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June 25, 2002

The Koizumi Administration One Year After: Evaluation and Future Expectations

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

Evaluation One Year After

Mr. Yotaro KobayashiOne year has passed since the Koizumi Administration was inaugurated with unprecedented high popularity and high hopes on the part of the general public in Japan. Last June I contributed an essay to this Platform, where I made some requests regarding certain policy measures and expressed my expectations for execution of necessary reforms. One year later I now wish to present my evaluation of the achievement of the Koizumi Administration for the past year, as well as make further requests.

My first point concerns Prime Minister Koizumi's political stance. He has been consistently maintaining his basic position to push structural reform forward and to carry out necessary reforms even when they accompany some pain. Furthermore, I think he has shown quite an ability to overcome various difficulties by making decisions in a politically realistic manner. Of course, some of those decisions might have appeared to the general public to be a compromise or even a step backward. However, I believe that a high mark should be given to the result of Mr. Koizumi's bold effort to deal with politically difficult and thus far untouchable issues such as reform of special public corporations.

With regard to his leadership, he has been making full use of his Prime Ministerial authority, which was strengthened by administrative reform. In particular, the existing faction-adjustment type of politics is being broken up by a policy formation process in which Prime Minister can exercise his executive power and lead discussions in the Council of Economic and Fiscal Policy. Through this process he has made a great contribution by making politics more transparent and open to Japanese citizens.

As for specific policies, higher marks can be given to foreign policies than to domestic policies. His responses to last year's terrorist attacks in the U.S., including the overseas dispatch of Japan's Self Defense Force, have had a particularly favorable effect on U.S.-Japan relations. On the domestic front, strengthening of the employment safety net can be appreciated, although it is not yet sufficient. In my previous article on this Platform, I made an appeal to the Koizumi cabinet to strengthen the social safety net because I was convinced that reform could not be advanced without a sense of security among the public.

We often hear the criticism that the speed of reform is too slow. But I think those Japanese who say so are too impatient and have a misconception that structural reform would mean instantaneous economic recovery. The difficulty that Japan is facing in its reform effort is unprecedented in history and the effect of such a reform effort will not become visible until several years later, as experienced by Western nations in their reform processes.

Instability Factors for the Administration: Declining Popularity

Nevertheless, we must admit that sharply declining popularity, due to various criticisms, is a serious instability factor for the Koizumi Administration. Of course, the direct cause of such a decline is the resignation of Makiko Tanaka as Foreign Minister. It is surprising to see how influential Tanaka was, if we identify the decline in the popularity rate for Koizumi with the popular support for Tanaka. Although Tanaka's resignation was a plus for Japan's foreign diplomacy, and, therefore, should have thus been perceived, the fact that it was not and she still enjoys a high popularity rate should indicate a deeply seated ochlocracy, or, fundamental immaturity in Japanese democracy.

One question is why the popularity rate for Prime Minister Koizumi has continued to decline, however gradually. One of the reasons may be a series of misconduct on the part of some LDP politicians. However, I believe that the biggest problem is widespread concern about the uncertainties of Koizumi's reform message among the public due to the fact that no message has yet been conveyed to the general public regarding Koizumi's ultimate vision after reform or concrete policies to achieve it, while only pain associated with reform has been emphasized in public. Koizumi and his Cabinet are now facing a serious challenge regarding their leadership style.

Requests for the Koizumi Administration

I continue to support the Koizumi Cabinet, but wish to make several requests to them.

The first request is that Prime Minister Koizumi should talk more about his vision after reform to the general public in his own plain words.

Second, it is important to make it clearer how such a vision is related to certain concrete policies. Especially important is to clarify the relationship among tax reform, fiscal reform and comprehensive social security reform. It has become clear by a government survey that 95% of people are more or less concerned about the future of the social security system in Japan. This is nothing but a fiscal problem of how to sustain a rapidly aging society in the future. Without dissolving such concern it is not possible to advance reform. Therefore, it is necessary to present a clear image of our future life to the general public by combining pension reform, medical reform and welfare reform into a comprehensive social security policy instead of treating them separately as in the past.

Currently, various discussions are taking place regarding the use of tax reform for the purpose of economic revitalization. I regard economic revitalization as an urgent issue. At the same time, however, a strategic approach is required to present tax, fiscal and social security reforms as a total package and link it to a targeted social image.

For the past year, Prime Minister Koizumi's passion has been directed to the destruction of the old LDP regime and the antiquated system and order in Japan. So far he has been doing quite well as a "lone reformer." However, from now Koizumi needs to create the future, not by himself, but through team-work of people with various opinions and positions. Such "ordinary" leadership is required of Prime Minister Koizumi in his second year.

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