Hashimoto's resignation

Any change of leadership in an economic giant such as Japan will obviously raise concerns among leaders across Asia because political uncertainty in the world's second largest economy could prolong, if not worsen, the monetary crisis already blighting a number of the region's countries.

Japan's political stability serves not only the fundamental interests of Tokyo and other governments in the Asia-Pacific region but is also beneficial to global peace and prosperity, or thus commented China on the resignation of Japanese Prime Minister Ryutaro Hashimoto.

Hashimoto, 60, said Monday that he was resigning after his Liberal Democratic Party (LDP) suffered a humiliating defeat in last Sunday's Upper House election. The LDP grabbed only 44 seats, a loss of 17 seats and far fewer than the 69 needed for a majority of the 126 seats contested in the election. Hashimoto will remain in office until July 30, when his successor is set to be sworn in.

Prior to his announcement, Japan's media predicted that Hashimoto -- who assumed office in January 1996 after instilling confidence in the Japanese with his "Big Bang" financial reform package to catapult already economically strong Japan into the next millennium -- would have to stand down because of his slow response to the country's financial crisis. The turmoil has lead to record high unemployment, rising bankruptcies and the weakening of the yen against the U.S. dollar. On top of that was his no-action stance over bribery allegations leveled against some LDP members.

Asian countries are attentively following the political developments in Japan and are keen to know who Hashimoto's successor will be.

Under Japan's political system, the most likely candidate is Foreign Minister Keizo Obuchi, who is tipped to become LDP president when the party convenes on July 21. With the LDP still holding a majority of 263 of the 500 seats in the more powerful Lower House of parliament, whoever wins the party's presidency will automatically become the country's prime minister. Another possible candidate is former chief cabinet secretary Seiroku Kajiyama.

What other Asian leaders expect from the change of leadership, according to observers here, is that Hashimoto's successor can come up with a concrete plan and quick action to resolve Japan's financial crisis and so be in a better position to help alleviate the region's economic woes.

Indonesia's Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita, who was in Tokyo to meet bankers, expressed his confidence Monday that Japan's political crisis would not affect Tokyo's direct help to Indonesia.

This is understandable considering that Japan's second largest overseas investments are in Indonesia. Total Japanese investments here at the end of last year amounted to US$41.38 billion, covering more than 1,000 projects.

We believe that, whoever becomes the next premier, Tokyo's policy toward Jakarta will not change greatly as there is too much at stake here. As Indonesian Minister/State Secretary Akbar Tanjung put it: "The government of Indonesia is convinced that the resignation of Mr. Hashimoto will not affect relations, especially economic relations, between the two countries."