Japan's great hope Junichiro Koizumi has failed to deliver on his economic promises and voters are now beginning to lose patience
It's been a year since Japan's answer to Beatle-mania, Koizumi-mania, swept the nation. These days, though, Prime Minister Junichiro Koizumi is looking more like an aging has-been than a popular rocker.
Gone is the maverick image and rock-star persona that endeared him to millions. Groupies no longer clamour after him. And Koizumi Inc, which sold loads of posters, coffee-table books and even CDs of his favourite Elvis Presley tunes, has fallen on hard times.
For those pondering what caused Koizumi's star to fade, here's a list of promises made a year ago that he's since broken. It explains much about why the Japanese went from loving Koizumi to rolling their eyes.
'Revive the economy.' Let's see: The Nikkei 225 is down 20% from its post-Koizumi high (and only government manipulation has lifted it more than 2,200 points after it crashed to an 18-year low in February); unemployment climbed to a record and price declines have accelerated since Koizumi was sworn in. The economy is in worse shape than a year ago, leaving no doubt that Koizumi hasn't delivered on his promise to revitalise things.
'Change the LDP, Change Japan.' Koizumi's campaign slogan told us everything we needed to know about the man. His priority was to change the Liberal Democratic Party as a means of helping Japan. Yet a prime minister should think first of his nation, then his party. He can't shake up the status quo by putting the party ahead of the public. Over the past year, Koizumi's reformist facade has fallen away to expose the old school, LDP-betrothed politician he really is. His firing of popular foreign minister, the feisty Makiko Tanaka, exposed him as such. So did his recent visit to Yasukuni Shrine, which honours Japan's 2.5m war dead, including its war criminals. It enraged Asian neighbours and distracted Koizumi from focusing on the economy. He knew the move would be unpopular after his first visit last August was met by outrage in Beijing and Seoul. That he did it anyway showed his need to pander to the party's powerful hard-line conservatives.
'Reform without sacred cows.' When Koizumi came to power he pledged to force banks to crack down on deadbeat borrowers, and clear the estimated ¥36.8 trillion of bad loans choking the life out of the economy. Then he helped cobble together a ¥520bn bailout for ailing retailer Daiei and its 100,000 workers. The prime minister's talk of selling the postal savings system has faded. Many politicians couldn't imagine life without the trillion-dollar slush fund that helps them finance pet projects in their home electorates. And while Koizumi has managed to trim spending on road-building projects aimed at creating jobs, the Japan Highway Corp. is nowhere near being sold off or scrapped, as he promised.
'Get Japan's borrowing under control.' A cornerstone of Koizumi's revolution was forcing Tokyo to change its borrow-and- spend ways. Over the past 11 years, Japan has amassed a debt load more than a third larger than its economy. Aside from being a major problem for ratings companies, which have stripped Japan of its coveted triple-A rating, the debt is crowding out private-sector issuers hoping to raise money in the bond market.
To hear Koizumi tell it, he's succeeded by implementing a ¥30 trillion cap on new bond sales this year. That's a whopping $230bn. And there's no guarantee he won't break it next year. That's like an alcoholic saying he's cured because he's switched to wine coolers from whiskey.
'Introduce competition.' A year into his tenure, Koizumi hasn't loosened regulations or increased efficiency. Thanks to the power of special interest groups, Japanese consumers still pay far, far more than those in other countries. Big business and the powerful farm lobby hold considerable sway over the LDP, which grants their wishes to keep out cheaper imports and make it hard for start-up firms to succeed.
'Raise Japan's stature in Asia.' Far from improving its standing in the region, Japan is heading toward irrelevance. From Manila to Seoul, officials are forging their own economic futures independent of Japan. His two visits to the Yasukuni Shrine have angered neighbouring countries aggrieved by Japan's military conquest and occupation of much of Asia last century. While Asia's developing economies are happy to accept loans from Japan through its overseas development assistance programme, they are hardly looking to Tokyo for leadership.
Has Koizumi achieved anything? Perhaps, but only at the margin. He trimmed 10% from public works spending, a step in the right direction. He also gets points for adding the word 'reform' to Tokyo's lexicon. A year ago, even talk of privatising the postal savings system or scrapping public corporations seemed unthinkable.
And admittedly, it'll take more than a year for any leader, no matter how charismatic, to change Japan. Yet if Koizumi is to impose change on a government fighting against it, he needs sky- high approval ratings. Trouble is, Koizumi's public support is a fraction of what it was a year ago, and he's losing ground each week.
And the future? 'Withering support for Koizumi lowers the chances of meaningful economic reform and raises concerns of a political power shift,'' says Grace Chen, a London-based economist at the Royal Bank of Scotland.
In other words, Japan isn't just back to where is started a year ago when Koizumi arrived. It's in even worse shape.
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