they expect him to
cnnti.nue with the defense policiee of the Ohira administration, his views on
defense matters are not very well known. Although Mr Suzuki appears to agree with
Mx Ohira on tlie neceseity of a comprehensive security plan incorporating "naCural
resource d iplomacy" ae well as "peace diplomacy" because "national security cannot
be protected by military arms alone," he has also s-aid, "It is important that we
work to upgrade our defense capability commensurate with out national strength and
" circ:umetancee. From these piecemeal statements it can be taken that defense
increases are important to him, but they do not directly indicate how he will
handla def ense expenditures in the 1981 budget appropriations.
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_ 1'he UeEmnge Agency is pr.esently engroseed in studying the peraon and character of
Mr Suxuki. Recently even while at his reaidence they requeated Chat he explain
about defense matters, and on the 23rd Vice Minister Hara requested a"separate
handling paper on defense spending. From these kind of actions it is plain that
the Agency is anxious to aecertain Mr Suzuki's viewe.
CadrdinaCing With Financial Reconstruction
'Che defenee spending rate �or 1980 0� .9 percent of the groas national product (GNP)
wns determined by extraordinary political negotiationa. The circumetances surrounding
ttie defenee budget for 1981 will be even more fierce. The Finance Ministry, which
is wavtng a banner of finance reconatruction, will be taking a hard look at all
budgetary requests being submitted the end of this month. If that is so there is a
poqei.bility that the military budget will be about the same as thie year's .9%GNP.
nirereor--c;enera]. Umtira of the Defenae Agency has been trying to cultivate the prime
miniKLer, thr top three ranking members of the LDP, Foreign Minieter Ito and Chief
Cnbitire Secretary Miyazawa, but the problem is in negotiating with the Finance
Che pr.ime miniater is the only one who can 'pin' Finance Minister
Miniecry. I',
WaCactnhc." (OfCicJ.als of the LDP Security InvesLigative Committee)
Cven purring nyide the need to maintain ite ally relationship with the United StaCes,
- T'ximw Minister Su7uki ahould realize that increased defense apending is an issue
that ci;ntiot be avoided. "Thia is a problem for .Tapan to decide ita~!lf (rormer
1'rime MLnister Otiira)," but one cannot forget that increased defense spending might
der.re.nse trnde diacord with the United Statea. Defense spending is not only a
� nroblwm af more money. Other problems are how to-bring about and formulate the
prime miniyLer's pr.oposal of a"General Security Conference," and how to handle
U11HitleNy damande to relax the Third Principle on Exporting Armaments. If Prime
Mtntetcr nhita was the "wait 5 minutea adminietration," Prime Minister Suzuki's
cau:lcl be eald to be the "wait 8 minutes administration." However, there can be
"no waiC" on thix issue.
- "Natlotial General Security Conference," by Masamichi Inoki, director, Research
Tnatitute Eor Peace and Security [in box]
(Texcl Whst we would like the Suzuki cabinet to do is Co establish a Cri.sie Manage-
mpnt System. In that senae I agree with the prime minister'e idea to eatabliah a
"generrzl security conference." That was the same conclusion reached by the
"General 5ecurity Research Croup" (the late Prime Minister'a Ohira's policy "brain")
which I chnired. We definitaly want a conference. There are many problems which
must he wtud�ted before then, buC if the prime minister sees the need, he could
ntArt thie off in n hurry by deciding to aet up an official advisory body in the
cabinet. '1'he advisory body could be made up of inen in their forties, and could
stucly thp examples of the United States and West Germahy, presentfng their report
wiChin n year.On the basie of that report legal refnrm could be considered in
- oXCier ta esteblieh the conference.
Ii a~. tfrrence Is establiahed, it would help b::eak down the bad effects of a
governme:ne bound to the past, and make it eaeier to acquire funding for defense
expendltiTres. 'Ttie three aeparate Northern Defense Proposals" o� the ground, sea
and air ),ranr.hes of the Self Defense Forces could be promoted as a single plar that
woulcl mske it easier to obtain funding. The Suzuki cabinet security policies are
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- mOvtng in :t qood direction. However, aince this conference is for the protection
- af thc people, L would like to suggeat that the word "national" be added to the
Citle tia thnt i.t would be the "NaCional General Security Conference."
Change in Annual Primary Budget Expenditures
- r..." Social related expenditures
�---a Public construction
Education-science
Defenae
Percent of defense expenditurea
of total budget
(Hundred
Bi11.ion
Yen)
ao
5
L
N -
p 1 1 I J f 1 1
1975 1976 1977 1978
(:nk'XRI.CHT: Nihon Keizai Shimbuneha 1980
918p
CSq: 4105
21
Ff1R ()Fti'T11r AT TTCR f1NT,Y
_i I 1 J I
l9'79 1980
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POLITICAS, AND SOCIOL0()ICAL
CC)NJCC'rURL ON LDY 5TABILITY, POST-SUZUYCI LEADER5HIP
Part 1. Hawkish Trend
Takyo YOMIIJHt S1iT.hfBUN in Jnpanese 11 Sep 80 p 2
[Five-part seri.gllzed article: "Suzuki's Liberal-Democratic Party"]
[Text J .Ct wi.].l soon be 2 monthe since the beginning of the Suzulci government. In
that perind Clte LI)P hae passed its firet quiet summer in a long time, having gained
a Ntubl.e majori.tv and a"whole party" in the double election of both the Upper and
the Lawer liouee for the firat time eince the SaCo government. With thia background
at' ntimer. ic.al HLt�ength there have been eigne o� a tough attiCude, euch es the etate-
menCs on revision of the Constitution by LDP Secretary General Sakurauchi and
.?uHt.ice M-1.n:isL�er Okuno. Confrontation with the oppositinn parties, which will
demand ttic, di3mtesal of the justice minister, can be expected from the very start
of the extzaordinary session of the Diet. The undercurrent within the LDP, on -
the nther lland, ie already directed at the "poat-S�zuki" era, and a battle of =
interloppr.o-7 tius already begun. All factions are active in thia regard, ae though
tu mock the resolution calling �or elimination of factions which was pasaed in the
AgsembJ.y oC Members of Both Houses of the Diet. Thia is a report, prior to the
extrAnrclinnry eession of the Diet, on "the LDP with a stable majority."
Finally, fi Peaceful Summer
"WfinC a qutet eummer." For Takeo Fukuda (former prime minister), who dislikes air
c:andltioning, the cool summer was more than just exceptionally easy to endure.
'1'ha prsviaus gumner, Masayoahi Ohira (previoue prime minister) had been puehing for
dieAC7lution of the Aiet and was in a sharp confrontation with Fukuda and Takeo Miki,
wha were ral.ling �or party reform rather than diseolution. Since the time of the
r,r.itil.cS.sm af money politice which Fukuda and Miki directed against Kakuei Tanaka
(former primp minister) in 1974, all summere had been hot for the LDP.
Fukuda is not the anly one who felt increaeed emotion at finally spending a peaceful
summet witllouC confrontation between the party mainstream and count erma ins tream
farce:. Ryutaro Nemoto (head of the Basic Iasues and Operationa ltesearch Council)
charttererires today'e LDP, which has turned back from the brink of dismemberment
and formnd a"whole parCy," by saying, "This is really a second conservative merger."
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The I.DP study group whlch met on the ehoree of Aehinoko in early autumn wae
envaloped in an armnAphere warm and brighe enough to make the participants sweat.
'I"hey were a11 from the mainetream factione. There were no enemies. With the
rntiurn of the LDP's etsble majority, it ao longer has any need to f ear enemies
nutaide the party--oppoeition partiee--either.
F'nllnwing Prime Minieter (and party Preeident) Zenko Suzuki's call for self-control
end self-dlecipline inetead of glorying in victory, Secretgry General Yoshio
Sakurauchi, Executive Council Chairnian Susumu Nikaido and Policy Research Committee
Chairman Shintaro Abe made epirited atatemenCs euch as "rightiet criticism is off
_ the mark," "avoid unprincipled compromisee," and "persevere in doing what should be
done."
1'he l.eaders of the LAP are in very high apirits now. The statements and policies
which enlivened the quiet summer--special handling of the defense budget, the rice
prnducere, price increase, etate maintenance of Yasukuni Shrine and revlslon of the
- ConeCitution--all started on the party side. Activity has been sur_h that "party
leadetship" has become fixed as the major characteriatic of Suzuki politics.
Itelnxed About Violations
"Fdlldwi,ng the death of Prime Minister Ohira, we did everything, big jobs and little,
frnm fund-raising to campaign epeeches. And because we won the election, it ie
naCtiral Ctut the campaign pledges are reflected in the budget and policies
"The nverwhelming v ictory in the election is an expresaion of the people's desire
Co pureue ttie polic ies of the LDP. It is the party'e responsibility to the nation
Co play an rsc,tive role."
From gn LDP in wfiich etruggle within the party was obvious ta a ruling party reapon-
gible f'ar carrying nut policy--it ie the view of party leaders that "party leadership"
is the naCural form of 5uzuki politica under an all-mainstream setup.
nf r.ntiree, the party leaders do not mention "establiehment of political morality,"
the fixAC Af the party's piedges. The House of Representatives epecial committee
to investigate aircraft imports was quickly abolished, and the party has taken a
relaxed attitude toward the treatment of Mitsuya Yaeumichi (Chiba lst District), for
whnm majnr violations of electton practices had become a problem, saying "Wait a
little longer." Enthusiasm for right-leaning policies 11ke Yasukuni, defense, and
constitutional changes, which were unthinkable when the party did not have a clear
majority, is pgi.red with a coolneee toward political morality. This atriking
r,ontraet ie not a c'lear contradiction if it is viewed as a manifeetation of the
nssurance that enemiee inaide and outeide the party have disappeared.
Afrw days before the LDP Research Group met, Kunikichi Saito (minister of health
and welfare), Rokusuke Tanaka (miniater of international trade and industry) and
5ukeyuehi Kurihara (LAP eenior senior deputy secretary general) visited the Prime
Minieter'd off.ice one by one. All are leaders o� the old Ohira faction. And all
three were agreed in the eubetance of what they said:
J
'2
"WhaC Qkuna snid le all right in terms of logic, but in terme of politics it was
wrong. It'9 best that you yourself eay off icially there are no plans to revise the
ConetituCion."
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5liruki told e.uci; of ttie three that he had been thinking the same thing. He wae
snmewhet uneasy aboiit Okuno's (minieter of juatice) having mede a statemenC in the
bi.eC dn eetnbliehing an independent constitution, in cloee agreement with
- Snkurnuclii'H consCitutional. revision etatement (19 August), and having even
menCioned criticism of the constitutional preservation wovement.
5uxixki, whn irs puHhing "harmonloue rule" of governme.nt and party together, is, of
r.ourne, concerned about criticism that he is drifting to the right in the wake of
the purl.y. EHpecially in the issue of the Constitution the oppoaition parties are
lined up Cogether on the matter of preserving the Conatitution, and they are ready
for a confrontation. It was not desirable to have an igsue which would lower the
image of the new government at its first outing, the extraordinary sesaion of the
nier.
S]ip,tit repSstnnce by 5uzuki to "party leadership" can be aeen both in his making it
clear, in reypanee tn a question at the etudy group meeting, that he is "not
cansider.ing revieion of the Constitution," and in his calling in the top three
pRrty leaders after the government/party leaderehip conference on the 8th to warn
them about tlne gener.al conduct of budgeting by party leaders.
inr.r.3perty ConcernR, Rather Than Leadership
Just the sAr.ie, Suzuki probably does not intend to develop enough leadership to
suppresH party views. After stating that he is "not considering revision of the
Coneticution," lye quickly added that "discussion of constitutional revi.sion is
fine." This Hhowq consideration for the party's assertion that "revision of the
(;onstitutton le the platform of the Liberal-Dei.ocratic Party."
Ac�euaLly tfie 1.DP, indlfferent to the uneasiness of Suzuki, made a party policy
c3ec;ieion bucking Okuno in the Executive Council meeting on the 9th. It also made
n c:nunCernttaek agginat Suzuki'e restraints on formation of the budget, eaying,
"The party 1A not a yes-man for the Fiaance Ministry."
_ I,n u magnr,ine inter.view Fukuda wae aeked, "Isn't Suzuki somehow lacking in ability
t,o ]esd7" 11e replied, "That's too hareh. In any case, he ie still warming up."
13ue the real s1Cuation may turn out to be a"Suzuki Full-Team Baseball Government"
in whlcti, wtiil.e the coach is warming up, the playere have all begun to swing the
bat Cowar.d Ctie riAht-field f.ence.
- 'Che trtr.t is, ae Sakurauchi eays, "There's no point in proposing revision of the
l:ongtitution in the present eftuation, where the party holds fewer than two-thirds
c7f the seats in both houaes of the Diet." The truth is that the emergence of the
conetitutiangl reviKion and Yasukuni Shrine issues is not some definite action
takCn following thorough preparations, but rather an expre8sion of "the real views
nf the L17P," now that the aituation is finally stable and relaxed again.
7'o say "ttie rea1. views" is a generalization, of course. But there is great danger
l.f raw views, devoid of control and reflection, suddenly are made into party policy.
'The rrial nf "harmonicA"--how to lead an unrivaled LDP--now begine.
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Part 2. Intraparty Factionai Strife
_ Tokyo YUMIURI SHIMBUN in Japanese 12 Sep $0 p 2
- ['Cext] Rallying for Next Time
Un tfie ninth floor of a building on the third block of Chiyoda-ku in Tokyo, the
- office of. Toshio Kohmoto was filled with activity on 4 September. This concentration
nf freeh energy is rare, in this year's political world, which etill has an air of
summpr vgcation about it.
The teadcrs of the former Miki faction--Yoshikazu Moriyama, Naozo Shibuya, Masayuki
rujii, Yukikgzti Noro, Shohei Mori--all ehowed up tanned from golf or travel. In
the middle w$g 'I'oehio Kohmoto. Around the edges were younger membere of the Diet. -
"The Miki faction is completely dissolved. As a result, everyone has been scattered.
We only learn about moves within the party and what the political world is doing
frmm newapapers. We cannoC obtain information which, as politicians, we naturally -
need ta know. Can this be right?"
Influentinl. Sekieho Kitagawa stirs them up with what eounds like a prearranged
speech. There ate criee of.agreement and clapping. -
"A pnlitician can't exist like this. A forum for exchange of information is
nbenlutely neceseary. How would it be to form a faction now?"
The angwer r.omes from Moriyama, repreaenting the leadership: "We start on that
riqht when the 1.DP ge a whole is moving in the direction of eliminating factions.
But stnr,e At present the party is not performing the function of facCione, it is
imporCant thgC a group of Diet members function in place of the party. I don't
think iC'g desirable for the Kohmoto eupport group to go on as it is now."
The repreaentative.agent is Yoshikazu Moriyama. The chairman is Hyosuke Niwa.
A:id thus what ie eseentially the "Kotunoto factiont" is born. It is to meet the
firgt nnd third Thursdaye of each month.
tt wae just 2 montha earlier, on 27 June, that the Miki faction set the example for
the other factions by disbanding. Since the Kohmoto faction is an almost exact
continuati.on of the Miki faction, it is both the first to diaband and the first
tn reeume factional activity. Kohmoto has explained, "The party is not in a
poeir.ion to provide campaign funds or expenses for daily political activity, so niet members have had to band together as a transitional measure." But terms like
"f.unds," "policy studies," and "infornation exchange" are all cliches for
legitimizatian of factions. The true intent of Kohmoto, who is looking to the
"next time," is to get his faction azmed and ready ss aoon as possible for intraparty
strife.
5imp1Q Ftevivnl
Kohmnto is not alone. As the cool summer ended and the.winds of autumn started up, -
the powerful men of the party began to rumble. Yasuhiro Nalcasone, who like
Kohmoto has begun his preparationa for "next time," has recently hed talka with
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M$sea Kuranari and Motvcharu Morimote, key figures of the Nakasone faction. They
cnnAUlted on the schedule under which factional activity should be resumed as
nutumn approached. Both Kuranari and Morimoto are capable men for liaison work
witliin and outside the party. It wae decided to begin such things as faction lunches,
with an eye to the convening of the extraordinary sesaion of the Diet, but firet the
Naknsone faction held a golf match in Htikone on the 24th and 25th. Having gone their
sepsrate wuye in exrly .1uly, these "friends joined by common emotiona" (in Nakasone's
words) were togerher again.
dn 3 5eptember, Nakasone met with Michio Watanabe, Che minieter of finance. The
tglks were partly open and partly private, and their results were also partly
revea].ed And partly left in darkness. The open part ia that the director of the
Adminietrative Manugement Agency and the minisCer of finance are agreed on policy
for adminfatrative reform; the unknown part is the extent to which the peraonal
friendghip beCween Nakaeone and Watanahe has been restored. Nakasone expelled
Watannbe from the faction in November 1979 as an extra to the 40-day struggle. The
ideo that Nnkasone, in beginning factional activity to commence a new strategy,
hgd attempted reconciltation with Watanabe, who is quite influential with the
younger membere of the faction, is not far from the truth if it is not entirely
- rni�recC.
Thp 'i'anaka group tias also wanted to get moving. Its leadere met on 3 September and
eiecideci to hol.ci regtilar meetings; these leadere are not all old hands, but include
representatives of Diet membera grouped by number of times elected. Regardlese of
when qeneral. meetinga are held, representatives will be brought in each year to
- faci.litate communicationa. It will also facilitate the communication of deciaiona
of thr leaderehip meetings.
- "AlthauKh wn tried diebanding the factions, it wae useless, because the party
inn't Set iip tn work that way." (Tatsuo Ozawa)
"W,a just finiqhed the elections--it'e human nature f.or frienda who fought ao hard
- mide hy bide to atick together." (Susumu Nikaido)
The mood 2 months aga fnr diebanding the factiona has already dispersed.
Fol.l.owing Che simultaneoua electiona for the Upper Houee and I.ower House, the
Yukuda faction did not hold the customary victory party, but instead set the model
Eor the ciiHhnnding af factLons. On 11 Auguet, over 30 members of this Fukuda
far.,tinn showed ta>> for a golf match in Gumma, Takeo Fukuda's home base. For 3 days
afkErwnrd, such things as the policy study group met in a hotel in the city to
gumrd ngninHt excessive relaxation.
AlehOugh the a1d 0}iira faction, as the faction of the party president, could not
make nny apen moves, even after it disbanded, the Diet members who had been
elwcted no more than three times did not disband their "Wednesday Club," and this
drganir,ntion of young members is said to be the beginning of a resucuption of
nctiv',-y. "OF course it is the young onea who are important in terms of binding
r.he fet-eion together. Even if they are more easily enticed by other factions than
the ald reliables, they don't sell out that easily. If we just hold on to the
- ynung onea, we can rebuild the faction at any time." (a faction leader) And so
to begin with, the Wednesday Club begins meeting in October.
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Like (Me'e Home Town
(fi a day in mid-Auguet--during the Obon session, when there were few people or
care in Tokyo--Party Secretary General Yoshio Sakurauchi strolled out of.party
headquartere before lunch. It ia quite uncormnon for key government or party
p@reonnel td be out walking about. Accompanied only by Security Police (the
protective divieion of the Police Agency), he crosaed to Hiragawa, behind party
headquarters. Sakurauchi entered the Erosion Control Hall some 100 meters farther
along, climbed to the second floor, and puahed open the door marlced Office of the
Palitical Science Inetitute.
mhat institute is the officp of the Nakasone faction, which had announced the firat
parr of July that the faction had diebanded. It is said that neur.ral Secretary
C.aneral Sakurauchi ie domiciled with the Nakasone faction and presently residing
with the former. Ohira faction. At the deetination Af hia unusual stroll, the
secretary general, who is pushing for the dissolution of factions, emiled: "I just
happened Co be pasaing by."
Thf Feeling is eomehow like returning to one's old hometown. Perhaps ehe place was
Ci11e-d with the epell of LDP factions which two adminietrations--5aito and Fukuda--
resolved to dissolve, but which reaisted and revived. And now the third disaolution
df fectione, resolved by the general conference of LDP members of both houses of
the Dtet at the heginning of the Suzuki government, ia following the same course.
And will the "evilA" of factional strife be revived at the same time?
Part 3. Former Pxime Ministere
Tokyu YOMIt)FiI SHIMaUN in Japanese 13 Sep 80 p 2
['fextJ Gn1f Talk Repercussions
Three former prime ministers--Kakuei Tanaka, Takeo Miki, and Takeo Fukuda--spent the
_ height of the summer at Karuizawa, and each must have had complex feelings as he
loaked back on the paet year of political struggles.
Of ttie three, Miki unquestionably felt alarm. The reaeon was, needless to say,
the golf talka between Tanaka and Toehio Kohmoto (director general, Economic
Planning Agency) on 11 Auguat.
'Che AolE couree at Karuizawa, where Tanaka had gone to recuperate, is crowded with
gulfern on Sunday, so a Monday was chosen for the two to play, in order to avoid
notice.
Hut ttie golf talke, which were to be kept aecret even from Kohmoto's close asaociatea,
wer.e knowre to some in political circles several daqs in advance. Finally, even
Miki heard the rumor that Tanaka and Kohmoto would be plaqing golf.
Mikl c:ouldn't believe it was true, but at the Karuizawa Hotel where he want to
recuperate on the lOth, he happened to see the driver who had ruehed Kohmoto there
frnm Tokyo, and he knew the rumor was correct.
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Miki met Kohmoto that d4y, but Kohmoto had nothing to say about the golf talks with
Tanaka. Miki didn't ask. Miki was closemouthed about hia meeting with Kohmoto in
Karu.xxawg, ancl he was not anxious to say much about the golf talka: "Kohmoto may
havm some idens--there seem to be a number of viewa in the (Kohmoto) faction,
btt. .
Uiscontent Among Senior Members
Miki and Tanaka are irnown to be old enemies. Since the arrest of Tanaka in the
Luckheed affair and the subgequent dumping of Miki, Miki hae criticized the politics
of corruption gnd financial fnfluer.,ce and has, under the banner of political
mor.nlity, set himself againet Tanaka, who has hidden strength within political
cirGleg. It ie natural that Miki would have hard feelings about the fact that
Kotunoto, who inherited the Miki faction, went to meet Tanaka under Miki's uery nose.
However, Kohmoto thi.nks of formation of the Kotunoto faction not ae a mere change of
uniforme follcwi,ng "abdication," but rather as "independence." After disaolution of
the Miki �action on 27 July, [Kohmoto] made his separation from Miki clear and
- e:mbarked nn an independent path. Kohmoto, to whom Tanaka's strength was vividly
clear, even after rhe sudden demise of Prime Minisrer Ohira, was impatient knowing
that tae would not come to power as a minority, countermainstream force which
eritieizeci financial influence. Thus he wanted to open up a new route with Tanaka.
I'ollowing the golf talks with Tanaka, Kohmoto ea�d, "I want to meet with a broad
range of peopl.e--the meeting with former Prime Minister Tanaka ia vne example of
this." This waa the explanation he gave to faction leaders who called to asked his
- motivee, but the fact is that Diet members who were used to long yeare of Miki
i , . . - � ut:hAr~_ r~7 tA'18 iuuve u01,TCr
~.~~....~..~5 r..::c.~cu nctu o.
At the tinet:ion conference on 4 September there was an appeal tc "not atrike the
r.elarn of pnli.tica.l morality and crit'Lciem of financial influence" (faction
executive Soehi Funii). Miki's absence from the Kohmoto faction's gathering is
nat simply "a matter o� Kohmoto's having taken over."
Pukuci:t, wtio untike Miki atill adminieters a faction, seems to understand Miki's
repliitgs and told those arnund him, "It's terrible what has happened to Miki."
t)uring tiic political changes following passage of the vote of no confidence againat
tizc nhira cabfnet, there were rumore of the independence of Fukuda faction leader
Shirttaro Abe (Policy Affairs Research Council chairman) but Fukuda was f illed with
conf'tdence that, "there are no cracks in thia faction."
nne renean f.nr, this is the good relationehip he has had with Abe. Another is that
- Fukudn, who expects the Suzuki government to continue two.terms, or 4 1/2 years,
ie determi.ned to eupport Suzuki in order to keep the government from passing to the
cnnHervative brancli of Yaeuhiro Nakaeone and Toshio Kohmoto, and in order to
mgintain relations with younger men like Abe, Kiichi Miyazawa (chief cabinet
aer.retary) anci Noboru Tskeshita (former finance minieter). Perhaps for this
r.easari, Fukuda hae expreesed a friendly view of Suzuki, whose lack of leadership
_ haa been pointed out, by atating: "He's turned ouC to be surprisingly popular."
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Thin eummer Fukuda net and discussed international issues with foreign peraonalities
like U.S. Republican vice preaidential candidate Bueh, former French Interior Minister
Poniatofeki, and former South Korean Prime Minister Chong I1-kwon, and has polished
up "the econnmic Fukuda." It has been hie moat fulfilling summer vacation in some
time.
Authnrity of the "Hidden Power"
And there is Tanaka. Whan he tended to eupport Nakasone at one point after Ohira's
death, Mnkoto Kanemaru (former director general of the Defense Agency) made noises
of opposiCion within the Tanaka faction, but Tanaka suppreased this rumbling; he
Aeems to have even more authority now than in the past. The golf talka with Kohmoto
aleo ahowed Tanaka's real strength, and they had the effect of increasing Tanaka's
ntithority as a"hidden power" within the faction and within the party as well.
It is eaid that in Karuizawa, Tanaka played golf on the clear days and tipped a
brandy snif.ter on the rainy days. But every night froin after midnight to about
3 am he read and eagerly etudied economic materiale packed with figures.
Tanaka drinke more now, but Hajime Iahii, who set up the talke between Tanaka and
Kohmoto, eays he's juet concerned about the Lockheed trial.
Nnw that the three men have finiahed their respective summer vacationa, Miki is
looking �orward to an election which doesn't require money and is putCing hie
pfEorts i.ntn revieing Che Fair El.ections Act. Fukuda wants to become the Suzuki
_ qovernment's economic adviser--a poetwar Korekiyo Takahaehi. And Tanaka has
Chrnwn himself into reform of the House of Councilors electoral eyetem. One wonders
whnt efferk theee three fnrmer Prime Minietera will have on the future political
8C@i1C.
Part 4. Time Bomb
Tokyo YOMIURT SHIMAUN in Japanese 14 Sep 80 p 2
(Texe] "Poet-Suzuki" Tnrget
~
"From nuw on, I can leave everything to Nikaido (Executive Committee chairman),
Ahe (Policy Affairs Reeearch Council chairman), and the chief (Deputy Secretary
Genernl Kurihara), and concentrate on friendly relations with Eaetern Europe."
With these worda, Yoshio Sakarauchi (secretary general) left Narita Airport the
evening of the 13th in ehe company of Seiichi Ota. He showed a feeling of relief,
perhape of being released from the routine dutiea of the party.
Thie Sakurauchi had taken comnand of the LDP and led it to victory in the double
elections following the eudden death.of Maeayoshi Ohira (previous prime minister),
and now he ehows firm self-confidence as secretary general, the key position in
thn paxty. And he is well received in the party: "He remains neutral and does a
gnod job."
aut etrangely enough, there is great unhappineas with Sakurauchi in the Nakasone
facCion, Co which he belongs.
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"Sakutn�chi bectime secretery general because of the strength of our faction.
Shduldn'e he lean a 1lttle more our way and work to bring about a governaent
headed by Nakaeone? And the preliminary election for party president is so
unpopular that it would be better to lead the party in the direction of doing
gwuy wi,Ch 1[
That unhappineea is quite clear in the worde of the nucleus of the faction which
speeke thig way. And it is posaible to aee at the same time the Nakasone camp's
anguieh in regard to the preliminary elections.
Yaeuhiro Nakasone (director general of the Administrative Management Agency) and
Toghia Kohmoto (director general of the Economic Planning Agency) were said to be
the legding candidaCea to succeed Ohi.ra, but they yielded before the sudden riae of
7.enko Suzuki (Prime Miniater) and were reluctantly incorporated 'into the cabinet
with "equA1 standing." But both have set their sighte on the poet-Suzuki aituation,
and tiheir deaireis burning ae hotly as ever. The two men, however, have opposing
attirtidee towarcl the preliminary election: where Kohmoto ia atrongly in favor of
LmplcamenCinA it, Nakaeone prefera a freeze, or complete abolition.
'Chis difference nrises from the results of fierce efforts by each camp tu recruit
party memberK in anticipation of Che preliminary election scheduled for the fall of
198q. ne Paxty RS a whole recruited 3.1 million members (plus 100,000 friends of
the rgrty), buti nearly a million of these were brought in by Kohmoto--a daring
faat wtiich braught Kohmoto even with the Ohira forces in combination with the Tanaka
fBCClbn. Nakasone, by comparison, had 400,000 or 500,000--a decided gap at that
staRe, Since that time it is said Nakasone has aided with Takeo Fukuda (former
pr.ime min.teter), who called for a freeze ("preliminary electione will promote
government by �inAncial influence"), and has leaned toward the idea that "without
direrC halloting, it would be better to abandon it."
Kohmaro'H "Moment oE Need"
BecauAe of the decieion to delay preliminary elections, the number of cuntinuing
party members which the T,DP announced in late Auguat was down to 1 million, a third
caf ].sst year's level. Zf the figures are examined on a regional basis, there is a
marked di.ff.erence between Hyogo PrefectLre, which is Rohmoto's base, and Gununa
Pzefer,.tur.e, the base of b'ukuda and Nakaeone. The number of party members in Hyogo
decllnetd fram ins4 year's 285,000 to 171,000, but Hyogo is still first in the
nation with a retention rate of 60 percent. But Gumma, even though it aupports
ewo party strongmen, �ell mt once from 86,000 to 16,000 members. That is a
reteriClnn rate of, barely 10 percent. These figurea are clear evidence that Kohmoto
hne rrepared for hi.y moment of need.
Hecause Che Suxuki government was organized of the premiae that preliminary elections
would nat be }ield, the party agreed that there was "no neceseity to implement"
pre].2minary elections, at least this fall. Recently Kohmoto, who opposed the
"poHCponement" to the very last, fe11 in line with the mood prevailing in the party:
"I do~,'t intend to be a candidate in the preliminary elections while the political
aittiucion continues ae it is at preaent."
Aut that j.s just for thie time, and Kohmoto.faction leader Naozo Shibuya (former
minister or home aff.airs) is looking for victory in preliminary electiona 2 years
from now: "'She freeze absolutely cannot be allowed to Continue until the preliminary
electtonK 2 years from now."
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Tn nrder to coordinate views within the party, as represented by the opposition
between Nakesone and Kohmoto, the party'e executive section has asked the party
reform promAt:Lon headquarters (Zenko Suzuki, chairman) to examine the iaeue of
prelimingr.y electiona, including whether or not they ahould be held.
1tyuCarn Nemoto (party reform headquartera vice chairman and head of the Baeic Issues
and Operations Research Council) is prepared to deal with this iesue carefully:
"We will take it up at leiaure, once the extraordinary seseion of the Diet has begun.
If we reacti g canclusion in April 1981, after the regular party congreas in January,
vre wLl.] be in Cime for the August deadline for payment of inemberahip dues, if it is
decidsd to implement preliminary elections."
1E nn argument on thia iaeue begine, the views of the factions will clash head-on,
aad cnnfrontation is sure to flare up again within the party, which had become
placid. Tlie hand"ling of the issue will be a delicate matter which not only will
afEact the poet-Suzuki period but will ehake the footin,g of the Suzuki government as
well. That is why Nemoto is being cautious.
Profit F'rom Duee
1.n additian to the views within the party, there is another problem whirh will have
ta be given careful conaideration in any digcussion of preliminary elections. That
is tha thinking of inembers and frienda of the party and the role of their dues in
party financee. Because the preliminary elections began with the catch-phrase
"Your Choice of Prime Miniater and Party President," general party members almost
a11 favor retention of the preliminary elections. Moreover, their dues have
enriclled party headquarters and the prefectural and metropolitan party organizations.
- Anrty duee are 2,000 yen per year (10,000 for friende of the party), which for a
millinn membere comes to 2 billion yen. One-third of this goes to party headquarters
end twn-thirdg to local organizationa. The local organizationa could not bear to .
- tosu thie eource oE �unde, of course, and neither could party headquarters, which
is 12 billion yen in debt.
Nemdto has aaid, "Increaeing party duee to 20,000 yen per peraon would be another
way Co harmonize continuation of the system with etricter qualif icationa for party
memberehip." Lurking within the preliminary election system, wh ich was introduced
- to revitaltze the party, is the poesibility of a"time bomb" that the present LDP,
which has gained more than a etable majority, will �ind.difficult to hanc'.le.
Part 5. Succession Iseue
_ Tokyo YOMIURI SHIMBUN in Japanese 16 Sep 80 p 2
[Text] Startling Miyazawa Transformation
"As deputy secretary general, T do the dirty work �or the president xnd the
HecretAr,y general. As secretary.to the cabinet, you will have to do the dirty
work for the Prime Minister."
"T know. That's my intention."
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- "Suzuki (Nrime Minister) asked me (during eelection of a successor following the
deaCh of Prime Minieter Ohira) what was wrong with you. There was no one pushing
fnr you. T.n the Kochikai there was no agreement among Masayoshi Ito, Rokusuke
Tanaka, and me, so...."
"Thne's right. That's where the fault lay."
'1'he questioner is LDP Senior Deputy Secretary General Sukeyoshi Kurihara, and the
circumspect responses are Erom Chief Cabinet Secretary Kiichi Miyazawa. The two
mcr, as membere of the old Ohira faction, which supports the Suzuki government,
r,hRtted fnr. 3 hours in a restaurant in Akasaka, Tokyo, on 5 Saptember.
5ince hiA promotinn to chief cabinet secretary in the Suzuki cabinet, Miyazawa has
made n etxrtling tXaneformation. In drinking apots lately he signs things like
"Kachtifiha no Uta." For those who knew him ae his ald self, taking his stance with
un I:nglish-language newepaper under his arm, the nervous manner that surrounds
Miyazaya naw is ref7.ected in the unusual.
When the producers' price of rice wae decided in July, associates of Kakuei Tanaka
(former prime minister) revealed that Miyazawa had gone to Tanalca's residence; he
went so far $s to publicly state, "Miyazawa doesn't qualify as a Daimyo, anyway."
'1'here were rven those who said, "Trying to rush things that can't be done just
ciisc;oura$es you, so it's beCter to hold back." (Kurihara)
011 19 Auguar, Ktiri.}iara met for 3 houre with Yasuhiro Nakasone (director general of
etie Aciministrative Management Agency) in another restaurant, also in Akasaka.
Kurittara explained in detail the trouble the late Masayoehi Ohira had gone to in
puCCing his captured game pieces back into action in order to take and maintain
- power. Ag they aroee, Nakaeone made a single remark to Kurihara: "Why muet one go
Ca such l.engtlis to become prirte minieter and party president'?"
Abotit g week earlier, on 11 August, Toshio Kohmoto was led to hie first meeting with
Kj;kue1.'ranaka by Hajime Ishii (Tanaka faction), who, like Kohmoto, was elected from
Hyogo Prefectiure. Leaving even his Special Police guard behind, Kohmoto rushed in
HecreY to n Karutzawa golf course in Nagano Prefecture, where Tanaka nailed the
matter dawn when he firet spoke: "You've been Miki'e (former prinle miniser) yes-man,
hut if you wanti to do that eort of thing now, I have soine ideas."
Ay "ehat Aort of thing" he was referring to the.40-day struggle in 1979 and the
abeence f.rom the floor of the House of Representatives when the motion of no
confldence in the Ohira cabinet was presented. Kohmoto wae making every effort
to eeparmte himself from Miki, but it may be that Tanaka was still aensitive to
Mik1.'s influence.
NakaHOne and hohmoto Check Each Other
'I'hr, be;�.tnnf�g of the new government did not change the three-way opposition among
Nakasotiw, Kohmoto, and Miyazawa, the leading candidatea for the poet-Suzuki era.
They alqa hnve items in common. All three seem to have many ensmies within the
paxty, and their bases of support within the party and their factiona are weak
- points. Each epent this summer in his own way, keeping out of sight while trying
to overcome his weaknessee.
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The choice of strategy in Miyazawa's case is to increase chances to gain strength
by serving in key posts while Suzuki continues in of�ice for two terms, or 4 years.
But coasidering thefr ages, Nakaeone and eapecially Kohmoto have to aim at a date
2 years from now. ThuB the unseen competition between these two men is intense.
_ When Nakaeone accepted the post of director general of the Administrative Management
Agertcy, he specified the following condition: "I want to be deeignated acting
prime minister when the Prime Miniater is traveling abroad." When Suzu'Ki agreed, he
addad, "Not juet once--I mean all the time." This story is whispered within the ald
Ohira focCion. Since Nakasone could not get his hands on the poat of deputy prime
minieter, hie only way out wae to be acting prime minister, in order� to make a fait
accomplt of hie number-two seat in the cabinet. The reminder "not just once" was
etuck in so that the deaignation of acting prime minister would not be rotated to
Kohmoto and the other ministers each time Suzuki went abroad.
On the other hand, when Kohmoto was being sounded for th e Economic Planning Agency
post, he confirtaed that Nakasone- would head the Adminiatrative Management Agency by
saying, through a leader of the Kohmoto faction, "I take it that the other one
(Nakasone) will not be in a higher poaition (such as minister of finance or of foreign
affairs."
On 4 September, Kohmoto actually raised the banner of the "Kohmoto f.action." That
night N.3kaeone brushed it off, muttering "A faction is more than just maney--it's
a matCer of heart." There was a sort of pressure from this Rohmoto, who .had gained
a million party membere, draum near to Kakuei Tanaka and, who, indifferent to
appeaxances, hsd txied to attain power. Nakasone's uneasinees about this fast-rigirig
xivdl wae aggravated. In meetings of the cabinet or of government and ruling party
l.egdeYe, the two men check each other and seldoin speak.
And, of course, for Suzuki (Prime Miniater), whoae poeition is based on the
Ohira-Tanaka-Fukuda conservative mainstream, it ie ea8y to control the two as long
ae they are in contention with each other.
The abeence of cooperation between the two can also be seen in the fact that it was
poaeible to lock them into the lightweight poats of Economic Planning and Adminis-
trative Management. A reshuffling of cabinet and key party posts is scheduled for
Che eummer of 1981, and there could be a great change in the lineup if those two
shnwed the eort of cooperation seen in the past in the oil-and-water relationship
of Miki and Fukuda. However
Sharp-Eyed New Leader
Aoee Miyazawa become the leading candidate if Nakasone and Kohmoto remain.at odds?
It 3e not that eimple. Within the old Ohira faction there are ati11 the
anCi-Miyazawa forces of Ito (minister of foreign affairs) and Tanaka (minister of
i.nkernational trade and induatry), and [here is strong opposition to Miyazawa
from new leaders in the party like Shintaro Abe (Policy Affairs Research Council
chairman), Noboru Takeshita, Ichiro Nakagawa (Science and Technology Agency directot
general), etc.
At a conference of government and ruling party leaders on 8 September, Abe s3id,
"Interminiaterial coordination of next year's budget ahould (not be given nver to
the party, but ehould) be clearly woriced out in cabinet meetings." Becauae
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- reaching settlemenCs in cabinet meetings is, in the abaence of decisions by the
i'rime Minisater, the Jah of the chief cabinet secxetary, thia was clearly directed
;ie Miynxawet. Afterward, Abe, ae head of the Ftiroshima prefectural party organization,
rasked Miygxawa to decide the queation of party membership for Hidetada Nakagawa
(independent, Hiroehima 2nd District), who ia on bad terms with the prefectural
vrganixation. AnSmoHity toward Miyazawa can be seen in the raising of issues
iiormally coord inated by the eecretary general in leaderehip meetings which are
centerpd on policy diecussinne.
Scratc:}iing Che eurf.ace of the Suzuki government, which appears stable from the
outgide, reveals complex interpereonal relations which are involved with designs
for tlie poet-Suzuki period. There ia no guarantee that the accumulated discontent
xnd hnrd �eelinge w11L not come out into the open during the extraordinary aession
oE tlie Die.t this autumn, the regular session which follows, the reshuffling of
personnel, und the future political echedule.
CbPYRIGHT: Yamiuri Shimbunsha 1980
9601
r,sn: 4105
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POLImTCAL AND SOCIOLOGICAL
JAPAN'S CP'5 MIYAMOTO INTERVIEWED BY ITALIAN PAPER
OW041345 Tokyo JPS in English 0909 GMT 3 Nov 80
[Text] Tokyo Nov 3 JPS--A progressive Italian evening paper "PAESE SERA" recently
- c:arried an interview with Kenji Miyamoto, presidium chairman of the Japanese
Cammunist Party.
AKAHATA in ite November 3 iasue carried the part on 3nternaCional probleme in
MiyamaCo's reply to the Italian papery almoat in full as Miyamoto had atated. Trt
an introdur.tion attached, AKAHATA eaid this interview (carried in October 20 and
22 iseues of "PAESE SERA") given by Miyamoto to an Italian correspondent Claudio
Moffa nn September 13, and as he went back home soon after the interview, 1t was
Gompil.ed in the correspond ent's reaponeibility and there were some omisoions.
[Paesage es received] AKAHATA aleo said that a TASS dispatch from Rome diatributed
the part which is concerning China only, and the dispatch was an abridged one o�
thnt part, not in fu11. "In order to give correct information" AKAHATA carried
almodt a11 of Miygmoto's reply in that part:
Moffg: I would like to ask you ebout the Sina-Soviet dispuCea. As Japan is
located nearer to both China and the Soviet Union, I suppose the Japanese Communist
Party is more deeply related with them. How does the JCP see them?
Mi.yamoto: I think it cannot be eaid that we always have more detailed in�ormation
than you. Geographically speaking, Japan is located nearer to China than Italy
ie. But re].ations between our party and the Communiet Party of China have been
sevcred since the "CulCural Revolution." Therefore, we have no specisl infarmation
to be obtalned through interchange.
But, referring tn relatione between our party and the parties of China and the
Soviet Union, we Au�fered ouCrageoua iaterferences fxom the parties ot the two
countries in the 1960's.
AC thet time, the partiea of China and the Soviet Union wers in dispute on courses
ta take. In the diaputes, the Chinese sine wae condemning the Soviet attitude
_ toward the United Statea as a policy of coming close ta or in collaboration with
U.S. ruling circles. But, at preaent, as you know well, China hae come very cloee
to the United Statee as repreaented by its suppoxt to the Japan-U.S. miXttary
alLiance. China's foreign policy is that, in tYe -aame of opposition to Saviet
hegemony, it calls for an anti-Soviet united �ront, and is trying to induce Japan
to jo3n it. On thia point, tt muet be also pointed out that by creating such an
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iseue ae the Afghaniatan iseue, the Soviet Union has given China a certain excuae
t'or ite criticium of the Soviet Union. Anyhow, on the dieputes between the two
parties, we don't think any of them keepe correct internati.onal course. Moreover,
the disputea ovar coursea have becoma rivalry between the etates.
It is under Ghina's deep influence that most of Japaneee oppoeition parties, except
the Japanese Communiat Party, have come to support the Japan-U.S. miliCary alliance.
The Japanese Communiet Party has maintained the stand of no-support to China's
anti-5oviet united front which China has cal.led for since the beginning of the
"Cultural Itevolution." D18eatiafied with the etand of the JCP, China hae launched
inCerference in our party, and then, relations between the two parties have been
cut off.
On Che queetion what the Sino-Soviet relations will be in future, the problem for
aut parCy is that, one of the two big socialiat countries, both of which are geo-
graphically near to Japan, has not yet liquidated the barbarity of the "Cultural
Revolution" especially in the field of its foreign policy seeking for anti-JCP
split factions in Japan, thus taking the pollcy of big power interference.
The Soviet eide is actually augmenting people's disappointment with socialism by
creating euch pzob.lema ae the Afghanistan problem, although the problem of its intar-
ference in thc Japqnese Communiet ParCy has been settled at present through talks
(between the JCP and the CPSU) laet year with the Soviet eide admitting that it had
been erroneaus to have inCerfered in the JCP.
We hope t,hese errora will be overcome ana both countriea will come to fallow couraes
nroper to socialist countries ae earliest as poseible. We cannot foretell, however,
tn whnt extent our hope will be realized i.n future.
Maffg: S~.~cr.eCary General Berlinguer of the Italian Communiat Party paid a viQit to
China. fInw do ynu think about it?
Miyamot:o: '.Chie is a matter belonging to an independent right of the Italian Commu-
nigt I'arty. We have nothing to say abouC the matCer thaC thE Chineae and Italian
parCics have come into f.riendly relations on an agreement of non-interference witn
each other. Generally speaking, we hold a principle that it is poaeible to keep
friecidly relati.one with any party of any country ao long as it doea not inrerfere
in thE internal af.fairs. But, in the caee of China, it (the Chinese CP) has been
continuing varioua eubvertive activitieE against the leaderahip of the Japanese
Communiet Parky, in oppoaitiion to the course of the Japanese Communist Party, aince
the Cime of the "Cultural Revolution." This problem has not y2t been solved. Those
who took the command of var.ious interferences (in .Tapan) at that time are now still
being eutRoi:itative persone in charge of China'8 relations with Japan. This is the
xoot of the problem.
We, toa, recognize certain notable changes are taking place in China in its domestic
field. But, it has consietently mainCained the viewpoint of aeeking for an anti-
Soviet united front since the time of the "Cultural Revolution." k'rom this view-
point, Ch:ina is recently puahing ahead with the policy of wooing U.S. imperialism.
36
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J
Ch1na (7had) once tried to create split factions tn communieC parties in the world
_ in line wiCh the Mao Zedong Thought, but this hae come to a fiasco. Now it has
begun Co approach eome independent partiea. But so far as relat:lone with our pazty
is concerned, no �undamen*.al change had taken place, ae I mentioned. Thie will also
be infl.uenced by the f act Chat the Chinese leadership is eeeking for the formation
_ nf e poliCicel and militery bloc of Japan, the U.S. and Ghina, and in contrast,
the Japanpee Communiet Party is oppoaed to such a b1oc.
Moffas The Soviet Union seys Chat the Afghan problem was caused by attacks by
reactinnary for::ee,, the U.S. and the CIA. How do you view revolts of Islamitea
ggninet Che Kabul Regime in your analyeis?
MiymmoCo: Our view is that the greateet point at iasue of the Afghan problem is
Che Sovtet iJnion'e military involvement in the coup d'etat, or the political change
in the poLirical power of the People's Democratic Party of Afghanietan. This view-
point hne already been pointed out in a letter which I sent to Leonid Brezhnev,
general aecreCary of the Coramunist Party of the Soviet Union.
Mnffn: In Afghanistan, fighting is now spreading against the coup d'etat and
Snvtet txoope.
MiyamoCo: The Soviet troops, which had caueed the Afghan problem, has bsen carrying
out military operations to support actually the Kabul Regime. Speaking about their
motivee, their operatione conetitute eerious intervention in the right Co self-deter-
mination. It is inevitable that the people's resistance is spreading in �ace of
such (?Berious) eitaation.
At ttin egme time, the U.S. and China had been eupporting guerrillas to destroy the
Atghan dcmocrntic revolutlon even before the Soviet made invaeion of Afghanietan.
(etnCenr,e ne receivedJ We are aleo criticizing the U.S. and other countries for
their ecCions ae they amount Co intervention in Afghanietan's ri4nt to seif-deter-
mination.
Therefore, our beeic viewpoint is that the Soviet troope must withdraw from Afghanie-
ran, Chat the U.S. and China ahould end outside interventione, and that the Afghan
- iseue muet be eolved by the Afghan people themselvee.
MAffe: You do not recognize the Karmal Regime as an authentic one, becauae of the
Sovtet intervention in the political change, which led to killing of Amin, do you?
Miynmoto: No.
Mnffa: How about the issue of Vietnam, particularly refugee problem and thE
Cambodinn problem? And the Polish problem?
Mlyomoto: We mede a thorough inquiry into the Cambodian problem. It was confirmed
by AKAHA'TA correspondentis etationed in Vietnam that the conflicts between the Pol
_ Pot Regime and Vietnam had been repeatedly provocated by the former, that it had
rejecCed Che Vietnamese propoeals for solution by negotiations with the hop e that
_ Chtnn wniald support it, and that it had made wide scale invaeion of Vietnam at
- bordor arexs.
37
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In the meanCime, the Cambodian people themselves rose against the cruel rule by
Yol PoC.
In thie course of events, Vietnam had repeatedly made proposals for negotiationa,
- bul: the Pol Pot eide gave an answer to Vietnam, with the action of cut ire stute
rc].ntianA. The Pol. pot Regime made an invaeion of Vietnam, and suffered cruehing
blowe. At thie juncture, the Cambodian people rose in oppoeition to the Pol Pot
Regime and overthrew it.
The difficulty in eettling today's refugee problem is linked to the policy puraued -
_ by the U.S., China snd Japan, which have not yet recognized the new government of
Cnmbodir+ governing the country effectively and the policy of Thailand. Most of
- the refugeee are the reaidente having been taken away by the Pol Pot troope, or
Choee who got away to [the] border. The essence nf the ieaue is that the Weetern
= countriee such as Japan and the U.S. are obetructing the humanitarian and complete
eoluti,an at the refugee g:oblem. Japanese Poreign Miniater Masayoshi Ito called
- fnr nn international conference in support of Pol Pot, during his trip to China
~ cind ASEAN countrl.ea.
The Afghan eituation and the Cambodian problem are different iseues in essence.
'['he baeic poin: of [the] refugee problem pertai.ns to the protracted U.S. war of -
aggreesion against Vietnam and the responaibility of the cruel Pol Pot Regime, which _
= has nothing to do wiCh socialistn.
- We are delightful with the outcome af the Polieh event as a development of socialiet
democrncy.
Yt gaee without eaying that there is one question why there was an economic eitua-
= ttdn where the Polish workers had to strike.
le in very good f.rom the viewpoint of democracy in socialism which we &re aiming
_ nC reqching, Chat its trocpe and palice did not suppresa the workers in etrike, -
- buC iCo par.ty ar.d the government heLd talks eincerely, and expanded self-authc+rity
of trade union nctivi.ties, settling the isgue by recognizing the right to strike.
Of cduree the Polish people are expected to face many difficslties henceforth. But
we hope that the Polieh people will solve independently theee difficulties with
the splr.it of socieliem and in a manner appropriate to socialism.
CSn: 4120
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FOR OFFICIAL USE flNLY
POLI'TICAL AND SOCIOLOGICAL
'AK.AHATA'EXpLAIN5 JCP'S NONPARTICIPATION IN BERLIN CONFERENCE
OW031047 Tokyo JPS in English 0926 GMT 3 Nov 80
~ [Text] Tokyo Nov 3 JPS--The Japanese Communiat Party did not send its representa-
tives to the "International Theoret2cal Conference" held on October 20-24 in _
Berlin, under the co-eponsorship of the Socialist Unity Party of Gern:any (SED)
- nnd the editorial board of the "Problems of Peace and Socialiam."
AKANA'CA dn Nnvember 3 releaeed the reason for JCP'e not sending representatives
to Ctint conference. AKAHATA says, "Because it was made clear that equal treatment
for a11 par;icipanCA could not be expected in the conference, the Centre.l Committee
of the JCP decided not to send representatives to it."
AKAIiA'1'A goee on to eay:
"The CC of the JCP wns in preparation for sending three representatives, including -
Comrade Hiroyuki Okamoto, director of the Social Science Institute, while making
questions to the sponeor on October 6, whether a keynote report and a concluding
rpmark would be made, and whether all participants would be dealt with equally.
If besed an the universally recognized principles that every communist and workera'
party af the respective country is independent and equal, the conference should _
ngturnlly be a place for free and democratic discuasione by the participants who
have equal riqhtR. _
"Un Oceober 15, the sponsor informed us of an additional agenda of the conference,
- that in the apening plenary eeaeion, representatives of the three epecific countries
wnuld epacially make addresees, ae well as SED General Secretary E. Honecker as
the Aponeor.
"'I'ttuR, it beCame clear that the opening plenary sesaion would be a place for aub- '
~ stanCial keynoCe speeches, preceding to separate meetings, and all participants -
would not be treated equally. As the Central Committee of the JCP takes thie to
be incompatible wiCh democratic mana,gement of a conference, it decided on October _
17 noC tu sead its delegates to the conference."
CSO: 4120
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POLITICAL AND SOCIOLOGICAL
BRIEFS
LAF' FACTIOIv RESUME5 ACTIVITY--The intraparty faction of liberal-democrats led by
Prime Minister Zenko Suzuki resumed ite activity Thursday, four months after it announced its disbanding in the interest af party unity following Suzuki's nomina-
l�ion as liberal-democratic party president. Forty-five Diet members attended the
faction's general meeting in Tokyo. It decided to hold factional meetings every
_ Thureday to exciZange views on various matters. The group was the last LDP faction -
to reeume acCivity in the conservative party, which had pledged to el.iminate all
faCCiOriA at a genaral meeting of all LDP Diet members laet July 17. Political
obgervere eaid that the LDP factfons had resumed activity to prepare �ar a possible
poweY gtruggle :Cn the procese of selecting a successor to Suzuki, who is expected
to xemain in of.fice Eor two more years. [Excerpte] [OW160159 Tokyo THE JAPAN TIMES
- i.n Eciglish 14 Nov 80 p 41
CSO: 4120
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ECONOMIC
i'FRCEPTIpNS OF JAPAN-U.S. TRADE WAR EXAMINED
`Cokyo TfIC JAPAN TIMES in English 9 Nov 80 p 12
["Gueet Forum" column by Naohiro Amaya:
['Cext ]
A pradWtO OI Ihe WnlvRrslty Of.
Tokyo. Mr. Nsohlro Arfaya entsiretl
the Mlnletry of Gommsrce hn0 Irr
duttry. prod*CttW d tM proMnt
Iniunatlonal TrWe and Induetry
Mlnlstry, In 1911. Me has Nned In
vanous 4mportint potts - u direC+
ta of ths Intornallond Economia
Atlaln OepaAment o1 thf Inlarra-
tionai Tndf Pdicy Buroau and dN
roclor�psnKal of the Apency lor
Nawral Rowurca ana Enerpy. Cur-
rently. he le vlce mInlsISr for Inter-
nauonal aNUn at MITt. Ths tollow-
mg Ir �n sbrltlqetl trenelsSlon o1 an
arUCla,publuho0 In fhe.OCtOber le�
sue of Voice rripuine. wrnen lor
Jepenos� consumplon. on the
quucUOn ol trWs Irictlon between
JeWn anC th� Unitsd Stuea.-
Eoitor
~ n o
At t~r aa exports an0 1m-
portp of Induatrlai Qoods are
conrerned, Jopene4e trede
praMlcn todwy an lalr. How-
ever. pIaylng talr a1one doea
not wlve all erade problema It
Jqpanese products are dc.
nounced because Jnpan is sald
to be enaaQed
tn untalr trade)
precttces, wch~
censure should,
end It Japan
atopped such
proctlces. The
preoent iftua-
tlon ls that Ja-
pan I� censured
"Who's Being Unfair in U.S.-Japan Trade War"J
tn spite of the'tact thai it is
not engaged fn untalr prac-
�tfces regardtnB elthex exports
or lmports. Thereln ltes the
problem. '
Wttereas accusatlons that Ja-
pan hes barrtera agalnst Im-
ports are often the result of
misunderstandfng, we must re-
alize that crlticlsm agalnsk
J8P8nese lRpOt'LS 81'2 i1'WrC Of-
ietl Zh8i1 nOt 8q expie8Si0n Ot
grlcwance egalrLst any fUrcher
qulek rise in Japanese expor[s
regaMless of whether untatr�
ness exlsts or not. Japen-U.S,
and Japan-Europe trade fMc-
uon invaving Auwmoniies, Tv
sets and steel are of this type
and are yualltatlvely dltterent
irom the traae trlctions that
exisled before the "Nfxon
shock" of 1971.
U.S. Prov{ded P1afdamentals
It !s my opinlon that before
and atter tbe Nixon ahock, the
type8 oI ttade irlMlons that
have occurred, tlkir pathology
and Acrord1ngly thelr pre=
vention .aAd cure have been
qufte dlffereat. in order to
68W Yau' undergtanding ot. mj+
thouiphts on thts subject, let
me explaln how I lntet'pret the
elanlflcance of the Nlxon shock
es an epochal event In hlstory.
The "pre-Ntxon shock era"
~ was sttU the heyday of pax-
Americana. Dur1ng thlr pert�
od. the United States was able
lo provtde, wfth eaee and pon-
stancy, the Free World with
the following stx lundamentals
tllat auppOrted !t.
The tlrst tundamental, wes
'vafues. . Po11t1ca]ly, ttieae va!� .
lICS lYieaift AfiEL'iC811 dC11'!OC�
racy, economlcatly the tree err
tt'Tp1'19l gy8tefi 811d Ai 8 W8y
of Ute; the American 1ltestyle
of drivJng cars, having electrlc
appllances at home and drink-
Ing Coca-Cola.
The seoond tundamental was
securlty provided to $urope,
Japan and other _Free World
coutftrles thrbugh 1he NATO
treaty, the Japan-U.S. Secu-
rlty Tresty, etc.
Thlyd was law-coat oll. Brit-
ish Petroleum and Shetl can-
not be fgfored, but tt was the
American oU majors that pro-
vfded the world with an abun-
dant supply of oil at a low
pNce trom the 1920s until 1973.
Fourth was tood. T'hanks fo
the ample supply at low price
of Amerlcan toods, the world
was able to emerge trom the
tood shoriage nightrhare after
World War II. .
47.
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Flflh wes IechnoloE(y. Most
securlty aM values. These tn-
major industrtes ooly In the
of the technnlaqy that Japan
dustrles form ttre nucleUs of a
tlelds of agriculture, alrcratt,
now uaes In Its xteel, automo-
country. Frfcttons that lnvolve .
5paCe, energy, Weaponry and
tlve enC electrfc eppllance pro-
ttkae tttidusirles attect a na-
cornputers. It fs oNy natural
ductlon ceme trom the U.S.
tfon'= Ncurfty and are deQply
that under these new Clrcum-
Md the slxth was CATT and
related ta the people's prlde
atances. American enthuafasm
the IMF, the tundamental eco-
t[nllke tfwse aUected by the
tor the free crade system has
nomlc order tor the Free
pre-Nlxon stwck era trtctlons.
Waned.
World whlch the Unlted States
When trlctlon over steel rock-
gesteletton Not Valid
- dreated and suatalned.
ed Japan�U.S. trade relattons
ArQuing that the assertlons
However, tirom the latter
In 1972-73, the Americans
made by the U.S. Congress
- dayr of Presldent Nlxon's ad-
charged that Japan was dump�
and- auW induatry go against
minlntratfon (ettQr 1971). the
Ing steel In ths U.S. Never�
~ GATT prtnclpies will not have
Amerlcan capaclty to provide
theleaa, thece are reasorts to
much persuaafve power under
these fundamentals markedly
betleve that the Amertcans
*
such clrcuMstances. Aa t see
decllned, marking the begin�
themeelves dld not
really . be-
tt. Amerlcap leeders know that
nlng of tfic end of the era of
Fleve tn what they charged. He.
the Japaneae araument is
pax�Americana. American val-
gardtng trlctlon over Jap4nese
right as tar,as GATT loglc ls
ues were shaken by the Vtet-
auto exports, there are tew
concerned and that they have
nem War and the Walergate
Amertcans who thkik that Ja�
no valid reason W restrlct im-
scandal, the oU majors lost
pan !s guiliy of nnJair e,xport
ports of Japanese cars. Never-
thelr prerogative fn lhe face of
practices. Nevertheless. Japan'
theless. when consldered on
thc tncreasing asaertlveneas of
Is crlticized for Its auW, ex�
the -polttical plane, the tact
- the OPEC cwuntrles and Amer�
pocts. 'fietr position, we must
that the Japanese share of the
_ Ican supremacy In technology
realize. is qfat when the Amer�
American suto market has
- nlgo waned.,
ican automotlve lndustry Is In
grown trom 18 W,23 percent In
In addtton, both the IMF and
trouble and Chryster and Ford
an electlorr year, when unem-
thc GATT ruiea lost some of
ars, being""hospttallzed" so to
ployed autoworkers are sharp-
' thelr itt'iluence, the tocmer as
speak. JapBn slmuld not stomp
ly lncKeasing, cannot be ig-
a result of the 1971 Nlxon
arowd In the hospital corrl�
nored, !hey would say. This
shcxk and ihe lotter as a re�
dors by sharpiy fncreasing lts
thlnking has Ilttle to do with
sult at Amerlcan qraln export
auW euports W the U.S. .
GATT and can hardly be st-
rontrols and the OPEC oll em-
How then Shouid Japan deal
knced by resorting to GATT
_ bargo of 1973, Thc U.S. stlU
,
With thig Question.
It we
apply
lo c.
hns the capaclty to prAVlde
the pre-Nlxon
shock
era (or-
Now, hoW have Japanese n-
!;nc:urlty und toQd but some
mWg, what we shouid do Is w
dustrfes coped with such frtc-
cloubtg heve .begun lo be ex�
accuse the U.S. of vfolatlon of
tion? The U.S. steel fndustry
pregsed eancerning aecurity.
GATT pMnciples. The U.S. ac�
Was In a serloua slump in 1977�
Form,NAtureChange
cusatfons and pressure on
78 arid ifled complaints wtth
Due lo these structural
Japaese steel and auto ex-
the Treasury Department
ChfltiQCB, the torm and nature
ports widW proving the [act
aBAlnst Japanese and Eu-
ot trAde frletlon also under�
of acWal damage surely run
ropeen. steelmakers. Then di-
wcnt change. FrlcHons tn the
counter to GATT logic. HoW-
rector, oof the Basic Industrfes
praiVixan shock duys occurred
ever, thla 4rgument Is`valid
BUreau. I visited Washingtnn
when labor�intenslve 1n-
oNy under the premise that
many times to negotlate wtth
dustrles In the U.S� thrent�
the GAT'F-IMF order sti11
U.S. ottlclals.on thls problem.
ened bv tmports trom semf�fn~
reigns supreme.
As regards automobiles. I vis-
duatrlallzed countrles, brought
ited the U.S. last, March to
preAgure on thc government to
The maimtaY ~t supP�rted
make a flrsthand atudy of the
elther restrict lmports or torce
the GA'IT system was the U.S.
Impact of the
frictton and
exporttnR countrles to cut thelr
aW the moet pouvertul GATT-
,
~lked with many governrnent
exports, in temporary dis�
guPporting lorces in the
offtclals,congreaamenikndjour-
regard u( the OATT rules. The
U.S. were the auto induatry
~lists, pn the barsts of these
Japenose roactlon�.to auch U.S. .
and the Ucited Auto Workers
expertences, I have ldentifled
actlon was to censure the U.S.
unlon. This was bl~cause, untll ,
a maior ditterence irt the ways
for vlolating the GATT rules. a
very recently. Amerlca's auto
the two Japanese industries
pasitlon hlattly juatftlabte un-
Industry was No. 1 ln the
have dealt with trade irtctlon,
_ dej� ihe aATT pritlo,ophy. How-
World and the (ree trade sys-
Leaders of the Japanese
ever, the poat�Allxon shock era
tem GATT calted for was best
steel indusity have a feeling of
trlctlons have lnvolved ateel,
tor that fndustry's market ex�
�to the U.S. steel
TVa, nutomobtles, seml-
pansion worldwtde. ,
industry because tt was wlth
ronduL.ors, etc., whlch all tn�
The sltuatlon has alnce
U.S. capttal, equlpment and
voive hfahly advanced technol-
changed and today, the U.S. re=
productton technology that the
ogy and Induatrlea mlated to
tains suPremacy arriong the
Japanese steW industry, Was
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abte to riie to lta ptesent dotnl-
nant poeluon Irom the ruina of
Woeld War II. In the 21Y years
etnce ttfen. tht two ladustriea'
poslttorn have been reveeaed
as the U.S. steel lndu=try wlth
Its aQed equlpment loat its
compettttve edqc. When the
1M�78 trlctton Qevelopqd, the
Japaneae Qovernment and
atenl Indwtry made R a prin-
clple not W delve the U.3., :teel
Industty Into a coener and
trtad to Ilgen W� WAehlnaton'a
derrunds u much u pantble.
In actwl termc Jew coop.
erated wfth etw adoptlon of the
trfMr Qrlc:e system and the
bewh ftro woa put out betore
It developed InW a mxjor con-
nage.cion.,
Slnce the turn of the year., as
the Amerlean ateel Industry
agaln hlt a slump, U.S. Steel
Corp, has ttled a complafnt
aQainet European ateelmakers
tor dumpinR but hAa not done
the eome aQalnat Japan. Thle
fa becauae JApan haa not en-
QaQed !n dumplna and the U.S.
ed
eteelmakers are aaare that
the Japaneae steel induatry
haa pald due, ccnaldentlon to
thely dttttcult. Wtwitlon. 'Phe
Japanae atee! lndustry's han.
d11ng 'of the Metton was char-
actertzed by an avoldance of
any atep that mtght add w
' the U.S. aeel Induetry's,dltfl-
cultles.
Dltfeasit Perceptlone
On tha othm hand, there la a
corufderohle ditferenee In per-
ceptlon of the eltuatlon be-
eween the AmeMcAn and Japa-
neae euto Induetvlea, Ttie Japa-
nese auto Induatry asaerts that
the preeenc predlcament of the
U.S. auto tnduetry !s due to tts
tapure to reapond to the Amee-
lcan conaumere' need tor
smaller cacs, far whlch Japan
has no responslbllity, The
Japame ItMustry has done
CSO: 4120
nothfng"to be ceneured tor be-
cause all tt has done fa to ex-
port cars to meet Amertcan
consumer demands, lt argaes.
On the other hand. the Amer-
lcan suto Induetiy and labor
wlon iedc to atall Jepanese
, exports of small care out of
the teu tbat durinQ the tew
years r*cessary tor t,he Ameri-
can auto lndustry to prepare it-
aelt tor the prvducttoa of smatl
cam a subatanttai ahare of the
market 'tmY be capwred by
Japanese antomakers. As a
mearo W peevent tht& the In-
duatry, wants voluntary e!cport
controla by the Japmese autb
ledutitty.but tbe U.S. gov,ern-
ment Is not heedtng this
requm.
The Japanese government fs
irr no posltloa to make any
nwve'aa thla polnt tmless re-
quest+cd to cb eo by Waihtng
taa bsoawe of poNlble pe'ob-
lems wICN the U.S. Mti-Mo-
nopoly Law. Individual
Japanese automakers could
take gdwlne, voluntary sttpa
to curb exporta. I belleve. but
nor,e apparenux npive reu a
setiee oI urgencY to do So.
AS 9!'@SL1lt, Ufe'-U.S. 8Ut0 IM
dustry and unlon c611ed on the
Japanese auto lndustry to, lo-
vest tn the U.S., wlth' the U:S.
government aad Coagreas joln-
tng in the call. Sirce it had no
. alternative, tlfe Japanere pv-
ernment urQed tbe fndu=try W
heed the cal1. Hovuever. thtatc-
Ing that na msh decblon was
justitte4 major Japaneae auto-
makers. except Handa and Nfii-
san, made notrcommlttal re-
pHes. In the meantlme. as the
alump In the U.S. auto tn-
dustry became furttier aggra-
vated, the lnduatry and unton
resocted to more dtrect steps
and torntally asked tor an im-
poR restrlMlon under Artlcle
201 of the U.S. Trade Law.
As revtewed above.' commu-
ntcations bave tat appesred
good among the parttes can-
cetned - between the Japa-
nese and U.S. auW lnduatrles.
U.S. and Japeneae Qovern
43
ments, among U.S. govern-
ment aQenetes, �between the
Japanese aovernmdtt and suto
inatmtcY. and among Japanese
automalter8, 'I'Aere are com-
plex reaemit Wr the dlscord.
ahie b the 8wareneas, on the
part of JapAneae aItomakera
that, unltke Amerlaan steel-
mAlteta. U.S. automalcers are
stul very powahtl corapettwes
and once they have re,-eatab-
Ilshed themaelvea. tlrey wiU
have ltttle troubie ta drlving
out Jqmese cm frosit the
U.S. market. '1'he Arnerfctm
auto Induatry, on the other
harba. aeema to pprretve che
Japanese competltton as
stranger than u actwUy !s.
(krmamy, Jepim 8appott (iATT
tn aealtng wtth the economic
tricttana occurrinQ Wader the
dlfttcult condiqons as revievved
here. the fmportant� thUig to
bear !n mind ts ttM ttwe are
oNy two countries in the. worfd
ttwt tully support GATT now
- Wesi Germany and Japan.
To be sure, the U.S: and other
Eumpean countrtes believe in
tree trade and pre against re-
versloa to the protectbnlsm of
the 19309 by desttoying the
GATT syatem, but their sup.
poct of cree trade 'ts lesa than
whotNtearted. Thus tAe Free
World ts lett hanglnQ between
two alterriatives.
The basic postnre Japan
should take ln thia s1WMion !s
to bbaerve the Jspanese dtc-
tum. "the atmng walk on tlp-
coe." in poker. there ls nothinQ
arorig m ane ptayer's wtn-..
Nng evetY asnfe. Bpt he does
thac ac rne nslc of befng ex-
cluded trom the gatne t11e next
time. It you want to, rematn in
the game, you have to lose
once in a whtle. Let 'me re-
peat: A w4se, strong man
welks on tlptoe and considers
others' posttions, and only the
wlse and strong can become
truly powertul.
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- E:CONOM i c:
'AKAN/1'1'A' C0MMFNTS ON U.S. ITC'S UECISION ON CAR IMPORTS
(1W121031 'L'nkyo JPS 1.n English 0917 GMT 12 Nov 80
['i'ext.1 '1'okyo. 12 Nov (.fPS)--On the deciaion of the U.S. International Trade
t:ommiseion, which turned down the appeal for curbing imports of Japan-made and
other foreign cars to the U.S., AKAHATA commented on 12 November:
resu7.t waq that .lapan's claim was accepted, but the root cause of the Japan-
11.5. i`rtceian on automobile trade is deep, and there is a long way ahead [for]
bnth cnuntr les Cn vol.ve this problem.
"'!'he 'wnrlcl wcartnre' in relatianahip to emall cars, in which Japan is taking lead,
w111 be ftirChcr lntensified, against the background of energy crisis, and compe-
LltinnH for marketK by world capitalism under the days of low growth rate.
"1'he strong competitive power of Japanese sutomobile makers, as has often been
_ pnlnted out cven by the U.S. side, is also based on domestic conditions: low
wngeq, long working houra and intensification of labor plus heavy burdening on
gubr.ontractors.
"Naw ts tliv. time to review the way of production, or the atrengthening of competi-
ttve pawer iit che sacrifice of the people and the heavy dependence on overseas
markct.
"on thr. U.S. side, nttention is focuaed on new policies to be hammered out by the
nr.w keagni Itepublican admin3stration. Ford Motor, the UAW and protecCionists of
thr parliamenr nre. tr.ying to get the Reagan regime to have the ITC decision over-
turnecl.
"(C c:annot be overl.ooked that there is the possibility that the Resgan regime will
place prossure in relationship to automobiles on Japan by interlocking the demands
on inran for an increese in military atrength and etc."
('wt); 41.20
44
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!?CONOMI C
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MI11 'I'Q i)I2AF'I' LONG-Ti?RM AU'i'U INbUSTRY SURVIV4L STRATEGY
UW161.31.7 9'okyn THE JAPAN TIMES in Engliah 15 Nov 80 p 1
('i'ext) 'Che Ministry of International Trade and Industry (MITI) has decided to
drgfC n long-term atrategy for the aurvival of Japan's auto industry, which faces
Krow3ng uncertainCies in both dameatic and world markets, it was learned Friday.
'Che hrapoged strateqy Eor the auto industry would include a longer-term program
far the adjustment of its production levels and encouragement for atepped-up
overqeae 3nvestments, ministry sources said.
'('he drnftittg of such a strategy, according to the sources, has been prompted by
- mounting protectionist senti.ments abroad againet Japanese car exports plus viaible
clecL[neH in domestic sales.
Aceordinq eo MiTI, .lapan's annual car output (including trucks and buses) exceeded
- Chc 10-millian mctr.k laet year and Japan ie expected to become the world`e largeat
- c;ar prnducer Chis year, replacing the United States. _
YOe, the .lripanese auto industry's heavy dependency on exports is gradually stirring
prntecCiontNt mnveB in foreign markets, including the United States and the _
I;urope7n Common Merket.
A1maKC one ot' every Cwo .Japanese car producta was exported last year and the raCio
wlll rlpe Co 60 perr.ent this year, according to the roiniatry.
Dempltc btiiliRli exparCK, domestic car saTes have been declining eharply since the -
_ turn of thi.s year. Statistica show that domeatic eales for 1980's January-October
lieriod dipped by 5.4 percent from a year-before-level for the first time in 4 years.
M1'TT of.f.icials Haid that the per�ormance af the suto industry has a far-reachinR
- effr,ct on the nation's economy since the induatry is Japan's leading earner of
f'oreiqn currency. Also, car production accounCs for some 10 percent o� Japan's
eocai output in the manufacturing sectar. 4
"Tt i.K r.nmmon sense that car sales would hit a ceiling sooner or later in both -
damOpeir. nnd wnrld mxrketa. And it is high time that the suto induatry had a -
long-term sCrateAy for ita survival in the 1980's and beyond," a senior MITI =
af~icial commented.
1
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Subjects for ttic proPosed strategy-drafting discussiona would include a long-term
plnn on appropriate levels of car production facilities, measures to encourage
ovdrseas investments and discovery of naw lucrative markets in the Mi.ddle East,
LBtin America and ottier regions the sources said.
Work tn draft such aCrategy would not be initiated until the cooling-down of the
preaanC c-nr er.ade dieputes with the U.S. and Weatern Europe, they added.
C()i'YRtGHT: 1'HC JAPAN TIMF.S 1980
CS(1: 4 120
46
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CCONbM?C
EDTTORIAL ON PETRODOLLAR INVESTMENTS
OW310325 Tokyo THE JAPAN TIMES in English 30 Oct 80 p 12
[Editorial: "Shift in Oil Money Inveatment"]
[Text] Since spring foreign inveators, particularly those in Mideast oil-producing
countries, have been actively buying eo,uity aharea, creating a boam in the stock
market. Although the pace of investment has slowed lately, this reflects the
growing inveetor confidence in the future of the Japanese economy in general and
.lapanese bueinesses in particular.
- From 1976 to 1979 foreign etock purchases continued to fall below sales, leaving
the balance in the red. But during the firat 9 months of this year net buying
exaeeded yen 100 billion, or more than three timas the record set in 1969, the last
, year in which purchaees surpaseed sales. Zn September alone, foraignexs bought
abdut yen 274 billion worth of ehares in excese of what they sold.
1'ha figure for the .Tanuary-September period repreeents but a fraction of the total
value af .Japanese stocks, estimated at about yen 70 trillion at current prices
aa of the end of 1979. Yet the recent increase in stock acqu9.eitions by foxeign
individuale and inetitutiona indicates that iti ia not a paeaing phenc,menon but
probably the beginning of a long-term expaaeion in auch investment.
What ie eepecially significant ia that auch investment is esid to have been made
mainlp by oil-producing countries in the Middle East, including Kuwait. OPEC
natione are awash with surplus oil money. Their combined surplus is estimated
to have amounted to about $240 billion in 1979 and to increase by $100 billion
in 1980.
MideBet oil producers, now pureuing a"slow but eteady" policy in their domestic
development programe, need to invest thei r aurplus petrodollars abroad. Japan,
- which ie atable politically and ecommmically, providea good investment opportunities.
'nie r.emarkable eucceas with which the Japanese economy has overcome two successive
"oil ehoaks" ia an eloquent teetimony to ite outstanding ability to cope with crises.
't'he vieit here by Mr 'Abd al-'Aziz al-Qurayehl, governor of Saudi Arabia's Central
Benk, can be viewed in thia context. Early this week he reached agreement with
' Mr Haruc Maekawa, governor of the Bank of Japan, on the need to promote monetary
cooperation between the two countries. And in a meeting-with Finance Minieter
MiChio Watanabe, Mr al-Qurayehi indicated that Saudi Arabia would increase oil
money inveetment in thia country.
1 47
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nil money tiua been flowing rapidly not only into the stock market but alsa in
other araas of investment, including public and corporate bonds. Bond purchases
axceeded yen 200 bil.lion both in June and July, although the voliane has reportedly
droppad of lnte, as has sCock investment. Here again, most of the bond investment
iFa said to have been made by oil producers.
'Ciia el.owciown is probably due to temporary factora, such as the yen's movement in
foxeign oxr.hange marketa and the proapect of another cut in the official discount
rnte. '.Che cnntinuation of the Iran-Iraq war, moreover, may have dampened investors'
anthusiasm. In the long run, however, investors can feel reaeonably assured about
rha parfo nnance of the Japanese econoary.
Aa long as Japan retains its economic resilience and political atability, there
!.e na reaean why more oil money should not be inveated in this country. Oil
produr.ere are trying to diveraify their investmenta, which hitherto has been
concentrated in dollar asaets. So the weight of investment can be expected to
ehifC increaeingly in favor of the yen.
Whnr tliis would mean to Japanese businesaes, for instance, is unclear. Some people
fimnr chat oi1 producere might sell their ahares if the Japanese economy were to
enter a recession, thus cauaing disruptions in the stock market. There are also
"faarH" ChaG ttiey might try to participate in the management o� Japanese corpora-
tians, n-3 they did in Furope.
S�ch r~ppretienaione not withstanding, one thing is clear: an expanaion of oil
maney investment wi11 help to broaden the scope of economic and financial coopera-
Cion bcitwean.Tapan and oil-producing countries. In particular, inveatment in the
f.arm of yen-daflominated bonds, for example, will help to "reeycle" such surplus
funds to couneries that need auch assistance the moet--the devaloping countries
thnt clo not Uroduce oil.
't`he need to make more of such money available to these f.inancially depressed nations
ltps been emphoAized here and abroad, tdith international organizatione now taking
ttie bruttt nf the recycling operation. Japan seems to be in a good position to
tie1p ttiem in cooperation with oil-producing nations.
COC'YR 1GHT: THE JAPAN TIMES 1980
C:Sp: 4120
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3CIBNCE ANll TECHNOLOGY
NTT nEVELOP5 NEW OPTICAL FIBER CABLE
OW120529 Tokyn THE JAPAN TIMES in English 11 Nov SO p 2
[Text] Nippon xelegraph and Telephone Pub lic Corp. ras succseded in develaping
aophieticated mono-made optical fiber on an experimental basie, corporation
off:cials announced Monday.
The corporation's euccese virtually put an end to a long-time conteat among
_ advanced nations in developing the meanB of optical communicationa, which transmit
laser signals through optical fiber ae thim ae a.human hair.
The cnrporation plans to put the new comnunication system into practical uae in
1982, the o�ficials said.
The new nnticnl fiher developed with the co rpoxation's new technology extenda
100 km in length, compared with previ.ously developed fibgr extending only 10 km
- or sn.
An optical fiber cabLe conaiets of a"core" in the cer,ter and "cYad" covering the
cnre part. While the core part transmits laser beam signals, the clad part protects
the core �ram extexnal damage.
The optical fiber ie divided into "mono-mode" and "multiplex-mode" typea depending
on the ways of signal tranamiesion.
While Che multiplex-asode optical fiber caus es little "diffueed re�lection" while
transmiCting signals and thus disturbs the signala, no such trouble is experienced
with the mono-mude optical fiber through which signals are transmitted in a
etraight course.
% Z'tte mono-mode optical fiber is thus able to transmit accurately more than 10 times
- aB many signals than the multtiplex-mode aptical fiber the officials said.
7'he corporation's know-how to reduce im.purities in the fiber to e minimum level
made iC poeaible to develop such a sophisticated mono-mode optical fiher, the
o�ficials sai.d.
-The optical fiber meaeuring 125 microas and its core 8.9 microns in diameter can
aleo tranem3t signals with a wide froquency range of 1.3 to 1.7 microns with less
energy.
- CAPYEtIGHT: THE JAPAN TTMES 1980
END
Cso: 4120 49
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