Japan's cult hero PM wins new reforms mandate

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Leading article: Mr Koizumi must show his mettle and change Japan

The Japanese Prime Minister, Junichiro Koizumi, gained powerful support for his programme of radical reforms yesterday when his Liberal Democratic Party won a decisive victory in elections to the upper house of parliament.

By the early hours of this morning, Mr Koizumi's three-party coalition had won at least 73 of the 121 contested seats, with eight results still to be announced. The result confirms his remarkable personal popularity and places him in a strong position for the risky and uncertain political battle ahead.

"We fared better than I expected," Mr Koizumi told a television interviewer soon after declaring victory. "This is because of the hopes which people have for the Koizumi cabinet's reforms."

Mr Koizumi's outspoken style and promises of solutions to Japan's economic crisis have brought him unprecedented popularity in a country worn out by a decade of stagnation. The cult surrounding the Prime Minister, worthy of any pop star, is reflected in booming sales of Koizumi souvenirs, from posters and t-shirts to commemorative plates, fans and mobile phone straps.

But he faces opposition from vested business interests and from their conservative supporters in his party. In the short term his plans for cutting public spending and writing off bad loans at the banks will create further bankruptcies and unemployment at a time of serious hardship.

In the weeks leading up to the election, the LDP's programme was beginning to show signs of compromise between the prime minister and his party enemies. But without him, the party would have lost badly yesterday, and the result will give Mr Koizumi a much-needed shield against attacks from within the LDP.

"The basic plan will be implemented from now on," he promised last night. "Henceforth, this is my greatest responsibility. I will compile and implement specific measures in line with my basic principles. If there are people willing to cooperate from the opposition I will gladly accept."

Mr Koizumi's reform plans amount to a dismantling of the political and economic system that has powered Japan for the last 50 years. Reduced to its essentials, the system has depended on raising public money through the sale of bonds, and injecting it into the economy by spending on massive public construction projects. Having filtered down through the country's corporations, the theory goes, the money will find its way into the pockets of ordinary people who will continue to circulate it in the form of consumer spending.

Since the collapse of the so-called "bubble economy" 10 years ago, the system has broken down. Banks have started calling in their loans, forcing companies out of business.

Retailers have been hurt as consumers choose to save their money, rather than spend it. Meanwhile the continuing issuing of bonds has driven up the government's public debt to alarming levels. Successive governments have made half-hearted efforts at reform, but have always resorted to "packages" of needless public spending in the hope of giving the economy a short-term boost.

Mr Koizumi promises to abandon such short-term measures and to impose the painful austerity which, he believes, will eventually lead to recovery. He said: "I am resigned to not seeing a visible economic recovery for two or three years."

So far, however, he has presented almost no detailed proposals and has achieved very little. His visits to Europe and the US generated little of substance. He has accelerated disputes with China and South Korea by announcing that he plans to visit a Shinto shrine devoted to the Japanese war dead. Meanwhile, the economy shows signs of slipping further. On Friday, figures showed that consumer prices had slipped for the 21st consecutive month.

Mr Koizumi has promised a "social safety net" to offset the hardship that will result from his restructuring, but has not explained how this will work. Turnout yesterday was unexpectedly low at just under 50 per cent, a possible sign of a falling-off of interest in Mr Koizumi and his crusade. His personal approval rating is still high but it has slipped from its peak. It is certain to sink further, unless he embarks on detailed reforms.

"It's not that he is anything great in himself," said a 73-year old snack bar owner named Yasuko Terauchi. "He only seems to be a superstar, because the prime ministers who went before were so lousy. Everyone's waiting now to see what he's actually going to do."