Naoto Kan was elected head of Japan’s ruling party, paving the way for the 63-year-old finance minister to become the fifth premier in less than four years.
Democratic Party of Japan lawmakers voted 291 to 129 for Kan, who defeated Shinji Tarutoko, a five-term legislator. The DPJ is now set to use its majority in the lower house to appoint him prime minister.
Kan’s role as finance minister may convince voters his government can improve the country’s finances without compromising promises to boost spending on social programs. Kan said today he will pursue the main policy goals of Prime Minister Yukio Hatoyama, who announced his resignation on June 2 citing a broken vow to relocate U.S. troops.
“The DPJ now has a chance to lose moderately instead of drastically” in mid-term elections next month, said Minoru Morita, a Tokyo-based independent political commentator. “The DPJ wants to change its image to prevent a major defeat.”
Speaking immediately before today’s party vote, Kan vowed to help the DPJ boost its popularity.
“First and foremost we must gain the public’s trust,” he said in his 10-minute speech to lawmakers. “I decided to run because I want to help the party break through Japan’s frustrations.”
Kan cautioned yesterday he has no instant fix to rein in the world’s largest public debt and expects voters to punish the ruling party in next month’s contest. “I don’t think we can be optimistic,” he said.
Foreign Minister Katsuya Okada and Transport Minister Seiji Maehara yesterday backed Kan, removing his two most senior leadership rivals. The Nikkei 225 Stock Average was little changed today after rising the most in six months yesterday.
“This is still the second-largest economy in the world and it’s very important that we have strong, effective leadership,” said Ed Rogers, chief executive officer of Tokyo-based hedge- fund adviser Rogers Investment Advisors Y.K. “The political merry-go-round has got to stop.”
Hatoyama, 63, resigned less than a year after the DPJ took power and overturned half a century of almost uninterrupted one- party rule.
Hatoyama’s fall came weeks before the government will say how it intends to reduce debt and bolster investor confidence in the nation’s bonds amid growing global scrutiny following Europe’s fiscal crisis. The DPJ is also set to release a strategy to sustain a 3 percent growth rate over the next decade, a pace unseen since 1991.
Kan said yesterday he will announce a new strategy for growth and fiscal discipline later this month.
“At least I’d like to correct the trend in which the public debt keeps increasingly endlessly,” Kan said. “We couldn’t cut waste in budget spending as speedily as we had expected.”
Japan’s ratio of debt to gross domestic product is approaching 200 percent, the highest among developed nations, according to the Organization for Economic Cooperation and Development.
Kan pledged to handle the dispute over where to relocate the Futenma Marine facility on the island of Okinawa based on the 2006 agreement with the U.S. and an accord Hatoyama announced last month.
“I told Mr. Kan I will support him,” Okada, 56, told reporters yesterday in Tokyo. “I would like him to fulfill Hatoyama’s wish to regain the party’s spirit lost by money politics.”
Maehara, 48, also said he will back Kan. With Hatoyama and Ichiro Ozawa, the party’s No. 2 official, both resigning, the DPJ has a chance to recapture public support by ending a revolving door of leaders who inherited their parliamentary seats, said Koichi Nakano, a political science professor at Sophia University in Tokyo.
Kan, like Okada and Maehara, is a first-generation politician and was first elected to parliament in 1980 as a member of the now-defunct Socialist Democratic Federation.
He rose to prominence as health minister in the 1990s when he exposed that agency’s role in allowing up to 5,000 Japanese to contract HIV through contaminated blood products. A co- founder of the DPJ in 1998, he was forced to step down as party leader in 2004 after admitting he failed to fully pay his national pension contribution.
Hatoyama and his four immediate predecessors were all the descendents of a prime minister or cabinet member.
“This is an opportunity for the DPJ to turn things around and show a different face to the public,” Nakano said.