Prospects for the LDP presidential election, dissolution of the Lower House and the general election

Japanese prime ministers are not chosen directly by public referendum.

Instead, they are selected through a mutual vote of Diet members, with the president of the ruling party usually being nominated the Prime Minister.

The election to determine the president of the Liberal Democratic Party, planned for September 20, will be the third one for Prime Minister Koizumi since he took office. Interest is currently focused on who the opposing candidate will be, and whether or not Koizumi will be re-elected. Although special dynamics come into play in LDP presidential elections, at the moment, the name of a formidable rival yet to surface.

Taking his re-election as given, Prime Minister Koizumi is said to have determined that, to continue pushing forward the structural reforms which he has advocated since his inauguration without changing his basic policies, he would have to drastically reshuffle the Cabinet, reform LDP structures, dissolve the House of Representatives in October, and, after winning the people's confidence vote at the November election stabilize his administrative base.

The Koizumi administration capitalizes on the public's--and not the LDP's--high approval rating to push its structural reforms forward. So far, the tactic of naming all LDP factions critical of his policies as "resistance forces" to structural reforms and suppressing them has proven effective to a certain extent.

It is true, however, that we are seeing increasing instances whereby many bold reform bills have been met with strong resistance not only by these "resistance forces" but also by ministerial and agency interest groups, and had to be substantially modified.

Commenting on structural reforms, the Prime Minister insisted that the seeds of reform had been planted and were coming into bud, and that he was determined to fight all attempts to nip those buds. He added that, if he were re-elected, it would be possible to determine the reforms related to fundamental structures and establish a system for their promotion.

Koizumi stressed his plan to focus on privatizing Japan Post and the four highway-related public corporations. He also disclosed that he would make privatization of Japan Post in 2007 his campaign pledge. Meanwhile, the opposition parties charged that if the Koizumi Administration were allowed to continue steering the country, Japan would be ruined. The focus of their attacks will be on Japan's unemployment rate that remains high, structural reforms that are making little progress, and failed economic policies.

Will the LDP presidential election, the dissolution of the House of Representatives and the ensuing general election turn out as Mr. Koizumi had intended? It is also interesting to see if and how two recent changes will affect these series of events: the first rebound of stock prices in a year and the upturn in the assessment of business confidence.