Press Conference by the Press Secretary April 10, 1998

1. Upcoming visit to Japan by Secretary of State Madeline Albright of the United States of America
2. Statement by Prime Minister Ryutaro Hashimoto on the occasion of the approval of the fiscal year 1998 budget
3. Visit to Japan by Deputy President Thabo Mbeki of the Republic of South Africa
4. Proposed discussions with Secretary of State Madeline Albright of the United States of America
5. Economic development of the Northern Territories
6. Proposed non-visa exchanges with Sakhalin
7. Ministerial participation in the Japan-South Africa Partnership Forum
8. Joint Russia-Japan development projects
9. Non-visa trips between Japan and the Northern Territories
10. Acceptance of Taiwanese passports
11. Reported missile tests by Pakistan

1. Upcoming visit to Japan by Secretary of State Madeline Albright of the United States of America

   Mr. Shimanouchi: I would like to make two announcements and give you one readout of a very important visit to Japan that took place this week. Secretary of State Madeline Albright of the United States of America will visit Japan on 28 April. During her visit, she is scheduled to have a meeting with Minister for Foreign Affairs Keizo Obuchi, among other meetings. In her meetings in Tokyo we expect to discuss, among other things, the bilateral relations between Japan and the United States, including economic relations, and also the current economic situation in Asia. We are told that Secretary Albright will be visiting the People's Republic of China, the Republic of Korea and Mongolia after visiting Japan.

2. Statement by Prime Minister Ryutaro Hashimoto on the occasion of the approval of the fiscal year 1998 budget

   Mr. Shimanouchi: I think you are well-aware of Prime Minister Ryutaro Hashimoto's announcement made late yesterday regarding the new economic package. Let me give you some of the salient points of the economic package. In his statement yesterday, Prime Minister Hashimoto addressed a number of areas. He first talked about tax reductions. He said that he would introduce a large tax reduction amounting to over 4 trillion yen. In addition to the 2 trillion yen tax reduction in individual income tax and resident tax, which has already been put into effect this year, he said an additional two trillion yen tax reduction will be implemented within this calendar year. He also said that the 2 trillion yen temporary tax reduction will continue to be in effect for 1999. Aside from this he said we would introduce special tax measures -- that is, policy-prioritized tax measures in such areas as welfare, education and investment. With regard to income tax and residence tax, he said that he would like to make a thorough review from a comprehensive point of view of the structure of these taxes -- that is, the individual income tax and the residence tax -- with the aim of constructing a tax system that is fair and transparent. Regarding the corporate income tax, he said that he would like to set the overall tax rate in line with levels widely seen in other countries as soon as possible within the next three years. He added that he would like to request the tax council of both the Government and the ruling parties, to start an urgent review. He also said that he would convene today the Conference on Fiscal Structural Reform and initiate discussion on the Fiscal Structural Reform Law. He underscored the fact that the necessity of fiscal structural reform has not changed by any means. He said that nevertheless, we need to urgently examine what measures should be taken as an emergency approach while maintaining the basic structure of the fiscal structural reform. Then he went on to discuss the 21st century. He said that he aims to enhance Japan's social infrastructure in order to establish a rich and robust economy and society. He said that in this process, emphasis should be placed on those areas to be appreciated by future generations. He mentioned in this context such areas as dioxins and the global environment, development of nursing homes for the aged and baby nurseries to prepare for the aging society and the decline in the birth rate, promotion of science and technology as well as information and communications which provide the basis for future development and education for our children. With respect to the so-called "real water" argument, he said he was determined to accept without hesitation any fiscal burden essential for the purposes that he mentioned in the previous paragraph. He said that he would not be surprised if the total fiscal burden on national and local governments, including tax reduction and public works, amounted to around 10 trillion yen. He also underscored that the total amount of the economic policy package would be over 16 trillion yen, the largest package ever. In his statement, he also referred to financial issues and the role that Japan is taking toward the stabilization of the financial and economic situation in other Asian countries.

3. Visit to Japan by Deputy President Thabo Mbeki of the Republic of South Africa

   Deputy President Thabo Mbeki of the Republic of South Africa was in Japan from 7 to 10 April. He left this morning. In the course of his visit he had an audience with Their Majesties the Emperor and Empress of Japan. He had a working lunch with Prime Minister Hashimoto and he also had meetings with Foreign Minister Obuchi and Minister of International Trade and Industry Mitsuo Horiuchi. During this visit an exchange of notes was effected between the two sides on a 6 billion yen loan for the rural infrastructure program. He had a number of meetings, but let me give you the readout of the discussions held at the time of the working lunch hosted by Prime Minister Hashimoto. The discussions focused on the African Renaissance Initiative proposed by Deputy President Mbeki. The Prime Minister mentioned in this context that at the time of the Denver Summit, he and President Jacques Chirac of the French Republic made the case for making Africa a summit agenda item. He also said that the United Kingdom was enthusiastic about this subject. The Prime Minister also referred to the Tokyo International Conference on African Development (TICAD II) meeting scheduled to be held in Tokyo this October, and said that this was a measure of the importance that Japan attached to Africa. He said that this policy would continue. He said that the stability and economic development of South Africa were of great importance for stability and development of the entire region. He also said that there was a growing interest in the Japanese private sector for South Africa. Deputy President Mbeki talked about the self-help efforts that South Africa was making and also the efforts that South Africa was making to effect reforms in various areas, including the political, economic and cultural areas. Deputy President Mbeki said that in order for the 21st century to become Africa's century, it was important for the African countries to honor their undertakings with the World Bank but at the same time, the industrialized countries needed to consider the possibility of extending debt relief to the most impoverished countries. They also talked about the Japan-South Africa Partnership Forum, which both sides agreed to establish in the meeting between Foreign Minister Obuchi and Deputy President Mbeki. With regard to this forum, Deputy President Mbeki said that this was a very meaningful forum and that he would like to expand bilateral relations across the board through this forum. The Prime Minister said that he was pleased that this new forum was established and expressed his hope that through this forum the relations between Japan and South Africa would develop further. The Prime Minister also mentioned the importance of promoting small and medium-sized businesses in South Africa. Deputy President Mbeki said that the promotion of small and medium-sized enterprises was of particular importance in areas with high unemployment and that Japan's cooperation was important in this context. The Prime Minister thanked Deputy President Mbeki for South Africa's support for Japan's permanent membership in the United Nations Security Council. With regard to the TICAD II meeting, the Prime Minister requested that President Nelson Mandela of the Republic of South Africa come to Japan to participate in the meeting, and if this was difficult, that he hoped that Deputy President Mbeki would be able to come. Deputy President Mbeki said that the South African Government would consider these requests.

4. Proposed discussions with Secretary of State Madeline Albright of the United States of America

   Q: Could you tell us if Secretary Albright will be meeting with Prime Minister Hashimoto and if discussions will include the latest economic measures announced by the Japanese Government. Also, there seems to be some doubt about the benefit to the Japanese economy of the latest economic measures.

   Mr. Shimanouchi: With regard to Secretary Albright's visit to Japan, we are still working on the details of her schedule here in Japan. We are discussing possible dates for a meeting with the Prime Minister, with the Prime Minister's office. Since the visit is still almost three weeks away, it is still a little premature to discuss what exactly the two sides will be discussing at the time of Secretary Albright's visit. All I can say is that the two sides will be discussing issues of mutual interest. Regarding your second question, you have to look at things in the longer term. We hope that the market will respond favorably to the package announced yesterday as the specifics of the package and its impact become clear.

5. Economic development of the Northern Territories

   Q: What does Japan think about joint economic development with Russia of the four Northern Islands.

   Mr. Shimanouchi: I have heard various terms used on this question. I think you are referring to the joint economic activities. As you are well aware, then-Foreign Minister Yevgeny Primakov of the Russian Federation during his visit in November 1996 put forward the idea of joint economic activities in the four islands. A proposal was made by the Russian side in the meeting held at the vice-ministerial level in Moscow this January. This matter was further discussed in the meeting of foreign ministers held in February of this year. Both sides have agreed to continue discussions on this matter. That is where we are right now. I would like to underscore that while the Government of Japan is quite happy to continue consultations with the Russian side on the question of joint economic activities on the four islands, at the same time we feel that this should not have the effect of shelving or deferring the question of where the four islands belong.

6. Proposed non-visa exchanges with Sakhalin

   Q: The administration of the Sakhalin region of Russia proposed including non-visa exchanges with citizens of Sakhalin. There are exchanges now between the Northern Territories and Hokkaido. The proposal is to include those living on Sakhalin Island. How do you evaluate this proposal?

   Mr. Shimanouchi: I am not aware of that specific proposal. Regarding the expansion of exchanges concerning the four islands, it was agreed at the time of the foreign ministers' meeting held in May 1997 that we would consider replacing the present framework for emergency humanitarian assistance, which was established to address the 1994 earthquake disaster, and to replace this with a more general emergency humanitarian support framework. A basic agreement was reached that specific measures for expanding and increasing the exchange would be further developed. We are presently working on the specifics of these two aspects.

7. Ministerial participation in the Japan-South Africa Partnership Forum

   Q: Regarding this Japan-South Africa Partnership Forum, could you tell us which ministers will be co-chairing? Is Japan any closer to approving South Africa's nomination for ambassador to Japan?

   Mr. Shimanouchi: The documents concerning the forum only mention the ministerial level, so my guess is that is something that needs to be discussed between the two sides. With regard to the second question, we understand that he has not arrived because of reasons on his side. This is not an issue between the two countries.

8. Joint Russia-Japan development projects

   Q: I would like to go back to Russia. Yesterday on the front page of the Nikkei, there were nine projects that were some rather big ones -- a hydroelectric power plant -- lots of projects that are going to cost quite a lot of money. At what stage are Russia and Japan on these projects and also how much money are we talking about?

   Mr. Shimanouchi: A number of projects were proposed by the Russian side to the Japanese side. A number of development projects in the Russian Far East were proposed by the Russian side to the Japanese side at the time of the meeting of the Far East Subcommittee of the Intergovernmental Committee on Trade and Economic Issues held in Yuzhno-sakhalinsk in March. We understand that these projects are now being discussed by the business sectors of the two countries. The Government of Japan will be following with interest the developments regarding these projects in the business sectors of the two countries.

   Q: How about the money? Where is the money going to come from? How much is involved?

   Mr. Shimanouchi: Let me make a correction. These projects were discussed at the time of the Far East Subcommittee of the Intergovernmental Committee meeting and the private sector meeting which was held in parallel to the Intergovernmental meeting, and I understand that these projects were discussed at the private sector meeting.

   Q: Are we to understand that the Government of Japan will have absolutely no monetary involvement, that the Export-Import Bank will not get involved?

   Mr. Shimanouchi: I did not say that. I said that we will be watching developments with great interest. At the present moment, I can only make a very general statement regarding the position of the Government of Japan, which is that it is the policy of the Government of Japan to approach actively the strengthening of our ties with the Russian Far East. I think you are interested in specific projects, but presently what I can say is that we need to look at such aspects as how the private sector looks at the projects and if the project is feasible. We have to look at these projects on a case-by-case basis and consider the possibility of government cooperation.

   Q: One last question. Is there any possibility of a trade, for example, of Russian oil for Japanese development of, say, one hydroelectric plant?

   Mr. Shimanouchi: I am not aware of any such proposal being put on the table, and I cannot answer a question concerning a hypothetical situation.

9. Non-visa trips between Japan and the Northern Territories

   Q: Can you tell us about the latest decision regarding non-visa trips from Japan to the Northern Territories, from Hokkaido to the Northern Territories? Can you explain the latest decision of the Government of Japan concerning non-visa trips?

   Mr. Shimanouchi: I answered this question in part in response to the question from this gentleman in front of you. Presently we are still looking at the specific measures. I would like to refrain from any further comment on this matter.

10. Acceptance of Taiwanese passports

    Q: On a completely different topic -- I saw a story today by Kyodo saying that Foreign Minister Obuchi was defending a decision to accept Taiwanese passports. I am not familiar with the policy in place up until now, but I would assume that any sort of change in Japan's policy with Taiwan would upset the Chinese greatly. What can you comment on this?

    Mr. Shimanouchi: This does not imply a change in any way in Japan's policy toward Taiwan. That is the short answer to your question. A bill was submitted to the Diet recently -- I do not have the exact date -- and it is now being considered in the Diet. It is an amendment to Japanese immigration legislation. Under the existing legislation, we only recognize as valid those passports issued by governments recognized by the Government of Japan. This new legislation will make it possible for the Government of Japan to regard, for the purposes of the legislation, as valid those passports or documents issued by authorities other than those governments recognized by Japan. To be more specific, the main beneficiary of this legislation is expected to be Taiwan. But I would like to emphasize that this is being done for technical reasons, to simplify the procedures for issuing visas.

    Q: How did Taiwanese get into Japan up to now?

    Mr. Shimanouchi: I think they came to Japan with travel documents. I will have to check and get back to you.

11. Reported missile tests by Pakistan

    Q: Do you have any comments on Pakistan's missile test?

    Mr. Shimanouchi: We are aware of a media report about this missile test. We are now gathering information on whether such a test took place and the details, if indeed such a test was held. The situation in South Asia in terms of the development and deployment of missiles may have an important influence on stability in that area and also on global security, and as such is a source of concern for us. We will continue to watch developments closely.