Koizumi Given a New Lease of Life
09/18/2005
Geraoid Reidy,
The Post (Ireland)
It's a rare moment in politics when the re-election of a party that has ruled for decades is seen as a revolution. But such was the case with the return to power of Japan's Liberal Democratic Party (LDP), led by Junichiro Koizumi.
The party had ruled for five decades, but last week's election victory – in which Koizumi's coalition won 327 out of 480 seats – has given it a new lease of life and a strong mandate for economic reform.
“We've dismantled the LDP of the past,” Koizumi said after the election.
“The LDP has been transformed into a reform party.”
Just as Tony Blair has done to Labour in Britain, Koizumi has changed some of the most basic beliefs within his party and, in so doing, has sidelined the opposition.
Koizumi called the election in order to pass his plans to sell off Japan Post, the government-owned postal system that is also the world's biggest bank.
While the Democratic Party of Japan (DPJ), the main opposition, dawdled on the issue of privatisation, Koizumi transformed his staid, scandal-tainted party.
“Koizumi was very effective at framing the issue and the DPJ incompetent when it came to devising a strategy to deal with the prime minister,” said Robert Djurric, a visiting research fellow at the Japan Institute of International Affairs.
But Koizumi's success means there will be no room for excuses if he fails to deliver on much-needed and often-promised economic reform. Koizumi was first elected on a platform of reform designed to reinvigorate the world's second-largest economy.
So far his actions have failed to live up to his words.
“I think his performance to date is mixed,” said Ellis Kraus, an expert on Japanese politics at the University of California in San Diego. “Because of resistance within his own party, he hasn't been able to accomplish as much as he might have hoped.”
While the market is performing well – the Nikkei rose to its highest level was four years after the election result – Japan's economy is fragile.
“One of the most pressing domestic issues is pension reform,” said Kraus, pointing out that this year is the first when more Japanese people would die than be born.
That means a declining workforce, less money in the pension system and increasing costs for an already struggling healthcare system.
Koizumi also needs to work on his hit-and-miss record in foreign affairs.
Bilateral relations with the US are better than ever, but as China's influence has grown in Asia, Japan's relationship with its Asian neighbour has deteriorated.
Investors are flocking to China whose annual 9 per cent growth would seem to put Japan's 2.5 per cent in the shade. But with Japan's GDP still three times that of China, even a minor boom in the Japanese market is good news for the world economy – particularly export-heavy China.
With Japan dependent on China's growing consumer market for its own exports, it's more important than ever that the two countries learn how to get along. Tellingly, China did not send a message of congratulations to Koizumi on his re-election.
It has been suggested that Koizumi is better at tearing old things down – whether dated economic policies or Sino-Japanese relations – than building new ones.
That may be the task of his successor. Despite his overwhelming victory, Koizumi last week re-stated his intention to step down as prime minister next September.
