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Japanese Voters Approve Prime Minister's Leadership

Japanese Prime Minister Junichiro Koizumi won a sweeping victory for his economic reform in the September 11th general elections. Many analysts say Mr. Koizumi's triumph goes beyond economics and signals broad approval of his unconventional leadership style.

Postal Reform

The recent Japanese election campaign focused almost entirely on issues of economic reform, specifically privatization of the monolithic postal service. In Japan, the Post Office provides banking and life insurance, as well as mail service, and it is the world's largest financial institution with multi-trillion dollar assets. Kent Calder, Director of East-Asian Studies at The Johns Hopkins University's School of Advanced International Studies, says that during the Japanese financial crisis in the late-1990s, many people transferred their money from banks to the Post Office because they felt it was safer there.

"It has also been tax exempt up to 6,000.000 yen -- almost a 50.000 dollars tax exemption [per account] -- which has made it very attractive, particularly because for a long time you didn't have to show or give proof of your identity or earnings when you made deposits into the system. So Japan had three times as many postal savings accounts as it did people, each of them taking advantage of these very large exemptions."

But postal banking services have had an adverse effect on Japan's sluggish economy, says Professor Calder, and the Prime Minister wants to change it. "He wants to end a lot of the loopholes, to privatize it to have the money invested commercially and to get the postal savings system out of the business of banking. He is going to split up the activities at the Post Office."

Koizumi's's Leadership Style

For many observers, the unprecedented voter turnout suggests that most Japanese agree with Mr. Koizumi's vision of economic reform: spurring economic growth through consumption and capital spending instead of relying on public works spending and exports. The Prime Minister's supporters say his policies have prevented the bankruptcy of Japan's banking system, even though the country's unemployment rates rose, reaching a high of 5 and a half percent in 2003. His critics say he has not done enough. Still, under Mr. Koizumi, Japan's economy has started to recover from more than a decade of stagnation. But many analysts say the Prime Minister won more voters' hearts with his leadership style than with his economic plan.

"He himself is a very attractive figure, just even physically. He has this long flowing hair. He has this very outgoing manner, not so reserved, not such a party apparatchik-type figure. That's number one," says Derek Mitchel, an Asia analyst at the Center for Strategic and International Studies here in Washington. "Secondly, he has in his quiet way, sought to assert Japanese identity and Japanese pride in a way that we really haven't seen since World War Two. Some are concerned about the direction of this," remarks Mr. Mitchell. "Is it leading to a nationalism that will forget the past and that will do injustice to the sufferings of others in the region? Those in China and Korea are worried about that, but within Japan there is a sense of relief and the sense of pride again in the Japanese nation that he represents through his politics."

Foreign Relations

Derek Mitchell says that Sino-Japanese economic ties are stronger than ever and that they will continue to grow.

"Japan's investment in China is critical for China's development. The Chinese market is critical for the Japanese economy, in fact it is probably the primary factor for Japan turning around its economy after a decade of recession. In South Korea as well there's a lot of business with Japan. There are a lot of cultural ties between the two sides. So it's a very complex relationship there. On the security side there is a lot of friction. But on the economic side, there is less so because they truly need each other."

But there have been renewed tensions in the region as both Japan and China continue to probe for oil and gas in disputed waters of the East China Sea. Peter Ennis, Editor of the monthly Oriental Economist Report, a joint U-S/Japanese publication, says Tokyo still has many unresolved problems and some new ones emerging.

"Japan's budget is so out of balance as to dwarf just about any other industrial country. The percentage of the national debt [in relation] to the GDP is huge. Japan is an aging population and that means there will be the cost of taking care of the aged. Unless the economy starts growing faster, taxes will have to go up on average people to pay for pensions and for other forms of retirement, nursing homes and so on. It's a huge problem!"

Japan After Koizumi

Mr. Koizumi's mandate as the leader of the Liberal Democratic Party ends next September and he has announced that he will step down at that time. Many analysts question whether his successor will be able to continue with Mr. Koizumi's reforms. But, Peter Ennis says, the Prime Minister leaves a legacy that will be hard to reverse.

"He has raised the standard of how a [Japanese] politician is supposed to rule, dramatically. He has been in that sense a transitional, but almost a revolutionary figure. No one can function in the old way. You can no longer go on Japanese TV and be this colorless figure who wears a blue suit with white shirt and a matching blue tie and basically says nothing because all of your work is done behind the scenes. That doesn't work any more."

The Japanese Prime Minister has replaced some of the most conservative legislators of his party with younger candidates - many of them women - including former newscasters, athletes and popular TV show hosts. Most analysts agree that this new generation of politicians will make a return to politics as usual in Japan very hard.

This story was first broadcast on the English news program, “VOA News Now.” For other “Focus” reports, Click Here.