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Japan may not be able to recover loan after U.S. Marine Corps Guam relocation

On March 30, the Diet began discussing the Japan-U.S. agreement signed in February on the details of the planned relocation of U.S. III Marine Expeditionary Force personnel and their dependents from Okinawa to Guam.

Based on the May 2006 Japan-U.S. agreement on the Guam 'relocation' (the "Roadmap"), the February agreement is unacceptable in that Japanese tax money is being used for the construction of a U.S. military base abroad.

A report brought to light the irresponsible government stance regarding the details of the Guam relocation project submitted by the Defense Ministry to the House of Representatives on March 25.

The document was produced in September 2008 by Kume Sekkei, an "international multidisciplinary architectural and engineering firm," commissioned by the Defense Ministry.

Japanese Communist Party representative Kasai Akira questioned the government about the detailed plan.

In addition to the fact that the project requires 70 million yen per housing unit for U.S. Marines, another problem has arisen: a part of Japan's loans and other funding used for the construction of facilities may not be repaid by the U.S.

As part of the "total" cost for the facilities and infrastructure development, estimated at 10.27 billion dollars, the Japanese government will provide 6.09 billion dollars, including 2.8 billion dollars in direct cash contributions that will be used for constructing housing for officers and NCOs of the USMC units.

Besides, as part of "Japan's financial contributions to fund the development of required facilities and infrastructure" such as housing units for servicemen's families in Guam, the government promised to provide the U.S. with 32.9 billion dollars in loans and other means of funding through the Japan Bank for International Cooperation (JBIC), a government international financial cooperation institution created in 1999.

The government explains that the government and private corporations concerned will provide 32.9 billion dollars in funding to JBIC and that the money be repaid over a period of 50 years.

The Kume Sekkei report, however, leaves doubts as to whether the U.S. will really meet their repayment obligations.

A separate document attached to the report on "risk sharing" warns that because of an expected reduction of deployed military personnel in Guam, unpaid rents, and possible wars and terrorist incidents, default on the loans will be possible.

The two governments will then be required to share burdens, states the report, suggesting the possibility that Japan will have to throw additional tax money in to cover the default.

Also, the report refers to the expected surge in the number of project-related workers on Guam from 2010 to 2014, when the project is expected to finish. While accepting a maximum of 50,000 workers from outside the island will adversely affect the security, public health, and regional economies of Guam, the report has nothing to offer regarding a solution to these problems.

The Defense Ministry-funded report clearly reveals how irresponsible the Japanese government is in agreeing to construct luxurious housing units and in making such shaky loans available for the Guam 'relocation' project.

- Akahata, March 31, April 1, 2009

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