Prime Minister Junichiro Koizumi’s administration, which had been sailing smoothly until a few months ago, now faces strong head winds amid a series of scandals. The first scandal to hit was the disclosure late last year that a certified architect had falsified building data on earthquake resistance. Since the beginning of this year, the administration has been roiled by the Livedoor case, the import of banned U.S. beef parts and bid-rigging cases involving the Defense Facilities Administration Agency.
All this raises questions anew about last September’s general election in which the Liberal Democratic Party won a landslide. The LDP, riding on the wave of Mr. Koizumi’s reform initiative, secured a solid majority of 296 seats in the Lower House.
During the campaign, Mr. Koizumi focused on the privatization of postal services, putting aside virtually all other issues. In this sense, the LDP victory was largely a reflection of voter support for his postal reform agenda — or at least for his enthusiasm for reform.
In this regard, a Kyodo poll taken in late January produced an interesting result: 50.6 percent of the respondents said that structural reforms being pushed by the Koizumi administration, such as introducing market principles into the public sector and easing or scrapping cumbersome government regulations, should be “reviewed.”
This does not necessarily indicate that popular support for reform is declining rapidly or that the number of people in favor of change is rising sharply. Rather, the finding suggests that more people are beginning to worry about the “negative effects” of structural reform. In the September election, many voters supported Mr. Koizumi primarily because they thought that his reform programs would stall if the “resistance forces” — the old guard within the LDP — staged a comeback.
Public anxiety about reforms going too far has been a subject of parliamentary debate of late. The key message is that Mr. Koizumi’s reforms are beginning to widen, rather than narrow, economic and other disparities in Japanese society — a point made even by leading figures in the ruling coalition.
“Life is difficult in sparsely populated areas,” said Mikio Aoki, chairman of the LDP caucus in the Upper House. “Disparities are spreading as the entire country is polarizing into light (winners) and shadow (losers).” In a similar vein, Mr. Takenori Kanzaki, the head of New Komeito, said: “Progress in structural reform is spreading distortions, or disparities, in the midst of our society.”
The Livedoor case — which led to the arrest of its maverick leader, Mr. Takafumi Horie, for stock-trading irregularities — seems to epitomize the economic polarization of Japanese society. Indeed, the meteoric rise of the Internet service provider can be attributed partly to Mr. Koizumi’s advocacy of structural reform. Market fundamentalism — the belief that the market is almighty — tends to encourage money worship (Mr. Horie once said “money can buy even people’s hearts”) or “fund-managed capitalism” that attempts to maximize a company’s market capitalization (as Livedoor did).
In the last general election, Mr. Koizumi and his party supported Mr. Horie, who had run as a proreform “assassin” candidate against an old-guard LDP candidate opposed to Mr. Koizumi’s postal reform. Although Mr. Horie lost, the LDP leadership bears a degree of responsibility for trumpeting him as a “poster child” for the reform campaign.
The LDP has been able to hold power most of the time since it was founded in 1955 thanks to its hands-on efforts to prevent social segmentation and development of disparities between urban and rural regions. In the process, however, those efforts have created vested interests as well as cozy ties between government, bureaucracy and business. The purpose of Mr. Koizumi’s drive for “structural reform with no sanctuaries” is to eliminate these obstacles.
One wonders, though, whether Mr. Koizumi, in his eagerness to push his reforms, has not been blind to the negative side of his “no reform, no gain” campaign. The growing concerns about his reform initiative, as necessary as it is, suggest that an increasing number of people are becoming skeptical, if not critical, about the way it is going.
Mr. Koizumi has said in a parliamentary exchange that “society will lose its vitality unless people are very careful not to get jealous of successful ones or drag them down.” He is right, but these are the words of a commentator, not a responsible political leader. He needs to demonstrate through deeds that he sympathizes with those who are economically and socially disadvantaged, so that they will not become victims of a society that rewards only the successful.
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