POLITICS-JAPAN: New Premier has Little Room for Error

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Jul 30 1998 (IPS) - Japan’s new prime minister Keizo Obuchi, named premier on Thursday, is counting on his low-key, consensual style to muster the political strength to pull Japan out of its worst post-war recession.

But his job is far from easy. His political future is far from assured, with majority of seats in the Diet held by opposition politicians who may well oppose his economic bills in the coming weeks and months.

Still, some analysts say what many call one of Obuchi’s biggest faults — his colourlessness — could yet help him survive Japan’s difficult political waters.

So far, his first Cabinet appointment has met with cautious welcome. Obuchi, 61, picked another Liberal Democratic Party (LDP) stalwart, 79-year-old Kiichi Miyazawa, to be his finance minister.

Obuchi clearly hopes that the political experience of Miyazawa, a former prime minister who stepped down in 1993 after bribery scandal, will help improve Japan’s image as a doddering economic power.

Together with Miyazawa, who is well-known in international financial circles, Obuchi’s government faces pressing tasks to improve Japan’s economy.

Several key bills including an income tax cut of about 42 billion U.S. dollars, a supplementary budget of 70 billion dollars and the establishment of a bridge bank, have been outlined Obuchi’s as plans for propping up the economy.

Miyazawa is a strong supporter of the bridge-bank plan, which is based on a public fund to help banks to dispose of their huge debt, recently valued at 1 trillion dollars in New York, and to protect investors.

Obuchi also aims to undertake administrative reform toward reducing excessive bureaucratic control in policymaking in Japan — and thus take on one of the most entrenched powers in the country’s political culture.

For instance, one of his major plans is to promote a bill to reduce the number of government departments to 13 from the existing 22 by January 2000.

These are ambitious plans, whose accomplishment depends greatly on how Obuchi puts his consensus-making skills to work. Obuchi is noted for his patience and gentle negotiation in contrast to the fiery personality of his predecessor Ryutaro Hashimoto, who resigned due to his failure to repair the economy.

“Without the ability to manage the free from bureaucratic meddling, public confidence and market confidence cannot be restored,” the ‘Asahi Shimbun’ argued Thursday.

Getting bills passed in the Diet is going to be a challenge after the LDP, which has 263 seats in the 500-lower house, saw its strength in the 252-member chamber dwindle to 105 after the July 12 election.

The Opposition bloc led by charismatic politician Naoto Kan, who heads the Democratic Party of Japan, opposes many of bills proposed by the LDP, including the bridge-bank bill.

Kan is urging Obuchi to dissolve the Lower House and call an election, something political analysts do not rule out in the future.

“The Obuchi administration represents a typical conservative LDP government. He is not a popular politician with the people, not with business and certainly is up for scepticism internationally because he looks a lame duck already,” explained economist Kenichi Omura of the Institute of Developing Economies.

Analysts note that if the LDP fails to deliver on the economic front soon, the Japanese may go to polls once again by early next year.

The result could then be a very bad blow for the ruling LDP, which steered Japan to economic prosperity from the ashes of the Pacific War and has led the country for most of the time since then.

“The people are keen for a change. The next few months are crucial,” said political critic Minoru Morita.

Morita does not hold out much hope that Obuchi, despite his political skills, can take drastic steps toward instilling transparency in policy taking or clearing up bad debt.

“He just cannot do it because he does not have leadership qualities, which means he cannot move powerful bureaucrats who oppose any move to reduce their power in financial policies or revealing to the public,” Morita said.

Indeed, the yen stayed at a high of 142 against the dollar at the end of the day, and markets reacted despondently by reflecting a meager gain of .27 percent after Obuchi announced his new Cabinet.

The prospect of a limping Japan does not look good for the economic recovery of Asia, which has been banking on Tokyo for investment and trade in these hard times, and which is keenly hoping for leadership from the regional power.

The Chinese news agency Xinhua quoted Hu Zhaoqing, spokesman for the Ministry of Foreign Trade and Economic Cooperation, as expressing the hope that the two nations can work to hurdle difficulties in bilateral trade resulting from the yen’s weakness.

Despite the fact that most economists expect no drastic changes under Obuchi, analysts say his experience as foreign minister before his assumption of the premiership makes him fully aware of international pressure for Japan to get back on its feet.

Thus, Omura believes that Obuchi will push through with Japan’s pledge for an extra 150 billion yen loan to Indonesia sometime this year. “Japan will hold up this pledge because the government is acutely aware of the need to do something concrete to help out,” he explained.

But first, Obuchi has to do something concrete for the ailing domestic economy. And for that, Japan’s 23rd premier since the Pacific War has very little room for error.