JAPAN: Koizumi’s Popularity May Burst at Any Moment – Analysts

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Oct 29 2002 (IPS) - Despite his historic visit to North Korea last month and approval ratings that make him among Japan’s most popular leaders, Prime Minister Junichiro Koizumi faces a rocky political road ahead, say analysts.

”Koizumi must watch out,” says Shiota Ushio, a regular political commentator on television. ”His current popularity is comparable to a soap bubble that can pop at any moment.”

For now, the tough-talking Koizumi, who has unveiled reforms in the bureaucracy and the huge public works budget, can still count on his popularity despite the economy’s continued bad shape.

A poll released Tuesday by the ‘Yomuiri’ daily newspaper shows public support for his cabinet at a whopping 66 percent, little changed from September. His disapproval rate was 23.9 percent, representing a 0.5 percentage-point fall from last month.

The poll was based on face-to-face surveys covering 3,000 eligible voters during the weekend.

Koizumi’s popularity has also been able to shore up the ruling Liberal Democratic Party (LDP). Five out of six of its candidates won in a supplementary election over the weekend, even though the voter turnout was an all-time low of 30 percent.

But increasingly, many in this country of 128 million people are wondering exactly what the 60-year-old Koizumi has achieved since he came into office in April 2001.

Unemployment, at 5.4 percent, is at historically high levels and industrial output fell 0.3 percent in September from the previous month, according to government figures. Consumption is shrinking and people are worried about the future.

Akira Mita, 55, an engineer who has managed to keep his job despite restructuring in his electronics company, says, ”I can only support Koizumi further if he turns around the economy.”

The Nikkei average dropped again Tuesday, falling 6.70 points or 0.08 percent with traders retreating to the sidelines ahead of the release of the latest figures on non-performing loans and deflation.

The latest ‘Yomiuri’ poll indicates that 80 percent of respondents said the revival of the economy was a top priority for them.

But easing Japan’s recession is not an easy task. Though a post-war economic miracle, Japan over the last 10 years has been suffering one of the longest financial hangovers in living memory – compounded by a weak political system and a corrupt bureaucracy.

To undertake reforms, Koizumi has brought into his cabinet members of the private sector and academia, including controversial economic adviser Heizo Takenaka and Naoki Inose, a popular writer highly critical of the political culture of pouring tax money into rural construction projects.

But last week, Takenaka, a former professor at Keio University, ran into a wall of resistance from top lawmakers and bankers on the eve of announcing a new package to contain deflation and tackle bank debt. That decision has now been delayed.

Takenaka, minister for fiscal and economic policy, is proposing to implement an excessive purging of bad loans in fiscal 2003, to combat deflation and accelerate the cleanup of a banking sector saddled with yen loans.

The move, presented as a ”hard landing” solution, is expected to bring about a fresh round of bankruptcies among financial institutions and would lead to a rise in unemployment.

Takenaka has said that he would allow big banks that have overextended themselves to go under, saying that ”refusing their bankruptcy has been jeopardising corporate governance”.

His remarks have been applauded by some, but politicians have used his policy to criticise Koizumi.

”Compared with the high-handedness he has displayed for reforms, what the prime minister lacks most is the leadership to deal with economic issues,” says Mikio Aoki, secretary general of LDP members in the upper house of parliament.

Experts note that Takenaka is up against influential politicians who have close contacts with the financial sector and other industries that stand to gain from being politically protected from the proposed changes.

The reform package is widely seen as a make-or-break measure for the Koizumi administration. ”The bitter medicine dolled out by Takenaka is long overdue for Japan,” says Kioichi Ishiyama, who teaches economics at Shoin University.

But despite the signs of dissatisfaction with Koizumi, some political analysts say it is way too early to say that his standing is at risk.

Koizumi’s fiery speeches that focus on his determination to reform the conservative, ruling LDP and re-energise Japan still hold many people spellbound, they say.

”What voters here want most is a politician who has leadership skills. They find that in Koizumi’s flamboyant political style and direct promises,” Shiota says.

Recent opinion polls indicate that 49 percent of the Japanese electorate are floating voters, or those who do not have fixed allegiances to any political party. For the moment, analysts say, floating voters support Koizumi’s reforms in the hope that this could revive a stagnant economy.

In the end, Ishiyama says that he supports Koizumi’s latest reform package given the hopeless political situation, where opposition parties have not put forward an alternative and the old LDP guard is not willing to pursue structural changes in Japanese politics and the economy.

”What choice do we have?” asks Ishiyama. ”If Koizumi leaves the scene now, who do we have to replace him?”

JAPAN: Koizumi’s Popularity May Burst at Any Moment – Analysts

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Oct 29 2002 (IPS) - Despite his historic visit to North Korea last month and approval ratings that make him among Japan’s most popular leaders, Prime Minister Junichiro Koizumi faces a rocky political road ahead, say analysts.
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