Koizumi's Second Act

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It's 4:15 p.m. as Japanese Prime Minister Junichiro Koizumi approaches the podium, about to begin the most important chapter of his career. He's here before a crowd of 5,000 in Tokyo's Shinjuku district to kick off his campaign for re-election as the president of Japan's dominant Liberal Democratic Party (LDP), and thus retain his position as Prime Minister. The stakes are high, not just for Japan but for Koizumi's reputation. He needs another term, one more successful than his first, if he is to be remembered, as he desperately desires, as the reformer who set Japan back on track.

But on this blistering hot day, Koizumi does not look like a desperate man. Maybe it's the casual ease with which he delivers his lines, the confident gestures he uses to punctuate a point or the way his jokes, scripted or not, seem to come to him spontaneously. Whatever it is, Koizumi radiates an aura of inevitability, as if he himself is convinced that his return to office is assured. "Pessimism seems to prevail these days," he says. "But we are still a country ... where peace and prosperity have prevailed for half a century." If, on election day this Saturday, Koizumi does succeed against his three challengers—who are also gathered here for a day of speechifying—and if he can lead the LDP to victory in the parliamentary general elections that must take place before next summer, he stands a good chance of remaining Prime Minister until 2006. That, in itself, would be an achievement, making him the longest-serving Japanese head of state in three decades. But Koizumi, ever the dreamer, wants more than simple longevity: he wants nothing less than to build a new Japan.

Despite numerous setbacks over the past few years and frequent accusations that he pathologically promises more than he delivers, Koizumi's popularity and his power are soaring again. Thanks to his public appeal, a suddenly resurgent economy and his virtuosic manipulation of some of the LDP's most formidable mandarins over the past two months, Koizumi's re-election looks virtually guaranteed. Now, the more relevant question is how big his mandate from within the party will be. For that will signal how well Koizumi can fend off a newly ascendant opposition spearheaded by an alliance of longtime LDP foes Naoto Kan and Ichiro Ozawa in the upcoming general parliamentary elections.

In many ways, the Koizumi era heralds the beginning of image politics in Japan. Even now, as Koizumi sews up what had promised to be a fractious party election, the LDP Old Guard is only beginning to fathom what the media and others realized long ago: that Koizumi represents a new breed of Japanese politician, one who derives power from his image, and the popular support it generates, rather than from favors curried with party insiders. Says Norihiko Narita, a professor of political science at Surugadai University in Saitama prefecture: "These days, voters support candidates not for their policies but for their style. Take (Tokyo governor) Shintaro Ishihara, who should be much too right wing for the Tokyo voters' tastes. He enjoys a high approval rating."

This, then, is the secret of the Koizumi longevity paradox: his relationship with the public has allowed him to remain in office far longer than many had expected, especially considering that most of his own party hates him. What's more, this popular approval has enabled Koizumi to gain control of the political agenda in an unprecedented fashion. Ordinarily, party insiders and career bureaucrats make most major decisions and dominate the entire political debate. In just the past few months, however, Koizumi has seized the initiative in significant areas, not least in his own re-election campaign. "He may not have been as successful yet at changing Japan as he would have liked, but he is changing the LDP," says veteran political commentator Takao Toshikawa. "He is bent on destroying the way the party operates, and in that he is succeeding."

Right here, in Shinjuku among the people, Koizumi is in his element, reveling in applause that is palpably more enthusiastic for him than for anyone else. Although he may never recapture the charmed aura he possessed in 2001 as Japan's anointed savior, he still retains an almost Clintonian ability to seduce a crowd, a gift for compelling listeners to drink in and—sometimes despite themselves—believe his every word. That's amply on display today when compared with the lukewarm reception garnered by his three competitors: little-known Takao Fujii, Old Guard stalwart Shizuka Kamei and late entrant Masahiko Komura. During their speeches, his opponents trot out the same old whistle-stop bromides: Japan needs a more self-sufficient food supply, increased government spending is the only solution to the nation's economic woes, most foreigners are either criminals or vultures. Koizumi aims instead for the poetic and the aspirational. "Takeshi Kitano just won an award in the Venice Film Festival," he declares. "We have athletes—swimmers, runners, baseball and soccer players—doing incredibly well all over the world. What's important is to find ways to expose our latent talent." Frustrated, all three challengers take shots at Koizumi's broken pledges, calling him everything from an empty suit to a lackey of the U.S. But the vitriol has little effect. The gathered listeners barely respond to such strikes. And Koizumi? He's not even paying attention, too busy laughing and waving at busloads of tourists to register what his opponents are saying. The crowd seems to agree. Twenty-six-year-old airline employee Satomi Yamada says: "He has leadership. He's the only one who can pull the country together."





 

When Koizumi swashbuckled his way to power 21/2 years ago in an unexpected landslide, he energized a society desperately seeking an excuse for optimism. In a nation of dwindling economic vitality and increasingly ineffectual leadership, the 61-year-old divorcé's flowing silvery mane, handsome looks and tough talk (tempered with a New Age vibe that felt your pain) heralded something new. Though he was a third-generation LDP politician, Koizumi proudly played the outsider, famously declaring he would pursue a reform agenda "without sanctuary," even if it meant demolishing his own party in the process. With gargantuan promises of a political revitalization and audacious plans for economic reforms, Koizumi seemed bent on doing far more than simply talking about a revolution. He enjoyed an astonishing 87% approval rating, and his visage adorned everything from chewing gum to cakes.

Almost immediately, however, Koizumi found it impossible to deliver on many of his boldest promises. Old Guard LDP members, none too happy about his intention to overhaul powerful constituencies, such as agriculture, banking, construction and the postal service, blocked many initiatives. And once in office, Koizumi proved more willing to compromise than his firebrand campaigning had let on. His pledge to limit government borrowing to $8.5 billion per year? That one got thrown out within his first few months in office. His pledge to cut public spending? The amount of public spending may be falling but, as economist Richard Katz notes, the rate of spending cuts under Koizumi is no more aggressive than under his Old Guard predecessors. And the privatization of the postal service and state highway corporation? Those grand plans are still on Koizumi's "to do" list, headlining this year's election promises as well.

Even in the face of such setbacks, Koizumi has maintained his primary power base: popular support. Indeed, one of his biggest strengths is how well he manages his image as an outsider and reformer, despite significant evidence to the contrary. He does this, say observers, in part by intentionally submitting unrealistically ambitious policy ideas that he knows will punch the traditional LDP forces' hot buttons. The message is clear: Koizumi wants to effect massive change, but it's those old boys that are stopping him. The public? They love it, and Koizumi uses their enthusiasm to strengthen his standing within the party. Though Koizumi's approval rating is off its postelection high, he still garners a respectable 58%, far more than any other politician in Japan today. Ezra Vogel, an Asia expert and professor at Harvard University, remarks: "The Prime Minister's greatest achievement is that the public is with him."

But that's only part of the story. It's doubtful that Koizumi could maintain such approval if he were just a master at crafting his public image. Despite what his critics say, Koizumi has, in fact, changed Japan more than any of his recent predecessors have. Although he may have failed to live up to the lofty expectations he himself set, Koizumi has delivered on several fronts. Take banking reform. Heizo Takenaka, Koizumi's controversial Minister of State for both Financial Services and for Economic and Fiscal Policy, has forced the nation's banks to accelerate their disposal of nonperforming loans and to shore up their capital bases. In May, he helped orchestrate a $17.2 billion bailout of Resona Bank, the nation's fifth largest. "I believe the finance regeneration is proceeding on schedule," Takenaka told TIME in August. "Japan is now in the third year of Koizumi's reforms, and I think results are beginning to bud." Similarly, Koizumi helped oversee Japan's first formal structural-reform program, which allows local governments to sponsor special economic zones where tariff reductions and other innovations can be tested. These projects, most of which began only this summer, range from extending the business hours of a port in Kyushu to allowing a few farmers near Japan's Inland Sea to rent fallow fields to corporations and not just to other farmers. "It's ridiculous how the media brush Koizumi as a nonreformer," says Kazuo Aichi, a former LDP lower-house member. "The man has been in office for just 21/2 years, and he's remained consistent about his reforms. How could anyone get structural reform done in that amount of time, especially in this country?"

In foreign affairs, meanwhile, Koizumi's statecraft has been even more enterprising. In one of the most decisive acts of solo diplomacy by a Japanese Prime Minister in years, Koizumi met North Korean leader Kim Jong Il while on a trip to Pyongyang last September. Although Koizumi has been steadfast in his criticism of reports of North Korea's renewed nuclear ambitions, he has won far more praise domestically for sticking to his demand that all Japanese citizens abducted by North Korea in the 1970s be allowed to return home. Also, Koizumi has dramatically stepped up Japan's national-security measures and military initiatives, going so far as to suggest he'd like to amend the country's pacifist constitution. He's overseen the drafting of legislation that gives Japan more options in dispatching troops to combat terrorism or to engage in peacekeeping missions worldwide. Likewise, the country recently launched two spy satellites and is exploring the feasibility of a missile defense system. Finally, Koizumi demonstrated that he's not a captive of public-opinion polls when he offered unyielding support for America's war on Iraq, despite vehement domestic opposition. This loyalty to the U.S. may have produced significant hidden benefits, perhaps encouraging Washington to keep quiet about Japan's recent currency-market interventions aimed at weakening the yen and thereby boosting foreign exports.

Such reforms are just the beginning. Indeed, Koizumi's lasting impact on Japan may rest above all in the way he has shaken up his own party. Nearly three years ago, "Change the LDP, Change Japan," was one of Koizumi's key campaign slogans. Pithy but unrealistic, right? Perhaps not. Take a closer look at the way Koizumi has seized control of this presidential election, and you begin to see that he may indeed be transforming the LDP—and, yes, therefore Japan. In the past few months, Koizumi has essentially driven a stake through the heart of the factional politics that were the lifeblood of the LDP. Historically, powerful LDP insiders have controlled smaller groups of Diet members that functioned almost as parties within the party. These insiders would routinely come together and make major decisions, often picking the next Prime Minister and his entire Cabinet. In a recent master stroke of strategy, however, Koizumi has outmaneuvered the faction system while virtually guaranteeing his re-election.





 

Here's how the gamesmanship worked: By virtue of his office, Koizumi has the power to call parliamentary general elections at any time. He could have scheduled them even before this week's party-leadership elections. But Koizumi understood that sitting parliamentarians will have a much easier time getting re-elected with him around than without him. That's why he announced as early as July that he would probably call for elections as soon as possible after the presidential balloting. The declaration was a dare to those in his own party: Did individual LDP Diet members really think they could win re-election in their home districts so soon after toppling him? This was no empty posturing. "If he's not re-elected, the LDP will not survive his defeat," says Gerald Curtis, a professor of political science at Columbia University. "There will be a lot of jumping off that ship. The LDP will break up."

Koizumi's brinkmanship quickly caused panic among the Old Guard. Forced to choose between fielding a unified opposition candidate, backing Koizumi or disintegrating in disagreement, many of the major LDP factions fell apart. Mitsuo Horiuchi's 51-member faction blinked first, when Horiuchi announced that he was letting members vote however they pleased—though he added pointedly that he was voting for Koizumi. More significantly, the 100-member Hashimoto faction, once the largest and most unified in Japanese politics, also blew apart. The milestone was marked by the Asahi Shimbun, a liberal daily, which editorialized: "The days of internal party factions are coming to an end." Just a few days later, Hiromu Nonaka, a senior member of the Hashimoto faction and an unyielding Koizumi opponent, confirmed the death sentence when he unexpectedly announced he was retiring from politics.

The deck is now clearly stacked in Koizumi's favor—so how will he play his winning hand? Much will depend on his margin of victory. If Koizumi snags a landslide, some supporters believe he'll push for the sweeping reforms he has always desired. But this scenario seems overly optimistic. Internally, the rivers of resentment against Koizumi run deep, and most of the LDP stalwarts who hindered his reform last time around are unlikely to change. Take Shizuka Kamei, a die-hard traditionalist also running for party president. Just days before officially announcing his candidacy, Kamei met with TIME and in a passionate near-monologue declared Koizumi's initiatives so fundamentally misguided that he had no choice but to fight them. "Koizumi is pursuing recession-producing policies which are shrinking the country," Kamei said. "I advocate doing the exact opposite of virtually everything Koizumi proposes." Furthermore, Koizumi, ultimately, is a party man, no matter how fervently he paints himself the outsider. Despite his avowed willingness to blow up the LDP in order to stay in power, he'd prefer to change the system from within than to destroy it. That means he may—once again—push reform more slowly than many are hoping. Finally, in exchange for surprise endorsements from Horiuchi and other heavy hitters, Koizumi may have dangled promises to compromise on his more ambitious reforms. He may even oust members of his Cabinet, though it's unlikely he will offer up the most coveted scalp of all—that of finance czar Takenaka, whom the Old Guard particularly dislikes.

A more pressing concern for Koizumi will be simply retaining the LDP's hold on power in the parliamentary elections. That's because, for the first time in a decade, it faces an opposition party with a small but genuine shot at toppling the LDP's virtually unbroken 48-year hegemony. On July 24, Naoto Kan and Ichiro Ozawa—two longtime LDP foes and by far the country's best-known opposition leaders—announced they had decided to set aside their differences and to merge Kan's Democratic Party of Japan (and its 174 sitting Diet members) with Ozawa's Liberal Party (and its 30 Diet members) in an attempt to steal as many of the LDP's 357 seats as possible. The alliance is more of an acquisition, with the Liberal Party agreeing to be absorbed into the DPJ, which will retain Kan as its leader. Ozawa says he's happy to concede leadership to Kan. The most important thing to him, he says, is a unified reform movement that takes on the LDP. Speaking with TIME, Ozawa says: "There has never been a major power shift between the ruling party and the opposition party. Japan needs that power transfer in order for the country to improve, and this is that opportunity." And what's the new DPJ's message? That it is impossible for the LDP to be a force of real change because that party is still locked in Japan's legendary iron triangle of conflicts of interest among government bureaucrats, politicians and corporations: "This power structure feeds the codependency between vested interests, who work to maintain the status quo. We want our political representatives to be accountable. What we're talking about is more of a revolution than reform." Other issues? Democrats are calling for heavier taxes on higher incomes and more diplomatic independence from the U.S. They are scathing about Koizumi's support for the America-led war on Iraq. Says Ozawa: "We shouldn't send troops to support the war effort of individual countries."

No doubt the DPJ will have a difficult time unseating the majority held by the LDP's ruling coalition, though it could steal a significant number of seats. Even though the LDP enjoys a reputation for near invincibility, DPJ backers point out that some 40% of Japanese voters don't view themselves as belonging to any one party. With a truly viable opposition, Kan and Ozawa reason, many voters will no longer view a dissenting vote as a wasted vote. "We are positive that many citizens will support the new party in the light of the many issues that need to be tackled now," Kan told TIME. What's more, traditional strongholds of LDP voting power—such as unions representing postal and construction workers—are not as dependable as they used to be. And the DPJ has a history of performing better than pre-election polls suggest. If Koizumi's presidential election is close and Kan can orchestrate a unified campaign, the grand old party of Japan may have something to worry about.

Koizumi, meanwhile, must be quietly wondering how he will fare in the estimates of future historians. Will they portray him as just another forgettable—if uncharacteristically long-serving—Prime Minister in a depressing line of forgettable Prime Ministers? Or will they remember him as a watershed figure in Japanese politics? The answer may be far closer to the latter than many people think. It's unfair to expect a wholesale restructuring of Japan's political and economic landscape from just one Prime Minister, and a third-generation LDP man at that. But there's no denying that Japanese politics is changing, and Koizumi, more than anyone else, personifies that landmark shift. As Professor Curtis of Columbia sees it, Koizumi is part of a national transformation that began when the Japanese bubble burst in 1989, an arc that includes the end of the cold war, the humiliation of being unable to respond to the first Gulf War, and the LDP's first, brief loss of power in 1993. All of those events contributed to a cultural upheaval, psychological dissonance and political dissatisfaction, says Curtis, that Japan is still trying to digest. In the end, Koizumi may be remembered as the Mikhail Gorbachev of this era in Japan—a crucial but transitional figure. "Koizumi is a force for dismantling the old system," says Curtis, "not necessarily the man to build the new one. It's probably the next guy who will build the new one." Still, considering the enormity of his task and the progress he has already made in undoing decades of political calcification, Koizumi may well go down as a towering figure, after all.