<div dir="ltr">J@pan Inc Newsletter<br>The 'JIN' J@pan Inc Newsletter<br>A weekly opinion piece on social, economic and political trends<br>in Japan.<br>Issue No. 483 Wednesday September 24, 2008, Tokyo<br><br>-----------------------------------------------------------<br>
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More about PBXL: <a href="http://www.pbxl.jp/aboutus2">http://www.pbxl.jp/aboutus2</a><br>-----------------------------------------------------------<br><br>So, much to the surprise of no-one, Taro Aso has become the nation's <br>
latest prime minister and has elected a fittingly conservative cabinet. <br>Aso will face several challenges, not the least of which will be getting<br>the economy to pull a U-turn. As the country headed into recession, former<br>
Prime Minister Yasuo Fukuda called for more stimulus packages – it <br>didn't seem to worry Fukuda that stimulus packages had left Japan with the<br>highest public debt among developed nations – it's now at about 150 <br>
percent of GDP. Neither was he really worried that the last stimulus <br>package was far too small to really do anything (or about the fact that <br>most people saw it as pork-barrel politics at its most obvious). <br><br>
But that's all history now.<br><br>Before Aso tackles the economy, he will have to win a mandate<br>from the public – analysts expect him to call a general election as<br>soon as late October. In a move that is par for the course for the<br>
comedy show that is Japanese politics, the LDP will hold an election<br>as soon as possible so that the newly elected PM doesn't have a chance<br>to become more unpopular than opposition leader Ichiro Ozawa. To lose<br>
power would be a feat for Aso – the LDP has only been out of power for<br>10 months since 1955 – but, considering the dismal performance of the<br>ruling party, and Minshuto's successful win in the last upper house<br>
elections, anything could be on the cards.<br><br>Aso has already begun a likeability offensive with geeks in Akihabara<br>sporting Taro masks, while attempting to sell assorted Taro<br>merchandise. The PM, a self-proclaimed manga fan, has already promised<br>
to bring a bit of life into the nation's political scene. Koizumi may<br>have had a few Elvis songs up his sleeve but a Humphrey Bogart<br>impersonation? Has he ever danced at a summit wearing a samurai<br>costume? Well possibly, but Aso definitely has and no doubt there's<br>
plenty more in store for the public.<br><br>So apart from beating the extremely unlikable Ozawa in a battle for<br>popularity, what else will the PM have to do to keep his political<br>head? For starters, he'll need a scandal-free cabinet. Easier said<br>
than done. He seems to have learnt from the mistakes of Abe and<br>Fukuda, selecting a team of old hats who have hopefully had enough mud<br>thrown at them over the years to have little that can still stick to<br>them.<br>
<br>Okay, so what else? Back to the economy for a second. Aso wants to<br>crank start the economy with some stimulation. He has been talking<br>about temporary flat income tax cuts, among a bunch of other tax cuts.<br>Also government spending and deregulation. Economists have said that<br>
Japan will have to raise its 5 percent consumption tax in order to<br>cover welfare costs as they increase. This will be hard to get past<br>the public, though.<br><br>The pension mess still needs to be sorted out. It remains a thorn in<br>
the side of the LDP and will not go away in a hurry. The ruling party<br>has no-one else to blame over the affair and its poor handling. All it<br>can do is clean it up as well as possible – and that won't be finished<br>
by the next general election.<br><br>Foreign affairs is another area that pundits, at least at an<br>international level, are watching. Fukuda did manage to improve ties<br>with Japan's biggest trading partner, China. Although Aso has, at<br>
times, been an outspoken nationalist, many believe that he will act<br>pragmatically.<br><br>Also Japan's support of the US-led military operations in Afghanistan<br>will be important for relations with the United States. But regardless<br>
of whether the LDP wins the next election, with the opposition holding<br>power in the Upper House it will continue to be difficult for<br>legislation to be passed so that the nation can supply fuel to<br>American ships in the Indian Ocean.<br>
<br>With all the chaos on Wall Street, and the resulting carnage in<br>Japan's markets, it was easy to lose track of the LDP election. The<br>public knew what the outcome would be anyway. But now the real show<br>will hit the road and the nation won't have to wait too long to see<br>
the final act.<br><br>Ozawa was quoted in Time magazine as saying that the upcoming<br>elections will be Japan's "last chance" to change. I'm sure what he<br>really means is that: "If Minshuto can't win this election, we won't<br>
have a hope in all eternity of ever, ever being elected into<br>government."<br><br>"Japan's last chance to change" is probably snappier.<br><br>Michael Condon<br>Editor-in-chief<br><br>-------------Japan Inc is worth every penny!---------------<br>
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<br>-----------------------------------------------------------<br><br>STAFF<br>Written by: Michael Condon, Editor-in-Chief, Japan Inc Magazine<br>READ PREVIOUS NEWSLETTERS<br>Check out our other Japan-specific newsletters:<br>
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