Some light in sight

THE rise and fall of Prime Ministers have become so frequent in Japan in recent years, the arrival of a new Prime Minister has ceased to evoke much interest. But the exit of the controversial Yoshiro Mori and the entry of the popular politician, Junichiro Koizumi as the country's eleventh Prime Minister in 13 years, has stirred enormous expectations. Koizumi's victory over the establishment candidate, former Prime Minister Ryutaro Hashimoto has been hailed by the media as a seismic shift and a step towards reforms of the political party seen as "tainted by corruption, bound by special interests and dominated by factional feuding." This is not surprising as Koizumi fought the elections on "Change LDP, Change Japan" plank and had received a groundswell of rank and file support from the party's 2.3 million grassroot members - he had swept 123 of the 141 prefectural chapter votes besides 287 of the 478 ballots cast in the Lower House of Parliament. A colourful personality, Kozumi's assumption of office was a "Golden Week" gift to the nation. Koizumi assumed office on April 25, the beginning of a week long spring holiday in Japan; but will he be able to give the nation a golden era - a nation battered by a decade of recession and several decades of highly politicised system of governance? Knowledgeable circles keep their fingers crossed.

The 59-year-old Koizumi is different from the rest of the LDP politicians. He was considered a "political maverick" from a traditional party and appeared to be "a breath of fresh air" in an otherwise troubled and murky politics of the country. Parlaying his reputation as an eccentric into a powerful image as a popular reformer, Koizumi rose to the top post on a platform of change. But Koizumi has risen to the top of the governing Liberal Democratic Party by adhering closely to rules and conventions set down by the ruling conservative elite and his victory is as much a result of backroom deal-making as a groundswell of popular opinion. As a matter of fact, Koizumi is supported by two former Prime Ministers, Yasuhiro Nakasone and Yoshiro Mori, besides Mikio Aoki, a powerful figure of the Hashimoto group. But Koizumi is a "stubborn, uncompromising" person and with his sizeable public appeal, he is considered by far the "No.1 person" in today's Japanese politics. His landslide has almost destroyed the chances of the opposition from making dents in LDP strength in the polls to the Upper House in late July this year. However, the more important question is, will Koizumi be able to keep his pledge to fix Japan's stagnant economy and shake up his hidebound ruling party?

Koizumi's election has stirred enormous expectations of reforms, but the international community is sceptic whether Japan's highly politicised system of governance can at all be reformed in a quick-fix operation. The critics of Japanese politics see the system as the main obstacle to an open and accountable government. Previous attempts to disband the system have all failed and Koizumi himself depends on the major factions to which some of the powerful political brokers belong. But in appointing his cabinet he shook up the country's politics by promoting more women (five women as Cabinet Ministers) and younger figures to posts in the cabinet. Though Koizumi eliminated the past practice of choosing the cabinet in a way that establishes a balance of power between the various LDP factions and ousted all members of the rival Hashimoto faction that has been controlling the LDP both from party executive and ministerial positions, the exercise cannot hide the fact that two powerful members of Hashimoto faction, Mikio Aoki, the Secretary General of the LDP Upper House and Hiroshi Takayama, the Chairman of the LDP Upper House, had to be reappointed to their incumbent positions. Besides insiders feel Koizumi has replaced powerful Hashimoto factional leaders with two new Kingmakers - the former Prime Ministers, Nakasone and Mori, and Nakasone is building close ties with Shintaro Ishihara, Japan's outspoken politician and Governor of Tokyo currently.

In his election campaign, Koizumi was visibly excited and has spoken of his plans to tackle the main causes of Japan's economic malaise. He has said he would force commercial banks to write off their bad debts and would privatise Japan's postal savings system, a major source of fuel for Japan's money-driven and secretive politics. But the reform of privatisation of postal savings cannot be that easy. There is conflict of interest over this issue between the Ministry of Public Management, Post and Telecommunications and the Ministry of Finance. Koizumi himself, as Vice-Minister of Finance and Chairman of the Finance Commission of the Lower House earlier, had failed in his priviatisation plans. Besides, his plan for reform of the government's spending structure will deprive government bodies of their power already established and there is bound to be strong opposition from the bureaucrats.

Koizumi's second economic plan - bailout of huge amount of bad loans that Japanese financial institutions still hold, has run into bad weather before it has started. Behind the scenes, major banks are attempting to destroy the policy - no bank is willing to abandon the collection of bad loans or sell bad assets through auction. In order for the government to implement the policy for bailout, it has to decide which financially troubled companies will survive and which will die. The Financial Affairs Agency is rushing to establish a committee to decide the guidelines to accomplish this task and no one is willing to serve on the committee. No economic organisation, including Japan Bankers' Association and the Federation of Japan's Economic Organisation (Keidanren) wants to set the standards for deciding which company should go bankrupt.

Meanwhile, since elected Prime Minister, Koizumi has persistently been brandishing his "Structural Reformation of Japan" flag, but people are yet to see the real meat of his plan. The Council for Economic and Fiscal Policy attached to the Prime Minister's office is working out a draft of the structural reforms. The draft dwells upon the areas of fiscal reform, national fiscal policy, public projects, social security and local governments. But according to critics the draft is full of abstracts and there are no indications either of the priorities or of specifics on implementation. Again, many economists feel that Koizumi's structural reforms would worsen unemployment - add up 900,000 to over a million new unemployed workers. But the government rejects this figure and asserts that the draft plan has provision to create five million new jobs over the next five years, mainly in service industries, though no concrete plan over the how of it is set out. Past experience indicate that government figures are wide off the mark and experts fear that Koizumi's structural reforms plan may deepen recession.

Koizumi appears to have come on the scene as LDP President and Prime Minister a little ahead of time. The coming weeks, until the coming Upper House elections in late July, will be very crucial for him. He has to accomplish the reforms he has promised before the opposition groups, within and without, raise their voice in an attempt to pull him down. Japanese news media are still reportedly ecstatic with "Koizumi fever". Public opinion ratings for the Prime Minister appear to be very high. The nation is on his side and Japan hopes that Prime Minister Junichiro Koizumi will be able to achieve the economic reforms he had set before himself and do whatever he can to end factional politics within his Liberal Democratic Party.

N.KRISHNASWAMI

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