Japan PM: Reviving weak economy top priority

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Associated Press

Posted on October 26, 2009 at 1:10 PM

TOKYO (AP) — Japan's new prime minister declared Monday that reviving the nation's sluggish economy is top priority for his government and stressed seeking "close and equal" ties with the U.S. in a speech outlining his main policy goals to parliament.

Prime Minister Yukio Hatoyama, whose government swept to power in an August election victory that unseated a long-ruling conservative party, said key objectives include creating new jobs, cutting public works spending, and giving cash to families with children.

Hatoyama also said he wants to seek a "close and equal" alliance with the U.S., which he described as the "cornerstone" of Japanese diplomacy. He added that he wants to "frankly" discuss a plan to realign U.S. military bases in Japan, where 47,000 American troops are based under a security pact.

Concerns that a rift is emerging between the U.S. and Japan have grown after Hatoyama's government has suggested it would like to make changes to a 2006 agreement to rework the American military presence in the country, as well as end a naval refueling mission in the Indian Ocean supporting U.S.-led troops in Afghanistan.

Addressing the more powerful lower house of parliament, Hatoyama promised to launch new measures to create jobs and take steps to save small businesses from going bankrupt.

"The financial crisis has made a grave impact on the economy and employment, and the situation remains serious," he said. "Putting the Japanese economy back on recovery track and achieve sustainable growth ... is the most important task for the Hatoyama government."

The prime minister renewed his campaign promise to cut wasteful government spending and scrutinize use of taxpayers money by eliminating unnecessary public works projects. Huge dam, bridge and airport projects scattered around the country were a key part of the economic policies under the previous administrations of the Liberal Democratic Party.

"Japan is at a turning point — whether to stick to an old mindset and go downhill, or seek further development under a new vision," he said. "I will steer Japan to the right direction under the new policies for the people's well-being.

But the speech provided few new details of government's economic growth strategy, which critics say is vague. On Friday, the government issued an emergency plan to create 100,000 jobs in areas such as elderly care, agriculture and service sectors. It promised to help small businesses by encouraging financial institutions to ease lending terms.

Hatoyama also vowed to deal with Japan's aging, shrinking population that is adding burdens on the younger generation, and pledged to give parents cash payments of 26,000 yen ($280), per month for each child and make high school education free to stimulate consumer spending and encourage women to have more children.

"Child rearing and education is no longer an individual matter. The entire society needs to share the cost as an investment for the future," he said.

A major sticking point in the 2006 U.S. military realignment plan has been the future of a Marine airfield on the southern island of Okinawa, where residents are concerned about base-related crime and noise. Under the agreement made by the previous LDP government, the Futenma airfield was to be relocated to a less crowded part of Okinawa, where more than half of U.S. troops in Japan are based. Some members of Hatoyama's party have said they want it moved off the island entirely.

On Friday, after meeting with senior U.S. military officials, Foreign Minister Katsuya Okada said relocating it off Okinawa was "not an option" — although he said it would be difficult to resolve the location of the new site before President Barack Obama's Nov. 12-13 visit to Japan.

Hatoyama said that Japan's contribution for Afghanistan's reconstruction would focus on areas "really needed," such as stronger police, agriculture and job training, rather than the Indian Ocean naval refueling mission.

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