Public Expectations for the New Koizumi Administration

Yotaro KOBAYASHI (Chairman of the Board, Fuji Xerox, Co., Ltd.)

Change in People's Minds and the Birth of the Koizumi Administration

In the LDP leadership elections, Mr. Koizumi won the primaries among party members by an overwhelming majority, at which he himself was probably surprised, to become the president of the LDP and the new Prime Minister. Mr. Koizumi's victory over Mr. Hashimoto, who was supported by the largest faction of the LDP, has proven how strong public criticisms against factional LDP politics and public expectations for reform really were. And the public was shown a possibility of a change in the factional politics, as Mr. Koizumi appointed the three key posts in the LDP.

The Japanese public has long been seen as being indifferent about politics. They seemed tired of the old-fashioned LDP and its association with special interest politics, but could not find a responsible party as an appropriate alternative to the LDP. Also, because each individual felt powerless as his or her vote did not count, the public has been increasingly detached from elections. However, the political consciousness of the Japanese public, which gave birth to the Hosokawa administration, driving the LDP into a minority position in 1993, did not die after all. This fact may have been underestimated by many politicians at the national level.

This time, an important factor for the birth of the Koizumi administration was the fact that the organized votes that were supposed to belong to various factions went to Mr. Koizumi in the primary elections among LDP party members. However, one wonders if the sense of strong unity and confidence of each LDP faction over their closely tied special interest groups has vanished completely. The answer is mostly likely no. The Koizumi landslide in the primary elections was largely due to LDP members' concern about a big defeat in the Upper House election in July unless some visible "change" in the leadership takes place. Although high approval of the public for the Koizumi administration continues, what the public really see in Prime Minister Koizumi's structural reform is still unclear, and depending on upcoming specific policy measures, especially economic and social security related policies, their attitude could change.

As the public has been attracted to the TV coverage of the Diet (Parliament) since the start of the Koizumi administration, there seems to be renewed interest in politics. It is said that political debates in the Diet are "interesting" for the first time in many years. To be sure, Mr. Koizumi's speeches and actions are refreshing, and his words, attitude and way of thinking are raising public expectations for a change this time, unlike in the past.

On the other hand, Foreign Minister Makiko Tanaka, whom the Prime Minister reportedly handpicked in spite of strong objections within the party, seems quite risky in view of her attitude regarding the textbook issue and meetings with foreign dignitaries. Her rude treatment of Foreign Ministry staff, broadcast on TV, gave the public a glimpse of her authoritarian character, and she may well become the "Achilles Heel" in the Koizumi administration.

What is Required of the Koizumi Administration

Mr. Koizumi won the position of LDP president by insisting on "structural reform without a sacred cow," and has been keeping his word in the Diet debates until now, leading to an extremely high approval rate among the public. But he will face a real test from now on.

The Koizumi administration has given an impression that it will respond to public expectations for LDP reform. On the other hand, the public is also hoping for economic recovery. Once individual policy measures to push structural reform are announced, those who are adversely affected by those measures undoubtedly will raise a lot of criticisms. And conservative factions within the LDP may well take advantage of those criticisms and start bashing Mr. Koizumi. Needless to say, what is required of the Koizumi administration is not to yield to such reactions, but to continue their dialogue with the public on the necessity of reform in such a way that the opposition finds it difficult to upstage. In this regard, Prime Minister Koizumi is doing a good job and hopefully will maintain his current stance in the future.

Most of all, however, it is important to adopt and upgrade policy measures to mitigate the pain of structural reform, the so-called "safety net," not for particular interest groups but for individuals. Especially, in the area of employment, measures must be taken to deal with current concern about job insecurity due to the disposition of nonperforming loans by financial institutions. The mismatch in the labor market also must be resolved in order for Japanese industries to adapt to the new information age and for individual workers to be able to make full use of their potentials and enjoy working in a better environment. For that purpose, the safety net in employment should be upgraded to encourage labor mobility to such an extent that its scale and scope could be viewed as being too large to avoid moral hazards. Needless to say, the Prime Minister is expected to come up with public funds for such policy measures by cutting back on some of the conventional expenditure items in the budget.

If Mr. Koizumi presents a current reform plan to push the disposition of non-performing loans with a concrete safety net program, as well as pushes a social security policy that would lessen the public's future concerns, and if he presents a budgetary reform plan to restore the so-called "primary balance" in the budget, his administration will generate even greater support and higher hopes at home and abroad.

Long-term Political Reform

Since 1993 we have been hoping for political reform, in which political parties would be reorganized on the basis of their policies and multiple parties with enough responsibilities would compete over their policies. What the Koizumi administration is pursuing, such as departure from special interest politics, the leadership of the Prime Minister in politics, and clear presentations of policy agenda, seems more or less consistent with this direction. However, there are several problems which remain to be fully discussed in public, such as constitutional issues including the public (direct) election of the Prime Minister. But at least in view of unprecedented high evaluations and expectations of the Koizumi administration after one month since its birth, we can anticipate that it will remain in power through the Upper House elections this summer and possibly beyond.