Domestic woes endanger Fukuda’s hopes for big G8 splash



Prime Minister Yasuo Fukuda over the weekend restated his resolve to demonstrate leadership on environmental and other issues at the Group of Eight summit in July, as he made his first visit to the main venue in Hokkaido.

But the 71-year-old prime minister must first address various tasks stemming from the political gridlock in the Diet, where the opposition bloc controls the House of Councilors, to clear up uncertainties about his administration, which has seen its support rating plunge in recent weeks.

“I will handle foreign and domestic politics at the same time. The Bank of Japan personnel and issues to do with the summit will also proceed simultaneously (in my mind),” Fukuda told reporters Friday before heading to Hokkaido, indicating his eagerness to engage in foreign diplomacy at the same time he addresses domestic woes.

Fukuda’s two-day visit to the scenic hot-spring resort town of Toyako was his first since taking office last September, after his predecessor Shinzo Abe, who selected the Lake Toya area for the summit, abruptly announced his resignation.

After checking the main venue, the Windsor Hotel Toya Resort & Spa, and other related facilities Saturday, Fukuda said, “I’m sure the leaders of other countries will be satisfied with this place.”

The visit may have served as a brief break for Fukuda, who recently failed to prevent the leadership vacuum at the BOJ and to extend a provisionally raised gasoline tax of about ¥25 per liter beyond its expiration March 31.

“We have to think how other countries will see us. I think (the political gridlock) is an issue we should not ignore also from the view of diplomatic power,” Fukuda told a news conference March 31 after failing to extend the gas and other road-related tax rates due to resistance by the opposition parties led by the Democratic Party of Japan.

While the row over selecting a BOJ governor is likely to settle soon, a showdown over the tax wars is expected to come to a head late this month when the ruling coalition of the Liberal Democratic Party and New Komeito will be allowed under constitutional provisions to hold a second vote in the House of Representatives, which they control, to win Diet approval for the bill to reinstate the tax rates.

From the government’s viewpoint, the tax row has not been just about gasoline prices but one related to the environment.

“Is lowering gasoline prices an issue Japan can proudly mention to the leaders of Western countries at the Toyako summit?” Fukuda said earlier, expressing his concern that cheaper gasoline will encourage more use of cars and other countries may regard it as a move that goes against global efforts to curb greenhouse gas emissions.

The government and the ruling parties plan to reinstate the special tax levies, although some LDP lawmakers fear a public backlash and such a move may prompt the DPJ to submit a censure motion against Fukuda in the Upper House.

A government source said the prime minister could “ignore” this as it would a nonbinding motion, but it would nonetheless be another blow to the government.

The best scenario for Fukuda would be to ride out the road tax storm and score points by hosting a successful G8 summit at Lake Toya on July 7 to 9.

Given that the Lower House’s current four-year term runs until September 2009, the ruling parties will probably want to delay a general election for as long as possible, fearing they could lose their two-thirds majority in that chamber.

However, with the DPJ turning up the heat on the government, it is not certain Fukuda will see this scenario come to fruition. DPJ President Ichiro Ozawa has noted the possibility that Fukuda may be forced to dissolve the Lower House for an election at an earlier date to resolve the political deadlock.

Calls for Fukuda to be replaced may also emerge from within his party if his popularity continues to decline.

The approval rating for the Fukuda Cabinet has plunged to 26.6 percent, the lowest since he took office and below the “danger” line of 30 percent for the first time, according to a Kyodo News poll conducted nationwide Friday and Saturday.

Meanwhile, demonstrating leadership as the G8 host on environmental issues will not be an easy task for Fukuda, with Japan already facing difficulty in attaining its goals for reducing greenhouse gas emissions under the Kyoto Protocol.