Staff writers Reformist Prime Minister Junichiro Koizumi seems to know too well that what counts is his image.
And his image-conscious political style may be doing the trick as ordinary citizens, weary after a decade of economic and social doldrums, are starting to see a new — and entertaining — political light.
Nearly a month into the job, Koizumi boasts approval ratings that have topped an unprecedented 90 percent in some opinion polls, as well as high viewer ratings of live broadcasts of Diet sessions, which some pundits attribute to his straightforward responses to questions.
Unlike many of his predecessors, Koizumi is eager to speak with reporters on camera. During Diet deliberations, he strays from the text prepared by bureaucrats and occasionally loses his place, provoking laughter as he tries to find where he was.
The latest TV commercial of his Liberal Democratic Party features Koizumi with the catchy phrase: “A weirdo in (Japan’s political center of) Nagata-cho is sane in the ordinary world.”
But while these changes may be refreshing, there have been few concrete indications of the direction his reforms will take the country.
Critics say — and many Koizumi fans agree — that the idealistic prime minister is short on details regarding such key policy areas as the economy and national security, while changes initiated by his predecessor, Yoshiro Mori, including educational reforms, remain on the back burner.
Still, the prevailing mood in the nation is to let Koizumi do what he can.
“Since the birth of the Koizumi administration after a revolution within the LDP, the nation has been by and large in a state of excitement,” political analyst Minoru Morita said. “Until this euphoria wears off, neither the public nor the media will demand concrete policy details from him.”
Morita said Koizumi’s popular appeal seems to have given him nearly sacred status. Opposition lawmakers who have lashed out at the prime minister during televised Diet sessions have found themselves flooded with protest phone calls and e-mail.
Even some of Koizumi’s LDP colleagues, including policy chief Taro Aso, warn that the current phenomenon is getting out of hand.
“It’s dangerous, because it could spawn an atmosphere that disrupts free expression of opinion,” Aso said in Shizuoka earlier this week.
Economic circles are particularly anxious about the lack of specifics, and want more than just image and popular appeal from the leader.
Hopes raised by Koizumi’s election in late April initially set off a flurry of buying by offshore investors, who purchased a net 773.5 billion yen in stocks on the Tokyo Stock Exchange during the first two weeks of May.
“The sense (among market players) was that something had changed within the LDP, and that (that) would translate into real change in the Japanese economy,” said Yasunari Ueno, chief market economist of Mizuho Securities Co.
“But (in the third week), stock and bond market players became aware of the limits of what they had come to think of as ‘Koizumi structural reform prices.’ “
The entrancing effect of Koizumi’s repeated vows to not flinch at the pains of structural reform is beginning to wear off, and market-watchers now want something more to help them gauge where the economy is headed.
One major concern is that crucial details remain elusive in the government’s emergency economic package, submitted to Mori in April.
Central to the package is the final disposal of banks’ problem loans and the unburdening by banks of their massive stock holdings. Plans call for erasing delinquent loans from banks’ balance sheets within two to three years and for a system to absorb some bank shareholdings.
Nonperforming loans and shareholdings left over from the asset-inflated bubble economy of the late 1980s have been blamed for decimating banks’ earnings and their ability to support promising enterprises.
But even though a real economic recovery won’t occur until the banking house is put back in order, the nuts and bolts of the problem-loan disposal remain a mystery because the Financial Services Agency, banks and corporations have yet to agree on how to carry through with the so-called final disposal.
Private research institutes estimated that if banks were to nudge borrowers whose financial positions are less than healthy into bankruptcy, as many as 1.5 million jobs would be lost.
The pain of such a situation would also be exacerbated by government efforts to reduce the snowballing public debt.
Just exactly what would be affected by Koizumi’s structural reforms is to be spelled out in a policy guideline to be unveiled in June by the government’s Council on Economic and Fiscal Policy.
“Where is the economy going? Where are the new industries that will absorb the ensuing unemployment? What assurance do we have that something new will spring up after we go on a destruction spree?” are questions that need answering, said Naoki Iizuka, senior economist at Fuji Research Institute.
Iizuka said he doubts Koizumi’s high support rate will continue, once people actually start feeling the pain of widespread restructuring.
For example, public support for Koizumi in urban areas is based on expectations that his administration will eliminate rural public works projects that urbanites believe are a waste of taxpayer money, he said.
But once layoffs kick in big time in the big cities, their tone may change, he said. “The fervor is already wearing off,” the economist said. “Some form of economic stimulus will become necessary.”
Meanwhile, Koizumi is crossing swords with the LDP old guard to keep his campaign pledge of capping government bond issues at 30 trillion yen in fiscal 2002 — a 3 trillion yen cut from the Finance Ministry’s projection.
Koizumi, who is eager to slash tax grants to local governments as well as public works projects, said Monday that he wants to incorporate into the campaign platform for the July House of Councilors election the idea of expanding the use of funds currently earmarked exclusively for road construction to other projects.
These funds, financed by revenue from gasoline and vehicle taxes, will amount to 5.85 trillion yen for both the central and local governments in fiscal 2001. Road construction is a major component of annual public works outlays.
Koizumi’s plan, however, has already met with fierce opposition from LDP heavyweights who apparently fear they will fall from favor with construction firms — a traditional LDP vote generator and the main feeders from the pork-barrel.
On national security, Koizumi’s footing appears less certain, as seen in his apparent contradictory remarks on Japan’s exercising of the right to collective defense.
The debate is being watched with keen interest, as it comes at a time when the administration of U.S. President George W. Bush is aiming to strengthen the bilateral security alliance, including cooperation on a planned antiballistic missile system.
While saying Japan should exercise the right of collective defense, which would allow it to defend its allies — mainly the United States — should they be attacked by a third country, Koizumi initially insisted that the Constitution’s war-renouncing Article 9, the key sticking point, should be revised.
But since any constitutional revision could take years, Koizumi then warmed to the idea — as a temporary measure — of changing the government’s interpretation of the relationship between the article and the collective defense right through the adoption of a Diet resolution.
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