Budget Rise Eyed for '08 Seen As Reform Retreat

Reviewed by Takahiro MIYAO

Article:
Budget Rise Eyed for '08 Seen As Reform Retreat
The Japan Times (12/21/2007)
http://search.japantimes.co.jp/cgi-bin/nb20071221a1.html

Comments:

These days Japan's Prime Minister Yasuo Fukuda seems to be rapidly losing his popularity, even among LDP supporters. Initially, his "ambiguous" style of politics was regarded rather highly by those who had been tired of the hard-nose political approach by former prime ministers, Koizumi and Abe, but is now considered the sign of his indecision and lack of leadership by many Japanese.

The fiscal 2008 draft budget just unveiled by the Ministry of Finance appears to be typical of the Fukuda approach, in which a compromise is hit among various demands by those bureaucrats and politicians who are representing their local interests. Especially, the pressure by the ruling coalition has been quite strong and clearly affecting the main part of this draft budget in anticipation of general elections sometime early next year. As a result, there is a slight increase in public spending to support residents in rural areas, whereas the overall burden on the household sector as a whole will increase to pay for such spending.

Unfortunately, the main signal that this draft budget is sending to Japanese and overseas observers might be summarized as "draft budge falls short of reforms" (Daily Yomiuri), "fiscal reform loses steam as funds are plowed to rural areas" (Asahi.com) as well as the headline of the Japan Times article shown above. This will not help Mr. Fukuda regain his popularity or win the next general election. Therefore, he has to change his political style, sooner or later, from the "ambiguous" to "unambiguous" approach, especially regarding economic and fiscal reforms.

Acknowledgment:
This review is adopted from the following blog (with its Japanese translation):
http://glocom.blog59.fc2.com/blog-date-20071221.html