The forthcoming resignation of the Japanese Prime Minister, Mr Yoshiro Mori, has served to highlight the poor performance of the country's economy and the parlous condition of its political system. Mr Mori's popularity reached an all-time low in the opinion polls after a succession of political misjudgments and blunders, which have finally convinced his party and coalition partners that he has to go. Whoever succeeds him will find it difficult indeed to restore the government's credibility if they cannot tackle the economy effectively.
Mr Mori's short term in office must be seen in the context of the last 13 years, when there have been 11 prime ministers in all. That illustrates the problems faced by any incumbent who has to grapple with party factionalism, closed-door politics and the relative weakness of the office in directing policy. Such structural shortcomings are mirrored in deep public disenchantment with politics, expressing itself in low voter turnout and cynicism about the prospect of change in the dominant Liberal Democrat Party. But there are signs at local and regional levels that alternative voices can be heard and several dissident critics have been elected as governors.
The Japanese economy has suffered from sluggish or nil growth for the last decade since the collapse of the financial bubble based on soaring property prices in the 1980s. This left the banking system dangerously exposed to bad debts. The government's attempts to stimulate the economy by pump-priming expenditure have accumulated large-scale public indebtedness. The latest plans for tax cuts and a special fund to reduce bank indebtedness do not carry much conviction in the middle of a political transition. Consumption remains stubbornly low, reflecting the public's lack of confidence, and latest figures suggest a recession is possible.
It is not a very auspicious time for the large Irish trade delegation currently visiting Japan, and led by the Tanaiste, Ms Harney, to do business there. But it would be quite wrong to conclude that because of its prolonged difficulties Japan's immense economy has lost its attractions for trading and investing partners. Those activities between Ireland and Japan were valued at some £4.5 billion last year, with substantial increases in IT and software. Much of Japan's international trading economy has been restructured and is highly competitive, while its level of maturity is such that overseas investment continues to flow to Europe, Asia and the United States.
There are many opportunities for skilful companies to develop activities in its market place with some of the highest incomes in the world. Japan remains the world's second largest economy, bigger than the rest of Asia combined. Establishing a presence there now will pay off if and when growth resumes. That it can do so with appropriate policies and stronger political leadership remains a realistic assumption. Unfortunately, an overcautious approach to tax cuts and restructuring the domestic sectors of the economy by making them more competitive has dogged successive governments. It remains to be seen whether Mr Mori's successor will be able to change that.