Prime Minister Koizumi Delivers Administrative Policy Speech

In February, Japanese Prime Minister Junichiro Koizumi delivered his first administrative policy speech since becoming Prime Minister. The speech was designed to enlarge on the general policy speech he delivered after his inauguration and to give specific form to the subsequent "meaty plans" that he promised.

We have reported in previous issues of JLF (Vol.2,Vol.3,Vol.10) on the problems faced by the Koizumi government. Koizumi now sees strong opposition from even within his own Liberal Democratic Party as expected, where strong voices are calling for the Prime Minister to place priority on avoiding a deflationary spiral rather than going ahead with fiscal and economic reforms. Voices in opposition parties also claim that his plans for privatizing road-related public corporations and abolishing and consolidating governmental financial institutions are too hasty.

Prime Minister Koizumi has in the past drawn strength from the overwhelming public support he enjoyed, but with the stepping down of Foreign Minister Tanaka after her duels with the Ministry of Foreign Affairs, even this support is crumbling, according to surveys by the major newspapers. Although popular support still exceeds 50%, some 70% of the population have doubts that sweeping reforms can ever be implemented.

During his visit in mid-February, American President George Bush expressed his support for the Prime Minister's reform platform. This gave the Prime Minister some elbow room for policy maneuvering. According to media reports, although the United States is frustrated with Japan's lack of specific policy-level steps for jump-starting its economy, President Bush showed restraint in not demanding any numerical targets for dealing with non-performing bank loans or economic growth.

Even more than the United States, the Japanese people and Prime Minister Koizumi want quick and high-profile economic reforms in Japan to stabilize the global economy. Despite this, no immediate or effective cure is in sight for addressing issues associated with tax reform, pension reform, or unemployment. Although Prime Minister Koizumi expressed a strong commitment in his administrative policy speech to fighting deflation and implementing other economic measures, he was also keen to point out that this year is for implementing reforms and that visible results will not be forthcoming until 2003.