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Japan is back, and Koizumi
rules
By Richard Hanson
TOKYO
- Hello! This is a wake-up call from Japan, which isn't
called the Land of Rising Sun for nothing.
Try
to be calm about this, but Japan is back. Premature?
Maybe. But take a quick look, and what do you see? A
strong political leader; an economy growing, at this
moment, at a best-of-the-Group-of-Seven annual rate of
3.9 percent; and a currency at recent highs. And let's
go back to the strong-leader thing: one who seems to be
getting things under control.
First the news.
Over the weekend, Prime Minister Junichiro Koizumi, 61,
kicked butt within his own political party, the ruling
Liberal Democratic Party (LDP), winning a three-year
term in a contest for party president. Call it a
landslide. He won more than 60 percent of the available
party votes against a field of three opponents.
So he's still prime minister, a job he first won
in spectacular form by winning the party election in
April 2001. At that time, he immediately ran into
withering attacks from "anti-Koizumi" factions in his
own party. That nearly derailed his ambitious agenda for
sweeping "structural" reforms - political and economic.
This time the wily "lone wolf", as he is known,
has come back stronger than even his most ardent
supporters (not to mention his enemies) could have
imagined - co-opting, defeating or otherwise neutering
his opponents.
No time was wasted savoring
victory on Saturday. Koizumi's first move: stack the
party leadership, which had foiled his agenda in the
past, in his favor. His choices surprised many, but
showed the same sort of careful thinking that won him
the party election.
As LDP secretary general,
the prime minister chose a very popular, savvy (and
sober) 49-year-old Shinzo Abe, who as one writer put it
"knows just how tough the political world is". This is
really young for the upper ranks of the political world,
especially since Abe is only in his third term. But it
is never too soon to be groomed as a future prime
minister, even if it's a diversion on Koizumi's part.
There is no shortage of prime minister wanna-bes
to take over when Koizumi's two-term limit is reached in
2006. Shinzo is perfect. His father, Shintaro, a
well-known foreign minister, died in 1991 before
reaching the prime minister's post. Shinzo Abe took over
the family seat in the southern Honshu prefecture of
Yamaguchi - an LDP stronghold - backed by an iron-willed
political mom, the daughter of the legendary postwar
co-founder of the LDP and named war criminal, Nobusuke
Kishi.
"I inherited more DNA from my grandfather
than from my father," he says.
Last year, he was
named deputy chief cabinet secretary and won praise for
a tough stand on the issue of Japanese abducted to North
Korea (the big issue in Japan). Meanwhile, Koizumi put
an anti-Koizumi faction leader and a member of a
pro-Koizumi faction in the other key posts.
The
prime motivation is to shed some of the LDP's bad
reputation for corruption and other indiscretions before
the next general election, which is pretty much expected
to be held in November (the first in more than three
years). The outgoing secretary general, Taku Yamasaki,
who has a woman scandal buzzing around, was shunted to
the usually unfilled party vice president's slot.
That over, the prime minister got down to the
nitty-gritty of reshuffling his cabinet for the first
time in one year (and only the second shuffle since
taking office in April 2001). Here too, Koizumi showed
deft judgment and timing - and, more striking,
confidence and control. After all, he had divided and
annihilated the opposition factions within the party.
Here Koizumi went for, and rewarded, loyalty and
good results. Koizumi had just broken all the rules
about buying loyalty and votes with money - the
raison d'etre of party factions - by not using
money to win votes. He was also confident enough to
ignore to a certain degree pleas from within the party
to dump some cabinet ministers whose policies (or
non-lawmaker status) annoyed certain factions.
Here again, Koizumi played his cards close to
his chest right to the last moments. Take the most
controversial member of the cabinet, Heizo Takenaka, 52,
who is from the academic world and began his career in
the now-defunct Japan Development Bank.
A year
ago, the prime minister, having no luck at solving the
crisis crippling the nation's incompetent (and virtually
insolvent) banks, combined the two positions of minister
of state for economic and fiscal policy and minister of
state for financial services (in charge of the powerful
Financial Services Agency, which regulates financial
institutions).
Koizumi gave the dual job to
Takenaka, who then drew up a radical plan to rescue or
bury the banks. The political firestorms that lit were
intense (see The banking crisis: Post-mortem). A
year later, and with one more major government bank
rescue (Resona) under the belt, Takenaka's approach
seems to have been a best effort, given the
circumstances. He was certainly loyal to Koizumi.
So at the last moment, literally it seems as was
entering the Prime Minister's Office, he was rewarded
with both jobs again.
Takenaka told the press:
"Non-performing loans have started to decrease in a very
explicit way, allowing us to tackle the problem with its
end in sight. I can say that this problem, which has
been left unresolved for the past decade, can be
resolved without question," he said, according to Kyodo
News.
"I'm aware of various opinions [about the
reappointment], but the prime minister told me to
continue with the jobs, which shows how strongly he is
resolved to go through with the reforms, and I'm having
a sense of self-renewal," Takenaka said.
What
was music to Koizumi's ears is that he also sees the
Japanese economy recovering. "The Japanese economy found
itself posting the highest growth rate among the
industrialized nations for the third consecutive
quarter," he said. In the second quarter this year, the
annualized rate of growth is estimated at 3.9 percent.
He also sees some better news about the bad loans that
have swamped the banking system.
In contrast,
the other cabinet appoints were unspectacular, with a
large number retaining their office or moving to other
cabinet posts.
On the financial side, Koizumi
moved Sadakazu Tanigaki, 58, to the post of minister of
finance (from the national public safety slot),
replacing an ailing Masajuro Shiokawa, 81.
The
prime minister kept Yoriko Kawaguchi, 62, as minister of
foreign affairs. She is from the private sector and was
the target of factions who wanted their lawmaker
candidates. Koizumi appointed two other women - Yuriko
Koike, 51, as minister of environment and Kiyoko Ono,
67, as a minister of state - bring the number to three,
as in the outgoing cabinet.
The key
reappointment is that of the very loyal chief cabinet
secretary, Yasuo Fukuda, 67. Koizumi was raised as a
politician in the faction of the late prime minister
Takeo Fukuda. It is a good guess that Fukuda is a prime
candidate to become the leader of Japan.
So does
a cabinet reshuffle indicate that Japan is making a
comeback? Probably not. But the evidence is that stable
political leadership in the past couple years under
Koizumi has contributed in a positive way to confidence
on the part of investors in the Japanese stock market,
and hence in some ways to a strong yen (which does not
help Japanese exporters).
And there is less
apprehension over the state of Japan's banking system,
especially whether political factions will try to block
measures to resolve problems. This also ignores the role
of opposition parties, which are mounting new offensives
against the LDP in preparation from a general election.
What is still to be seen is whether the new
cabinet will be able to resist opponents to major
restructuring of the economy. These include significant
changes in the relationships between the central
government and local governments. Their factions will
battle against the revamping of such items as postal
system, the public construction system, and Japan's
massively protected farm community.
The answer
to some of these questions will be more evident during a
general election this autumn, when voters - possibly
oblivious to Japan being back in the minds the rest of
the world - will make a judgment on whether Prime
Minister Junichiro Koizumi is in back, and in control,
and whether Japan's sun is indeed rising.
(Copyright 2003 Asia Times Online Co, Ltd. All
rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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