JAPAN’S NEW prime minister, Yukio Hatoyama, began the delicate task of forming a new government yesterday, hours after inflicting a devastating defeat on the ruling Liberal Democratic Party (LDP).
The euphoria of the night before, when his Democratic Party of Japan (DPJ) secured 308 out of 480 seats in the lower house of the country’s parliament, quickly gave way to the business of addressing record unemployment and deflation as Japan struggles to emerge from its deepest recession since the second World War.
Questions are already being asked about his ability to end the bureaucracy’s stranglehold on economic policy and to focus on the interests of consumers rather than those of powerful corporations.
“It has taken a long time, but we have at last reached the starting line,” Mr Hatoyama told reporters at his home in Tokyo. “This is by no means the destination. At long last, we are able to move politics – to create a new kind of politics that will fulfil the expectations of the people.” His opponent, Taro Aso, resigned as president of the LDP, which now has 119 MPs in the lower house compared with 300 before the election.
Mr Hatoyama has about two weeks to put together the new administration. Bureaucrats and business leaders will use that time to prepare themselves to work with a different ruling party for only the second time since 1955. The markets reacted positively, with the Nikkei rising to a near 11-month high before retreating slightly as a stronger yen pushed down shares among exporters.
The DPJ’s honeymoon period promises to be short-lived amid concerns about its ability to fund extra spending pledges expected to reach 16.8 trillion yen (€126.4 billion) in the next four years. The party has vowed to end wasteful spending and invest heavily in welfare, introducing a child allowance and raising the minimum wage while keeping the consumption tax unchanged at 5 per cent.
Despite disquiet about Mr Hatoyama’s recent attack on “unrestrained market fundamentalism”, business leaders offered him a cautious welcome. Kaoru Yano, president of electronics firm NEC, said the election result was “an expression of the people’s call to break out of these tough economic and stagnant social conditions”.
US president Barack Obama said he looked forward to working with Mr Hatoyama, who has recently toned down his promise to end Japan’s “subservience” to US foreign policy. – (Guardian service)
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