Obuchi Succession May Slow Japan's Recovery

The stroke that has left Japan's Prime Minister Keizo Obuchi fighting for his life is bad news for those studying his country's vital signs. The Japanese cabinet resigned en masse Tuesday, paving the way for the election of a new leader. But that may not be a simple matter in a ruling party divided on issues ranging from the pace of banking reform to personality differences. "Obuchi was the one leader able to unite the different factions of the ruling party," says TIME Tokyo bureau chief Tim Larimer. "Those who had been complaining that Obuchi's government had been too slow and cautious in moves toward reforming the banking system and other aspects of Japan's economy may now have to accept a period of even less change. Without someone uniting the different factions of the Liberal Democratic party, the government is even less likely to act decisively."

The LDP's crisis is ameliorated by the fact that the opposition remains weak, and they may not even need the sympathy vote they could count on if they called snap elections. "They're more likely to wait until after they host the G7 summit in July," says Larimer. "The question is who they'll appoint as their candidate. Rather than choose a fresh face who can lead Japan into the future, they may be more tempted to opt for a safe but uninspired choice acceptable to different factions." And, of course, that might slow the pace of reform. "Remember, Obuchi himself represented a more cautious option when he replaced the reformist Hashimoto," says Larimer. "The pace of change in Japan is glacial in the best of times, and with Obuchi leaving the scene, his replacement may be even less likely to adopt bold measures." The good news is that much of the good work that Obuchi was willing to undertake is already in place, reflected in the new budget that's already been passed. Still, the leadership change forced by its leader's illness is unlikely to speed the recovery of Japan's economy.