By Brian Fowler and Bill Austin
Sept. 2 (Bloomberg) -- Yasuo Fukuda's resignation as Japan's prime minister, less than a year after his predecessor quit, threatens to end the ruling Liberal Democratic Party's half-century grip on power in the world's second-biggest economy.
Taro Aso, an LDP lawmaker and former Olympic marksman who is favored by polls to take over, faces a hostile opposition and an economy sliding toward the first recession in six years. He may call a snap election to confirm his leadership rather than wait until lawmakers' terms expire in September 2009.
Aso would ``probably get a bounce in popularity because he's new and pretty good on the stump,'' said Gerald Curtis, a political science professor at Columbia University in New York.
Fukuda, 72, stepped down yesterday after 11 months in office marked by political gridlock, plunging approval ratings and party disarray. He asked Aso, a rival for the position last September, to organize an LDP leadership election, which would likely determine the next prime minister.
The resignation is likely to be positive for the economy, said Jonathan Schiessl, investment manager for Asia-Pacific equities at Ashburton Ltd. in Jersey, Channel Islands.
``Political paralysis is the worst scenario,'' said Schiessl, whose company oversees $1.7 billion in assets. ``Ultimately it will hasten a general election so we hopefully will then finally get some sort of political change in Japan and ensuing reforms.''
Fukuda followed Shinzo Abe, who also quit suddenly two months after the LDP lost control of the less-powerful upper house of parliament in July 2007 to the Democratic Party of Japan.
Political Gridlock
Both leaders proved unable to work with the opposition or win popular support for road taxes and a commitment to provide fuel to allied troops fighting in Afghanistan. The new prime minister will need to resolve those issues as well as revive an economy that contracted in the second quarter.
Fukuda's resignation ``is an act of suicide for the Liberal Democratic Party,'' said Yasunori Sone, a professor of politics at Keio University in Tokyo. ``The public will probably want new elections to be held, instead of an LDP leadership vote.''
Aso, who turns 68 this month, can count on plenty of support within the LDP, the largest grouping in the lower house.
``Many people within the party want Taro Aso to be Fukuda's successor and I feel that way too,'' said Yoshiro Mori, a former LDP prime minister.
Aso, appointed party secretary general by Fukuda last month, declined to comment on the succession. In a Jiji Press poll taken last month, he was voted the most-suitable candidate for prime minister among all politicians, including the opposition.
Koizumi Legacy
Fukuda's resignation comes two years after ex-Prime Minister Junichiro Koizumi vowed to destroy the ruling party after encountering opposition to his plan to privatize Japan's postal savings service. Aso opposed the policy, suggesting he may also struggle to escape the unfavorable leadership comparisons with Koizumi that dogged Abe and Fukuda.
Their short terms contrasted with Koizumi, who enjoyed the third-longest tenure since World War II. During his five-and- half years in office, he cut government spending and rode roughshod over the nation's banks by forcing them to slash bad loans. Koizumi also broke with tradition by naming cabinet members without consulting party factions.
``Under Koizumi, Japan had a certain international visibility,'' said Valerie Niquet, director of the Asia center at IFRI, the French Institute of International Affairs. ``With Fukuda, there was a return to the sort of gray bureaucratic government that's just not in synch with Japanese society.''
Aristocratic Roots
A public clamoring for change may not find it in Aso, who like Fukuda hails from a political dynasty. He has previously shrugged off his aristocratic roots by pointing to his fondness for Japanese comics. His mother was a daughter of postwar Prime Minister Shigeru Yoshida, and his wife's father also led the country. His great-great grandfather was Toshimichi Okubo, a nobleman who helped lead the 19th Century Meiji Restoration that gave power back to the Emperor and opened up Japan after 200 years of seclusion.
Aso, who competed in clay pigeon shooting at the Montreal Olympics in 1976, was elected to parliament for the first time three years later.
The LDP is required to hold lower-house elections by September 2009. The party has been in power through coalitions for all but about a year since it was formed in 1955.
Refueling Mission
The coalition had to use its two-thirds majority to override upper-house vetoes of legislation to renew refueling missions in the Indian Ocean for allied forces fighting in Afghanistan, and taxes earmarked for road construction. It was the first time the lower house used the maneuver since 1951.
The disputes led Fukuda's approval rating to plunge by almost half since he took office last September. He attempted to regain support by shuffling the Cabinet last month and pledging last week to spend about 2 trillion yen ($18 billion) to revive the economy. Public support for his Cabinet fell to 29 percent, down 9 percentage points from early August, the Nikkei newspaper reported yesterday, citing its own telephone survey. Fukuda's disapproval rating rose 14 points to 63 percent, Nikkei said, without providing a margin of error.
Fukuda replaced Abe, who cited his inability ``to gain the trust of the people'' for stepping down. Abe, 53, resigned after his approval rating fell to below 30 percent.
Cabinet Resignations
The LDP's loss of the upper house to the DPJ followed the discovery that the government misplaced more than 50 million pension records, the resignation of four ministers and the suicide of another minister under investigation for corruption.
Fukuda, the first prime minister whose father also held the position, beat Aso in the LDP's party vote for the leadership. He had served as cabinet chief for Koizumi and Mori.
After DPJ leader Ichiro Ozawa refused to back Japan's Afghanistan refueling missions, the opposition party then blocked Fukuda's first two candidates to lead the central bank, leaving the post vacant for three weeks, the first such vacuum in more than eight decades.
The political gridlock under Abe and Fukuda helped drive down Japan's Nikkei 225 Stock Average about 20 percent since Koizumi left office, leaving their successor the task of restoring investor confidence or risking the party's hold on power.
``The 53-year-old LDP is reaching the end of its political shelf life,'' said Masayuki Fukuoka, a professor of political science at Hakuoh University north of Tokyo. ``Koizumi promised to change Japan by destroying the LDP, and that's what we're seeing -- an eviscerated party on its last legs.''
To contact the reporter on this story: Brian Fowler in Tokyo at Bfowler4@bloomberg.net
Posts
No comments:
Post a Comment