TCS Daily

Koizumi's Legacy

By Jason Miks - May 15, 2006 12:00 AM

TOKYO -- Last month saw quite a milestone in Japanese politics. Prime Minister Junichiro Koizumi marked 5 years in office. This is no mean feat in the notoriously faction-driven world of Japanese politics -- indeed Koizumi is now the third longest serving prime minister in the post-WWII period.

This consistency is in itself one of Koizumi's greatest achievements, as it has brought much needed stability to the political system and has seen the diminishing importance, at least for now, of the Liberal Democratic Party's (LDP) narrow factionalism.

Koizumi has managed this transition by appealing, when necessary, over his party's head to the general public -- often in the face of fierce internal resistance. This tactic was on display last year with his decision to call a snap election when faced with opposition from within his own party over plans to break up the postal service. He even went as far as withholding the Party's endorsement from 37 rebels and sought so-called "assassin" candidates to run against these now unendorsed independents. He was rewarded with a thumping victory which exceeded most commentators' expectations.

The tone for such populist appeals was set early on when he campaigned for the leadership of the LDP back in 2001 with a national campaign tour that exploited his outsider image in public appearances and in the media. Eight of the prefecture branch 'primaries' for the LDP leadership were held before the decisive main vote. Koizumi won all eight races, which astounded most observers, and which all but forced the party to select him ahead of the heavy favourite Ryutaro Hashimoto or risk open revolt.

With his insistence on outlining clear policy proposals and the need to destroy the old factional system within the LDP, Koizumi has transformed the executive into a much more active and decisive force. This is certainly preferable to the days when LDP leaders would merely attempt to court a narrow base through handouts and promises of expensive public works programs in key districts.

Political stability has been coupled with economic recovery. Under Koizumi's watch, the Japanese economy has turned the corner after more than a decade in the doldrums and last year saw annualised growth of over 5 per cent according to the cabinet office, providing further evidence of a sustained recovery. Indeed as of March, Japan was in its 50th straight month of growth since emerging from recession in early 2002.

Koizumi has also managed to push through some necessary, though much resisted, reforms, the most contentious of which has been privatisation of Japan Post. The sheer size of Japan's postal system was creating a huge distortion in financial services against private banks and insurers with its deposits worth around ¥330 trillion. As with the highway agency, which has also been part of the reform package, the ability to allocate funds acted as a consistent magnet for political corruption as politicians sought to influence key groups in their constituencies.

Though some of Koizumi's reforms have been watered down, he has still made genuine progress towards his pledge in May 2001 to create a simpler, more effective and -- perhaps most importantly -- "smaller" government (all to promote the structural reforms necessary for Japan's financial rehabilitation). These reformist policies have thus dramatically altered the old system in which politicians worked to attract public works to their areas, and as a consequence, public works-related spending has been slashed to less than half of the peak it reached in the late 1990s.

However questions still remain over the LDP's economic management. A number of polls show that many Japanese are increasingly concerned about growing economic inequalities between the country's haves and have-nots. And some have even begun to ask whether Koizumi has been reforming without any real purpose.

It is not just on internal issues that he is facing increasing public unease. Surveys are consistently showing a public that is concerned at the deterioration of relations with Japan's neighbors -- particularly China and South Korea.

Though managing relations with neighboring countries was always going to be tricky -- China has worked hard to suppress Japanese influence in recent years -- and Koizumi has shown little imagination in constructively addressing these tensions. His repeated visits to Yasukuni Shrine (see my previous effort here) have unnecessarily antagonised both China and South Korea and, at the same time, have likely set back any hope of a permanent seat on the UN Security Council.

The Chinese economy has been growing by about 10 percent a year and in 2005, its gross domestic product was roughly 270 trillion yen -- bigger than that of Italy and Russia. Questions also loom over China's military ambitions. Yet Koizumi has failed to outline a clear strategy for managing these challenges and Japan's regional diplomacy has instead been bogged down in an Asian blame-game.

Koizumi's leadership at home -- and his courage in facing down his own party -- mean Japan is better positioned to tackle the domestic challenges it faces -- particularly coping with an aging, and now contracting, population. Yet his leadership in the region has too often been lacking or misguided. It is therefore essential that his successor in September learns the right lessons from Koizumi's tenure. When to go it alone, and just as importantly, when not to.

Jason Miks is a Tokyo-based writer and Assistant Editor at the Center for International Relations.


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