Campaigning starts for LDP leadership contest

With two weeks to go before elections to replace the current Japanese Prime Minister, Mr Yoshiro Mori, four candidates started their campaigns here yesterday.

But although the former prime minister, Mr Ryutaro Hashimoto, is widely tipped to win the contest for president of the Liberal Democratic Party (LDP), he faces a serious challenge from an outsider, Mr Junichiro Koizumi, who has vowed to break the mould of Japanese politics.

Mr Hashimoto, who is backed by the largest faction within the LDP and would normally be expected to win, has so far remained vague about policy details although he is known to favour fiscal reform. His reluctance to discuss specifics is widely seen as evidence he has toned down his views in response to criticism of his past performance.

In 1998 Mr Hashimoto resigned from the leadership post after he was widely blamed for sabotaging Japan's short economic recovery with a badly timed rise in consumption tax.

The former health minister, Mr Koizumi, meanwhile has made the factional politics that dominate Japan's ruling party into an election issue by suggesting a constitutional revision to enable the prime minister to be chosen by popular vote.

With the economy still bumping along the ground and public debt the worst in the industrial world at 130 per cent of GDP, economic policy has already emerged as the election's key issue. Mr Koizumi has promised to help rein in Japan's public spending by limiting the issue of public bonds. His controversial plan to privatise the postal savings system has made him key reformer in the election. A third candidate, the LDP policy chief, Mr Shizuka Kamei, in contrast, supports old-fashioned pump-priming fiscal spending to keep the economy afloat.

The Economics Minister, Mr Taro Aso, has also thrown his hat into the ring. He said yesterday the most pressing problem facing the country was the resolution of the bad loans problem that has plagued Japan's banks for a decade.

Reuters adds: Mindful of a possible backlash from conservative voters, all contenders to replace Mr Mori yesterday threw their support behind a new history textbook written by nationalist scholars.

Japan's Education Ministry approved the draft of the textbook this month after some amendments, setting off fierce protests from North and South Korea as well as from China.

"Each country has its own history, and it is natural that there should be various views of such history," Mr Hashimoto told a news conference.