INTERVIEW WITH KEIZO OBUCHI

Prime Minister of Japan (1998- April 2000)

A (not so) bold reassesment

Serge Berthier. - You have been recently reelected chairman of the Liberal Democratic Party (1). Your two contenders for the election, former LDP Secretary-General Koichi Kato and former LDP policy chief Taku Yamasaki, slammed during the race your plan to form a new tripartite coalition with the Liberal Party (Jiyuto) and New Komeito (Komeito) while you emphasized its necessity. Why did you enlarge the majority with a party which so far had little sympathy for the LDP policies?

Keizo Obuchi. - Since the Liberal Democratic Party (LDP) lost power in 1993, the first time it was not in power since 1955, and until recently, Japan has been overall lacking in stability. In a very short period of time, we went through a tide of political reorganization and dizzying changes of the political power. Given this background, I formed a bipartite coalition with the Liberal Party at the beginning of this year for the purpose of stabilizing the political landscape (2). However, since our bipartite coalition did not have a majority in the House of Councillors, there were times when the Government has had difficulty passing the legislation necessary for the implementation of our policies. Now, as a result of forming a tripartite coalition including the New Komeito, we have a ruling majority in both the House of Councillors and the House of Representatives. This will empower the Government to actually enact as law the policy agreements made among the three parties.

S.B.- Indeed, but if the tripartite coalition is the only way to secure an absolute majority, some critics point out that such a coalition is unnatural and unhealthy in itself as it is nothing more than an embodiment of the political concept of "strength in numbers" with little policy agreements in common at stake.

K.O.- I won the confidence of a majority of Diet members and nearly 70 percent of LDP (rank-and-file) members. So I believe that it means I my policy.is understood. The support for it is very strong (3) because by launching a Government with a stable political foundation, we have put into place a powerful policy implementation structure. Such stable structure will allow us to fully meet the various urgent issues we need to address, in the economic, security, social security and education fields to ensure the prosperity and stability of Japan well into the 21st century.

S.B.- If I understand you, the strongest merit of the tripartite coalition is in fact to bring stability of the political landscape. It does not necessarily mean that as regards policies, the tripartite coalition is an asset. In Korea, President Kim admits readily that the two parties coalition is a necessity as well as a burden.

K.O.- As far as the policies are concerned, the basic policy principles adhered to by the three parties are being coordinated and integrated. By sharing responsibility in this tripartite Cabinet, I am certain that we can come up with better policies, and that the coalition makes it a certainty that they will, then, be implemented (4).

S. B.- If a tripartite coalition is today a necessity to bring stability to the political landscape, isn't it because the corporate world can no longer bring the desired stability it created in the Japanese society?

K.O.- The Japanese business community has indeed long taken an active role toward social issues at different levels. It was doing its best to maintain long-term employment by exerting efforts to avoid to discharge the surplus personnel. It went to the rescue of companies which had become insolvent, the mergers being more often than not a way to avoid massive layoffs. It took an active role in organizing social welfare measures such as the promotion of home ownership, corporate pension schemes and the establishment of company accommodation and health facilities. It is true that these measures have until now contributed significantly to Japanese stable socioeconomic development. And it is also true that, amidst the significant ongoing changes in the environment surrounding the corporate world, as well as the society, you could call it the effect of the globalization of the economy and of the society, Japan is now required to undertake a bold reassessment.

S.B.- What bold reassessment?

K.O.- What we must do and are doing is to ensure that what is good remains and what hinders us does not (5).

S.B.- The corporate world has little choice. Either the Japanese companies will be able to compete on even term on the world market, or they will die. What is the government proposing to help them shed their social role which hinders their competitiveness today?

K.O.- Our system must enable the Japanese corporations to withstand the huge international competition they are facing. My understanding is that the private sector has been conducting various reassessment from such a perspective. At the same time, the Government is reviewing the division of labor between the public and the private sector and is advancing deregulation and efforts to prepare an environment in which the market can function in a sound manner.

(At the time, Prime Minister Obuchi would not elaborate further on the corporate restructuring and its impact on the society but, only days later, in a interview given on November 18 to the Review Editor Nayan Chanda, and Far Eastern Rewiev Tokyo bureau chief Chester Dawson - he contradicted himself by giving a new definition of the word "market":

K.0.- I do support restructuring (…) reducing the payroll is unavoidable, however, (it must be done) by gradually reducing new hires, or transferring employees to affiliates (…). Sudden cuts that create instant unemployment aren't acceptable (…). The strengths of Japanese-style management should be retained (…). We have to find a middle way.

S.B.- In Japan, deregulation has a particular meaning (as can be seen by the above comments). What is at stakes is in fact a new division of responsibilities between what is public, and must be handled by the public sector, that is the government, and what is private, and exclusively private and must not be handled by a corporation within its own structure. In other words, it is the role of the politician that is taking a new dimension, don't you think so?

K.O.- I agree that we could engage in various discussions on the sort of impact the trend you mention is having on the current developments proceeding in the political reorganization. My own belief is this: as we approach the 21st century, Japan must strive to become an ideological nation that strikes an appropriate balance between material and spiritual fulfillment. Myself, I have long advocated the concept of an abundant nation of great virtue. The achievement of this objective involves not only the social issues I have just mentioned, but also requires the Government to play an active and instrumental role. It can only be achieved with the understanding and cooperation of the people of Japan, and so a greater participation.

S.B.- Most of the problems the Japanese government has to deal with, such as political stability, deregulation, unemployment and corporate restructuration, are quite common among governments. But what make the Japanese government quite in an unique position is the fact that it has to deal with the prospect of a country where the majority of the people will be elderly. No other country has to deal with such a prospect. Their problem is most of the time to have too much labor-force available and not enough jobs. In Japan, it might come to the opposite with a dwindling labor-force. How is Japan going to cope with such a problem?

K.O.- While it has been projected that Japan in the future will face a reduced labor force as a result of the aging population and dwindling birth rate, I do not believe it is appropriate for us to solve our problem of a labor shortage stemming from such a society simply by accepting immigrants to Japan (6). Rather, I feel that it is of greater importance to proceed with improving the employment situation to enable senior citizens, women and other people to perform to the fullest, enhance labor saving and increase effectiveness, and improve employment administration.

S.B.- Yes, but such policies have their limits.

K.O.- That is why we will be more pro-actively encouraging skilled foreign laborers in expert and technical fields to come, so as to further stimulate and further internationalize the Japanese socioeconomic environment. However in terms of acceptance of unskilled foreign laborers, as most countries believe, I think it is important to act based upon the trends in consciousness of the people of Japan, since such an acceptance would impact significantly on both the Japanese socioeconomic environment and the people’s lives.

S.B.- In short, Japan will remain for the time being shy as regards immigration policies, in spite of the dwindling pool of Japanese of working age.

K.0.- The policies for accepting foreign laborers into Japan can only be reviewed in light of changes in the Japanese socioeconomic climate and we will keep monitoring them (7).

S. B. - One of the changes in the Japanese socioeconomic climate is the role of women. A number of measures have been taken to further integrate women into what was very much seen from outside as a male society. Is it significant that a record number of female candidates won seats in the last prefectural assemblies held in April 1999?

K.O.- Advancing the involvement of women in the decision making process for policies and guidelines reflects the changes taking place in the social structure of the country. Such trend encourages the further development of democracy and contributes to the formation of a well-balanced society (8).

S.B.- Certainly, but Japan, traditionally, never was a gender-equal society.

K.O.- Japan, today, is striving toward the realization of a gender-equal society in which men and women, irrespective of gender, are able to fully demonstrate their individuality and ability. The Basic Law for a gender-equal Society was enacted in June this year. In this, my government is united. Another thing we are doing to promote further such goal, is to propose at my own initiative in the reform of the central ministries and agencies that we are currently doing, the establishment of a Bureau for gender equality in order to strengthen the administrative structure promoting such policy.

S.B.- The cynics say that the promotion of women in the Japanese society is done more out of economic consideration than any other consideration?

K.0.- It is a fact that the realization of a gender-equal society serves as a major element in determining the orientation of Japan, whether we are talking its economy or its social structure. Such evolution is necessary in order to achieve an enriched and invigorated society able to response to the challenges of the aging population and the dwindling birth rate we are facing.

Autumn 1999

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Notes;

1.- Prime Minister Keizo Obuchi was reelected president of the ruling Liberal Democratic Party (LDP) on September 21, 1999 after scoring a landslide victory in the party's leadership race, beating former LDP Secretary-General Koichi Kato and former Policy Research Council Chairman Taku Yamasaki, and was given his first full two-year term as LDP leader.

Obuchi's victory was viewed as assured as he won support from five of the seven intra party factions - accounting for 70 percent of the LDP legislators. In the final results of the vote counting, Obuchi garnered 350 votes - 253 from legislators and 97 from rank-and-file members. Kato won 113 votes - 85 from Diet members and 28 from other party members - and Yamasaki got 51 votes - 33 from legislators and 18 from ordinary party members.

2.- "Stabilizing the political landscape" is an elegant way to describe what one could call bluntly "avoiding a electoral defeat" or "learning from past mistakes". The conservative Liberal Democratic Party (LDP) rules continuously from 1955 until 1993, when it was replaced by a coalition of breakaway LDP groups and opposition parties, one of the architects of the defeat being Ichiro Ozawa, a former secretary-general. To stabilize the political landscape, the LDP joined a coalition government made of a left-wing party, the Social Democratic Party (SDP) led by Tomiichi Murayama, and a tiny party, the Sakigage opposition. This unnatural coalition lasted eighteen months with near-record low public approval ratings. In 1995, the political establishment of all stripes was so much despised that two former TV comedians won a major governorship, Tokyo and Osaka, over hand-picked candidates fielded by the usual parties (the LDP candidate was again defeated by a ultra-rightist candidate for the governorship of Tokyo in 1999).

In July 1995, the ruling coalition, and Murayama's SDP in particular, were roundly rejected in a national election for the Upper House (House of Councillors). Because only 50% of the seats were at stakes, the ruling coalition hung on to an overall majority, but the results furthered eroded Murayama's and Foreign Minister Yohei Kono's, the president of the LDP, hold on their respective party. Soon after, Yohei Kono withdrew his candidacy before the biannual election for LDP President, earning the distinction of being the first ever President of the LDP who would not be Prime Minister. MITI Minister Ryutaro Hashimoto was elected for the top post. Every one then thought that the days of the coalition were numbered, but it was still holding on in the early days of 1996, the LDP, with dismal ratings, being happy not have to face a general election that would have been called for if the coalition had collapsed. In January 1996, Murayama stepped down, after serving eighteen months as prime minister of a coalition dominated by the LDP, a party he had spent much of his political life opposing. Hashimoto took over, keeping the coalition alive. He was the fourth prime ministers of Japan since the last general election in July 1993, coming to power again without consulting the electorate. The coalition had then only one common stand: to keep out opposing lawmakers, and one has to wonder if the new three-parties coalitions, with little in common, does not have the same raison d'être. Fortunately for Hashimoto, Ichiro Ozawa, the leader of the opposition, today a member of the ruling coalition, pushed the main opposition to the verge of self-destruction when he instructed the members of his party to blockade the parliament to prevent a bill being signed that would bail out housing-loan companies (the irony is that he is not today opposing the bailout of the financial system which started to crumble when the housing-loan companies failed and had to be merged at all costs, plunging the banking system in further trouble. Ozawa's blunders gave the LDP a window of opportunity to held the fort. During the October 1996 election for the 500-lower house seats, the LDP secured 239 seat, up from 211, while its unnatural partners were all but destroyed. Ozawa had however scared many supporters by his antics and the opposition did not benefit from the voters' disgust (the election turnout was a record low of 60%). It lost four seats, leaving the LDP once again unchallenged, but with a very shallow majority in the lower house and no majority of its own in the upper house, although the remains of its former coalition partners had agreed to provide support from outside the cabinet. Hashimoto, then, said the opposite of what Prime Minister Obuchi is telling us: As head of the LDP, Hashimoto said that he saw the single-party rule as the key to bringing Japanese back into alignment. That is provided the LDP had the support of the population, but the public remained unimpressed. Their revenge came on July 12, 1998, when elections for half of the 252 seat of the upper house (the ones which had not been renewed in July 1995). Again the government, very much like in 1995, took a beating. Angry voters threw their weight behind the non-LDP parties. The turnout for such election was the highest in 12 years at 59%. Le LDP secured only 44 seats, the largest opposition (revamped under the name Democratic Party, and without Ozawa) picked up 27 seats and the Communist Part 15 seats.

The LDP ended up with 102 seats, 25 seats short of a majority. Hashimoto was forced to resign the day after the defeat, paving the way for the election of Obuchi who became Prime Minister on July 30, 1998. And since the voters would not deliver a majority to the LDP, Obuchi set out to built up a majority with a new alliance, first with arch-foe Ichiro Ozawa, who, too, has been sidelined by the voters, and Komeito, a party with a Buddhist organization as its backbone.

3.- It is hard to gauge whether the support Prime Minister Obuchi enjoys within the party has anything to do with the policy. After all, Hashimoto was elected with a strong support too, by the same LDP Diet members although he was for a single-party rule. If Prime Minister Obuchi is pushing for a policy that is the only one the Diet members feel will help them win the next election, obviously he is certain to get their full support. But that is political posturing at its worst, as it was during the Muryama period.

To enlarge the support of the LDP, which has been eroded on the left by the opposition party, and on the right by Ichiro Ozawa's party, there are talks of a possible merger between Ozawa's party and the LDP. It would be in effect the return of a breakaway faction into the fold of the LDP which is already made of seven intra party factions.

A opinion survey, made in November 1999, by the Mainichi, Shimbun indicates that over 60 percent of the prefectural chapters of the Liberal Democratic Party (LDP) are opposed to, or at least cautious about a merger with the Liberal Party, one of its two ruling coalition partners. The Mainichi Shimbun surveyed high-ranking officials of all the LDP's 47 prefectural chapters across the country. According to the results, 21 of them clearly expressed opposition to a merger between the LDP and Liberals and eight others displayed caution about such an amalgamation. Only three chapters - Yamanashi, Fukuoka and Kagoshima prefectures - said they support the idea.

Most of those who are opposed to the idea cite the lack of reasons for merging with Liberals, antipathy toward Liberal Party leader Ichiro Ozawa, who once served as secretary-general of the LDP but left the party later, and their concern that a merger with Liberals could adversely affect the LDP's chance of winning the next general election. LDP Diet members are divided over whether to merge with the Liberal Party. Shizuka Kamei, chairman of the LDP Policy Research Council, has reiterated that he supports an LDP-Liberal merger. On the opposite side, LDP factions led by former Secretary-General Koichi Kato and former Policy Research Council Chairman Taku Yamasaki, are opposed to the move.

Ultimately, Obuchi insists that the LDP needs "the numbers in order to implement its policies" and asserts that securing stable majorities in both houses of the Diet will help to strengthen the Cabinet's base of support. His opponent Kato argued that "greater numbers do not necessarily mean stability" and that the LDP's cooperation with the Komeito should take place outside of the Cabinet. Yamasaki adopted a similar position, insisting that the LDP should not be swayed by short-term concerns such as securing more votes to facilitate its management of the Diet. Obuchi accused Kato and Yamasaki of lacking principle for criticizing the LDP alliance with the Liberals and Komeito at this late stage. Kato and Yamasaki responded by describing Komeito's entry into the coalition as a mistake in judgment on Obuchi's part. The controversy over the tripartite alliance has raised important questions regarding the nature of political alliances and how the LDP views the relationship between politics and votes in the Diet. The results of various opinion polls indicate that the public is wary of the emergence of a massive ruling party. Obuchi has justified the alliance as a means of "speedily implementing policies."

4.-Which policies? We were unable to get a clear picture of which policies we are talking about. It is still not clear what kinds of policies will be pursued by this alliance and the controversy will not die easily as very little efforts are made to establish a common political agenda.

The three parties clearly have ( or rather had) different positions on fiscal and economic policy, national security, social security and education. Prime Minister Obuchi places top priority on achieving an economic recovery through fiscal expansion see interview with top bureaucrat Tadashi Iwashita in this issue). Hence the adoption of a multi-billion yen package in the first extraordinary session of the Diet end of October 1999 (since Obuchi took office 15 months ago, his government has issued deficit-covering bonds totaling 50 trillion yen). But otherwise, we are none the wiser.

5.- What a reply! By far, the biggest challenge to Japan is the reform of the social insurance system since the companies are no longer going to be in the future the main provider (see interview with Yotaro Kobayashi in this issue). In 1999, medical expenditures will exceed 30 trillion yen, and the finances of the medical-insurance system have reached a crisis point. As long as the number of elderly, whose medical costs are higher than those of the working population, continues to increase, medical expenditures will inevitably soar because the elderly incur medical costs that are five times as high as those of the rest of the population. Furthermore, every year, the number of elderly people who are sustained by benefits from the social insurance system increases by more than 600,000, while the number of working people who pay into the system declines. Demographic trends will make it increasingly difficult to maintain public pension benefits at current levels. Pension, medical insurance, and nursing care insurance premiums will have to be hiked in order to keep Japan social insurance system viable. Yet, Prime Minister Keizo Obuchi has said almost nothing about medical insurance reform, while the opposition has emphasized the need for a safety net for the weak but has not explained how it would be financed.

The key question in the social insurance debate that has to be addressed is how to split the burden between the elderly and the working population. While additional benefits need to be paid to the elderly who live on low incomes and those who are not drawing pensions, the elderly will have to share some of the burden in correlation to their income and assets. Although, the Health and Welfare Ministry survey found that nearly 60 percent of the working population believed that an increase in our social insurance burden is unavoidable, the political leadership, whether in power or in the opposition, have done little to explain that painful policies are unavoidable.

Moves are afoot in the coalition to fundamentally alter the nature of the public nursing-care insurance scheme scheduled to start April 2000, while there is little consensus on the subject. To buy time, the ruling parties, have agreed to put off collecting premiums for nursing-care insurance for the first six months and to provide cash payments to households that are entitled to benefits but do not seek any services. This flies in the face of the insurance scheme's original purpose, which was to alleviate the care burden on family members by providing for outside help. The shortfall from the freeze on premiums will have to be made up for with new bond issues, whose bill taxpayers will eventually be asked to foot.

Pledges made by the same political parties seem to be overrun daily simply for short-electoral gain and it is therefore not surprisingly, to see at the same time, that attempts were made to suspend the law banning political donations to individual lawmakers from corporations and organizations, which was due to come into force in April 2000.

Takako Doi, head of the Social Democratic Party of Japan, accused the ruling Liberal Democratic Party of preparing to exploit a loophole in the Political Funds Control Law during a debate in the Diet. Doi was particularly incensed at the mushrooming number of local LDP chapters, which can receive corporate donations.

"I'm astounded to see last year's Home Affairs Ministry figures," Doi said while questioning Prime Minister Keizo Obuchi during a one-on-one debate session in the Upper House, pointing out that the LDP, which he heads, has some 5,800 local chapters nationwide and that this figure has continued to rise since the law was revised in 1994. "What is this?", she demanded. The law was revised after a number of financial scandals involving LDP politicians came to light in the 1980s and 1990s.

Although Obuchi announced his intention to stick to the ban on corporate donations to individual politicians beginning in January, as stipulated by the revised funds control law, critics have pointed out that politicians will still be able to receive corporate donations through local chapters, whose heads are, in most cases, the Diet members themselves.

The law places no limits on the number of local chapters a party can set up. A party can increase the number of its chapters as long as they have different names, but it is not permitted to do so simply to increase the funds it can receive. Yet, according to the Home Affairs Ministry, the number of registered LDP local chapters stood at 5,736 as of January this year, an increase of 1,041 from four years ago (when, ironically, the SDP was part of the ruling coalition).

"This means there are between 19 and 20 local chapters for every (LDP) Diet member elected from a single-seat constituency," said Doi, demanding that Obuchi implement further restrictions on corporate donations.

"I believe opinions like yours are a minority here in the Diet," Obuchi answered, : I do not subscribe to that kind of notion, that is, that political donations should be deemed as an evil."

That LDP Diet members are against anything that will alter the financing of the party is hardly worth mentioning, but such astonishing and careless reply flies in the face of what democracy is. It is obvious that most Diet members want corporate donations through local chapters to continue, but that was hardly what was at stakes.

6.-see interview of Yotaro Kobayashi, Chairman of the board of Fuji-Xerox.

7.-Japan has always been fearful of foreigners and the subject has always been taboo. It looks like it is still taboo. Quite recently, a group of public notaries in Japan have brought to light that a number of municipalities failed to comply with guidelines set by the Home Affairs Ministry by issuing copies of certificates of residence for naturalized citizens without deleting references to naturalization. The group made a request to the ministry, demanding that its officials enforce the guidelines more thoroughly, but it is not the first time that the Japanese bureaucracy balked at implementing new regulations regarding foreigners in Japan. It must be said here, that Prime Minister Obuchi is right when he outlines that the Japanese socioeconomic environment plays here a major role, but one might argue the government, by remaining out of the debate as much as possible, fails to educate the population.

According to the group of public notaries, 22 of the 51 municipalities surveyed in 10 prefectures have failed to comply with the guidelines, including the city of Fukuoka and Marugame, Kagawa Prefecture. It is expected that the number increase as the investigation proceeds.

As copies of certificates of residence are often seen by others, municipalities are instructed not to include information involving one's privacy such as naturalization and divorce in the Ministry of Home Affairs' manual on administrative proceedings issued in 1988. Typically, a bureaucrat in Marugame pointed out that: "a report on naturalization was not specified as problematic in the 1967 manual, so we continued the custom. We will change it in the future."

The practice has been criticized by a human-rights group representing ethnic Korean residents of Ozaka, as the practice mainly targets them

8.- Changes taking place in the social structure of the country are indeed taking place. Quite recently, in the race for seat in the 44 prefecture assemblies, candidates without support from political parties exceeded 30% for the first time in 44 years, and the number of female candidates jumped to 323, out of 4013 candidates. 136, up 79 from the previous elections were declared winners. Three females candidates won seat in the Ehime prefectural assembly, which was previously the only assembly with no female members. (Addendum: it is Obuchi's daughter who was elected in his fief after his death. However such election is not a sign of progress but a good example of what is wrong with Japanese politics).

Autumn 1999

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