Fernando Delage discusses the changes that have taken place in Japan over the last five years under the administration of Junichiro Koizumi. Prime Minister Koizumi gained extraordinary popularity for his ability to deal with diverse interest groups and bring about the structural reforms that the Japanese economy had been needing since the beginning of the 90’s. Now that Koizumi‘s government is ending, the question to be asked is: whether Shinzo Abe, Koizumi‘s successor, will have the consistency and leadership to clear up economic uncertainty, secure foreign policy, and continue the legacy of reforms?
AFTER FIVE AND A HALF YEARS AT THE HEAD OF THE JAPANESE GOVERNMENT, Junichiro Koizumi will give up his position as Prime Minister at the end of September. Only one year ago he attained a historic victory for his party, the Liberal Democratic Party (LDP), but he made a promise to abandon power in 2006, and that promise will be maintained.
In Japan, five and a half years in office is a long time. One peculiarity that differentiates the Japanese system from the majority of Western democracies is that the election of Prime Minister is an internal process of the majority party, and not a part of the Legislative elections. Because the Liberal Democratic Party holds the majority in Parliament, it’s President than becomes the Prime Minister, thus explaining the rapid succession of Prime Ministers as well as their limited power. In most cases, it is rare for a Prime Minister to be in power for more than two years.
But everything changed with Koizumi. His huge popularity and the gradual rise of the LDP allowed him to transform the way politics were done in Japan. On one hand, he went up against the leaders of his party, destroying the system of factions that had characterized the liberals for the last fifty years. And on the other, he attempted to reduce the influence of bureaucracy, a pillar of the Japanese State since the Meiji era.
The result was something that had never been seen before: a strong Prime Minister with the capacity to handle multiple interest groups and still carry forth the structural reforms that the Japanese economy has been demanding since the 90’s.
 SHINZO ABE, HIS SUCCESSOR
Koizumi’s success has been so personal that the first doubt that comes to mind is whether his successor, Shinzo Abe, elected President of the LDP on September 20th, will consolidate this new political system, or if he will be incapable of avoiding the return of factions. Abe’s leadership appears to be much more traditional than Koizumi’s; he lacks charisma, and so far has not made any declarations to reform.
The proximity of the next Senatorial elections, set for July of 2007, will give him a brief period in which to prove himself, and assure his continuance in power.
There is also a lot of uncertainty about his ideas on economic issues. Japan has begun to grow again, and last spring, the deflation process of the last several years officially ended. But the reforms needed are far from over. The rapid aging of the population, the large fiscal deficit –the largest of all of the members of the OECD– the challenges of globalization, and the economic emergence of China, all demand a strong leader.
Shinzo Abe has had no experience in management of any of these fields, although he may choose, as Koizumi did, to leave the economy in the hands of independents.
TOWARDS DIPLOMATIC NORMALIZATION
Abe is a mystery in regards to political and economic reform. But his ideas on foreign policy are well known. His popularity is precisely due to the hard line that he takes against China and North Korea.
The most probable thing will be for the new Prime Minister to continue with the plan for the diplomatic normalization of Japan, begun by Koizumi, although this will require Japan to come out of its current isolation.
 TENSION WITH CHINA AND SOUTH KOREA
The repeated visits of Koizumi to the Yasukuni Temple, where he paid homage to the Japanese soldiers who gave their lives in war, including dozens of war criminals, provoked a diplomatic crisis for Japan with China and South Korea.
Abe has so far not announced whether he will visit the temple. He seems conscious of the opportunity before him to forge better relations with his neighbors.
The summit of the forum for Asia- Pacific Economic Cooperation in Hanoi next November will be a key moment for Abe to characterize his diplomacy. We’ll just have to wait and see.