Prime Minister Junichiro Koizumi on Monday declared that his administration is determined to initiate the hard-hitting structural reforms needed for Japan's "resurrection and development."

To ensure the continuity of business-stimulating measures launched by the preceding coalition government, Mr. Koizumi promised prompt implementation of the demand-creating programs adopted by the government of former Prime Minister Yoshiro Mori.

At the same time, however, he intends to shift the priority in the government's economic policy from the business stimulation dependent on fiscal spending to measures designed to solve the bad-loan problem and promote structural reforms. This will mark a clear departure from the Liberal Democratic Party's traditional national economic management, which has relied on deficit fiscal spending and often focused on immediate measures such as shoring up stock prices.

Specifically, Mr. Koizumi intends to initiate fiscal reconstruction in two phases, starting with the fiscal year 2002 government budget, in which the total amount of government bonds will be held below 30 trillion yen. Reforms will be carried out to restore the "primary balance" -- the balance left after deducting the revenues from bond issuance and the payment of interest on the principal -- to the budget. Success depends primarily on Koizumi's determination to fight the forces opposed to change.

Riding a crest of public popularity, Mr. Koizumi declared that reforms must be implemented across the board. He also referred to such cherished topics as a constitutional change allowing popular election of the prime minister and privatization of the government-run postal services -- mail, savings and insurance.

Mr. Koizumi also wants to see the bad-debt problem resolved in a few years -- a painful process that will involve writing off commercial banks' nonperforming loans once and for all. But the government will have to involve itself in that process one way or the other. Of course, outright debt writeoffs will require drastic restructuring on the part of dead-beat businesses, such as those in construction, real estate and distribution.

No doubt such surgical measures will meet strong resistance, not only from those debt-heavy borrowers but also from within the ruling parties. That could prompt the government to pump more public money into the banks to help bolster their capital base. Such a move would put Mr. Koizumi's leadership to the acid test.

All told, Mr. Koizumi's first policy speech was long on principles but short on details. These shortfalls will be resolved through coming Diet debates between government leaders and opposition-party representatives. But none of the proposed reforms can be implemented without hurting affected economic sectors. Because the LDP has been supported by such businesses, Mr. Koizumi will probably face the strongest resistance from within his own party.

In particular, many members of the governing parties are still demanding that public-works spending should play an active role in invigorating the economy. Politicians backed by voters in the postal-services sector are, of course, reluctant to accept Mr. Koizumi's idea of privatizing the government postal services. Therefore, Mr. Koizumi has more than one hurdle to clear to achieve his reform goals.

In this connection, it should be noted that Mr. Koizumi used "dialogue with the people" as another key phrase, in addition to "reforms," in his speech. This is fitting for the first LDP leader to succeed in winning the post of party president on the strength of public popularity. Mr. Koizumi should seek ways to win even more public support in order to achieve his reform goals.

His most formidable enemy in the coming months will be time. With the Upper House election scheduled for July, failing to take any definite step forward in his major reform projects could deal Mr. Koizumi and the governing party a fatal electoral blow. Then both the new prime minister and his widely hyped reform plans would have been nothing but a flash in the pan. This kind of outcome is what the Japanese people most hate to see.

Mr. Koizumi has proved himself a great orator. He must now prove that he is a politician with the courage and perseverance to meet difficult challenges. He rightly calls his Cabinet a "reform team," vowing to fight an all-out war against the status quo. It is going to be an uphill battle, but it is a battle he must win at all costs. Otherwise, he will remain largely what he was when he ran for LDP president: a maverick crying for reform.