Press Conference 1 June 2004

1. Statement by Minister for Foreign Affairs Yoriko Kawaguchi on terrorist attacks in Al-Khobar in Saudi Arabia
2. Publicity of Foreign Direct Investment Promotion in the United States of America on the occasion of the Sea Island Summit
3. Question concerning upcoming G8 Summit Meeting at Sea Island, Georgia
4. Questions concerning reconstruction of Iraq
5. Question concerning discussion on bill restricting port call
6. Follow-up questions concerning promotion of foreign direct investment

1. Statement by Minister for Foreign Affairs Yoriko Kawaguchi on terrorist attacks in Al-Khobar in Saudi Arabia

   Press Secretary Hatsuhisa Takashima: Good afternoon and thank you for coming to the briefing. Today, I would like to make two announcements before I take questions.

   The first announcement is about the terrorist attacks in the Kingdom of Saudi Arabia.

   Minister for Foreign Affairs Yoriko Kawaguchi issued today a statement regarding the terrorist attacks in Al-Khobar in Saudi Arabia in which she said as follows.

   Japan extends its heartfelt sympathy for those who were killed in the terrorist attacks that took place in the early morning of 29 May local time in the city of Al-Khobar in Saudi Arabia and sincere condolences to the bereaved. Japan also prays for the early recovery of the injured.

   The Government Japan feels strong resentment against these attacks that victimized many civilians. Resolutely condemning terrorism that sacrifices innocent people, the Government of Japan will cooperate with the international community to eliminate terrorism.

   The Government of Japan will also do its utmost to secure the safety of Japanese nationals residing in or visiting foreign countries.

   Related Information (Statement by Ms. Yoriko Kawaguchi, Minister for Foreign Affairs, on Terrorist Attacks in Al-Khobar in Saudi Arabia)
   
2. Publicity of Foreign Direct Investment Promotion in the United States of America on the occasion of the Sea Island Summit

   Mr. Takashima. The second announcement is about the promotion of foreign direct investment in Japan.

   In order to attract more foreign direct investment in Japan, the Government of Japan today announced that it will carry newspaper advertisements and run TV spot commercials in the United States of America and the rest of the world this month. These newspaper ads and TV commercials will feature Prime Minister Junichiro Koizumi and his personal appeal to foreign investors to invest in Japan and will be carried or shown on and around 8 June in conjunction with the Sea Island Summit, a gathering of world leaders which attracts the attention of business circles an the media around the world.

   Related Information (Publicity of Foreign Direct Investment Promotion in the U.S., on the Occasion of the Sea Island Summit)
   
3. Question concerning upcoming G8 Summit Meeting at Sea Island, Georgia

   Q: Just on the G8 Summit, it will be next week which is just around the corner. What does Japan hope to achieve from the Summit Meeting this year?

   Mr. Takashima: We would like to have international solidarity to promote the political process in Iraq and the successful handover of sovereignty from the Coalition Provisional Authority (CPA) to the Iraqi Government and also towards the general election which is scheduled for January next year. The international cooperation for the reconstruction of Iraq is of utmost importance and Japan will cooperate with other countries in the world to assist the Iraqi people's effort to rebuild their nation.

   In addition to the Iraqi situation, we would like to see that broader Middle East and North African initiatives will be materialized so that the countries in that region will be able to have further cooperation from other industrial nations to achieve reform of the government and the social system so that there will be further democratization and economic development. Japan will carry out its own effort to provide assistance in the Middle East in order to bring about peace and stability to that region.

   We would like to see that world economic development is further promoted and that the G8 Summit Meeting will reaffirm the effort for a peaceful and diplomatic solution of the North Korean nuclear issues which would help to further strengthen the peace and stability in Northeast Asia, and indeed in the world itself.

   Related Information (G7/G8)
   
4. Questions concerning reconstruction of Iraq

   Q: You mentioned cooperation with other nations in Iraq through United Nations resolution. The French Republic and the Federal Republic of Germany, but particularly France, still say that they have no intention of participating. Some other nations such as the Republic of Singapore or Spain have pulled out their troops from Iraq. In order to get other nations to contribute troops or to join the process, what does Japan think that the US and other coalition members should do? Especially, there is the issue about granting of contracts for aid or reconstruction work, possibly to give a portion of those to French or German companies to entice them to come on board. Japan is obviously making a very big contribution to those efforts, what with their US$5 billion grant. Is Japan willing to award contracts to European firms in order to facilitate that process?

   Mr. Takashima: Firstly, we understand that the effort to adopt a new Security Council resolution on Iraq's reconstruction and rebuilding is now under way and there is discussion among the permanent members of the Security Council in the hope that this Security Council resolution will become a further tool to realize more cooperation among the Security Council permanent members states, including France, as well as other nations, including Germany, for the reconstruction of Iraq.

   As for the contracts you mentioned, we have already disbursed more than US$800 million for Iraqi reconstruction including contribution to the fund set up by the United Nations and the World Bank. Through those efforts we would like to see the reconstruction effort to be accelerated. The contracts to be awarded to the private companies are still under consideration and the Government of Japan would also be interested in seeing those contracts awarded to Japanese companies if the situation allows, mainly that the security in Iraq becomes more adequate for the participation of private companies and corporations to operate by themselves in Iraq. Unfortunately, the current situation in Iraq is too volatile for those from the private sector to go directly into Iraq. Therefore, there are no Japanese companies and corporations currently directly involved in the reconstruction work in Iraq.

   Q: How about giving these contracts to the French or Germans?

   Mr. Takashima: We have no objection of awarding the contracts to French, German or any other countries' companies or corporations if the conditions are met.

   Q: The overall cost of reconstruction, there are a lot of numbers floated around - US$155 billion is about the highest. Does the Government of Japan have any rough estimate as to what the reconstruction bill for Iraq may be?

   Mr. Takashima: The figures have already been calculated by the United Nations and the World Bank as well as by the Governments of the United Sates and the United Kingdom. In accordance with those estimates, we have made a pledge of contributing up to US$5 billion until the end of 2007. Currently we have been disbursing that money in a timely manner so that it would be used for the reconstruction work which was seen as appropriate and meeting the needs of Iraq. We believe that there is no other estimate that is being presented by anybody else at this moment, and the only standing estimate was done by the United Nations and the World Bank.

   Related Information (The Issue of Iraq)
   
   
5. Question concerning discussion on bill restricting port call

   Q: This morning the Lower House committee on transport passed the bill for the so-called port call restriction and it is likely that it will pass since, as far as I know, no significant issue has been raised on it. I was just wondering, what is the rationale for the passage of this bill at this time, especially after Prime Minister Koizumi agreed with Chairma. of the National Defense Committee of North Korea Kim Jong-Il when they met in Pyongyang and discussed about the abduction issue?

   Mr. Takashima: The Government of Japan has been making it very clear that in dealing with the various issues surrounding North Korea, we would use the so-called dialogue and pressure approach. This bill, which is now under consideration by the Diet, would be one of the measures regarded as part of the pressure which might be applied to North Korea. However, when Prime Minister Koizumi visited North Korea recently, he promised Chairman Kim Jong-Il that as long as North Korea adhered to the Japan-Democratic People's Republic of Korea Pyongyang Declaration, Japan would not implement restrictions or measures that may be considered part of the pressure applied by various means.

   Our position is that the bill which is now under consideration will constitute a part of the pressure which might be applied if the situation requires for the Government to use. At this moment, we do not see that there is such need.

   Related Information (Japan-North Korea Relations)
   
6. Follow-up questions concerning promotion of foreign direct investment

   Q: On the FDI commercials you mentioned that would be shown in the US featuring Prime Minister Koizumi, could you tell us how much those are going to cost in terms of production and also the advertising fees that are being charged by the stations? Also, on which channels will they be shown?

   Mr. Takashima. They will appear on CNN and also CNBC for television and the Wall Street Journal and the Financial Times for the newspapers. This is directly handled by the Cabinet Office. Therefore, I do not have the figures of the cost. I think I should refer you to the Cabinet Office.

   Q: Related to that, one issue that the foreign business community in Japan often complains about is the tax rules on cross-border share swaps, which they say is a big barrier to FDI in Japan. That would require just for the rules to be changed. It would require a change in legislation and some estimate, at least the people who have talked to me, that it would possibly increase acquisition from overseas by as much as 40%. Do you think that rather than the Government of Japan trying to encourage investors through such advertisement that a more effective, and less expensive, step would be to eliminate this rule on cross-border share swaps which does not apply to domestic investors?

   Mr. Takashima: Generally speaking, the Government of Japan has been making various efforts to reduce or eliminate any sort of barriers or impediment that would discourage, prohibit or deny foreign direct investment in Japan. For the details, I would refer you to the Ministry of Finance who would be in a better position to answer those questions.

   Related Information (Invest Japan !)