By William Pesek
Japanese politicians chose a new prime minister Monday. Yoshihiko Noda wasn't who the nation's 127 million people wanted, and that may augur poorly for prospects for economic change.
Voters wanted Seiji Maehara, the former foreign minister who they hoped might be less beholden to entrenched powerbrokers in Tokyo. Instead, they may be getting the same old, same old. As finance minister, Noda has displayed none of the boldness or fresh thinking Japan so badly needs. Not even a hint, in fact.
Noda shouldn't expect a honeymoon -- not with Japan's sixth leader in five years facing daunting challenges that include:
--Controlling debt. The recent move by Moody's Investors Service to downgrade Japan is a harbinger of things to come. For too many years, under too many leaders, Japan added to a debt that's more than double the size of the economy. Credit raters fret about a fast-aging population, a declining birthrate and entrenched deflation.
--Strong yen. Japanese leaders haven't grasped that the yen is rising because the dollar and euro look even worse. Intervening won't help, and neither will Noda's recently announced $100 billion fund to help companies cope with a firm currency; only making the economy more competitive and entrepreneur-friendly will.
--Restrictive tariffs. The longer Japan drags its feet on cutting tariffs, the more it falls behind Asian neighbors. Ignore gripes from interest groups like farmers and do what's best for the $5 trillion economy. The fallout from the March 11 earthquake and radiation crisis demands bold policy moves.
--Immigration. If ever there were a time to get serious about welcoming more foreign labor -- both low-wage and highly skilled -- it's now. Japan's atrophying economy needs all the fresh energy it can get.
--Sticking around. The fractious nature of Tokyo politics means leaders spend much of their time struggling to keep their job and little time doing it. Noda should try the opposite: Act fast and rack up some early successes. That may buy him some time to tackle Japan's mounting problems -- and avoid the revolving door that spits out leaders every nine months or so.
(William Pesek is a Bloomberg View columnist)-0- Aug/29/2011 13:37 GMT