Politic-Economic-Society-Tech

Election win strengthens reform hand of Koizumi

Japan's triumphant prime minister, Junichiro Koizumi, prepared on Monday to convert the mandate from his ruling coalition's huge election victory into concrete, and painful, reforms of an economy sliding into recession, reports Reuters. 

Koizumi needed a sound win in the Upper House election on Sunday to survive challenges to his leadership and to his proposals to rein in Japan's massive public debt and clean up a banking system weighed down with bad loans. 

"We fared better than I expected," an unshaven, weary Koizumi, 59, said in a television interview after his long-ruling Liberal Democratic Party (LDP) and its partners had locked up more than half the 121 seats at stake in the 247-seat Upper House. 

The ruling coalition won 78 seats, according to public broadcaster NHK. Its total in the upper chamber now stands at 139, including seats that were not up for grabs. 

Fast on the heels of victory, though, came a sobering reminder of the urgent task Koizumi faces. Data showed industrial output down for a fourth straight month in June. 

Stock prices too were suffering, with Tokyo's benchmark Nikkei average of 225 stocks down 1.3 percent by the midday break -- a stone's throw from 16-year lows touched last week. 

"With the results of the voting, I think Koizumi will be more convinced that he has to go with structural reform," Yasuhisa Shiozaki, an LDP "Young Turk," told the news agency Television. 

"He's been saying 'no pain, no gain' all through the election campaign, and while he's not a specialist in macro-economic policy, I think he is instinctively sensing the need to economically restructure Japanese society." 

Chief Cabinet Secretary Yasuo Fukuda said the coalition's strong showing gave Koizumi his needed stamp of approval. 

"It (election results) showed that people have high hopes for his reforms," Fukuda told a news conference. "It is most important for the Koizumi cabinet to proceed with those reforms." 

With the better-than-expected victory, Koizumi is also expected to survive an LDP presidential election in September, offering the potential to break the revolving door that has seen 11 Japanese leaders in 13 years. The LDP itself gained three seats to 64 in a chamber that is being reduced in size, a reversal of two previous Upper House polls. The 1998 election proved such a disaster for the LDP that then-Prime Minister Ryutaro Hashimoto was forced to resign. 

The first major test of Koizumi's reform efforts comes in mid-August when government ministries and agencies file their budget requests for the next fiscal year beginning in April. 

Analysts say powerful politicians could hamper reform moves by jockeying for their share of the budget. 

"I believe the battles will begin when the budget discussions start," said Yoshio Suzuki, a lawmaker with the small opposition Liberal Party. 

Newspapers warned, however, that Koizumi and the LDP now have to make sincere efforts to carry out his reform proposals or face the wrath of the electorate.

"The LDP has been given the responsibility of actively supporting Koizumi's reforms," the daily Nihon Keizai Shimbun said in an editorial. "If they were to obstruct this, it would be a huge betrayal of the voters." Koizumi leapt to power in April in a surprise victory over old-guard rivals with the support of LDP members desperate for a new image to avoid defeat in the Upper House election. 

An outsider to the LDP's old guard, the prime minister and his economic advisers must move now to flesh out his still vague reform proposals. 

The LDP's Shiozaki said that Koizumi's first task would be to set up a specific menu and timetable for the reforms. "But I think his first priority should be the non-performing loan problem." 

Some question whether this is the right time for a radical plan that is certain to boost unemployment and spark corporate bankruptcies amid signs the economy is sliding into its fourth recession in a decade. 

"How can there be reforms if the economy is dead?" said Shizuka Kamei, a senior LDP official.

source: Asia Pacific /bangladesh.com/, July 30, 2001