Analysis: Fate rides on quick, effective policies

and MITSUKO NASHIMAStaff writers

Amid mounting demands at home and abroad for steps to reflate the nation’s ailing economy, the political fate of Keizo Obuchi, the newly elected president of the ruling Liberal Democratic Party, will largely depend on how quickly he can promote measures to achieve that goal.

Obuchi now inherits a party that lacks both a majority in the House of Councilors and unity, due to internal cracks that developed during the heated and closely watched runup to the presidential election.

While his much expected victory came as no surprise, many economists contend that a sense of disappointment is certainly out there, especially among those with hopes for a drastic change in political leadership.

“The problem of financial institutions is an issue of the utmost urgency,” said Nobuhiro Okuyama, research director at Mitsubishi Research Institute. “But given its fragile political foundation, I wonder whether the new government (to be formed under Obuchi) will be able to take the drastic measures necessary to solve this problem.”

After watching Friday’s presidential election, opposition parties will probably renew their criticism of the LDP because of its numb sense of responsibility, and become less cooperative with it over policy, he said.

Obuchi won the election largely through the support of those who were most responsible for the LDP’s debilitating setback in the July 12 Upper House election.

And the outcome indicates that the LDP has not learned its lesson, political experts said.

“Instead of reforming the party, the LDP is simply trying to postpone a general election as long as possible in order to avoid a repetition of the defeat,” said Fukashi Horie, professor emeritus at Keio University.

“What a majority of LDP Diet members chose in the election is to maintain the status quo,” said Yasunori Sone, another Keio professor.

Echoing their views, Hidekazu Kawai, a Gakushuin University professor, said the primary purpose of the Obuchi administration, which is expected to be formed next Thursday at the earliest, is to hold off dissolution of the House of Representatives until its members’ current terms expire in October 2000.

However, both Horie and Kawai predict that the LDP will be forced to call a general election within a year because unified local elections are scheduled for next April, and it is highly probable voters will send the LDP another angry message.

Sone pointed to widespread concern among the party’s members, particularly the younger ranks elected in urban areas, that the LDP may not be able to survive the local elections under Obuchi’s leadership.

As several opinion surveys conducted by national dailies and TV networks during the presidential campaign earlier this week showed, Obuchi clearly has less public support compared with his two rivals in the party race — former Chief Cabinet Secretary Seiroku Kajiyama and Health and Welfare Minister Junichiro Koizumi.

“It appears very unlikely that Obuchi will see an increase in his public support rate, because he will soon have to face a number of hard tasks,” Sone said.

Horie and Kawai said Obuchi may name Kajiyama finance minister in an effort to restore party unity.

In addition to low public support and fragile party unity, Obuchi is likely to have a rough time with policy, considering the LDP’s 104-seat presence in the 252-seat House of Councilors. Before the Upper House election, some in the LDP had brazenly predicted that it would take a majority. Instead, it lost 15 seats.

It is likely to be impossible for the LDP to get a bill of even the slightest controversy, aside from financial reforms, through the Diet without support from other parties, its Lower House majority notwithstanding.

The LDP, therefore, should once again seek an ally or allies if it wants to steer the nation in an effective and steady manner.

“However, neither the Liberal Party nor (the Upper House party) Komei is likely to form an alliance with the LDP after observing the voters’ rejection of the LDP in the Upper House election,” Kawai said.

Concerning the much-criticized style of the LDP’s traditional method of selecting a party president based on the power balance in the LDP, Sone has seen some signs of changes after observing that Kajiyama, who has no factional backing, obtained about one fourth of the 411 votes in the race.

“Kajiyama’s performance in the election is significant considering that past LDP presidents were products of intraparty factional bargaining,” Sone said. “Still, there are factional barriers but they have become obscure.”

Meanwhile, many economists wonder whether Obuchi — who has been described as “nice but mediocre” and whose capability in economic policy is unknown — can take decisive actions and pull the economy out of its prolonged doldrums.

In the course of LDP presidential campaign, both business community and market players had sent clear messages that they would not want to see Obuchi as a new leader, showing clear preference for Kajiyama, who had advocated decisive steps on the nation’s bad loan problem.