Japan on the brink

The Diet returned to business yesterday after a two-day recess, with Prime Minister Fukuda and members of his cabinet delivering speeches outlining the government’s basic policies for the 2008 regular session.

Prime Minister Fukuda — despite his decline in popularity, which he has said “can’t be helped” — gave another excellent speech, his second in two days, in which he outlined the nature of the problems facing Japan and the work that remains to be done. Continuing the soft approach that he has followed since taking office in September, Mr. Fukuda opened his address by praising the work of the recently finished special session and calling attention to the ways in which the government and the opposition were able to cooperate to pass legislation, despite the conflict over the anti-terror law.

He then correctly identified the problems facing Japan today: “In the midst of the change in the global economy symbolized by the rapid growth of China, India, and others, how do we preserve our country’s economic strength, how do we maintain our social security system in tough economic conditions, how do we deal with the problem of declining birth rates, how do we deal with the problems of expanding irregular employment and stagnant regional economies, and also, how do we deal with the fierce global competition in technology, and how do we deal with the problems of the global environment, natural resources, and energy?” He spoke of building a new Japan, not a beautiful Japan, and he said “our” — he emphatically did not lay down an ideological blueprint for this new Japan. Indeed, if Mr. Fukuda has an ideology, it is one that upends the traditional way of politics in Japan, elevating the people at the expense of the government and bureaucrats.

As expected, he emphasized the need of build a consumer-centered society. He stated five goals: (1) realizing a consumer-centered society; (2) securing the livelihood of the people by creating a new social security system; (3) constructing a vital economic system; (4) “realizing Japan as a peace cooperation state”; and (5) finding a way to a society that is both energy-efficient and prosperous. What follows is a long and detailed statement articulating how the government will pursue these goals. I doubt that he will have enough time and power to act on this agenda, but it’s important to note that Mr. Fukuda gets it. As I have suspected since he took office, Mr. Fukuda, far from being an aged functionary and tool of the factions, has a keen appreciation for the problems facing Japan today. He may not be flashy like former prime minister Koizumi, but in many ways he has a more constructive vision for Japan than the mercurial former prime minister. (Like Mr. Koizumi, I think Mr. Fukuda realizes that a new system will not emerge without political change. The political system has long been dead weight holding back Japan.) He recognizes the interconnectedness of the problems facing Japan; for example, towards the end of his address he spoke of the importance of changing the education system to enhance Japan’s international competitiveness. Unlike his predecessor, whose ideas about education harkened back to the Meiji-era rescript on education, Mr. Fukuda recognizes Japan’s responsibility to its children. (He also undoubtedly angered the conservative ideologues by noting that if Japan is to revise its constitution, revision has to be the result of broad consensus among all parties. For an illustration of the contrast between Mr. Fukuda and Mr. Abe, check out the picture of Mr. Abe in this article.)

It is truly unfortunate that Mr. Fukuda was not elected LDP president and prime minister in September 2006, when he would have been in a position to move forward aggressively with this agenda. He would have control of both houses of the Diet, the goodwill of the public, and a sincere desire to tackle the problems facing Japan. Instead Japan got Mr. Abe, and the rest is, of course, history. Now Mr. Fukuda has to juggle a divided Diet, a divided party, and an insecure public that does not seem to be particularly willing to be patient while Mr. Fukuda tries to make progress on building a new Japan.

I do not think that Mr. Fukuda was exaggerating when he spoke of the scale of the problem facing Japan. As Ota Hiroko, his minister of economic policy, said yesterday, Japan is no longer a first-rate economic power. Takenaka Heizo, Mr. Koizumi’s reform czar, made the same point in an article in the February issue of Voice. Mr. Takenaka called Japan a “policy third-world country,” citing the government’s inability to resolve any of the long-standing economic problems facing Japan.

But I also think that Mr. Fukuda will be hard-pressed to address these problems in this Diet session, especially with the prospect of a general election looming over the proceedings. He will not be helped by talk of a consumption tax hike, which Finance Minister Nukaga Fukushiro dared to do yesterday. I don’t doubt that Mr. Fukuda’s approach will put pressure on the DPJ in a general election campaign — and may make the difference in the LDP’s keeping an HR majority — but the festering problems within the LDP may be enough to undermine his government fatally.

It may be the case that true reform will have to wait for regime change.

One thought on “Japan on the brink

  1. Anonymous

    You correctly recognized that Prime Minister Fukuda Yasuo \”gets it.\” He appears to have a very solid and substantial understanding of the major problems facing Japan in the next five years. And as you said it was unfortunate that Abe Shinzo replaced Koizumi after his departure instead of Fukuda. It was obvious to me as early as 2005 that this would happen. Fukuda\’s understanding of foreign challenges to Japan is also very substantial, and this may well be the most important contribution he can make given the revolutionary changes that the world faces today. The difficulties facing the global economy will be as important as the strategic challenges in East Asia and especially the Middle East.


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