Koizumi’s Shake, Rattle & Roll

Japan hasn't seen his like before, but what did the populist PM really achieve?


Elvis impersonator? Japan’s Thatcher? Faction buster? Nah, as the curtain falls on the Koizumi show, he will be remembered above all for his missed opportunities and self-indulgent gestures at Yasukuni Shrine in Tokyo — that, and steamrollering the Constitution’s war-renouncing Article 9 into oblivion.

At a time when one of the most critical issues facing Japan is the startling emergence of China as a superpower, Prime Minister Junichiro Koizumi single-handedly derailed bilateral relations and postponed a critical top-level dialogue between Asia’s main powers. As Japan’s bid for a seat on the United Nations Security Council imploded, territorial disputes festered, and China proved conspicuously unhelpful on North Korean missile launches, the costs of alienating Beijing are clear. Climbing out of this deep hole is his successor’s daunting challenge.

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Koizumi is one of those savvy politicians who bowed out on his own terms and did not overstay his welcome. The contrast with Tony Blair’s tragic farce is instructive. He will, by choice, fade quickly into the background. There, perhaps, he will enjoy some solitude, since his only private moments since he assumed Japan’s highest office on April 26, 2001 seem to have been during his annual pilgrimages to Yasukuni Shrine on the occasions he disingenuously went there as a “private citizen.”

So now, with Shinzo Abe elected Sept. 20 to replace him as president of the ruling Liberal Democratic Party, and set to take the prime ministerial reins on Sept. 26, what exactly did Koizumi achieve?

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Many pundits are dismissing Koizumi’s impact, insisting that his successor will roll back his reforms and that his legacy will be ephemeral. This may, however, underestimate both the constraints on those who follow and the reforms that have been set in motion.

In fact, Koizumi departs having presided over a sweeping transformation of Japan. Not all of it was his doing, as some changes were ongoing when he took office, but he made lots of things happen.

Certainly he leaves a mixed legacy, but there has been a tectonic shift in Japan’s security posture, and significant changes in its political economy. New information-disclosure legislation has improved transparency, and a series of judicial reforms are creating a more activist and accessible legal system. He has, for better and worse, exerted political and economic leadership — an uncommon quality in Japanese politics.

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‘Koizuminomics” involves deregulation, fiscal discipline and privatization. All were aimed at reviving Japan’s economy as it staggered into the 21st century.

This year’s Takafumi Horie/Livedoor and Yoshiaki Murakami/Murakami Fund scandals, which featured brash and flamboyant entrepreneurs making piles in the regulatory shadows, have become symbolic of the new sharp-elbowed capitalism introduced into Japan under Koizumi. Similarly, the series of technical glitches at the Tokyo Stock Exchange in 2006 are emblematic of a lagging financial services sector and a missed opportunity for Japan to become the Far East’s City of London.

But the banking sector has bounced back from the edge of insolvency, the stock index has recovered, GDP growth is solid and deflation has ended.

However, the less said about the public debt monster — 170 percent of GDP, making it the highest among developed nations — the better. Ditto Japan’s demographic time bomb. The populist PM could have done his successor a favor if he had ridden his luck and charisma by biting the tax bullet. Japan, after all, is third from bottom of the tax-burden league among 30 nations surveyed by the OECD, with just 22 percent going from pay packets in local and national income tax and social security deductions, compared to Germany (45.9 percent), France (33.1 percent) the United Kingdom (29.9 percent) and the United States (28.5 percent).

Japan has become a nation of winners and losers. Many Japanese find themselves left behind or out of work in a country with a minimalist safety net. Official figures show that part-timers now account for 30 percent of the workforce compared to 10 percent in the early 1990s; while the ranks of the NEETs (Not in Education, Employment or Training) have swelled to 850,000. It is stunning that in such a wealthy country, government estimates show 14 percent of children live in poverty.

Politically it makes sense to find a scapegoat for widening disparities, but it is not accurate to blame Koizuminomics. In the 1980s, the top 20 percent made 10 times more than the bottom 20 percent, but by 2000, they were making 168 times more. Significantly, this huge increase in the gap between rich and poor had already opened up before the Koizumi era, partially reflecting a rapidly aging work force and employers’ shift toward hiring part-timers. Nonetheless, according to the Esteban and Ray (ER) index, which measures income inequality between income brackets, Japan is clustered close to France and Germany, in contrast to the U.K., South Korea and the U.S., where disparities are more pronounced. Still, the gap is a controversial socio-economic development, even though polls show voters rating it low on their anxiety index compared with pension and medical-care reform.

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If one reform stands for Koizuminomics, it is the privatization of the postal system. This quixotic initiative is also directly linked to the downsizing of Japan’s construction state, since postal savings have long been the source of cheap funds for public works. Privatization will make it increasingly difficult for bureaucrats and politicians to siphon off these funds for their pet (vote-gleaning) projects.

Given the enormity of Japan’s fiscal crisis, cutting corruption and reducing profligate spending is a major step in the right direction. The privatization of the highways is another milestone on the road to fiscal discipline.

These privatization efforts are often pilloried as inadequate half-measures tainted by compromise, but such is the nature of politics. Reform is a process not an event. Koizumi deserves kudos for taking on the dinosaurs in his party and trimming their wings. Given the extent of Japan’s fiscal woes, and the surging demand for social services in a rapidly aging society, there is little room for a reverse course. There will inevitably be some backsliding, but Koizumi has given powerful momentum to Japan’s transformation.

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Style now matters. “Cool-biz” Koizumi has given his sclerotic party a heart transplant. Keizo Obuchi, his predecessor from 1998-2000, was known as “cold pizza.” By comparison, Koizumi has been nouvelle-fusion cuisine, trendy to the max. He is the leading choiwaru oyaji (cool older guy), with a coifed mane of hair and snazzy duds. He talks about music, e-mails members of the public, smiles like he means it and danced with Richard Gere. He is a master of political gestures and barking out snappy sound bites.

In what may be another tectonic shift, Koizumi has made voter-popularity a key criterion in selecting the LDP’s party leader. Those faceless gray suits that once slid into power from their smoke-filled rooms have given way to somewhat more telegenic, media-savvy performers who know how to play the crowds. Prime Minister-in-waiting Abe is a case in point, vaulting ahead of his elders by riding the North Korean kidnapping issue, and the surrounding media frenzy, to prominence.

Koizumi’s more “presidential” concentration of authority in the Prime Minister’s Office is a major development, and Abe will likely build on this by creating an equivalent of the U.S. National Security Council.

The PM gambled his political life on postal reform by calling a snap election last year when the Diet rejected his privatization bill. He then put some of the party’s geriatrics out to pasture for opposing him, and brought in some celebrities as lawmakers to add sparkle to his party’s image. This crowd-pleasing gesture reinforced his reputation as an eccentric maverick with guts and verve. There are not many politicians who fearlessly risk getting booted from power because they won’t take no for an answer. One of the profound changes under Koizumi that has affected powerful LDP politicians and their supporters, has been the huge cut in public-works spending from some 8 percent of GDP to 4 percent. This translates into fewer roads and bridges to nowhere, and much less “uglification.” The tightening of the spigot on such pork-barrel projects, important sources of employment in the countryside, has not only accentuated urban-rural income disparities, but has also undermined the nexus of corruption linking construction firms, politicians, bureaucrats and mobsters. Local chapters of the LDP are hurting as they have much less largesse to spread around among voters. The impact of this squeeze should be evident in the Upper House elections in 2007.

Koizumi has carried through on his threat to smash the LDP in other ways too. He marginalized the factions, purged dissenters and alienated significant constituencies like the postal workers who opposed his privatization initiative. He also made some quirky appointments such as that of Taro Aso as foreign minister, a man with a dangerous name, a penchant for foot-in-mouth disease and a decidedly undiplomatic smirk.

The LDP’s once-vaunted voting machine was rusty when he came to power, and has become even more decrepit. Last year’s landslide general election victory featured the LDP riding Koizumi’s charismatic coattails to power — but there is no heir with his aura or campaigning pizazz. The LDP’s trump card remains the opposition’s capacity to self-destruct.

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Koizumi is a man of contradictions. Though known for his love of opera, he lent his name to an Elvis compilation and crooned “Love Me Tender” at Graceland in Memphis, Tennessee while wearing “the King’s” shades.

Though he cultivated an image as a resolute leader of action, he spent the past year on an extended victory lap, transforming a landslide election victory into a prolonged lame-duck waddle to nowhere. Talking about missed opportunities, he provided no leadership on several key issues such as pensions, medical care, tax and agricultural reforms. He ran out of steam.

In foreign policy, Koizumi has embraced an assertive and abrasive policy toward East Asia, while vying with Tony Blair for President Bush’s “loyal lapdog” award. Sidestepping the constitutional constraints of Article 9, he sent troops to Iraq and increased security cooperation with the U.S. His breakout gambit of visiting Pyongyang to normalize relations backfired, raising bilateral tensions and distrust. Consequently, Tokyo now has a lopsided relationship with Washington that rests uncomfortably on expanded military ties — while relations with East Asia are in tatters.

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No doubt the biggest mistake of Koizumi’s tenure were his repeated visits to the Yasukuni Shrine. He hasn’t convinced anyone that those annual pilgrimages reflect his commitment to peace and desire for harmonious neighborly relations, for the very obvious reason that this particular shrine is not about peace and harmony. It is a talismanic symbol of unrepentant militarism, and the Yushukan Museum on its grounds asserts a vindicating narrative of Japanese aggression.

As foreign policy gaffes go, they don’t get any bigger.

Yasukuni visits don’t play well either at home or abroad. Japan comes across as petulant and lacking contrition, ensuring that history remains a controversial and divisive issue between it and its neighbors. Although a recent poll indicated that the visits are supported by only 16 percent of voters, they fuel concerns about a resurgent and dangerous Japanese nationalism. Koizumi single-handedly put Sino-Japanese relations into the deep freeze by continuing his ill-considered shrine visits. Naturally, China’s leaders have not wasted any opportunity to use the hammer of history Japan handed to them.

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Drawing a line in the gravel at Yasukuni has accomplished nothing except to remind people how costly and self-defeating nationalistic impulses can be.

Hopefully, Abe will keep this in mind. An inexperienced leader with a lot to prove, he will take Japan’s highest office following an overly timid battle for party leadership. He talks of strengthening the U.S. relationship, but knows that Washington is very concerned that Japan is gratuitously alienating China. This comes at a time when America is trying to cultivate China as a stakeholder in the international system.

For Abe, the road to better ties with Washington, and resolution of the North Korean impasse, leads through Beijing.

Most probably the new leader will reach gingerly for the olive branch the Chinese are eagerly offering by, among other things, having clearly expressed hope they could work with Koizumi’s successor. In fact, Koizumi has set the bar so low that Abe need not accomplish too much to revive a dormant relationship that both countries need to improve. By doing so, he can immediately look resolute, pragmatic and effective in pursuing national interests.

As he faces many hard domestic economic issues and a tough election ahead, Abe will be tempted by the easy pickings of putting Sino-Japanese relations back on track. With impeccable neocon credentials, he is in a good position to make a breakthrough if he seizes the opportunity. China will do all it can to help him do so, and Washington will welcome such sensible efforts.

Whether he can sustain that will depend on finding a face-saving way for both nations out of the Yasukuni deadlock. This depends on forging a forward-looking bilateral agenda that respects both nations’ dignity as they pursue reconciliation over their shared history.

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Koizumi shook things up and put some rattle and roll back into the economy. The Elvis ballad for Abe is “It’s Now or Never,” as the high-stakes tensions in East Asia require resolute action and leadership. Beijing could help by turning down the volume on some of its favored Rolling Stones classics like “Time is on My Side,” “(I Can’t Get No) Satisfaction” and “Under My Thumb.”

Jeff Kingston is the author of “Kokka Saisei” (Hayakawa, 2006) and Director of Asian Studies, Temple University, Japan Campus

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