Tue, 13 Sep 2005

Changing Japan

The 63-year-old silver-haired political veteran took a gamble, and it has paid off handsomely.

Pending the final tally to be announced on Friday, reports point to Japanese Prime Minister Junichiro Koizumi's Liberal Democratic Party (LDP) winning a clear majority for the first time in 15 years with 296 of the 480-seat parliament. An alliance with the New Komeito Party, which took another 31 seats, ensures domination of both chambers by this coalition.

The headline issue was the privatization of Japan Post -- a financial services empire which includes savings and insurance services with a total of US$3 trillion in assets. But the key to his victory was Koizumi's astuteness in moving away from traditional closed-door politics and appealing directly to voters to back his plan after his initial reform proposals were defeated in parliament.

Koizumi believed the reforms would stimulate Japan's economy and clean up central government finances.

His political decision to "go public" and "innovation" to "stifle" party rebels, and to appeal to the young middle class, rejuvenated the normally apathetic Japanese electorate as evidenced by the higher voter turnout of 67.5 percent, compared to 60 percent in the 2003 election.

His pledge to step down from his party's leadership has also endeared him to voters.

Koizumi has built a reputation as a slick campaigner but has a patchy record of implementing reform. Critics are also right in suggesting that his policy agenda is somewhat bereft of concrete plans.

But with such a mandate, Koizumi may now go beyond just postal reform and look to adopt the most salient points of other agenda, some of which was raised by the opposition during the campaigns, on issues such as pension and medical care.

Indonesia should welcome a rejuvenated Japan, especially one with an economy that is rising beyond what seems to be a perennial recession.

Politically, a stronger and stable Japan is favorable to the emerging strategic landscape to help build a robust East Asia Community which includes nations of southeast and regional giants China and India.