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Koizumi's successor faces some formidable challenges

Author: Douglas Turner, International Affairs Fellow in Japan, 2005-2006
September 4, 2006
Financial Times

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Now that he has made his intentions official, Shinzo Abe looks almost certain to be chosen by his fellow Liberal Democratic party members as Japan’s 29th prime minister since the second world war. In less than three weeks, he is likely to inherit leadership of a country with improving prospects but some daunting challenges.

Many Japanese, and indeed much of the world, believe that Junichiro Koizumi, the outgoing prime minister, has been good for Japan and its image abroad. But they are generally hard pressed to give specifics. What, exactly, has Mr Koizumi done?

The maverick politician’s greatest achievement was to change the style and method of Japanese politics. He used the media and his telegenic personality to take politics out of closed-door sessions of the Diet, or parliament, and bring it to the people. He rallied the public to care about Japan’s status as a “normal” nation. Unlike his predecessors, he expressed policy in simple terms. He sent troops to Iraq and proposed to rewrite Article 9 of the “pacifist constitution” to permit the country to use force in United Nations missions. Although he severely damaged relations with China and Korea with his visits to Yasukuni shrine, which honours the war dead, he earned public support as a decisive leader.

Mr Koizumi by-passed the traditional system of factions within the LDP, allocating ministerial posts on merit rather than according to which factions delivered the most votes. And he got lucky: no big mistakes were made and the economy continued its recovery.

Staking his legacy on reforming Japan’s postal system and its massive pool of private savings, Mr Koizumi ran the 2005 snap lower house elections on this issue and won. Later, the Diet approved a law authorising the dismantling and privatisation of Japan Post, the world's largest financial services institution. The actual changes, however, will take at least a decade.

The creation of separate post, banking and insurance businesses could deprive the government of its much used—and abused—Fiscal Investment and Lending Programme or “shadow budget”. The pool of postal savings, which was used to finance pork-barrel projects such as roads and bridges, helped ruling party members to “buy” their electoral victories. While Mr Koizumi’s reform earned him public loyalty, he undermined the historical means by which his own party cultivated voter support. These tactics rallied voters to his personality, not his policies and, least of all, to his party.

Many pundits now ask whether Mr Abe can maintain the momentum. To succeed, he must push the issues Mr Koizumi used to attract voters but failed to finish, such as postal reform and revision of Article 9. Mr Abe must find his own way to complete the agenda and overcome some obstacles.

Consider constitutional reform and the challenge presented by Article 9. The constitution has never been changed, partly because any change requires approval by two-thirds of both houses of the Diet as well as a majority in a national referendum. Yet, there is no legal framework for such a process and in any event, Japanese referendum results are not binding. An attempt was made in the last Diet session to pass a referendum law but it failed. Komeito, the LDP’s coalition partner, does not seem supportive either.

Another challenge is Japan’s abysmally low fertility rate (1.32 children per woman) and its ageing population. Ultimately, the shrinking workforce will diminish the country’s ability to grow and to play a regional leadership role. Previous governments tried, but failed, to tackle this problem through parental leave and childcare reforms for working women. Why? The problem is less government policy than a discriminatory labour market that forces women to choose between economic independence and motherhood.

Mr Abe recently suggested that Japan could improve its birthrate through government regulation of the omiai or arranged marriages. If this is an example of how he plans to complete the Koizumi agenda, Japan may be in trouble.

Before addressing any of these issues, however, Mr Abe must fight for his own political survival.

The LDP, after its huge September 2005 lower house victory, is newly energised. But the party faces two by-elections next month whose outcome may determine its fate in crucial upper house elections in June 2007. To win these races, Mr Abe may need to ask Mr Koizumi to come back and campaign for him.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here (Subscription required).

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