Koizumi's reform plan faces opposition from partymen

By Amit Baruah

SINGAPORE, NOV. 20. It was never going to be an easy ride for the wavy-haired Prime Minister of Japan, Mr. Junichiro Koizumi. With opposition to his plans of economic reform of a troubled economy coming from within the ranks of the ruling Liberal Democratic Party (LDP), Mr. Koizumi now has a job on his hands. The Prime Minister inherited a slowing economy; one which pundits have been trying for years to set right. Mr. Koizumi, who promised cuts in public spending, is encountering considerable opposition from within his own ranks.

While public support for Mr. Koizumi remains high at 75 per cent according to a Mainichi Shimbun poll, it is down six per cent from the ratings in October. The poll also said Mr. Koizumi's support would decline to 30 per cent if he dismissed his controversial but popular Foreign Minister, Ms. Makiko Tanaka.

Ms. Tanaka's spat with the bureaucracy is far from over. So far, Mr. Koizumi has chosen not to make any decisive move. In the coming months, his hand may well be forced on the Tanaka issue.

In an editorial, The Asian Wall Street Journal painted a grim picture of the Japanese economy: ``The shadow of recession is darkening, the banks remain mired in bad debt and unemployment is at an all-time post-War high of 5.3 per cent. The Prime Minister has done little to turn things around. The most dangerous problem facing Mr. Koizumi at the moment is disunity within his Liberal Democratic Party. With the economy in decline, no consensus exists regarding how best to stimulate renewed growth. Not prone to changing the public policies that brought the economy to this point, the LDP old guard still thinks the Government can spend its way to salvation,'' the paper said.

Criticising one of Mr. Koizumi's Cabinet Ministers for not ruling out another emergency spending package, the journal added: ``More than a conflict of egos, this may turn out to be the last stand for the LDP's political monopoly. If Mr. Koizumi has to slay the LDP dinosaur, so be it. He could then cobble together a coalition of reformist democrats, like-minded LDP members and anyone else interested and be done with the obstructionists.''

Mr. Koizumi's core reform proposals entail the selling of heavily-indebted Government corporations, reform of the banking industry as well as an end to huge public spending on highway construction projects. In its comment, the Asahi Shimbun took a different tack. ``Elimination or privatisation of Government entities and overhaul of the national medical system will involve hardships for everyone involved,'' it said.

According to the paper, anti-reformists in the LDP were girding for a fierce battle to protect their vested interests. If economic conditions worsen, they will demand more money for public works projects and hefty supplementary budgets.

``Opponents of reform should drop their outmoded assertions of maintaining the status quo or for destroying reform and instead propose more constructive responses. At the same time, we are very concerned that Koizumi seems to be provoked by the challenges to his reform proposals,'' it said.

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