The end of Koizumi's reign

Posted in Japan | 18-Feb-06 | Author: Hisane Masaki| Source: Asia Times

Koizumi award a trophy to Yokozuna Asashoryu.
TOKYO - With seven months left before Japanese Prime Minister Junichiro Koizumi is to step down, his rule is showing some cracks.

Koizumi has said he will step down as president of the ruling Liberal Democratic Party (LDP) and thereby as prime minister in September when his current three-year term at the helm of the party expires. And what happens between now and then will have a big effect on the race to succeed him and ultimately on the next leader.

The popular reformist is expected to have a significant voice, if not the final one, in picking his successor. Potential successors have treaded carefully for fear of losing his blessing. Some have parroted his reformist slogan and openly defended his foreign policy, including his controversial visits to the war-related Yasukuni Shrine in Tokyo.

But as Koizumi's power shows signs of eroding, his potential successors may feel tempted to deviate from the policy direction he has set, or at least tweak it, in hopes of demonstrating they are their own men.

Koizumi was riding a significant wave of popularity when his his LDP-led coalition won a landslide victory in last autumn's general elections. But lately, he has been on the defensive over a spate of scandals involving accounting fraud by Internet startup Livedoor, falsified earthquake-resistance data for buildings, bid-rigging for construction projects at the Defense Agency, and the reimposition of an import ban on US beef.

Some blame the government for letting former Livedoor president and founder Takafumi Horie test legal loopholes and limits with Livedoor's repeated stock splits and aggressive takeovers. Horie, who ran unsuccessfully in the election as an independent but with the high-profile backing of the LDP, and the company now face a range of criminal charges.

Farm Minister Shoichi Nakagawa and defense chief Fukushiro Nukaga face pressure from the opposition to take responsibility over the beef and bid-rigging cases, respectively. But Koizumi has shrugged off opposition demands for their resignations.

Prosecutors on January 30 arrested Takayoshi Kawano, 57, a top official at the Defense Facilities Administration Agency, and two others on suspicion of leading bid-rigging for projects ordered by the agency. The two others are Takashige Matsuda, 52, an official at the agency's general affairs department, and Mamoru Ikezawa, 57, the agency's former technical councilor.

The Koizumi government in December lifted a ban on beef imports from the United States, imposed two years earlier after the discovery of the first case of mad-cow disease in Washington state. But the government announced on January 20 that it would reimpose a total ban on US beef imports after a shipment contained carcass parts that posed a risk of bovine spongiform encephalopathy. The opposition and consumer groups have lashed out at the government for rushing to resume US beef imports out of political consideration for the United States and at the expense of consumer safety. In another twist, Nakagawa apologized for the government's failure to keep its promise to send officials to check US beef processors prior to resuming the imports.

The falsification of quake-resistance data by architect Hidetsugu Aneha led to the construction of numerous defective condominiums, shocking the nation and leaving residents distraught after they spent tens of millions of yen to buy the units. The Land, Infrastructure and Transport Ministry filed a criminal complaint in December but the fallout has spread to political circles. Kosuke Ito, an LDP lawmaker and former chief of the now-defunct National Land Agency, has had a fairly close relationship with Susumu Ojima, president of Huser, a company at the center of the scandal.

Koizumi's plunging popularity apparently reflects a feeling among many Japanese that his government is not properly handling this recent series of incidents and scandals.

Meanwhile, some cabinet ministers, including outspoken Foreign Minister Taro Aso, a potential successor, have voiced doubts about Koizumi's plan to amend the Imperial Household Law to enable a woman to ascend the imperial throne. Aso and Finance Minister Sadakazu Tanigaki asked for caution recently over any such revisions. They made their comments before the news of Princess Kiko's pregnancy broke on February 7, shelving Koizumi's plan.

A public opinion poll shows that support for the Koizumi cabinet has sharply nosedived. Many of "Koizumi's children" - the more than 80 LDP Lower House members elected for the first time in September's elections on the back of the premier's popularity - have joined LDP factions, ignoring his advice not to do so, at least until the LDP presidential election in September.

A poll by the major business daily Nihon Keizai Shimbun, published on February 6, showed that support for the Koizumi cabinet had plunged to 45%, a sharp decline of 14% from the previous survey in December. The disapproval rating rose 9% to 43%. The newspaper attributed the decline in popular support - the first since early August immediately after he dissolved the Lower House for a snap election - to the series of incidents and scandals. Noting an unfavorable mood that has gripped the government and the LDP recently, a senior coalition leader said on condition of anonymity, "The feeling that the [Koizumi] administration is in its last days has emerged."

Speak one's mind
In Nagata-cho, Japan's political nerve center where the prime minister's official residence, the diet building and LDP headquarters are located, four potential candidates to succeed Koizumi are collectively called "Kozo Asagaki", a name coined using one Chinese character from each of the four names - Chief Cabinet Secretary Shinzo Abe, Tanigaki, Aso, and former chief cabinet secretary Yasuo Fukuda.

The contenders say they will begin to talk in earnest about their ambitions after the fiscal 2006 budget is enacted in the diet, or parliament, by the end of March.

When Koizumi formed the current cabinet on October 31 after the elections, he said, "I've placed the right people in the right places." He described his new team as "a cabinet to carry on reforms". Koizumi had previously indicated he would bring his potential successors into his new team and let them compete for reform. His implicit message was: only a real and fully tested reformer is qualified to follow in his footsteps.

Since naming his new cabinet, Koizumi has pursued three reforms as top priorities - consolidation or even abolition of government-affiliated financial institutions, reduction in the bloated number of central and local government employees, and the so-called triune reform of local government finances. The ultimate goal of these reforms is to make the central government leaner and more efficient amid the ballooning budget deficit. Japan's fiscal condition is already the worst among major industrialized economies. The total deficits held by the central and local governments are expected to reach 775 trillion yen (US$6.5 trillion), or about 150% of the country's gross domestic product (GDP), at the end of fiscal 2006.

Key election issues
With the LDP presidential election still seven months away, major election issues have emerged. Among them are Japan's Asia policy, the consumption-tax hike, and the perceived widening of a gap between rich and poor in a society long known for its "all-Japanese-are-middle-class mentality".

A split has emerged recently among cabinet ministers and senior LDP members over the proposed rise in the consumption-tax rate. Tanigaki has distanced himself from Koizumi on the consumption-tax issue, insisting that necessary bills to raise the tax be introduced to the diet in the first half of 2007. Koizumi has said any such tax hike will not come that early and argued that the government should give top priority to cutting spending before considering increasing the tax burden on the public. The conservative Abe is also believed to be against the bill.

On the foreign-policy front, Japan's relations with Asian neighbors, especially China and South Korea, are likely to be a top election issue. Japan's political ties with those two countries have plunged to their lowest points in decades because of nasty territorial rows and the dispute over a history textbook authored by a group of right-wing scholars for use at high schools, as well as Koizumi's repeated visits to Yasukuni Shrine, where 14 World War II Class A war criminals, including former prime minister Hideki Tojo, are enshrined along with some 2.5 million war dead.

Among the four leading candidates to succeed Koizumi, Abe, by far the most popular among them, and Aso are both known as hawkish and anti-China as well as being staunch supporters of Koizumi's visits to the Shinto war shrine. Tanigaki and Fukuda, known as pro-China politicians, are seen as critical of the Yasukuni visits. But there are growing calls for a change in Koizumi's Asian policy, not only from the opposition but also from within the LDP-New Komeito party coalition and business circles.

China, Japan's largest trading partner, has threatened to keep top-level bilateral contacts frozen if Koizumi's successor visits Yasukuni Shrine. Sino-Japanese relations are often said to be "cold in politics and hot in economy". Japanese businesses fear the frosty political ties might spill over into the business realm, hurting their business opportunities in China. Toyota Motor Corp chairman Hiroshi Okuda, also chairman of the Japan Business Federation (Nippon Keidanren), the nation's biggest business lobby, said in his New Year news conference that if possible, he hoped the Koizumi government would change its policy toward Asian neighbors, especially China.

As the top government spokesman, Abe has meticulously chosen words to avoid unnecessary controversy. But Aso has made one controversial remark after another since taking the post of foreign minister. Aso said in December that China was beginning to pose a "considerable threat". In an attempt to assuage China's anger at his remark, the Koizumi cabinet disclosed a position paper in January that indicated Japan does not recognize China as a threat. Last month, Aso urged Emperor Akihito to visit Yasukuni Shrine. More recently, Aso used the word "country" to refer to Taiwan. Japan does not recognize the island as a country. Aso also stated in the same speech that Japan's colonial rule of Taiwan contributed to its high compulsory-education standards.

According to a survey conducted by the Japan Business Federation, 43% of executives at federation member firms named Abe when asked who is the most suitable to be the next prime minister, with Fukuda the next favorite with 18%. Fukuda, whose popularity is in the single digits in public opinion polls by media organizations, is seen among businesses as an icebreaker in chilly Sino-Japanese ties.

Whoever succeeds Koizumi will be faced with tough decisions apart from anything the prime minister leaves them to deal with.

With its society rapidly aging and birth rate declining precipitously, Japan's social-security system, including pensions, medical insurance and nursing-care insurance for the elderly, is creaking. Japan's population shrank last year for the first time since the end of World War II. There is a common view that it is impossible to reduce staggering debts only with cuts in expenditures. The current social-security system is widely seen as bound to collapse in the future because it was designed for a pyramid-shaped demographic structure with a large population of younger people.

Koizumi has denied the widening gap between rich and poor. But most Japanese think differently. A recent survey by the Yomiuri Shimbun showed that three-fourths of those polled agreed with the widespread observation that their country is on the way to becoming a society marked by a widening disparity between winners and losers.

Add to the mix that the Koizumi government plans to enact during the current diet session a basic law for promoting administrative reform, including the integration and consolidation of government-affiliated financial institutions and cutbacks in total personnel cost of government employees. It is aimed at legally binding his successor to continue pursuing his reform drive.

Koizumi himself has given indications he favors Abe, though he has said he will not make his choice known until immediately before the LDP presidential election.

Meanwhile, each of the "Kozo Asagaki" seems to be going to great pains to be seen as Koizumi's legitimate heir. Still, some of them, as well as many LDP lawmakers, have begun to distance themselves from the prime minister, underscoring that his previously unchallenged leadership is beginning to erode.

The next seven months in Japanese politics should prove to be extremely interesting.

Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy. Masaki's e-mail address is