With a 72-day extraordinary Diet session convening today, Prime Minister Junichiro Koizumi and his government face two major challenges: seeking consensus on Japan’s support for expected U.S.-led military operations against terrorists and on steps to help the flagging economy.

The first task is to secure Diet approval of a bill to allow the Self-Defense Forces to lend noncombatant support to U.S. forces in retaliatory actions for the Sept. 11 terrorists attacks in the United States, which the U.S. asserts were masterminded by Saudi-born millionaire Osama bin Laden.

The bill, to be submitted in early October, is intended to give legal backing to Koizumi’s pledge last week to provide the U.S. with logistic and other rear-area assistance.

A Lower House special committee is expected to hold full-scale debate on support for the U.S.-led antiterrorist campaign and on reinforcing Japan’s antiterror preparedness.

Government officials have said they want to see the bill clear the Diet as quickly as possible — hopefully by the end of October — so the nation will be prepared if and when the retaliatory attacks begin.

A bill’s passage through the more powerful Lower House effectively means it will be enacted.

“Speedy passage of this bill is a must, or it will become meaningless,” a top official at the Prime Minister’s Official Residence, who declined to be named, said Tuesday.

The bill, now being crafted by the three ruling parties, is expected to pave the way for the SDF to provide medical support not only to U.S. military personnel but also to its allies. The SDF also would be allowed to offer humanitarian aid to refugees fleeing Afghanistan, where bin Laden is believed to be hiding.

So far, discussions within the coalition on the planned SDF deployment have proceeded with few hitches, thanks in part to basic acceptance of the idea by New Komeito, whose largest backer is the lay Buddhist organization Soka Gakkai. Advocating a pacifist stance, the main coalition partner of Koizumi’s Liberal Democratic Party has long been wary of any overseas activities by the nation’s military.

At a tripartite meeting Tuesday, Tetsuzo Fuyushiba, secretary general of New Komeito, went as far as to call for reviewing the current tight rules on the SDF’s use of weapons to bring the regulations closer to global standards so SDF members can properly protect refugees and themselves.

The main opposition Democratic Party of Japan, with members ranging from hawkish conservatives to pacifists, remains sharply divided over how Japan should respond to the expected U.S.-led military operations.

With the three ruling parties — the LDP, New Komeito and the New Conservative Party — holding a majority in both Diet chambers, they can ram the bill through without support from the opposition.

Still, Koizumi has been calling on the DPJ to support the ruling camp’s initiative. Some senior DPJ members have indicated they would support the bill if the United Nations endorses a retaliatory military strike.

In a separate legislative step to better protect Japan from terrorist attacks, the ruling bloc plans to revise the Self-Defense Forces Law to allow SDF elements to guard important public facilities, including nuclear plants and U.S. military installations in Japan.

Some key public facilities in central Tokyo, however, will likely be dropped due to strong opposition from within the LDP.

Senior LDP members, including former Prime Minister Ryutaro Hashimoto and former Secretaries General Hiromu Nonaka and Koichi Kato, have stated that deploying the SDF at buildings in central Tokyo would give the impression that Japan is under martial law.

Responding to such internal calls, LDP Secretary General Taku Yamasaki said Saturday in Fukuoka that it would be necessary to exclude the Imperial Palace, the Diet building and the Prime Minister’s Official Residence from the list of facilities to be guarded by the SDF.

Koizumi’s bid to seek changes in the defense legislation seems to be gaining public support. According to a recent poll conducted by the Nihon Keizai Shimbun, 70 percent were in favor of Japan’s noncombatant support of the U.S. military and 76 percent wanted the SDF to be allowed to guard public facilities such as nuclear plants.

On economic issues, which will likely overwhelm Diet debate in the latter half of the session, however, Koizumi will probably find himself in a tight spot as he pursues dual goals — structural reforms and steps to prop up the ailing economy.

The Cabinet has maintained that these two seemingly contradictory targets can be achieved at the same time. Koizumi on the other hand has repeatedly stated, “No reform, no growth.”

The Council on Economic and Fiscal Policy, a key advisory panel, adopted a package of reform priorities, with the greatest focus on speeding up banks’ disposal of bad loans.

The panel also called for the establishment of a public-services employment program to generate jobs and for quick action to revitalize the stagnant stock market.

The legislative revisions needed to cover these measures will be presented to the Diet, while steps requiring budgetary appropriations will be incorporated in a supplementary budget expected to be submitted by mid-November.

Because of the current economic malaise, however, the Koizumi administration is now facing growing calls from within his own party to pursue more growth-oriented policies.

Shizuka Kamei, a longtime advocate of pump-priming measures, is not the only one making such calls. Taro Aso, the LDP’s policy affairs chief, is also urging Koizumi to expand the size of the planned extra budget to support the economy.

The Sept. 11 terrorist attacks that destroyed the World Trade Center in New York have apparently narrowed Koizumi’s policy options, as the global community expects Japan to play a greater role in preventing a worldwide economic slide.

Even hardcore reformist Heizo Takenaka, minister for economic and fiscal policy, told a news conference last week: “We must admit that the basis of Japan’s recovery has been changing. We may need to revise the scenario.”

If the government is to shift toward growth-oriented economic policies, the question may arise whether Koizumi can fulfill his promise of capping bond issuances below 30 trillion yen.

Masaru Takagi, an economics professor at Meiji University, urged Koizumi to give up this goal, which the prime minister touts as a first step toward fiscal reform.

“I believe the time is not ripe for fiscal belt-tightening,” Takagi said. “Under the current dismal economic conditions, in which tax revenues will likely be smaller than expected, delivering on the bond-cap promise is like stopping a blood infusion in the middle of surgery.”

Takagi stressed that limiting bond issuances should wait until banks have taken care of their bad loans at the soonest, so the economy can regain strength and reduce dependence on economic stimulus by the government.

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