Koizumi boom good for LDP and reform

By Linda Sieg

TOKYO (Reuters): Voters in a Tokyo municipal election on Sunday sent one clear message to Japanese politicians of all persuasions: something has got to change.

And that message, optimists say, will provide impetus for popular Prime Minister Junichiro Koizumi's agenda of vital but painful reforms to Japan's long-stagnant economy and stale political sphere.

Touting his message of reform and promising to pay more heed to the nation's neglected cities, Koizumi lured a substantial number of jaded urban voters back to his conservative Liberal Democratic Party (LDP) in a Tokyo election that was being eyed for clues to a national July poll for parliament's Upper House.

The main opposition Democratic Party -- which shares much of Koizumi's reform agenda but lacks a charismatic leader -- also gained seats despite an uphill battle against the premier, whose dashing looks and soundbite savvy have made him something of a superstar on the campaign trail.

"Both of the main parties are saying the same thing. There is a major league consensus here that things have to change, and if you tell people they don't have to suffer pain, they'll say you are lying," said Chuo University Professor Steven Reed.

The LDP won 36 percent of votes cast in the election for the 127-seat Tokyo Metropolitan Assembly, up from about 30 percent in the last Tokyo election in 1997. The Democrats edged up to 13.5 percent from around 10 percent, media said.

In a sign that bodes well for the LDP in July, the party fared far better than in an election for parliament's Lower House one year ago. Urban voters in that poll were put off by then-Prime Minister Yoshiro Mori's penchant for gaffes and a belief the scandal-tainted LDP was bound by rural interests.

In that national poll, LDP candidates in Tokyo's proportional representation districts, where voters cast ballots for parties rather than individual candidates, took a mere 19.5 percent against the Democrats' 29 percent.

"What didn't happen was a miracle, it was a fairly normal boom," Reed said. "But the LDP is going to increase their seats in the Upper House -- that's almost guaranteed."

Advisers to Koizumi, who rose to power in a stunning victory over Old Guard enemies in the long-ruling LDP, last week unveiled a blueprint for reform which they said would lead the economy, now teetering on the brink of recession, to steady growth. But they admitted the process would bring a hefty dose of pain first.

Koizumi needs the LDP to perform well in the Upper House election to survive a party presidential poll set for September, though his three-way coalition can stay in power even if they lose, given their majority in the more powerful lower chamber.

The party's respectable showing in the Tokyo election will probably persuade Koizumi's LDP critics to stay silent, at least a while longer, political analysts said.

"Those inside the LDP who are opposed to Koizumi's reforms were the losers" in the Tokyo election, said political pundit Nobuhiko Shima. "The mood is making it harder to oppose him."

LDP members wondering which side to back in the intra-party struggle may now be more likely to opt for Koizumi and reform.

"Those inside the LDP who were in doubt about their direction will probably now make up their minds," said Toin Yokohama University professor Jinyo Kaneko.

"Ahead of the Upper House election, even his opponents will have to unite under his leadership."

Still, skeptics remained dubious over the LDP's ability to kick an addiction to vested-interest politics that has stood in the way of economic reforms despite a decade of stagnation.

An Upper House victory for the LDP-led ruling coalition "would be good if you believe that they were going to implement the (reform) platform. The question is, how much they will be able to implement it against strong internal resistance," said Marshall Gittler, head of Asian currencies at Bank of America.

"Koizumi has already made several compromises and right now he is at the peak of his popularity," he added. The prime minister has enjoyed record-high public support rates of over 80 percent since taking office in April.

"The LDP has changed in the past," Gittler added. "The question is, can they change in a way that disadvantages their core constituencies?"

Signs the economy is already headed for recession again also raise doubts as to whether fickle voters are prepared to go the distance when reforms start to bite into jobs and livelihoods.

"A continued economic downturn will provoke a chorus of criticism in many circles," wrote Ichiro Ichikawa, deputy editor of the Nihon Keizai Shimbun business daily on Monday.

"Ratings are volatile and can drop as fast as they rise."

The LDP won 53 seats in Sunday's Tokyo election, little changed from the 54 it took four years ago but far better than anticipated only a few months ago, when Mori was prime minister.

The Democrats won 22 seats, up from 13 and claimed close ties with another seven victorious candidates.