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Foreign Minister Keizo Obuchi and former Chief Cabinet Secretary Seiroku Kajiyama declared their candidacies Friday for the presidency of the ruling Liberal Democratic Party to succeed Prime Minister Ryutaro Hashimoto.

In addition, senior members of an LDP faction led by former Finance Minister Hiroshi Mitsuzuka agreed to field Health and Welfare Minister Junichiro Koizumi, making it likely that the party’s July 24 election will be a three-way race.

At separate news conferences held at LDP headquarters, Obuchi and Kajiyama announced the outline of their policy agendas, both focusing on reviving the nation’s sluggish economy through aggressive fiscal measures.

They stressed the need to promote measures to make financial institutions dispose of their bad loans and called for corporate and individual income tax cuts. Obuchi specifically promised tax cuts worth 6 trillion yen and a fresh extra budget worth 10 trillion yen during the current fiscal year.

Kajiyama, 72, belongs to the largest party faction, which is led by the 61-year-old Obuchi. Hashimoto, also of the Obuchi faction, announced Monday that he will step down as LDP president and prime minister to take the blame for the party’s devastating setback in Sunday’s Upper House elections.

In announcing the policy agenda, Obuchi said he decided to run for the LDP presidency because it is his responsibility as a politician who has served as a lawmaker for the last 35 years. ‘I would like to make the utmost effort to lift the country from the worst economic slump since World War II,” Obuchi said. “It is my responsibility to run for the presidency at a time when the nation is facing crisis.”

Obuchi’s proposed 6 trillion yen in tax cuts includes reducing the corporate tax rate to 40 percent and easing tax burden for middle-income people. Earlier in the day, Obuchi said, “I think the LDP lost the election because the people exploded in anger … I deeply feel the political responsibility for the prolonged economic slump after the burst of the bubble economy, which is causing anxiety among people.”

He said he believes “establishing a political system under which politicians take responsibility and make their own policy decisions instead of relying on bureaucrats, will lead to a restoration of the people’s confidence in politics.”

Kajiyama, on the other hand, did not mention any specific amount of tax cuts but stressed the necessity of implementing permanent income tax cuts and reducing corporate taxes to international standards. He also promised a radical reform of the nation’s financial system within two years.

When he attended a meeting of about 30 senior lawmakers supporting his candidacy at a Tokyo hotel earlier in the day, Kajiyama said he will make every effort to boost Japan’s now-stagnant economy. “I am determined to do the work at the cost of my life. (My pressing task is) how to revive the ailing economy,” Kajiyama told the meeting.

At the opening of the meeting, Kajiyama said lawmakers must seriously consider how they can save the country. “We have to accept the LDP’s humiliating defeat in the Upper House elections and consider ways to break the deadlock that Japan faces,” Kajiyama said.

Although Kajiyama appears to be the favorite of the financial markets, whether he has any chance of winning more support than Obuchi from party lawmakers remains unclear. Obuchi is the apparent choice of departing party executives and has the support of leaders of some major factions, including his own.

Taro Aso, a former chief of the Economic Planning Agency, and another participant in the meeting of Kajiyama supporters, said the public does not expect much from Obuchi and it is necessary for the LDP to listen to the voice of the people. About 30 lawmakers from different factions gathered for the meeting.

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