Veterans retained in new Mori Cabinet

TOKYO, JULY 4. The Japanese Prime Minister, Mr. Yoshiro Mori, re- elected by Parliament today, announced a new Cabinet charged with ensuring Japan's economic recovery stays on track.

But even before the Cabinet line-up - featuring familiar faces in key posts - was announced, speculation bubbled that Mr Mori himself may have trouble hanging onto his post. Analysts said it was too soon to predict the Prime Minister would lose his job in coming months. But he is fresh from an election setback and faces a more confident Opposition, criticism over a new scandal and a controversial corporate bailout.

The pitfalls ahead are many, and the unpopular Mr. Mori could face tough going once a July 21-23 Group of Eight (G- 8) Summit of rich nations and Russia has passed. As previously announced, the Finance Minister, Mr. Kiichi Miyazawa, the Economic Planning Minister, Mr. Taichi Sakaiya, and the Foreign Minister, Mr. Yohei Kono, were kept on board to handle this month's G-8 Summit.

In line with time-honoured tradition, the other seats were divided up between Mr Mori's coalition partners and factions of his dominant Liberal Democratic Party, prompting criticism from the Opposition camp.

``The same old politics with the same old politicians will just linger on,'' said Mr. Ichiro Ozawa, leader of the tiny Opposition Liberal Party. ``But this is what the people have chosen, so I guess there's no help for it.''

The current Cabinet is expected to last only until January, when the number of Ministries will be cut to 12 from 22 as part of a sweeping Government reorganisation.

Mr Mori got both some good news and some bad today. The Bank of Japan's key ``Tankan'' survey showed that business sentiment improved sharply in the three months to June, with an index measuring confidence at large manufacturers rising to plus three, the first positive reading since September 1997. But the ``Tankan'' portrayed a two-tiered economy of globally competitive manufacturers and cosseted smaller firms and non-manufacturers still mired in their worst post-war downturn.

Potentially more troubling for Mr Mori was a public opinion poll showing the popularity of the main Opposition Democratic Party has more than doubled, while support for his dominant Liberal Democratic Party (LDP) sagged. The opinion poll in the conservative daily Yomiuri Shimbun said support for the Democrats jumped to 20.6 percent from 9.6 Percent while that for the LDP - the dominant party in the three-way ruling camp - fell to 29.9 percent from 34.2 percent in May, when the paper's last survey was conducted.

A June 25 election for Parliament's lower House returned the three-way ruling coalition to power, but slashed its presence in the Chamber and deprived the LDP of its outright majority. The Democrats, who attacked Mr Mori's performance and the LDP's spend-now, pay-later fiscal policies as their key campaign plank, made substantial gains.

Analysts have said LDP elders and Mr Mori's rivals may be loathe to fight an upper House election in July 2001 with the unpopular Premier leading the fight, but much can happen before then.

- Reuters

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Section  : International
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