Foreign Pessimism about the Koizumi Administration

John de Boer (University of Tokyo)

Over the past six months, the outside perception towards the chances of serious reform in Japan has shifted from euphoric optimism to absolute skepticism. The LDP's landslide victory in July's Upper House elections was originally interpreted by most as the rubber stamp for Koizumi's reforms with "no sacred cows." However, the prediction made by the Financial Times back on July 26th that "Koizumi's popularity may end up damaging him", by getting more conservative LDP members elected has begun to manifest itself.

Over the past week foreign newspapers have intensified their critique of the Koizumi administration due to his cabinet's inability to lead the nation to serious reform. Calls for a cabinet reshuffle have been echoed throughout the world and all have emphasized incompetence. On November 10, the world's largest circulating Spanish language daily El Pais, carried a full-page article depicting the back-stabbing political environment in Japan between traditional conservative LDP members led by former Prime Minister Ryutaro Hashimoto and Koizumi's reform minded group of inexperienced law makers. Their analysis ridiculed Foreign Minister Makiko Tanaka characterizing her leadership style as that of a mama-san battling her male counterparts.

The focus of David Ibison's article in the Financial Times (Nov. 7th) was on the debate concerning banking reforms. The public mood he said was difficult to predict. With increasing unemployment many are concerned about the safety of their bank deposits. However, for politicians who need not worry about their financial situation the battle was over power interests. He warned that traditional conservative interests led by Shizuka Kamei (the eminence grise of the LDP), who called for a delay in banking reforms, was gaining ground to the detriment of foreign interests.

Kwan Weng Kin of the Singapore Straits Times (Nov. 9) wrote about the mounting pressure on Koizumi for a cabinet reshuffle. In this article, Foreign Minister Makiko Tanaka, Farm Minister Tsutomu Takebe, economic policy chief Heizo Takenaka and Minister for Financial Services Hakuo Yanagisawa were all identified as being on the way out.

Perhaps the most scathing remarks were made by Gillian Tett of the Financial Times (Nov. 11). She dismissed Koizumi as nothing more than a 'telegenic' public relations expert who had good instincts but no idea about policy implementation. Tett explained that, "the problem is that Koizumi is not a policy monk. Nor is he a hands-on manager. Instead he seems to be a born delegator who prefers to hand much of the messy business of government to his cabinet advisors." Her dissection of the cabinet left no hope. She described Finance Minister Masajuro Shiokawa as having a limited grasp of macro-economics, accused Financial Reform Minister Hakuo Yanagisawa as having vested interests in defending the policies of the Financial Services Agency, characterized Yasuo Fukuda as an "excessively cautious operator" and dismissed Heizo Takenaka as powerless. This was not all, the entire bureaucracy she said was, "riddled with vested interests and power divisions," making it impossible to implement long-term oriented reform measures.

The ultimate conclusion provided by the foreign press was that serious reforms were unlikely due to the fact that traditional conservatives would succeed in sabotaging any serious reforms ensuring that Japan's economic policy would continue to be defensive and driven by short-term power interests.

Articles:

• Gillian Tett, "Koizumi strangled by his own sound bites," The Financial Times, November 11, 2001.
• David Ibison, "Japanese leaders cross swords over bank reform," The Financial Times, November 9, 2001.
• Kwan Weng Kin, "Koizumi faces mounting pressure for reshuffle," The Singapore Straits Times, November 9, 2001.
• Gillian Tett, "A reformer tackles his supporters," The Financial Times, July 26, 2001