Ishihara has eye for voters’ buttons

But bashing banks and foreigners won't exorcise fiscal demons

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He falls just short of branding manufacturers and users of diesel vehicles murderers as he holds up a PET bottle filled with soot from diesel exhaust and says, “We’re talking about 120,000 of these released into the air every day in Tokyo . . . and the people are falling prey to lung cancer.”

“Inept and lazy fools,” he calls officials of the Finance Ministry.

“Who the hell do they think they are?” he says in disgust after the Chinese government issued warnings of the ramifications if he met with the visiting Dalai Lama.

On the first day of his four-year term last year, Tokyo Gov. Shintaro Ishihara promised to refrain from making controversial remarks. The vow has not stunted his confrontational style.

The colorful Tokyo governor who previously provoked controversy with the 1989 sensation “The Japan That Can Say No,” which he coauthored with then-Sony chairman Akio Morita, has, while in office, said a loud “no” to:

* U.S. bases in the nation’s capital;

* major banks’ not paying taxes;

* plans to move the capital from Tokyo, calling them “nonsense;”

* parents who spoil their children;

* “Planet of the Apes” metro officials;

* Article 9 of the Constitution, which he says was “imposed on Japan by the Occupation Forces.”

His remarks have antagonized many, bringing in letters of protest from several sectors, including the Chinese government, the Japanese Bankers Association and Korean and other foreign residents here.

Workers at the governor’s office have had to work around the clock to read and process letters from Tokyo residents in the last two weeks, following Ishihara’s April 9 remark that illegal foreigners in Tokyo are committing heinous crimes and may riot following a major earthquake, urging Self-Defense Forces troops to be on alert.

The incident revealed that Ishihara shares “a widespread assumption by Japanese . . . that foreigners are potential criminals,” said Yasushi Tokai, a lawyer whose clients include foreign residents fighting discrimination. “I had thought better of him.”

Said one exhausted metro official, “We are receiving (over 100) letters of protest a day.”

But Ishihara appears to have emerged unscathed from what might have been a crippling blow to a less popular politician, observed a Liberal Democratic Party metro assembly member.

Despite the chorus of protests from foreign resident groups, intellectuals and the mass media, Ishihara’s aides say about 70 percent of the telephone calls and e-mail messages from Tokyo residents basically supported what he said about foreigners.

“The people are drawn to his candid style,” the assembly member said. “There is nothing to be gained from challenging him now.”

Ishihara also takes it to the media, his channel to the public. Gripping the podium during a news conference last week, he lashed out at reporters: “Your job is to find out what is really happening. Go talk to Metropolitan Police Department officials (about crimes by illegals). Then we can debate this.”

The Ishihara brand of open confrontation has won the admiration of some voters, whether the targets of his invective are elite bureaucrats, bankers or the United States.

He has also set into motion plans that include punishing diesel vehicles without emission-cutting equipment and creating the rudiments of a bond market for small and medium-size companies.

Throughout, he has displayed a knack for seizing media attention, with a combination of surprise actions, including a visit to Taiwan that provoked China’s ire, proposals such as creating a casino in Odaiba and making Haneda an international airport, and demanding joint military-civilian use of the U.S. Yokota Air Base.

Metropolitan assembly members, quick to ride on Ishihara’s coattails, have been reluctant to oppose the governor on policy ideas that sound appealing to voters, like the ordinance passed last month that levies size-based taxes on major banks operating in Tokyo.

“Riding with Ishihara is like riding on the wave of public opinion,” said one assembly member of New Komeito.

“He’s very shrewd at selecting his enemies and issues that appeal to voters,” he said, referring to Ishihara’s targeting of large banks, which have been blamed for the nation’s protracted economic woes.

Positive or negative, however, attention from the media, the central government or China may do little when it comes to Ishihara’s real job as governor — the most challenging part of which may be to overcome the capital’s mounting fiscal debt.

“Fretful,” Ishihara said when asked a single word that best describes how he feels a year after taking office. “Things don’t move quickly enough, and the situation gets worse and worse.”

The governor has his back to the wall, with very real deadlines to bring Tokyo’s finances back from the brink of bankruptcy.

Ishihara has set a target of securing 630 billion yen through spending cuts and revenue increases to restore Tokyo to fiscal health during his four-year term.

But the metro government just barely managed to balance its 5.98 trillion yen budget for fiscal 2000, by whittling away at welfare programs, eliminating 2,138 jobs from its payroll and putting off repayment of 106.8 billion yen in debt.

“Tokyo has no more reserves,” the governor said repeatedly during two weeks of combing through the capital’s expenditures for more cuts before he compiled the fiscal 2000 budget in January.

Currently, Tokyo is the only local government body not dependent on central government subsidies.

But if the capital accumulates 300 billion yen or more in debt, it will effectively come under fiscal control of the central government. This would seriously hamper Ishihara’s bid to make bold policy moves in defiance of central government policies, such as his recent bank tax.

This leaves a very slim window of opportunity for Ishihara to put Tokyo back on its feet, said Takashi Asaba, a senior analyst at Fuji Research Institute.

Now is the time to bite the bullet and sell off loss-making third-sector projects and land that have been dragging Tokyo down, Asaba said. According to the credit research agency Teikoku Databank, Tokyo’s 35 third-sector corporations were weighed down by a total of 1.82 trillion yen in loans — 6.3 times their combined annual sales — at the end of fiscal 1999.

“Missing this opportunity, Tokyo will probably be forced to keep these projects and wait until land prices come back.”

The much-touted bank tax will secure only 110 billion yen in additional metro revenues in fiscal 2001, and analysts project this sum to decrease during the five years during which the tax is in effect.

The ordinance approved last month levies a tax for five years on the gross profits of major banks before subtracting personnel and operating costs, and only adds to metro coffers when the economy is down. This could mean a loss to Tokyo if banks begin logging higher earnings in the years to come, the analysts said.

“The bank tax is important in that it secures funds in an era when it is difficult to secure additional revenue,” Asaba said. “But it is no long-term solution.”

Ishihara admits that the real battle lies ahead, and that of the many policy saplings he has planted, none has yet borne fruit.

“It’s easy to put things in motion,” Ishihara said during a recent news conference when asked how he rates his first year. “I’ve received too much credit for projects . . . from which we still don’t see results.”