Japan's Revolution Could End Up As Paralysis

With the formation of Japan's first non-Liberal Democratic Party government in 38 years, talk of political revolution is reverberating in Tokyo. New Prime Minister Morihiro Hosokawa is billed as a populist in shining armor riding to the rescue of Japan's long-oppressed electorate. He and his eight-party coalition are supposedly poised to enact electoral reform, overhaul the tax system, rein in bureaucrats, deregulate the economy, and make the consumer king. All of which means it's time for a reality check.

There's no denying that the LDP's sudden, shocking loss of power has altered Japan's political landscape, perhaps forever. The aging generation of postwar leaders is finally being edged out. And there's no doubting that the ascendant younger politicians have different ideas from their forerunners.

FRAGILE ALLIANCE. But anyone who expects sweeping overnight changes in Japanese policies or behavior will be disappointed. Hosokawa's disparate coalition, pulling together socialist, Buddhist, and conservative parties, is so fragile that any serious policy dispute could break it up. What's more, Ichiro Ozawa, the renegade who engineered the LDP's downfall, is the kingmaker of the coalition. Behind the scenes, he is arguing for caution while he uses his political and fund-raising skills to build a new party capable of forming a government on its own.

Hosokawa and Ozawa may be able to push through some electoral redistricting--the only thing the whole coalition agrees on. But the partners are likely to squabble over virtually everything else--from military spending to tax policy. Paralysis could well be the result. "These guys are about to learn that running a government is a lot harder than winning an election," says a veteran LDP aide.

The potential paralysis forebodes darker days for U.S.-Japanese economic relations. The ballyhooed new "framework" for trade talks hammered out by President Bill Clinton on his recent trip to Tokyo could soon start unraveling. "I fear the talks could be doomed," says one Administration official. Adds another: "We know the Japanese are going to try to blame the change in government for more delay."

As usual, a big frustration will be figuring out who's really in charge and how to deal with them. For some years, true political power in Japan has been wielded not by Prime Ministers such as Toshiki Kaifu or Kiichi Miyazawa but by shadowy back-room puppeteers. These included Shin Kanemaru, the now disgraced don of LDP politics whose trial for tax evasion recently started. When former U.S. Ambassador Michael H. Armacost had to twist Japanese arms for gulf war assistance, he went not to Kaifu but to Kanemaru.

Hosokawa's new government appears to be cut from the same cloth, with Ozawa as the real power broker. Indeed, Ozawa, a former LDP secretary-general, previously served as understudy to none other than Kanemaru. It was 51-year-old Ozawa who masterminded the split from the LDP in June of 35 Diet members that doomed Miyazawa's government. Hosokawa, 55, wouldn't be Prime Minister but for the blessing of Ozawa, whose party outguns Hosokawa's Japan New Party. Recently, the smooth, affable Ozawa brushed off suggestions that he was the key player in the new coalition. "That's never occurred to me," he insisted. "The mission of politics isn't about such petty questions but whether we can accomplish the will of the people." But a Diet member from Hosokawa's party acknowledges privately that Ozawa is calling most of the shots.

Hosokawa and Ozawa offer a striking contrast in styles. Hosokawa is the scion of one of Japan's most prominent samurai families. The self-effacing former governor of southern Kumamoto Prefecture talks publicly in the reserved, enigmatic style of traditional Japanese politicians. Many observers think Hosokawa is a little naive. He is an idealist who wants to clean up politics because he thinks it is the right thing to do. He has no significant experience at the national level and is likely to be severely tested by a major domestic or international political flare-up.

OUTSPOKEN. By contrast, Ozawa is the consummate political professional. A second-generation member of the Diet in his ninth term, he speaks with the boldness of a political heavyweight. He wants to build a modern, accountable system because he believes that's what Japan needs to become a world-class power. Everyone believes he would like to head up such a government once it is in place. Washington may find Ozawa's candor refreshing after his mealy-mouthed predecessors. He wants to see a Japan that is more forthright about assuming international obligations--something the U.S. wants. But he is less likely to put up with what he regards as American bullying.

While something of an odd couple, Ozawa and Hosokawa are temporarily united on a mission. Both want to reform Japan's corruption-inducing, disproportionate electoral system. They hate Japan's overwhelming bureaucracy and overregulation. And they want politicians to engage in a real policy debate that leads to an activist international agenda for Japan. But their very different goals and mind-sets are bound to clash. Their current collaboration and likely split will shape the drama of Japanese politics over the next year.

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